# SORRENTO PACIFIC FINANCIAL, LLC X-17A-5 (2024-04-01) — Broker-dealer annual report - Company: SORRENTO PACIFIC FINANCIAL, LLC - Form: X-17A-5 - Filed: 2024-04-01 - Period: 2023-12-31 - Accession: 0001252927-24-000001 - CIK: 1252927 - File #: 8-66046 - Type: Broker-dealer - Material weakness: No - Auditor: Citrin Cooperman - Auditor location: New York, NY - Contact: Ted Horwith - Phone: (858) 882-6503 - Email: theodore.horwith@atriawealth.com - Website: atriawealth.com - Signed by: Ted Horwith (CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1252927/000125292724000001/SPFshortreport23_.pdf --- {0}------------------------------------------------ OMBAPPROVAL UNITED STATES OMB Number: 3235-0123 SECURITIES AND EXCHANGE COMMISSION Expires: Oct. 31, 2023 Washington, D.C. 20549 Estimated average burden hours per response: 12 ANNUAL REPORTS SEC FILE NUMBER FORM X-17A-5 8-66046 PART III FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 12/31/2023 filing for the period beginning 01/01/2023 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION NAME OF FIRM: SORRENTO PACIFIC FINANCIAL LLC TYPE OF REGISTRANT (check all applicable boxes): ® Broker-dealer | Security-based swap dealer | | Major security-based swap participant □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) 10150 MEANLEY DRIVE, 1ST FLOOR (No. and Street) San Diego CA 92131 (State) (Citv) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING Ted Horwith (858) 882-6503 Theodore.Horwith@atriawealth.com (Area Code - Telephone Number) (Name) (Email Address) B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* Citrin Cooperman (Name - if individual, state last, first, and middle name) 50 Rockafeller Plaza New York NY 10020 (Address) (City) (State) (Zip Code) 11/02/2005 2468 (Date of Registration with PCAOB)(if applicable) (PCAOB Registration Number, if applicable) FOR OFFICIAL USE ONLY \* Claims for exemption from the requirement that the annual reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable. Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION swear (or affirm) that, to the best of my knowledge and belief, the l. Ted Horwith financial report pertaining to the firm of SORRENTO PACIFIC FINANCIAL LLC as of 2 023 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 12/31 partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. > See Attachment for California Notary Signature: Title: Managing Director - Chief Financial Officer Notary Public #### This filing\*\* contains (check all applicable boxes): - (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - O (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - □ (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (i) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (l) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ {n} }nformation relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - @ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - @ (t) Independent public accountant's report based on an examination of the statement of financial condition. - [u] Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | as applicable. - □ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - O (z) Other: - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ # CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT หลังจากพระองค์เล่นจากพลังสงคราคาอาจจุดจากพลงองคงองค์เล่นจังสงค์ที่สุดของสหลายคนองค์เล่นสนองค์เล่นสนองค์เลนครองค์เลน A notary public or other officer completing this certificate verifies only the individual who signed the A notaly partificate is attached, and not the truthfulness, accuracy, or validity of that document. | State of California
county of Cos Angeles | | | |----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--| | on 03/29/2024 | lameron Elliott notam public
before me, ___________________________________________________________________________________________________________________________________________________________________ | | | Date | Here Insert Name and Title of the Officer | | | personally appeared | theodore Horwith (aKA | | | | Name(s) of Signer(s) | | | | Horwith
to | | who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in Subsontheir authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. > I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ![](_page_2_Picture_8.jpeg) Signature Signature of Notary Public Place Notary Seal Above OPTIONAL Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document. | Title or Type of Document: Anneal Reports farm - Document Date: | | | | | | | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--|--| | Number of Pages: _____________________________________________________________________________________________________________________________________________________________ | | | | | | | | | Capacity(ies) Claimed by Signer(s)
Signer's Name: _______________________________________________________________________________________________________________________________________________________________ | Signer's Name: _______________________________________________________________________________________________________________________________________________________________ | | | | | | | | O Corporate Officer - Title(s): | C Corporate Officer - Title(s): | | | | | | | | O Partner - O Limited [] General | O Partner - [ Limited ] General | | | | | | | | [ Individual | O Individual | | | | | | | | □ Guardian or Conservator
Trustee | [ Trustee | | | | | | | | [] Other: | O Other: | | | | | | | | Signer Is Representing: ______________________________________________________________________________________________________________________________________________________ | Signer Is Representing: ______________________________________________________________________________________________________________________________________________________ | | | | | | | | | | | | | | | | assumer and the research were works and the revention of the revers and ©2014 National Notary Association · www.NationalNotary.org · 1-800-US NOTARY (1-800-876-6827) · Item #5907 {3}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC ANNUAL FILING IN ACCORDANCE WITH RULE 17a-5 AS OF DECEMBER 31, 2023 TOGETHER WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THEREON {4}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC # TABLE OF CONTENTS | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 1 | | |------------------------------------------------------------|--| | Statement of Financial Condition | | | Notes to Financial Statement | | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member and the Board of Managers Sorrento Pacific Financial, LLC # **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Sorrento Pacific Financial, LLC as of December 31, 2023, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Sorrento Pacific Financial, LLC as of December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** This financial statement is the responsibility of Sorrento Pacific Financial, LLC's management. Our responsibility is to express an opinion on Sorrento Pacific Financial, LLC's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Sorrento Pacific Financial, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as Sorrento Pacific Financial, LLC's auditor since 2020. New York, New York April 1, 2024 We served as Financial LLC {6}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023 | ASSETS | | | |----------------------------------------|---|-----------| | Cash and cash equivalents | | 1.942.694 | | Receivables from clearing firm | | 469.984 | | Other receivables | | 533.195 | | Deposits with clearing firms | | 100.000 | | Other assets | | 110,869 | | Due from affiliates | | 15 | | Total assets | S | 3,156,757 | | | | | | LIABILITIES AND MEMBER'S EQUITY | | | | LIABILITIES | | | | Accounts payable | S | 33,569 | | Accrued commissions | | 721,372 | | Due to affiliates | | 114,007 | | Deferred revenue | | 66.845 | | Other accrued liabilities | | 83,361 | | Total liabilities | | 1,019,154 | | COMMITMENTS AND CONTINGENCIES (Note 7) | | | | MEMBER'S EQUITY | | 2,137,603 | | Total liabilities and member's equity | S | 3,156,757 | The accompanying notes are an integral part of this financial statement. {7}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2023 ## NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY Sorrento Pacific Financial, LLC (the "Company"), a wholly owned subsidiary of its ultimate parent company, Atria Wealth Solutions, Inc. ("AWSI"), is a registered broker-dealer and investment advisor licensed by the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority. The Company provides broker-dealer and investment advisory services for regional and community banks and independent registered representatives as an introducing broker-dealer, clearing customer transactions through other broker-dealers on a fully disclosed basis. ## NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Basis of Presentation This financial statement is prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which require the Company to make estimates and assumptions regarding valuations of certain financial instruments, accruals for liabilities, and other matters that affect the financial statement and related disclosures. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the financial statement. #### Concentrations of Credit Risk The Company maintains cash balances with a financial institution. At December 31, 2023, accounts at the financial institution are insured by the Federal Deposit Insurance Corporation up to \$250,000. As of December 31, 2023, the Company had uninsured cash balances of \$1,162,280. Management performs periodic evaluations of the relative credit standing of this institution. The Company has not recognized any credit losses from this institution. The Company maintains accounts at its clearing firm, which are insured by the Securities Investors Protection Corporation up to \$500,000 (including a maximum of \$250,000 for claims for uninvested cash awaiting reinvestment). As of December 31, 2023, the Company had an uninsured balance of \$30,414 at the Company's clearing firm. Management performs periodic evaluations of the relative credit standing of its clearing firm. The Company has not recognized any credit losses from its clearing firm during the year ended December 31, 2023. At December 31, 2023, the Company had commission receivables of \$469,984 with its primary clearing firm or 51% of the total receivables from clearing firm and commission related other receivables. #### Income Taxes The Company is a single member limited liability company which is disregarded for federal income tax purposes. Accordingly, no income tax expense or deferred tax assets and liabilities are recorded within the Company's financial statement. #### Cash and Cash Equivalents Cash equivalents are highly liquid investments with an original maturity of 90 days or less that are not required to be segregated under federal or other regulations. #### Current Expected Credit Losses Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses (Topic 326) introduces a credit loss methodology, Current Expected Credit Losses (CECL), which requires earlier recognition of credit losses, while also providing additional transparency about credit risk. {8}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2023 The CECL methodology utilizes a lifetime "expected credit loss" measurement objective for the recognition of credit losses for loans, held-to-maturity securities and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. The methodology replaces the multiple existing impairment methods in current GAAP, which generally require that a loss be incurred before it is recognized. For financial assets measured at amortized cost (e.g., cash and cash equivalents and receivables from clients), the Company has concluded that there are no expected credit losses based on the nature and contractual life or expected life of the financial assets and immaterial historic and expected losses. ## Receivables from Clearing Firms and Other Receivables Commissions and other receivables are stated at the amounts the Company expects to collect. The Company considers accounts receivable to be fully collectible. The determination of the amount of credit losses is based on the estimated creditworthiness of the counterparty and the length of time a receivable has been outstanding. Other factors are considered by management based on relevant information about past events, current conditions and reasonable supportable forecasts as deemed necessary on a counterparty-by-counterparty basis. The Company continually monitors these estimates over the life of the receivable. The allowance for credit losses reflects the amount of loss that can be reasonably estimated by management. No allowance for credit losses was recorded as of December 31, 2023. ## Property and Equipment Property and equipment are recorded at cost and are depreciated on a straight-line basis over the estimated useful lives of the depreciable assets, which range from three to seven years. Maintenance costs are considered period costs and are expensed as incurred. ## NOTE 3 - PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following at December 31: | Computers and equipment | | 42,471 | |------------------------------------------------|--|----------| | Software | | 26,802 | | Total property and equipment | | 69.273 | | Less accumulated depreciation and amortization | | (69.273) | | Property and Equipment, net | | | ## NOTE 4 - OTHER ACCRUED LIABILITIES The components of other accrued liabilities at December 31, 2023, are as follows: | Employee compensation and benefit payables | | 36.637 | |--------------------------------------------|--|--------| | Other payables | | 46.724 | | Total other accrued liabilities | | 83.361 | ## NOTE 5 - NET CAPITAL REQUIREMENTS The Company is subject to Rule 15c3-1(a)(2)(ii) of the Securities Exchange Act of 1934, as amended, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. Under this rule, {9}------------------------------------------------ # SORRENTO PACIFIC FINANCIAL, LLC NOTES TO FINANCIAL STATEMENT DECEMBER 31, 2023 equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. The Company is also subject to the net capital requirements and is required to maintain minimum net capital of \$50,000 or 6 and 2/3% of aggregated indebtedness, whichever is higher. At December 31, 2023, the Company had net capital of \$1,656,112 which was \$1,588,169 in excess of the required minimum net capital of \$67,943. At December 31, 2023, the Company's ratio of aggregate indebtedness to net capital was 0.62 to 1. The Company is exempt from the provisions of Rule 15c3-3 (per Paragraph (k)(2)(ii) of such rule) under the Securities Exchange Act of 1934 as a broker or dealer which carries no customer accounts and does not otherwise hold funds or securities of customers. Due to such exemption, the Company is not required to prepare a determination of reserve requirement for brokers or dealers. # NOTE 6 - COMMITMENTS AND CONTINGENCIES ## Litigation In the normal course of business, the Company may be party to litigation or other regulatory matters. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated liability would be accrued in the Company's financial statement. If the assessment indicates that a potentially material loss contingencies is not probable, but is reasonably possible, or is probably but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. ## Clearing and Custody, and Trustee and Administrator Relationships In the normal course of its business, the Company indemnifies and guarantees certain service providers, such as clearing and custody agents, and trustees and administrators, against specified potential losses in connection with their acting as an agent of, or providing services to, the Company or its affiliates. The Company also indemnifies some clients against potential losses incurred in the event specified third-party service providers, including sub-custodians and third-party brokers, improperly executed transactions. However, the Company believes that the exposure is not material, and it is unlikely it will have to make material payments under these arrangements. Also, it has not recorded any contingent liability in the Statement of Financial Condition for these indemnifications. # NOTE 7 - EMPLOYEE 401(k) SAVINGS PLAN The Company has a 401(k) savings plan (the "Plan") covering all eligible employees. The Plan provides for voluntary employee contributions up to a dollar limit prescribed by law and has an employer matching plan. # NOTE 8 - SUBSEQUENT EVENTS The Company has performed an evaluation of events that have occurred subsequent to December 31, 2023, and through April 1, 2024, the date of filing this report. On February 12, 2024, AWSI entered into a definitive purchase agreement to be acquired by LPL Financial LLC. FINRA approval is anticipated to be completed in the late third quarter / early fourth quarter of 2024. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.