# DOUGH LLC X-17A-5 (2019-02-28) — Broker-dealer annual report
- Company: DOUGH LLC
- Form: X-17A-5
- Filed: 2019-02-28
- Period: 2018-12-31
- Accession: 0001044627-19-000007
- CIK: 1443255
- File #: 8-67992
- Material weakness: No
- Auditor: Ernst & Young, LLP
- Auditor location: Chicago, IL
- Contact: Agnes Krupa
- Phone: 312-444-8691
- Signed by: Agnes Krupa (Chief Financial Officer)
Original filing: https://www.sec.gov/Archives/edgar/data/1443255/000104462719000007/Dough_SOFC.pdf
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141 W Jackson Blvd., Suite 800 Chicago, IL 60604
# Statement of Financial Condition
Dough LLC Year Ended December 31, 2018 With Report of Independent Registered Public Accounting Firm
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
## ANNUAL AUDITED REPORT FORM X-17A-5 PART III
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August 31, 2020
SEC FILE NUMBER
8-67992
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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 01/01/2018 | | AND ENDING 12/31/2018 | |
|----------------------------------------------------------------------------------------|--------------------------------------------------------|-----------------------|-------------------------------|
| | MM/DD/YY | | MM/DD/YY |
| | A. REGISTRANT IDENTIFICATION | | |
| NAME OF BROKER-DEALER: DOUgh LLC | | | OFFICIAL USE ONLY |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | FIRM I.D. NO. |
| 141 W Jackson Blvd., Ste 800 | | | |
| | (No. and Street) | | |
| Chicago | Illinois | | 60604 |
| (City) | (State) | | (Zip Code) |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Agnes Krupa | | | (312) 444-8691 |
| | | | (Area Code - Telephone Number |
| | B. ACCOUNTANT IDENTIFICATION | | |
| INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | |
| Ernst & Young LLP | | | |
| | (Name - if individual, state last, first, middle name) | | |
| 155 N. Wacker Drive | Chicago | Illinois | 60606 |
| (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 | | |
| | | | |
| | | | |
| | | | |
\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant 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
> information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
SEC 1410 (11-05)
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### OATH OR AFFIRMATION
| Agnes Krupa | , swear (or affirm) that, to the best of | |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------|--|
| my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | | |
| dough LLC
of December 31 | , as
are the count of the and correct. If further swear (or affirm) that | |
| neither the company nor any partner, principal officer or director has any proprietary interest in any account
classified solely as that of a customer, except as follows: | | |
| | | |
| OFFICIAL SEA
PHILIP B GRIGUS
Notary Public, State of Illinois
My Commission Expires 1/14/2023 | Signature
Chief Financial Officer, PEAK6 Capital Management LLC
Title | |
| Notary Public | | |
| This report ** contains (check all applicable boxes):
V (a) Facing Page.
(b) Statement of Financial Condition.
(c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement
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.
(f) 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 15c3-3.
(i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3.
(k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of
consolidation.
(1) An Oath or Affirmation.
(m) A copy of the SIPC Supplemental Report.
(n) A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. | | |
| ** For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). | | |
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# Statement of Financial Condition
Year Ended December 31, 2018
# Contents
| Report of Independent Registered Public Accounting Firm | |
|---------------------------------------------------------|--|
| Statement of Financial Condition | |
| Notes to Statement of Financial Condition | |
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Ernst & Young LLP 155 North Wacker Drive Chicago, IL 60606-1787
Tel: +1 312 879 2000 Fax: +1 312 879 4000 ev.com
### Report of Independent Registered Public Accounting Firm
To the Members of Dough LLC
### Opinion on the Financial Statement
We have audited the accompanying statement of financial condition of Dough LLC (the Company) as of December 31, 2018 and the related notes (the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2018, in conformity with U.S. generally accepted accounting principles.
### Basis for Opinion
This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. 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 overal financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
We have served as the Company's auditor since 2010.
Chicago, Illinois February 27, 2019
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# Statement of Financial Condition
# Year Ended December 31, 2018
| Assers | | |
|-----------------------------------------------------------|------|-----------|
| Cash | S | 3,294,880 |
| Receivables from clearing brokers | | 1,039,992 |
| Fixed assets, less accumulated depreciation of \$31,842 | | 350,267 |
| Other assets | | 46,932 |
| Total assets | ಕ್ಕಾ | 4,732,071 |
| | | |
| Liabilities and member's equity | | |
| Liabilities: | | |
| Accounts payable, accrued expenses, and other liabilities | ಿಕ | 286,912 |
| Payable to affiliate | | 151,270 |
| Accrued compensation | | 6.233 |
| Total liabilities | | 444,415 |
| Members' equity | | 4,274,961 |
| | | |
| Additional paid-in capital | | 12,695 |
| Total equity | | 4,287,656 |
| Total liabilities and members equity | S | 4,732,071 |
| | | |
See accompanying notes.
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# Notes to Financial Statements
### December 31, 2018
### 1. Organization and Nature of Business
Dough LLC (the Company) is a Delaware limited liability company that is owned by PEAK6 Investments LLC (50%) and tastytrade, Inc. (50%). The two members have Class A shares with equal rights and privileges with the exception of Board Seats, where PEAK6 has four to tastytrade's three.
The Company operates a platform to facilitate the opening of customer accounts and securities transactions. All accounts are introduced to and carried by Apex Clearing Corporation on a fullydisclosed basis. As a result, Dough will not hold customer funds or securities. Dough is a registered broker-dealer with the Securities and Exchange Commission and is a member of FINRA. As of December 31, 2018 the Company did not have any active customer accounts.
### 2. Significant Accounting Policies
The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Management believes that the estimates utilized in preparing its financial statements are reasonable and prudent. Actual results could differ from these estimates.
### Receivables from Clearing Brokers
Receivables from clearing brokers relate to proprietary test trades and cash balances held by the clearing brokers.
### Stock-Based Compensation
Stock-based compensation is recognized over the requisite service period of granted awards, which generally is the vesting period of such awards. The stock-based compensation for each award is calculated based on the grant-date fair value of each award according to Accounting Standards Codification (ASC) 718, Stock Compensation.
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# Notes to Financial Statements (continued)
### 3. Related-Party Transactions (continued)
the amount reported and (c) the respective financial statement line item in which the amount is reported:
- · The Company pays affiliates for consulting services related to technology, compliance, legal, HR, recruiting, operations, facilities, marketing and accounting services. \$99,291 has been reported in consulting fees from affiliate on the statement of operations.
- · At December 31, 2018, \$151,270 of amounts payable to affiliates is included in payable to affiliate on the statement of financial condition
### 4. Stock-Based Compensation
The Company maintains stock-based compensation in the form of an equity incentive plan (the Plan). All of the options outstanding pursuant to the Plan are options to buy common membership interests (interests) of the Company granted to employees of the Company. Under the terms of the Plan, the Company may grant eligible officers, employees, directors, and other individuals performing direct services for the Company equity incentive awards up to 10% of the total number of the Company's interests. Options outstanding to employees represented 4% of the Company's interests as of December 31, 2018.
For the year ended December 31, 2018, the Company's compensation expense related to all current outstanding options was \$12,695 and is included in compensation and benefits expense in the statement of operations.
The vesting for each option grant is set by the Company. During 2018, all employee option grants had a vesting period of four years from first anniversary date following the grant date. The options will vest with respect to 25% of the aggregate number of interests on each of the first four anniversaries of the applicable start date. In general, one-fourth of the options become exercisable on the first anniversary date. The remaining three-fourths become exercisable over the remaining three years. All options expire seven years after the date from which the vesting begins.
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# Notes to Financial Statements (continued)
### 4. Stock-Based Compensation (continued)
The following table summarizes the option activities of the Company's employees for the year ended December 31, 2018:
| | Number
of
Options | Weighted-
Average
Exercise
Price | | Weighted-
Average
Remaining
Contractual
Term
(Years) |
|----------------------------------|-------------------------|-------------------------------------------|-------|---------------------------------------------------------------------|
| Outstanding at January 1, 2018 | | | | |
| Granted to employees | 41,600 | S | 10.00 | 3.67 |
| Exercised by employees | | | | |
| Forfeited by employees | | | | |
| Outstanding at December 31, 2018 | 41,600 | S | 10.00 | 3.67 |
| Exercisable at December 31, 2018 | | | | |
The fair value of the option grant was estimated on the date of the grant using the Black-Scholes option-pricing model. The model takes into account the stock price and exercise price at the grant date and the following assumptions:
| Risk-free interest rate | 2.98% |
|-------------------------|---------|
| Expected volatility | 31 55 |
| Time to maturity | 7 years |
The risk-free interest rate assumption is based on the rate available on zero-coupon U.S. government issues with a remaining term similar to the expected life of the options. The expected volatility assumptions are based on the historical volatility of the industry counterpart's stock at the grant date. The expected term represents the period of time that options granted are expected by the Company to be outstanding.
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# Notes to Financial Statements (continued)
### 5. Commitments and Contingencies
### General Contingencies
In the ordinary course of business, the Company enters that contain a variety of representations and warranties that provide indemnifications to the counterparties under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company expects the risk of loss to be remote.
### 6. Net Capital Requirements
The Company, as a registered broker-dealer with the Securities and Exchange Commission (SEC), is subject to the net capital requirements of the SEC Uniform Net Capital Rule 15c3-1 (the Rule) of the Securities and Exchange Act of 1934, administered by the SEC and FINRA. The Company is required to maintain net capital equal to the greater of 2% of combined aggregate debit items or \$250,000, as these terms are defined. At December 31, 2018, the Company had net capital of \$3,890,465, which was \$3,640,465 in excess of its required net capital of \$250,000.
The Rule may effectively restrict advances to affiliates or capital withdrawals.
## 7. Subsequent Events
Management has evaluated the possibility of subsequent events existing in the Company's financial statements through the date the financial statements were available to be issued. Management has determined that there are no material events or transactions that would affect the Company's financial statements or 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.