# CROSSTREE CAPITAL SECURITIES, LLC X-17A-5/A (2021-03-25) — Broker-dealer annual report
- Company: CROSSTREE CAPITAL SECURITIES, LLC
- Form: X-17A-5/A
- Filed: 2021-03-25
- Period: 2020-12-31
- Accession: 0001497307-21-000002
- CIK: 1497307
- File #: 8-68662
- Material weakness: No
- Auditor: Spicer Jeffries LLP
- Auditor location: Denver, CO
- Contact: Katherine Anderson
- Phone: 4043038840
- Website: spicerjeffries.com
- Signed by: Jeff Ellis (Managing Member)
Original filing: https://www.sec.gov/Archives/edgar/data/1497307/000149730721000002/CCS20PublicAMENDED3.pdf
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Public
AMENDED
SEC 1410 (11-05)
UNITEDSTATES SECURITIES ANDEXCHANGE COMMISSION Washington, D.C. 20549
OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response ... ... 12.00
# ANNUAL AUDITED REPORT FORM X-17A-5 PART III
| SEC FILE NUMBER |
|-----------------|
| 8-68662 |
## FACING PAGE
Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder
| REPORT FOR THE PERIOD BEGINNING 01/01/2020 | | AND ENDING 12/31/2020 | | |
|-------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-----------------------|------------------------------------|--|
| | MM/DD/Y Y | | MM/DD/Y Y | |
| | A. REGISTRANT IDENTIFICATION | | | |
| NAME OF BROKER-DEALER: Crosstree Capital Securities, LLC
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | OFFICIAL USE ONLY
FIRM I.D. NO. | |
| | | | | |
| 2701 North Rocky Point Drive, Suite 925 | | | | |
| | (No. and Street) | | | |
| Tampa | EL | | 33607 | |
| (City) | (State) | | (Zip Code) | |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Katherine Anderson | | | 404-303-8840 x1002 | |
| | | | Telephone Number)
(Area Code | |
| | B. ACCOUNTANT IDENTIFICATION | | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | |
| Spicer Jeffries LLP | | | | |
| | (Name of individual state last, first, middle name) | | | |
| 4601 DTC Blvd., Suite 700 | Denver | CO | 80237 | |
| (Address) | (City) | (State) | (Zip Code) | |
| CHECK ONE: | | | | |
| Certified Public Accountant | | | | |
| | | | | |
| Public Accountant | | | | |
| Accountant not resident in United States or any of its possessions. | | | | |
| | FOR OFFICIAL USE ONLY | | | |
| | | | | |
| | | | | |
| | | | | |
\* lains for exemption from the requirement that the annual report be covered by the opinion of an independent public accommant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See Section 240.17a-5(e){2}
> Potential persons who are to respond to the collection of
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### OATH OR AFFIRMATION
| I. Jeff Ellis | sweather state of the such (or affirm) that, to the best of |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| my knowledge and belief the accompanying financial statement and supporting schedules persaining to the firm of
Crosstree Capital Securities, LLC | ાડ |
| of December 31 | 20 20 are true and correct. I further swear (or affirm) that |
| classified solely as that of a customer, except as follows: | neither the company nor any partner, principal officer or director has any proprietary interest in any account |
| | Signature |
| F.I. Univers License provided | Managing Member
Tille |
| 13-02/23/202
Notary Public
This report ** contains (check all applicable boxes):
(a) Facing Page.
(b) Statement of Financial Condition.
of Comprehensive Income (as defined in §210.1-02 of Regulation S-X).
(d) Statement of Changes in Financial Condition.
(e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
(I) Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3.
(i) Information Relating to the Possession or Control Requirements Under Rule 15e2-3.
Computation for Deternimation of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | SUSAN K. SPURGEON
MY COMMISSION # GG 074726
EXPIRES: May 1, 2021
Bonded Thru NotBry Public Underwriters
(c) Statement of Income (Loss) or, if there is other comprehensive in the period(s) presented. a Statement
(j) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the |
| consolidation.
(1) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report. | (k) A Reconciliation between the and inaudited Statements of Financial Condition with respect to nethods of
(1) A report describing any material inadequacies found to sxist or found to have existed since the previous andit. |
| | |
\*\* For conditions of confidential treatment of certain partions of this filling, see section 240.170-510/13).
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### **STATEMENT OF FINANCIAL CONDITION**
**DECEMBER 31, 2020**
The report is fila:l in accordance with Rule 17&5(e)(3) under the Securities Exchange Act of 1934 a5 a **PUBLIC DOCUMENT.**
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4601 DTC BOULEVARD . SUITE 700 DENVER, COLORADO 80237 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 www.spicerjeffries.com
### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Members of Crosstree Capital Securities, LLC
#### Opinion on the Financial Statements
We have audited the accompanying statement of financial condition of Crosstree Capital Securities, LLC (the " Company") as of December 31, 2020, and the related notes to the statement of financial condition. In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of December 31, 2020 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) (PCA OB) 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 PCA OB.
We conducted our audit in accordance with the standards of the PCA OB. Those standards require that we plan and perform the audit to obtain ressonable 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 statements. We believe that our audit provides a reasonable basis for our opinion.
We have served as Crosstree Capital Securities, LLC's auditor since 2011.
Denver, Colorado February 11, 2021
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#### **STATEMEXT OF Fl:\A~CIAL COXDITIO\'**
#### **DECEMBER 31 , 2020**
| | | .ASSETS |
|--|--|---------|
| | | |
| Cash and cash equivalents | S 857.964 |
|---------------------------|-------------|
| Other assets | 5,495 |
| Total assets | S 863
59 |
### **LIABILITIES AXD l\lEl\IBER'S EQllTY**
| LIABILITIES: | | |
|------------------------------------------------------------|---|-------------|
| Promissory note payable a-,: ore 4) | S | .083
32 |
| .-\cc01n.1ts payable | | l L677 |
| Total liabilities | | -B,760 |
| COMl\IIT'.\IE~TS AXD CO\'TIXGE.'-.CIES (\'OTES 3 A.'\'D 5) | | |
| MEMBER'S EQllTY
(!\ote 2) | | 8
19.699 |
| Total liabilities a11d member's equity | | S 863,459 |
The a:companyi ng notes are an i ntegra part of this statement.
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### **NOTES TO Fl NANCI AL STATEMENTS**
### **NOTE 1-ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
### **Organization and Business**
Crosstree Capital Securities, LLC (the "Company") is a Florida limited liability company formed on July 21 , 2008. The Company is affiliated with Crosstree Capital Partners, Inc. ("CCP"), a management consulting firm to life ~iences companies, through common ownership. The Company is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FlNRA"). The Company identified the provision of Footnote 74 under which the Company snot required to daim an exemption from 17 C.F.R. 240.15c3-3.
The Company provides investment baiking and corporate finance a:lvisory and consulting services rega-ding mergers and acquisitions and growth capital financing. The Company spe::ializes in the life sciences and healthcae industries, with a focus on pharmaceutica outsourcing, diagnostic products and sa-vices aid life science tools.
### **Revenue Recoc:J1ition**
The Company's main source of revenue is consulting and advisory fees and records this revenue when earned. As of Da:ember 31, 2020, maiagement has determined that no al I owance for doubtful accounts is neces.5a)'.
### **Cash and Cash Equivalents**
For purpo~ of the statement of cash flows, the Company considers money maket funds with an original maturity of three months or I ess to be cash equivalents.
#### **lnoomeTaxes**
The Company is not a taxable entity aid thus the financial statements do not indude a provision for income taxes. The Company 's member is taxed on his respective share of the Company's earnings.
The Compa,y is required to determine whether a tax position is more likely than not to be sustained upon exanirniion by the ~plirable taxing authority, including rerolution of a,y tax relata:i appeas or litigation proces938, ba:a:l on the technica merits of the position. The Compaiy files an income tax return in the U.S. **federal** jurisdiction and may file income tax returns in vaious U.S. states. The Company is not subject to income tax return exaninations by major taxing authorities for yeas before 2017. The tax benefit recognized is measured as the I agest anount of benefit that has a greater thai fifty percent Ii kel i hood of being realized upon ultimate ~tlement. De-recognition of a tax benefit previously recognized results in the Company remrding a tax liability that reduces net assets. However, the Company's conclusions regarding this policy may be subject to revieN and a:ljustment at a later dae based on factors induding, but not limited to, on-going analy~ of and cha,ges to tax latvs, regulations and interpretations thereof. The Company recognizes interest a::crued related to unrecognized tax benefits and penalties related unrecognized tax benefits in income taxes payable, if asressed No interest expense or penalties have been recognized as of and for the yea ended Decanber 31, 2020.
#### **Recs,t Accounting Pronouncements**
The Company has evaluated FASB Standards Update 2016-02, Lease (Topic 842) - effective for fiscal years beginning after DEO:mber 15, 2018 a,d has updates its rerogni ti on of the corresponding I ease as9::is aid liabilities. Implementation of the new standard did not materially affect the Company's operations or net ~tal computations.
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### **NOTES TO Fl NANCI AL STATEMENTS** (continued)
# **NOTE 2- NET CAPITAL REQUIREMENTS**
F\Jrsuait to the net capita provisions of Rule 15c3-1 of the Securities Exchaige Act of 1934, the Compa,y is required to maintan a minimum net capita , as defined under such provisions. At December 31, 2020, the Company had net capital and net capital requirements of \$814,204 and \$5,000, respectively. The Company's net capital ratio (aggregate indebtedness to net capital) was .05 to 1. According to Rule 15c3-l , the Company's net ecpital rcii o sial I not exceed 15 to 1.
### **NOTE 3** - **OPERA TING LEASE**
The Company has a non-cancel able operating lease for subleases office space with CCP whid1 expires Januay 31 , 2021. In addition, the future minimum lease payments ere as follows:
| Year Ending | |
|--------------|--------|
| December 31, | Amount |
| 2021 | 880 |
Rental expense was \$10,562 for the yea- ended December 31 , 2020.
### **NOTE 4** - **RELATED PARTY TRANSACTIONS**
The Company has a, expense siaing ~reernent with CCP. Under the ~reernent, the Company pays 50% of CCP's operating expenses including, but not limited to legal, marketing. payroll and salaries, utilities and insurance expenses.
The Company has entered into a separate ~reement to sublease office space from CCP through January 31 , 2021 (see Note 3).
The Compaiy has a convertible promi S':!Dry note payrol e due to a related paty , Shane Senior. As of December 31 , 2020, the Compa,y owes \$25,000 of principal and \$7,083 of interest. The note requires periodic payments of simple interest on the principal baaice at a rate of three percent (3%) per annum. Such interest will accrue unti I repayment of the note or unti I conversion.
The note is convertible into 50% of the fully diluted interest of the Compa,y at 'cr!Y time upon notice to the Compa,y. In the ~ent that the conversion date does not OCa.Jr prior to December 31, 2020, the Compa,y sia I, upon written dema,d, pay the full principle bal'crlce aid all accrued interest.
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### **NOTES TO FINANCIAL STATEMENTS** ( cone! uded)
# **NOTE 5- FINANCIAL INSTRUMENTS, OFF-BALANCE SHEET RISK AND CONTINGENCIES**
The Company's financial instruments, including cash and cash equivalents, due from affiliate, other assets and accow1ts payable are carried at arnow1ts that approximate fair value due to the short - term nature of those instruments. The estimated fair value of the Company's conve1tible promissory note payable, based on the maket rates of interes a,d simila maturities, approximate its cary value or contra:::ted anounts.
The Compa,y is enga;;ied in vaious corporate a:lvis::>ry cdivities with counterpaties with which the Compa,y has a, invesment banking assignment. In the event that counterpaiies do not fulfill their obligations, the Compa,y ma'y' be exposed to risk. The risk of default depends on the creditworthiness of the counterpaty. It is the Company's policy to review as necessary, the credit standing of each counterparty with which it conducts business.
#### **NOTE 6** - **SUBSEQUENT EVENTS**
The Compa,y has performed a, evaluation of subrequent events through the date the financial statements were iSSJed. The evaluation did not result in criy subrequent events that required disclosures cric:1/or cdjustments.
Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.