# PACENOTE CAPITAL LLC X-17A-5 (2024-06-27) — Broker-dealer annual report - Company: PACENOTE CAPITAL LLC - Form: X-17A-5 - Filed: 2024-06-27 - Period: 2024-03-31 - Accession: 0001784687-24-000004 - CIK: 1784687 - File #: 8-70385 - Type: Broker-dealer - Material weakness: No - Auditor: Crowe LLP - Auditor location: New York, NY - Contact: Robert Fortino - Phone: 212-751-4422 - Email: rfortino@dfppartners.com - Website: dfppartners.com - Signed by: Kurt C. Peters (President & CCO) Original filing: https://www.sec.gov/Archives/edgar/data/1784687/000178468724000004/pncpublic.pdf --- {0}------------------------------------------------ # PACENOTE CAPITAL LLC Statement of Financial Condition March 31, 2024 {1}------------------------------------------------ #### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 ## ANNUAL REPORTS FORM X-17A-5 PART III SEC FILE NUMBER 8-70385 | | | | | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | |-----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------|-----------------|-----------------------------------------------------------------------------------------------------------| | FILING FOR THE PERIOD BEGINNING | MM/DD/YY | AND ENDING | 03/31/2024 | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | | | NAME OF FIRM: Pacenote Capital LLC | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
Broker-dealer
□ Check here if respondent is also an OTC derivatives dealer | Security-based swap dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 1410 East 3rd Street | | | | | | | (No. and Street) | | | | | Austin | I X | | | 78702 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Robert Fortino | 212-751-4422 | | | rfortino@dfppartners.com | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. Accountant Identification | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Crowe LLP | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 485 Lexington Ave. Floor 11 | New York | | NY | 10017 | | (Address) | (City) | | (State) | (Zip Code) | | 09/24/2003 | | | 173 | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | | | | | | | * Claims for exemption from the requirement that the annual reports of an independent public | CFR 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}------------------------------------------------ #### OATH OR AFFIRMATION s and belief and belief and best of my knowledge and belief, the ı, Kurt C. Peters financial report pertaining to the firm of Pacenote Capital LLC a managar and salam and service and services as of 3/31 partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. ![](_page_2_Picture_4.jpeg) | MARYROSE MERCADO
NOTARY PUBLIC, STATE OF NEW YORK | | |---------------------------------------------------------------------------------------------------|--| | Registration No. 01ME6423025
Qualified in Queens County
Commission Expires October 4. 20 J5 | | | Signature: // | | |---------------------------|--| | Title:
PRESIDENT & COO | | Notary Public #### This filing\*\* contains (check all applicable boxes): - = (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - O (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - പ (f) Statement of changes in liabilities subordinated to claims of creditors. - \_ (g) Notes to consolidated financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - ال (i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - □ (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - □ (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - □ (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capible net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - | (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.18a-7, as applicable. - | - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - \_ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - | as applicable. - \_ (y) Report describing any material inadequacies found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). - □ (z) Other: - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17o-5(e)(2), or 17 CFR 240.180-7(d)(2), as applicable. {3}------------------------------------------------ | Page(s) | |---------| |---------| | Report of Independent Registered Public Accounting Firm 1 | | |------------------------------------------------------------|--| | Financial Statement | | | Statement of Financial Condition 2 | | | Notes to Financial Statement 3-5 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Equity Owner of Pacenote Capital LLC Austin, Texas #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Pacenote Capital LLC (the "Company") as of March 31, 2024, 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 March 31, 2024, 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 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. Crowe LLP We have served as the Company's auditor since 2024. New York, New York June 26, 2024 {5}------------------------------------------------ ### Pacenote Capital LLC Statement of Financial Statement March 31, 2024 | Pacenote Capital LLC | | | |---------------------------------------|----|----------------------| | Statement of Financial Statement | | | | March 31, 2024 | | | | | | | | | | | | | | | | ASSETS | | | | Cash
Accounts receivable | \$ | 615,845
9,231,738 | | Other assets | | 6,451 | | Total assets | \$ | 9,854,034 | | LIABILITIES AND MEMBER'S EQUITY | | | | Liabilities | | | | Accounts payable and accrued expenses | \$ | 102,663 | | Due to parent | | 38,744 | | Guaranteed payments payable | | 2,871,097 | | Total liabilities | | 3,012,504 | | Member's equity | | 6,841,530 | | Total liabilities and member's equity | \$ | 9,854,034 | | | | | | | | | | | | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ #### 1. Nature of operations and summary of significant accounting policies #### Nature of Business Pacenote Capital LLC (the "Company"), a wholly-owned subsidiary of PEBB Holdings, LLC (the "Parent"), is a limited liability company organized under the laws of the state of Delaware on May 14, 2019. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA") effective March 17, 2020. The Company's operations consist primarily of private placement of securities and, accordingly, the Company does not carry securities accounts for customers or perform custodial services and, accordingly, claims exemption from Rule 15c3-3 of the Securities Exchange Act of 1934. #### Basis of Presentation The Company's statement of financial condition has been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). #### Income Taxes The Company is a single member Limited Liability Company. As such, the Company is a disregarded entity for tax purposes and is not subject to federal or state income taxes on its income. The Internal Revenue Code ("IRC") provides that any income or loss is passed through to the member(s) for federal and state income tax purposes. Accordingly, the Company has not provisioned for federal or state income taxes. At March 31, 2024, management had 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. The Company remains subject to U.S. federal and state income tax audits for all periods since inception. #### 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. #### Allowance for Credit Losses ASC Topic 326, Financial Instruments – Credit Losses ("ASC 326") impacts the impairment model for certain financial assets measured at amortized cost by requiring a Current Expected Credit Losses ("CECL") methodology to estimate expected credit losses over the entire remaining life of the financial asset. 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 cash, cash equivalents, fees and other receivables is not significant and, accordingly the Company has not provided an allowance for credit losses at March 31, 2024. {7}------------------------------------------------ #### 2. Related-party transactions On March 17, 2020, the Company entered into an Administrative Services Agreement (the "Expense Sharing Agreement") with the Parent. In accordance with the Expense Sharing Agreement, the Company reimburses the Parent, on a monthly basis, for a proportional share of the cost of the premises, payroll and certain administrative services provided by the Parent. As of March 31, 2024, the Company has approximately \$39,000 payable to Parent. #### 3. Concentration of credit risk From time to time, the Company will maintain cash balances in a financial institution that may exceed the Federal Deposit Insurance Corporation ("FDIC") coverage of \$250,000. Management regularly monitors the financial condition of these institutions in order to keep the potential risk to a minimum. #### 4. Net capital requirement The Company, as a member of FINRA, is subject to the SEC 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 March 31, 2024, the Company's net capital was approximately \$433,000, which was approximately \$232,000 in excess of its minimum requirement of approximately \$201,000. #### 5. Banking Risk Disclosure In March 2023, the shut-down of certain financial institutions raised economic concerns over disruption in the U.S. banking system. The U.S. government took certain actions to strengthen public confidence in the U.S. banking system. However, there can be no certainty that the actions taken by the U.S. government will be effective in mitigating the effects of financial institution failures on the economy and restoring public confidence in the U.S. banking system. Additional financial institution failures may occur in the near term that may limit access to short-term liquidity or have adverse impacts to the economy. Continued disruption could lead to operational difficulties that could impair the Company's ability to manage its businesses and could limit its revenue due to customers reducing their level of activity or due to a sell-off in markets that would limit anticipated revenue that is based on managed assets. {8}------------------------------------------------ #### 6. Subsequent events The Company evaluated subsequent events or transactions that occurred from April 1, 2024 through the date this financial statement was issued. The Company did not have any significant subsequent events that require recognition or disclosure in this financial statement. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.