# CANDLEWOOD SECURITIES, LLC X-17A-5 (2024-03-27) — Broker-dealer annual report - Company: CANDLEWOOD SECURITIES, LLC - Form: X-17A-5 - Filed: 2024-03-27 - Period: 2023-12-31 - Accession: 0001222416-24-000001 - CIK: 1222416 - File #: 8-65845 - Type: Broker-dealer - Material weakness: No - Auditor: Marcum, LLP - Auditor location: Deerfield, IL - Contact: Stephen Latkovic - Phone: 216-472-6642 - Email: sjl@candlewoodpartners.com - Website: candlewoodpartners.com - Signed by: Stephen Latkovic (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1222416/000122241624000001/Public.pdf --- {0}------------------------------------------------ # CANDLEWOOD SECURITIES LLC FINANCIAL STATEMENT AS OF DECEMBER 31, 2023 Filed as a Public Document Pursuant to Rule 17a-5(d) of the Securities Exchange Act of 1934. \*\*\* PUBLIC DOCUMENT \*\*\* {1}------------------------------------------------ **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 8-65845 # **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 \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 01/01/23 12/31/23 MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** #### NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ CANDLEWOOD SECURITIES, 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.) #### \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 600 SUPERIOR AVE. E., SUITE 1800 | OH
_____________________________________________________________________________________ | | | |-------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | 44114 | | (State) | | (Zip Code) | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | 216-472-6642 | SJL@CANDLEWOODPARTNERS.COM | | | (Area Code – Telephone Number) | (Email Address) | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | | DEERFIELD
9 PARKWAY NORTH, SUITE 200 | IL | 60015 | | _____________________________________________________________________________________
(City) | (State) | (Zip Code) | | _____________________________________________________________________________________ | 688 | | | | STEPHEN LATKOVIC
(Name – if individual, state last, first, and middle name) | _____________________________________________________________________________________
INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*
_____________________________________________________________________________________ | \* 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.** {2}------------------------------------------------ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ #### SECURITIES AND EXCHANGE COMMISSION #### Washington, D.C. 20549 #### ANNUAL AUDIT REPORT As Of December 31, 2023 Candlewood Securities LLC (Name of Respondent) 600 Superior Ave., East, Ste. 1800 Cleveland, Ohio 44114 (Address of Principal Executive Office) Mr. Stephen Latkovic Candlewood Securities LLC 600 Superior Ave., East, Ste. 1800 Cleveland, Ohio 44114 (216) 472-6660 (Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission) {4}------------------------------------------------ # CANDLEWOOD SECURITIES LLC # TABLE OF CONTENTS | | PAGE | |---------------------------------------------------------|------| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 1 | | FINANCIAL STATEMENT | | | Statement of Financial Condition | 3 | | Notes to Financial Statement | 4-5 | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Member of Candlewood Securities, LLC # **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Candlewood Securities, 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 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 2016. Deerfield, IL March 18, 2024 {6}------------------------------------------------ # CANDLEWOOD SECURITIES LLC Statement of Financial Condition December 31, 2023 #### ASSETS | Cash | \$
152,790 | |------------------|---------------| | Receivables | 136,688 | | Prepaid expenses | 10,202 | | Other assets | 923 | | TOTAL ASSETS | \$
302,603 | #### LIABILITIES AND MEMBER'S EQUITY | Accounts payable
Accrued commissions | \$
3,368
128,146 | |-----------------------------------------|------------------------| | TOTAL LIABILITIES | 131,514 | | MEMBER'S EQUITY | 171,089 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
302,603 | {7}------------------------------------------------ ### NOTE A - Summary of Significant Accounting Policies #### Business activity Candlewood Securities LLC (the "Company") is a registered broker-dealer under the Securities Exchange Act of 1934. The Company provides general investment banking and advisory services to a wide array of clients, ranging from start-ups to publicly traded companies. Its broker-dealer services focus primarily on private placements for closely-held companies or institutional investment funds. The Company was formed on September 9, 2002, as an Ohio limited liability company; as such, its sole member possess limited personal liability for obligations of the Company. The Company will continue to exist perpetually unless terminated earlier by Candlewood Holdings, LLC ("Parent"). #### Basis of accounting The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States ("GAAP") as determined by the Financial Accounting Standards Board Accounting Standards Codification ("ASC"). #### Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. #### Risks and Uncertainties: Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of cash and receivables from customers. The Company maintains cash in banks offering protection for cash by Federal Depository Insurance Company ("FDIC") up to \$250,000. The Company does not have any exposure as cash balances were not in excess of FDIC limits as of December 31, 2023. During the year, from time to time, the Company may be in excess of these limits. Management believes that the Company is not exposed to any significant credit risk on cash. # Major Customer: The Company had one customer account for 65% or \$89,966 of Receivables as of and for the year ended December 31, 2023, respectively. #### Income taxes The Company is a single member limited liability company. The Company is treated as a disregarded entity for federal and state income tax purposes. In lieu of paying taxes at the company level, Parent is taxed on the Company's taxable income. Therefore, no provision or liability for federal or state income taxes has been included in these financial statements. The Company follows the accounting guidance for uncertainty in income taxes using the provisions of ASC 740, Income Taxes (ASC 740). Using that guidance, tax positions initially need to be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. As of December 31, 2023, the Company had no uncertain tax positions that qualify for either recognition or disclosure in the financial statements. It is the Company's policy to include any penalties and interest related to income taxes as income tax expense; however, the Company currently has no penalties or interest related to income taxes. The earliest year that the Company is subject to examination is the year ended December 31, 2020. {8}------------------------------------------------ # NOTE B – Net Capital Rule The Company is typically required to maintain a minimum net capital balance (as defined) of the greater of \$5,000, pursuant to the SEC's Uniform Net Capital rule 15c3-1, or 6 2/3% of total aggregate indebtedness. The Company's net capital balance was \$149,422 at December 31, 2023, which was \$140,655 in excess of its required minimum net capital of \$8,768. The Company must also maintain a ratio of aggregate indebtedness (as defined) to net capital of not more than 15 to 1. The Company's ratio was .88 to 1 at December 31, 2023. ### NOTE C - Related Party The Company is party to a services agreement with Candlewood Partners, LLC ("Partners") whereby the Company pays for rent and utilities incurred by Partners on behalf of the Company. At December 31, 2023, the Company owed \$4,719 to a representative group owned in party by one of the Company's officers. ### NOTE D – Contingencies In the normal course of business, the Company is subject to routine examinations by FINRA and the SEC and subject to penalties, fines and capital assessments resulting from those examinations. The Company is presently not under examination by the SEC or FINRA. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.