# FINANTIA USA INC. X-17A-5 (2023-02-24) — Broker-dealer annual report - Company: FINANTIA USA INC. - Form: X-17A-5 - Filed: 2023-02-24 - Period: 2022-12-31 - Accession: 0001593201-23-000003 - CIK: 1000316 - File #: 8-48578 - Type: Broker-dealer - Material weakness: No - Auditor: YSL & Associates LLC - Auditor location: New York, NY - Contact: Shari Rothenberg - Phone: 908-743-1307 - Signed by: Felipe Marques (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1000316/000159320123000003/fin22s2.pdf --- {0}------------------------------------------------ #### **UNITED ST A TES** 0MB APPROVAL **SECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549 ## **ANNUAL REPORTS FORM X-17A-5 PART** III | 0MB Number: 3235-0123 | | |--------------------------|--| | Expires: Oct. 31, 2023 | | | Estimated average burden | | | hours per response: 12 | | SEC FILE NUMER 8- 48578 FACING PAGE Information Required Pursuant to RuJes 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 FILING FOR THE PERIOD BEGINNING O 1/01 /22 AND ENDING 12/31 /22 MM/DDNY MM/DDNY #### **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: \_\_\_ F\_in\_a\_n\_tia\_ U\_S\_A\_ ln\_c\_. \_\_\_\_\_\_\_\_\_\_\_\_ \_ TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer O Security-based swap dealer O Major security-based swap participant D Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ## 1221 Brickell Avenue, Suite 1460 | | (No. and Street) | | |-----------------------------------------------|--------------------------------|----------------------------------| | Miami | FL | 33131 | | (City) | (State) | (Zip Code) | | PERSON TO CONT ACT WITH REGARD TO THIS FILING | | | | Shari Rothenberg | (908) 743-1307 | srothenberg@integrated.so1utions | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | B. ACCOUNT A~T IDENTIFICATION | | INDEPENDENT PUBLIC ACCOUNT ANT whose reports are contained in this filing\* ## YSL & Associates | (Name - if individual, state last, first, and middle name) | | | | | | |------------------------------------------------------------|----------|---------|-------------------------------------------|--|--| | 11 Broadway, Suite 700 | New York | NY | 10004 | | | | (Address) | (City) | (Stale) | (Zip Code) | | | | 6/6/06 | | 2699 | | | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, ifapplicable) | | | #### **FOR OFFICIAL USE ONLY** \* Claims for exemption from the requirement that the annual reports be covered by the reports ofan 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. I 7a-5(eXl)(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 0MB control number.** {1}------------------------------------------------ #### AFFIRMATION I, Filipe Marques , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to Finantia USA Inc. as of 12/31/22 , is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equiva lent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. cco Title STATE OF FLORIDA COUNTY OF ~ ing instrument was acknowledged before me via hys1cal preses:rce r O online notariJ~ons This day f 1 '/l *'.I* • 20 By ~~· ~·;,g..2..L..J;~~~~~..::..J,:.~:.:. 1-~~--- ![](_page_1_Picture_6.jpeg) **JOEL MEN.** Notary Public > State of Florida Comm# **HH1SS874** Expires 7/'20/202S {2}------------------------------------------------ #### **This filing\*\* contains (check aU applicable boxes):** - **CEl** (a) Statement of financial condition. - CEl (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable. - D ( 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 § 2 10.1-02 of Regulation S-X). - D (d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or members' or sole proprietor's equity, as applicable. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to unconsolidated or consolidated financial statements,, as applicable. - D (h) Computation of net capital under 17 CFR 240. l 5c3-l or 17 CFR 240. l 8a- l, as applicable. - **D** (i) Computation of tangible net worth under 17 CFR 240. l 8a-2. - **D** (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240. l 5c3-3. - D (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. l 8a-4, as applicable. - D (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240. I 5c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (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. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240. l 5c3-l, 17 CFR 240. I 8a- l, or 17 CFR 240. l 8a-2, as applicable, and the reserve requirements under 17 CFR 240. I 5c3-3 or 17 CFR 240. I 8a-4, as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - CEJ (q) Oath or affirmation in accordance with 17 CFR 240. l 7a-5, I 7 CFR 240. l 7a-J 2, or 17 CFR 240. l 8a-7, as applicable. - D (r) Compliance report in accordance with 17 CFR 240. l 7a-5 or 17 CFR 240. 18a-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240. l 7a-5 or 17 CFR 240. 18a-7, as applicable. - CEJ ( t) Independent public accountant's report based on an examination of the statement of financial condition. - D ( u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240. l 7a-5, 17 CFR 240.18a-7, or 17 CFR 240. l 7a-I2, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240. l 7a-5 or 17 CFR 240. I 8a-7, as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240. I 7a-5 or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240. l 5c3-le or 17 CFR 240. l 7a-l 2, as applicable. - D (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.l 7a-12(k). D (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.* {3}------------------------------------------------ # **Finantia USA** Inc. Statement of Financial Condition Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2022 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 11 Broadway, Suite 700, New York, NY 10004 Tel: (212) 232-0122 Fax: (646) 218-4682 ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder of Finantia USA Inc. #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Finantia USA Inc. (the "Company") as of December 31 , 2022, 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 the Company as of December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting finn registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company 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 perfonning 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. We have served as Finantia USA Inc. 's auditor since 2022. New York, NY February 23, 2023 {5}------------------------------------------------ ### **Finantia USA Inc. Statement of Financial Condition December 31 , 2022** | Assets | | |-------------------------------------------------------------|--------------| | Cash | \$ 2,456,153 | | Fail to deliver | 3,432,500 | | Due from customer | 191,888 | | Prepaid expenses | 23,541 | | Prepaid income taxes | 768 | | Due from affiliates | 269,267 | | Leasehold improvements, furniture and equipment | | | (net of accwnulated depreciation of\$234,641) | 14,174 | | Operating lease right-of-use assets | 23,296 | | Security deposits | 26,959 | | Deferred tax asset | 8,800 | | Total assets | \$ 6,447,346 | | Liabilities and Stockholdc r's Equity | | | Liabilities: | | | Fail to receive | \$ 3,418,925 | | Due to customer | 205,464 | | Accrued expenses and other liabilities | 53,820 | | Operating lease liabilities | 26,669 | | Total liabilities | 3,704,878 | | Stockholder's Equity: | | | Common stock (\$.01 par value; 1,000 shares authorized, 233 | | | issued and outstanding) | 2 | | Additional paid-in capital | 514,219 | | Retained earnings | 2,228~47 | | Total stockholder's equity | 2,742,468 | | Total liabilities and stockholder's equity | \$ 6,447,346 | | | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ #### **1. Organization and Business** Finantia USA Inc. (the "Company"), incorporated under the laws of the State of Delaware, is a broker-dealer in securities registered with the Securities and Exchange Commission (the " SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a wholly owned subsidiary of Finantia Holdings B.V. (the "Parent"), which is an indirect wholly owned subsidiary of Banco Finantia S.A. (the " Ultimate Parent"). The Company acts as a broker for institutional customers in the purchase and sale of foreign securities. The Company executes and clears all of these foreign trades through two separate affiliates. These trades are settled on a delivery versus payment basis. #### **2. Summary of Significant Accounting Policies** #### **Basis of Presentation** This financial statement is prepared in confonnity with accounting principles generally accepted in the United States of America ("GAAP") which require 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 amounts ofrevenues and expenses during the reported period. Actual results could differ from these estimates. #### **Revenue Recognition** The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The guidance requires the Company to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. #### **Transfer Pricing Revenue:** Pursuant to a Services Agreement between the Company and two affiliates, the Company acts on behalf of those affiliates, providing execution and brokerage services for transactions with its institutional investors primarily in the purchase and sales of foreign securities, in accordance with SEC Rule l5a-6. This represents the only performance obligation which is satisfied over time as the services are provided. The Company and the affiliates agreed to a 15% cost-plus arrangement, which is in agreement with a transfer pricing study obtained by both the Company and its affiliates. The amounts due pursuant to this agreement are received periodically by the Company from the affiliates in the normal course of business. Amounts due from the affiliates at December 3 1, 2022 were \$269,267. #### **Cash** Cash deposits are held at one financial institution and therefore are subject to the credit risk at this fmancial institution. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. {7}------------------------------------------------ #### **2. Summary of Significant Accounting Policies (continued)** #### **Leasehold Improvements, Furniture and Equipment** Leasehold improvements are recorded at cost, net of accumulated amortization, which is calculated on a straight-line basis over the lesser of the economjc useful life of the improvement or the term of the lease. Furniture and equipment are recorded at cost, net of accumulated depreciation, which is calculated on a straight-line basis over estimated useful lives of three to five years. #### **Fair Value of Financial Instruments** Certain financial instruments arc carried at amounts that approximate fair value due to the short-term nature and negligible credit risk. These instruments include cash, short-term receivables, accounts payable, and ocher liabilities. #### **Income Taxes** The Company's earnings are subject to applicable U.S. federal, state and local taxes. The amount of current and deferred taxes payable or refundable is recognized as of the date of the financial statements, utilizing currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized in the financial statements for the changes in deferred tax liabilities or assets between years. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period that includes the enactment date. In the event it is more likely than not that a deferred tax asset will not be realized, a valuation allowance is recorded. Management has determined that no valuation allowance is required. At December 31 , 2022, management has detennined that the Company had no uncertain tax positions that would require financial statement recognjtion. The Company's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the year ended December 3 1, 2022. #### **Leases** The Company recognizes its leases in accordance with ASC Topic 842, Leases ("ASC 842"). The guidance increases transparency and comparability by requiring the recognition ofright-of-use assets and lease liabilities on the statement of financial condition. The Company conducts an analysis of contrac ts, including real estate leases and service contracts to identify embedded leases, to determine the in itial recognition of right-of-use assets ("ROU") and lease liabilities, which required subjective assessment over the determination of the associated discount rates. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rates of the Company's leases are not readily determinable and accordingly, the Company uses its incremental borrowing rate based on the information available at the commencement date for all leases. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. {8}------------------------------------------------ #### **2. Summary of Significant Accounting Policies (continued)** The Company has elected, for all underlying classes of assets, to not recognize right of use assets and lease liabilities for short-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise. The Company recognizes lease costs associated with short-term leases on a straight-line basis over the lease term. The Company's office space leases require it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used **to** determine lease liability and arc recognized as variable costs when incurred. Other information related to leases as of December 3 I, 2022, is as follows: Weighted average remaining operating lease term Weighted average discount rate of operating leases | .33 years | |-----------| | 5.5% | #### **Allowance for Credit Losses** ASC Topic 326, Financial Instruments - Credit Losses ("ASC 326") impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. Under the accounting update, the Company could determine there are no expected credit losses in certain circumstances ( e.g., based on the credit quality of the client). The Company identified fees and other receivables (including, but not limited to, receivables related to securities transactions, and advisory fees) as impacted by the new guidance. The allowance for credit losses is based on the Company's expectation of the collectability of financial instruments, including fees and other receivables utilizing the CECL framework. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. The Company's expectation is that the credit risk associated with fees and other receivables is not significant and accordingly, the Company has not provided an allowance for credit losses at December 31, 2022. #### **3. Customer Transactions** In the normal course of business, the Company effects transactions on behalf of customers on a basis of either delivery or receipt versus payment. If these transactions do not settle due to fai lure to perform by either the customer or the counterparty, the Company may be obligated to discharge the obligation of the nonperforming party and, as a result, may incur a loss if the market value of the securities is different from the contract amounts. The risk of loss to the Company is normally limited to the differences in the market value of the securities compared to their contract amounts. {9}------------------------------------------------ #### **4. ReguJatory Requirements** The Company is subject to Securities and Exchange Commjssion Uniform Net Capital Rule 15c3 l and has elected to compute its net capital reqwrements in accordance with the Alternative Net Capital Method. Under this alternative, net capital, as defined, shall not be less than \$250,000. At December 3 1, 2022, the Company had net capital of approximately \$2,106,000, which exceeded the required net capital by approximately \$1,856,000. The Company carries customer accounts related to their securities transactions but is exempt from SEC Rule l 5c3-3, under the Securities Exchange Act of 1934, pursuant the provisions of paragraph (k)(2)(i) of that rule. #### **5. Leasehold Improvements, Furniture and Equipment** Details of leasehold improvements, furniture and equipment are as follows: | Leasehold Improvements | \$
173,723 | |------------------------------------------------|---------------| | Furniture | 32,629 | | Equipment | 42,463 | | | 248,815 | | Less: accumulated depreciation and amortizafon | (234,641) | | | \$
14,174 | #### **6. Commitments** The Company leases office space under a non-cancellable lease agreement in Florida which expires May 31, 2023. The Company leases space in New York on a month-to-month basis. Maturities of lease liability under the noncancelable operating lease at December 31, 2022 are as follows: | 2023 | \$
26,977 | |-----------------------------------|--------------| | Total undiscounted lease payments | 26,977 | | Less: | | | Imputed interest | (308) | | Total lease liabilities | \$
26,669 | The minimum annual rents are subject to escalation based on increases in real estate tax and certain operating costs incurred by the lessor. The Company also has security deposits of \$26,959 relating to the leases. #### **7. Related Party Transactions** In accordance with the Services Agreement, two affiliates will pay the Company a fee that is calculated at 115% of the Company's costs, as defined by the agreement. At December 3 1, 2022, the Company is due \$140,019 and \$129,248 from the two affiliates under thjs arrangement. The terms of any of these transactions may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. {10}------------------------------------------------ #### **8. Income Taxes** Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31 , 2022, the significant components of the Company's deferred tax assets and liabilities, at their tax effect, are as follows: | Deferred tax assets | | |--------------------------|-------------| | Professional fees | \$ 11,000 | | Rent expense | 700 | | | 11,700 | | Deferred tax liabilities | | | Depreciation | \$
2,900 | | Net deferred tax asset | \$ (8,800) | #### 9. **Subsequent Events** Management of the Company bas evaluated events or transactions that may have occurred since December 31 , 2022 and determined that there are no material events that would require disclosure in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.