# WESTWOOD CAPITAL, LLC X-17A-5 (2024-03-28) — Broker-dealer annual report - Company: WESTWOOD CAPITAL, LLC - Form: X-17A-5 - Filed: 2024-03-28 - Period: 2023-12-31 - Accession: 0001002604-24-000002 - CIK: 1002604 - File #: 8-48745 - Type: Broker-dealer - Material weakness: No - Auditor: Withum Smith Brown - Auditor location: Whippany, NJ - Contact: Keiki Cabanos - Phone: 2128677275 - Email: jmessersmith@westwoodcapital.com - Website: westwoodcapital.com - Signed by: Jon Messersmith (Managing Director / Financial Operator) Original filing: https://www.sec.gov/Archives/edgar/data/1002604/000100260424000002/westwoodpublic2023im.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 ## ANNUAL REPORTS FORM X-17A-5 PART III | SEC FILE NUMBER | |-----------------| 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 01/01/23 | | | | AND ENDING 12/31/23 | | | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------------------------------|------------------------------------------------------------|---------------------|-------------------------------------------|--| | | | MM/DD/YY | | | MM/DD/YY | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: Westwood Capital, 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.) | | | | | | | | 437 Madison Avenue, 24th Floor | | | | | | | | | | (No. and Street) | | | | | | New York | | | NY | | 10022 | | | (City) | | | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Jon Messersmith | | 212-867-3200 | | | jmessersmith@westwoodcapital.com | | | (Name) | | (Area Code - Telephone Number) | | (Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing * | | | | | | | | Withum Smith + Brown | | | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 200 Jefferson Park, Suite 400 Whippany | | | | NJ | 07981 | | | (Address) | | (City) | | (State) | (Zip Code) | | | 10/08/03 | | | | PCAOB ID 100 | | | | (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 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}------------------------------------------------ #### OATH OR AFFIRMATION | | Jon Messersmith | | swear (or affirm) that, to the best of my knowledge and belief, the | | |-------|-----------------|--|-------------------------------------------------------------------------------------------|-------| | | | | financial report pertaining to the firm of Westwood Capital, LLC | as of | | 12/31 | | | 2 023 , 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. ![](_page_1_Picture_3.jpeg) | | gnaturella ( n ( 2 man | | |--------|------------------------|--| | Title: | | | Managing Director / Financial Operator 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 capible 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 différences 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 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 240.17a-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 240.180-7(d)(2), as applicable. {2}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM DECEMBER 31, 2023 {3}------------------------------------------------ ## **CONTENTS** | 1 | |-----| | | | 2 | | 3-8 | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Management and Member of Westwood Capital, LLC: ### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Westwood Capital, LLC (the "Company") 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 the Company 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 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 provides a reasonable basis for our opinion. We have served as the Company's auditor since 2014. Whippany, New Jersey March 4, 2024 {5}------------------------------------------------ ## **STATEMENT OF FINANCIAL CONDITION** | December 31, 2023 | | |-----------------------------------------|---------------| | ASSETS | | | Cash | \$
434,306 | | Investment in securities, at fair value | 52,326 | | Due from Parent | 15,000 | | Due from Related Party | 20,000 | | Property and equipment, net | 8,133 | | Other assets | 43,091 | | | \$
572,856 | | LIABILITIES AND MEMBER'S EQUITY | | | Accounts payable | \$
67,981 | | Member's equity | 504,875 | | | | | | \$
572,856 | {6}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ### **1. Nature of business and summary of significant accounting policies** #### *Nature of Business* Westwood Capital, LLC (the "Company") is a limited liability company organized under the laws of the State of Delaware on May 9, 1995 and will continue to exist until May 19, 2025. The Company is a wholly-owned subsidiary of Quarter Century Holdings, LLC,(the "Parent" or "QCH").The Company engages in investment banking activities, specializing in the private placement of equity and debt issues. Investment banking activities also include financial advisory services and mergers and acquisition advisory services. The Company is a registered broker-dealer with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). ### *Basis of Presentation* The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). #### *Accounts Receivable* Receivables from clients are stated at the amount management expects to collect from outstanding balances. On a periodic basis, management evaluates its receivables and provides for probable uncollectible amounts through a charge to operations and a credit to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to receivables from clients. As of January 1, 2023 and December 31, 2023, the Company had no accounts receivables from a non-affiliated entity. #### *Valuation of Investments in Securities and Securities at Fair Value - Definition and Hierarchy* In accordance with GAAP, 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. In determining fair value, the Company uses various valuation approaches. In accordance with GAAP, 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 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 assumptions 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* - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 securities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. *Level 2* - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. *Level 3 -* Valuations based on inputs that are unobservable and significant to the overall fair value measurement. {7}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **1. Nature of business and summary of significant accounting policies (continued)** ## *Valuation of Investments in Securities and Securities at Fair Value - Definition and Hierarchy (continued)* The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including, the type of security, whether the security 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 judgment. 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 than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities 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. Fair value is a market-based measure considered from the perspective of a market participant rather than an entityspecific measure. Therefore, even when market assumptions are not readily available, the Company's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy. #### *Valuation Techniques* #### Investments in Securities The Company values investments in securities that are freely tradable and are listed on a national securities exchange or reported on the NASDAQ national market at their last sales price as of the last business day of the year. #### *Property and Equipment* Property and equipment is stated at cost less accumulated depreciation and amortization. The Company provides for depreciation and amortization on a straight-line basis as follows: | Asset | Useful Life | |-------------------------|-------------| | Furniture and fixtures | 7
years | | Computers and equipment | 3
years | | Leasehold improvement | 10 years | {8}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **1. Nature of business and summary of significant accounting policies (continued)** #### *Revenue Recognition* The revenue recognition guidance of ASC Topic 606, 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 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 revenue recognition guidance does not apply to revenue associated with financial instruments and interest income. ### *Income Taxes* The Company is a limited liability company, and as such does not record a provision for federal and state income taxes in the accompanying financial statements as each member of the Parent is responsible for reporting its share of income or loss, as reported for income tax purposes. At December 31, 2023, 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. #### *Use of Estimates* The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of 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. #### **2. Revenue from contracts with customers Investment Banking Revenues** #### *Advisory fees* The Company earns fees for related advisory work by providing market information, market research, structuring advice and financial advice on an hourly or negotiated fee basis. The Company records advisory fee revenues over time, gross of related expenses, because the customer is receiving and consuming the benefits provided by the Company. Such performance obligation may include, but is not limited to, time allocated to the assignment or discussion of its market opinion. {9}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **2. Revenue from contracts with customers Investment Banking Revenues (continued)** #### *Success fees* The Company earns revenue by way of transaction success fees that are recognized at the point in time that performance under the arrangement is completed. The Company has determined that this date is the appropriate point in time to recognize revenue for success fees as the performance obligation has been satisfied, there are no significant actions which the Company needs to take subsequent to this date and the purchaser obtains the control and benefit of the proceeds at that point. Recognizing revenue prior to closing would be inappropriate as it represents contingent consideration and potential for significant reversal if revenue exists. Payment for revenue is due upon closing. #### *Disaggregation of Revenue* Disaggregation of revenue can be found on the statement of operations for the year ended December 31, 2023 by type of revenue streams. #### *Contract Assets and Liabilities* As of January 1, 2023, the Company had no contract assets but did have a \$50,000 contract liability from a nonaffiliated entity for cash received prior to the performance obligation at the end of 2022. The performance obligation was satisfied in 2023 and revenue was recognized. The Company has no contract assets or liabilities as of December 31, 2023. #### *Significant Judgments* Revenue from contracts with customers includes fees from investment banking service. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. #### **3. Fair value measurements** The Company's assets recorded at fair value have been categorized based upon a fair value hierarchy as described in the Company's significant accounting policies in Note 1. The following table presents information about the Company's assets measured at fair value as of December 31, 2023: | Quoted Prices
in Active
Markets for
Identical Assets
(Level 1) | | Significant
Other
Observable
Inputs
(Level 2) | | Significant
Unobservable
Inputs
(Level 3) | | Balance
as of
December 31,
2023 | | | |----------------------------------------------------------------------------|----|-----------------------------------------------------------|----|----------------------------------------------------|----|------------------------------------------|----|--------| | Assets (at fair value)
Investment in securities | | | | | | | | | | Common stock | \$ | 52,326 | \$ | - | \$ | - | \$ | 52,326 | {10}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **4. Property and equipment** Details of property and equipment at December 31, 2023 are as follows | Furniture and fixtures | \$
8,984 | |-------------------------------|-------------| | Computers and equipment | 235,629 | | | 244,613 | | Less accumulated depreciation | | | and amortization | (236,480) | | | \$
8,133 | Depreciation and amortization expense for the year ended December 31, 2023 was \$2,894. ## **5. Net capital requirement** The Company, as a member of FINRA, is subject to the SEC Uniform Net Capital Rule 15c3-1. This Rule requires the maintenance of minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1 and that equity capital may not be withdrawn if the resulting net capital ratio would exceed 10 to 1. At December 31, 2023, the Company's net capital was \$409,233, which was \$404,233 in excess of its minimum requirement of \$5,000 and the net capital ratio was .17 to 1. ### **6. Concentrations of credit risk** In the normal course of business, the Company provides credit to its clients in the form of deferring collection of certain receivables. These clients are not concentrated in any particular industry or specific geography. The Company evaluates the collectability of its receivables from its clients on a quarterly basis and writes off those balances that management deems to be uncollectible. The Company maintains its cash accounts primarily with a bank located in New York. The total cash balances are temporarily insured by the Federal Deposit Insurance Corporation ("FDIC") up to \$250,000 per bank. The Company has cash balances on deposit at December 31, 2023 above the minimum FDIC coverage. Any loss incurred or lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations and cash flows. For the year ended December 31, 2023, two customers accounted for 95% of revenue. ## **7. Non-Covered Firm** The Company is deemed a Non-Covered Firm (as defined in Q&A 8 of the July 1, 2020 FAQ Concerning the July 30, 2013 Amendments to the Broker-Dealer Financial Reporting Rule issued by SEC staff July 1, 2020) and solely engages in Non-Covered Firm activities. As such, the Company is not subject to any Rule 15c3-3 requirements according to the footnote 74 to SEC Release 34-70073. The Company (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3). {11}------------------------------------------------ **NOTES TO FINANCIAL STATEMENTS** ## **8. Related party transactions** The Company had a service agreement with a related party to provide business advisory services to institutional clients of the affiliate included but not limited to the development, structuring, advisory and/or administrative services of certain private equity funds and provide additional personnel for the related party engagements and other domestic and international advisory services. For the year ended December 31, 2023, the Company had \$80,000 in revenues associated with this agreement. As of January 1, 2023 and December 31, 2023, the Company had accounts receivables due of (i) \$14,000 and \$20,000 from a related party, and (ii) \$62,527 and \$15,000 from parent. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.