# ALPACA SECURITIES LLC X-17A-5 (2021-02-12) — Broker-dealer annual report - Company: ALPACA SECURITIES LLC - Form: X-17A-5 - Filed: 2021-02-12 - Period: 2020-11-30 - Accession: 0001702580-21-000002 - CIK: 1702580 - File #: 8-69928 - Material weakness: No - Auditor: Alvarez & Associates, Inc. - Auditor location: Northridge, CA - Contact: David Chaskin - Phone: 9142634742 - Signed by: John Torola (President, COO, CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1702580/000170258021000002/alpaca.pdf --- {0}------------------------------------------------ # ALPACA SECURITIES LLC STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM NOVEMBER 30, 2020 (PURSUANT TO RULE 17a-5(e)(3)) {1}------------------------------------------------ # Alpaca Securities LLC # STATEMENT OF FINANCIAL CONDITION AND INDEPENDENT AUDITORS' REPORT ## NOVEMBER 30, 2020 ## CONTENTS | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-----| | Financial Statements | | | Statement of Financial Condition | | | Notes to Financial Statements | 3-8 | {2}------------------------------------------------ - r--- ,----•- -----.. - ·-·- · 1-. r 1 r --- .- : ·.;---- # !"#\$%&'()\*+ ,-./0123456789:;<=> ?@ABCDEFGHI JKLMNOP | | [\ ]^_`abcd | | | |---------------|-------------------------------------------------------|--|--| | | efghijk
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' | | | > ¢£¤¥ ¦§¨©ª«¬®¯°±²³´µ¶·¸¹º»¼½¾¿ ÀÁ ÃÄÅÆ ÇÈÉÊË ÌÍÎÏÐ ÑÒÓÔÕÖרÙÚÛÜÝÞßàáâãäåæç èéêë ìíî ïðñ òóôõ ö÷øùú ûüýþ-- !"#\$%&'()\*+,-./01234567829:;5<=3>?@,-ABCD EFGHIJK {3}------------------------------------------------ #### **OATH OR AFFIRMATION** | I, John Torola | , swear (or affirm) that, to the best of
my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the flrm of | |-----------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------| | -----
Alpaca Securities LLC | ------------------------------
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of November 30 | -
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, BS
2020
are true and correct. I further swear (or affirm) that | | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest In any account | | classified solely as that ofa customer, exc;:epl as follows: | | | | | | | | | | | | | | | | | | | | | | Signature | | | President, CCC, COO | | | Title | | | | | | | | Notary Public | CHIRAG PATEL
ELECTRONIC NOTARY PUBLIC | | This report•• contains (check all applicable bo11.es); | COMMONWEALTH OF VIRGINIA | | El (a) Facing Page. | REGISTRATION #7679556 | | 0 (b} Statement of Financial Condition. | COMMISSION EXP JUNE 30, 2024
D ( c) Statement of Income (Loss) Qr, if there is other compre'h'etl!i~'Trfc'o'ffl'I! 'lif Uil! period( s) presented, a 'Statement | | of Comprehensive Income (as defined in §210,1-02 of Regulation S-X). | | | (d) Statement of Changes in Financial Condition. | | | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. | | | (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital. | | | (h) Computation for Oetenninatlon of Reserve Requirements Pursuant to Rule 15c3-3. | | | (I) lnfol'Dlation Relating to the Possession or Control Requirements Under Rule I Sc3-3. | | | | D (j) A Reconciliation, including appropriate explanation of the Computation ofNet Capital Under Rule I 5c3-l and the | | Computation for Determination of the Reserve Requirements Under E11.hibit A of Rule t5c3-3. | | | | O (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with respect to methods of | | consolidation.
(I) An Oath or Affirmation. | | | (m) A copy of the SIPC Supplemental Report. | | | ~ | (n) A report describing any material inadequacies found to exist or found to have e11.isted since the date oflhe previous audit . | | | | *.. For conditions of confidential treatment of certain portions of this filing, see section 240. I 7a-S(e)(3).* Document Notarized using a Live Audio-Video Connection {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To Those Charged with Governance and the Member of Alpaca Securities LLC~ ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Alpaca Securities LLC (the "Company") as of November 30, 2020, 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 November 30, 2020 in confonnity 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 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. We have served as the Company 's auditor since 2019. Northridge, California February 11 , 2021 > **9221** Corbin Avenue Suite 165 ~ Northridge, California 91324 800.848.0008 • ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ # ALPACA SECURITIES LLC Statement of Financial Condition | November 30, | | 2020 | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|-----------------------------------------------------------------------| | ASSETS | | | | Cash
Cash segregated under Federal and other regulations
Investment securities owned, at fair value
Due from brokers
Clearing brokers deposit
Receivable from customers
Prepaid expenses | ക | 1,971,031
40,848
4,771
117,715
200,017
2,547
12,674 | | Total assets | S | 2,349,603 | | LIABILITIES AND MEMBER'S EQUITY | | | | Liabilities
Accounts payable and accrued expenses
Due to broker
Related party payable
Investment securities sold, not yet purchased
Payables to customers
Total liabilities | ക | 38,400
23,135
346,464
27
41,479
449,505 | | Member's Equity | | 1,900,098 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | | 2,349,603 | The accompanying notes are an integral part of these financial statements {6}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS (Confidential Pursuant to Rule 17a-5(e)(3)) ## 1. Nature of business and summary of significant accounting policies ## Nature of Business and Organization Alpaca Securities LLC (the "Company") is a wholly owned subsidiary of AlpacaDB, Inc. ("Parent"). The Company is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Requlatory Authority ("FINRA"). The Company currently acts as an introducing broker and or in an omnibus capacity for listed securities, and retails corporate equity securities over-the-counter. The Company operates under Rule 15c3-1 of the Securities Exchange Act of 1934, where the requirement is to maintain sufficient liquidity in order to cover the Company's obligations. The Company executes and clears its customer securities transactions on a fully disclosed basis, unless acting in an omnibus capacity, with Electronic Transaction Clearing, Inc. dba Apex PRO ("Apex Pro"). The clearing broker-dealer carries all of the accounts of the customers and maintains and preserves all related books. The Company also operates under Rule 15c3-3 of the Securities Exchange Act of 1934, conducting business on an omnibus basis and clearing through Velox Clearing LLC ("Velox"). Receivables to broker reflected in the statement of financial condition are amounts due from and to the brokers at November 30, 2020. ## Basis of Presentation The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). ## Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect the amounts disclosed in the financial statements. Actual results could differ from those estimates. {7}------------------------------------------------ #### - #### --- # 56789:;<=:> !"#\$%&"'\$()\*+,-+("''!.+)&/0(12&3433 ?@ABCDEFGHIJFJIGKLAMDADNAOLIDIPAQLIFNILIPHRCDEFGHST@IR@IJQIJOAKFOQAQUCOUAQAOFLFGQJPFPAIGRCDAPFV EWOECJAJFGQIJGCPJWNXARPPCPFVAJCGIPJIGRCDAY?@AZFOAGPCUP@ABCDEFGHIJF[B\BCOECOFPICGY]JAVELFIGAQ IG^CPA\_SP@ABCDEFGH@FJFGAVEAGJAJ@FOIGKFKOAADAGPTIP@P@AZFOAGPY`GQAOP@APAODJCUP@AFKOAADAGPSP@A ZFOAGPOAIDNWOJAJP@ABCDEFGHUCOFLLPFVAJSIGRLWQIGKEFHOCLLFGQJFLAJPFVY]RRCOQIGKLHSP@ABCDEFGH@FJGCP EOCaIQAQIGP@AJAUIGFGRIFLJPFPADAGPJUCOUAQAOFLCOJPFPAIGRCDAPFVAJY > bGFRRCOQFGRATIP@c]]ZSP@ABCDEFGHIJOAdWIOAQPCQAPAODIGAT@AP@AOFPFVECJIPICGCUP@ABCDEFGHIJDCOA LIeALHP@FGGCPPCNAJWJPFIGAQWECGAVFDIGFPICGNHP@AFEELIRFNLAPFVIGKFWP@COIPHSIGRLWQIGKOAJCLWPICGCUFGHOALFPAQ FEEAFLJCOLIPIKFPICGEOCRAJJAJSNFJAQCGP@APAR@GIRFLDAOIPJCUP@AECJIPICGY?@APFVNAGAUIPPCNAOARCKGIfAQIJ DAFJWOAQFJP@ALFOKAJPFDCWGPCUNAGAUIPP@FPIJKOAFPAOP@FGUIUPHEAORAGPLIeALHCUNAIGKOAFLIfAQWECGWLPIDFPA JAPPLADAGPYgAMOARCKGIPICGCUFPFVNAGAUIPEOAaICWJLHOARCKGIfAQRCWLQOAJWLPIGP@ABCDEFGHOARCOQIGKFPFVLIFNILIPH P@FPTCWLQOAQWRADADNAOhJAdWIPHY?@IJECLIRHFLJCEOCaIQAJKWIQFGRACGP@OAJ@CLQJSDAFJWOADAGPSQAMOARCKGIPICGS RLFJJIUIRFPICGSIGPAOAJPFGQEAGFLPIAJSFRRCWGPIGKIGIGPAOIDEAOICQJSQIJRLCJWOASFGQPOFGJIPICGP@FPIJIGPAGQAQPC EOCaIQANAPPAOUIGFGRIFLJPFPADAGPRCDEFOFNILIPHFDCGKQIUUAOAGPAGPIPIAJYiFGFKADAGPhJRCGRLWJICGJOAKFOQIGKP@IJ ECLIRHDFHNAJWNXARPPCOAaIATFGQFQXWJPDAGPFPFLFPAOQFPANFJAQCGUFRPCOJIGRLWQIGKSNWPGCPLIDIPAQPCSCGMKCIGK FGFLHJAJCUFGQR@FGKAJPCPFVLFTJSOAKWLFPICGJFGQIGPAOEOAPFPICGJP@AOACUY > ?@ABCDEFGHIJOAdWIOAQPCUILAIGRCDAPFVOAPWOGJIGNCP@UAQAOFLFGQJPFPAPFVXWOIJQIRPICGJY?@ABCDEFGHhJPFV OAPWOGJFOAJWNXARPPCAVFDIGFPICGNHPFVIGKFWP@COIPIAJIGP@AXWOIJQIRPICGJIGT@IR@IPCEAOFPAJIGFRRCOQFGRATIP@ P@AGCODFLJPFPWPAJCULIDIPFPICGJIGP@AFEELIRFNLAXWOIJQIRPICGYjCOUAQAOFLEWOECJAJSP@AJPFPWPACULIDIPFPICGJIJP@OAA HAFOJY]RRCOQIGKLHSP@ABCDEFGHIJGCLCGKAOJWNXARPPCAVFDIGFPICGCUUAQAOFLOAPWOGJUILAQDCOAP@FGP@OAAHAFOJ EOICOPCP@AQFPACUP@AJAUIGFGRIFLJPFPADAGPJY?@AJPFPWPACULIDIPFPICGJUCOJPFPAEWOECJAJIJKAGAOFLLHP@OAAHAFOJS NWPDFPAVRAAQP@IJLIDIPFPICGQAEAGQIGKWECGP@AXWOIJQIRPICGIGaCLaAQYkAPWOGJP@FPTAOAUILAQTIP@IGP@AFEELIRFNLA JPFPWPAOADFIGJWNXARPPCAVFDIGFPICGY]JCU^CaADNAOlmSnmnmSP@Abko@FJGCPEOCECJAQFGHFQXWJPDAGPPCP@A BCDEFGHhJPFVECJIPICGY #### p qr r stus s us q vr u BFJ@JAKOAKFPAQWGQAOjAQAOFLFGQCP@AOOAKWLFPICGJOAEOAJAGPJOAJPOIRPAQRFJ@JAKOAKFPAQIGFRRCOQFGRATIP@P@A BWJPCDAOZOCPARPICGkWLAw[kWLAxyRlMl\zCUP@AoARWOIPIAJ{VR@FGKA]RPCUx|l\_SFJFDAGQAQwP@A[{VR@FGKA]RP\zY `GQAOkWLAxyRlMlSFNOCeAOQAFLAORFOOHIGKRWJPCDAOFRRCWGPJIJJWNXARPPCOAdWIOADAGPJOALFPAQPCDFIGPFIGIGK RFJ@COdWFLIUIAQJARWOIPIAJIGFJAKOAKFPAQOAJAOaAFRRCWGPUCOP@AAVRLWJIaANAGAUIPJCURWJPCDAOJY?@ANFLFGRACU RFJ@JAKOAKFPAQWGQAOjAQAOFLFGQCP@AOOAKWLFPICGJFP^CaADNAOlmSnmnmTFJ}\_mS~\_~FGQIJIGRLWQAQCGP@A FRRCDEFGHIGKJPFPADAGPCUUIGFGRIFLRCGQIPICGY {8}------------------------------------------------ - #### #### !"" # #### :! ; # < \$%&'()\*+',)-./0120-',,&30.+45-67\$+8\$988 =>?@AB>CDEF?>GDEDHIBAJK?G>@JDICAALCCDI?F>JDID?LCM?A>K>A>DN>LLI?J?AND?LCGD>IL KDHLO?PDF?D>G>FLDCILDEOCB?OLDJDQRE?>CDE?A@AM>?@ABE>??GENDEDJCG?>KCDE >LFBDCDED?BCJDIOCB?CCDCLJA>K>A>D>CQ #### S T@AUCCDLJA>K>A>DNM>?@ABC?KCJILVBIDJF?>GC>LGD>@O?PDCMI?>JLD>GACCDCLJA>K>A>D>CQ #### T@AWCCDCLJA>K>A>D>CM>?@AB?KCJILIKC?@KA>LFBDCDED>LGABJXVBIDJO?PDF?>GCMI?C>O>A? 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| yWz | yWz | yv | yv | \_FG>M>G@ABD>ILDGEL>VBCLJ>LFBDCBCJ>LJD?O>L>LDEM>?@ABIMGEGACCIMCCDCLJA>K>A>D>C MIAAIHX `abcdefRECCGB?>D>CGILC>CDIMGIOOILCDIGPQRECCGB?>D>C?@ABJKCJIL?@>HIMVBIDJO?PD F?>GCMI?>JLD>GACCDCQ ghibjcdchklmnhopnldehdqbjirskhofRECCGB?>D>CGILC>CDIMGIOOILCDIGPCIAJCEI?DQ\_EI?DFIC>D>ILC?F?>GJ BC>LDEODEIJCJCG?>KJKI@Q {9}------------------------------------------------ ### Alpaca Securities LLC November 30, 2020 ## NOTES TO FINANCIAL STATEMENTS (Confidential Pursuant to Rule 17a-5(e)(3)) #### ব Due from brokers Pursuant to its clearing agreements, the Company introduces all its securities transactions to Apex Pro on a fully disclosed basis and to Velox on an omnibus basis. Those customers' money balances and security positions cleared through Apex Pro are carried on the books of Apex Pro. Those customers' security positions cleared through Velox are carried on the books of Velox in omnibus. In accordance with the clearance agreements, the Company has agreed to indemnify the clearing brokers for losses, if any, which the clearing brokers may sustain from carrying securities transactions introduced by the Company. In accordance with industry practice and regulatory requirements, the Company and the clearing brokers monitor collateral on the customers' accounts. In addition, pursuant to its executing agreement, the Company executes securities transactions with executing brokers. As of November 30, 2020, the due from brokers of \$117,715 are pursuant to these agreements. ## 5. Clearing brokers deposits The Company has a brokerage agreement with its clearing brokers to carry its accounts of its clients as customers of the clearing brokers have custody of the Company's cash balances which serve as collateral for any amounts due to the clearing brokers as well as collateral for securities sold short or securities purchased on margin. Interest is paid monthly on these cash deposits held at Apex Pro and Velox. The balance at November 30, 2020 was \$200,017. ## 6. Receivable from and payable to customers Accounts receivable and payable to customers include amounts due on cash and margin transactions. Securities owned by customers are held as collateral for receivables. ## 7. Related party transactions The Company has an expense sharing agreement with its Parent performs and provides certain functions for the Company, including office facilities, payroll services, professional services, and technology. In accordance with the terms of this agreement, the Company was charged approximately \$1,200,661 for these services, for the year ended November 30, 2020. The intercompany payable represents unpaid amounts due to Parent of \$346,464 at November 30, 2020 and is included on the accompanying statement of financial condition. {10}------------------------------------------------ # NOTES TO FINANCIAL STATEMENTS (Confidential Pursuant to Rule 17a-5(e)(3)) ## 8. Net capital and reserve requirement The Company, as a member of FINRA, is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3-1. This rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness as defined to net capital, shall not exceed 15 to 1. The rule also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. At November 30, 2020, the Company's net capital was \$1,768,992 which was \$1,518,992 in excess of its minimum net capital of \$250,000. This minimum net capital is based upon the greater of \$250,000 or 6.67% of aggregate indebtedness. The Company's ratio of aggregate indebtedness to net capital was 0.25 to 1 The Company is also subject to Rule 15c3-3 under the Securities Exchange Act of 1934 (Customer Protection Rule) and other applicable regulations, which require us to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of clients. The SEC Customer Protection Rule requires broker-dealers to segregate client fully paid securities and cash balateralizing margin positions and not swept to money market funds or bank deposit accounts included in cash and investments segregated and on deposit for regulatory purposes represent actual balances on deposit, whereas cash and investments require to be segregated and on deposit for regulatory purposes at November 30, 2020 totaled \$40,848. On December 2, 2020, the Company deposited \$58 of cash into its segregated reserve account. ## 9. Off-balance sheet risk and concentrations of credit risk In the normal course of business, the Company's customer activities involve the execution, settlement, and financing of various customer securities transactions. These activities may expose the Company to off-balance-sheet risk in the event the customer or other broker is unable to fulfill its contracted obligations. The Company maintains cash in bank accounts which, at times, may exceed federally insured limits. The Company is subject to credit risk to the extent any financial institution with which it conducts business is unable to fulfill contractual obligations on its behalf. ## 10. Commitments and contingencies The Company has entered into a fully disclosed clearing agreement with Apex Pro. The agreement terminates on February 14, 2021 and requires minimum monthly charges to the termination date that total an aggregate of \$15,625. The Company has entered into an omnibus clearing agreement with Velox. The agreement requires minimum monthly charges that total an aggregate of \$52,000 for the year ended period November 30, 2021. In the normal course of business, the Company may be involved in disputes, claims or assessments from time to time. The Company is not aware of any such matters that would have a material impact on its financial statements. The Company incurred significant losses in the current period associated with becoming a new entrant into its industry. Similar startup costs are not projected for the next fiscal period. The company has significant liquid funds to continue its operations and meet its obligations that are due within one year following the date that the financial statements are issued. {11}------------------------------------------------ #### - #### --- #### 55678 9 : 8 8; 8 88 !"#\$%&"'\$()\*+,-+("''!.+)&/0(12&3433 <=>?@ABCADEFGHIJK?>LMNOPPB?QLMRSTUOVWXEIY?CP?PIZKOVKPBU?AP?Q?PJK??[OPJO=\\BOQC=V?]TA^?CP? 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