# LBMZ SECURITIES, INC. X-17A-5 (2024-02-29) — Broker-dealer annual report - Company: LBMZ SECURITIES, INC. - Form: X-17A-5 - Filed: 2024-02-29 - Period: 2023-11-30 - Accession: 0000277453-24-000002 - CIK: 277453 - File #: 8-23266 - Type: Broker-dealer - Material weakness: No - Auditor: Michael Coglianese CPA P.C. - Auditor location: Bloomingdale, IL - Contact: Douglas Colombo - Phone: 13127182573 - Email: dcolombo@zacks.com - Website: zacks.com - Signed by: Douglas Colombo (FINOP) Original filing: https://www.sec.gov/Archives/edgar/data/277453/000027745324000002/Binder5.pdf --- {0}------------------------------------------------ # LBMZ SECURITIES, INC. Chicago, Illinois # FINANCIAL STATEMENTS Including Independent Registered Public Accounting Firm's Report As of and for the Year Ended November 30, 2023 > (Filed as CONFIDENTIAL Information Pursuant to Rule 17a-5(e)(3) Under the Securities Exchange Act of 1934) {1}------------------------------------------------ ## UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 # **ANNUAL REPORTS FORM X-17A-5 PART Ill** | 0MB APPROVAL | |------------------------| | 0MB Number: 3235-0123 | | Expires: Nov. 30, 2026 | | Estimated average | | burden hours per | | | | SEC FILE NUMBER | | 8-23266 | FACING PAGE **Information Required Pursuant to Rules 17a-5, 17a-12, and 1 Sa-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING 1210112022 AND ENDING 11 f 30f2023 | NAME OF FIRM: LBMZ Securities Inc | | | | | |---------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|--| | TYPE OF REGISTRANT (check all applicable boxes):
~ Broker-dealer | Security-based swap dealer
□ Check here if respondent is also an OTC derivatives dealer | Major security-based swap participant | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | 10 South Riverside Plaza, Suite 1600 | | | | | | | (No. and Street) | | | | | Chicago | IL | | 60606 | | | (City) | (State) | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Douglas Colombo | (312) 718-2573 | | doug@colom~nsulting.com | | | (Name) | (Area Code - Telephone Number) | (Email address) | | | | | ACCOUNTANT IDENTIFICATION
B. | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | Michael Coglianese CPA, P.C. | | | | | | (Name - | if individual, state last, first, and middle name) | | | | | 125 E Lake Street, Suite 30 Bloomingdale | | IL | 60108 | | | (Address) | (City) | (State) | (Zip Code) | | | 10/20/2009 | | 3874 | | | | (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 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-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 | | {2}------------------------------------------------ ## **OATH OR AFFIRMATION** I, **Judith Ann Calde\_r \_\_** , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of **LB M Z Securities Inc., as of 11/30/2023** is true and correct. I further swear (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. Notary Public This filing\*\* contains (check all applicable boxes): 0 (a) Statement offinancial condition. □ (b) Notes to consolidated statement of financial condition. 0 (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). 0 (d) Statement of cash flows. 0 (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. 0 (f) Statement of changes in liabilities subordinated to claims of creditors. 0 (g) Notes to consolidated financial statements. 0 (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. 0 (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. D (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 appl icable. □ (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. D (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. 0 (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, or 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. D (p) Summary offinancial data for subsidiaries not consolidated in the statement offinancial condition. 0 (q) Oath or affirmation in accordance with 17 CFR 240. l 7a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. 0 (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. D (t) Independent public accountant's report based on an examination of the statement of financial condition. 0 (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. D (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. 0 (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. 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. D (y) Report describing any material inadequacies found to exist or 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)(3} or 17 CFR 240.18a-7(d)(2), as applicable. {3}------------------------------------------------ ## TABLE OF CONTENTS | Facing Page | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------| | Oath or Affirmation | | | Report of Independent Registered Public Accounting Firm | | | Financial Statements | | | Statement of Financial Condition | 2 | | Statement of Income | 3 | | Statements of Changes in Stockholder's Equity | 4 | | Statement of Cash Flows | 5 | | Statement of Changes in Subordinated Borrowings | 6 | | Notes to Financial Statements | 7 - 11 | | Exemptive Provision Under Rule 15c3-3 | 12 | | Supplemental Information | | | SCHEDULE I - Computation of Net Capital Under Rule 15c3-1 of the Securities
and Exchange Commission | 13-
15 | | SCHEDULE II - Computation for Determination of Reserve Requirements
Under Rule 15c3-3 (Exemption) and Information for Possession or
Control Requirements Under Rule 15c3-3 (Exemption) of the Securities
and Exchange Commission | 16 | | Report of Independent Registered Public Accounting firm on Applying Agreed-Upon
Procedures-Report on Schedule of Assessment
and Payments (Form SIPC-7) | 17 | | SIPC-7 General Assessment Reconciliation | 18-19 | | Report of Independent Registered Public Accounting Firm on Exemption Report | 20 | | Exemption Report for SEC Rule 15c3-3 | 21 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Bloomingdale I Chicago ## **Report of Independent Registered Public Accounting Firm** To the Board of Directors and Stockholders of LBMZ Securities, Inc. #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of LBMZ Securities, Inc. as of November 30, 2023, the related statements of income, changes in stockholder's equity, changes in subordinated borrowings, and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of LBMZ Securities, Inc. as of November 30, 2023, and the results of its operations and its cash flows for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of LBMZ Securities, lnc.'s management. Our responsibility is to express an opinion on LBMZ Securities, lnc.'s financial statements 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 LBMZ Securities, Inc. 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 statements are 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 statements, 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. ## **Supplemental Information** The supplemental information listed in the accompanying table of contents has been subjected to audit procedures performed in conjunction with the audit of LBMZ Securities, lnc.'s financial statements. The supplemental information is the responsibility of LBMZ Securities, lnc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records , as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the supplemental information listed in the accompanying table of contents is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as LBMZ Securities, lnc.'s auditor since 2015. *(flt~* ~1,~~fJA,P.C. Bloomingdale, IL February 27, 2024 {5}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION As of November 30, 2023 | ASSETS | | |---------------------------------------------------------------------------------------------------------------------|---------------------------------------------| | Cash and cash equivalents
Receivable from clearing brokers
Other receivable from broker
Due from affiliate | \$
333,463
530,088
5,000
45,342 | | Other Receivable
Deferred income tax asset
Prepaid Expenses | 1,089
447,161
11,564 | | TOT AL ASSETS | 1,373,707_ | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | LIABILITIES | | | Due to affiliate | 256,605
\$ | | Accounts payable | 75,604 | | Accrued expenses
Total liabilities before accrued interest payable subordinated debt | 29 027
361,236 | | Accrued interest payable subordinated debt | 124.550 | | TOTAL LIABILITIES | 485,786 | | LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS | 1,000,000 | | STOCKHOLDER'S EQUITY | (112,079) | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | 1373707 | {6}------------------------------------------------ #### STATEMENT OF INCOME For the Year Ended November 30, 2023 | REVENUES | | |-----------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------| | Commissions, executions and clearing fee
Interest | 1,126,184
\$
633,636 | | Gain (Loss) on Investment | 12 | | Total Revenues | 1,759,832 | | EXPENSES | | | Professional and regulatory fees
Salaries and bonuses
Consultants
Marketing
Employment expense
IT expense
Other
Total Expenses | 201 ,227
980,229
219,231
57,190
50,234
10,546
102,605
1,621 ,262 | | GAIN BEFORE INCOME TAX BENEFIT | 138,570 | | Income tax expense | 39,496 | | | | | NET Gain | 99,074
\$ | {7}------------------------------------------------ #### STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY For the Year Ended November 30 , 2023 | | Common
Stock | | Paid In
Capital
Deficit | | Total | | |----------------------------|-----------------|-------|-------------------------------|-----------------|---------------|--| | BALANCE, November 30, 2022 | \$ | 1,000 | \$ 1,019,000 | \$ ( 1,223,890) | \$ (211 ,153) | | | Capital contributed | | | | | | | | Net Gain/Loss | | | | 99,074 | 99,074 | | | BALANCE, November 30, 2023 | | 1 000 | \$ 1,019,000 | \$ (1 ,124,816) | (112,079) | | Common stock, no par value; 1,000 shares authorized, issued, and outstanding. {8}------------------------------------------------ #### STATEMENT OF CASH FLOWS For the Year Ended November 30, 2023 | CASH FLOWS FROM OPERA TING ACTIVITIES
Net loss | \$
99,074 | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------| | Adjustments to reconci le net income to net cash used in operating activities | | | Deferred income taxes | 39,496 | | Allowance for depreciation
(Increase) decrease in:
Other receivable from broker
Receivables from clearing brokers
Due from affiliate
Prepaid expenses
Other receivable
Increase (decrease) in:
Due to affiliates
Accounts payable
Accrued expenses
Accrued interest payable subordinated debt | 0
40
(261,105)
(21,615)
(2,155)
(1,006)
164,020
40,214
(14,760)
14,550 | | Net Cash Provided by Operating Activities | 56,753 | | CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Investment in stock
NET CASH PROVIDED BY INVESTING ACTIVITIES
CASH PROVIDED BY FINANCING ACTIVITIES
NET CASH PROVIDED BY FINANCING ACTIVITIES | | | Net Increase in Cash and Cash Equivalents | 56,701 | | CASH AND CASH EQUIVALENTS, Beginning of Year | 276 709 | | CASH AND CASH EQUIVALENTS, END OF YEAR | \$
333,463 | | Supplemental disclosure of cash flow information: | | | Cash paid during the year for interest
Income tax payments | \$0
\$0 | {9}------------------------------------------------ #### STATEMENT OF CHANGES IN SUBORDINATED BORROWINGS For the Year Ended November 30, 2023 Subordinated Debt, Beginning Balance New subordinated borrowing **SUBORDINATED DEBT, Ending Balance** \$1 ,000,000 **\$LOOO.OOO.** {10}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended November 30, 2023 #### **NOTE 1 - Nature of Operations** LBMZ SECURITIES, INC. (the "Company", also known as "ZacksTrade"), a C Corporation, established in 1978 in the state of Illinois, is a fully disclosed, introducing securities broker dealer registered with the Securities and Exchange Commission and is a member of the Financial Industry Regulatory Authority **("FINRA').** The Company derives commission income from retail brokerage operations. Customer accounts are introduced to our clearing broker, Interactive Brokers, LLC on a fully-disclosed basis. #### **NOTE 2 - Summary of Significant Accounting Policies** #### Government and Other Regulation The Company's business is subject to significant regulation by governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. ## Basis of Presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") as detailed in the Financial Accounting Standards Board's Accounting Standards Codification ("ASC"). #### Revenue Recognition All commission and clearance fee revenue is recognized in the month in which the transactions associated with the commissions are completed (settlement date). GAAP requires revenue to be recognized in the month in which the transactions associated with the commissions are earned (trade date). Generally, there is no material difference between settlement date and trade date in the recognition of this revenue. The Company recognizes interest income from its customers at Interactive Brokers, LLC. Interest income is accrued, based on the month ending balance in the customers' accounts, and is paid to the Company in the following month. #### Cash and Equivalents The Company defines cash and equivalents as highly liquid, short term investments with a maturity at the date of acquisition of three months or less. {11}------------------------------------------------ #### NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended November 30, 2023 #### *Income Taxes* The Company is subject to the accounting standard for uncertainty in income taxes. The tax effects from an uncertain tax position can be recognized in the financial statements, only if the position is more likely than not to be sustained on audit, based on the technical merits of the position. The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized, upon ultimate settlement with the relevant tax authority. When applicable, interest and penalties on uncertain tax positions are calculated based on the guidance from the relevant tax authority and included in income tax expense. The Company did not have any uncertain tax positions as of November 30, 2023 Income tax returns filed or to be filed for the years ended November 30, 2020 through 2023 remain open and are subject to review by applicable tax authorities. #### *Deferred Income Taxes* Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Deferred taxes consist primarily of temporary differences relating to the recognition of certain expenses in different periods for book and tax purposes. Management believe that it is more likely than not that the benefit from this net operating loss carry forward will not be realized in the near team. Consequently, a valuation allowance of \$150,000, was applied against the deferred tax asset related to these net operating loses carryforward. #### *Other Receivable from broker* Represents cash held in a brokerage account that is not being traded. #### *Fair Value of Financial Instruments* The Company's short-term financial instruments consist of the following: cash, receivables from clearing broker, investment in stock available for sale, accounts payable and accrued expenses. The carrying values of these short-term financial instruments approximate their estimated fair values based on the instruments short-term nature. For the fiscal year Ended November 30, 2023, there have been no changes in the application of valuation methods applied to similar assets and liabilities. ## *Use of Estimates* The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reporting period. Actual results could differ from those estimates. #### *Subsequent Events* The Company has evaluated subsequent events occurring through the date of the Independent Registered Public Accounting Firm report The Company feels that no material events have occurred through that date would require recording or disclosure in the Company's financial statements. {12}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended November 30, 2023 # **NOTE 3** - **Related Party\_ ... T\_ra\_n\_s\_a\_ct,\_io\_n\_s \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_** The Company uses the payroll services of its affiliate, Zacks Investment Research, Inc. ("ZIR"), to process its payroll. ZIR funds the payroll and then charges the Company for its employees' share. ZIR, at times, will also pay for other services provided to the Company, such as professional fees, health insurance, shipping, postage, and the in-house services of ZIR employees. These expenses are then charged to the Company. The Company also receives office space and related services from ZIR at no cost. Total charges incurred with ZIR during the Year Ended November 30, 2023 are as follows: | Payroll | \$
388,794 | |-----------------------------------|---------------| | IT expense | 22,136 | | Professional and outside services | 18,857 | | Fees and subscriptions | 5,533 | | Employment | 7,109 | | Marketing | 38,023 | | Other expenses | 3,568 | | Total | \$
484,020 | As of November 30, 2022, \$92,585 of these charges were unpaid and accrued and carried forward to November 30, 2023 as follows: | Balance, November 30, 2022 | \$ 92,585 | |-----------------------------------|---------------| | Charges | 484,020 | | Payments and credits to affiliate | (320,000) | | Balance, November 30, 2023 | \$
256,605 | The Company pays registration and other fees on behalf of employees of its affiliate, Zacks Investment Management, Inc. ("ZIM") who are also employees of the Company. These expenses are then charged to ZIM. Total fees incurred by the Company, on behalf of ZI M, during the year ended November 30, 2023 are \$144,346. Total charges incurred with ZIM during the year Ended November 30, 2023 are as follows: | Registration Costs | \$59,168 | |--------------------|-----------| | Consulting Fees | \$57,069 | | Email Archive | \$18,760 | | Other | \$ 9,349 | | Total | \$144,346 | As of November 30, 2022, \$23,726 of these charges were unpaid and accrued and carried forward to November 30, 2023 as follows: | Balance, November 30, 2022 | \$23,726 | |----------------------------------|-------------| | Charges | 144,346 | | Payment and credits to affiliate | . (122,731) | | Balance, November 30, 2023 | \$ 45,341 | | | | {13}------------------------------------------------ ## NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended November 30, 2023 ## **NOTE 4 - Income Taxes** Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The deferred tax asset as of November 30, 2023, which consists entirely of a deferred income tax asset arising from the recognition of certain expenses in different periods for financial reporting and income tax reporting purposes, is as follows: | Deferred: | | |---------------------------------|-----------| | Federal | \$397,258 | | State | 49,904 | | Total deferred income tax asset | \$447,161 | ## **NOTE 5- Liabilities Subordinated to Claims of General Creditors** Liabi lities subordinated to claims of general creditors are payable to the stockholder, bearing interest of 1.2% and 1.3% per annum, respectively, and mature on June 24, 2025, \$500,000 and March 1, 2027, \$500,000. The subordinated borrowings are covered by agreements approved by FINRA and are thus available in computing net capital under the Securities and Exchange Commission's Uniform Net Capital Rule (Rule 15c3-1 ). To the extent that such borrowings are required for the Company's continued compliance with minimum net capital requirements , they may not be repaid. ## **NOTE 6 - Concentrations of Credit Risk** The Company maintains cash balances in one financial institution located in Illinois, which at times, may exceed federally insured limits. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal deposit Insurance Corporation ( FDIC ) up to \$250,000. On November 30, 2023, the Company did not have any cash balances in excess of the FDIC insured limits. Deposits with clearing organizations and all securities are uninsured. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. The Company is engaged in various trading 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 at risk, which 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. {14}------------------------------------------------ NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended November 30, 2023 ## **NOTE 7 - Net Capital Requirements** The Company is subject to 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, not exceed 15 to 1. Rule 15c3-1 also provides that equ ity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. On November 30, 2023, the Company had net capital of \$381,647, which was \$331,647 in excess of its required net capital of \$50,000. The Company's ratio of aggregate indebtedness to net capital was.95 to 1. Below is the reconciliation between the net capital calculated above and the net capital computed and reported in the Company's November 30, 2023 FOCUS filing: | | Financial Statements | Per FOCUS Filing | |--------------------------|----------------------|------------------| | Total net capital | \$ 381,647 | \$
381,647 | | Required net capital | 50,000 | 50,000 | | Total excess net capital | \$331,647 . | \$-----3aj 647 | {15}------------------------------------------------ ## EXEMPTION PROVISION UNDER RULE 15c3-3 As of November 30, 2023 The computation for determination of the reserve requirement under Rule 15c3-3 and the information relating to the possession or control requirements under Rule 15c3-3 are not applicable to the Company as the Company qualifies for exemption under Rule 15c3-3(k)(2)(ii). {16}------------------------------------------------ ## SCHEDULE I- COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION As of November 30, 2023 ## Broker or Dealer: **LBMZ SECURITIES, INC.** | 1. Total ownership equity from Statement of Financial Condition | \$ | (112,079){3480} | |----------------------------------------------------------------------------------------------------|----|--------------------------| | 2. Deduct ownership equity not allowable for Net Capital | - | ------------------{3490} | | 3. Total ownership equity qualified for Net Capital | | (112,079) {3500} | | 4. Add: | | | | A. Liabilities subordinated to claims of general creditors allowable in computation of net capital | | 1.000.000 {3520} | | B. other (deductions) or allowable credits (list) | | _____
-_{3525} | | 5. Total capital and allowable subordinated liabilities | | 887,921 {3530} | | 6. Deductions and/or charges: | | | | A. Total nonallowable assets from Statement of | | | | s
Financial Condition (Notes Band C)*
505,156 {3540} | | | | ____
B. Secured demand note deficiency
- {3590} | | | | C. Commodity futures contracts and spot commodities | | | | proprietary capital charges
- {3600} | | | | D. other deductions and/or charges
- {361 O} | | (505, 156} {3620} | | 7. other additions and/or allowable credits (list) | | - {3630} | | 8. Net capital before haircuts on securities positions | | 382,765 {3640} | | 9. Haircuts on securities (computed, where applicable, pursuant to 15c3-1 (f)) | | | | A. Contractual securities commitments
- {3660} | | | | ____
B. Subordinated securities borrowings
- {3670} | | | | C. Trading and investment securities: | | | | 1. Exempted securities
- {3735} | | | | 2. Debt securities
- {3733} | | | | 3. Options
- {3730} | | | | 1,118 | | | | 4. other securities
{3734} | | | | D. Undue concentration
- {3650} | | | | E. other (list)
- {3736} | | (1 ,118) {3740} | | 10. Net Capital | \$ | 381 ,647 {3750} | | Non-allowable assets include: | | | | s
Due from affiliates
45,342
1,089
Other Asset | | | | Deferred Income tax asset
447,161 | | | | Prepaid Expenses
11 566 | | | | s
Total non-allowable assets
505,156 | | | {17}------------------------------------------------ ## SCHEDULE I-COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION As of November 30, 2023 #### Broker or Dealer: **LBMZ SECURITIES, INC.** #### **Part A** | 11 . Minimum net capital required (6 2/3% of line 18) | | | =\$_ | __
_,24 ,082 {3756} | |--------------------------------------------------------------------------------------------------|----------------------------------|----------|------|------------------------| | 12. Minimum dollar net capital requirement of reporting broker or dealer and minimum net capital | | | | | | requirement of subsidiary computed in accordance with Note (A) | | | ____ | 5=0"'-0=0=0 {3758} | | 13. Net capital requirement (greater of line 11 or 12) | | | --- | 50, 000 {3760} | | 14. Excess net capital (line 10 less line 13) | | | ___ | 331.,647{3770} | | 15. Excess net capital at 1000% (line 10 less 10% of line 18) | | | ___ | 321,,647{3780} | | COMPUTATION OF AGGREGATE INDEBTEDNESS | | | | | | 16. Total A.I. Liabilities from Statement of Financial Condition | | | | 361,236 {3790} | | 17. Add: | | | | | | A. Drafts for immediate credit | _____
=\$ | - {3800} | | | | B. Market value of securities borrowed for which no equivalent value | | | | | | is paid or credited | -
--------------------{381 O} | | | | | C. other unrecorded amounts (list) | _____ | - {3820} | | _____
- {3830} | | 18. Total aggregate indebtedness | | | \$ | 361,236{3840} | | 19. Percentage of aggregate indebtedness to net capital (line 18 / line 10) | | | | 94.65%{3850} | | 20. Percentage of debt to debt-equity total computed in accordance with Rule 15c3-1 (d) | | | | 56.31 % {3860} | #### **NOTES:** (A) The minimum net capital requirement should be computed by adding the minimum dollar net capital requirement of the reporting broker-dealer and, for each subsidiary to be consolidated, the greater of: 1. Minimum dollar net capital requirement, or - 2. 6-2/3% of aggregate indebtedness or 2% of aggregate debits if alternative methods used. - (B) Do not deduct the value of securities borrowed under subordination agreements or secured demand notes covered by subordination agreements not in satisfactory form and the market values of memberships in exchanges contributed for use of Company (contra to item 17 40) and partners' securities which were included in non allowable assets. (C) For reports filed pursuant to paragraph (d) of Rule 17a-5, respondent should provide a list of material nonallowable assets. (D) There are no material differences between the amount reported herein and the Form X-17-A-5 Part I IA Filing. (E) There are no material differences between the Audited and Unaudited Statement of Financial Condition.: {18}------------------------------------------------ ## SCHEDULE I - COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION As of November 30, 2023 Broker or Dealer: **LBMZ SECURITIES, INC.** #### **EXEMPTIVE PROVISIONS UNDER RULE 15c3-3** 26. Identify below the section upon which an exemptive provision from Rule 15c3-1 is claimed: A. (k)(1 ) - \$2,500 capital as per Rule 15c3-1 B. (k)(2)(i) - "Special Account for the Exclusive Benefit of Customers" maintained - -------------------- { 4560} | C. (k)(2)(ii) -All customer transactions cleared through another broker-dealer on a fully disclosed basis | ___ | :.x _____ {4570} | |-----------------------------------------------------------------------------------------------------------|-----|------------------| | Name of Clearing Firm(s): INTERACTIVE BROKERS. LLC | | | D. (k)(3) - Exempted by order of the Commission (include copy of letter) \_\_\_\_\_ {4580} \_\_\_\_\_ {4550} {19}------------------------------------------------ SCHEDULE II - COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15c3-3 (EXEMPTION) AND INFORMATION FOR POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 (EXEMPTION) OF THE SECURITIES AND EXCHANGE COMMISSION As of November 30, 2023 **Broker or Dealer:** LBMZ SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER RULE 15c3-3 LBMZ SECURITIES, INC. is exempt from Rule 15c3-3 under the provision of Rule 15c3-3(k)(2)(ii) INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 LBMZ SECURITIES, INC. is exempt from Rule 15c3-3 under the provision of Rule 15c3-3(k)(2)(ii) {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) Bloomingdale I Chicago ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES** Board of Directors and Stockholders of LBMZ Securities, Inc. We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation (SIPC) Series 600 Rules, which are enumerated below and were agreed to by LBMZ Securities, Inc. and the SIPC, solely to assist you and SIPC in evaluating LBMZ Securities, lnc.'s compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the fiscal year ended November 30, 2023. LBMZ Securities, lnc.'s management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed, and our findings are as follows: 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no material differences; 2) Compared the Total Revenue amount reported on the Annual Audited Report Form X-17A-5 Part Ill for the year ended November 30, 2023 with the Total Revenue amount reported in Form SIPC-7 for the year ended November 30, 2023, noting no material differences; 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no material differences; 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments noting no material differences. We were not engaged to, and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on LBMZ Securities, lnc.'s compliance with the applicable instructions of the Form SIPC-7 for the fiscal year ended November 30, 2023. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of LBMZ Securities, Inc. and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. Bloomingdale, IL February 27, 2024 {21}------------------------------------------------ ## **GENERAL ASSESSMENT FORM** For the fiscal year ended 11/30/2023 | | Determination of "SIPC NET Operating Revenues" and General Assessment for:
MEMBER NAME
SEC No.
LBMZ SECURITIES INC
8-23266 | | |---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------| | | 12/1/2022
and ending
11/30/2023
For the fiscal period beginning | | | 1 | Total Revenue (FOCUS Report-
Statement of Income (Loss)-
Code 4030) | \$ 1,125,272.00 | | 2 | Additions: | | | | a Total revenues from the securities business of subsidiaries (except foreign
subsidiaries) and predecessors not included above. | | | | b Net loss from principal transactions in securities in trading accounts. | | | | c Net loss from principal transactions in commodities in trading accounts. | | | | d Interest and dividend expense deducted in determining item 1. | | | | e Net loss from management of or participation in the underwriting or
distribution of securities. | | | | f Expenses other than advertising, printing, registration fees and legal fees
deducted in determining net profit management of or participation in
underwriting or distribution of securities. | | | | g Net loss from securities in investment accounts. | | | | h Add lines 2a through 2g. This is your total additions. | \$ 0.00 | | 3 | Add lines 1 and 2h | \$ 1,125,272.00 | | 4 | Deductions: | | | | a Revenues from the distribution of shares of a registered open end investment
company or unit investment trust, from the sale of variable annuities, from the
business of insurance, from investment advisory services rendered to
registered investment companies or insurance company separate accounts
and from transactions in security futures products. | | | | b Revenues from commodity transactions. | | | | c Commissions, floor brokerage and clearance paid to other SIPC members
in connection with securities transactions. | \$6,466.00 | | | d Reimbursements for postage in connection with proxy solicitations. | | | | e Net gain from securities in investment accounts. | \$ 12.00 | | | f 100% commissions and markups earned from transactions in (I) certificates
of deposit and (ii) Treasury bills, bankers acceptances or commercial paper
that mature nine months or less from issuance date. | | | | g Direct expenses of printing, advertising, and legal fees incurred in connection
with other revenue related to the securities business (revenue defined by
Section 16(9)(L) of the Act). | | | | h Other revenue not related either directly or indirectly to the securities business.
Deductions in excess of \$100,000 require documentation | | | 5 | a Total interest and dividend expense (FOCUS Report - Statement
of Income (Loss)- Code 4075 plus line 2d above) but
not in excess of total interest and dividend income | | | | b 40% of margin interest earned on customers securities accounts
(40% of FOCUS Report- Statement of Income (Loss)-
Code 3960)
\$ 253,454.00 | | | | c Enter the greater of line Sa or Sb | \$ 253,454.00 | | 6 | Add lines 4a through 4h and Sc. This is your total deductions. | \$ 259,932.00 | {22}------------------------------------------------ | SIPC-7
37 REV 0722 | SECURITIES INVESTOR PROTECTION CORPORATION | | SIPC-7
37 REV 0722 | |-----------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|-----------------------| | | GENERAL ASSESSMENT FORM | | | | | For the fiscal year ended
11/30/2023 | | | | 7 | Subtract line 6 from line 3. This is your SIPC Net Operating Revenues. | | \$ 865,340.00 | | 8 | Multiply line 7 by .0015. This is your General Assessment. | | \$1 ,298.00 | | 9 | Current overpaymenUcredit balance, if any | | \$ 752.00 | | 10 | General assessment from last filed 2023 SIPC-6 or 6A | \$1 ,039.00 | | | 11 | \$ 752.00
a Overpayment(s) applied on all 2023 SIPC-6 and 6A(s)
\$ 0.00
b Any other overpayments applied
\$ 287.00
c All payments applied for 2023 SIPC-6 and 6A(s)
d Add lines 11a through 11c | \$1 ,039.00 | | | 12 | LESSER of line 10 or 11d. | | \$1 ,039.00 | | | 13 a Amount from line 8
b Amount from line 9
c Amount from line 12
d Subtract lines 13b and 13c from 13a. This is your assessment balance due. | \$1 ,298.00
\$ 752.00
\$1 ,039.00 | (\$ 493.00) | | 14 | Interest (see instructions) for
16
days late at 20% per annum | | \$ 0.00 | | 15 | IIAmount you owe SIPC. Add lines 13d and 14. | | \$ 0.0011 | | 16 | OverpaymenUcredit carried forward (if applicable) | | (\$ 493.00) | | SEC No.
8-23266 | Designated Examining Authority
FYE
DEA: FINRA
2023
MEMBER NAME
LBMZ SECURITIES INC
MAILING ADDRESS
10 S RIVERSIDE PLAZA STE 1600
CHICAGO, IL 60606 | Month
Nov | | Subsidiaries (S) and predecessors (P) included in the form (give name and SEC number) [Z] By checking this box, you certify that you have the authority of the SIPC member to sign this form; that all information in this form is true and complete; and that on behalf of the SIPC member, you are authorized, and do hereby consent, to the storage and handling by SIPC of the data in accordance with SI PC's Privacy Policy | LBMZ SECURITIES INC | Douglas Colombo | |-----------------------|------------------------| | (Name of SIPC Member) | (Authorized Signatory) | | 2/14/2024 | dcolombo@zacks.com | | (Date) | (e-mail address) | Completion of the "Authorized Signatory" line will be deemed a signature. **This form and the assessment payment are due 60 days after the end of the fiscal year.** {23}------------------------------------------------ ![](_page_23_Picture_0.jpeg) Bloomingdale I Chicago ## **Report of Independent Registered Public Accounting Firm** To the Board of Directors and Stockholders of LBMZ Securities , Inc. We have reviewed management's statements , included in the accompanying Exemption Report of Brokers and Dealers ("Exemption Report") pursuant to SEC Rule 1 ?a-5, in which (1) LBMZ Securities, Inc. claimed an exemption from§ 240.15c3-3 under the provisions of§ 240.15c3-3 (k)(2)(ii) and (2) LBMZ Securities, Inc. state:! that LBMZ Securities, Inc. met the identified exemption provisions for the period ending November 30, 2023. LBMZ Securities , lnc.'s management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and accordingly, included inquiries and other required procedures to obtain evidence about LBMZ Securities, lnc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated , in all material respects , based on the provisions set forth in paragraph (k)(2)(ii) (exemption provision) of Rule 15c3-3 under the Securities Exchange Act of 1934. Bloomingdale, IL February 27, 2024 {24}------------------------------------------------ # **LBMZ Securities, Inc.** LBMZ Securities Inc's Exemption Report LBMZ Securities, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § 240.17a-5(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: ( 1) The Company claimed an exemption from 1 7 C .F .R. § 240 .15 c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3 (k)(2)(ii) (2) The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k) throughout the most recent fiscal year without exception. LBMZ Securities, Inc. I, Judith Calder, swear ( or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct. By: Title: Chief Compliance Officer February 28, 2024 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.