# LIONTREE ADVISORS LLC X-17A-5 (2023-03-01) — Broker-dealer annual report - Company: LIONTREE ADVISORS LLC - Form: X-17A-5 - Filed: 2023-03-01 - Period: 2022-12-31 - Accession: 0001550366-23-000002 - CIK: 1550366 - File #: 8-69097 - Type: Broker-dealer - Material weakness: No - Auditor: Deloitte & Touche LLP - Auditor location: New York, NY - Contact: Janice Parise - Phone: 212-751-4422 - Email: jparise@dfppartners.com - Website: dfppartners.com - Signed by: Ehren Stenzler (Managing Partner) Original filing: https://www.sec.gov/Archives/edgar/data/1550366/000155036623000002/ltapublic.pdf --- {0}------------------------------------------------ # **LIONTREE ADVISORS LLC SEC ID No. 8-69097** STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2022 AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM > PUBLIC DOCUMENT Filed pursuant to Rule 17a-5(e)(3) {1}------------------------------------------------ | | UNITED STATES | | | | |------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------|--| | SECURITIES AND EXCHANGE COMMISSION
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PART III | | | SEC FILE NUMBER | | | | | | 8-69097 | | | | FACING PAGE | | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | | | | | REPORT FOR THE PERIOD BEGINNING | 01/01/2022
AND ENDING
MM/DD/YY | 12/31/2022
MM/DD/YY | | | | | A.
REGISTRANT IDENTIFICATION | | | | | NAME OF FIRM: LionTree Advisors LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
☒Broker-dealer
☐ Check here if respondent is also an OTC derivatives dealer | ☐Security-based swap
dealer | ☐Major security-based swap participant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
Avenue, 15th Floor
745 Fifth | | | | | | | (No. and Street) | | | | | New York | NY | | 10151 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Janice Parise | 212-751-4422 | | Jparise@dfppartners.com | | | (Name) | (Area Code – Telephone Number) | | (Email Address) | | | | B.
ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Deloitte & Touche LLP | (Name – if individual, state last, first, middle name) | | | | | | | | | | | 30 Rockefeller Plaza
(Address) | New York
(City) | NY
(State) | 10112
(Zip Code) | | | 10/20/2003 | | | 34 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB Registration Number, if applicable) | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | | **Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.** {2}------------------------------------------------ - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ ## LIONTREE ADVISORS LLC | | Page(s) | |---------------------------------------------------------|---------| | Report of Independent Registered Public Accounting Firm | | | Financial Statement | | | Statement of Financial Condition 2 | | | Notes to Financial Statement 3–7 | | {4}------------------------------------------------ **Deloitte & Touche LLP** 30 Rockefeller Plaza New York, NY 10112-0015 USA Tel: +1 212 492 4000 Fax: +1 212 489 1687 www.deloitte.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Managing Partners and Member of LionTree Advisors LLC ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of LionTree Advisors LLC (the "Company") as of December 31, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2022, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit of the financial statement provides a reasonable basis for our opinion. March 1, 2023 We have served as the Company's auditor since 2013. {5}------------------------------------------------ # LIONTREE ADVISORS LLC # STATEMENT OF FINANCIAL CONDITION AS OF DECEMBER 31, 2022 ## **ASSETS** | Cash and cash equivalents | | 39,680,177 | |---------------------------|----|------------| | Accounts receivable | | 28,299,933 | | Other assets | | 482,240 | | TOTAL ASSETS | \$ | 68,462,350 | #### **LIABILITIES AND MEMBER'S EQUITY** | LIABILITIES | | | |---------------------------------------|----|------------| | Accounts payable | \$ | 118,930 | | Deferred revenues | | 50,000 | | Due to ultimate parent | | 17,899,411 | | Due to UK affiliate | | 4,132,897 | | TOTAL LIABILITIES | | 22,201,238 | | MEMBER'S EQUITY | | 46,261,112 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$ | 68,462,350 | The accompanying notes are an integral part of this financial statement {6}------------------------------------------------ ## LIONTREE ADVISORS LLC NOTES TO THE STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022 ## NOTE 1 DESCRIPTION OF ORGANIZATION AND BUSINESS LionTree Advisors LLC (the "Company") provides investment banking services including financial advisory services, underwriting participant, private placement agent and similar services. The Company is a broker-dealer registered with the Securities and Exchange Commission and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is wholly owned by LionTree Advisory Holdings LLC (the "Parent", "Member"), which is wholly owned by LionTree LLC (the "Ultimate Parent"). LionTree Advisors UK LLP (the "UK affiliate") provides corporate finance advisory services in the UK and the European Economic Area ("EEA"). The UK affiliate is authorised and regulated by the Financial Conduct Authority ("FCA"). LionTree France Advisors SCS (the "France affiliate") is a limited liability partnership registered under the laws of France. The Ultimate Parent and its subsidiaries, including the Company and the UK and France affiliates are referred to as "LionTree". ### NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ## Basis of Presentation The financial statement was prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). # Use of Estimates The preparation of the financial statement in conformity with U.S. GAAP 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 statement and the amounts of revenues and expenses during the reporting period. Actual results could materially differ from these estimates. ## Accounts Receivable Accounts receivable are comprised of receivables for advisory and underwriting revenue and reported net of an allowance for expected credit losses. The accounts receivable are measured at amortized cost. The Company evaluates collectability of its accounts receivable and determines if an allowance for credit losses is necessary based on historical payment information, known customer financial concerns, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability. The Company determined there is no allowance for expected credit losses at December 31, 2022. The accounts receivable balance was \$3,243,634 at December 31, 2021 and \$28,299,933 at December 31, 2022. {7}------------------------------------------------ ## LIONTREE ADVISORS LLC NOTES TO THE STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022 #### NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) #### Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification ("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 or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (1) identify the contract(s) 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 entity satisfies a performance obligation. ### Investment Banking Advisory fees: The Company provides advisory services related to corporate finance activities such as mergers and acquisitions, reorganizations, tender offers, leveraged buyouts, and the pricing of securities to be issued. The Company enters into agreements with institutional clients, written or otherwise, whereby the Company provides advisory services to clients in exchange for fees. The determination and identification of distinct performance obligations in such agreements may require judgment. Revenue is recognized as the Company satisfies performance obligations. This occurs when promised services are provided to customers in an amount that reflects the consideration the Company expects to receive in exchange for such services. Revenue for advisory services is recognized over time when the services are simultaneously provided by the Company and consumed by the client. For certain contracts, the consideration is included in the transaction price and is constrained until it is probable that a significant reversal of revenue will not occur. In some circumstances, significant judgment is needed to determine the timing and measurement of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities which are recorded in deferred revenue on statement of financial condition. From time to time, the Company receives consideration from investment banking clients in a noncash form (i.e., securities). The Company reflects securities received as noncash consideration at fair value. These securities are carried at fair value. ## Underwriting fees: The Company underwrites securities for business entities seeking to raise funds through a sale of securities to public or private markets. Revenues are earned from fees arising from securities offering in which the Company acts as a co-managing underwriter. Revenue is recognized on the trade date (the date on which the Company purchases the securities from the issuer) for the portion the Company is contracted to buy. The Company believes that the trade date is the appropriate point in time to recognize revenue for securities underwriting transactions as there are no significant actions which the Company needs to take subsequent to this date and the issuer obtains the control and benefit of the capital markets offering at that point. {8}------------------------------------------------ ## LIONTREE ADVISORS LLC NOTES TO THE STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022 ### NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ### Revenue Recognition (continued) The following is a roll forward of the deferred revenue (contract liability) associated with revenue recognition: | Balance at December 31, 2021 | \$106,033 | |-------------------------------------------------------------------------|-----------| | Decrease in deferred revenues (contract liabilities) for current period | (56,033) | | Balance at December 31, 2022 | \$50,000 | Generally, performance obligations in connection with investment banking activities will be settled within one year; therefore, the Company has elected to apply the practical expedient in ASC 606-10-50-14. ### Cash and Cash Equivalents The Company considers amounts held in money market accounts with initial maturities equal to less than three months to be cash equivalents. ### Fair Value Hierarchy U.S. GAAP establishes a hierarchy that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs when determining Fair Value estimates. Fair value is defined as the price that would be received to sell an asset or aid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. The three levels of inputs are: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. > Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. {9}------------------------------------------------ ## LIONTREE ADVISORS LLC NOTES TO THE STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022 ## NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ## Fair Value Hierarchy (continued) The recorded amounts of cash equivalents approximate their fair value due to the shortterm nature of these financial assets and liabilities and are categorized in Level 1. The recorded amounts of accounts receivable, other assets, accounts payable, payable to Ultimate Parent and the UK affiliate, and deferred revenue approximate their carrying value but can still approximate fair value and are categorized in Level 2. Exchange-traded equity securities are measured at fair value based on quoted prices from the exchange. To the extent these securities are actively traded, they are categorized in Level 1 of the fair value hierarchy; otherwise, they are categorized in Level 2 of the fair value hierarchy. There are no equity securities as of December 31, 2022. # Credit Facility On August 4, 2021, the Company entered into a revolving credit agreement with a national banking association for a committed credit line of \$35 million. As of December 31, 2022, there are no unpaid drawdowns on this credit line. The facility has a maturity date of August 4, 2024. # NOTE 3 RELATED PARTY TRANSACTIONS Pursuant to an administrative service agreement (the "Agreement") between the Company and the Ultimate Parent, the Company pays a monthly administrative fee for utilizing certain resources of the Ultimate Parent. As of December 31, 2022, the Company owes the Ultimate Parent \$17,899,411 related to this Agreement and for expenses reimbursed by clients but incurred by the Ultimate Parent on behalf of the Company. For the year ended December 31, 2022, the Company recorded \$5,000,000 in capital contributions representing forgiveness of the intercompany payable to the Ultimate Parent for the Company's share of its expenses provided for in the amended ESA. The Company made cash distributions to the ultimate parent of \$97,500,000 and non-cash distributions of \$2,083,930. These contributions and distributions are reflected in the Member's equity section on the Statement of Financial Condition. As of December 31, 2022, the Company owes the UK affiliate \$4,132,897 related to transfer pricing. {10}------------------------------------------------ ## LIONTREE ADVISORS LLC NOTES TO THE STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2022 ## NOTE 4 REGULATORY REQUIREMENTS The Company is a registered broker-dealer and is therefore subject to the Securities and Exchange Commission ("SEC") Uniform Net Capital Rule 15c3-l which requires the maintenance of minimum net capital. The Company has elected to use the alternative method permitted by the Rule, which requires the Company to maintain a minimum net capital equal to \$250,000. At December 31, 2022, the Company's net capital was approximately \$17,478,917, which was approximately \$17,228,917 in excess of its minimum requirement of \$250,000. # NOTE 5 CONCENTRATIONS Cash held by financial institutions which exceed the Federal Deposit Insurance Corporation ("FDIC") limit of \$250,000 expose the Company to concentrations of credit risk. Balances throughout the year usually exceeded the maximum coverage provided by the FDIC on insured depositor accounts. # NOTE 6 INCOME TAXES The Company adopted Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. There was no impact to the Company's financial statement as the Company is a single member limited liability company and is treated as disregarded entity for federal, state and city income tax purposes; therefore it does not incur income taxes at the Company level. Instead its earnings and losses are passed through to the member and included in the calculation of the Member's tax liability. Accordingly, no provision for income taxes has been made in the accompanying financial statement. ### NOTE 7 COMMITMENTS AND CONTINGENCIES In connection with investment banking activities, the Company may from time to time provide underwriting commitments to clients in connection with capital raising transactions. As of December 31, 2022, the Company had no commitments. In the ordinary course of business, various legal actions may be taken against the Company. Management believes, based on currently available information, that the results of such matters, in the aggregate, will not have a material adverse effect on the Company's financial statement. ### NOTE 8 SUBSEQUENT EVENTS The Company has evaluated subsequent events for adjustment to or disclosure in this financial statement through the date of this report and determined that there are no subsequent events requiring adjustments to or disclosure in the financial statement except for a \$15,000,000 cash distribution to the Ultimate Parent in January 2023. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.