# J. WOOD CAPITAL ADVISORS LLC X-17A-5 (2023-03-08) — Broker-dealer annual report - Company: J. WOOD CAPITAL ADVISORS LLC - Form: X-17A-5 - Filed: 2023-03-08 - Period: 2022-12-31 - Accession: 0001632418-23-000002 - CIK: 1586446 - File #: 8-69348 - Type: Broker-dealer - Material weakness: No - Auditor: S D Mayer & Associates - Auditor location: San Francisco, CA - Contact: Linda Grimm - Phone: 212-897-1685 - Signed by: Jason M. Wood (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1586446/000163241823000002/jw22s3.pdf --- {0}------------------------------------------------ ~ ITED STATES 0MB APPROVAL SECURITIES A.'\'D EXCHA~GE CO~tMISSION Washington, D.C. 20549 # AN UAL REPORTS FORM X-17A-5 PARTIJI | 0MB Number: 3235-0123 | | |--------------------------|--| | Expires: Oct. 31, 2023 | | | Estimated average burden | | | hours per response: 12 | | 8- 69348 FACING PAGE Information Required Pursuant to Rules l 7a-5. 17a-12, and 18a-7 under the Securities Exchange Act of 19~ FILING FOR THE PERIOD BEGINNING **O 1/01 /22** AJ~m ENDING **12/31 /22** **MMDD'YY** **~1~1DDYY** **A. REGISTRA.~T IDENTIFICATION** # NAMEOFFIRM: J. Wood Capital Advisors LLC TYPE OF REGISTRANT (check all applicable boxes): ~ Broker-dealer D Security-based swap dealer D Major security-based swap participant D Check here if respondent is also an OTC deri\"ativcs dealer ADDRESS OF PRJ CIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 1820 Calistoga Road | | (No. antration with PCAOB)(if applicable) (PCAOB Reg1~tration Xumber. 1fapplicable) #### FOR OFFICIAL t:SE O:\LY • Claims for exemption from the reqwrcment that the annual report~ be covered by lhc report~ of an mdependcnt public accountant mm t be supported by a statement of facts and circumstances relied on as the basis of the excmpuon. See 17 CFR 240. I 7a-5(e)( I )(ii), 1f applicable. Persons who are to re.pond to the collection of information contained in thi~ form are not r equired to r~pond unJe,, th(' form displa~ a currently ,·alid 0MB control number. {1}------------------------------------------------ #### AFFIRMATI01' 1, Jason M. Wood , swe~r (or affirm) that, to the best of my knowledge and belief, the f"lnancial report pertaining to J. Wood Capital Advisors LLC as of 12131/22 , is true and correct. I further swear {or affirm) that neither the clutipA»y **HOP ~ny plll'tn~r.** offieer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of a customer. Chief Executive Officer Title Notary Public **proY8d lo me <11 tie** ba5is of sa5sf3clo,y **eo,iderQ lo** be ll!e peno:l(s) **who appeared belcteme.** {2}------------------------------------------------ ## This filing\*\* contains (check all applicable boxes): - m (a) Statement of financial condition. - CEI (b) otes to unconsolidated or consolidated statement of financial condition, as applicable. - D ( c) Statement of income (loss) or, if there is other comprehcnsi,·e income in the period(s) presented. a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X). - D (d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or members· or sole proprietor's equity, *as* applicable. - D (f) Statcmcnc of changes in liabilities subordinated co claims of creditors. - D (g) Notes to unconsoLidated or consolidated financiaJ statements .. as applicable. - D (h) Computation of net capital under 17 CFR 240.15c3-L or 17 CFR 240.18a- L as applicable. - D (i) Computation of tangible net worth under 17 CFR 240. l 8a-2. - D (i) Computation for determination of customer rcscr,c requirements pursuant to Exhibit A to L 7 CFR 240.15c3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 2-f0. J 5c3- 3 or Exhibit A to 17 CFR 240. l 8a-4, as applicable. - D (I) Computation for Determination of PAB Requirements Wldcr Exhibit A to§ 2-W.l 5c3-3. - 0 (m) Information relating co possession or control requirements for customers under 17 CFR 240.1 c3-3. - D (n) lnformat1on relating to possession or control requirements for security-based swap customers under l 7 CFR 240. J 5e3- 3(p)(2) or 17 CFR 240. l 8a-4, as applicable. - 0 (o) Reconciliations. including appropriate explanations. of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240. J 5c3-l. 17 CFR 240. l8a-l , or 17 CFR 240.18a-2. as applicable, and the rcsenrc requirements under 17 CFR 240. l 5c3-3 or 17 CFR 240. l 8a--f. as applicable, if material differences exist, or a statement that no material differences exist. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - C!l (q) Oath or affirmation in accordance with 17 CFR 240. J 7a-5. 17 CFR 240. l 7a-l2. or 17 CFR 240. l8a-7. as applicable. - 0 (r) Compliance repon in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7. as applicable. - D (s) Exemption report in accordance with 17 CFR 240. I 7a-5 or 17 CFR 240. l 8a-71 as applicable. - CEI (t) Independent public accountant's report based on an examination of the statement of financial condition. D (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. I 8a-7, or 17 CFR 240. J 7a-1 2, as applicable. - 0 (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. J 8a-7, as applicable. - D (\\) Independent public accountant's report based on a review of the exemption report under l 7 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures. in accordance with 17 CFR 240. l 5c3-I e or 17 CFR 240.17a-l 2, as applicable. - D (y) Report describing any material inadequacies foWld to exist or found to have existed since the date of the pre, ious audit. or a statement that no material inadequacies exist. under 17 CFR 240. l 7a-12(k). D (z) Other:------------------------------------- - *\*\*To reques1 confidential treatmem of cenain portions of lhis filing, see 17 CFR 240. l 7a-5(e)/3) or 17 CFR 240.l 8a-*7(d)(2), *as applicable.* {3}------------------------------------------------ # J. Wood Capital Advisors LLC Statement of Financial Condition December 31, 2022 {4}------------------------------------------------ ![](_page_4_Picture_1.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Member of J. Wood Capital Advisors, LLC ## **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of J. Wood Capital Advisors, LLC as of December 31, 2022, and the related notes (collectively referred to as the " financial statement"). Tn our opinion, the financial statement presents fairly, in all material respects, the financial position of J. Wood Capital Advisors~ 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 J. Wood Capital Advisors, LLC 's management. Our responsibility is to express an opinion on J. Wood Capital Advisors, LLC's financial statement based on our audfr. 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 J. Wood Capital Advisors, 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 J. Wood Capital Advisors, LLC's auditor since 2015. San Francisco, California March 8, 2023 {5}------------------------------------------------ ## **J. Wood Capital Advisors LLC Statement of Financial Condition December 31 , 2022** ### **Assets** | Cash and cash equivalents | S 22,001,089 | |-------------------------------------------------------------|---------------| | Securities held at fair value | 90.830,938 | | Fees receivable | 3,441,625 | | Accrued interest receivable | 549,041 | | Operating lease right-of-use asset | 68,513 | | Fixed assets (net of accumulated depreciation of \$213,072) | 16,994 | | Other assets | 49,755 | | Total assets | S 116,957,955 | | Liabilities and Member's Equity | | | Securities sold shon at fair value | S
870,320 | | Profit sharing payable | 839,943 | | Accrued expenses | 138,822 | | Lease liability | 68,513 | | Total liabilities | 1,917,598 | | Member's equity | I 15,040,357 | | Total liabilities and member's equity | S 116,957,955 | The accompanying nores are an inregral pan of crus financial scaremem. {6}------------------------------------------------ #### 1. **Organization and Business** J. Wood C\_apital Advi~o~ LLC (the ''Company") i~ a limited liahility company formed under the law~ of the State of California. The Company is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and is a member of the financial lndus(I)' Regulatory Authority. The Company renders corporate financial advisory services to selected clients. Such advisory services involve mergers and acquisitions, debt and equity financing, derivative strategies and leveraged buyouts. The Company also serves as an underwriter of securities or selling group participant and engages in private placements of securities. ## **2. Summary of Significant Accounting Policies** ## **Basis of Presentation** This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") which require management to make estimates and assumptions that affect the reponed amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement. ## **Revenue Recognition** The revenue recognition guidance under Accounting Standards Codification ("ASC") Topic 606, *Revenue from Contracts with Customers* requfres 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 it is probable that a significant reversal in the amount of cumulative revenue recognized would nor occur when the uncertainty associated with the variable consideration is resolved. The revenue recognition guidance does not apply to revenue associated with financial instruments, interest income and expense, leasing and insurance contracts. Advisory fees are recognized over time using a time elapsed measure of progress as the Company 's clients simultaneously receive and consume the benefits of those services as they are provided. Private placements1 mergers and acquisitions and financial restructuring fees are recognized at the closing of the respective transactions. Unrealized appreciation or realized gains on securities are included in the statement of operations. 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 wtder the contracr, and whether constraincs on variable c-0nsideration should be applied due to wtcenain future events. {7}------------------------------------------------ ## **2. Summary of Significant Accounting Policies (continued)** #### **Credit Losses** The guidance under ASC Topic 326, *Financial lnsln11nenls* - *Credi! Losses* ("ASC 326n). ASC 326 impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. Under the accounting update, the Company has the ability to determine that there are no expected credit losses in certain circumstances (e.g., based on the credit quality of the customer). The allowance for credit losses is based on the Company's expectation of the colleccability of financial instruments, including fees and other receivables utilizing the CECL framework. The Company considers factors such as historical experience, credit quality, age of baJances and current and future economic conditions that may affccl the Company's expectation of the collectability in determining the allowance for credit losses. At December 31, 2022, the Company did not establish an allowance for credit losses. #### **Leases** The Company recognizes its lease in accordance with ASC Topic 842, Leases ("ASC 842"). The guidance increases transparency and comparability by requiring the recognition of right-of-use assets and lease liabi Ii ties on the statement of financial condition. Lease liabilities were recognized at the initial present value of the fixed lease payments using the prime rate. Right-of-use assets are recognized based on the amortized initial present value of the fixed lease payments. The Company has elected, for all underlying classes of assets, to not recognize right-of-use assets and lease Liabilities for sbon-term leases that have a lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonable certain to exercise. The Company recognizes lease costs associated with short-tenn leases on a straight-line basis over the lease term. ## **Cash and Cash Equin lents** Cash and cash equivalents include invesnnents in money market funds with a maturity date of three months or less. #### **Fixed Assets** Furniture and equipment is recorded at cost, net of accumulated depreciation, which is calculated on a straight-line basis over an estimated useful life of three to five years. ## Income Taxes The Company is a single member limited liability company and is treated as a disregarded entity for federal income tax reporting purposes. The Internal Revenue Code provides that any income or loss is passed through to the ultimate beneficial individual member. Accordingly, the Company bas not provided for federal and state income taxes. At December 31 , 2022, 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. {8}------------------------------------------------ ## **2. Summary of Significant Accounting Policies (continued)** #### **Receivables** The Company records as fees receivable amounts earned for services rendered where payment has not been received. #### 3. **Employee Benefit Plan** The Company participates in a 40 I (k) plan and a cash balance plan covering its employees. #### **4. Securities** For the year ended December 31 , 2022, the Company had investments in fixed income securities, equities and warrants. The net unrealized or realized profit on securities is reflected in the statement of operations. The values assigned to investments and any unrealized gains or losses reported are based on available informa tion and do not necessarily represent amounts that might be realized if a ready market existed and such difference could be material. Furthermore, the ultimate rea lization of such amounts depends on future events and circumstances and, therefore, valuation estimates may djffer from the value realized upon disposition of inruvidual positions. In the ordinary course of business, the Company receives securities as compensation or purchases sectLrities for its own account. lo instances where the Company receives securities as compensation or purchases securities for its own account, somerimes the securities may not be sold or otherwise Liquidated for a set period of time. In these cases, an illiqwdity discount may be taken on the quoted marketable value. Fair Value Measurement guidance establishes a ruerarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements) when market prices are not readily available or reliable. Accordingly, the degree of judgement exercised in deterrruning fair value is greatest in Level III investments. The three levels of ruerarchy a re described below: **Level** I - Quoted prices are available in active markets for identicaJ securities as of the reporting date. The types of investments which would generally be included in Level J include listed equities, listed options and listed derivatives. As required by GAAP, the Company does not adjust the quoted prices for these investments, even in a situation where the Company holds a large position and a purchase or sale could reasonably impact the quoted price. **Level** Il - Pricing inputs are other than quoted prices in active markers, which arc either directly or .indirectly observable as of the reporting date, and fair value is determined through the use of models or other valuation methodologies. The types of investments which would generally be included in this caregory include less liquid and restricted debt or equity securiries and certain over-the-counter derivatives. {9}------------------------------------------------ #### 4. Securities (continued) Level **lfl** - Pricing inputs are unobservable for the investment and includes situations where there is little, if any, market activity for the investment. The inputs into the determination of fair value require significant management judgment or estimation. The types of investments which would generally be included in this category include equity and/or debt securities issued by private entities. The following table presents the Company's fair value hierarchy for securities owned and securities sold shon as of December 31, 2022: | | Level I | | Level U | | Level III | | | |-----------------------------------------|------------------------------------------------------------|---|------------------------------------------|---|------------------------|---|---------------------------| | Securities held
at fair value: | Quoted prices
in actiYe markets
for identical assets | | Signifi~nt
other obsen•able
inputs | | Unobsen·able
inputs | | Balance
as of 12/31/22 | | Equities | \$
35.411,521 | s | - | s | | | 6,600,292 S 42,011.813 | | Fixed income securities | | | 211722,750 | | 14/09,000 | | 36,431
,750 | | Other | 12,387,375 | | | | | | 12,387,375 | | Total | \$
47,798,896 s 2 | | 1,722,750 s | | | | 21,309,292 S 90,830,938 | | Securities sold short
at fair value: | | | | | | | | | Options | \$
(870,320) S | | - | s | - | S | (870,320) | | Total | \$
(870,320) S | | - | s | - | S | (870,320) | The following table presents the changes in assets classified in Level III of the fair value hierarchy for the year ended December 31 , 2022 attributable to the following: | | | | | Fixed Income | | |----------------------------|---|---------------|---|--------------|------------------| | | | Common Stock | | Securities | Total | | Purchases | s | 7,621
,319 | S | 15,000,000 | \$22,62
1,319 | | Transfers into Level Ill | | 4,590,000 | | | 4,590,000 | | Transfers out of Level III | | | | | | {10}------------------------------------------------ #### **4. Securities (continued)** The following cable summarizes the valuation techniques used for the Company's investments that are categorized in Level ITI of the fair value hierarchy as of December 31, 2022: | Level ill Investments | Fajr VaJue
as of 12/31/22 | Valuation Tecbojque | |----------------------------|------------------------------|----------------------------------------------------------| | Equities | | Discount taken on
assumed value of
similar shares. | | Equities | 6,000,292 | Discount taken on
value of marketable
shares | | Fixed income securities | 14,709,000 | As provided by
clearing t>roi{er | | Total Level IU Investments | \$ 21 ,309 ,292 | | ## 5. Regulatory Requirements The Company is subject co SEC Uniform Net Capital Rule l 5c3-I 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 co I. At December 31 , 2022, the Company had net capital of approximately \$72,900,000 which exceeded the required net capital by approximately \$72,800,000. The Company does not handle cash or securi1ies on behalf of customers. Accordingly, it is not affected by SEC RuJe 15c3-3. ## **6. Fair Value Measurements** Securities owned and securities sold, not yet purchased (short sales) are recorded at fair value. {11}------------------------------------------------ ### 7. **Commitments** The Company leases office space from the Managing Member of the Company. This lease provides for monthly payments of \$2,000 and expires on December 31 , 2025. Maturities of lease liability under the operating lease at December 31, 2022 arc as follows: | Years ending | | | |------------------------|--------|---------| | December 3 I , | Amount | | | 2023 | \$ | 24,000 | | 2024 | | 24,000 | | 2025 | | 24,000 | | | s | 72,000 | | Less: imputed interest | | (3,487) | | | s | 68,513 | The Company currently has three one-year leases for office space which will expire during 2023 and will mos1 likely be renewed. ## **8. Concentrations** The Company's cash and cash equivalents are held by one financial institution and therefore are subject to the credit risk at that financial institution. The Company does not consider itself to be at risk with respect to its cash balances. ## **9. Subsequent Events** The Company has evaluated events that have occurred after December 3 J, 2022 through the date the financial statements were issued and has determined that there were no material subsequent events requiring adjustment or disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.