# SAGETRADER, LLC X-17A-5 (2024-12-26) — Broker-dealer annual report - Company: SAGETRADER, LLC - Form: X-17A-5 - Filed: 2024-12-26 - Period: 2024-09-30 - Accession: 0002013816-24-000079 - CIK: 1345538 - File #: 8-67169 - Type: Broker-dealer - Material weakness: No - Auditor: Nawrocki Smith LLP - Auditor location: Hauppauge, NY - Contact: Robert Peters - Phone: 212-668-8700 - Email: rpeters@acisecure.com - Website: acisecure.com - Signed by: Mike Forsythe (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1345538/000201381624000079/sagepub.pdf --- {0}------------------------------------------------ ## **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 > SEC FILE NUMBER 8-67169 # **ANNUAL REPORTS FORM X-17A-5 PART III** **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 _____________________ AND ENDING ______________________ | 10/01/2023 | 09/30/2024 | |-----------------------------------------------------------------------------------------|------------|------------| | | | | MM/DD/YY MM/DD/YY ## **A. REGISTRANT IDENTIFICATION** ### NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ SageTrader, LLC TYPE OF REGISTRANT (check all applicable boxes): ☐ Broker-dealer ☐ Security-based swap dealer ☐ Major security-based swap participant ☐ Check here if respondent is also an OTC derivatives dealer ■ ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | 282 Grand Avenue, Suite #2
_____________________________________________________________________________________ | | | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|------------------------------------------------------------|--------------------------------------------|-----------------------|--| | | | (No. and Street) | | | | | Englewood
_____________________________________________________________________________________ | | NJ | | 07631 | | | (City) | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | Robert Peters
_____________________________________________________________________________________ | | 212-668-8700 | | rpeters@acisecure.com | | | (Name) | | (Area Code – Telephone Number) | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
Nawrocki Smith LLP
_____________________________________________________________________________________ | | | | | | | | | (Name – if individual, state last, first, and middle name) | | | | | 100 Motor Parkway, Suite #580
_____________________________________________________________________________________ | | Hauppauge | NY | 11788 | | | (Address) | | (City) | (State) | (Zip Code) | | | 03/04/2009
_____________________________________________________________________________________ | | | 3370 | | | | (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 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-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}------------------------------------------------ ![](_page_1_Picture_3.jpeg) - - - - - - - - - - - - - - - - - - - - - - - - - - - {2}------------------------------------------------ ## **SAGETRADER, LLC** **STATEMENT OF FINANCIAL CONDITION** **September 30, 2024** {3}------------------------------------------------ ### **SAGETRADER, LLC** #### For the Year Ended September 30, 2024 #### **Contents** | Report of Independent Registered Public Accounting Firm | | | |---------------------------------------------------------|-------|--| | Financial Statements | | | | Statement of Financial Condition | 2 | | | Notes to Financial Statements | 3 - 6 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Sagetrader, LLC: ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Sagetrader, LLC (the "Company") as of September 30, 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 Sagetrader, LLC as of September 30, 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 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 U.S. 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 Sagetrader, LLC's auditor since 2024. Hauppauge, New York December 23, 2024 {5}------------------------------------------------ #### Statement of Financial Condition September 30, 2024 #### **ASSETS** ` | Cash and cash equivalents
Due from clearing broker
Accounts receivable
Prepaid expenses | \$
626,944
1,102,688
1,205,331
10,165 | |--------------------------------------------------------------------------------------------------|---------------------------------------------------| | TOTAL ASSETS | \$
2,945,128 | | LIABILITIES AND MEMBERS' EQUITY
LIABILITIES: | | | Accounts payable and accrued expenses | \$
1,170,925 | | Members' Equity | 1,774,203 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | \$
2,945,128 | *See Accompanying Notes to Financial Statements Confidential Pursuant to SEC Rule 17a-5(e)(3)* {6}------------------------------------------------ ### Notes to Financial Statements For the Year Ended September 30, 2024 #### **1. Organization and Nature of Business** On March 31, 2022 Sage Brokerage Holdings, LLC-the 100% owner and parent of SageTrader, LLC entered into a purchase and sale agreement wherein Bogert Investments, LLC ("Bogert") acquired a 20% equity interest in SageTrader, LLC with the remaining 80% equity interest to be acquired when the Financial Industry Regulatory Association ("FINRA") approved the Bogert Investments, LLC acquisition. On December 5, 2022 the acquisition was approved and Bogert Investments, LLC acquired the remaining 80% equity interest effective January, 2023. SageTrader, LLC (the "Company") is a Delaware Limited Liability Company formed in 2003. The Company is now wholly-owned by Bogert Investments, LLC ("Bogert"), its sole member. As a limited liability company, the member's liability is limited to the amount reflected in the member's capital account. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC"), and is a member of: FINRA, the CBOE Exchanges; ( BZX, BYX, EDGA, EDGX), NYSE ARCA, Nasdaq and MIAX Pearl. The Company has a clearing relationship with Clear Street, LLC ("Clear Street") and RQD. The clearing relationship with Clear Street is a direct relationship with the Company to support its execution and net trading business. The fully disclosed relationship with RQD is to support the future introduced customer business. #### **2. Summary of Significant Accounting Policies** #### **Basis of Accounting** The Company's financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and are stated in U.S. dollars. The following is a summary of the significant accounting policies used in preparing the financial statements: #### Cash and cash equivalents Cash consists of cash on deposit and money market accounts with commercial banks which, at times, may exceed federally insured limits. Cash equivalents are "short-term, highly liquid investments that are readily convertible to known amounts of cash and that are so near their maturity that they present insignificant risk of changes in value because of changes in interest rates". The Company has not experienced any losses in such accounts. At September 30, 2024 the Company has \$263,725, which is in excess of Federally insured limits. #### **Revenue Recognition** #### Revenue from Contracts with Customers Revenue from Contracts with Customers ("ASC Topic 606") requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. The Company generates and recognizes revenue from: 1) introduced customer commissions, 2) execution revenues/net profit riskless principal transactions, 3) Stock loan locate fees, and 4) routing income. {7}------------------------------------------------ #### Commissions Introducing commission revenue is generated by the Company as a non-carrying introducing broker dealer from introducing the customers' trades to other clearing brokers. The Company establishes the commission rate with the customer and ultimately sets the price and records commissions on a gross basis. In general, the commissions are charged to customers on the trade date by the clearing brokers. #### Execution Revenue Execution revenue comes from mark-up's charged to customers for orders directed to the Company for execution through broker-dealers with whom it has relationships and on the exchanges to which it is a member. The Company establishes the execution rate with the customer and passes through any exchange fee. Riskless principal transactions generate commission equivalent revenues when the Company executed limit orders directed by customers at or better than the customer's limit price while simultaneously finding the other side of the customer order in the market as a principal trade. The Company makes a small amount on the difference in the pricing of the trades but the customer is not charged an execution commission or any exchange fees on the transaction. #### Stock Loan Locate Fees The Company maintains Securities Lending agreements with several broker dealers (Velocity, Clear Street, Muriel Siebert) for the benefit of customers who as part of their trading strategies need to sell stocks short. Under these agreements they provide a daily machine readable "Easy to Borrow List" ("ETB") and provide "Locates" on securities, which are not on the ETB List. The customer is quoted a rate per share displayed in their trading platform. Should they decide to accept the locate, the Company is given a discounted rate by the broker dealer. These discounts range from 30%-50% of the rates quoted to the customer. #### Routing Revenue The Company also earns various types of revenue from order routing: 1) receipt of pass-through volume tier discounts on liquidity charges from executing brokers; 2) smart order routing (SOR) profits captured through utilizing a platform provided by LYNX Capital Partners of NJ LLC. Liquidity fee discounts are reflected on the Company's invoices received from executing brokers and exchanges. In some instances, this is offset by predetermined offset credits to customers on a per trade basis. Revenues and related clearing expenses are recorded on the trade date (the date that the Company fills the trade order by finding and contracting with a counter party and confirms the trade with the customer). The Company believes that the performance obligation is satisfied on the trade date because it is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and reward of ownership has been transferred to/from the customers. #### Recently Adopted Accounting Pronouncement 2016-13, Financial Instruments- Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 replaces the "incurred loss" credit losses framework with a new accounting standard that requires management's measurement of the current expected credit loss ("CECL") to be based on a broader range of reasonable and supportable information for lifetime credit loss estimates including historical experience, current conditions, and reasonable and supportable forecasts. {8}------------------------------------------------ #### Accounts Receivable The Company's receivables include receivables due from other broker-dealers. The Company's accounts receivable are carried at cost less the allowance for credit losses. Accounts receivables are generally due after the credit period as per agreement and are collected within 30 days of the month end in which they are posted. The Company had an opening accounts receivable balance on October 1, 2023 of \$167,530 and at September 30, 2024 the Company had a closing accounts receivable balance of \$1,205,331. Account balances outstanding longer than the contractual payment terms are considered past due. The credit risk associated with receivables is that any customers with which it conducts business is unable to fulfill contractual obligations. The allowance for credit losses is based on the Company's expectation of the collectability of such receivables 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 receivables is not significant until it is past due based on the contractual arrangement and expectation of collection in accordance with industry standards. Management monitors the credit risk of customers, including historical experience, current conditions, reasonable assurance and supportable forecasts to determine expected credit loss. Substantially all accounts receivable as of September 30, 2024 have been subsequently received as of the report date, and the Company has not recorded an allowance from credit losses. #### Accounting for Income Taxes The Company was taxed as a partnership through December 31, 2022, and provided each partner with a K-1 for their share of the taxable income. Each partner was responsible for their portion of the income tax on their share of taxable income, as reflected in the K-1. Effective January, 2023 the Company became a single member LLC and as such is treated as a disregarded entity for tax purposes with taxable income being included on its sole member's tax return. The Company has evaluated its uncertain tax positions as of September 30, 2024 and does not expect any material adjustments to be made. Management's conclusions regarding uncertain tax positions may be subject to review and adjustment at a later date based upon ongoing analyses of tax laws, regulations and interpretations thereof as well as other factors. #### Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates, assumptions and judgments that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### **3. Revenue Concentration** During the year ending September 30, 2024, the Company maintained one large execution customer and several broker-dealer execution clients. Commission revenue earned for the large customer including execution services and principal transactions amounted to \$3,457,720 representing approximately 73% of the Company's commissions and execution revenue during the year. #### **4. Net Capital Requirements** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. On September 30, 2024, the Company had net capital of \$558,707 after deductions for non-allowable assets. Net capital was \$480,645 in excess of its required net capital of \$78,062. The Company's aggregate indebtedness to net capital ratio was 209.58% #### **5. Clearing Firm Security Deposit** As of September 30, 2024 the Company had required clearing firm Security deposits of \$103,036 at Clear Street and \$250,000 at RQD. These amounts are included in Due from clearing broker on the Statement of Financial Condition. {9}------------------------------------------------ #### **6. Indemnifications** FASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. FASB ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying factor (such as an interest or foreign exchange rate, security or commodity price, an index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. This guidance also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees of indebtedness of others. In the normal course of its business, the Company indemnifies and guarantees certain service providers against specified potential losses in connection with their acting as an agent of, or providing services to, the Company. The maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. However, the Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded any contingent liability in the financial statements for these indemnifications. The Company has issued no guarantees at September 30, 2024, or during the year then ended. #### **7. Occupancy** On January 1, 2023 the Company entered into a month-to-month office sharing agreement with Bogert Investments, LLC for the office in Englewood NJ. From October 1, 2023 through September 30, 2024, the Company paid Bogert Investments, LLC \$20,000. This agreement is for as long as Lynx Trading Technologies (LTT) rents the existing premises. LTT signed a new two year lease on April 1, 2023. #### **8. Commitments, Contingencies, and Guarantees** The Company enters into contracts that contain a variety of indemnifications for which the maximum exposure is unknown but for which management expects the risk of loss, if any, to be remote. The Company has no current claims or losses pursuant to such contracts. #### **9. Related Party Transactions** As part of an extension to the Chief Compliance Officers employment agreement with the Company, effective May 12, 2022 the Company loaned the officer \$50,000, subject to a Promissory Note with a maturity date of June 1, 2024. The promissory note bears interest at 1.875% per annum. If the officer continues service with the Company the note will be forgiven beginning in increments in fiscal year 2023 and will be fully forgiven by maturity date. As at September 30, 2023, \$25,000 was forgiven and reflected as employee compensation and benefits on the statement of income. As of December 31, 2023 the remaining \$25,000 was forgiven. During the period of October 1, 2023 through September 30, 2024, the Company paid Lynx Trading Technologies, LLC, an affiliate of Leon Redensky, the ultimate owner of SageTrader, LLC, a total of \$2,366,963 for data services. This amount is included in technology market and data on the statement of income and there is an accounts payable outstanding amount of \$324,280 on the statement of financial condition. During the period of October 1, 2023 through September 30, 2024, the Company paid to and received from TradePro Securities, an affiliate of Leon Redensky, the ultimate owner of SageTrader, LLC, funds for routing income in the amount of \$496,530 and paid funds, too, in the amount of \$519,559 for stock loan locate fees, stock loan license fees and commissions. These amounts are on the statement of income and there is a receivable of \$19,297 on the statement of financial condition. ### **10. Subsequent Events** The Company's management has evaluated events and transactions through December 23, 2024, the date the financial statements were available to be issued, noting no material events requiring disclosure in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.