# FIRST ASSET FINANCIAL INC. X-17A-5 (2022-03-31) — Broker-dealer annual report
- Company: FIRST ASSET FINANCIAL INC.
- Form: X-17A-5
- Filed: 2022-03-31
- Period: 2021-12-31
- Accession: 0001347371-22-000002
- CIK: 1347371
- File #: 8-67191
- Type: Broker-dealer
- Material weakness: No
- Auditor: Ohab and Company, PA
- Auditor location: Maitland, FL
- Contact: Philip Ciantro
- Phone: 6462269300
- Email: faf@firstassetfinancial.com
- Website: firstassetfinancial.com
- Signed by: Jim R. Webb (CEO)
Original filing: https://www.sec.gov/Archives/edgar/data/1347371/000134737122000002/fafpublic21.pdf
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| PUBLIC | | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 | OMB APPROVAL
OMB Number: 3235-0123
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| ANNUAL REPORTS | | | | SEC FILE NUMBER | | | |
| FORM X-17A-5 | | | 8-28026 | | | | |
| | | | | | | | |
| Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | FACING PAGE | | | | | |
| AND ENDING 12/31/21
filing for the period beginning 01/01/21 | | | | | | | |
| | | MM/DD/YY | | MM/DD/YY | | | |
| A. REGISTRANT IDENTIFICATION | | | | | | | |
| NAME OF FIRM. First Asset Financial Inc. | | | | | | | |
| TYPE OF REGISTRANT (check all applicable boxes):
■ Broker-dealer
Check here if respondent is also an OTC derivatives dealer | | | | _ Major security-based swap participant | | | |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | |
| 1600 Pennsylvania Ave | | | | | | | |
| | | (No. and Street) | | | | | |
| | McDonough | GA | | 30253 | | | |
| (City) | | (State) | | (Zip Code) | | | |
| PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | |
| Jim R Webb | 770-400-9800 | | | faf@firstassetfinancial.com | | | |
| (Name) | (Email Address)
(Area Code - Telephone Number) | | | | | | |
| | | B. ACCOUNTANT IDENTIFICATION | | | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
OHAB AND COMPANY, PA | | | | | | | |
| | (Name - if individual, state last, first, and middle name) | | | | | | |
| 100 E SYBELIA AVE, SUITE 130 MAITLAND | | | i | 32751 | | | |
| (Address) | | (City) | (State) | (Zip Code) | | | |
| JULY 28, 2004 | | | 18339 | | | | |
| (Date of Registration with PCAOB)(if applicable) | | FOR OFFICIAL USE ONLY | | (PCAOB Registration Number, if applicable) | | | |
| * 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.
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#### OATH OR AFFIRMATION
| epons agertaining to the firm of First Asset Financial Inc. | swear (or affirm) that, to the best of my knowledge and belief, the
as of |
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| 10 127
as that of a customer | 2 021 , is true and correct. I further swear (or affirm) that neither the company nor any
rely of the con or equivalent person, as the case may be, has any proprietary interest in any account classified solely |
| | Signature:
RWar |
| COUI | Title:
CEO |
#### otary Public
1
#### 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).
- [ (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.
- |
- [ {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.
- [] {|} 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) Information 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 capible 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 240.18a-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.
- | |x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.17a-12, 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).
- □ (z) Other:
- \*\* To request confidential treatment of chis filing, see 17 CFR 240.17o-5(e)(3) or 17 CFR 240.18c-7(d)(2), as applicable.
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# **FIRST ASSET FINANCIAL, INC.**
**Financial Statements For the Year Ended December 31, 2021**
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100 E. Sybelia Ave. Suite 130 Maitland, FL 32751
Certified Public Accountants Email: pam(@ohabco.com
Telephone 407-740-7311 Fax 407-740-6441
#### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholder's of First Asset Financial, Inc.
#### Opinion on the Financial Statement
We have audited the accompanying statement of financial condition of First Asset Financial, Inc. as of December 31, 2021, 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 First Asset Financial, Inc. as of December 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
#### Basis for Opinion
This financial statement is the responsibility of First Asset Financial, Inc.'s management. Our responsibility is to express an opinion on First Asset 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 First Asset 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 РСАОВ.
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 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.
Ohab and Company, PA We have served as First Asset Financial, Inc.'s auditor since 2009. Maitland, Florida
March 28, 2022
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Statement of Financial Condition December 31, 2021
#### **ASSETS**
| Cash and cash equivalents
Clearing deposit
Commissions receivable
Prepaid expenses | \$ 118,654.73
10,000
34,479
1,656 |
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| TOTAL ASSETS | \$
164,790 |
| LIABILITIES AND STOCKHOLDER'S EQUITY | |
| LIABILITIES | |
| Accounts payable and accrued expenses | \$
108 |
| Commissions payable | 18,407 |
| Due to related party | 1,001 |
| Federal income tax payable | 14,056 |
| State income tax payable | 2,583 |
| Deferred Revenue | 34,070 |
| TOTAL LIABILITIES | 70,225 |
| Stockholder's Equity | |
| Common stock, \$1 par value, 10,000 shares authorized | |
| issued and outstanding | 10,000 |
| Additional paid in capital | 105,895 |
| Treasury stock | (3,000) |
| Retained earnings (deficit) | (18,330) |
| TOTAL STOCKHOLDER'S EQUITY | 94,565 |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
164,790 |
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## 1. Business and Summary of Significant Accounting Policies
## Business
First Asset Financial, Inc. ("the Company") is a registered broker-dealer with the Securities and Exchange Commission ("SEC"), is a member of Financial Industry Regulatory Authority ("FINRA). The Company was incorporated in June 2005. The Company introduces its customers' business on a fully disclosed basis to a clearing broker, who clears and carries the Company's customer accounts.
The Company underwent a change in ownership in the current fiscal year. In May 2021, American Global Wealth Services, Inc. executed an agreement to purchase 100% of the stock of the Company.
# Basis of Presentation
The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Revenue is recognized when earned, while expenses and losses are recognized when incurred.
## Cash in Bank
The Company maintains its bank accounts in high credit quality institutions. Balances at times may exceed federally insured limits. The company has not experienced any losses in such accounts and believes it is not exposed to any significant risk.
#### Receivable from Clearing Firm and Restricted Cash
The Company has an agreement with a clearing broker to execute and clear, on a fully disclosed basis, customer accounts of the Company. In accordance with this agreement, the Company is required to maintain a deposit in cash or securities. The Company has a deposit with its clearing broker, which is refundable to the Company should it discontinue its arrangement. Amounts receivable from its clearing organization consist of commissions receivable. The receivable is considered fully collectible and no allowance is required.
## Property and Equipment
Furniture and equipment are stated at cost less accumulated depreciation. Depreciation is based on the straight-line method over the estimated useful lives. The estimated useful lives of furniture and equipment are from 5 to 7 years. Expenditures for maintenance and repairs are charged against operations. Additions, improvements, and expenditures that extend the life of the assets are capitalized.
The Company periodically assesses the recoverability of the carrying amounts of long-lived assets. A loss is recognized when expected undiscounted cash flows are less than
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the carrying amount of the asset. The impairment loss is the difference by which future cash flows are less than the carrying amount of the asset. The impairment loss is the difference by which the carrying amount of the asset exceeds its fair value. The Company did not recognize an impairment loss on its long-lived assets for the year ended December 31, 2021.
## Income Taxes
The Company was taxed as an "S" Corporation under the provisions of the Internal Revenue Code and state tax law from Jan to April of 2021 under the previous owner. Accordingly, no provisions for Federal and New York State income taxes are reflected in the accompanying statement of income. Instead, the stockholders are liable for individual income taxes on their respective share of the Company's taxable income. A short year tax return was filed for Jan through April of 2021.
The company, under new ownership, will have a "C" Corporation designation beginning May 2021 going forward. Income taxes are computed based on income for financial reporting purposes. Deferred income taxes are reported for timing differences between items of income or expenses reported in the financial statements and those reported for income tax purposes. The differences relate principally to book income calculated using the accrual method of accounting and tax income calculated using the cash basis.
The Company is included in the consolidated federal income tax return filed by its Parent. Federal income taxes are calculated as if the Company filed a separate federal income tax return. The Company and its subsidiaries file their own state and local tax returns.
The company recognizes and measures its unrecognized tax benefits in accordance with FASB ASC 740, Income Taxes. Under that guidance the Company assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on the facts, circumstances and information available at the end of the period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change.
#### Use of Estimates
The process of preparing financial statements in conformity with US GAAP requires the use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Such estimates primarily relate to transactions in process and events as ofthe date ofthe financialstatements. Accordingly, upon completion, actual results may differ from estimated amounts.
# Related Party Transactions
For the period January 2021 through April 2021, the Company rented its facilities, and some
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of its furniture and equipment from organizations comprised of members of the stockholders' family under an annual agreement. The Company paid \$2,000 in rent to the related parties for the lease term January 1, 2021 through April 30, 2021.
Pursuant to the purchase agreement in May 2021 with American Global Wealth Services Inc., the Company is responsible for the following monthly payments: To the prior owner for rent in the amount of \$500 per month, site and operations expenses in the amount of \$2000 per month, which totaled \$6000 and \$16,000 for the year ending December 31, 2021. The contract also includes payments to the former owner \$5,333 per month which totaled \$42,664 for the year ending December 31, 2021.
The Company has elected not to apply the recognition requirements of Topic 842 relating to its related party office lease and instead has elected to recognize the lease payments as lease costs on a straight-line basis over the lease term.
The provision for income taxes consists of the following:
| Current federal tax expense | \$ 14,056 |
|-----------------------------|-----------|
| Current state tax expense | \$ 2,583 |
| | \$16,639 |
In respect of the currently calculated provision, the Company recognized a net increase of \$16,639 in the liability due to income taxes.
### 2. Revenue from Contracts with Customers
#### Significant Judgements
Revenue from contracts with customers includes commission income and mutual fund and 12b-1 fees. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events.
*Brokerage commissions.* The Company buys and sells securities on behalf of its customers. Each time a customer enters into a buy or sell transaction, the Company charges a commission. Commissions and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counterparty and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership of the securities have been transferred to/from the customer.
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Commissions from the sale of mutual funds and variable annuities and 12b-1's are recognized as revenue at the point in time the associated service is fulfilled which is based on the trade date.
3. Commitments
The Company does not have any commitments or contingencies.
### 4. Financial Instruments with Off-Balance Sheet Risk and Concentrations of Credit Risk
The Company's customer securities activities are transacted on either a cash or margin basis. In margin transactions, the Company's Clearing Broker extends credit to the customer, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customer's account. As a result of guaranteeing customer margin balances carried by the Clearing Broker, the Company may be exposed to off-balance sheet risk in the event margin requirements are not sufficient to fully cover losses the customer may incur. At December 31, 2021, margin accounts guaranteed by the Company were not material.
The Company is also exposed to off-balance sheet risk of loss on transactions during the period from the trade date to the settlement date, which is generally three business days. If the customer fails to satisfy its contractual obligations to the Clearing Broker, the Company may have to purchase or sell financial instruments at prevailing market prices in order to fulfill the customer's obligations. Settlement of these transactions is not expected to have a material effect on the Company's financial position.
The Company seeks to control the risks associated with its customer activities by requiring customers to maintain margin collateral in compliance with various regulatory and the Clearing Broker's guidelines. The Company monitors required margin levels daily and, pursuant to such guidelines, requires customers to deposit additional collateral, or to reduce positions, when necessary.
The Company maintains cash and other deposits with banks and brokers, and, at times, such deposits exceed applicable insurance limits. The Company reduces its exposure to credit risk by maintaining such deposits with high quality financial institutions.
# 5. Net Capital Requirements
The Company is subject to the Securities and Exchange Commission's Uniform Net Capital (Rule15c3-1), which requires the maintenance of minimum net capital at an amount equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness and requires that the ratio of aggregate indebtedness to net capital not to exceed 15 to 1.
At December 31, 2021, the Company had excess net capital of \$77,788 and a net capital ratio of 84.83% to 1.
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# 6. Contingencies and Concentration of Credit Risk
Pursuant to a clearing agreement, the Company introduces all of its securities transactions to a clearing broker on a fully disclosed basis. Therefore, all of the customer's money balances and long and short securities positions are carried on the books of the clearing broker. Under certain conditions, as defined in the clearing broker agreement, the Company has agreed to indemnify the clearing broker for losses, if any, which the clearing broker may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company, and the clearing broker, monitor collateral on the securities transactions introduced by the Company.
The Company is subject to arbitration and litigation in the normal course of business. The Company has no litigation in progress at December 31, 2021.
## 7. COVID-19
In March 2021, the World Health Organization has declared COVID-19 to constitute a "Public Health Emergency of International Concern." This pandemic has disrupted economic markets and the economic impact, duration, and spread of the COVID-19 virus remains uncertain at this time. This may have an effect on the Company's business, but it cannot be estimated at this time.
#### 8. PPP Loan
On April 30, 2020, the Company was granted a loan in the amount of \$25,100 pursuant to the Paycheck Protection Program ("PPP"). The PPP, established as part of the Coronavirus Aid Relief and Economic Security Act (CARES Act), provided loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of qualifying businesses. The Company applied for and has been notified that \$25,100 in eligible expenditures for payroll and other expenses described in the CARES Act has been forgiven. Loan forgiveness is reflected in other income in the accompanying statement of operations. There is no remaining loan balance as December 31, 2021.
# 9. Subsequent Events
Events of the Company subsequent to December 31, 2021 have been evaluated through March 28, 2022 which is the date the financial statements were available to be issued, for the purpose of identifying events that would require recording or disclosures in the financial statements in the year ended December 31, 2021. No subsequent events were identified that require disclosure.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.