# ZANBATO SECURITIES LLC X-17A-5 (2023-11-28) — Broker-dealer annual report - Company: ZANBATO SECURITIES LLC - Form: X-17A-5 - Filed: 2023-11-28 - Period: 2023-09-30 - Accession: 0001648813-23-000005 - CIK: 1648813 - File #: 8-69654 - Type: Broker-dealer - Material weakness: No - Auditor: EisnerAmper LLP - Auditor location: San Francisco, CA - Contact: Yuen Na Chun - Phone: 9176017066 - Website: eisneramper.com - Signed by: Knut Nicolai Sand (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1648813/000164881323000005/zasesofc.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response . . . 12.00 ### **ANNUAL AUDITED REPORT** SEC FILE NUMBER **FORM X-17A-5** 8-69654 **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 | 10/01/22 | AND ENDING | 09/30/23 | | |--------------------------------------------------------------------------|--------------------------------------------------------|------------|-----------------------------------------|--| | | MM/DD/YY | | MM/DD/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER - DEALER: | | | | | | Zanbato
Securities LLC | | | OFFICIAL USE ONLY
__________________ | | | | | | FIRM ID. NO. | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | | 711/715 N. Shoreline Blvd | | | | | | (No. and Street) | | | | | Mountain View | CA | | 94043 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | Gregory L. Wright | | | (201) 747-6223 | | | | | | (Area Code - Telephone No.) | | | | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | | EisnerAmper LLP | | | | | | (Name - if individual, state last, first, middle name) | | | | | One California, Suite 1700 | San Francisco | CA | 94111 | | | (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).*SEC 1410 (3-91) {1}------------------------------------------------ ![](_page_1_Picture_4.jpeg) | Signature: | | |---------------|--| | Title:
CEO | | - - - - - - - - - - - - - - - - - - - - - - - - - - {2}------------------------------------------------ **Statement of Financial Condition Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 and Regulation 1.10 under the Commodity Exchange Act September 30, 2023** {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) EE **EisnerAmper LLP** One California, Suite 1700 San Francisco, CA 94111 **T** 415.974.6000 **F**415.974.5488 www.eisneramper.com #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Zanbato Securities LLC #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Zanbato Securities LLC (the "Company") as of September 30, 2023 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 September 30, 2023, in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opinion* This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the 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 the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2015. **EISNERAMPER LLP San Francisco, California November 22, 2023** "EisnerAmper" is the brand name under which EisnerAmper LLP and Eisner Advisory Group LLC and its subsidiary entities provide professional services. EisnerAmper LLP and Eisner Advisory Group LLC are independently owned firms that practice in an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. EisnerAmper LLP is a licensed CPA firm that provides attest services, and Eisner Advisory Group LLC and its subsidiary entities provide tax and business consulting services. Eisner Advisory Group LLC and its subsidiary entities are not licensed CPA firms. {4}------------------------------------------------ ### **Statement of Financial Condition September 30, 2023** | Assets | | | |---------------------------------------|----|-----------| | Cash and cash equivalents | | 3,740,650 | | Accounts receivable, net | \$ | 508,207 | | Prepaid expenses and other assets | | 18,016 | | Total assets | \$ | 4,266,873 | | Liabilities and Member's Equity | | | | Liabilities | | | | Commission payable | | 2,156,939 | | Accounts payable and accrued expenses | \$ | 93,246 | | Due to affiliates | | 16,360 | | Total liabilities | | 2,266,545 | | Member's equity | | 2,000,328 | | Total liabilities and member's equity | \$ | 4,266,873 | See accompanying notes to the statement of financial condition. {5}------------------------------------------------ #### **Statement of Financial Condition September 30, 2023 Notes to Statement of Financial Condition September 30, 2023 Notes to Statement of Financial Condition September 30, 2023** #### **1. Organization and Business** Zanbato Securities LLC (the "Company"), is a limited liability company organized under the laws of the state of Delaware. The Company is a wholly owned subsidiary of Zanbato Holding Company LLC and an indirect subsidiary of Zanbato Inc. (the "Ultimate Parent"). The Company is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and an introducing broker registered with the Commodity Futures Trading Commission ("CFTC") and is a member of the Financial Industry Regulatory Authority ("FINRA") and the National Futures Association ("NFA"). The Company's operations include acting as an agent to match buyers and sellers of privately-held securities through an alternative trading system maintained by the Ultimate Parent and referral of investors into hedge funds. #### **2. Summary of Significant Accounting Policies** #### **Basis of Presentation and Use of Estimates** This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP") which 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. Actual results could differ from these estimates. #### **Cash and Cash Equivalents** All cash deposits are held by two financial institutions. Cash equivalents include short-term, highly liquid investments that are readily available to know amounts of cash and have original maturities of three months or less. The Company invests a majority of its available cash in a money market fund carried at fair value. #### **Accounts Receivable** The Company's accounts receivable, which primarily consist of balances due from customers for commission and fee income, are carried at amortized cost less the allowance for credit losses. Account balances outstanding longer than the contractual payment terms are considered past due. The credit risk associated with receivables is that any customers with which it conducts business is unable to fulfill contractual obligations. The allowance for credit losses is based on the Company's expectation of the collectability of such receivables in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 326-20, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. Management monitors the credit risk of customers, including historical experience, current conditions, reasonable assurance and supportable forecasts to determine expected credit loss. At October 1, 2022, the accounts receivable balance was \$1,867,112. As of September 30, 2023, accounts receivable balance of \$508,207 in the statement of financial condition is stated net of an allowance for credit losses of \$230,040. {6}------------------------------------------------ #### **Statement of Financial Condition September 30, 2023 Notes to Statement of Financial Condition September 30, 2023** #### **Income Taxes** The Company is a single member limited liability company and is treated as a disregarded entity for income tax reporting purposes. The Internal Revenue Code ("IRC") provides that any income or loss is passed through to the ultimate beneficial individual member for federal and state income taxes. Accordingly, the Company has not provided for income taxes. At September 30, 2023, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will always be subject to ongoing reevaluation as facts and circumstances may require. #### **3. Transactions with Related Parties** The Company has entered into an Expense Sharing Agreement ("ESA") with its Ultimate Parent whereby the Ultimate Parent provides office support services, information and marketing support services, employee compensation, payroll taxes and benefits, general consulting services and others at no charge to the Company. The ESA has a term of one year and is automatically renewed annually, unless terminated or modified by written notice. The terms of these arrangements may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. For the year ended September 30, 2023, the value of such services provided by the Ultimate Parent was approximately \$3,722,433. The Ultimate Parent does not charge these expenses to the Company and does not intend to seek reimbursement of such expenses. As of September 30, 2023, the Company owed \$16,360 to the Ultimate Parent, \$12,671 of which was for legal fees that were paid by the Ultimate Parent on the Company's behalf. #### **4. Regulatory Requirements** The Company is subject to the SEC Uniform Net Capital Rule 15c3-1 under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and is also subject to the net capital requirements of the CFTC Regulation 1.17 and the requirements of the NFA. At September 30, 2023, the Company had net capital of \$1,698,366 which exceeded the required net capital by \$1,547,263. The Company's net capital ratio was 1.3 to 1. #### **5. Contingencies** The Company is subject to litigation in the normal course of business. The Company has received a demand letter from a customer in connection with the failed acquisition of shares during the fiscal year ended September 30, 2022. On November 17, 2022, the Company rejected the customer's demand. The Company believes the claims against them are without merit and intends to defend themselves rigorously. No provision for damages has been made in the accompanying statement of financial condition. #### **6. Concentration of Credit Risk** In the normal course of business, the Company maintains cash and cash equivalents, which at times may exceed federally insured limits, in financial institutions in the United States of America. The Company is subject to credit risk to the extent any financial institution with which it conducts {7}------------------------------------------------ #### **Statement of Financial Condition September 30, 2023 Notes to Statement of Financial Condition September 30, 2023** business is unable to fulfill contractual obligations on its behalf. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. #### **7. Indemnifications** In the normal course of its business, the Company enters into contracts that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not occurred. The Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statement for these indemnifications. #### **8. Subsequent events** The Company had evaluated events or transactions that may have occurred since October 1, 2023 through November 22, 2023. Between October 1, 2023, through November 22, 2023 the Company made capital distributions of \$1,640,000 to its Ultimate Parent. There were no other material subsequent events that would require disclosure in the Company's financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.