# TRUMID FINANCIAL LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: TRUMID FINANCIAL LLC - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0001611660-21-000001 - CIK: 1611660 - File #: 8-69500 - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: Stamford, CT - Contact: Lance Barrett - Phone: 2126180300 - Signed by: Daniel Siracuse (Chief Financial Officer & Chief Operating Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1611660/000161166021000001/TMF_Stmt_of_Fin_Cond_2020.pdf --- {0}------------------------------------------------ ## **TRUMID FINANCIAL, LLC** # STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM DECEMBER 31, 2020 *Filed pursuant to Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a Public Document* {1}------------------------------------------------ ## **TRUMID FINANCIAL, LLC** Index | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|----------| | Financial Statement | | | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3 -
6 | {2}------------------------------------------------ {3}------------------------------------------------ ## **TRUMID FINANCIAL, LLC** ## Statement of Financial Condition #### **December 31, 2020** (in thousands) | Assets | | |----------------------------------------------------------------------|--------------| | Current Assets | | | Cash | \$
9,416 | | Receivable from Intermediation
Agent
and Invoiced Clients | 3,254 | | Prepaid Expenses, Other Receivables, and Other Current Assets | 390 | | Total Current Assets | \$
13,060 | | Non-Current Assets | | | Office
Equipment
and Furniture, net | 56 | | Intangible Assets, net | 2,641 | | Goodwill | 6,254 | | Total Non-Current Assets | \$
8,951 | | Total Assets | \$
22,011 | | Liabilities and Member's Equity | | | Liabilities | | | Current Liabilities | | | Accounts Payable, Accrued Expenses,
and Other Current Liabilities | \$
239 | | Total Current Liabilities | \$
239 | | Commitments and Contingencies (Note 8) | | | Member's Equity | | | Member's
Equity | \$
21,772 | | Total Member's
Equity | \$
21,772 | | Total Liabilities and Member's Equity | \$
22,011 | *The accompanying notes are an integral part of this financial statement* {4}------------------------------------------------ ### **1. Nature of Operations and Summary of Significant Accounting Policies** #### *Nature of Operations* Trumid Financial, LLC ("Trumid" or the "Company"), a Delaware limited liability company, was formed on June 4, 2014 and was granted its license as a broker dealer in November 2014. The Company was organized to operate an electronic trading platform for USD-denominated corporate bonds and treasury securities. The Company is a wholly-owned subsidiary of Trumid Holdings, LLC (the "Parent"), which is in the business of increasing enterprise value through its subsidiaries, and intends to continue to capitalize those subsidiaries to ensure continued operations and compliance with capital requirements. The Company is a broker dealer registered with the U.S. Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company operates an Alternative Trading System (ATS) for which all anonymous trades filled on the ATS are executed, settled, and cleared by State Street Global Markets, LLC ("SSGM"). The Company's ATS also directly connects institutional buyers and sellers of corporate bonds through an attributed trading protocol. #### *Basis of Presentation* The accompanying financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). #### *Cash* Cash is maintained at two major global banks which at times may exceed federal insurance limits. Given this concentration, the Company is exposed to certain credit risks in relation to its deposits at these banks. The Company has not experienced and does not expect to experience any nonperformance by either bank. ### *Use of Estimates* The preparation of the Company's financial statement in conformity with GAAP requires the Company to make estimates and assumptions that might affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement. Actual results could differ from those estimates. ### *Goodwill and Intangible Assets* The Company is required to assess goodwill for impairment by comparing the estimated fair value with its carrying value on an annual basis (or more frequently when certain events or circumstances exist). Goodwill is an indefinite life asset and is not amortized. The Company has elected to use December 31 as its annual impairment test date. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill and other indefinite lived assets are not considered impaired. If the estimated fair value is less that the carrying value, further analysis is necessary to determine the amount of the impairment, if any. The Company completed its qualitative annual review of goodwill as of December 31, 2020 and no impairment was identified. {5}------------------------------------------------ ### **1. Nature of Operations and Summary of Significant Accounting Policies (continued)** At December 31, 2020, the Company had finite-life intangible assets of \$2,641 comprised primarily of client relationships related to the acquisition of Electronifie Securities LLC ("Electronifie"). Intangible assets with a finite life are amortized over their estimated useful lives, where the useful life is the period over which the asset is expected to contribute directly or indirectly to the Company's future cash flows. These assets are reviewed for impairment on an interim basis when certain events or circumstances occur or exist. #### *Office Equipment and Furniture* Office equipment and furniture is carried at cost, less accumulated depreciation, amortization, and impairment losses. The Company uses the straight-line method of depreciation with an estimated useful life of 3 years for office equipment and 6 years for furniture. Office Equipment and Furniture is comprised of the following: | Office Equipment
(hardware and software) | \$
117 | |---------------------------------------------|-----------| | Furniture | 44 | | Accumulated Depreciation | (105) | | Total Furniture and Office Equipment, net | \$
56 | #### *Recent Accounting Pronouncements* In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-15, "Intangibles—Goodwill and Other—Internal-Use Software: Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract". The standard requires the capitalization of implementation costs incurred in a cloud computing arrangement to be aligned with the requirements for capitalizing costs incurred to develop or obtain internal-use software. The Company adopted this ASU on January 1, 2020, and the adoption of this guidance did not have a material impact on the Company's Financial Statement. #### **2. Income Taxes** The Company is organized as a Delaware limited liability company and is treated as a disregarded entity for U.S. income tax purposes with no federal, state, or local tax liability. #### **3. Employee Benefit Plan** All participating employees are eligible to participate in the TriNet Select 401(k) Plan. {6}------------------------------------------------ #### **4. Affiliate Transactions** The Company and its Parent have executed a written agreement whereby certain costs are allocated to the Company for occupancy and common operating costs, and cash settled pursuant to the agreement. There was no amount due to the Parent under this agreement as of December 31, 2020. The Company received cash of \$11,250 in the form of capital contributions from its Parent in 2020. #### **5. Receivable from Intermediation Agent and Invoiced Clients** The Company has an arrangement with SSGM, the Company's intermediation agent, whereby SSGM receives a share of the markup the Company earns from transactions on its platform as well as a fixed monthly fee. The balance due from SSGM at December 31, 2020 was \$582. In addition, the Company has arrangements with certain clients where the Company directly bills the client for monthly trade billing on the anonymous and attributed protocols. The balance due from directly billed clients at December 31, 2020 was \$2,672. #### **6. Credit Risk** The Company is exposed to the risk that its intermediation agent and invoiced clients will not perform its obligations, including managing all settlement risks. The Company's agreement with its intermediation agent provides that any losses deemed to be due to an error by the trading platform might be an obligation of the Company. The Company has not experienced any such matters in any material respect. ### **7. Segment Information and Customer Concentration** The Company operates in a single operating segment under ASC 280 and all assets and operations are located in the United States. #### **8. Commitments and Contingencies** In the normal course of business, the Company enters into contracts that may contain a variety of representations and warranties which may provide for general indemnifications. The Company's maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Company that have not yet occurred. However, the Company expects the risk of loss, if any, to be remote. ### **9. Net Capital and Customer Protection Requirements** Pursuant to the Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934 the Company is required to maintain minimum net capital as defined, equal to \$250. As of December 31, 2020, Trumid Financial had net capital of \$9,177 which exceeded its minimum required net capital by \$8,927. The Company is exempt from the provision of Rule 15c3-3 under the Securities Exchange Act of 1934. {7}------------------------------------------------ #### **10. Subsequent Events** The Company has evaluated whether any events or transactions occurred subsequent to the date of the Statement of Financial Condition through February 26, 2021, which is the date the financial statement was available to be issued. There were no subsequent events that required adjustment to or disclosure in the financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.