# N4 FINANCIAL, INC. X-17A-5 (2021-02-24) — Broker-dealer annual report - Company: N4 FINANCIAL, INC. - Form: X-17A-5 - Filed: 2021-02-24 - Period: 2020-12-31 - Accession: 0001319670-21-000002 - CIK: 1319670 - File #: 8-66849 - Material weakness: No - Auditor: Michael Coglianese, CPA, PC - Auditor location: Bloomingdale, IL - Contact: Mark Rogers - Phone: 650 464-7272 - Signed by: Mark ROgers (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1319670/000131967021000002/FULL.pdf --- {0}------------------------------------------------ ACCOUNTING FIRM REPORT FINANCIAL STATEMENTS AND INDEPENDENT REGISTERED PUBLIC DECEMBER 31, 2020 {1}------------------------------------------------ # **CONTENTS** | Report of Independent Registered Public Accounting Firm | 1 | |-----------------------------------------------------------------------------------|-------| | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Operations | 3 | | Statement of Changes in Stockholders' Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 - 7 | | Supplemental Information | | | Schedule I | 8 | | Computation of Net Capital under Rule 15c3-1 | | | Reconciliation with Company's Net Capital Computation | | | Schedule II | 9 | | Computation for Determinination of Reserve Requirement Pursuant
to Rule 15c3-3 | | | Information for Possession or Control Requirements under Rule 15c3-3 | | | Reconciliation between Audited and Unaudited
Statement of Financial Condition | | | Report of Independent Registered Public Accounting Firm on Exemption Report | 10 | | Exemption Report for SEC Rule 15c3-3 | 11 | {2}------------------------------------------------ #### YRMXIHWXEXIW" WIGYVMXMIWERHI\GLERKIGSQQMWWMSR" [ewlmrkxsr."H0G0"4276=" 0.+"\*11203\*-" 0.+"/B;57?)" '&'(#\$%&'" ,D>9?7@)" ,.63-/4#(&\$#'%'( ,@A9;4A76"4C7?487"5B?67=" (**-** @53"6785";A925?" 66849 # IMROP"NGO"OGPNMLPG''"'"'"'"'")\*'(( ")116)/")6+.5,+"4,3245" -240"7#%')#&" 3)45"..." **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | | 01/01/2020 | 12/31/2020
REPORT FOR THE PERIOD BEGINNING______________________________ AND ENDING______________________________ | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------|-------------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | N4 Financial, Inc.
NAME OF BROKER-DEALER: | | | =6673718"A@5"=;8C" | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | 67?9"7'4'";=' | | | 809 Laurel Street #952
___________________________________________________________________________________________________________________ | | | | | | | (No. and Street) | | | | | San Carlos
___________________________________________________________________________________________ | CA | | 94070
__________________________ | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
_____________________________________________________________________________________________________________________
Mark Rogers 650 464-7272 | | | | | | | | | (Area Code – Telephone Number) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Michael Coglianese, CPA
_____________________________________________________________________________________________________________________ | (Name – if individual, state last, first, middle name) | | | | | 125 E Lake Street Suite 303
_____________________________________________________________________________________________________________________ | Bloomingale | IL | 60108 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE: | | | | | | #
Certified Public Accountant | | | | | | #
Public Accountant | | | | | | #
Accountant not resident in United States or any of its possessions. | | | | | | | &*+"*&&'\$'#("-,%"*)(." | | | | | | | | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* 3EJ>DJA8B" F>HIEDI" M@E" 8H>" JE" H>IFED=" JE" J@>" ;EBB>;JAED" E?" AD?EHC8JAED";EDJ8AD>="AD"J@AI"?EHC"8H>"DEJ"H>GKAH>="JE"H>IFED= @53"),)("#%%#\$&\$" KDB>II"J@>"?EHC"=AIFB8NI"8";KHH>DJBN"L8BA="20\*";EDJHEB"DKC9>H\$" {3}------------------------------------------------ | Mark Rogers | 650 464-7272 | as a more and swear (or affirm) that, to the best of | |--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | N4 Financial, Inc. | | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | | of December 31 | | are true and correct. I further swear (or affirm) that | | | | neither the company nor any partner, principal officer or director has any proprietary interest in any account | | | classified solely as that of a customer, except as follows: | | | None | | | | | PLEASE SEE ATTACHED
ACKNOWLEDGEMENT/JURAT
FROM NOTARY PUBLIC | Signature
CEO
Title | | SEE ATTACHED | | | | | Notary Public | | | V (a) Facing Page. | This report ** contains (check all applicable boxes):
(b) Statement of Financial Condition.
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
(d) Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3.
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
consolidation.
(1) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report. | (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
(i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the
(k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of | | | ** For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). | (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | {4}------------------------------------------------ | ACKNOWLEDGMENT | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | A notary public or other officer completing this
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document. | | State of California
San Mateo
County of | | before me, Carolina Samantha Alvarez, Notary Public
(insert name and title of the officer) | | personally appeared Mark Rogers
who proved to me on the basis of saffsfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that helshelthey executed the same in
his/her/their 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. | | CAROLINA SAMANTHA ALVAREZ
WITNESS my hand and official seal.
Notary Public - California
San Francisco County
Commission # 2185039
My Comm. Expires Feb 27, 2021 | | (Seal)
Signature | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Board of Directors of N4 Financial, Inc. ### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of N4 Financial, Inc. as of December 31, 2020, the related statements of operations, changes in shareholders' equity, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of N4 Financial, Inc. as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. # **Basis for Opinion** These financial statements are the responsibility of N4 Financial, Inc.'s management. Our responsibility is to express an opinion on N4 Financial, Inc.'s financial statements 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 N4 Financial, Inc. 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 statements are 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 statements, 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. ### **Supplemental Information** The supplemental information listed in the accompanying table of contents has been subjected to audit procedures performed in conjunction with the audit of N4 Financial, Inc.'s financial statements. The supplemental information is the responsibility of N4 Financial, Inc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information listed in the accompanying table of contents is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as N4 Financial, Inc.'s auditor since 2006. Bloomingdale, IL February 18, 2021 {6}------------------------------------------------ # **STATEMENT OF FINANCIAL CONDITION** | December 31, 2020 | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------| | | | | Assets | | | Cash and cash equivalents
Prepaid expenses | \$
207,078
11 | | Total assets | \$
207,089 | | Liabilities and stockholders' equity | | | Liabilities
Due to Affiliate
Accounts Payable
Other liabilities
Total liabilities | \$
-
300
6,300
6,600 | | Stockholders' equity
Common stock (no par value, 100 shares issued and outstanding)
Paid in capital
Retained earnings
Total stockholders' equity | 100
174,900
25,489
200,489 | | Total liabilities and stockholders' equity | \$
207,089 | {7}------------------------------------------------ ## **STATEMENT OF OPERATIONS** | Year ended December 31, 2020 | | |--------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------| | Income
Placement Fees
Total income | \$
262,500
262,500 | | Expenses | | | Registered Representative Compensation
Professional fees
Regulatory fees
Internet
Rent
Other operating expenses | \$
232,750
9,000
2,914
1,860
3,600
40
- | | Total expenses | 250,164 | | Income (loss) before interest and income taxes | 12,336 | | Interest income | 19 | | | | | Net Income (Loss) | \$
12,355 | {8}------------------------------------------------ # **STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY** | Year ended December 31, 2020 | | | | | |-----------------------------------------|-----------------|--------------------|----------------------|---------------| | | Common
Stock | Paid in
Capital | Retained
Earnings | Total | | Stockholders' equity, beginning of year | \$
100 | \$
174,900 | \$
13,134 | \$
188,134 | | Capital contributions | - | - | - | - | | Capital withdrawals | - | - | - | - | | Net income (loss) | - | - | 12,355 | 12,355 | | Stockholders' equity, end of year | \$
100 | \$
174,900 | \$
25,489 | \$
200,489 | {9}------------------------------------------------ # **STATEMENT OF CASH FLOWS** | Year ended December 31, 2020 | | | |---------------------------------------------------------------------------------------------------|---------|-----------------| | | | | | Cash flows from operating activities
Net Income (Loss) | \$ | 12,355 | | Adjustments to reconcile net income to net cash provided by
(used) by
operating activities: | | | | (Increase) decrease in:
Prepaid expenses
Due to/from Affiliate
Other liabilities | | 220
-
900 | | Net cash provided (used) by operating activities | | 13,475 | | Net change in cash and cash equivalents | 5 | 13,475 | | Cash and cash equivalents, beginning of year | 5 | 193,603 | | Cash and cash equivalents, end of year | 5
\$ | 207,078 | {10}------------------------------------------------ # **N4 Financial, Inc.** # **NOTES TO FINANCIAL STATEMENTS** ### **1. Nature of operations and summary of significant accounting policies** #### *Nature of Operations* N4 Financial, Inc. (the "Company"), a California corporation, is a private placement and introducing broker-dealer, registered with the Financial Industry Regulatory Authority ("FINRA"), and licensed by the Securities and Exchange Commission ("SEC"). The Company primarily derives execution and referral fees from a limited number of institutional clients. During 2020 no execution or referral fees were earned by the Company. #### *Government and other Regulation* The Company's business is subject to significant regulation by governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. #### *Basis of Presentation* The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") as detailed in the Financial Accounting Standards Board's Accounting Standards Codification ("ASC"). #### *Cash Equivalents* The Company considers all demand deposits held in banks and certain highly liquid investments with maturities of 90 days or less, other than those held for sale in the ordinary course of business, to be cash equivalents. #### *Investment Income* Interest is recognized on the accrual basis. #### *Income Taxes* The Company's Parent files a consolidated income tax return in which the Company is included as a fully owned subsidiary. Therefore, the Company is not required to make an income tax provision. As of December 31, 2019, the Company's Parent federal and state tax returns generally remain open for the last three years. #### *Use of Estimates* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Company's management to make estimates and assumptions that affect the amounts disclosed in the financial statements. Actual results could differ from those estimates. {11}------------------------------------------------ # **N4 Financial, Inc.** # **NOTES TO FINANCIAL STATEMENTS** ### **2. Revenue Recognition** In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers: Topic 606, to supersede nearly all existing revenue recognition guidance under GAAP. ASU 2014-09 also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The Company adopted the provisions of this guidance on January 1, 2018 using the modified retrospective approach The Company has performed an assessment of its revenue contracts as well as worked with industry participants on matters of interpretation and application and has not identified any material changes to the timing or amount of its revenue recognition under ASU 2014-09. The Company's accounting policies did not change materially as a result of applying the principles of revenue recognition from ASU 2014-09 and are largely consistent with existing guidance and current practices applied by the Company. Topic 606 did not have an impact on revenue recognition or timing of revenue in 2019. #### **2. Net capital requirements** The Company is subject to the Securities and Exchange Commission's uniform net capital rule (Rule 15c3-1) which requires the Company to maintain a minimum net capital equal to or greater than \$5,000 and a ratio of aggregate indebtedness to net capital not exceeding 15 to 1, both as defined. At December 31, 2020, the Company's net capital was \$200,478 which exceeded the requirement by \$195,478. ### **3. Related party transactions** The Company has an Expense Sharing Agreement with Synthym, Inc., its parent company. During 2020 the shared expenses included in the Statement of Operations were \$9,100. ## **4. Concentration of credit risk** In the normal course of business, the Company maintains its cash balances in financial institutions, which at times may exceed federally insured limits. The Company is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. Management monitors the financial condition if such financial institutions and does not anticipate any losses from these counterparties. #### **5. Subsequent events** These financial statements were approved by management and available for issuance on the date of the Independent Registered Public Accounting Firm Report. Subsequent events have been evaluated through this date. There were no subsequent events requiring disclosures and or adjustments. {12}------------------------------------------------ ### **SUPPLEMENTAL INFORMATION** **December 31, 2020** # **Schedule I Computation of Net Capital under Rule 15c3-1 of the Securities and Exchange Commission** | Net capital: | | |------------------------------------------------------------------------------------------------------------------|---------------| | Total Stockholders' Equity qualified for net capital | \$
200,489 | | Less: Non allowable assets | (11) | | Net capital | 200,478 | | Haircut | - | | Adjusted net capital | 200,478 | | Net minimum capital requirement of 6.67% of aggregate indebtedness
of \$6,600 or \$5,000 whichever is greater | 5,000 | | Excess net capital | \$
195,478 | | Reconciliation with Company's Net Capital Computation
(included in Part II of Form X-17A-5) | | | Net capital as reported in Company's Part II of Form X-17A-5
as of December 31, 2020 | \$
200,478 | | No Reconciling Differences | - | Net capital per above computation \$ 200,478 {13}------------------------------------------------ #### **SUPPLEMENTAL INFORMATION** **For the year ended December 31, 2020** ### **Schedule II Computation of Determination of Reserve Requirements Pursuant to Rule 15c3-3** Not applicable ### **Information for Possession or Control Requirements under Rule 15c3-3** Not applicable ### **Reconciliation between Audited and Unaudited Statement of Financial Condition** There are no reconciling items for the year ended December 31, 2020 {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) # **Report of Independent Registered Public Accounting Firm** To the Board of Directors of N4 Financial, Inc. We have reviewed management's statements, included in the accompanying Exemption Report, in which (1) N4 Financial, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which N4 Financial, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(i) (exemption provisions) and (2) N4 Financial, Inc. stated that N4 Financial, Inc. met the identified exemption provisions throughout the fiscal year ended December 31, 2020 without exception. N4 Financial, Inc.'s management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about N4 Financial, Inc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(i) (exemption provisions) of Rule 15c3-3 under the Securities Exchange Act of 1934. Bloomingdale, IL February 18, 2021 {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) January 25, 2021 Securities & Exchange Commission 100 F Street, NE Washington, DC 20549 # **Re: Exemption Report for SEC Rule 15c3-3 for Fiscal Year 2020** Dear Sir/Madame: For the fiscal year ending December 31, 2020, N4 Financial, Inc. claimed exemption from SEC Rule 15c3-3 as outlined under paragraph (k)(2)(i) of the respective rule. This section states the following: Rule 15c3-3(k)(2)(i) provides an exemption from the SEC's so-called "customer protection rule" for firms that: carry no margin accounts; promptly transmit all customer funds and deliver all securities received in connection with their broker-dealer activities; do not otherwise hold funds or securities for, or owe money or securities to, customers; and effectuate all financial transactions with customers through one or more bank accounts designated as "Special Account for the Exclusive Benefit of Customers" of the broker-dealer. N4 Financial, Inc. met the exemption provided above for the fiscal year ending December 31, 2020. Sincerely, Mark Rogers President & CEO Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.