# FIGURE SECURITIES, INC. X-17A-5 (2025-03-03) — Broker-dealer annual report - Company: FIGURE SECURITIES, INC. - Form: X-17A-5 - Filed: 2025-03-03 - Period: 2024-12-31 - Accession: 0001801474-25-000001 - CIK: 1801474 - File #: 8-70478 - Type: Broker-dealer - Material weakness: No - Auditor: KPMG LLP - Auditor location: NEW YORK, NY - Contact: JANICE PARISE - Phone: 2127514422 - Email: jrives@figuresecurities.com - Website: figuresecurities.com - Signed by: JASON RIVES (CHIEF EXECUTIVE OFFICER) Original filing: https://www.sec.gov/Archives/edgar/data/1801474/000180147425000001/figurepublic2024.pdf --- {0}------------------------------------------------ ## FIGURE SECURITIES, INC. ## STATEMENT OF FINANCIAL CONDITION ## DECEMBER 31, 2024 (With Report of Independent Registered Public Accounting Firm Thereon) {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ## ANNUAL REPORTS FORM X-17A-5 PART III | OMB APPROVAL | | | | |---------------------------|--|--|--| | OMB Number: 3235-0123 | | | | | Expires: Nov. 30, 2026 | | | | | Estimated average burden | | | | | hours per response:
12 | | | | | SEC FILE NUMBER | |-----------------| | 8-70478 | FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 AND ENDING 12/31/2024 FILING FOR THE PERIOD BEGINNING 01/01/2024 MM/DD/YY MM/DD/YY A. REGISTRANT IDENTIFICATION # NAME OF FIRM: FIGURE SECURITIES, INC. TYPE OF REGISTRANT (check all applicable boxes): @ Broker-dealer @ Security-based swap dealer | | Major security-based swap participant Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ## 650 CALIFORNIA STREET, SUITE 2700 | (No. and Street) | | | | | | | | | |---------------------------------------------------------------------------------------|---------|-----------------------------|--|--|--|--|--|--| | CA | 94108 | | | | | | | | | (State) | | (Zip Code) | | | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | | | JASON RIVES
865 385-6776 | | JRIVES@FIGURESECURITIES.COM | | | | | | | | (Area Code - Telephone Number) | | (Email Address) | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
KPMG LLP | | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | | | | | NEW YORK | NY | 10154 | | | | | | | | (City) | (State) | (Zip Code) | | | | | | | | | | | | | | | | | | | | 185 | | | | | | | (Date of Registration with PCAOB)(if applicable) (PCAOB Registration Number, if applicable) FOR OFFICIAL USE ONLY \* Claims for exemption from the requirement that the annual 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-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 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)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ ## FIGURE SECURITIES, INC. CONTENTS | Report of Independent Registered Public Accounting Firm………………………………………….…3 | | |----------------------------------------------------------------------------|--| | Statement of Financial Condition…………………………………………………………….….……4 | | | Notes to the Financial Statement……………………………………………………………….…5-9 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) KPMG LLP Suite 1400 55 Second Street San Francisco, CA 94105 #### **Report of Independent Registered Public Accounting Firm** To the Stockholder and the Board of Directors of Figure Securities, Inc.: #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Figure Securities, Inc. (the Company) as of December 31, 2024, and the related notes (collectively, 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, 2024, in conformity with U.S. generally accepted accounting principles. #### *Basis for Opinion* This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion. ![](_page_4_Picture_9.jpeg) We have served as the Company's auditor since 2023. San Francisco, California February 28, 2025 {5}------------------------------------------------ ## FIGURE SECURITIES, INC. STATEMENT OF FINANCIAL CONDITION (In thousands, unless otherwise denoted) | | As of December 31,
2024 | | |----------------------------------------------------------------------------------|----------------------------|--------------| | Assets | | | | Cash | \$ | 818 | | Prepaid expenses | | 23 | | Other assets | | 5 | | Total assets | \$ | 846 | | Liabilities and stockholder's equity
Liabilities | | | | Due to Parent
Accounts payable
Accrued Expenses | | -
52
1 | | Total liabilities | \$ | 53 | | Stockholder's equity | | | | Common stock, \$.001 par value; 1,000 shares authorized, issued, and outstanding | | - | | Additional paid-in capital | | 8,196 | | Accumulated deficit | | (7,403) | | Total stockholder's equity | | 793 | | Total liabilities and stockholder's equity | \$ | 846 | {6}------------------------------------------------ The accompanying notes are an integral part of this financial statement. ## FIGURE SECURITIES, INC. NOTES TO THE STATEMENT OF FINANCIAL CONDITION FOR THE PERIOD ENDED DECEMBER 31, 2024 #### NOTE 1 – BASIS OF PRESENTATION #### *Organization and Nature of Business* Figure Securities, Inc. (the "Company" or "Figure Securities") is a Delaware corporation with its principal place of business in San Francisco, California. The Company is a wholly-owned subsidiary of Figure Technologies, Inc. ("FTI" or "Parent"), a Delaware corporation through March 17, 2024. A reorganization agreement (the "Agreement") was entered into on March 18, 2024 with various affiliates. Subsequent to the reorganization agreement, Figure Securities is a wholly owned subsidiary of Figure Markets Holdings, Inc. ("FMHI"). Accordingly, the parent ("Parent") of the Company is defined as FMHI subsequent to the reorganization on March 18, 2024, and FTI prior to the reorganization on March 18, 2024. Figure Securities received Securities Exchange Commission ("SEC") approval to become a registered broker dealer on April 5, 2021. As a registered broker dealer, the Company is regulated by the Financial Industry Regulatory Authority ("FINRA"). The Company operates an Alternative Trading System ("ATS") platform, through which there were no transactions during the year ended December 31, 2024. The ATS matches buyers and sellers of digital asset securities native to the Provenance Blockchain. Provenance Blockchain is an open-source ecosystem for developing and deploying blockchain-based decentralized finance (DeFi) apps, is used only as a parallel source of information, and blockchain technology is not used as a source for accounting or reporting purposes. Custody and settlement of the digital asset securities matched on the ATS are facilitated through the buyers and sellers outside of the ATS platform and off the blockchain. The Company has no possession or control obligations under SEC Rule 15c3-3(b) and no reserve deposit obligations under SEC Rule 15c3-3(e) because the Company does not hold customer funds or securities and is a "non-covered" firm pursuant to Footnote 74 to SEC Release 34-70073 and therefore is not subject to the Rule. #### *Liquidity and Going Concern* The accompanying Financial Statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our assessment of our ability to fund future operations is inherently subjective, judgment-based and susceptible to change based on future events. The Company has obtained a commitment letter from the Parent, FMHI, for financial support of the Company in the form of allowing invoices to be paid directly by FMHI on behalf of the Company and periodically forgiving the Company's intercompany payable to FMHI in the form of in-kind capital contributions. Based on our commitment from the Parent, the Company has sufficient liquidity to fund operations for the next twelve months following the date these financial statements are issued. {7}------------------------------------------------ ### NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES ### *FISCAL YEAR* The Company has a fiscal year end of December 31. The financial statement was prepared as of and for the period ending December 31, 2024. #### *BASIS OF ACCOUNTING* The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") as determined by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"). #### *USE OF ESTIMATES* The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that could affect both the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. ### *CASH* Cash consists of unrestricted deposits with federally insured financial institutions. Cash deposits regularly exceed federally insured limits. #### *DUE TO AFFILIATES AND EXPENSES ALLOCATED FROM PARENT* The Company has been party to an expense allocation agreement with its Parent. The agreement requires that certain direct and indirect expenses be allocated to the Company. These include any direct expenses of the Company paid by the Parent and also indirect shared expenses paid by the Parent, including certain employees' payroll, stock-based compensation, benefits, office rent, technology fees, and office expenses. The Parent allocates shared costs to the Company based on time spent by employees on behalf of the Company, headcount, or other basis when considered more appropriate. Beginning in 2024, the Parent changed its cost-sharing arrangement with its subsidiaries including Figure Securities, Inc. resulting in an annual service and management fee charged from the Parent to subsidiaries for technology related support. #### *RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS* In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Specifically, the new guidance requires disclosure, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), and an amount for other segment items by reportable segment, with a description of its composition. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and provide new segment disclosure requirements for entities with a single reportable segment. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of this new standard did not have a material impact to the Company's financial statement disclosures since the Company operates under a single segment. {8}------------------------------------------------ #### NOTE 3 – RELATED PARTIES Figure Securities periodically has a Due to Parent balance due to expenses allocated to the Company from the Parent or paid on the Company's behalf by the Parent. As of December 31, 2024, the Company has \$0 Due to Parent. The operating expenses paid on behalf of the Company by the Parent were accounted for as in-kind capital contributions, which totaled \$1,045 thousand during the year ended December 31, 2024. The entirety of the Compensation and benefits, Occupancy and equipment, and Other operating expense financial statement lines were the result of expense allocations from the Parent. The amount of these allocations from Parent for the year ended December 31, 2024 was \$738 thousand, and \$217 thousand of professional fee expenses and regulatory fees and expenses paid on behalf of the Company by the Parent were recorded within expenses in the Statement of Operations. Management believes the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to, or the benefit received by, the Company during the period presented. #### NOTE 4 – INCOME TAXES The Company is included in the consolidated federal income tax return filed by its Parent. Federal income taxes are calculated as if the Company filed a separate federal income tax return. #### *SIGNIFICANT COMPONENTS OF DEFERRED TAXES* The types of temporary differences that give rise to the Company's deferred tax assets as of December 31, 2024 are as follows: | For the period ended | December 31, 2024 | | |---------------------------|-------------------|---------| | Net operating losses | \$ | 1,164 | | Stock based compensation | | - | | Technology fee expense | | - | | Total deferred tax assets | \$ | 1,164 | | Valuation allowance | | (1,164) | | Net deferred tax assets | \$ | - | The Parent changed its cost sharing arrangement with its subsidiaries including Figure Securities, Inc. in the current year, and completed a reorganization resulting in a newly established stock option plan at the Parent. This resulted in the removal of deferred tax assets related to stock-based compensation and technology fee expense as of December 31, 2024. The Company records valuation to reduce deferred tax assets to the amount that is more likely than not to be realized. In making this assessment, management analyzes future taxable income, reversing temporary differences and ongoing tax planning strategies. The Company maintained a full valuation allowance against net deferred tax assets. The change in valuation allowance during the period ended December 31, 2024 was a decrease of \$43 thousand. Should a change in circumstances lead to a change in judgement about the realizability of deferred tax assets in future years, the Company will adjust related valuation allowances in the period that the change occurs, along with a corresponding increase or change to income. Utilization of the net operating loss carryforwards may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state tax regulations. Under Section 382 of the Code, substantial changes in our ownership and {9}------------------------------------------------ in the ownership of acquired companies may limit the amount of net operating losses that are available to offset taxable income. The annual limitation may result in the expiration of net operating losses and tax credits before utilization. Accordingly, our ability to utilize these carryforwards may be limited as a result of such ownership change. For federal income tax purposes, the Company is treated as a taxable subsidiary. The results of the Company's operations are included in a consolidated tax return under the Parent. All tax years since 2020 are subject to examination by tax authorities. The Parent is currently not under examination by any federal or state jurisdiction. The Company recognizes uncertain tax positions in the financial statements if that position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company does not have any unrecognized tax benefits for the year ended December 31, 2024. As of December 31, 2024, the Company had no accrued interest and penalties related to uncertain tax positions. #### NOTE 5 – REGULATORY REQUIREMENTS Figure Securities, Inc. is registered as a securities broker dealer with the Securities and Exchange Commission ("SEC"). FINRA serves as Figure Securities' primary self-regulatory organization. The Company is subject to the SEC Uniform Net Capital Rule (SEA Rule 15c3-1), which requires the maintenance of a minimum amount of net capital. Under Rule 15c3-1, the Company is required to maintain a minimum net capital, equal to the greater of \$250 thousand or 6 2/3% of its aggregate indebtedness. At December 31, 2024, the Company had net capital of \$765 thousand, which was \$515 thousand in excess of its required net capital of \$250 thousand. The Company's ratio of aggregate indebtedness to net capital was .0693 to 1. The Company has no possession or control obligations under SEC Rule 15c3-3(b) and no reserve deposit obligations under SEC Rule 15c3-3(e) because the Company does not hold customer funds or securities and is a "non-covered" firm pursuant to Footnote 74 to SEC Release 34-70073 and therefore is not subject to the Rule. ## NOTE 6 - COMMITMENTS AND CONTINGENCIES ## *CONTINGENCIES* The Company may become involved in a number of judicial, regulatory and arbitration matters arising in connection with our business. The outcome of matters the Company has been and currently is involved in cannot be determined at this time, and the results cannot be predicted with certainty. There can be no assurance that these matters will not have a material adverse effect on our results of operations in any future period and a significant judgment could have a material adverse impact on our financial condition, results of operations and cash flows. The Company may in the future become involved in additional litigation in the ordinary course of our business, including litigation that could be material to our business. The Company reviews the need for any loss contingency reserves and establishes reserves when, in the opinion of management, it is probable that a matter would result in a liability and the amount of loss, if any, can be reasonably estimated. Management, after consultation with legal counsel, believes that there are no known actions or threats that would result in a material adverse effect on the Company's financial condition, results of operations, or cash flows. {10}------------------------------------------------ ### NOTE 8 – SEGMENTS AND GEOGRAPHICAL INFORMATION The Company is engaged in a single line of business as a broker-dealer, which is currently comprised of its securities business. The Company has identified its Chief Executive Officer as the chief operating decision maker ("CODM"), who currently considers net income (loss) as the primary metric to evaluate the results of the business to manage the Company. Additionally, the CODM uses excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy. The Company's operations constitute a single operating segment and therefore, a single reportable segment, because the CODM manages the business activities using information of the Company as a whole. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. All of the Company's revenue and accounts receivable are derived from domestic sales to customers. ### NOTE 9 - SUBSEQUENT EVENTS The Company has evaluated all subsequent events and transactions that occurred after December 31, 2024, and through February 28, 2025, the date the financial statements were issued. No events or transactions requiring recognition or disclosure in the financial statements have been identified. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.