# REDBIRD BD, LLC X-17A-5 (2023-02-27) — Broker-dealer annual report - Company: REDBIRD BD, LLC - Form: X-17A-5 - Filed: 2023-02-27 - Period: 2022-12-31 - Accession: 0001741196-23-000002 - CIK: 1741196 - File #: 8-70125 - Type: Broker-dealer - Material weakness: No - Auditor: Reynolds & Rowella, LLP - Auditor location: New Canaan, CT - Contact: Robert Klein - Phone: 212-235-2040 - Email: rklein@redbirdcap.com - Website: redbirdcap.com - Signed by: Robert Klein (President) Original filing: https://www.sec.gov/Archives/edgar/data/1741196/000174119623000002/redbirdbdllcpublic22.pdf --- {0}------------------------------------------------ # **REDBIRD BD, LLC** **Financial Statement December 31, 2022** {1}------------------------------------------------ | UNITED
STATES
SECURITIES
AND
EXCHANGE
COMMISSION
Washington, D.C. 20549
ANNUAL REPORTS
FORM X‐17A‐5
PART
III | | | OMB APPROVAL
OMB Number: 3235‐0123
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SEC FILE NUMBER
8‐70125 | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--| | | 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
MM/DD/YY | ENDING | 12/31/2022
MM/DD/YY | | | | | A.
REGISTRANT | IDENTIFICATION | | | | | NAME
OF
FIRM: RedBird
BD, LLC | | | | | | | ☐ Check here if respondent is also an OTC derivatives dealer
ADDRESS
OF
PRINCIPAL
PLACE
OF
667
Madison
Avenue,
16th
Floor | BUSINESS:
(Do
not
use
P.O. | Box
No.) | | | | | | | (No. and Street) | | | | | New
York | | NY | 10065
(Zip Code) | | | | (City)
PERSON
TO
CONTACT
WITH
REGARD | TO
THIS
FILING | (State) | | | | | Robert
Klein 212‐235‐2040 rklein@redbirdcap.com | | | | | | | (Name) | (Area Code – Telephone Number) | | (Email Address) | | | | | B.
ACCOUNTANT | IDENTIFICATION | | | | | INDEPENDENT
PUBLIC
ACCOUNTANT | whose
opinion
is
contained | in
this
filing* | | | | | Reynolds
&
Rowella,
LLP | | (Name – if individual, state last, first, middle name) | | | | | 51
Locust
Avenue | New
Canaan | CT | | 06840 | | | (Address) | (City) | (State) | | (Zip Code) | | | 04/23/2009 | | | | 3448 | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | | * Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public | FOR OFFICIAL USE ONLY | | | | | 240.17a‐5(e)(1)(ii), if applicable. **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}------------------------------------------------ | | Page(s) | |------------------------------------------------------------|---------| | Report of Independent Registered Public Accounting Firm 1 | | | Financial Statement | | | Statement of Financial Condition 2 | | | Notes to Financial Statement 3–6 | | {4}------------------------------------------------ ## **RedBird BD, LLC Statement of Financial Condition December 31, 2022** | ASSETS | | | |---------------------------------------|----|------------| | Cash | \$ | 11,819,859 | | Fees receivable | | 13,486,158 | | Prepaid expenses and other assets | | 3,364 | | | | | | Total assets | \$ | 25,309,381 | | LIABILITIES AND MEMBER'S EQUITY | | | | Liabilities | | | | Accounts payable and accrued expenses | | 155,878 | | Due to affiliate | | 1,083,521 | | Income taxes payable | | 47,049 | | | | | | Total liabilities | | 1,286,448 | | Member's equity | | 24,022,933 | | Total liabilities and member's equity | \$ | 25,309,381 | The accompanying notes are an integral part of the financial statement. {5}------------------------------------------------ #### **1. Nature of operations and summary of significant accounting policies** #### *Nature of Business* RedBird BD, LLC (the "Company"), a wholly-owned subsidiary of RedBird Capital Partners Alternative Holdings LLC (the "Parent"), is a limited liability company organized under the laws of the State of Delaware on November 30, 2016. On October 8, 2018, the Company received approval to become a capital acquisition broker-dealer and as such is registered as a capital acquisition broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a strategic and financial advisory firm, which focuses on the private placement of securities and on the planning and structuring of transactions, including mergers, acquisitions, restructurings and other significant corporate and finance activities, which may result in securities offerings. #### *Basis of Presentation* The Company's financial statement has been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). #### *Use of Estimates* The preparation of the financial statement in conformity with US GAAP requires the Company's 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 those estimates. #### *Cash and Cash Equivalents* The Company defines cash equivalents as short term, highly liquid investments with original maturities of less than ninety days at the time of purchase. The carrying amounts of cash equivalents approximate the fair value due to the short term nature of these instruments. There were no cash equivalents as of December 31, 2022. #### *Fees Receivable* Fees receivable are carried at the amounts billed to customers, net of an allowance for credit losses, which is an estimate for credit losses based on a review of all outstanding amounts. Fees receivable includes one transaction at the present value of a series of contractual payments. As of December 31, 2022, the present value of the fee receivable was \$486,158 as compared to the aggregate contractual principal amounts outstanding of \$500,000. No portion of the fee receivable from this one transaction is due greater than one year from December 31, 2022. There were no fees receivable past due as of December 31, 2022. #### *Allowance for credit losses* The Company applies Accounting Standards Codification ("ASC") Topic 326, Financial Instruments – Credit Losses ("ASC 326") for certain financial assets measured at amortized cost to estimate current expected credit losses ("CECL"). {6}------------------------------------------------ #### **1. Nature of operations and summary of significant accounting policies (continued)** #### *Allowance for credit losses (continued)* The allowance for credit losses is based on the Company's expectation of the collectability of financial instruments carried at amortized cost, including fees receivable utilizing the CECL framework. 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. The Company's expectation is that the credit risk associated with fees receivable is not significant until they are 90 days past due on the contractual arrangement and expectation of collection is in accordance with industry standards. Management does not believe that an allowance is required as of December 31, 2022. #### *Disaggregation of Revenue* Contract assets arise when the revenue associated with the contract is recognized prior to the Company's unconditional right to receive payment under a contract with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a receivable or the cash is received. No contract assets are reported in the accompanying statement of financial condition at December 31, 2022. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. As of December 31, 2022, there were no contract assets or liabilities reported on the accompanying statement of financial condition. #### *Income Taxes* The Company is a single member limited liability company treated as a disregarded entity for federal and state income tax purposes and, accordingly, no income taxes are incurred by the Company as all earnings and losses flow directly to the Parent. However, the Company is subject to New York City Unincorporated Business Tax and records a provision for unincorporated business taxes and reimburses the Parent for taxes incurred attributable to the Company's income, which is reported in the Parent's tax returns. At December 31, 2022, management has determined that the Company had no uncertain tax positions that would require financial statement recognition and or disclosure. This determination will always be subject to ongoing reevaluation as facts and circumstances may require. The Company remains subject to U.S. federal, state and local income tax audits for tax years 2020 through 2022. At December 31, 2022, the Company had income taxes payable of \$47,049 in the accompanying statement of financial condition. {7}------------------------------------------------ ### **1. Nature of operations and summary of significant accounting policies (continued)** #### *Leases* In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases and in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Leases collectively ("Topic 842"), which supersedes the existing guidance for lease accounting, Leases (Topic 840). Topic 842 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The Company performed an internal review of its active agreements including its expense sharing agreement with an affiliate of the Company, RedBird Capital Partners Management LLC (the "Operating Affiliate"). The expense sharing agreement does not convey the right to control the use of specific space as the space utilized by the Company is leased by and also shared with the Company's Operating Affiliate which has significant operations in the United States and the space is at any time subject to substitution at the sole discretion of the Operating Affiliate. Since the Company cannot reasonably identify the underlying asset and does not exercise control over the asset, it is the Company's position that rent allocated to the Company pursuant to the expense sharing agreement does not constitute a lease within the scope of Topic 842. Therefore, the Company concluded Topic 842 did not have an impact on its operations as the Company has determined it has no leases. ### **2. Related party transactions** Effective October 8, 2018, the Company entered into an expense sharing agreement with the Operating Affiliate whereby the Operating Affiliate provides certain administrative services in connection with the Company's operations. These include personnel, professional services, physical premises, utilities, the use of office equipment, travel, insurance, subscriptions, and other general and administrative services. As of December 31, 2022, \$1,083,521 was payable by the Company to the Operating Affiliate and was included in due to affiliate in the accompanying statement of financial condition. ### **3. Concentration of credit risk** The Company maintains its cash balance with one financial institution which is insured by the Federal Deposit Insurance Corporation ("FDIC"). The Company's cash balance may exceed the FDIC coverage of \$250,000. The Company has not experienced any losses in such account and believes it is not subject to any significant credit risk on cash. ### **4. Concentration of fees receivable** As of December 31, 2022, 100% of the fees receivable were due from two customers. ### **5. Net capital requirement** The Company is a member of the Financial Industry Regulatory Authority and 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 to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1. At December 31, 2022, the Company's net capital was \$10,545,370, which was \$10,459,607 in excess of its minimum requirement of \$85,763. At December 31, 2022, the Company's aggregate indebtedness to net capital as defined by SEC Rule 15c3-1 was 0.12 to 1.0. {8}------------------------------------------------ #### **6. Exemption from Rule 15c3-3** The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240,15c3-3 since the Company limits its business activities pursuant to footnote 74 to SEC Release 34-70073 Concerning the July 30, 2013 Amendments to the Broker-Dealer Financial Reporting Rule 17a-5 and since the Company carries no customer accounts, and does not otherwise hold funds or securities of customers. #### **7. Risks and Uncertainties** In the ordinary course of business, the Company may be subject to litigation. In management's opinion, based upon the information available at this time there are no litigation claims against the Company that would have a material impact on the financial position or operating results of the Company. #### **8. Subsequent events** The Company has evaluated its subsequent events through February 27, 2023, the date that the accompanying financial statement was available to be issued. There were no significant subsequent events which would require recognition or disclosure in the accompanying financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.