# ERUDITE TRADING LLC X-17A-5 (2024-03-26) — Broker-dealer annual report - Company: ERUDITE TRADING LLC - Form: X-17A-5 - Filed: 2024-03-26 - Period: 2023-12-31 - Accession: 0001975811-24-000006 - CIK: 1975811 - File #: 8-71096 - Type: Broker-dealer - Material weakness: No - Auditor: Jesser, Ravid, Jason, Basso, and Farber, LLP - Auditor location: Chicago, IL - Contact: Daniel DiPaci - Phone: 8454614114 - Email: dipaci@eruditetrading.com - Website: eruditetrading.com - Signed by: Daniel DiPaci (COO/CFO) Original filing: https://www.sec.gov/Archives/edgar/data/1975811/000197581124000006/erudite-audtdfinstmtpub2023.pdf --- {0}------------------------------------------------ #### STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM DECEMBER 31, 2023 {1}------------------------------------------------ #### **STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** #### **DECEMBER 31 , 2023** ## **CONTENTS** | | Page | |------------------------------------------------------------------------------------------------|------| | Facing Page | | | Oath or Affirmation | 2 | | Report of Independent Registered Public Accounting Firm
on Statement of Financial Condition | 3 | | Financial Statement: | | | Statement of Financial Condition | 4 | | Notes to Statement of Financial Condition | 5-7 | {2}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** 0MB APPROVAL 0MB Number: 3235-0123 Expires: Nov. 30, 2026 Estimated average burden hours per response: 12 > SEC FILE NUMBER 8-71096 ## **ANNUAL REPORTS FORM X-17A-5 PART** Ill **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 January 1, 2023 AND ENDING December 31 , 2023 MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** # NAME OF FIRM : ERUDITE TRADING LLC TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer □ Security-based swap dealer □ Major security-based swap participant D Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) ## 555 FAYETTEVILLE ST, SUITE 300 | (No. and Street) | | | | |----------------------------------------------|---------------------------------------------------------------------------|-----------------|---------------------------| | RALEIGH | NC | | 27601 | | (City) | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | Daniel DiPaci | 845-461-4114 | | dipaci@eruditetrading.com | | (Name) | (Area Code -Telephone Number) | (Email Address) | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | Jesser, Ravid, Jason, Basso, and Farber, LLP | | | | | (Name - if individual, state last, first, and middle name) | | | | | 230 W. Monroe St., Ste. 2300 Chicago | IL | 60606 | | (Address) | (City) | (State) | (Zip Code) | |----------------------------------------------|-----------------------|---------|--------------------------------------------| | 11/05/2003 | | 851 | | | rte of Reg;,t,aUo" w;th PCAOBl(ff appUcableJ | | | (PCAOB Reg;,traUo" N,mbe,, ff appUcableJ I | | | FOR OFFICIAL USE ONLY | | | | | | | | \* Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(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 0MB control number.** {3}------------------------------------------------ #### **OATH OR AFFIRMATION** | _______________
I, _D_a_ni_el_D_iP_a_ci | ~ swear (or affirm} that, to the best of my knowledge and belief, the | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|----------| | financial report pertaining to the firm of ERUDITE TRADING LLC
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12/31 | is true and correct. I further swear (or affirm} that neither the company nor any | as of | | 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. | | | | | | | | | Signature: | | | | | | | --- | Title:
FINOP | | |
Vend a y I a Monice Jubilee McNeil | | | | Notary Public, State of Texas | | | | Notary Public
County of Harris 10; 12; 2025 | Vendayla Monice Jubilee McNeil | | | This filing** contains (check all applicable boxes): | ID NU MBER
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>~,.;,,~\{,¥ | | | ~ (a) Statement of financial condition. | 1!:~~:
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• | ~-:PIREs | | ~ (b) Notes to consolidated statement of financial condition. Electronically signed and notarized online using the Proof platform. | | | | □ (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). | | | | □ (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. | | | | □ (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 capital or tangible net | | | | worth under 17 CFR 240.15c3-1, 17 CFR 240.18a-1, 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.
□ (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 240.17a-12, or 17 CFR 240.18a-7, as applicable. | | | | □ (r) Compliance report in accordance with 17 CFR 240.17a-S 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. | | | | ~ (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 report or 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-le or 17 CFR 240.17a-12, | | | | as applicable. | | | | □ (y) Report describing any material inadequacies found to exist or 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 240.17a-5(e}(3) or 17 CFR 240.18a-7(d)(2), as applicable. {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 230 W. Monroe St., Suit e 2300 Chicago, IL 60606 Office: (312) 782-4710 Fax: (312) 782-4711. ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON STATEMENT OF FINANCIAL CONDITION To the Member of Erudite Trading, LLC Raleigh, NC #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Erudite Trading, LLC as of December 31, 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 Erudite Trading, LLC as of December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of Erudite Trading, LLC's management. Our responsibility is to express an opinion on Erudite Trading, LLC'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 Erudite Trading, LLC 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 Erudite Trading, LLC's auditor since 2023. Chicago, IL March 15, 2024 {5}------------------------------------------------ ## STATEMENT OF FINANCIAL CONDITION #### DECEMBER 31, 2023 #### ASSETS | Cash | \$
299,516 | |------------------|---------------| | Prepaid expenses | 2,725 | | Other assets | 2,064 | | | | | Total Assets | \$
304,305 | #### LIABILITIES AND MEMBER'S CAPITAL | LIABILITIES: | | |----------------------------------------|---------------| | Accounts payable and accrued expenses | \$
8,877 | | Total Liabilities | 8,877 | | MEMBER'S CAPITAL | 295,428 | | Total Liabilities and Member's Capital | \$
304,305 | See Notes to Statement of Financial Condition. {6}------------------------------------------------ ### NOTES TO THE STATEMENT OF FINANCIAL CONDITION ## DECEMBER 31, 2023 ## 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: #### Organization and Business Erudite Trading LLC (the "Company"), a Delaware Limited Liability Company was formed under the laws of the State of Delaware on October 11, 2022. The Company is registered as a brokerdealer with the Securities and Exchange Commission ("SEC") and is a member of the Chicago Board Options Exchange ("CBOE"). The Company's primary business purpose will be market making and proprietary trading in exchange listed financial instruments. The Company will not trade on behalf of customers, will affect transactions only with other broker dealers, and will clear and carry its trading accounts with a registered clearing firm. The Company is a wholly owned subsidiary of Da Vinci Holding LLC (the "Parent"). The Parent was formed in Delaware on October 11, 2022. #### Use of Estimates The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America 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 those estimates. #### Income Taxes The Company is not liable for federal or state income taxes as the Member recognizes the Company's income or loss on its personal tax returns. Accordingly, no provision for income taxes has been made in the financial statement. FASB provides guidance for how uncertain tax positions should be recognized, measured, disclosed and presented in the financial statement. This requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions are "more-likely-thannot" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax asset or liability in the current year. For the year ended December 31, 2023, management has determined that there are no material uncertain income tax positions. #### Financial Instruments Valuation In accordance with U.S. generally accepted accounting principles ("U.S. GAAP"), fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. A fair value hierarchy for inputs is used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used {7}------------------------------------------------ ## NOTES TO THE STATEMENT OF FINANCIAL CONDITION ## DECEMBER 31, 2023 ## 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued: #### Financial Instruments Valuation - continued: when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company's assumption about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: **Level 1 Inputs** - Valuation is based on quoted prices in active markets for identical assets or liabilities at the reporting date. **Level 2 Inputs** - Valuation is based on other than quoted prices included in Level 1 that are observable for substantially the full term of the assets or liability, either directly or indirectly. **Level 3 Inputs** - Valuation is based on unobservable inputs for the valuation of the asset or liability. Level 3 assets include investments for which there is little, if, any, market activity. These inputs require significant management judgement or estimation. The availability of valuation techniques and observable inputs can vary from investment to investment and is affected by a wide variety of factors, including, the type of investment, whether the investment is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgement. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower that the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the lowest level input that is significant to the fair value measurement. At December 31, 2023, the Company held no Level 1, Level 2 or Level 3 investments. {8}------------------------------------------------ #### NOTES TO THE STATEMENT OF FINANCIAL CONDITION ## DECEMBER 31, 2023 ## 2. NET CAPITAL REQUIREMENTS: Pursuant to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, the Company is required to maintain minimum net capital, as defined, equal to the greater of \$100,000 or 6 2/3% (12.5% in first year) of aggregate indebtedness. At December 31, 2023, the Company had net capital of \$290,639 which was \$190,639 in excess of the required minimum net capital. The Company's net capital ratio (aggregate indebtedness to net capital) was 3.05% to 1; according to Rule 15c3-1, the Company's net capital ratio shall not exceed 15 to 1 (8 to 1 in first year). #### 3. RELATED PARTY TRANSACTIONS: The Company pays expenses on behalf of its affiliates from time to time. During the year ended December 31, 2023, such expenses paid by the Company on behalf of its affiliates totaled \$36,316. At December 31, 2023, the Parent was indebted to the Company in the amount of \$1,000, which is included in other assets on the Statement of Financial Condition. #### 4. FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISKS AND UNCERTAINTIES: The Company maintains its cash balances in two financial institutions, which at times may exceed federally insured limits. As of December 31, 2023, the Company held \$49,516 in excess of the federally insured limit. The Company has not experienced any losses and believes it is not exposed to any significant credit risk on cash. #### 5. SUBSEQUENT EVENTS: The Company has performed an evaluation of subsequent events through March 15, 2024, the date the financial statement was available to be issued. The Company's Parent contributed \$500,000 to the Company on March 5, 2024. The purpose of the capital contribution was to fund the Company's forecasted expansion. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.