# ROCKFLEET FINANCIAL SERVICES, INC. X-17A-5 (2023-06-30) — Broker-dealer annual report - Company: ROCKFLEET FINANCIAL SERVICES, INC. - Form: X-17A-5 - Filed: 2023-06-30 - Period: 2023-03-31 - Accession: 0001453721-23-000001 - CIK: 1453721 - File #: 8-68139 - Type: Broker-dealer - Material weakness: No - Auditor: MICHAEL T REMUS CPA - Auditor location: Hamilton Square, NJ - Contact: Catherine Corrigan - Phone: 2122572205 - Email: compliance@rockfleetfinancial.com - Website: rockfleetfinancial.com - Signed by: John R Swift (Managing Director) Original filing: https://www.sec.gov/Archives/edgar/data/1453721/000145372123000001/Rockfleet_3-31-2023__Public.pdf --- {0}------------------------------------------------ UNITED STATES PUBLIC DOCUMENT Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden # ANNUAL REPORTS FORM X-17A-5 PART III | 12
ours per response: | | |--------------------------|--| | SEC FILE NUMBER | | | 8-68139 | | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 4/1/2022 FILING FOR THE PERIOD BEGINNING MM/DD/YY MM/DD/YY 3/31/2023 A. REGISTRANT IDENTIFICATION NAME OF FIRM: Rockfleet Financial Services, Inc. TYPE OF REGISTRANT (check all applicable boxes): @ Broker-dealer □ Check here if respondent is also an OTC derivatives dealer AND ENDING ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 420 Lexington Avenue, Suite 1402 | | (No. and Street) | | | |--------------------------------------------------|---------------------------------------------------------------------------|-----------------|--------------------------------------------| | New York | NY | | 10170 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | John R. Swift | 212-257-2205 | | compliance@rockfleetfinancial.com | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | Michael T. Remus, CPA | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | (Name - if individual, state last, first, and middle name) | | | | | Hamilton Square | NJ | 08690 | | | (City) | (State) | (Zip Code) | | PO Box 2555
(Address)
2/23/2010 | | 3598 | | | (Date of Registration with PCAOB)(if applicable) | | | (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. {1}------------------------------------------------ ### OATH OR AFFIRMATION | John R. Swift
swear (or affirm) that, to the best of my knowledge and belief, the | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of Rockfleet Financial Services, Inc.
as as of | | 3/31
2 023 is true and correct. I further swear (or affirm) that neither the company nor any | | 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. | | | | Signature: | | | | Ittle:
EDYTA BARAN | | NOTARY PUBLIC STATE OF NEW YORK
Managing Director | | PUTNAM
LIC. #01BA6267534 | | Notary Public
COMM. EXP. 08/20/20'L | | 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 in the period(s) presented, a statement of | | comprehensive income (as defined in § 210.1-02 of Regulation S-X). | | J (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. | | (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. | | 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. | | [ (I) 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 | | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 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 certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ Rockfleet Financial Services, Inc. STATEMENT OF FINANCIAL CONDITION as of March 31, 2023 This report is filed as a Public Document in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934. {3}------------------------------------------------ # MICHAEL T. REMUS Certified Public Accountant P.O. Box 2555 Hamilton Square, NJ 08690 Tel: 609-540-1751 Fax: 609-570-5526 # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors Rockfleet Financial Services, Inc. # Opinion on the Financial Statement I have audited the accompanying statement of financial condition of Rockfleet Financial Services, Inc. as of March 31, 2023, and the related notes (collectively referred to as the financial statement). In my opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Rockfleet Financial Services, Inc. as of March 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 Rockfleet Financial Services, Inc.s management. My responsibility is to express an opinion on Rockfleet Financial Services, Inc.s financial statement based on my audit. I am a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and am required to be independent with respect to Rockfleeet Financial Services, 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. I conducted my audit in accordance with the standards of the PCAOB. Those standards require that I 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. My 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. My 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. I believe that my audit provides a reasonable basis for my opinion. Michael T. Remus I have served as Rockfleet Financial Services, Inc.s auditor since 2014. Michael T. Remus, CPA Hamilton Square, New Jersey June 26, 2023 {4}------------------------------------------------ ### STATEMENT OF FINANCIAL CONDITION ### ASSETS | ROCKFLEET FINANCIAL SERVICES, INC. | | |---------------------------------------|-----------------| | STATEMENT OF FINANCIAL CONDITION | | | March 31, 2023 | | | | | | ASSETS | | | | | | Assets | | | Cash | \$
129,664 | | Secured demand note (Note 6) | 900,000 | | Accounts receivable | 5,350 | | Prepaid expense | 6,904 | | Other receivables | 3,520 | | Total Assets | \$
1,045,438 | | | | | | | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | Liabilities | | | Accounts payable and accrued expenses | \$
150 | | Interest payable | 23,016 | | Subordinated liabilities (Note 6) | 1,020,000 | | | | ### LIABILITIES AND STOCKHOLDERS' EQUITY | Liabilities | | |-------------|--| |-------------|--| | LIABILITIES AND STOCKHOLDERS' EQUITY | | |-------------------------------------------------|-----------------| | | | | Liabilities | | | | | | Interest payable | 23,016 | | Subordinated liabilities (Note 6) | 1,020,000 | | Total Liabilities | 1,043,166 | | Commitments and Contingencies (Note 9) | | | Stockholders' Equity | | | Common stock, \$0 no Par Value, 10,000 shares | | | authorized, 5,333 shares issued and outstanding | 2,814,992 | | Retained earnings (deficit) | (2,812,720) | | Total Stockholders' Equity | 2,272 | | Total Liabilities and Stockholders' Equity | \$
1,045,438 | | | | | | | See accompanying notes. {5}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 #### 1 Organization and Nature of Business Rockfleet Financial Services, Inc. (the "Company") is a Delaware corporation conducting business as a securities broker dealer, financial advisor, and New York State registered investment adviser. The Company holds no customer funds or securities. The Company's principal business activity is the sale of securities and financial advisory services. The Company is registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). ### 2 Significant Accounting Policies # (a) Basis of Presentation The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") unless otherwise disclosed. # (b) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts 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. Actual results could differ from those estimates. # ( c) Statement of Cash Flows For purposes of the statement of cash flows the Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months, that are not held for sale in the ordinary course of business. The company has adopted the indirect method of presenting the statement of cash flows in accordance with current authoritative pronouncements. There were no cash equivalents at March 31, 2023. # (d) Accounts Receivable The Company establishes an allowance for uncollectible trade accounts receivable based on managements evaluation of the collectibility of outstanding accounts receivable. Management has evaluated accounts receivable at March 31, 2023 and believes they are all collectible. Accounts receivable are not collateralized. # (e) Computer Equipment Equipment is stated at cost and is depreciated on a straight-line basis over its estimated useful life of 3 years. Maintenance, repairs and renewals that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Gains and losses on disposition of equipment are included in income. {6}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 # (f) Revenue Recognition Revenues include fees for financial advisory services, underwriting activities, placement agency fees, commissions, and gains and losses on secondary market sales. The Company engages in the underwriting of securities for issuers that use the proceeds from the sale of such securities for purposes specified in the issuer's offering document. Pursuant to ASU 2014-19 as amended, revenues arising from the primary offering of securities for the portion of the securities the Company is contracted to purchase are recognized on the trade date. The Company provides financial advisory services. Revenues are earned from fees arising from the rendering of financial advice. The Company recognizes financial advisory fees at a point in time when the related transaction is successfully completed, i.e., closing date, when related to an issuance. For non-transaction-related financial advisory services, the Company recognized financial advisory fees when the client is invoiced and all performance obligations have been substantially completed. The Company defers financial advisory expenses only to the extent they are explicitly reimbursable by the financial advisory clients and records expenses when the related revenue has been recognized. Expenses reimbursed by the Company's clients are recognized as financial advisory revenues; otherwise, financial advisory expenses are recognized as they are incurred. Fees for placement agent services are recorded when earned and are considered earned when the service has been delivered to the customer and all performance obligations have been satisfied. Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur. (g) Income Taxes The Company recognizes and measures its unrecognized tax benefits in accordance with ASC Topic 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 financial reporting period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. Certain transactions of the Company's may be subject to accounting methods for federal and state income tax purposes which differ significantly from the accounting methods used in preparing the financial statements. Accordingly, the net income or loss of the Company and the resulting balances in the shareholders' capital accounts reported for federal and state income tax purposes may differ from the balances reported for those same items in these financial statements. Management has determined that the Company has no uncertain tax positions that would require financial statement recognition at March 31, 2023 and there are no open tax years prior to 2019. This determination will always be subject to ongoing evaluation as facts and circumstances may require. In addition, no income tax related penalties or interest have been accrued for the year ended March 31, 2023. {7}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 # (h) Advertising and Marketing Advertising and marketing costs (if any) are expensed as incurred (i) General and Administrative Expenses General and administrative costs are expensed as incurred. (i) Subsequent Events The Company has evaluated subsequent events occurring after the statement of financial condition date through the date of June 26, 2023 which is the date the financial statements were available to be issued. Based on this evaluation, the Company has determined that no subsequent events have occurred which require disclosure in or adjustment to the financial statements. (k) Fair Value Hierarchy FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: | Level 1 - | Quoted prices (unadjusted) in active markets for identical assets or liabilities | |-----------|----------------------------------------------------------------------------------| | | that the Company has the ability to access at the measurement date. | | Level 2 - | lnputs other than quoted prices included in Level 1 that are observable for the | | | assets or liability either directly or indirectly. | | Level 3 - | Inputs are unobservable for the assets or liability. | The availability of observable inputs can vary from security and is affected by a wide variety of factors, including, for example, the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining the fair value is greatest for instruments categorized in level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. For further discussion of fair value, see "Note 9 Fair Value" {8}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 #### 3 Net Capital Requirements The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), 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 (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At March 31, 2023, the Company's net capital and required net capital were \$441,498 and \$100,000, respectively, resulting in excess net capital of \$341,498. The Company's net capital ratio was .0525 to 1. # 4 To facilitate securities transactions on behalf of its customers, the Company enters into agreements with other broker/dealers ("Clearing Brokers") whereby the Company forwards (introduces) securities transactions to the Clearing Broker/Dealers on a fully disclosed basis. The processing, and if applicable, any financing pertaining to any introduced transactions, are performed by the Clearing Broker/Dealers. The Company may be held responsible for any losses arising when the customers introduced by the Company to a Clearing Broker/Dealer fail to meet their contractual commitments pertaining to the purchase, sale and possible financing of securities transactions. The Company may therefore be exposed to off-balance-sheet risk in the event the customer is unable to fulfill its contracted obligations and it is necessary for the Clearing Broker/Dealer to purchase or sell the securities at a loss. The Company's exposure to risk would consist of the amount of loss realized and any additional expenses incurred pertaining to the transaction or other customer activity. The Company has not entered into any securities transactions with the clearing broker dealer during the year. #### 5 Credit Risk and Concentrations The Company is engaged in various trading and brokerage activities in which the counter-parties primarily include broker dealers, banks, municipalities, other financial institutions and the Company's own customers. In the event the counter-parties do not fulfill their obligations, the Company may be exposed to credit risk. The risk of default depends on the creditworthiness of the counter party or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counter party. The Company maintains its cash balance at two financial institutions. The Federal Deposit Insurance Corporation insures the Company's bank account up to \$250,000. The Company has not experienced any losses on this account and believes it is not subject to any significant credit risk. {9}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 #### 6 Liabilities Subordinated to Claims of General Creditors The Company has entered into separate subordinated loan agreements and secured demand note agreements as detailed below. The subordinated lenders are shareholders of the Company. Subordinated Loans | | | Pursuant to | | |----------------------|------------------|----------------|---------------| | Maturity Date | Principal Amount | Secured Demand | Interest Rate | | | | Note Agreement | | | Due April 27, 2025 | \$ 55,000 | | Prime plus 3% | | Due April 26, 2024 | 65,000 | | Prime plus 3% | | | | | | | Due March 15, 2024 | 500,000 | 500.000 | Prime plus 3% | | | | | | | Due January 20, 2026 | 400,000 | 400,000 | 8% | Appendix D of SEC Rule 15c3-1 requires the prior written approval of FINRA before any repayment of a subordination agreement can be made. The value of the securities collateralizing the \$500,000 Secured Note (SDN) has decreased significantly since entering the SDN agreement in March, 2021. As of March 31, 2023, the per share price of the collateral was \$0.0112. The securities collateralizing the SDN are illiquid and therefore pursuant to Rule 15c3-1(c)(2)(vii) marketplace blockage the securities are subject to a 100% haircut and treated as a non-allowable asset when calculating net capital. In addition, because the Lender has declined to adequately collateralize the SDN no interest has been accrued on this note during the year. Subordinated loans pursuant to secured demand note agreement in the amount of \$400,000 meets the definition of equity subordinations. Subordinated loans are subordinated to the claims of general creditors, have been approved by FINRA and are available in computing adjusted net capital under the SEA Rule 15c3-1. Subordinated borrowings may only be repaid if, after giving effect to such repayment, the Company meets the SEA Rule 1 5c3-1 capital regulations governing the withdrawal of subordinated debt. The value of the securities collateralizing the \$400,000 SDN is approximately\$673,000. The Company has made no principal payments in the year ended March 31, 2023. In addition, to the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements, they may not be repaid. #### Lease Commitments 7 As of March 31, 2023, the Company had no leases with terms longer than twelve months. The Company is not party to any noncancelable lease agreements. The total expenditures for office space for the year ended March 31, 2023 were \$1,207. ### 8 Fair Value Cash and cash equivalents, receivables, accounts payable and other current liabilities are reflected in the financial statements at carrying value which approximates fair value because of the short-term maturity of these instruments. {10}------------------------------------------------ Notes to Financial Statements Year Ended March 31, 2023 #### 9 Commitments and Contingencies Pursuant to Securities and Exchange Commission Rule 15c3-1(e)(2)(2) the Company may not authorize distributions to its stockholders if such distributions cause the Company's net capital to fall below 120% of the Company's minimum net capital requirement. As of March 31, 2023 the Company was not in violation of this requirement. The Company had no lease or equipment rental commitments (except as disclosed in Note 7 above), no underwriting commitments, no contingent liabilities, and had not been named as a defendant in any lawsuit at March 31, 2023 or during the year then ended. #### Income Taxes 10 The Company has net operating loss carry forwards that may be offset against future taxable income. The loss carry forwards at March 31, 2023 total approximately \$910,503 of which \$605,699 were realized in 2017 and prior and will expire on March 31, 2037 and \$304,804 which were realized in 2018 and after, and may be carried forward indefinitely. At March 31, 2023, the Company has a deferred tax asset of approximately \$191,200 relating to its net operating loss carryforward. A valuation allowance in the same amount has been recorded as management believes it is more likely than not that the tax benefits may not be realized. # 11 - Anti-Money Laundering Program The Company is required to have a program to actively prevent and prohibit money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. At March 31, 2023 the Company was in compliance with this program. #### 12 Related Party Transactions During the year ended March 31, 2023, the Company compensated two shareholders with an aggregate of 500 shares of restricted common stock in lieu of cash compensation. The Company recognizes share based compensation expense for stock awards granted in accordance with ASC Topic 718, stock compensation. Fair value is determined at the date of grant and is not remeasured unless its terms are modified such that the fair value immediately after modification exceeds the fair value immediately prior to modification. Management has determined, based on contemporaneous transactions at \$1,000 per share, that the fair value of the shares granted was approximately \$500,000 for the year ended March 31,2023. No shares are expected to be repurchased in the following annual period in connection with this equity compensation. This share based compensation is not reflected in the accompanying financial statements in accordance with ASC Topic 718 and has no commercial value until the shares vest. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.