# SPEEDTRADER, INC X-17A-5 (2024-03-13) — Broker-dealer annual report - Company: SPEEDTRADER, INC - Form: X-17A-5 - Filed: 2024-03-13 - Period: 2023-12-31 - Accession: 0001129512-24-000001 - CIK: 1129512 - File #: 8-53035 - Type: Broker-dealer - Material weakness: No - Auditor: Wagner, Ferber, Fine & Ackerman PLLC - Auditor location: Floral Park, NY - Contact: Mark Jordon - Phone: 800-874-3039 - Email: jely@speedtrader.com - Website: speedtrader.com - Signed by: Mark Jordon (CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1129512/000112951224000001/2023Public1.pdf --- {0}------------------------------------------------ SPEEDTRADER, INC. ANNUAL AUDITED REPORT FORM X-17X-5 PART III SEC FILE NO. 8-53035 YEAR ENDED DECEMBER 31, 2023 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONFIDENTIAL TREATMENT REQUESTED {1}------------------------------------------------ | | SEC FILE NUMBER | | |--|-----------------|--| | | | | | FILING FOR THE PERIOD BEGINNING 01/01/2023 | MM/DD/YY | ___ AND ENDING 12/31/2023 | | MM/DD/YY | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-------------------------------------------|-----------------|--------------------------------------------| | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: SpeedTrader, Inc. | | | | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
■ Broker-dealer
O 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.) | | | | | | 2875 RT 35, STE 5C-2 | | | | | | | (No. and Street) | | | | | Katonah | NY | | | 10536 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Joe Ely | 845-926-5656 | | | jely@speedtrader.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. Accountant IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Wagner, Ferber, Fine & Ackerman, PLLC | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 66 South Tyson Ave. | Floral Park | | NY | 11001 | | (Address) | (City) | | (State) | (Zip Code) | | 05/26/2022 | | 3572 | | | | (Date of Registration with PCAOB)(if applicable) | FOR OFFICIAL USE ONLY | | | (PCAOB Registration Number, if applicable) | | | | | | | | * Claims for exemption from the requirement that the annual reports of an independent public
unters would be auguested by a seconomic of facts and circumstances rollad on ar the bacic of the nyamption. Can 17 | | | | | {2}------------------------------------------------ - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ #### **SpeedTrader, Inc. Index to the Financial Statements December 31, 2023** ### **Table of Contents** | Report
of
lndependent
Registered
Public
Accounting
Firm | 1-2 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------| | Financial
Statements: | | | Statement
of
Financial
Condition | 3 | | Statement
of
Operations | 4 | | Statement
of
Changes
in
Stockholder's
Equity
| 5 | | Statement
of
Changes
in
Liabilities
Subordinated
to Claims
of
General
Creditors
| 6 | | Statement
of
Cash
Flows
| 7 | | Notes
to
Financial
Statements | 8-14 | | Supplemental
Information: | | | Schedule
I
-
Computation
of
Net
Capital
under
Rule
15c3-l
of
the
Securities
and
Exchange
Commission……………………………………………………………. | 16 | | •
Computation
of
Aggregate
Indebtedness
•
Computation
of
Basic
Net Capital
Requirements
•
Reconciliation
of
Net
Capital
to
Submitted
Unaudited
Net
Capital | | | Computation
for
Determination
of Reserve
Requirements
for
Brokers
and
Dealers
Pursuant
to
Rule
15c3-3
of
the
Securities
and
Exchange
Commission


| 17 | | Securities
Investor
Protection
Corporation
Schedule
of
Assessment
and
Payments
| 18 | | Report
of
Independent
Registered
Public
Accounting
Firm
| 19 | | Statement
of
Exemption
from
SEC
Rule
15c3-3
| 20 | | Independent
Accountants'
Agreed-Upon
Procedures
Report
on
Schedule
of
Assessment
and
Payments
(Form
SIPC-7)
| 21 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Stockholders of SpeedTrader, Inc. #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of SpeedTrader, Inc. as of December 31, 2023, the related statements of operations, changes in stockholders' equity, changes in liabilities subordinated to claims of general creditors, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of SpeedTrader, Inc. as of December 31, 2023, and the results of its operations and its cash flows for the 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 SpeedTrader, Inc.'s management. Our responsibility is to express an opinion on SpeedTrader, Inc.'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 SpeedTrader, 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. {5}------------------------------------------------ ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** (Continued) ## **Supplemental Information** The Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission and other information have been subjected to audit procedures performed in conjunction with the audit of SpeedTrader, Inc.'s financial statements. The supplemental information is the responsibility of SpeedTrader, Inc.'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 Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission and other information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as SpeedTrader, Inc.'s auditor since 2009. New York, New York March 8, 2024 {6}------------------------------------------------ ## **SpeedTrader, Inc. Statement of Financial Condition Year Ended December 31, 2023** #### **ASSETS** | ASSETS: | | |--------------------------------------|-----------------| | Cash | \$
61,184 | | Commissions receivable, net | 150,099 | | Marketable Securities | 905 | | Other receivable | 553 | | Prepaid expenses & security deposits | 81,286 | | Clearing deposits | 750,025 | | Property and Equipment, Net | 11,502 | | Right-of-Use Asset, Net - Operating | 353,081 | | TOTAL ASSETS | \$
1,408,635 | ## **LIABILITIES AND STOCKHOLDER'S EQUITY** | LIABILITIES: | | |--------------------------------------------|-----------------| | Accrued expenses and accounts payable | \$
414,904 | | Lease Liability - Operating | 361,143 | | TOTAL LIABILITIES | 776,047 | | Commitments and Contingencies | | | Stockholder's Equity | | | Common stock | 200 | | Capital in excess of par value | 845,347 | | Retained earnings (deficit) | (212,959) | | TOTAL STOCKHOLDER'S EQUITY | 632,588 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
1,408,635 | {7}------------------------------------------------ ## **SpeedTrader, Inc. Statement of Operations Year Ended December 31, 2023** | REVENUES: | | |--------------------------------------------------------------|-----------------| | Commission income | \$
713,852 | | Margin Income | 517,508 | | Other income | 1,489,590 | | TOTAL REVENUES | 2,720,950 | | EXPENSES: | | | Employee compensation and benefits | 531,647 | | Clearing and execution fees | 1,324,716 | | Communication and data processing | 473,285 | | Lease expense | 81,912 | | Other expenses | 606,601 | | Depreciation | 5,111 | | TOTAL EXPENSES | 3,023,272 | | Loss before Other Income (Expense) and State Franchise Taxes | (302,322) | | OTHER INCOME (EXPENSE): | | | Trading loss | (3,754) | | Other Income | - | | TOTAL OTHER INCOME (EXPENSE) | (3,754) | | Loss before State Franchise Taxes | (306,076) | | State franchise taxes | 3,000 | | NET LOSS | \$
(309,076) | {8}------------------------------------------------ ## **SpeedTrader, Inc. Statement of Changes in Stockholder's Equity Year Ended December 31, 2023** | | Total
Stockholder's
Equity | | |----------------------------|----------------------------------|--| | Balance, January 1, 2023 | \$
941,664 | | | Distributions | - | | | Contributions | - | | | Net Loss | (309,076) | | | Balance, December 31, 2023 | \$
632,588 | | {9}------------------------------------------------ ## **SpeedTrader, Inc. Statement of Liabilities Subordinated to Claims of General Creditors Year Ended December 31, 2023** | Subordinated Liabilities - January 1, 2023 | \$
- | |----------------------------------------------|---------| | Subordinated Liabilities - December 31, 2023 | \$
- | {10}------------------------------------------------ ## **SpeedTrader, Inc. Statement of Cash Flows Year Ended December 31, 2023** | Cash Flows Provided by Operating Activities | | |------------------------------------------------------------------------------|-----------------| | Net loss | \$
(309,076) | | Adjustments to reconcile net loss, to net cash used in operating activities: | | | Depreciation | 5,111 | | Non-cash portion of lease expense for operating lease | 77,740 | | Trading loss | 3,754 | | Repayment of lease liability - operating lease | (73,310) | | Changes in assets and liabilities | | | Commission receivable | (29,387) | | Rebates and other receivable | 285 | | Prepaid expenses | (12,792) | | Clearing deposit | (10,025) | | Settlement Agreement Payable | (650,000) | | Accrued expenses and taxes payable | 258,403 | | Net cash used in operating activities | (739,297) | | Cash Flows Provided by Investing Activities | | | Purchase of Marketable Securities | (1,377) | | Net cash used in investing activities | (1,377) | | Net Decrease in Cash | (740,674) | | Cash at beginning of the year | 801,858 | | Cash at end of the year | \$
61,184 | | Supplemental cash flow disclosures
Taxes paid | \$
- | | Interest paid | \$
- | *The accompanying notes are an integral part of these financial statements* {11}------------------------------------------------ #### **NOTE 1. ORGANIZATION** SpeedTrader, Inc. ("the Company"), formerly Mint Global Markets, Inc., was incorporated in the state of the New York in 1999. During 2001, the Company received authorizationto engage in the business of performing security transactions for investors and businesses (clients) as a securities broker-dealer The Company is a member of Financial Industry Regulatory Authority ("FINRA"), and is registered with the Securities and Exchange Commission ("SEC"). The Company also allows its clients access to use any of its registered representatives to complete security transactions or directly complete any security transaction on line. The Company operates as an introducing broker through its clearing brokers, Axos Clearing, Inc. ("AXOS") and Curvature Securities, LLC ("Curvature") on a fully disclosed basis. The Company does not hold funds or securities for, or owes any money or securities to customers and does not carry accounts of or for customers. Customers send money directly to the clearing organization for deposit into the Company's accounts. The Company collects commission fees for its services to its customers. The Company is currently registered to do business in many states. #### **NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### *Basis of Accounting* The Company's financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which involve the application of accrual accounting; accordingly, the financial statements reflect all material receivable, payables, and other liabilities. #### *Cash and Cash Equivalents* The Company considers all short-term investments with an original maturity of three months or less to be cash and cash equivalents #### *Commissions Receivable* Commissions receivable are initially recorded at fair value upon the completion of services to the customers and are stated net of an allowance for uncollectible accounts which represents estimated losses resulting from the inability of customers to make the required payments. When determining the allowance for uncollectible accounts, the Company takes several factors into consideration including the overall composition of accounts receivable aging, historical collection experience, current trends, the type of customer and its day-to-day knowledge of specific customers. Estimated losses resulting from uncollectible accounts are recorded as the provision for doubtful accounts which is included in general and administrative expenses. At December 31, 2023, Management believes no allowance is necessary. #### *Rebates Receivable* Rebatesreceivable represent amounts due from various exchanges based on the volume of trades generated by the Company's clients #### *Investments in Equity Securities* Investments in equity securities not accounted for under the equity method of accounting are measured at fair value with changes recognized in net income. During 2023, the Company recognized \$3,754 of net losses on investments in equity securities. {12}------------------------------------------------ #### **NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)** #### *Property and Equipment, Net* Property and equipment are stated at cost, less accumulated depreciation and amortization. The costs of additions and improvements are capitalized and expenditures for repairs and maintenance are expensed as incurred. Fully depreciated assets are retained in property and depreciation accounts until they are removed from service. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation and amortization are removed from the accounts and the resulting gains or losses are included in operations. Depreciation of property and equipment is accounted for on the straightline method over the estimated useful lives of the assets. Amortization of leasehold improvements is calculated by the straight-line method over the shorter of the term of the related lease or the useful lives of the improvements. #### *Leases* The Company categorizes leases with contractual terms longer than twelve months as either operating or finance leases. Leases are classified as finance leases when the Company expects to consume a major part of the economic benefits of the leased assets over the remaining lease term. Conversely, the Company is not expected to consume a major part of the economic benefits of assets classified as operating leases. The lease classification affects both the pattern and presentation of the expense recognized in the statement of income, the categorization of assets and liabilities in the balance sheet, and classification of cash flows in the statement of cash flows. Total lease cost consists of two components; amortization expense related to the write-off of right-of-use assets, and interest expense from lease obligations. For financing leases, total lease cost is recorded on an accelerated basis whereby interest expense is recorded using the effective interest method and right-of-use assets are amortized on a straight-line basis over the remaining lease term. For operating leases, total lease cost is measured and recorded on a straightline basis over the lease term. Non-lease components, such as common area maintenance (CAM) charges, are separated from lease components based on terms of related lease. Variable lease components consist of real estate taxes and insurance charges related to the real estate lease and are recorded as lease expense as incurred. Lease obligations are measured and recorded at the present value of future lease payments using a discount rate. Because the Company generally does not have access to the rate implicit in each lease, lease obligations are measured using the incremental borrowing rate as the discount rate. The incremental borrowing rate is the rate that would be paid to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The Company uses a single incremental borrowing rate of 1.04% rate to its real estate lease. Right -of-use assets are generally measured and recorded at the sum of the lease obligation, any initial direct costs to consummate the lease, and any lease payments made on or before the commencement date. #### *Impairment of Long-Lived Assets* In accordance with Financial Accounting Standards Board (" FASB") Accounting Standards Codification ("ASC") 360, long-lived assets, including property and equipment and intangible assets subject to amortization are reviewed for impairment and written down to fair value whenever events or changes in circumstances indicate the carrying amount may not be recoverable through future undiscounted cash flows. An impairment loss is measured as the amount by which the carrying amount of a long- lived asset exceeds its fair value. At December 31, 2023, Management believes no impairment write down is necessary. {13}------------------------------------------------ #### **NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)** #### *Due to Brokers* The Company clears all of its brokerage transactions through two broker-dealers on a fully disclosed basis. Due to broker relates to obligations to the Company's brokers from a compilation of all securities activities. #### *Revenue Recognition* The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (ASC, Topic 606). The revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods of services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance requires an entity to follow a five-step model to (a) identify the contract with a customer; (b) identify the performance obligations in the contract; (c) determine the transaction price; (d) allocate the transaction price to the performance obligations in the contract: and (e) recognize revenue when, or as, the Company satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The revenue recognition guidance does not apply to revenue associated with financial instruments and interest income. Commission income is recognized at a point in time on a trade date basis as security transactions occur and consists of contractual commission percentages. Related clearing expenses are also recognized on a trade date basis as security transactions occur. Other income includes subscription fees for usage of the company's web based trading platform. Other income is in relation to customer related transactions wherein the Company is the Company is charged a fee that corresponds to a customer trade and then either adds a small markup or passes through the charge to the customer. Other income is reflective of the money that the customer has been charged for: Borrow Income – fees that were billed out to customers for holding a security on margin overnight Locate Income - fees involved with locating shares to short ECN Charges to Client - fees that are passed through for order routing #### *Income Taxes* The Company has elected to have its income taxed under Section 1362 (Subchapter S) of the Internal Revenue Code of 1986 and applicable state statutes, which provide that in lieu of corporate income taxes, the shareholder include his proportionate share of the Company's taxable income or loss on his individual income tax returns. Accordingly, no provision for federal or regular state income taxes is reflected in the financial statements. However, the Company is subject to various minimum state filing fees for which provisions have been made. The stockholder of the Company has concluded that the Company is a pass-through entity and there are no uncertain tax positions that would require recognition in the financial statements. If the Company was to incur an income tax liability in the future, interest on any income tax liability would be reported as interest expense and penalties on any income tax liability would be reported as incometaxes. The stockholder conclusion regarding unce1tain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. Generally, federal and state authorities may examine the Company'stax returns for three years from the date of filing; consequently, the respective tax returns for years prior to 2020 are no longer subject to examination by tax authorities. {14}------------------------------------------------ #### **NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)** #### *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, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. #### *Advertising Costs* In accordance with FASB ASC 720 "Other Expenses", advertising costs of \$7,266 were expensed as incurred for the year ended December 31, 2023. #### *Subsequent Events* Management has evaluated subsequent events or transactions through March 8, 2024, the date which the financial statements were available to be issued. #### **NOTE 3. BROKERAGE ACTIVTIES** All transactions for the Company's customers are cleared through a carrying broker- dealer (the "clearing firm") on a fully disclosed basis. Accordingly, open customer transactions are not reflected in the accompanying financial statements. The Company is exposed to credit losses in the event customers fail to satisfy their obligations in connection with their securities transactions. As of December 31, 2023, customer obligations to the clearing firm were collateralized by cash and securities with a market value in excess of their obligations. #### **NOTE 4. DEPOSITS WITH CLEARING ORGANIZATIONS** Under the Company's clearing agreements with Curvature and AXOS, the Company is required to maintain cash deposits which are reflected on the balance sheet as Clearing Deposits and are as follows: | Curvature Clearing | \$250,000 | |--------------------|-----------| | AXOS | 500,025 | | | \$750,025 | #### **NOTE 5. PROPERTY AND EQUIPMENT** Major classes of property and equipment consist of the following: | | Estimated useful life-
Years | | |-------------------------------------------------|---------------------------------|--------------| | Furniture and Fixtures | 7 –
10 | \$
37,462 | | Equipment | 7 –
10 | 96,595 | | | | 135,057 | | Less: Accumulated depreciation and amortization | | (122,555) | | Net property and equipment | | \$
11,502 | Depreciation expense for the year ended December 31, 2023 was \$5,111. {15}------------------------------------------------ #### **NOTE 6. LEASES** In April 2022, the Company entered into a three-year lease, expiring in May 2025 (with a three-year extension), for the facility located in Katonah, New York. The terms of the lease provides for annual rent payments over the remaining years (of the lease, including the three year extension) in amounts ranging from \$75,979 to \$88,081 through 2028. In addition to base rent, the Company pays for real estate taxes and insurance which are recorded as lease expense when inferred. The renewal option was included in the Company's determination of the right-of assets and related lease liability since the additional renewal was considered reasonably certain at the expiration date. The Company has elected the practical expedient to not separate lease components from non-lease components for its operating lease. Operating right-of-use asset is recognized based on the net present value of the remaining lease payments over the lease term. Since this lease does not provide an implicit rate of return, the Company uses its incremental borrowing rate based on information available at the remeasurement date in determining the present value of lease payments. The Company adopted Topic 842, Leases beginning on January 1, 2022, through a modified retrospective approach for leases existing at the adoption date. Amounts recognized as right-of-use asset related to the operating lease is included as an asset in the balance sheet, while related lease liabilities are also included in current and long-term liabilities in the balance sheet. As of December 31, 2023, right-of-use asset and lease liabilities related to the operating lease was as follows: Right-of-use asset: | Cost | \$ 475,824 | |--------------------------------|--------------| | Less: Accumulated amortization | 122,743 | | | \$ 353,081 | | Lease Liability: | | | Current portion | \$
76,233 | | Long-term portion | 284,910 | | | \$ 361,143 | A summary of total lease expense, by component, and other lease information for the year-ended December 31, 2023 is as follows: | Total Operating lease
expense | \$
81,911 | |------------------------------------------------------------------------|--------------| | Other lease information: | | | Cash paid for amounts included in the
measure of lease liabilities: | | | Operating Cash Flow from Operating lease | \$
73,310 | | Remaining lease term
–
Operating lease: | 4.42 years | | Discount rate
–
Operating lease: | 1.04% | {16}------------------------------------------------ #### **NOTE 6. LEASES (CONTINUED)** A summary of the future lease payments for the operating lease, reconciled to the lease liability recorded at December 31, 2023 is as follows: | Year Ending
December 31, | Operating Lease | |-----------------------------------------------|-----------------| | 2024 | \$
79,629 | | 2025 | 82,018 | | 2026 | 84,478 | | 2027 | 87,013 | | 2028 | 36,701 | | Total future lease payments | 369,839 | | Less effects of discounting | 8,696 | | Lease liability recorded at December 31, 2023 | \$ 361,143 | #### **NOTE 7. FAIR VALUE MEASUREMENTS** The company accounts for marketable securities in accordance with FASB ASC 820, "Fair Value Measurements and Disclosures". ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Basis of Fair Value Measurement | Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date | |---------|----------------------------------------------------------------------------------------| | | for identical, unrestricted assets or liabilities; | - Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly; - Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. A financial instrument's level with the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table presents, by level within the fair value hierarchy, the Company's investment assets at fair value as of December 31, 2023. As required by ASC 820, investment assets are classified in their entirety based upon the lowest level of input that is significant to the fair value measurement. | Description | Amount | Level 1 | Level 2 | Level 3 | |------------------------|-----------|---------|---------|---------| | Equity/Stock Positions | \$
905 | \$ 905 | \$
- | \$
- | The carrying amounts of the Company's other financial instruments, which include cash and cash equivalents, commissions receivable, accrued expenses and accounts payable, approximate their fair values at December 31, 2023 due to the short-term nature of these investments. {17}------------------------------------------------ #### **NOTE 8. NET CAPITAL REQUIREMENTS** As a registered securities broker, member of the Financial Industry Regulatory Authority, Inc., (FINRA), the Company is subject to the SEC's Uniform Net Capital Rule, which requires that the Company maintain minimum net capital, as defined, of 6 2/3% of aggregate indebtedness, or \$100,000, whichever is greater. At December 31, 2023, the Company had net capital of \$542,333, which exceeded the requirements by \$442,333. The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to clearing all transactions with and for customers on a fully disclosed basis with clearing brokers #### **NOTE 9. ACCRUED EXPENSES AND ACCOUNTS PAYABLE** Accrued expenses and taxes payable consist of the following: | Accrued communications and data processing costs | \$
42,591 | |--------------------------------------------------|---------------| | Accrued clearing and execution fees | 23,861 | | Accrued other cost | 348,452 | | Total | \$
414,904 | #### **NOTE 10. REGULATORY ACTION** The Company is currently in negotiations with FINRA to settle issues brought to light in two separate year end examinations. These issues are related to deficiencies in the Company's supervisory systems and written supervisory procedures. The Company has accrued \$125,000 towards this settlement which is reflected in the Company's Statement of Operations for the year ended December 31, 2023. #### **NOTE 11. COMMITMENTS AND CONTINGENT LIABILITIES** #### *Employee Benefit Plan* The Company offers its employees a 401(k) plan. Under the plan eligible employees in 2023 could defer up to \$22,500 for the year, in addition to a \$7,500 catch-up contribution for employees 50 years of age or older. There were no matching contributions for the year ended December 31, 2023. #### *Concentration of Credit Risk* Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash in banks with balances in excess of the U.S. Federal Deposit Insurance Corporation (FDIC) insured \$250,000 limit. Management believes that the Company is not exposed to any significant credit risk related to cash. At December 31, 2023 the Company had no cash deposits in excess of the FDIC limits. The Company also has cash balances in brokerage accounts with its clearing brokers who are insured under the Securities Investors Protection Corporation ("SIPC") up to cash balances of \$250,000. At December 31, 2023 balances exceeded the insured limits by approximately \$264,000. {18}------------------------------------------------ #### SUPPLEMENTAL INFORMATION #### PURSUANT TO RULE 17A-5 OF THE SECURITIES EXCHANGE ACT OF 1934 AS OF December 31, 2023 {19}------------------------------------------------ ## **SpeedTrader, Inc. Schedule I - Computation of Net Capital Under S.E.C. Rule 15C3-1 Year Ended December 31, 2023 of the Securities and Exchange Commission** | Computation of Net Capital: | | |--------------------------------------------------------------------------------|---------------| | Total Member's Equity | \$
632,588 | | Deductions and/or charges | | | Prepaid Expenses | (81,286) | | Other | (11,502) | | Net capital before haircuts on securities positions | 539,800 | | Haircuts and undue concentrations | (467) | | Net Capital | 539,333 | | Computation of Aggregate Indebtedness: | | | Accrued Liabilities and other payables | 776,047 | | Aggregate Indebtedness | 776,047 | | Computation of Basic Net Capital Requirement: | | | Minimum net capital required (6 2/3% of aggregate indebtedness) | 51,739 | | Minimum dollar requirement | 100,000 | | Net capital requirement (greater of minimum net capital or dollar requirement) | \$
100,000 | | Excess net capital | \$
439,333 | | Ratio: Aggregate indebtedness to Net capital | 1.44 | | | | | Reconciliation of Net Capital to Submitted Unaudited Net Capital | | | Net capital per unaudited X-17A-5 | \$
725,529 | | Audit adjustments: | | | Adjustment for additional accrued expenses | (186,196) | | Net capital per audit report | \$
539,333 | *The accompanying notes are an integral part of these financial statements* {20}------------------------------------------------ #### **SpeedTrader, Inc. Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 Under the Securities and Exchange Commission December 31, 2023** The Company is exempt from the provision of Rule 15c3-3 under the Securities Exchange Act of 1934, in that the Company's activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(ii) of the Rule. *See report of independent accounting firm.* {21}------------------------------------------------ ## **Securities Investor Protection Corporation Schedule of Assessment and Payments Year Ended December 31, 2023 SpeedTrader, Inc.** | Period Covered | Amount | | |--------------------------------------------------------------------------------------------|--------|--------------| | General asessment reconciliation for the period of January 1, 2023 to
December 31, 2023 | \$ | 2,445 | | Payment Schedule: | | | | Payment for SIPC-6 - September 1, 2023
Payment for SIPC-7 - February 27, 2024 | \$ | 809
1,636 | | Total Payments | \$ | 2,445 | {22}------------------------------------------------ ![](_page_22_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Stockholders of SpeedTrader, Inc. We have reviewed management's statements, included in the accompanying Management's Exemption Report, in which (1) SpeedTrader, Inc. identified the following provisions of 17 C.F.R. §15c3-3(k) under which SpeedTrader, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3: (2)(ii), (the "exemption provisions") and (2) SpeedTrader, Inc. stated that SpeedTrader, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. SpeedTrader, Inc.'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 SpeedTrader, Inc.'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), of Rule 15c3-3 under the Securities Exchange Act of 1934. New York, New York March 8, 2024 {23}------------------------------------------------ ![](_page_23_Picture_0.jpeg) # MANAGEMENT STATEMENT REGARDING COMPLIANCE WITH THE EXEMPTION PROVISIONS OF SEC RULE 15C3-3 We, as the management of SpeedTrader, Inc (the "Company ") are responsible for the Company's compliance with the exemption provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 ("SEC Rule 15c3-3"). The following statements are made to our best knowledge and belief: (1) the Company claims an exemption from the provisions of SEC Rule 15c3-3 under paragraph (k)(2)(ii), and (2) for the following reporting period of January 1, 2023 through December 31, 2023, the Company has met the identified exemption provision without exception. SpeedTrader, Inc. Joe Ely, CEO March 8, 2024 {24}------------------------------------------------ ![](_page_24_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPLYING AGREED-UPON PROCEDURES** Board of Directors of SpeedTrader, 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 on the accompanying General Assessment Reconciliation (Form SIPC-7) for the year ended December 31, 2023. Management of SpeedTrader, Inc., is responsible for its Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7. Management of the Company has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of assisting you and SIPC in evaluating the Company's compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 2023. Additionally, SIPC has agreed to and acknowledged that the procedures performed are appropriate for their intended purpose. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes. 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 differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-17A-5 Part III for the year ended December 31, 2023, with the Total Revenue amount reported in Form SIPC-7 for the year ended December 31, 2023, noting no differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no 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 differences; and - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were engaged by the Company to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA and in accordance with the standards of the Public Company Accounting Oversight Board (United States). We were not engaged to and did not conduct an examination or a review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Company's Form SIPC-7 and for its compliance with the applicable instructions on Form SIPC-7 for the year ended December 31, 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. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. This report is intended solely for the information and use of the Company and SIPC and is not intended to be and should not be used by anyone other than these specified parties. Floral Park, New York March 8, 2024 Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.