# EDGAR Filing Document

**Accession Number:** 0001484899
**File Stem:** 0001484899-23-000001
**Filing Date:** 2023-2
**Character Count:** 21529
**Document Hash:** 20f6927eaaf06cc2bfdc7a22518dbef3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001484899-23-000001.hdr.sgml**: 20230223

**ACCESSION NUMBER**: 0001484899-23-000001

**CONFORMED SUBMISSION TYPE**: X-17A-5

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230223

**DATE AS OF CHANGE**: 20230223

**EFFECTIVENESS DATE**: 20230223

**PERIOD START**: 20220101

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** CODE ADVISORS LLC
- **CENTRAL INDEX KEY:** 0001484899
- **IRS NUMBER:** 271674515
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** X-17A-5
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 008-68511
- **FILM NUMBER:** 23662160

**BUSINESS ADDRESS:**
- **STREET 1:** 921 FRONT STREET
- **STREET 2:** SUITE 2225
- **CITY:** SAN FRANCISCO
- **STATE:** CA
- **ZIP:** 94111
- **BUSINESS PHONE:** 415.659.8088

**MAIL ADDRESS:**
- **STREET 1:** 921 FRONT STREET
- **STREET 2:** SUITE 2225
- **CITY:** SAN FRANCISCO
- **STATE:** CA
- **ZIP:** 94111

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** CODE ADVISORS, LLC
- **DATE OF NAME CHANGE:** 20100222

### Attached PDF Documents

**Attachment 1:** `codepublic.pdf`

# Code Advisors LLC

## Statement of Financial Condition

**December 31, 2022**

**Public Document**

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

OMB APPROVAL

OMB Number: 3235-0123
Expires: Oct. 31, 2023
Estimated average burden
hours per response: 12

ANNUAL REPORTS
FORM X-17A-5
PART III

SEC FILE NUMBER

8-68511

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 ENDING 12/31/2022
MM/DD/YY MM/DD/YY

A. REGISTRANT IDENTIFICATION

NAME OF FIRM: Code Advisors 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 P.O. Box No.)

921 Front Street, 2nd Floor

(No. and Street)

San Francisco CA 94111
(City) (State) (Zip Code)

PERSON TO CONTACT WITH REGARD TO THIS FILING

Phyllis Chin 212-751-4422 pchin@codeadvisors.com
(Name) (Area Code - Telephone Number) (Email Address)

B. ACCOUNTANT IDENTIFICATION

INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*

Ernst Wintter & Associates LLP

(Name - if individual, state last, first, middle name)

675 Ygnacio Valley Road, Suite A200 Walnut Creek CA 94596
(Address) (City) (State) (Zip Code)

02/24/2009 3438

(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.

# AFFIRMATION

I, Steven Machtinger, affirm that, to the best of my knowledge and belief, the financial report pertaining to the firm of Code Advisors LLC, as of December 31, 2022, is true and correct. I further swear (or affirm) that neither the company nor 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.

![img-0.jpeg](img-0.jpeg)

See attached.

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).
(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.
(1) 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-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.
(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 240.15c3-1e 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.

# ACKNOWLEDGMENT

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of Marin

On February 16, 2023 before me, Erica G. Eichhorn, Notary Public
(insert name and title of the officer)

personally appeared Steven N. Machtinger
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

![img-1.jpeg](img-1.jpeg)

WITNESS my hand and official seal.

Signature (Seal)

# **Code Advisors LLC**

# **Table of Contents**

**Report of Independent Registered Public Accounting Firm**... 1

# **Financial Statement**

Statement of Financial Condition ... 2

Notes to the Financial Statement ... 3-5

**ERNST WINTTER & ASSOCIATES LLP** *Certified Public Accountants*

675 Ygnacio Valley Road, Suite A200
Walnut Creek, CA 94596

(925) 933-2626
Fax (925) 944-6333

# **Report of Independent Registered Public Accounting Firm**

To the Member of
Code Advisors LLC

# **Opinion on the Financial Statement**

We have audited the accompanying statement of financial condition of Code Advisors 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 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 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 Code Advisors LLC’s auditor since 2012.
Walnut Creek, California
February 23, 2023

1

# **Code Advisors LLC**

# **Statement of Financial Condition  
December 31, 2022**

# **ASSETS**

| Cash | $ | 2,652,956 |
| --- | --- | --- |
| Restricted certificate of deposit |  | 253,500 |
| Accounts receivable |  | 3,045,000 |
| Due from affiliate |  | 21,435 |
| Other assets |  | 85,019 |
| Leasehold improvements (net of $555,879 of accumulated depreciation) |  | 310,426 |
| Operating lease right-of-use asset |  | 1,966,748 |
| Total assets | $ | 8,335,084 |

# **LIABILITIES AND MEMBER'S EQUITY**

# **Liabilities**

| Due to affiliate | $ | 543,616 |
| --- | --- | --- |
| Accounts payable and accrued expenses |  | 14,300 |
| Operating lease liability |  | 2,274,667 |
| Total liabilities |  | 2,832,583 |

# **Member's equity**

|  |  | 5,502,501 |
| --- | --- | --- |
| Total liabilities and member's equity | $ | 8,335,084 |

The accompanying notes are an integral part of this financial statement.

2

# Code Advisors LLC

## Notes to the Financial Statement

### 1. Organization

Code Advisors LLC (the “Company”) was organized as a Delaware limited liability company in December 2009. The Company is solely owned by Code Holdings, LP (“Holdings”). The Company is a securities broker-dealer and registered with the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority in January 2011. The Company advises public and private companies on mergers, acquisitions and other corporate matters on a fee basis.

### 2. Significant Accounting Policies

#### Cash and cash equivalents

The Company considers all demand deposits held in banks and certain highly liquid investments with original maturities of three months or less, other than those held for sale in the ordinary course of business, to be cash equivalents. There were no cash equivalents at December 31, 2022.

#### Accounts Receivable

The Company accounts for credit losses in accordance with ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”). ASC 326 impacts the impairment model for certain financial assets measured at amortized cost by requiring a current expected credit loss (“CECL”) methodology to estimate expected credit losses over the entire life of the financial asset, recorded at inception or purchase.

The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the statement of financial condition that is deducted from the asset’s amortized cost basis. The Company considers accounts receivable to be fully collectible, and accordingly, no allowance for credit losses has been provided.

The Company had accounts receivables of $2,064,351 at January 1, 2022, and $3,045,000 at December 31, 2022.

#### Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use asset and operating lease liability in the statement of financial condition. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in the statement of financial condition. There were no finance leases at December 31, 2022.

Right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The discount rate used in determining the present value of leases is the Company’s incremental borrowing rate

The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on straight -line basis over the term of lease.

#### Use of Estimates

The preparation of this financial statement in accordance 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 at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and may have an impact on future periods.

#### Fair Value of Financial Instruments

Unless otherwise indicated, the fair values of all reported assets and liabilities that represent financial instruments (none of which are held for trading purposes) approximate the carrying values of such amounts. The Company has no financial instruments required to be reported at fair value on a recurring basis.

3

# Code Advisors LLC

## Notes to the Financial Statement

### 2. Significant Accounting Policies (continued)

#### Income Taxes

The Company is a single member limited liability company and is treated as a disregarded entity for tax purposes. In lieu of income taxes, the Company passes 100% of its taxable income and expenses to its sole member. Therefore, no provision or liability for federal or state income taxes is included in this financial statement. The Company's management believes there are no uncertain tax positions and income tax returns at the parent level for the years from 2015 through 2021 are open to examination by tax authorities.

#### Depreciation

The Company records leasehold improvements at cost. Leasehold improvements are depreciated over the 10-year term of the lease.

### 3. Related Party Transactions

The Company has overhead-sharing agreements with Code Management Company, LP ('Management') and Holdings, both companies under common ownership. Management provides office space and pays most overhead expenses for the Company and Holdings provides payroll and employment expenses. In addition, the Company agreed to fully reimburse all direct costs of the Company paid by Management on its behalf. The Company pays management fees to Management and Holdings as part of these agreements. At December 31, 2022, $543,616 was due to Holdings and $21,435 was due from Management, and are included in due to affiliate and due from affiliate, respectively, on the statement of financial condition.

The Company's results of operations and financial position could differ significantly from those that would have been obtained if the entities were autonomous.

### 4. Restricted Certificate of Deposit

In 2016, the Company established a $253,500 standby letter of credit with First Republic Bank as required under the terms of the lease obligation. The standby letter of credit is in place of the security deposit. Under the terms of the letter of credit, First Republic Bank has a continuing security interest in the restricted account included on the statement of financial condition. The letter of credit expires on March 16, 2023 but automatically renews annually through 2027.

### 5. Leases

The Company recognizes and measures its leases in accordance with FASB ASC 842, Leases. The Company is a lessee in a non-cancellable operating lease for office space. The lease liability is initially and subsequently recognized based on the present value of its future lease payments. The discount rate is the implicit rate if it is readily determinable or otherwise the Company uses its incremental borrowing rate. The implicit rate of the Company's lease is not readily determinable and accordingly, the Company used its incremental borrowing rate. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms and in a similar economic environment. The right of use ('ROU') asset is subsequently measured throughout the lease term at the amount of the remeasured lease liability (i.e., present value of the remaining lease payments), plus unamortized initial direct costs, plus (minus) any prepaid (accrued) lease payments, less the unamortized balance of lease incentives received, and any impairment recognized. Lease cost for lease payments is recognized on a straight-line basis over the lease term.

The Company has obligations as a lessee for New York office space for a 10-year term that expires in 2026. The Company's lease is principally a non-cancellable operating real estate lease. Occupancy lease agreements, in addition to base rentals, generally provide for rent and operating expense escalations resulting from increased assessments for real estate taxes and other charges.

4

# Code Advisors LLC

## Notes to the Financial Statement

### 5. Leases (continued)

Statement of financial condition amounts related to leases at December 31, 2022:

| Operating lease ROU asset | $1,966,748 |
| --- | --- |
| Operating lease liability | $2,274,667 |
| Remaining lease term | 46 months |
| Discount rate | 5.5% |

The future minimum lease payments under the lease are as follows:

| 2023 | $632,903 |
| --- | --- |
| 2024 | 650,308 |
| 2025 | 668,191 |
| 2026 | 569,528 |
| Total undiscounted lease payments | 2,520,930 |
| Less imputed interest | (246,263) |
| Total lease liability | $2,274,667 |

A portion of the leased space is subleased to an unrelated party that began on May 14, 2018. The agreement was amended and extended effective April 20, 2022 extending the lease to December 31, 2023.

### 6. Risk Concentration

At December 31, 2022, 100% of accounts receivable was due from one client.

### 7. Net Capital Requirements

The Company is subject to the SEC's uniform net capital rule (Rule 15c3-1), which requires the Company to maintain a minimum net capital equal to the greater of $100,000 or one fifteenth of aggregate indebtedness, both as defined. At December 31, 2022, the Company's net capital was $1,847,121, which exceeded the requirement by $1,747,121.

### 8. Subsequent Events

The Company has evaluated subsequent events through February 23, 2023, the date which the financial statement was issued.

5

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM X-17A-5

### ANNUAL AUDITED REPORT

### Filer Information

**Filer CIK:** 0001484899

**Filer CCC:** XXXXXXXX

**Is this a LIVE or TEST filing?:** LIVE

**Would you like a Return Copy?:** No

### Submission Information

**Report Period Begin Date:** 01-01-2022

**Report Period End Date:** 12-31-2022

**Type of Registrant:** Broker-dealer

**Any material weaknesses identified?:** No

### Registrant Identification

**Name of Broker-Dealer:** CODE ADVISORS LLC

**Business Address:** 921 FRONT STREET, SUITE 2225, SAN FRANCISCO, CA, 94111

**Contact Person:** Phyllis Chin

**Contact Phone:** 2127524422

### Independent Public Accountant Identification

**Accountant Name:** Ernst Wintter & Associates LLP

**Accountant Address:** 675 Ygnacio Valley Road, Suite A200, Walnut Creek, CA, 94596

**Accountant Type:** Certified Public Accountant

### OATH OR AFFIRMATION

I, **Steven Machtinger**, swear (or affirm) that, to the best of my knowledge and belief, the accompanying financial statements and supporting schedules pertaining to the firm of **CODE ADVISORS LLC**, as of **12-31-2022**, are true and correct.

**Signature:** Steven Machtinger

**Title:** CEO

**Notarized:** Yes