# PURESTREAM, LLC X-17A-5 (2023-03-30) — Broker-dealer annual report - Company: PURESTREAM, LLC - Form: X-17A-5 - Filed: 2023-03-30 - Period: 2022-12-31 - Accession: 0001798802-23-000005 - CIK: 1798802 - File #: 8-70472 - Type: Broker-dealer - Material weakness: No - Auditor: Crowe LLP - Auditor location: New York, NY - Contact: Armando Diaz - Phone: 201-694-6421 - Email: sbrown@compliance-risk.com - Website: compliance-risk.com - Signed by: Armando Diaz (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1798802/000179880223000005/PDFPSLARPublic2022E.pdf --- {0}------------------------------------------------ ### UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | ANNUAL REPORTS | |----------------| | FORM X-17A-5 | | PART III | SEC FILE NUMBER 8-70472 FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | Filing FOR THE PERIOD BEGINNING 1/1/2022 | | AND ENDING | 12/31/2022 | | |-----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|-----------------|--------------------------------------------| | | MM/DD/YY | | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | PureStream, LLC
NAME OF FIRM: | | | | | | 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 a P.O. box no.) | | | | | | 712 FIFTH AVENUE | 21ST FLOOR | | | | | | (No. and Street) | | | | | NEW YORK | NY | | | 10019 | | (City) | (State) | | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Scott Brown | 917-696-8331 | | | sbrown@compliance-risk.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 Avenue, Fl 11 | New York | NY | | 10017 | | (Address) | (City) | | (State) | (Zip Code) | | 9/24/2003 | | #173 | | | | (Date of Registration with PCAOB)(if applicable) | | | | (PCAOB Registration Number, if applicable) | | * Claims for exemption from the requirement that the annual reports of an independent public | FOR OFFICIAL USE ONLY | | | | accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 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. {1}------------------------------------------------ ### OATH OR AFFIRMATION swear swear (or affirm) that, to the best of my knowledge and belief, the Armando Diaz financial report pertaining to the firm of PureStream, LLC ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ December 31 \_ , 2 022 any 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_1_Figure_3.jpeg) ![](_page_1_Figure_4.jpeg) Notary Public ### This filing\*\* contains (check all applicable boxes); - (a) Statement of financial condition. - 2 (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable. - □ (c) Statement of income (loss) or, if there is other comprehensive in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - □ (d) Statement of cash flows. - □ (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - [] {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. - [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. - 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - O (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, or 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. - പ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - 2 (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - O (r) Compliance report in accordance with 17 CFR 240.17a-5 or 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. - 2 (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. - □ (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, as applicable. - □ (y) Report describing any material inadequacies found to 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)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ # PureStream, LLC Statement of Financial Condition with Report of Independent Registered Public Accounting Firm December 31, 2022 Filed as a Public Document in accordance with Rule 17a-5(e)(3) of the Securities Exchange Act of 1934 {3}------------------------------------------------ ### PureStream, LLC Table of Contents | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3-6 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Member of PureStream, LLC New York, New York ### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of PureStream, 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 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 2022. New York, New York March 29, 2023 {5}------------------------------------------------ ## December 31, 2022 | Statement
of Financial Condition
December 31, 2022 | | | | |----------------------------------------------------------|-------------|--|--| | ASSETS | | | | | Cash
and
cash equivalents | \$3,350,365 | | | | Accounts receivable | 770,295 | | | | Deposit with clearing broker | 1,000,000 | | | | Other
assets | 86,224 | | | | TOTAL ASSETS | \$5,206,884 | | | | LIABILITIES | | | | | Accounts payable | \$1,192,660 | | | | Salaries and wages payable | 890,951 | | | | Other liabilities and accrued expenses | 260,100 | | | | Due to Member | 29,110 | | | | TOTAL LIABILITIES | \$2,372,821 | | | | | | | | | MEMBER'S EQUITY | 2,834,063 | | | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$5,206,884 | | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ ### 1. ORGANIZATION AND NATURE OF BUSINESS PureStream, LLC (the "Company") is a Delaware single member LLC formed on October 17, 2019. The Company is an agency broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority, Inc. ("FINRA"). The Company is wholly owned by PureStream Trading Technologies Inc. (the "Parent"/"Member"). The Company, pursuant to Regulation ATS and Regulation ATS NMS, is the broker-dealer operator of the PureStream alternative trading system (the "ATS" or "PURE ATS"). The PURE ATS executes trades on an agency only basis in National Market System ("NMS") equity securities for its brokerdealer subscribers. The Company generates transaction fees for facilitating trading on the PURE ATS. The Company received regulatory approval to commence its broker dealer operations on March 15, 2021 and began operating the PURE ATS during August 2021. Income Taxes ### 2. SIGNIFICANT ACCOUNTING POLICIES ### Basis of Presentation The preparation of this financial statement is on an accrual basis of accounting and in accordance with accounting principles generally accepted in the United States of America ("GAAP"). ### Use of Estimates The preparation of this financial statement, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statement. Actual results could differ from those estimates. As a single member limited liability company, wholly owned by PureStream Trading Technologies Inc., a C-corporation, the Company is deemed a disregarded entity not subject to U.S. Federal income taxes. Taxable income or loss of the Company is therefore allocated to its Member and included in the income tax returns filed by its Parent. Uncertainties in income taxes are provided for under the provisions of FASB ASC 740, "Accounting for Uncertainty in Income Taxes." The ASC establishes guidance on uncertain tax positions using a threshold approach. For the year ended December 31, 2022, the Company had no material unrecognized tax and no uncertain tax positions. As such no related reserves or disclosures are included in the Company's statement of financial condition. In accordance with ASU No. 2019-12, the Company has not included deferred tax assets and liabilities in the Statement of Financial Condition. ### Government and Other Regulation A broker-dealer of securities business is subject to significant regulation by various governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. As a registered broker-dealer, the Company is subject to the Securities and Exchange Commission's net capital rule (Rule 15c3-1) which requires that the Company maintain a minimum net capital, as defined. {7}------------------------------------------------ ### Receivables and Contract Balances December 31, 2022 Receivables arise when the Company has an unconditional right to receive payment under a contract with subscribing Broker Dealers. The accounts receivable balance at December 31, 2022 was \$770,295. This consists of PURE ATS commission income receivable. 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 receivables) and are reversed when either it becomes a receivable, or the cash is received. Contract assets are reported in the statement of financial condition. As of December 31, 2022, there were no unbilled receivables and no contract assets. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are reversed when the revenue associated with the contract is recognized when the performance obligation is satisfied. As of December 31, 2022, there were no contract liabilities. Allowance for credit losses of trade receivable balances is regularly evaluated and a determination is made based on a combination of factors such as subscriber's creditworthiness, past transaction history with the subscriber, and reasonable and supportable forecasts. Changes to such allowance would be reflected in accordance with ASC 326. At December 31, 2022, the Company believes that all of its trade receivable balances will be collected. Due to the short-term nature of the accounts receivable, changes in future economic conditions are not expected to have a significant impact on the expect credit losses. The Company continually reviews the credit quality of its subscribers, which are SEC-registered broker-dealers. There were no credit losses incurred in 2022 and no allowance for credit losses was established as of December 31, 2022. ### Lease The Company follows the lease accounting guidance in ASC Topic 842. The Company elected the package of practical expedients permitted in ASC Topic 842 upon adoption. The Company defines a short-term lease as a lease that, at the commencement date, has a lease term of 12 months or less and does not contain an option to purchase the underlying asset that the lease is reasonably certain to exercise. The Company elected to recognize short-term lease payments as an expense on a straight-line basis over the lease term. Related variable lease payments are recognized in the period in which the obligation is incurred. The Member entered into a license (sub-lease) agreement on April 27, 2022, for a nine-month term which expired on December 31, 2022. The sub-lease agreement was then renewed on January 4, 2023 through December 31, 2023 ### Equipment Computer equipment is stated at cost less accumulated depreciation. At December 31, 2022, computer equipment of \$4,874 is reflected in other assets on the statement of financial condition. {8}------------------------------------------------ ### 3. DEPOSIT WITH CLEARING BROKER December 31, 2022 The Company has \$1,000,000 on deposit with its clearing broker. In accordance with the clearing agreement, the clearing broker has the right to charge the Company for certain losses that result from the Company's or a counterparty's failure to fulfill certain contractual obligations. No such losses occurred in 2022. ### 4. CONCENTRATION OF CREDIT RISK Credit Risk - The Company is subject to credit risk should the ATS's subscribing broker-dealers become unable to pay the amount receivable as reflected on the Statement of Financial Condition. However, the Company does not anticipate non- performance by these counterparties. Cash and Cash Equivalents - The Company had a cash balance of \$3,350,365 as of December 31, 2022, which is maintained in one banking institution and which at times may exceed federally insured limits. The Company has not experienced any losses in this account. The Company does not believe the banking institution poses significant credit risk on its cash. However, the Company's cash balance exceeds the federally insured limit by \$3,100,365. The Company considers all short-term investments purchased with an original maturity of three months or less as well as money market funds to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2022. ### 5. COMMITMENTS AND CONTINGENCIES The Company is exposed to unasserted potential claims encountered in the normal course of business. The Company has no litigation in progress at December 31, 2022. In the normal course of its operations, the Company enters into contracts and agreements that contain indemnifications and warranties. 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 yet occurred. However, the Company has not paid any prior claims or losses pursuant to these contracts and expects the risk of losses to be remote. ### 6. RELATED PARTY TRANSACTIONS The Parent maintains a share-based compensation plan. The Company has an expense sharing agreement in place with its Parent, the Member, which allows the Parent to act as paymaster for centrally processed expenses. The Parent paid expenses on behalf of the Company and the Company reimbursed the Parent for such expenses. The license (sub-lease) agreement described herein (Footnote 2) is between a member of the board's family office and the Member. {9}------------------------------------------------ 7. NET CAPITAL REQUIREMENTS The Company is subject to the SEC's Uniform Net Capital Rule ("Rule 15c3-1"), which requires the maintenance of minimum net capital, as defined, equal to the greater of \$100,000 or 6 2/3% of aggregate indebtedness. At December 31, 2022, the Company had net capital of \$1,877,544 which was \$1,719,356 in excess of the amount required of \$158,188. The ratio of aggregate indebtedness to net capital was 126.38%. A portion of the clearing deposit account is considered an allowable asset in the computation of net capital pursuant to an agreement between the Company and the clearing broker and in compliance with SEA Rule 15c3-1. 9. SUBSEQUENT EVENTS ### 8. CONTINUING OPERATIONS As an SEC-registered and FINRA member broker-dealer, the Company must maintain net capital on a daily basis in accordance with the SEC Uniform Net Capital Rule. It is the intention of the member to continue to operate the Company for the twelve-month period from the date that these financial statements are issued and contribute the necessary capital to maintain the operations, fund its ongoing expenses and meet the net capital requirements of the SEC's Uniform Net Capital Rule. The Company has evaluated subsequent events through the date of issuance of this statement of financial condition. Since December 31, 2022, and through the date of issuance, the Company received capital contributions of \$1,000,000 from the Parent. Except otherwise noted, the Company has determined that no events occurred that are required to be recognized or disclosed in the financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.