# NW CAPITAL MARKETS INC. X-17A-5 (2023-03-01) — Broker-dealer annual report - Company: NW CAPITAL MARKETS INC. - Form: X-17A-5 - Filed: 2023-03-01 - Period: 2022-12-31 - Accession: 0000786389-23-000001 - CIK: 786389 - File #: 8-35363 - Type: Broker-dealer - Material weakness: No - Auditor: Adeptus Partners LLC - Auditor location: Ocean, NJ - Contact: lisa petrosky muckle - Phone: 2016560115 - Email: denright@nwfinancial.com - Website: nwfinancial.com - Signed by: lisa petrosky muckle (FInop) Original filing: https://www.sec.gov/Archives/edgar/data/786389/000078638923000001/NWCSOFC.pdf --- {0}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION For the year ended December 31, 2022 {1}------------------------------------------------ #### **UNITED ST ATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** # **ANNUAL REPORTS FORMX-17A-5 PART** III | OMBAPPROVAL | |--------------------------| | 0MB Number: 3235-0123 | | Expires: Oct. 31, 2023 | | Estimated average burden | | hours per response: 12 | | | SEC FILE NUMER 8- 35363 | Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FACING PAGE | | | | |-------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------------------------------|--------------------------------------------|--| | FILING FOR THE PERIOD BEGINNING 01/01/22 | | AND ENDING 12f31 f22 | | | | | MM/DDNY | | MM/DDNY | | | | A. REGISTRANT IDENTIFICATION | | | | | __
NAME oF FIRM: | N_W_C_a_p_i_ta_l _M_a_r_ke_t_s_l_nc_. | __________ | _ | | | 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.) | | | | | | 2 Hudson Place | | | | | | | (No. and Street) | | | | | Hoboken | NJ | | 07030 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Dennis J Enright | (201) 656-0115 | DEnright@nwfinancial.com | | | | (Name) | (Area Code - Telephone Number) | | (Email Address) | | | | B. ACCOUNT ANT IDENTIFICATION | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose reports are contained in this filing*
Adeptus Partners LLC | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 733 Route 35 N, Suite A Ocean | | NJ | 07712 | | | (Address) | (City) | (State) | (Zip Code) | | | 01/06/2010 | | 3686 | | | | (Date of Registration with PCAOB)(ifapplicable) | | | (PCAOB Registration Number. if applicable) | | #### **FOR OFFICIAL USE ONLY** \* Claims for exemption from the requirement that the annual reports be covered by the reports ofan 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. l 7a-S(e)( I )(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.** {2}------------------------------------------------ ## **AFFIRMATION** I, Dennis J Enright , swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to NW Capital Markets Inc. as of 12/31 /22 , 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. *,/J* **Title** ::. ....... - **LISA PETROSKY-MUCKLE NOTARY PUBLIC STATE OF NEW JERSEY** . ::. .• **MY COMMISSION EXPIRES 02/10/2027** -· - **·l-,--.::.. ~----------** > **Swom to and subscribed** ~~~ {3}------------------------------------------------ ## **This filing\*\* contains (check all applicable boxes):** - **[El** (a) Statement of financial condition. - **[El** (b) Notes to unconsolidated or consolidated statement of financial condition, as applicable. - □ (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 members' or sole proprietor's equity, as applicable. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to unconsolidated or consolidated financial statements,, as applicable. - □ (h) Computation of net capital under 17 CFR 240. l 5c3-l or 17 CFR 240. l 8a-l , as applicable. - **D** (i) Computation of tangible net worth under 17 CFR 240. l 8a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - **D** (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. l 8a-4, as applicable. - **D (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. l 5c3- 3(p )(2) or 17 CFR 240. l 8a-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. l 5c3-l , 17 CFR 240. l 8a-l , or 17 CFR 240. l 8a-2, as applicable, and the reserve requirements under 17 CFR 240. l 5c3-3 or 17 CFR 240. l 8a-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. - [El (q) Oath or affirmation in accordance with 17 CFR240.17a-5, 17 CFR240.17a-12, or 17 CFR240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240. l 7a-5 or 17 CFR 240. l 8a-7, as applicable. - □ (s) Exemption report in accordance with 17 CFR240.17a-5 or 17 CFR 240.18a-7, as applicable. - [El (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. l 7a-5, 17 CFR 240.18a-7, or 17 CFR 240.l 7a-12, as applicable. - □ (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240. l 7a-5 or 17 CFR 240.l 8a-7, as applicable. - □ (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240. l 7a-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. l 7a-12, as applicable. - D (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. l 7a-12(k). □ (z) Other:----------------------------------- - *\*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.l 7a-5(e)(3) or 17 CFR 240. l 8a-7(d)(2), as applicable.* {4}------------------------------------------------ ## **CONTENTS** | | Page(s) | |---------------------------------------------------------|---------| | Report of independent registered public accounting firm | 1 | | Financial statement: | | | Statement of financial condition | 2 | | Notes to financial statement | 3-6 | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder of NW Capital Markets, LLC #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of NW Capital Markets, LLC 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 NW Capital Markets, LLC 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 NW Capital Markets, LLC's management. Our responsibility is to express an opinion on NW Capital Markets, 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 NW Capital Markets, 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 statements. 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 statements. We believe that our audit provides a reasonable basis for our opinion. We have served as NW Capital Markets, LLC's auditor since 2021. Ocean, New Jersey February 27, 2023 {6}------------------------------------------------ # **Statements of Financial Condition December 31, 2022** | Assets | | |------------------------------------------------------------------|-----------------| | Cash | \$
1,016,269 | | Receivable from clearing broker (including deposit of \$100,000) | 1,233,451 | | Securities, at fair value | 97,813 | | Prepaid expenses | 17,572 | | Total assets | \$
2,365,105 | | | | | Liabilities and Stockholder's Equity | | | Liabilities | | | Accounts payable and accrued expenses | \$
956,811 | | | 956,811 | | | | | Stockholder's equity | | | Common stock, no par value, 1,000 shares issued, | | | authorized and outstanding | 10,000 | | Additional paid-in capital | 140,462 | | Retained earnings | 1,257,832 | | Total stockholder's equity | 1,408,294 | | | | | Total liabilities and stockholder's equity | \$
2,365,105 | **The accompanying notes are an integral part of this financial statement.** {7}------------------------------------------------ # **Statements of Financial Condition December 31, 2022** #### **1. Nature of operations** NW Capital Markets Inc. (the "Company"), a wholly owned subsidiary of NW Financial holdings Inc., and a Subchapter S subsidiary, is incorporated under the laws of the State of Delaware. The Company is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company engages in underwriting, investment banking, principal transactions, and investment advisor services. #### **2. Summary of Significant Accounting Policies** #### **Basis of presentation** The accompanying financial statements are presented using the accrual basis of accounting in according with accounting principles generally accepted in the United States of America ("U.S. GAAP"). References to the "ASC" hereafter refer to the Accounting Standards Codification established by the Financial Accounting Standards Board ("F ASB ") as the source of authoritative U.S. GAAP. #### **Use of estimates** The preparation of financial statements 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 statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These financial statements were prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP") which 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 statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. #### **Cash** All cash deposits are held by one major financial institution in the United States. At various times throughout the year, the Company's cash balance may exceed the Federal Deposit Insurance Corporation insurance limits. The company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. As of December 31 , 2022, cash balances exceed FDIC limits by approximately \$756,000 #### **Investment valuation** The Company utilizes various methods to measure the fair value of most of its investments on a recurring basis. US GAAP establishes a hierarchy that prioritizes inputs to valuation methods. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. The three levels of inputs are: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access. {8}------------------------------------------------ # **Statements of Financial Condition December 31, 2022** #### **Investment valuation (continued)** Level 2 - Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data. Level 3 - Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Company's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. 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 judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3. 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 falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments in securities listed on a national exchange are valued at the last reported sales price on the day of valuation. Securities traded in the over-the-counter market and listed securities for which no sale was reported on that date are stated at the last quoted bid price. Other assets and securities for which market quotations are not readily available are valued at fair value as determined by or under the direction of the investment advisor in accordance with US GAAP. The resulting unrealized gains and losses are reflected in the statement of operations. Realized gains and losses from securities transactions are determined on the basis of identified cost. #### **Income taxes** The Company has elected to be taxed under the provisions of Subchapter S of the Internal Revenue Code. In lieu of corporate income taxes, the stockholder of the Company will be taxed on the Company's taxable income. Accordingly, no provision for income taxes has been included in the accompanying financial statements. The Company recognizes interest and penalties, if any, related to unrecognized tax provisions as income tax expense in the statements of operations. During the year ended December 31 , 2020, the Company did not incur any interest or penalties on its income tax returns. At December 31 , 2020, management has 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 subsequent to 2019. {9}------------------------------------------------ ## **Statements of Financial Condition December 31, 2022** #### **3. Non-Marketable Securities** The following table presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis at December 31 , 2020: | | Level 2 | Total | |---------------------------------|--------------|--------------| | Assets | | | | Securities owned, at fair value | | | | Municipal bonds | \$
97,813 | \$
97,813 | #### **4. Transactions with related parties** The Company maintains an administrative services agreement with an affiliate. Pursuant to the agreement, the affiliate provides administrative personnel and office space. The Company incurred expenses of \$120,000 for the year ended December 31 , 2022. The Company has reported \$910,000 for management fees on the Statement oflncome as Consulting fees with its Parent, all of which remain unpaid at year ended December 31 , 2022. All transactions with related parties are settled in the normal course of business. The terms of any of these arrangements may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. #### **5. Clearing broker** Pursuant to an agreement with a clearing broker, the Company is required to maintain a clearing deposit of \$100,000. As of December 31 , 2022, a deposit in the amount of \$100,000 is included in receivable from clearing broker on the accompanying statements of financial condition. In the normal course of its business, the Company indemnifies its clearing broker 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 this indemnification cannot be estimated. However, the Company believes that it is unlikely it will have to make payments under these arrangements and as such has not recorded any contingent liability in the financial statements for this indemnification. #### **6. Regulatory requirements** The Company is subject to SEC Uniform Net Capital Rule l 5c3-l under the Securities Exchange Act of 1934, 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. At December 31 , 2022 the Company had net capital of \$1 ,292,909 which exceeded the required net capital by \$1,192,909. The ratio of aggregate indebtedness to net capital, at December 31 , 2022 was . 7 4 to 1. The Company is exempt from the provisions of Rule l 5c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to clearing all transactions with and for customers on a fully disclosed basis with a clearing broker. {10}------------------------------------------------ ## **Statements of Financial Condition December 31, 2022** #### 7. **Subsequent events** Management of the Company has evaluated events or transactions that have occurred since December 31, 2022 and determined that there are no material events that would require recognition or 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.