# SAND CAPITAL LLC X-17A-5 (2021-02-26) — Broker-dealer annual report - Company: SAND CAPITAL LLC - Form: X-17A-5 - Filed: 2021-02-26 - Period: 2020-12-31 - Accession: 0001750362-21-000003 - CIK: 1750362 - File #: 8-70193 - Material weakness: No - Auditor: Citrin Cooperman & Company LLP - Auditor location: New York, NY - Contact: michael Stupay - Phone: 212-897-1692 - Signed by: Patrick Sweeney (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1750362/000175036221000003/sand20s.pdf --- {0}------------------------------------------------ (a wholly-owned subsidiary of Related Fund Management, LLC) Statement of Financial Condition Pursuant to Rule 17A-5 under the Securities Exchange Act of 1934 December 31 , 2020 {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | OMB APPROVAL | |---------------------------| | OMB Number: 3235-0
123 | | Expires: October 31, 2023 | | Estimated average burden | | hours per response 12.00 | 8-70 193 SEC FILE NUMBER ## ANNUAL AUDITED REPORT FORM X-17 A-5 PART III #### 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 | __
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=2~0~1~1~9 | AND ENDING | 12/31
/20 | | |-------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|------------|--------------------------------|--| | | MM/00/YY | | MM/00/YY | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER -
DEALER: | | | | | | Sand Capital LLC | | | OFFICLAL USE ONLY | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM ID. NO. | | | | 30 Hudson Yards 83rd Floor
(No. and Street) | | | | | New York | NY | | 10001 | | | (City) | (State) | | (Zip Code) | | | | B. ACCOUNTANT IDENTIFICATION | | (Area Code -
Telephone No.) | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | | Citrin Cooperman & Company LLP
(Name - if individual. stale last. first, middle name) | | | | | 529 Fifth A venue | New York | NY | 10017 | | | (Address) | (City) | (Stale) | (Zip Code) | | | CH
ECK ONE:
~ Certified Public Accountant
D
Public Accountant
D
Accountant not resident in United States or any or its possessions. | FOR OFFICIAL USE ONLY | | | | *\*Claims for exemption from the requirement that 1he annual repor/ be covered by 1he opinion of an independe111 public acco11111a11t must be suppor/ed by a sta/e111en1 offac/s and circumstances relied on as the basis for the exemption. See section 240. I 7a-5(e)(2).* SEC 1410 (3-91) {2}------------------------------------------------ ## **Sand Capital LLC** (a wholly-owned subsidiary of Related Fund Management, LLC) ## TABLE OF CONTENTS ## This report \*\* contains (check all applica ble boxes): - [x] Independent Auditors' Report. - [x] Facing Page. - [x] Statement of Financial Condition. - [] Statement of Operations. - [ ] Statement of Changes in Members' Equity. - [ ] Statement of Cash Flows. - [] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [ ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule l 5c3- I under the Securities Exchange Act of 1934. - [ ] Computation for Detennination of Reserve Requirements for Brokers and Dealers Pursuant lo Rule I 5c3-3 under the Securities Exchange Act of 1934. - [ l Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934. - [ ] A Reconciliation. including appropriate explanations, of the Computation of Net Capital Pursuant to Rule I 5c3-l (included with item (g)) and the Computation for Determination of Reserve Requirements Under Rule 15c3-3 (included in item (g)). - [ ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - [x] An Affirmation. - [ ] A copy of the Sf PC Supplemental Report. - [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control). - [ ] Independent Auditors' Report Regarding Rule I 5c3-3 exemption - [ ] Rule I 5c3-3 Exemption Report - \*\* *For conditions of confidential treatment of certain portions ofthisflling, see section 240.17a-5(e}(3).* {3}------------------------------------------------ #### AFFIRMATION l, Patrick Sweeney, :iflirm tha t, to the best of my knowledge and belief, the accompanying sla temcn I of fin:l ncial condition pertaining to Sand Ca pi la I J ,LC a t Dcccm ber 31, 2020, is true and correct. I further affirm that ncilhcr the Company nor any officer or tlircctor has :my proprieta ry hotmst in •• Y nccount dassifi•d .o!cly" !h>ot or• o~9 j ~~~\_\_.\_--~~~~~~~~~~~ Signature CEO Title Subscribed and s·worn lo befor e me t>2 - l '=> - "2..P 21 SUZANNE SHIELDS NOTAIY PUBUC STATI! OF Nl!W \'ORK . QtW.IFIKD IN N!W\'ORX COUNTY UC t 01.SH623+9S3 OOMM EXP: 01/31/2023 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To rhe Member and Management Sand Capital LLC ## Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Sand Capital LLC as of December 31, 2020, and the related notes (collectively referred to as the "financial statement"). ln our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Sand Capital LLC as of December 31, 2020, in conformity with accounting principles generally accepted in rhe United Stares of America. ## Basis for Opinion This financial statement is the responsibility of Sand Capital LLC's management. Our responsibility is to express an opinion on Sand Capital 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 arc required co be independent with respect to Sand Capital LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCr\OB. We conducted our audit in accordance with the standards of the PCAOB. Those standards rcguirc that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misscaremenr, whether due to error or fraud. Our audit included perfonning procedures to assess the risks of material missratemcnr of the financial statement, whether due to error or fraud, and performing procedures chat respond to those risks. Such procedures included examining, on a rest 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 se1'Ved as Sand Capital LLC's auditor since 2020. New York, New York February 11, 2021 CITRIN COOPERMAN & COMPANY, LLP 529 f"IFTH AVENUE NEW YORK, NY 10017 I TEL 212.697.1000 I FAX 212.697.1004 AH IHOEPCNOEHT FIRM ASSOCIAH.O WITH MOORE ST£PH~5 CITRINCOOPE HMAN.CC1M {5}------------------------------------------------ (a wholly-owned subsidiary of Related Fund Management, LLC) ## Statement of Financial Condition December 31 , 2020 | Asse
ts
Cash | \$ | 347,780 | |-------------------------------------------------------|----|-------------| | Prepaid expenses and other assets | | 4,734 | | Total assets | \$ | 352,514 | | Liabilities and Membe
r's Equity | | | | Liabilities:
Accounts payable and accrued expenses | \$ | 15,569 | | Due to affiliate | | 3,218 | | Total liabilities | | 18,787 | | Member's equity | | 333,727 | | Total liabilities and member's equity | \$ | 352,5
14 | The accompanying notes are an integral part of th is financial statement. {6}------------------------------------------------ ## **Sand Capital LLC (a wholly-owned subsidiary of Related Fund Management, LLC)** ## **Notes to Statement of Financial Condition December 31 , 2020** ## I. Nature of operations Sand Capital LLC (the ''Company") is limited liability company formed under the laws of the state of Delaware on July 19, 2018. The Company is a wholly-owned subsidiary of Related Fund Management, LLC (the "Parent''). On December I 0. 2019, the Company became a broker-dealer and as such is registered with the Securities and Exchange Commission (the "SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The primary business of the Company is to act as a broker-dealer providing financial and strategic advice on mergers and acquisitions, divestitures, restructurings, financings, capital raising and other similar transactions. ## 2. Summary of significa nt accounting policies ### Basis of presentation This financial statement was prepared in conformity with accounting principles generally accepted in the United States of America 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. #### Revenue recognition The Company recognizes 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 standard 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 not occur when the uncertainty associated with the variable consideration is resolved. ## Significant judgments: Revenue from contracts with customers includes success fees and advisory fees. The recognition and measurement of revenue is based on the assessment or 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. {7}------------------------------------------------ (a wholly-owned subsidiary of Related Fund Management, LLC) ## Notes to Statement of Financial Condition December 31 , 2020 ## 2. Summary of Significant Accounting Policies (continued) ### Revenue recognition (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 lake subsequent to this date and the purchaser obtains the control and benefit of the proceeds at that point. Payment for revenue is due upon closing. #### Advisory fees: The Company provides advisory services on mergers and acquisitions, restructurings, capital raising and other strategic transactions. Revenue for advisory arrangements is recognized over the time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to detem1ine the timing and measure of progress appropriate for revenue recognition under a specific contract. Payment for revenue is due upon invoicing. #### Contract assets and liabilities: Contract assets represent the Company's right to consideration in exchange for goods or services that the Company has transferred to a customer, excluding unconditiona l rights to consideration that are presented as receivables. Contract liabilities represent the Company's obligation to deliver products or provide data to customers in the future for which cash has already been received. ## Cash All cash deposits are held by one financial institution and therefore are subject to the credit risk at that financial institution and may at times exceed amounts insured by the Federal Deposit Insurance Corporation. 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. #### Income taxes The Company is a single member limited liability company and is therefore treated as a disregarded entity for income tax reporting purposes. The Internal Revenue Code ("!RC") provides that any income or loss is passed through to the ultimate beneficial individual member for federal, and state income taxes. Accordingly, the Company has not provided for federal state and local income taxes. At December 31, 2020, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will be subject to ongoing reevaluation as facts and circumstances may require. Interest and penalties assessed, if any, are recorded as income tax expense. The Parent's federal and state income tax returns are generally open for examination for years subsequent to 20 17. {8}------------------------------------------------ (a wholly-owned subsidiary of Related Fund Management, LLC) ## Notes to Statement of Financial Condition December 31, 2020 ## 2. Summary of significant accounting policies (continued) ## The Allowance for Credit Losses Effective January I, 2020, the Company adopted Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 326, Financial Instruments - Credit Losses ("ASC 326"). ASC 326 impacts the impairment model for ce11ain 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 could determine there are no expected credit losses in ce11ain circumstances (e.g., based on the credit quality of the client). The Company identified fees and other receivables (including, but not limited to, receivables related to securities transactions, and advisory fees) as impacted by the new guidance. ASC 326 specifies that the Company adopt the new guidance prospectively by means of a cumulative-effect adjustment to the opening member's equity as of the December 31, 2019. Accordingly, the Company recognized no adjustment upon adoption. The allowance for credit losses is based on the Company's expectation of the collectability of financial instruments, including fees and other receivables utilizing the CECL framework. The Company considers factors such as historical experience, credit quality, age of balances and current and future economic conditions that may affect the Company's expectation of the collectability in determining the allowance for credit losses. The Company's expectation is that the credit risk associated with fees and other receivables is not significant accordingly, the Company has not provided an allowance for credit losses at December 31, 2020. ## 3. Transactions with related parties An affiliate provides to the Company payroll, pension, and employee benefit administrative services for the Company's associated persons and office and administrative services for the Company to operate its business pursuant to an administrative services agreement (the "Expense Sharing Agreement"). At December 31, 2020. the Company owes \$3,218 to the affiliate for these services. Al I 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 wou ld otherwise exist or result from agreements and transactions among unrelated parties. ## 4. Regulatory requirements The Company is subject to SEC Uni form Net Capital Rule I 5c3- I under the Securities Exchange Act of 1934, which requires the maintenance of minimum net capital and requires that the ratio or aggregate indebtedness to net capital, both as defined, shall not exceed 15 to l. At December 31, 2020, the Company had net capital of \$328,993 which exceeded the required net capital by \$323,993. The ratio of aggregate indebtedness to net capital, at December 3 I, 2020 was .06 to I. The Company does not hold customers' cash or securities and, has no requirements under SEC Rule I 5c3-3 and therefore does not claim an exemption under paragraph (k). {9}------------------------------------------------ ## **Sand Capital LLC** (a wholly-owned subsidiary of Related Fund Management, LLC) ## Notes to Statement of Financial Condition December 31, 2020 ## 5. COVID-19 During the 2020 calendar year, the World Health Organization has declared COVI0-19 to constitute a "Public Hea lth Emergency of International Concern." This pandemic has disrupted economic markets and the economic impact. duration and spread of the COVID-19 virus is uncertain at this time. The financial perfonnance of the Company is subject to future developments related to the COVID-19 outbreak and possible government advisories and restrictions placed on the financial markets and business activities. The impact on financial markets and the overall economy, all of which are high ly uncertain, cannot be predicted. 1 f the financial markets and/or the overall economy are impacted for an extended period the Company's results may be materially affected. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. #### 6. Subsequent events Management of the Company has eva luated events or transactions that may have occurred since December 31 , 2020 and determined that there are no material events that would require 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.