# ZEUS FINANCIAL, LLC X-17A-5 (2020-02-27) — Broker-dealer annual report - Company: ZEUS FINANCIAL, LLC - Form: X-17A-5 - Filed: 2020-02-27 - Period: 2019-12-31 - Accession: 0000795051-20-000001 - CIK: 795051 - File #: 8-36214 - Material weakness: No - Auditor: Assurance Dimensions - Auditor location: Margate, FL - Contact: Steven Singer - Phone: 5617848922 - Signed by: Vincent Butkevits (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/795051/000079505120000001/zeuspublic2019.pdf --- {0}------------------------------------------------ **ZEUS FINANCIAL, LLC** ------------------ **STATEMENT OF FINANCIAL CONDITION** **DECEMBER 31, 2019** {1}------------------------------------------------ **UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington, D.C. 20549** OMB APPROVAL OMB Number: 3235-0123 Expires: "VHVTU Estimated average burden hours per response.. . . . . 12.00 **8-** SEC FILE NUMBER 36214 # **ANNUAL AUDITED REPORT FORM X-17A-5 PART III** **FACING PAGE** **Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT FOR THE PERIOD BEGINNING______________________________ | 01/01/19
MM/DD/YY | | AND ENDING______________________________
12/31/19
MM/DD/YY | | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|---------------|------------------------------------------------------------------|--| | A. | REGISTRANT IDENTIFICATION | | | | | Zeus
Financial
LLC
NAME OF BROKER-DEALER: | | | OFFICIAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | FIRM I.D. NO. | | | | 5002
___________________________________________________________________________________________________________________ | T-Rex
Avenue
Suite
(No. and Street) | 235 | | | | _____________________________________________________________________________________________________________________
Boca
Raton
(City) | FL
(State) | | 33431
(Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
_____________________________________________________________________________________________________________________
Steven
Singer | | | 561-784-8922
(Area Code – Telephone Number) | | | B. | ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | _____________________________________________________________________________________________________________________ | Assurance
Dimensions | | | | | | (Name – if individual, state last, first, middle name) | | | | | 2000
Banks
Road,
Suite
218
_____________________________________________________________________________________________________________________ | Margate | FL | 33063 | | | (Address) | (City) | (State) | (Zip Code) | | | CHECK ONE:
x
Certified Public Accountant
Public Accountant
Accountant not resident in United States or any of its possessions. | FOR OFFICIAL USE ONLY | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e)(2)* **Potential persons who are to respond to the collection of information contained in this form are not required to respond** SEC 1410 () **unless the form displays a currently valid OMB control number.** {2}------------------------------------------------ - - - - - - - - {3}------------------------------------------------ #### ------------------ STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019 # CONTENTS | Report of Independent
Registered Public
Accounting Firm………………………………………………1 | | |----------------------------------------------------------------------------------|--| | FINANCIAL STATEMENT: | | | Statement of Financial Condition…………………………………………………………………….……2 | | | Notes to Statement of
Financial Condition……………………………………………………………3-7 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Members and Management of **Zeus Financial, LLC** #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of **Zeus Financial, LLC** (the "Company") as of December 31, 2019 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, 2019 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on 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 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 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 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. Assurance Dimensions We have served as **Zeus Financial, LLC** auditor since February 2018. Coconut Creek, Florida February 27, 2020 **ASSURANCE DIMENSIONS CERTIFIED PUBLIC ACCOUNTANTS & ASSOCIATES** **TAMPA BAY**: 4920 W Cypress Street, Suite 102 | Tampa, FL 33607 | Office: 813.443.5048 | Fax: 813.443.5053 **JACKSONVILLE**: 4720 Salisbury Road, Suite 223 | Jacksonville, FL 32256 | Office: 888.410.2323 | Fax: 813.443.5053 **ORLANDO:** 1800 Pembrook Drive, Suite 300 | Orlando, FL 32810 | Office: 888.410.2323 | Fax: 813.443.5053 **SOUTH FLORIDA**: 2000 Banks Road, Suite 218 | Margate, FL 33063 | Office: 754.800.3400 | Fax: 813.443.5053 www.assurancedimensions.com {5}------------------------------------------------ # **ZEUS FINANCIAL, LLC -----------------** # **STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** # ASSETS | Cash and cash equivalents | \$
52,289 | |--------------------------------------------------------------|------------------| | Securities owned, at fair value | 46,225,950 | | Secured demand note, face value | 900,000 | | Clearing deposit | 500,000 | | Accrued interest receivable | 275,908 | | Employee advances | 246,516 | | Prepaid expenses and other assets | 53,878 | | Property and equipment, net | 14,501 | | | \$
48,269,042 | | | | | LIABILITIES AND MEMBER'S
EQUITY | | | Liabilities: | | | Payable to clearing broker | \$
37,073,694 | | Securities sold
short
not yet purchased, at fair value | 2,339,560 | | Accounts payable and accrued expenses | 740,743 | | Total liabilities | 40,153,997 | | Secured demand note | 900,000 | | Member's equity | 7,215,045 | | | \$
48,269,042 | SEE ACCOMPANYING NOTES. {6}------------------------------------------------ # **----------------- NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** # **NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION** ### **Company Operations** Zeus Financial, LLC (formerly Zeus Securities, Inc.) (the "Company") is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority ("FINRA"), whose primary business is fixed income proprietary trading. The Company is also a member of the Securities Investor Protection Corporation ("SIPC"). The Company is a single member Florida Limited Liability Company that is a disregarded entity for tax purposes. # **NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** ### **Cash and Cash Equivalents** The Company considers all money market accounts, time deposits and certificate of deposits purchased with original maturities of three months or less to be cash equivalents. The Company maintains its cash in bank deposit accounts at high quality financial institutions. The balances, at times, may exceed the Federal Deposit Insurance Corporation's (the "FDIC") current \$250,000 limit. At December 31, 2019 the Company did not exceed the federally insured limit. ### **Property and Equipment** Property and equipment is recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. ### **Revenue Recognition** In accordance with FASB ASC-940-605 Financial Services – Broker and Dealers – Revenue Recognition, proprietary securities transactions in regular-way trades entered into for the account and risk of the Company are recorded at fair value on a trade-date basis with realized and unrealized gains and losses reported in principal transactions in the statement of operations. The Company utilizes the "first-in, first out" method as the basis for determining the average cost of securities owned and sold not yet purchased. Amounts receivable and payable for securities transactions that have not reached their contractual settlement date are recorded net on the statement of financial condition as part of the payable to clearing broker. ### **Interest and Dividends** Interest revenues on fixed income securities owned and securities sold not yet purchased, including amortization of premiums and accretion of discounts, is recognized as earned or due. Dividend revenues are recognized as earned. {7}------------------------------------------------ # **----------------- NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** # **NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)** #### **Income Taxes** The Company is not a taxpaying entity for income tax purposes, and, accordingly, no provision has been made for income taxes. All profits and losses of the Company pass through to their sole member parent company. #### **Defined Contribution Plan** The Company maintains a 401(k) plan covering all of its employees. The Company matches up to 4% of employee payroll deferrals. #### **Use of Estimates in the Preparation of Statement of Financial Condition** The preparation of statement of financial condition 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 statement of financial condition. Actual results could differ from those estimates. #### **Fair Value Measurements** Securities are recorded at fair value in accordance with FASB ASC-820 Fair Value Measurements. ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by ASC 820, are used to measure fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability. The unobservable inputs should be developed based on the best information available in the circumstances and may include the Company's own data. {8}------------------------------------------------ # **----------------- NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** # **NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)** The following table sets forth by level, within the fair value hierarchy, the Company's net securities owned and other marketable instruments, and securities sold not yet purchased, at fair value on a recurring basis as of December 31, 2019: | | Level 1 | Level 2 | Level 3 | Total | |----------------------------|-------------------|------------------|---------|------------------| | Certificates of deposit | \$
- | \$
1,254,847 | \$
- | \$ 1,254,847 | | Government securities | (1,180,644) | - | - | (1,180,644) | | Mortgage backed securities | - | 33,682,844 | - | 33,682,844 | | Corporate debt securities | - | 2,476,702 | - | 2,476,702 | | Municipal securities | - | 7,652,641 | - | 7,652,641 | | | | | | | | Total, net | \$(
1,180,644) | \$45,067,034 | \$
- | \$43,886,390 | | | | | | | | | Level 1 | Level 2 | Level 3 | Total | | Long market value | \$
- | \$ 46,225,950 | \$
- | \$46,225,950 | | Short market value | ( 1,180,644) | ( 1,158,916) | - | ( 2,339,560) | | | | | | | | Total, net | \$( 1,180,644) | \$
45,067,034 | \$
- | \$
43,886,390 | The financial instruments of the Company are reported in the statement of financial condition at their fair values, or at carrying amounts that approximate fair values because of the short maturity of the instruments, except long-term notes payable, and subordinated borrowings, if any. The Company utilizes ICE Data Services ("ICE") fixed income pricing system. ICE provides the Company's clearing firm with a daily feed reflecting the Company's positions and related fair value pricing. Management will categorize as Level 3 of the fair value hierarchy, those securities that are valued based on market transactions and where there is a material price disparity between third-party pricing services and the Company's valuation based on observable and unobservable inputs. At December 31, 2019 there were no securities with such price disparities, and accordingly, no securities were categorized as Level 3 under the fair value hierarchy for the year then ended. During the year ended December 31, 2019, there were no transfers in or out of Levels 1, 2, or 3 of the fair value hierarchy. # **Recent Accounting Pronouncements** In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit losses ("ASU 2016-13"), which requires the immediate recognition of management's estimates of current expected credit losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted after fiscal years beginning December 15, 2018. The Company is currently evaluating the potential impact of adopting this guidance on its financial statement. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurements (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. The ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently assessing the impact of this standard on its financial statement. The Company does not believe that the adoption of any other recently issued, but not yet effective, accounting standards will have a material effect on its financial position. {9}------------------------------------------------ # **----------------- NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** # **NOTE 3 – PAYABLE TO CLEARING BROKER** The clearing and depository operations for customers' and counterparties' securities transactions are provided by a clearing broker pursuant to a fully disclosed clearing agreement. The Company has agreed to indemnify its clearing broker for losses that the clearing broker may sustain from the customers' and counterparties accounts introduced by the Company. At December 31, 2019, all customer accounts contained cash and fully paid for securities . At December 31, 2019, the amount due to the clearing f ir m is secured by the securities owned by the Company and included herein on the statement of financial condition. # **NOTE 4 – NET CAPITAL REQUIREMENTS** As a registered broker-dealer, the Company is subject to the Uniform Net Capital Rule of the Securities and Exchange Commission, which requires that "Net Capital", as defined, shall be at least the greater of \$100,000 or 6-2/3% of "Aggregate Indebtedness", as defined. At December 31, 2019, the Company's "Net Capital" was \$5,361,025 which exceeded requirements by \$5,241,025. The ratio of "Aggregate Indebtedness" to "Net Capital" was 0.14 to 1 at December 31, 2019. ### **NOTE 5 – PROPERTY AND EQUIPMENT** Property and equipment at December 31, 2019 consisted of the following: | Office equipment | \$
18,939 | |--------------------------------|--------------| | Less: accumulated depreciation | (4,438) | | Property and equipment, net | \$
14,501 | # **NOTE 6 – RISK CONCENTRATIONS** Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, proprietary trading positions and due from clearing organization. The Company maintains its cash in bank accounts, the balances of which, at times, may exceed Federal insured limits. Exposure to credit risk is reduced by placing such deposits in high quality financial institutions. Concentration of credit risk with respect to due from clearing organizations is limited due to the quality of the clearing organizations. In the normal course of business, the Company enters into various securities trading transactions. The execution, settlement, and financing of those transactions can result in off-balance sheet risk of loss not reflected on the accompanying balance sheet. The Company is exposed to off-balance sheet risk of loss on unsettled transactions between the trade date and the settlement date in the event customers and other counter parties are unable to fulfill contractual obligations. The Company's policy is to continuously monitor its exposure to market and counter party risk through the use of a variety of financial, position, and credit exposure reporting and control procedures. In addition, the Company has a policy of reviewing the credit standing of each broker/dealer, clearing organization, client and/or other counter parties with which it conducts business. The Company monitors the market value of collateral and requests and receives additional collateral when required. {10}------------------------------------------------ # **----------------- NOTES TO STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2019** ### **NOTE 7 – EMPLOYEE ADVANCES** Employee advances represent amounts advanced to the Company's proprietary traders for draws against their trading profits, as well as salary advances to certain employees. At December 31, 2019, draws due from traders totaled \$240,804, while amounts due from employees totaled \$5,712. # **NOTE 8 – SUBORDINATED BORROWINGS** The Company entered into a subordinated loan agreement with its Chief Executive Officer in the amount of \$900,000, which became effective upon FINRA's approval on March 29, 2019. The subordinated borrowing is in the form of a secured demand note ("SDN"), which is collateralized by cash and securities with a market value of \$1,029,392 as of December 31, 2019. The SDN carries an interest rate of 6% per annum and matures in March 2020. The principal amount of the SDN is available in computing net capital under the SEC's uniform net capital rule. # **NOTE 9 – COMMITMENTS** The Company sublets office space in Boca Raton, Florida, from its parent company. Additionally, the Company has WeWork (a shared office space provider) memberships in Charlotte, North Carolina and New York, New York. Effective January 2019, the Company adopted ASC 842, Leases. As of December 31, 2019, the Company did not have any leases that meet the requirements of ASC 842. ### **NOTE 10 – CONTINGENCIES** The Company can be subject to litigation, arbitration settlements, and regulatory assessments which arise in the ordinary course of business as a registered broker-dealer. The Company recognizes a liability and expense for any such matters at the time exposure to loss is more than remote and an amount of the loss is reasonably determinable. In the opinion of management, there are no outstanding matters at December 31, 2019 requiring contingent loss recognition. #### **NOTE 11 – SUBSEQUENT EVENTS** The Company has evaluated subsequent events through February 27, 2020, the date this statement of financial condition was issued, and determined that no additional financial statement recognition or disclosure is necessary. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.