# GRAVITAS CAPITAL INTERNATIONAL INC. X-17A-5 (2019-03-13) — Broker-dealer annual report - Company: GRAVITAS CAPITAL INTERNATIONAL INC. - Form: X-17A-5 - Filed: 2019-03-13 - Period: 2018-12-31 - Accession: 0001631661-19-000001 - CIK: 1631661 - File #: 8-69581 - Material weakness: No - Auditor: Lerner & Sipkin CPAs LLP - Auditor location: New Yok, NY - Contact: Robert Carbonaro - Phone: 416 367 0999 - Signed by: Robert Carbonaro (President) Original filing: https://www.sec.gov/Archives/edgar/data/1631661/000163166119000001/gciipubreport18.pdf --- {0}------------------------------------------------ # **GRAVITAS CAPITAL INTERNATIONAL INC.** Statement of Financial Condition December 31, 2018 (With Independent Auditors' Report Thereon Required by Rule 17a-5) {1}------------------------------------------------ **ASSETS** | Cash | \$
26,590 | |-------------------------------------------------------------------------------------|--------------| | Other Assets | 5,500 | | TOTAL ASSETS | \$
32,090 | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | Liabilities | | | Accounts payable and accrued expenses | \$
17,417 | | Total Liabilities | 17,417 | | Equity | | | Capital Stock, without par value, 200 authorized,
1 share issued and outstanding | 1,250 | | Additional paid in capital | 482,405 | | Accumulated deficit | (468,982) | | Total Equity | 14,673 | | TOTAL LIABILITIES AND EQUITY | \$
32,090 | The accompanying notes are an integral part of these audited financial statements. {2}------------------------------------------------ # NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS GRAVITAS CAPITAL INTERNATIONAL INC. ("we", "our" and the "Company") was incorporated on March 15, 2013 in New York State as a subsidiary of 2242257 Ontario Inc. which is the sole stockholder of the company. The Company is dependent upon its Stockholder. The Company is a member of the Financial Industry Regulatory Authority ("FINRA") and conducts a securities business generally limited to private placements of securities. The company commenced operations after receiving FINRA approval on August 6, 2015. The Company changed its name from P.S. Securities (USA) Inc. to Gravitas Capital International Inc. in May of 2018. # NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ## Cash and Cash Equivalents All short-term investments with an original maturity of three months or less are considered to be cash equivalents. ### Revenue Recognition Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"). The new revenue recognition guidance requires that an entity recognize revenue due to depict the transfer of promised goods orservices to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods orservices. The guidance requires an entity 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. The Company applied the modified retrospective method of adoption which resulted in no adjustment to retained earnings as ofJanuary 1, 2018. The new revenue recognition guidance does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. {3}------------------------------------------------ # NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) ### Advisory The Company provides advisory services on mergers and acquisitions. Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. ### Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the Company's 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. #### Concentration of Credit Risk The Company is engaged in various investment and brokerage activities in which counterparties primarily include broker-dealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. ### Income Taxes The Company accounts for income taxes in accordance with the US Generally Accepted Accounting Principles which requires the asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects {4}------------------------------------------------ # NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued) of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will expire before the Company is able to realize their benefits. #### Related Party Transactions The stockholder, 2242257 Ontario Inc., pays office and administrative expenses including accounting, rent, telephone and secretarial fees and allocates a portion of the expense to the Company. The Company is dependent upon the stockholder for continued financial support. ### NOTE 3 - NET CAPITAL REQUIREMENTS As a registered broker-dealer and member of FINRA, the Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-1. This rule requires that the ratio of aggregate indebtedness to net capital may not exceed 15 to 1, and equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At December 31, 2018, the Company's net capital was \$9,173 which was \$4,173 in excess of its required net capital of \$5,000. The Company's debt-equity ratio was 1.8987 to 1. ### NOTE 4 – GOING CONCERN The accompanying statements have been prepared assuming the Company will continue as a going concern. The Company had minimal revenues in 2018 and a loss from operations. This raises substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, the parent company has pledged any required additional support to the Company to enable it to continue as a going concern and maintain required regulatory minimum net capital. {5}------------------------------------------------ ## NOTE 5 - RELATED PARTY TRANSACTIONS The Company has an expense sharing agreement with its stockholder. The stockholder provides administrative and other services to the company. During the fiscal year ended December 31, 2018, the stockholder allocated to the Company \$250 per month for office space and administrative support. #### NOTE 6 - INCOME TAXES For income tax purposes, the company operates as a "C" corporation. ASC 740-10 requires a valuation allowance to be recorded when it is more likely than not that some or all of the deferred tax assets will not be realized. At December 31, 2018, the Company has available a net operating loss carryforward of approximately \$469,000 which will expire in the year 2038. A valuation allowance of \$118,000 was established to offset the deferred tax asset arising from this carryforward. Therefore, no deferred tax assets have been recorded on the accompanying statement of financial condition. ### NOTE 7 - SUBSEQUENT EVENTS The Company has evaluated subsequent events through February 12, 2019, the date that these financial statements were issued. The Company believes that there are no subsequent events requiring further disclosure. #### NOTE 8- SIPC Reconciliation Requirement SEA Rule 17a-5(e)(4) requires a registered broker-dealer to file a supplemental report which includes procedures related to broker-dealers SIPC annual general assessment reconciliation or exclusion from membership forms. In circumstances where the brokerdealer reports \$500,000 or less in gross revenue they are not required to file supplemental SIPC report. The Company is exempt from filing the supplemental report under SEA Rule 17a-5(e)(4) because it is reporting less than \$500,000 in gross revenue. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.