# GRF CAPITAL INVESTORS, INC. X-17A-5 (2021-03-02) — Broker-dealer annual report - Company: GRF CAPITAL INVESTORS, INC. - Form: X-17A-5 - Filed: 2021-03-02 - Period: 2020-12-31 - Accession: 0000852998-21-000001 - CIK: 852998 - File #: 8-41494 - Material weakness: No - Auditor: M7K CPAS PLLC - Auditor location: Houston, TX - Contact: Mark Heinrich - Phone: 918-744-1333 - Website: mkacpas.eom - Signed by: Mark W. Heinrich (President) Original filing: https://www.sec.gov/Archives/edgar/data/852998/000085299821000001/annualreportdoc.pdf --- {0}------------------------------------------------ | UNITED ST ATES | | | | |------------------------------------|--|--|--| | SECURfflES ANO EXCHANGECOM:MJSSION | | | | | Waslli11gto11, D.C. 20549 | | | | # **ANNUAL AUDITED REPORT FORM X-17A-5 PART** Ill | 0MB APPROVAL | | |--------------------------|---------------------| | 0MB Number: | 3235-07 23 | | Expires: | Oc.tol.,er 31, 2023 | | Estimated average burden | | | hours
r res | nse 12.00 | SEC FILE NUMBER s.41494 FACING PAGE # Information Rcqu ired of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder | | AND 1:iNDING_~2/31/2020
REPORT FOR THE PERIOD 13EGINNING01/01/2020 | | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------|------------|-----------------------------------|--| | | MM/OD/YY | | MM/DO/YY | | | | A. REGISTRANT IDENTlFICA TION | | | | | NAME oF BROKER-DE'ALER: GRF Capital Investors, Inc.
ADDRF.SS OJI PRINCJPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
6506 S. Lewis Ave., Ste. 160 | | | OFFICIAL USE ONLY
FIRMI.D. NO. | | | | | | | | | | (No und Street) | | | | | Tulsa | OK | | 74136 | | | (City) | | /ZipCoMark Heinrich 918-744-1333 | | | | | | | | | (Area Code - Tdcphou~ .Nun1berl | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | M & K CPA's PLLC
363 N Sam Houston Parkway E. Ste. 650 | (NH me · if lndil•id,w/. s1<11,· las!, /irst. middle 11umc)
Houston | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report•
(A(Zip Code) | | *\*Claims fur exemptirm.fi·om the rcquiremenr rhat the annual repori be covered by the opinion q(an independent pub/ie* accou11/unr *mu.rt he ,supporled* by *a sta/("ment of/acts and circ1,mstances relied on as the basisfor rhe exemption. See Section 240. l 7a-5(e)(2)* > Potential persons who are to respond to the collecllon of Information contained In this form are not required to respond unless thetorrn displays a currently valfd 0MB control number. SEC 1410 (11-05) {1}------------------------------------------------ ## **OATH OR AFFIRMATION** | J Mark Heinrich | _
_ _ | ____ , swear (or affirm) that, to the best of
_ | |-------------------------------------------------------------|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------| | GRF Captlal Investors, Inc. | ------ | my knowledge und helief the accompanying financial statement and supporting schedules pertaining to the firm of
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of December_3_1 _ | -
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20~ _
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_ , are true and correct. I funher swear (or affirm) that | | | | neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account | | classified :mlely as that of a customer, except as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AMAl'IDAPit.RI( | | | President ----------Title This reporl **u** contains (check 1111 applicable boxes): - 0 (a) Facing Page. - 0 (b) Statement of Financial Condition. Notary Putitic Notary ~Ublfc • State of Okl&"cma Commission Number 12004733 **My** CommtHlo~ E)(plre~ May 17, 2024 - IZ] (c) Stotenient of Income (Loss) or. if there is other cn111prche11sive income in the period(s) presented, a Statement ofCumprchensiv~ Income (as defined in §210.1-02 of Regulation S-X). - ✓ (d) StatcmenL of Changes in Financia l Condition. - ✓ (e) S1a1emcnl of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital. - (f) Statcmenl of Changes in Liabilities Subordinated to Claims or Creditors. - ✓ (g) Compuca1io11 of Net Capital - ✓ (h) Comp11rntio11 for Determination of Rcsorve Requirements Pursuant to Ruic l ScJ-3. - (i) Information Rein ing to the Possession or Control Rcr conditions of Co f!fidential h'eatmenl of certain portions of this jili11g, see section 240.* J *7a-5 (e)(3),* {2}------------------------------------------------ # GRF CAP IT AL INVESTORS, INC. Financial Statements and Supplemental Schedules Rccruired by the U.S. Securities and Exchange Commission Including Independent Auditor's Report Thereon For the Year-Ended December 31, 2020 1 {3}------------------------------------------------ # Contents | Independent Auditors Report , 3 | |----------------------------------------------------------------------------------------------------| | Financial Statements 4 | | Statement of financial Condition 4 | | Statement of Operations 5 | | Statement of (;ash Flows 6 | | Statement of Changes In Ownership Equity 7 | | Statement of Changes In Subordinated liabilities 8 | | Notes to Financial Statements 9 | | Supplementary Schedules Pursuant to SEC Rule 17a-5 15 | | Supplementary Statements Pursuant to SEC Rule 1Sc3-3(k)(2)(ii) Exemption 16 | | Statement Related to Uniform Net Capital Rule 16 | | Statement Related to Exemptlve Provision (Possession and Control) 16 | | Statement Related to Material Inadequacies 16 | | Statement Related to SIPC Reconcmation 16 | | Supplementary Reports Pursuant to SEC Rule 15c3-3(k)(2J(li) Exemption 17 | | Auditor's Report on Review of Exemption Letter Pursuant to SEC Rule 15-c3-3{k)(2)(ii) Exemption 18 | | Exemption Letter Pursuant to SEC Rule 15c3•3(k)(2)(ii} Exemption 19 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders GRF Capital Investors, Inc. ## Oprnion on the Financial Statements We have audited the accompanying statement of financial condition ofGRF Capital Investors, Inc. as of December 31, 2020, the related statements of operations, changes in ownership equity, changes in subordinated liabilities, and cash flows for the year then ended, and the related notes and schedules (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, lhe financial position of GRF Capital Investors, Inc. as of December 31, 2020, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of GRF Capital Investors, lnc.'s management. Our responsibility is to express an opinion on GRF Capital Investors, lnc.'s financial statements 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 GRF Capital Investors, Inc. 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 statements are 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 statements, 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 .:Js evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. The accompanying financial statements have been prepared assuming GRF Capital Investors, Inc. will continue as a going concern. As discussed in Note A to the financial statements, GRF Capital Investors, Inc. suffered losses from operations which raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainly. ## Auditor's Report on Supplemental Information The Supplementary Reports Pursuant to SEC Rule 15c3"3(k)(2)(ii) Exemption of the Securities and Exchange /\ct of 1934, Supplementary Schedules Pursuant to SEA Rule 17a-5 of the Securities and Exchange Act of 1934 has been subjected to audit procedures performed in conjunction with the audit of GRF Capital Investors, lnc.'s financial statements. The supplemental information is the responsibility of CRF Capital Investors, lnc.'s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records. as applicable. and performing procedures to lest the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information. we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.17a-5. In our opinion, the Supplementary Reports Pursuant to SEC Rule 15c3-3(k)(2)(ii) Exemption of the Securities and Exchange Act of 1934, Supplementary Schedules Pursuant to SEA Rule 17a-5 of the Securities and Exchange Act of 1934 is fairly stated, in all material respects, in relation to the financial statements as a whole. /s/ M&K CPAS, PLLC M&K CPAS, PLLC We have served as GRF Capital Investors lnc.'s auditor since 2019 Houston, TX March 2, 2021 363 N. Sam Houston Pkwy£., Suite 650 IIouston, TX 77060 www.mkacpas.eom {5}------------------------------------------------ | GRF Capital Investors, Inc. | | |-----------------------------------------------------------|-----------------------| | Financial Statements | | | Statement of Financial Condition | | | As of December 31, 2020 | | | ASSETS | | | CURRENT ASSETS | | | Cash In Bank | \$
15,200 | | Account Receivables | 18,936 | | Prepaid Expenses | 393 | | Security Deposit | 25 000 | | Total Current Assets | 59 529 | | PROPERTY ANO EQUIPMENT | | | Equipment | 44,508 | | Less: Accumulated Depreciation | (44,508) | | Net Property and Equipment | | | OTHER ASSETS | | | Other Assets | 1 773 | | | | | Total Other Assets | 1 773 | | TOTAL:ASSETS | | | | | | LIABILITES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITES | | | Accounts Payable | | | Accrued Liabilities | \$
5,714
10 771 | | Total Current Liabilities | 16 485 | | | | | LONG TERM LIABILITIES | | | Total Liabilities | 16 485 | | STOCKHOLDER'S EQUITY | | | Capital Stock, par value, \$.01 per share, | 5,308 | | 5,000,000 shares authorized, 530,800 shares | | | Issued and outstanding | | | Paid in excess | 426,692 | | Retained Earnings | (387,183) | | | | | Total Stockholder's Equity | 44 817 | | TOT AL LIABILITES AND | | | STOCKHOLDER'S EQUITY | \$
61 302 | The accompanying footnotes are an integral part of these financial statements. {6}------------------------------------------------ # **GRF Capital Investors, Inc.** Financial Statements **Statement of Operations** For the **Yeilr•Ended December 31, 2020** | REVENUES
Commissions Earned
Other Revenues
Interest Income | \$
132,355
7,074
543 | | |---------------------------------------------------------------------------------------------------------------|--------------------------------------|--| | Total Revenues
OPERA TING EXPENSES | 139,972 | | | Employment compensation and benefits
Floor brokerage, exchange and clearing
Occupancy
Other expenses | 69,353
24,160
23,676
22.995 | | | Total Operattng Expenses | 140 184 | | | Operating Loss (EBIT)
Other Income | (202)
15,000 | | | Income Before Taxes | 14,788 | | | Taxes | (0) | | | NET INCOME (LOSS) | \$
14,788 | | | Net Income Per Common Share: Basic & Diluted | \$
0.028 | | | Weighted Average Common Shares: Basic & Diluted | \$
5301800 | | | | | | The accompanying footnotes are an integral part of these financial statements. {7}------------------------------------------------ # GRF Capital Investors, Inc:. Financial Statements Statement of cash Flows For the Year-Ended December 31, 2020 | CASH FLOWS FROM OPERATING ACTIVITIES | | |-----------------------------------------------------------------------------------------------|--------------| | Net income | 14,788
\$ | | Adjustments to reconcile Net Income | | | (Loss) to net Cash provided by | | | (used in) operating activities: | | | Prior Period Adjustment | | | Depreciation and Amortization | | | Losses (Gains) on sales of | | | Fixed Assets | | | Decrease (Increase) in | | | Operating Assets: | | | Accounts Receivable | { 13,099) | | CRD Deposit | 40 | | Increase {Decrease) in | | | Operating Liabilities: | | | Accounts Payable | (4,743) | | Accrued Liabilities | 6 543 | | | | | Net Cash Provided By | | | Oporating Activities | 3,529 | | | | | CASH FLOWS FROM INVESTING ACTIVITIES | | | Capital Expenditures | | | Proceeds From Sale of Fixed Assets | | | NE,t Cash Provided By | | | lnl/esting Activities | | | CASH FLOW FROM FINANCING ACTIVITIES | | | Capital In Excess Of Par | 11,000 | | Dividends Paid | | | Proceeds From Sale of Stock | | | Treasury Stock | | | Net Cash Provided By | | | Financing Activities | 11 000 | | | | | NET INCREASE IN CASH | | | AND CASH EQUIVALENTS | 14,529 | | | | | CASH AND CASH EQUIVALENTS AT | | | BEGINNING OF PERIOD | 671 | | CASH ANO CASH EQUIVALENTS AT ENO OF PERIOD | \$
1s,200 | | | | | | | | '---------
The accompanying foot notes are an integral part of these financial statements. | ___ | | | ___J | 6 {8}------------------------------------------------ # GRF Capital Investors, Inc. Financial Statements **Statement of Changes In Ownership Equity For the Ye..r•Ended December 31, 2020** | | Common Stock | | Paid-In Capital | | Retained
Eamin2s
- | Total
Stockholder's
EQuitv
,._ - | | |--------------------------|--------------|---------|-----------------|-----------|--------------------------|-------------------------------------------|-------------| | | Shs | Amt. | Shs. | Amt. | Arnt. | Amt. | | | Balance at
12/31/2019 | 530,800 | \$5,308 | | \$415,692 | \$ (401,971) | \$ | 19,029
- | | Net Income | | | | | 14,788 | | 14,788 | | Dividends | | | | | | | | | Capital
Infusion | | | | 11,000 | | | 11,000 | | Balance at
12/31/20 | 530,800 | \$5,308 | | \$426,692 | \$ (387,183) | \$ | 44,8]7 | The accompanying footnotes are an integral part of these financial statements. {9}------------------------------------------------ **GRF Capital Investors, Inc.** Financial *Statements* **Statement of Changes In Subordinated liabilities** For **the Year-Ended De,ember 31, 2020** **No Statement is required as no subordinated liabilities exist at any time during the year** The accompanying notes are an integra! part of these financial statements. 8 {10}------------------------------------------------ # GRF Capital Investors, Inc. Notes to J:inancial Statements For the Year-Ended December 31, 2020 # NOTE A· SUMMARY OF ACCOUNTING POLICIES ## Organization GRF Capital Investors, Inc. (the "Company'1 ) was incorporated in June 1989 and is registered with the U.S. Securities and Exchange Commission ("SEC") as a broker and dealer pursuant to Section 15c3- 3(K)(2)(ii) of the Securities Exchange Act of 1934. The Company has adopted a fiscal year ended December 31 ## Net earnings (loss) per share calculations Net earnings (loss) per share dictates the calculation of basic earnings (loss) per share and diluted earnings per sham. Basic earnings per share are computed by dividing the weighted average number of common shares outstanding per year. Diluted net earnings (loss) per share is computed similar to basic earnings (loss) per share except that the denominator is increased to include the effect of dilutive securities, stock options and stock-based awards, plus the assumed conversion of convertible debt. At December 31, 2020, there were no such dilutive instruments. ## Description of Business The Company is a member of the Financial Industry Regulatory Authority (FINRA), formerly the National Association of the Securities Dealers, Inc., and the Securities Investor Protection Corporation. The Company executes transactions on a fully disclosed basis through a clearing broker. The Company does not hold customer funds or safe keep customer securities. The financial statements of GRF Capital Investors, Inc. have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. GRF Capital Invest ors, Inc. fiscal year end is December 31. #### Advertising The costs of advertising are expensed either as Incurred or the first time the advertising takes place. # Credit Risk The Company maintains its cash in bank deposit accounts, which at t imes, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash or cash equivalents. {11}------------------------------------------------ The Company does not require collateral from its customers with respect to accounts receivable but perfom1s periodic credit evaluations of such customers' financial conditions. The Company determines any required allowance by considering a number of factors including length of time accounts receivable are past due ancl previous loss history. The Company provides reserves for accounts receivable when they become uncollectible any payments subsequently received on such receivables are credited to the allowances for doubtful accounts. *As* of December 31, 2020 the Company has determined that no allowances for doubtful accounts Is required. #### Basis of Accounting The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. The Company's fiscal year end is December 31. The financial statements of the Corporation have been prepared on the accrual basis of accounting and accordingly reflect all significant receivables, payables, and other liabilities. #### Going Concern The Company's fi:iancial statements are prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. There can be no assurance that the Company will be successful in order to continue as a going concern. Management is focusing on smaller clients and hiring more registered representatives to increase revenue. ## Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash in bank, and temporary cash investments. Temporary cash investments are all highly liquid instruments with maturities of less than three months. The Company considers as cash all short-term investments with an original maturity of three months or less to be cash equivalents. #### Accounts Receivable - Recognition of Bad Debt Account Receivable are stated at the historical carrying amount net of write-off's and allowance for doubtful accounts. The Company establishes an estimated allowance for doubtful accounts received based on various factors, including revenue, historical credit loss experience, current trends, and specific customer collection issue that the Company has identified. Uncollectable accounts receivable are written off when a settlement is reached for an amount that is less that the outstanding historical balance or when t~ e Company has determined the balance will not be collected. As of December 31, 2020 the Company determined that all accounts receivable were collectible, therefore, no allowance for doubtful accounts was required. The Corporation considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination'; is made. {12}------------------------------------------------ ## Revenue Recognition Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. We determine revenue recognition through the following steps: - identification of the contract, or contracts, **with a** customer; - identification of the performance obligations in the contract; - determin;;1tion of the transaction price; - allocation of t he transaction price to the performance obligations in the contract; and - recognition of revenue when, or as, we satisfy a performance obligation. Revenue from the sale of mutual funds, security transactions and other revenue are recognized on the accrual basis. The Company records its revenue as received adjusted monthly for receivables based on the Company's estimate of revenue earned from the sale of specific financial products, but not yet collected from the respective mutual fund or other financial services company. Securities transactions and all related revenue and expense are recorded in the accounts on a settlement date basis. Revenue and expenses related to securities transactions executed but not yet settled as of period end are not material to the Company's financial statements. Revenue from the sale of mut ual funds is recogn,zed w hen the investment in the mutual fund is made. #### Estimations The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Income Taxes The components of income tax (benefit) expense, on continuing operations, for the year ended December **31,** respectively were as follows: | | 2020 | |---------|------| | Federal | \$0* | | State | 0 | | Tota l | \$0* | \* Represents estimate for 2020 tax expense. Tax returns have not been filed for the year ended 2020- Estimates were made with 21% Federal and 4.5% State t ax rates. {13}------------------------------------------------ The \$15,000 income recogniz.ed from the gain on extinguishment of the PPP debt forgiveness (see NOTE J) is excluded from the net income for income tax consideration. The resulting net operating loss of \$212 exclusive of this other income would result in a \$0 income tax expense at December 31., 2020. ## Office Equipment and Furniture Office equipment and furniture is depreciated using the straight-line method over its estimated useful life , which ranges from 3 to 7 years. Depreciation expense for the years ended December 31, 2020 is \$0 is reflected in the operating expenses in the accompanying statement of operations. Depreciation is ca lculated using the straight-line method. Expenditures for major repairs and betterments that extend the useful lives are capitalized. Expenditures for normal maintenance and repairs are experised as incurred. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are included in the accompanying statement of operations of the respective period. ## Recent Accounting Pronouncements In February 2016, the FASS issued ASU No. 2016-02, Leases {Topic 842); Accounting for Leases. This update requires that lessees recognize the right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at lease commencement date. The recognition, measurement, and presentation of expenses and cash flow arising from a lease by a lessee will largely remain unchanged and shall continue to depend on it classification as a finance or operating lease. The Company has adopted tlie ASU effective January 1, 2019 and has determined there is no effect to the Company. In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement-Reporting Comprehensive Income (Topic 22): Reclassification of Certain Tax Effects from Accumulated Other Comprehem,lve Income (ASU 2018-02), which allows companies to reclassify stranded tax effects resultlng from the Tax Act, from accumulated other comprehensive income to retained earnings. The new standard was adapted January 1, 2019, and the Company noted no tax effects as a result of this standard. ## Subsequent Event The Company has evaluated events subsequent to the balance sheet date for items requiring recording or disclosure in the rinancial in the financial statements. The evaluation was performed through March 2, 2021, which is the date the financial statements were available to be issued. Based upon this revit!w, the Company has determined that there were no events which took place that would have a material impact on its financial statements. ## NOTE 8 - POSSESSION OR CONTROL REQUll{EMENTS The Company does not have any possession or control of customer's funds or securities. There were no material inadequac·es in the procedures followed in adhering to the exemptlve provisions of SEC Rule 15c-3•(k)(2)(ii) by promptly transmitting all customer funds to the clearing broker who carries the customer accounts. {14}------------------------------------------------ # NOTE C- NET C.O.PITAL REQUIREMENTS Pursuant to the net capital provisions of Rule 15c3-3 of the Securities and Exchange Act of 1934, the Company is required to maintain a minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2020 the Company had net capital of \$42,649 which was \$37,649 in excess of its required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital was 38.66% to 1. There were no material differences In the net amount reported as Net Capital in the audited Computation of Net Capital and the broker-dealer's corresponding unaudited Part II-A of the FOCUS report required under Rule 1Sc3-1. #### NOTED - CONCENTRATION OF CREDIT RISK #### Concentrations For the year ended December 31, 2020, two of the Company's customers accounted for approximately 53% of revenues. As of December 31, 2020, RBC Capital Markets, LLC., the company's clearing brokerdealer accounted for 100% of the accounts receivable balance. During 2019, GRF Capital Investors, Inc. lost a major client which negatively affected the Company's revenues and their results of operations. During 2020, (95%) percent of comrnisslon income was attributable to two registered representatives. Other revenue consists of monthly association fee from another investment advisory representative. #### NOTE E - PROPERTY, EQUIPMENT, AND LEASEHOLD IMPROVEMENTS Property, equipment and leasehold improvements are stated at cost Jess accumulated depreciation. Expenditures form maintenance and repairs are charged to expense as incurred. Depreciation is calculated on the double declining method. The following is a summary of property, equipment and leasehold improvements: | | Estimated Useful Life | | |-------------------------------|-----------------------|----------| | Office Equipment & Furniture | 3-7 years | \$44,508 | | Less Accumulated Depreciation | | (44,508) | | Total | | 0 | Depreciation expense was \$0 for the year of December 31, 2020. #### NOTE F - STATEMENT OF EXEMPTION OF RESERVE REQUIREMENT The Company is subject to the Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum Net Capital. The Company has elected to use the basic computation method, as is permitted by the rule, which requires that the Company maintains minimum Net Capital pursuant to a fixed dollar amount of 6-2/3% of the total aggregate indebtedness, as defined, whichever is greater, and does not therefor calculate its net capital requirement under the alternative reserve requirement method. {15}------------------------------------------------ ## NOTE G - OTHER COMMITMENTS AND CONTINGENCIES lnduded in the Company's clearing agreement with its clearing broker-dealer, is an indemnification clause. This clause relates to instances where the Company's customer fail to settle security transactions. In the event this occurs, the Company will indemnify the clearing broker-dealer to the extent of the net loss on the unsettled trade. At December 31, 2020, management of the Company has not been notified by the clearing broker-dealer, nor were they otherwise aware, of any potential losses relating to this indemnification. #### NOTE H-RENT The Company's rental agreement is on a month to month basis. Monthly rental expense is \$1,973 and rent expense for the year ended December 31, 2020 was \$23,676. At this time, the company does not foresee any chanr,es in the near future with the present lessor's rental agreement. #### NOTE I-FAIR VALUE OF FINANCIAL INSTRUMENTS Current accounting literature clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, accounting literature established a three-tier fair value J,Jerarchy, which prioritizes the inputs used in measuring fair value as follows. Level 1. Observable inputs such as quoted market prices in active markets; Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and l evel 3. Unobservable inputs in which there is little or no market data, which require the reporting entiW to develop its own assumptions. The Company had no assets or liabilities that were measured and recognized at fair value on a nonrecurring basis as of December 31, 2020, and as such, had no assets or liabiHties that felt into the tiers described above. #### NOTE J - PPP LOAN AND OTHER INCOME 1n May 2020, the Company received a u.s Small Business Administration Loan under the Paycheck Protection Program {PPP Loan) primarily for payroll costs related to the COVID-19 crisis in the amount of \$15,000. Under the Paycheck Protection Program, the PPP Loan had a fixed interest rate of 1%, a maturity date two years from the date of funding of the loan and no payments were due for slx months. Pursuant to the terms of the PPP Loan, the Company applied for forgiveness of the arnount due on the PPP Loan and t his forgiveness was granted in December 2020 with the gain on extinguishment of debt of \$15,000 recorded ,1s other income on the statement of operations. {16}------------------------------------------------ # **GRF Capital, Investors, Inc. Supplementary Schedules Pursuant to SEA Rule 17a-S Of the Securities and Exchange Act of 1934 For the Year-Ended December 31, 2020** | Computation of Net Capital | | |---------------------------------------------------------------------------------------------------------------------------|------------------------| | Total Stockholder's Equity: | \$44,817 | | Non-allowable assets:
Fixed Assets
Accounts Receivable
2.166
Other As.sets
Tentative Net Capital | \$ (2,166}
\$42,651 | | Computation of lllet Capital | | | Haircuts
Undue Concentrations and Other Charges | s
H
(2) | | Net Capital | \$42,649 | | Minimum net capital as required as a percentage of aggregate indebtedness | \$ 1,100 | | Minimum dollar net capital requirement of reporting broker or dealer | \$ 5,000 | | Net capital requirement | \$ 5,000 | | Excess net capital | \$ 37,G49 | | Computation of Aggregate Indebtedness | | | Total Aggregate Indebtedness | \$_16,_ill | | Percentage of aggregate indebtedness to net capital
Reconciliation of the Computation of Net Capital Under Rule 15c3-1 | | | Computation of Net Capital reported on FOCUS IIA as of December 31, 2020
Adjustments: | \$42,705 | | Change in Equity (Adjustments) | (57) | | Change in Non~Allowable Assets | 1 | | Change in Haircuts | | | Change in Undue Concentration
NCC per Audit | | | Reconciled Difference | | | | | {17}------------------------------------------------ # GRF Capital Investors, Inc. Supplementary Statements Pursuant to SEC Rule 1Sc3-3(k)(2)(ii) Exemption Of the Securities and Exchange Act of 1934 For the Year-Ended December 31, 2020 ## Statement Related to Uniform Net capital Rule The Company **is a** member of the FINRA and is subject to the SEC Uniform Net Capital Rule 15c3-l. This rule requires the malnleni'lnce of minimum net capitt1I and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 1500% (15:1), or, during Its first year of operations, 800% (8:1), Net capital and the related net capital ratio may fluctuate on a daily basis. On December 31, 2020 the Company had net capital of \$42,649, whlch was \$37,649 in excess of its required net capital of \$5,000. The Company's ratio of aggregate indebte11ness to net capital was 38.66%. The Company has elected to use the basic computation method, as is perrrntted by the rule, which requires that the Company maintain minimum Net Capital pursuant to a fixed dollar amount or 6-2/3% percent of total aggregate indebtedness, as defined, whichever is greater, and does not, therefore, calc:ulate Its net capital requirement under the alternative reserve requirement method. There were no material differences reported *as* Net Capital in the audited computation of Net Capital and the brokerdeal~r's corresponding unaudited Parl IIA of the FOCUS l'eport required under Rule 15c3-1. ## Statement Relat,1d to Exemptive Provision (Possession and Control) The Company does not have possession or control of custom er's funds or securities. There were no material inadequacies in thr. procedures followed in adhering to the exemptive provisions of SEA Rule 15c3-3(k)(2)(il); All customer transactions cleared through another broker-dealer on a fully disclosed basis. #### Statement Related to Material Inadequacies This audit did not d;sclose any material inadequacies since the previous audit of the financial statements contained within the audit report of the Compulatlon of Minimum Net Capital Requirement as reported in the Supplemental Schedules contained within the audit report or the filed Financial and Operational Combined Uniform Single Report filed pursuant to SEA Rule 15c3-1. The firm Is exempt from 15c3-3; il does not maintain customer funds or securities and, thernfore, does not maintain customer funds to segregate nor does it maintain separate accounts for customers. #### Statement Related to **SIPC** Reconciliation SEA Rule 17a-S(e)(4) requires a registered broker-dealer to file a supplemental report which includes procedures related to the broke.r-dealers SIPC annual general assessment reconciliation or exclusion from membership forms. Jn circumstances where the broker-dealer reports \$500,000 or Jess in gross revenue they are not I equired to file the supplemental SIPC report The Company is exempt from filing the supplemental report under SEA Rule 17a-S(e)(4) because it is reporting less than \$500,000 in gross revenue. {18}------------------------------------------------ # GRF Capital Investors, Inc. Supplementary Reports Pursuant to SEC Rule 1Sc3-3(k)(2)(ii) Exemption Of the Securities and Exchange Act of 1934 For the Year-Ended December 31, 2020 Auditor's Report on Review of Exemption Letter Pursuant to SEA Rule 17a-5{d)(1)(i)(B){2) {19}------------------------------------------------ ![](_page_19_Picture_0.jpeg) # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders GRF Capital Investors, Inc. We have reviewed management's statements, included in the accompanying Exemption Letter Pursuant to SEA Ru!e 17a-5(d)(1 )(i)(B){2), in which (1) GRF Capital Investors, Inc. identified the following provisions of 17 C. F.R. §15c3-3(k) under which GRF Capita! Investors, Inc. claimed an exemption from 17 C.F.R. §240.15c3-3 (k)(2)(ii) (exemption provisions) and (2) GRF Capital Investors, Inc. stated that GRF Capital Investors, Inc. met the identified exemption provisions throughout the most recent fiscal year without exception. GRF Capital Investors, lnc.'s management is responsible for compliance with the exemption provisions and its statements .. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and. accordingly, included inquiries and other required procedures *to* obtain evidence about GRF Capital Investors, lnc.'s compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are no! aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects, based on the provisions set forth in paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. /s/ **M&K** CPAS, PLLC **M&K CPAS.** PLLC Houston, TX March 2, 2021 {20}------------------------------------------------ # GRF Capital Investors, Inc. Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the Securities and Exchange Act of 1934 As of and for the Year-Ended December 31, 2020 # Exemption Letter Pursuant to SEA Rule 17a-S{d)(l)(i}(B}(2} March 2, 2021 #### RE: Exemption Statement Rule 15c3-3(k) (21 Oil FYE December 31. 2020 GRF Capital Investors, Inc. claims the (k)(2)(ii) Exemption under Rule 15c3-3; and GRF Capital Investors, Inc. has met the identified exemption provisions in {240.15c3-3(k)(2)(ii) throughout the most recent fiscal year without exception. Addltlonally, please be advised that GRF Capital Investors, Inc., has compiled with Exemption Rule 15c3-3(k) (2) (ii) for the period of January 1, 2020 through December 31, 2020. GRF **Capital Investors,** Inc., did not hold customer securities of funds at any time during this period and has not done business on a limited basis in (publically registered nontraded REITS and Oil & Gas partnerships). GRF Capital Investors, lnc.'s, past business has been similar in nature and has compiled to this exemption since its inception, June 19, 1989. Mark W. Heinrich, the President of GRF Capital Investors, Inc. has made available to M&K CPA's all records and information including all communications from regulatory agencies received through the date of this report. Mark W. Heinrich has been responsible for compliance with the exemption provision throughout the fiscal year. Also, there were not any known events or other factors that might have affected GRF Capital Investors, lnc.'s, compliance with this exemption. If you would like additional information or have any questions, feel free to call me directly at (918) 744- 1333. Sincerely, -v' // ,/ "· //< ~L..eH- ,.,~;'CQ..' *(* **Mark W.** Heinrich GRF Capital Investors, Inc. President & CEO Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.