# INTELLIGENT CROSS LLC X-17A-5 (2022-05-27) — Broker-dealer annual report - Company: INTELLIGENT CROSS LLC - Form: X-17A-5 - Filed: 2022-05-27 - Period: 2022-03-31 - Accession: 0001708826-22-000004 - CIK: 1708826 - File #: 8-69970 - Type: Broker-dealer - Material weakness: No - Auditor: Alvarez & Associates, Inc. Certified Public Accountants - Auditor location: Northridge, CA - Contact: ANNA CROSS - Phone: 6154487851 - Email: anya.cross@intelligentcross.com - Website: intelligentcross.com - Signed by: John Palazzo (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1708826/000170882622000004/1ICsecpublic2022final.pdf --- {0}------------------------------------------------ ![](_page_0_Picture_0.jpeg) ## INTELLIGENT CROSS LLC ## STAMFORD, CONNECTICUT ## FINANCIAL STATEMENTS, FORM X-17A-5, PART III, SUPPLEMENTAL INFORMATION, AND REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM MARCH 31, 2022 {1}------------------------------------------------ ### **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | 0MB APPROVAL | | | |--------------------------|----|--| | 0MB Number: 3235-0123 | | | | Expires: Oct. 31, 2023 | | | | Estimated average burden | | | | hours per response: | 12 | | SEC FILE NUMBER 8-69970 ## **ANNUAL REPORTS FORM X-17 A-5 PART** Ill | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | |----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------|-----------------------------------------------|--| | FILING FOR THE PERIOD BEGINNING | ---------
04/01/21 | | ----------
03/31/22 | | | | MM/DD/VY | AND ENDING | MM/DD/VY | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME oF FIRM: Intelligent Cross LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
!!ii Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | □ Security-based swap dealer | | □ Major security-based swap participant | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | Soundview Plaza 1266 E Main St., Suite 700R | | | | | | | (No. and Street) | | | | | Stamford, | CT | | 06905 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Anna Cross | 615-448-7851 | | anya.cross@intelligentcross.com | | | (Name) | (Area Code -Telephone Number) | | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Alvarez & Associates, Inc. Certified Public Accountants | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 9221 Corbin Avenue, Suite 165 Northridge, | | | CA
91324 | | | (Address) | (City) | | (State)
(Zip Code) | | | 10/16/2018 | | 6517 | | | | r
te of Regi>t"M" with PCAOBl(if applicable) | | | {PCAOB Reglst,atioa N,m bee, if applleable) I | | | | FOR OFFICIAL USE ONLY | | | | | * Claims for exemption from the requirement that the annual reports be covered by the 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-S(e)(l)(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.** {2}------------------------------------------------ #### OATH OR AFFlRMATIO ![](_page_2_Figure_1.jpeg) M.,~ ~1 2 022 \_, i~ (.ry~ 11ndc.orrect. I furtrier swear (or affirm} th;.tl nc.."ill~r tht! company 11or an•; p.1rtner, offic;~, dirl'me (loss) or, if thee is oUies ~mprelu~nsiv., income m the p!"riod(s) praented. ~ statemrnt DI comprehc-n•.iv inc.ome **(as** defined in § 210 1 07 Cit He£Ulation S-X). - •7 (d} Statement or c.r.h flo - .J (cl al mt-nt of **changes** in stocltholdcri' or p.,rtners' or sole proprietor'~ t"QUtty. - 7 (f) Statement of ch ne~ in liabir · :S subordinated to da,rns of creditors. - :J f.i!.) Nott!s. to c.onsolidatceo finand.il stat~mMts.. - :J (h} C-Ompu~lion of nP.t c.apitai urulH 17 CFR240.1xJ-l or 17 CFR 240.18a-l. ;io:; .1pplir.ab!i-. - U (i) Compu a1)0n of tangible net worth l.lftder 17 CfR .M0.18a-2. - '.J m Computation for dl!'tMmination of customer rt I" requirements pum.:.ant to uh1lr.,t A to 1, <.:FR 240.l5c3-3. - :J {Ii:) Computation **for** determin:;iUon of *t-* rity-based swap re-.e r quirl'!ments pu~ant to EJtiibit B 10 11 O **ll** J40..15cl-3 or bhibit A to 17 CFR 240.lSa~. iil'S applicable. - = (H Comput;otion for Oete-rrnination of PAB Refluirl'!ments under Exhibit A lo ; 240. l~Ll-3. - (m) lnfonm1tion rel.tine to po~euion or controf requir~m~nt\$ tor customers und~r 17 CfR 240. 1~3. - C (nl **1nrorm.** tiOn r~ating to possession or t."tinUot requ1 remimts for securilv·b11,-r-d s.w.ap wstomen und~ 17 CfR 240.15c3·3{p}(21 or 17 CFR 240.18a , ~ app Clble. - ,:::J (o) Rc-rontil:atlCIV,, indudfng approprfate cxplJnahans, of the FOCUS RE!port with Lornpuution of net capital or langib~ nf!-t worth under 17 CFR 740.lSt.3-1, 17 CfR 240.18.t- l, *or* 17 CFR *2* 0.1&-2, a~ ap~rc..1lilt', .\nd the res1Eel'\•e rc--quiremcnl) 1md"r 17 CfR 240.l~c:.l-J or 17 CFR .240..18i1-4, as ai,pli~ble, ifmatertal diffeomu.~ ~~~r. or **a** stateme t that no mat~nal d,ff.-renr.e~ exist. - I (p} Sumnury of fiMnoal dat.a tor su!Kidiaries not consolid.fkd m the statement of finaooal c:ond11101\. - ~/al Oath Of, ffirrn.ation in accord.i ce with 17 a ff 240.17a-S., 17 CfR 240.17a· 17, or 1/ CfR 40.188-7. n app.!rahl~. - 7 (rl Compliance report in ·•uxirdan~ with 17 CfR **240.171t'!'>** 0117 CfR 240.18a-7, as appllcab' ... - :J (s) Exemption r~ort in acclJfdanc• with 17 CFR 240.1 la-Sor 17 CfR 240.18a 7, il'> applicable. - **!!I** (ti lndc:p ndent pub.ti.: accountanf5 rf..'POl'l .l~ on an examination of Ill(- :wst .m nt of fin;ma·I conditicm. - '1 (uj Independent public a .countant'i report ba~ on an t1x.amin.ation of e finan · ! rt."flutt or fin.inci.ll stat ments undtr 17 CFR:240.17.,-~ 1 / CFR 240.18:a-7. or 17 CFR **240.17a-l2, as** appficab!e. - **r-: tv) lndependml public .xc.ountant's report bils-cd on an examination of certain ~tateamP.nt:s in the complicance rcporl un.der 1 J** CFR 2 0.17~ 5 or 17 0 R 140.l&a-7, **;as** apptic:ablc. - L i (w) Independent public accountant's repart based on a r~ (lf *tM* emp on report unde< l 7 rJ R 240.Ua-5 or 17 CfR 240.18a-7, as applic.i!Jle. - :J (x}Sup~mental reports on applvint agreed-upon procedu~, in vet:nrdanc.e nth 17 CFR 240,15c.3· le or 1/ CFR 240.l7a-12. as., p ic.abN<. - :1 (v) Report cJ~ribing ,111y material inadcqu.i,~t-!!. found to exist or found to haVf' e,osted since the date or th"" P' vioui audit. or a statem~t that no material inadequ.uit•; t."lC1r.t, und~ 17 CFR 240.17a Ufl). 1~ (z} Other: \_\_\_ \_ - - •• ro request ronfidential *lrc-atment of* certain *porriOlls* o/ thr.<. *filrrig,* stt 17 Cf.Ct 240.17a 5{ ){.?} or ll CFR U0.18a-l(d,i(li, os *ap,rliicabk* {3}------------------------------------------------ ## INTELLIGENT CROSS LLC #### STAMFORD, CONNECTICUT ## FINANCIAL STATEMENTS, FORM X-17A-5, PART III, SUPPLEMENTAL INFORMATION, AND REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM #### MARCH 31, 2022 #### CONTENTS PAGE | FORM X-17A-5. PART JU
1 - | 2 | |-------------------------------------------------------------|---| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
| 3 | | FINANCIAL STATEMENTS | | | Statement of Financial Condition
| 4 | | Notes to Financial Statements


5 - | 8 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To Those Charged with Governance and the Member oflntelligent Cross LLC: ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition oflntelligent Cross LLC (the "Company") as of March 31, 2022, and the related notes ( collectively referred to as the "financial statement"). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of the Company as of March 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 firm 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 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. } ~ ~ k , Alvarez & A ociates Inc. We have served as the Company's auditor since 2020. Northridge, California May 26, 2022 > 9221 Corbin Avenue Suite 165 ~ Northridge, California 91324 **iii** 800.848.0008 **11** ![](_page_4_Picture_11.jpeg) {5}------------------------------------------------ #### INTELLIGENT CROSS LLC ## STATEMENT OF FINANCIAL CONDITION ## MARCH 31, 2022 #### ASSETS | Cash | \$ 5,090,556 | |---------------------------------------|---------------| | Deposits with clearing broker | 250,000 | | Accounts receivable | 3,321,284 | | Prepaid expenses and other assets | 62,170 | | TOTAL ASSETS | \$ 8,724,010 | | LIABfLITTE
AND MEMBER'S EQUITY | | | LIABILITIES | | | Accounts payable | \$
493,440 | | Accrued expenses | 33,389 | | Due to member | 244,083 | | TOT AL LIABILITIES | 770,912 | | MEMBER'S EQUITY | | | Member's equity | 7,953,098 | | TOTAL MEMBER'S EQUITY | 7,953,098 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$ 8,724,010 | See accompanying notes to the financial statements. {6}------------------------------------------------ ## NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS Intelligent Cross LLC (the "Company") is organized in the state of Delaware and is a nonintroducing broker dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FJNRA") and the Securities Investor Protection Corporation ("SIPC"). The Company operates an alternative trading system platform ("ATS") for trading in National Market System ("NMS"). They will provide access to the ATS only to other Broker Dealers who subscribe to the platform. Subscribing Broker Dealers will be able to trade on the platform and provide sponsored access to their respective buy-side clients. The Company commenced operations on January 17, 2018 and 1s a wholly-owned subsidiary ofimperative Execution, LLC (the "Member"/"Parent"). #### NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES ## Basis of Financial Statement Presentation The financial statements are presented on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America ("GAAP"). #### Use of e timate in the preparation of financial statements The preparation of financial statements in conformity with GAAP 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 revenues and expenses during the rep011ing period. Actual results could differ from those estimates. #### Cash and Cash Equivalents The Company maintains cash in a commercial checking account in a high credit quality financial institution. Balances have exceeded federally insured limits of \$250,000. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risk on cash and cash equivalents. As of March 3 1, 2022, the Company has\$ 4,840,556 in excess of federally insured limits. #### Accounts Receivable Receivables arise when the Company has an unconditional right to receive payment under a contract with a subscribing Broker Dealers and are reversed when the cash is received. The receivable balances as of March 31, 2022 were \$3,321,284. The Company carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful {7}------------------------------------------------ #### NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) accounts based on history of past write-offs and collections and current credit conditions. There was no allowance for doubtful accounts as of March 31, 2022. ### Deposits with Clearing Broker On September 4, 2020, the Company executed a clearing agreement with Instinet, LLC ("Instinet"). The Company has agreed to maintain a deposit account with Instinet in the amount of \$250,000 in accordance with the clearing agreement. #### Revenue Recognition The Company recognizes revenue in accordance with ASC-606, Revenue from Contracts with Customers. The standard provides a comprehensive, industry-neutral revenue recogmt10n model intended to increase financial statement comparability across various companies, aiming at recognizing revenue when the entity satisfied a certain performance obligation. In relation to financial broker dealers, trading commission revenue is deemed to be recognized as an ongoing obligation as of the trade date, which is the single performance obligation for both, trade execution and clearing services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligation in the contract, ( c) determine the transaction price, (d) allocate the transaction price to the performance obligation in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. The Company is a non-carrying broker dealer that receives commission income generated from Subscribing Broker Dealers trading using a platform supplied by the Parent. The Company works with the subscribing Broker Dealers to establish the commission rate and ultimately sets the price and is principal in the scope of ASU 2016-08 and records commissions on a gross basis. Fees are transaction based and are recognized at the point in time that the transaction is executed by the Company. Commission revenues and related clearing expenses are recorded on a trade-date basis as securities transactions occur. The trade date is the date the trade transaction is executed and processed by the Company. The Company believes that the performance obligation is satisfied on the trade date because that is when the underlying financial instrument or investor is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company's revenues are disaggregated as reported in the Statement of Operations. {8}------------------------------------------------ ## NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ## Operating Expenses Operating expenses such as professional services fees, regulatory fees and broker-dealer fidelity bond insurance premiums are related to operating activities of the Company. These are expensed in the period to which they relate. ## Taxes The Company is a single member limited liability company that is deemed to be a disregarded entity for federal income tax purposes. The taxable income or loss of the Company is allocated and taxed to its member. The Company accounts for uncertainties in income taxes under the provisions of F ASB ASC 740-10-05, "Accounting for Uncertainty in Income Taxes." In accordance with the rule, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. At March 31, 2022, management has determined that the Company had no material unrecognized tax positions that would require financial statement recognition. This determination will always be subject to ongoing reevaluation as facts and circumstances may require. The Company's 2018 through 2019 tax years are open for examination by the federal and state taxing authorities at the consolidated level. As of March 31, 2022, there were no examinations in process. ## Relevant Accounting Pronouncements The Financial Accounting Standards Board (the "F ASB") has established the Accounting Standards Codification ("Codification" or "ASC") as the authoritative source of generally accepted accounting principles ("GAAP") recognized by the F ASB. The principles embodied in the Codification are to be applied by nongovernmental entities in the preparation of financial statements in accordance with GAAP in the United States. New accounting pronouncements are incorporated into the ASC through the issuance of Accounting Standards Updates ("ASUs"). For the year ending March 31, 2022, various ASUs issued by the F ASB were either newly issued or had effective implementation dates that would require their provisions to be reflected in the financial statements for the year then ended. The Company has either evaluated or is currently evaluating the implications, if any, of each of these pronouncements and the possible impact they may have on the Company's financial statements. In most cases, management has determined that the pronouncement has either limited or no application to the Company and, in all cases, implementation would not have a material impact on the financial statements taken as a whole. {9}------------------------------------------------ #### NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Sub eguent Events The Company has evaluated events and transactions that occurred between March 31, 2022 and May 26, 2022, the date the financial statements were available to be issued, for possible recognition or disclosure in the financial statements. There were no subsequent events that occurred during the period that would require disclosure in this repmt or would be required to be recognized in the financial statements as of March 3 1, 2022. #### NOTE 3 -RELATED PARTY TRANSACTIONS The Company has an Expense Sharing Agreement (ESA) in place with its Parent. Under the terms of the ESA, the Parent provides the Company with human capital, technology, occupancy, communication and data product services, and general operational and infrastructure costs. Costs that are included are allocated to the broker dealer in a fair and reasonable manner. All these expenses are allocated to the Company monthly based on agreed upon percentages, and the Company's total reimbursements for the year amounted to \$4,055,700 for the year ended March 31, 2022. As of March 31, 2022, \$244,083 is included in Due to Member as reflected on the Statement of Financial Condition. Moreover, the Company has made \$ 4,084,406 in member distributions for the year ended March 31, 2022. ## NOTE 4- CONCENTRATIONS OF CREDIT RISK During the year ended March 31, 2022, approximately 17% of the Company's commissions revenue were from two customers. Moreover, the accounts receivable balance was comprised of approximately 25% from one customer as reported on the Statement of Financial Condition as of March 31, 2022. #### NOTE 5 - NET CAPITAL REQUIREMENTS The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-l ), 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. At March 31, 2022, the Company had regulatory net capital of \$6,251,244 which was \$6,199,850 in excess of its required minimum of \$51,394. The Company's ratio of aggregate indebtedness to net capital ratio was approximately 0.12 to 1. #### NOTE 7 - RISK AND UNCERTAINTIES The Company continues to monitor the impact of the COVID-19 ( coronavirus) outbreak closely as new developments and challenges take place. The outbreak of COVID-19 ( coronavirus) did not impact its operations. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.