# FINALIS SECURITIES LLC X-17A-5 (2022-02-07) — Broker-dealer annual report - Company: FINALIS SECURITIES LLC - Form: X-17A-5 - Filed: 2022-02-07 - Period: 2021-12-31 - Accession: 0001789982-22-000002 - CIK: 1789982 - File #: 8-70425 - Type: Broker-dealer - Material weakness: No - Auditor: Alvarez & Associates, Inc. - Auditor location: Northridge, CA - Contact: Edward M Smith - Phone: 4152467502 - Email: tad.bull@rubiconconsultinggroup.com - Website: rubiconconsultinggroup.com - Signed by: Federico Baradello (President) Original filing: https://www.sec.gov/Archives/edgar/data/1789982/000178998222000002/21pfs.pdf --- {0}------------------------------------------------ # FINALIS SECURITIES LLC STATEMENT OF FINANCIAL CONDITION FOR THE YEAR ENDED DECEMBER 31, 2021 #### PUBLIC DOCUMENT This report is filed in accordance with Rule 17A-5(e) (3) under the Securities Exchange Act of 1934 as a public document. {1}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12 # ANNUAL REPORTS FORM X-17A-5 PART III sec file number 8-70425 | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | FACING PAGE | | | |-------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|------------------------------------------------------------|-----------------|--------------------------------------------| | | | 12/31/2021
MM/DD/YY | | | | filing for the period beginning 01/01/2021
MM/DD/YY | | | | AND ENDING | | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF FIRM: Finalis Securities LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
■ Broker-dealer
□ Check here if respondent is also an OTC derivatives dealer | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 7 Pixley Avenue, #404 | | | | | | | | (No. and Street) | | | | | Corte Madera | CA | | 94925 | | (City) | | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Tad Bull | 917.923.9649 | | | tad.bull@rubiconconsultinggroup.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Alvarez & Associates, Inc | | | | | | 9221 Corbin Avenue, Suite 165 Northridge | | (Name - if individual, state last, first, and middle name) | CA | 91324 | | (Address) | (City) | | (State) | (Zip Code) | | 10/16/2018 | | | 6517 | | | (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 | | FOR OFFICIAL USE ONLY | | | 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. {2}------------------------------------------------ #### OATH OR AFFIRMATION Federico Baradello . \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ financial report pertaining to the firm of Finalis Securities LLC December 31 , 2 021 partner, officer, director, or equivalent person, as the case may proprietary interest in any account classified solely ![](_page_2_Picture_3.jpeg) Amahd Abasi Richburg REGISTRATION NUMBER 7910516 COMMISSION EXPIRES April 30, 2025 | | Amble Alia Killy 02/04/2022 | |--|-----------------------------| | | | | Signature: Federico Carlos Baradello | 02/04/2022 | |--------------------------------------|------------| | Title: | | | President | | Notarized online using audio-video communication Notary Public ### 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 income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - □ (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. - □ (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 240.18a-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 capible net worth under 17 CFR 240.15c3-1, 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. - | - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | - □ (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. - | 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)(2), as applicable. {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To Those Charged with Governance and the Member of Finalis Securities LLC: ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Finalis Securities LLC (the "Company") as of December 31, 2021, 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 December 31, 2021 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. Alvarez & Associates. Inc. We have served as the Company's auditor since 2020. Northridge, California February 1, 2022 > 9221 Corbin Avenue Suite 165 Northridge, California 91324 800.848.0008 www.AAICPAs.com ### Chicago, Dallas, Los Angeles, New York, San Francisco, Seattle {4}------------------------------------------------ ### Finalis Securities LLC STATEMENT OF FINANCIAL CONDITION December 31, 2021 ## ASSETS | Cash | ಕಾ | 10,486,103 | |----------------------------------------|------|------------| | Accounts Receivable | | 185,604 | | Prepaid Expenses and Other Assets | | 61,015 | | TOTAL ASSETS | ಳಿ | 10,732,722 | | LIABILITIES AND MEMBER'S EQUITY | | | | Liabilities: | | | | Accounts Payable | ਵਿੱਚ | 228,935 | | Accrued Expenses and Other Liabilities | | 9,374,153 | | Total Liabilities | | 9,603,088 | | Total Member's Equity | | 1,129,634 | | TOTAL LIABILITIES & MEMBER'S EQUITY | ਦੇਰੇ | 10,732,722 | See accompanying notes to financial statements. Confidential {5}------------------------------------------------ #### 1. Organization and Summary of Significant Accounting Policies #### Description of Business Finalis Securities LLC (the "Company") was formed as a Limited Liability Company on September 10, 2019 in the State of Delaware. The Company is registered with the Securities and Exchange Commission ("SEC") as a fully disclosed securities broker/dealer pursuant to Section 15 (b) of the Securities Exchange Act of 1934. In April 2020, the Company became a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company is subject to various governmental rules and regulations, including the Net Capital Rule set forth in Rule 15c3-1 of the Securities Exchange Act of 1934. The Company is a wholly-owned subsidiary of Finalis, Inc. (the "Parent"). The Company's primary business consists of offering intermediary marketing and placement services as agent, as well as private placements of securities. ### Cash Cash consists of cash in deposit accounts that the Company maintains at one institution, which at times may exceed federally insured limits. Accounts at the institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to \$250,000. The Company has not experienced any losses in such accounts. At December 31, 2021, the Company's cash balance exceeded the FDIC insured limit. #### Basis of Presentation The financial statements of the company have been prepared using accounting principles generally accepted in the United States of America ("U.S. GAAP"). #### Revenue Recognition The Company receives two types of revenue under an advisory contract: non-refundable monthly retainer fees and a transaction success fee. For each contract, the Company assesses whether non-refundable monthly retainer fees are a separate deliverable based on the performance obligations or part of a single deliverable that results in a transaction success fee being earned. In order to make this determination, the Company assesses the services being provided upon engagement as specified in the contract, the ability for the client to consume and benefit from the services prior to a transaction and whether the monthly retainer fees are insignificant in relation to the overall fee the Company would receive upon a completed transaction, among other considerations. If the Company determines that the non-refundable monthly retainer fees are a separate deliverable, the revenue is recognized monthly as services are provided and deferred when the earnings process is not yet completed, per the terms of the contract. If the Company determines that the non-refundable monthly retainer fees and {6}------------------------------------------------ transaction success fee are a single deliverable, the Company defers the revenue until the fee is earned or the contract is otherwise complete. Transaction fees stemming from a qualified transaction are considered variable consideration and accordingly are recognized when related transaction is complete, the amount of the fee is known and collection is reasonably assured. There were no open contracts for the year ended December 31, 2021. During the year ended December 31, 2021, the Company's retainer fees totaled \$2,315,822 and success fees totaled \$46,392,269. The Company provides services to its registered representatives under contractual agreements. The Company records services based on the services performed under the contract, subject to minimum amounts as indicated in the contract. During the year ended December 31, 2021, the Company's registered representative fees totaled \$783,698. #### Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Accordingly, actual amounts may differ from estimated amounts. #### Income Taxes The Company, with the consent of its Member, has elected to be a California Limited Liability Company. For Federal tax purposes, the Company is treated as a disregarded entity. Therefore, in lieu of business income taxes imposed on the Company, its Member is taxed on the Company's taxable income. Accordingly, no provision or liability for Federal income taxes is included in these financial statements. #### Lease Standards The Company does not have any leases that require applying ASC 842. #### 2. Related Party Transactions The Company is party to an expense sharing agreement with the Parent under which the Company is responsible for a portion of indirect costs incurred in the provision of support services. For the year ending December 31, 2021 there were no costs allocated for support services. #### 3. Indemnification The Company enters into contracts that contain a variety of indemnifications for which the maximum exposure is unknown. The Company has no current claims or losses pursuant such contracts. {7}------------------------------------------------ #### 4. 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. At December 31, 2021, the Company had net capital of \$883,015, which was \$242,809 in excess of its required net capital of \$640,206. The Company's net capital ratio was 10.88 to 1. #### 5. Litigation In the normal course of business, the Company may be a party to litigation and regulatory matters. As of December 31, 2021, the Company was not involved in any litigation. #### 6. Contingencies The worldwide outbreak of coronavirus (COVID-19) may lead to an adverse impact on the financial markets and the overall economy. In the event such an impact were to occur and last for a sustained period of time, the operations and financial performance of the Company may be adversely affected. At this point, however, the severity of such an event is highly uncertain and cannot be predicted. #### 7. Income Taxes As discussed in the Summary of Significant Accounting Policies (Note 1), the Company operates as a limited liability company treated as a disregarded entity for tax purposes. As such, the Company is not subject to any business income tax but a limited liability company gross receipts tax, with a minimum franchise tax of \$800. The Company files its tax returns using the accrual method of accounting. #### 8. Subsequent Events The Company has performed an evaluation of subsequent events through the date the financial statements were issued. The evaluation did not result in any subsequent events that required disclosures and/or adjustments. #### 9. Recently Issued Accounting Pronouncements The Financial Accounting Standards Board (the "FASB") has established the Accounting Standards Codification ("Codification" or "ASC") as the authoritative source of generally accepting accounting principles ("GAAP") recognized by the FASB. The principles embodies 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 ("ASU's"). {8}------------------------------------------------ For the year ending December 31, 2021, various ASU's issued by the FASB 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. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.