# GORDIAN KNOT INC. X-17A-5 (2022-12-19) — Broker-dealer annual report - Company: GORDIAN KNOT INC. - Form: X-17A-5 - Filed: 2022-12-19 - Period: 2022-09-30 - Accession: 0001146325-22-000001 - CIK: 1146325 - File #: 8-53706 - Type: Broker-dealer - Material weakness: No - Auditor: Withum Smith & Brown, PC - Auditor location: New York, NY - Contact: Juliette Saisselin - Phone: 917-547-3726 - Email: juliette.s@gordianknotinc.com - Website: gordianknotinc.com - Signed by: Juliette Saisselin (President) Original filing: https://www.sec.gov/Archives/edgar/data/1146325/000114632522000001/GK22s.pdf --- {0}------------------------------------------------ **UNITED STATES** 0MB APPROVAL SECURITIES AND EXCHANGE COMMJSSlON Washington, D.C. 20549 0MB Number: 3235-0123 Expires: Oct. 31, 2023 1 Estimated average burden **ANNUAL REPORTS FORM X-17A-5 PART** III **FACING PAGE** hours per response: 12 - - - 1-- SEC FILE NUMER 8- 53706 lnforn111tion Required Pursuant to Rules 17a-5. 1711-12. and 1811-7 under the Securities E,ctrnnge .\ct of 1934 FILING FOR THE PERIOD BEGINNING **10/01 /21** \IWDD YY AND ENDING **9/30/22** ---------- 1\!M 'DD.YY **A. REGISTRANT IDENTIFICATION** NAME or: FIRM· Gordian Knot Inc. TYPC OF Rl-GISTRANT (check all applicable boxes) ~ Broker-deakr O 5ecurity-based swap dealer O Major security-based swap participant 0 Check here if respondent is also an OTC derivatives dealer ADDR[S~ OF PRINCIPAL PLACF Or BUSINESS: (Do not use a P.O. box no.) 42 Broadway, Suite 12-129 !"lo. and Strcc:t) New York NY !Ci1:) (Slah:l PFRSON TO CON1 ACT WITI I REGARD TO Tl IIS FILING 10004 (/ipCodc) Juliette Saisselin (917) 54 7-3726 Juliette.S@gordianknotinc.com (Name:) (Arca C'nd1. - Telephone: \iumoc:r\ (Lmail Address) **B. ACCOUNTANT IDENTIFICATION** INDC:PENDENT PUBLIC ACCOtfl\JTANI whose reports are contained 111 this filing\* WithumSmith+Brown, PC /Name - if ind1\·idual. slah: last lirst. anJ middle name) 1411 Broadway, 23rd Floor New York NY (Address/ (Cil) l (Slate) 10/08/2003 100 10018 (/.ip Code) (Dale of Rcgis1rat1011 ,\ith J>C \OB )(if applicable) (f'l \OR Rcg1slralion Number. ifapplicable) **FOR OFFTCI.\I l SF O'\U** • Cl:1i111s for c,c:111p1ion from lhc: rcquirc111cn1 that 1hc: annual reports oc: co\crc:d by the rCJ'(lrls of an inJc:pcndcnt puhlte ac:coun1an1 must he supported b}· a statcme11! of facts and circumstances rdic:d on as 1hc hnsis of the c,cmption. Sec 17 CHl 2-10. I 7u-5(c)C I)( ii). if applicublc f>er,om \I ho arc to rc\pond to ihc collcchcm of information cuntaincd in thi, form ar c not required to respond unles,s the form displays a current!) ,alitl O~IB control number. {1}------------------------------------------------ ## AFFIRMATION I, Juliette Saisselin . swear (or affirm) that. to the best of my knowledge and belief. the financial report pertaining to Gordian Knot Inc. ~ of 9/30/22 , is true and correct. 'I further sweur (or affirm) that neither the company nor any partner, officer, director, or equivalent person, as the case may he, has any proprietary interest in any account classified solely as that of a customer. ~~Q\_ President Title 6dci ~ I 2\ n.) 2.o:i.2- Notary Public ![](_page_1_Picture_6.jpeg) {2}------------------------------------------------ ## **This filing\*\* contains (check all applicable boxes):** - CEJ (a) Statement or financ,al condition. - CEJ ( b) Notes to unconsolidated or consolidated statt!ment of financial condnion. ac; applicable. - D (C) Statement of income (loss) or. if there is other comprehensive income in the period(s) presented. a statement of comprehensh:c income (as defined in§ 210.1-02 of Regulation S-X). - D (d) Statement of cash flows. - D (c) Statement or changes in stockholders· or partners· or members· or sole proprietor's t:quity. as applicable. - D (I) Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to unconsolidated or consolidated financial statements .. as applicable. - D (h) Computation of net capital under 17 CFR 240. I 5c3-I or 17 CFR 240. I 8a-1. as applicable. - D (i) Computation of tangible net worth under 17 er R 240 I 8a-2. - 0 (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240. I 5c3-3. - D (k) Compuracion fordctennination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.IScJ-3 or Exhibit A to 17 CFR 240.1 Sa-4. as applicable. - D (I) Computation for Determination Clf PAB Requirements under Exhibit A Lo§ 240. I 5c3-3. - D ( m) Information relating to possession or control requirements for customers under 17 CFR 240. I 5c3-3. - D (n) l nformation relating to possl!ssion or control requirements for security-based swap cusLomers under 17 CFR 240. I 5c3- 3( p)(2) or 17 CFR 240.1 Sa-4. as applicable. - D (o) Reconciliations. including appropriate explanations. of the roe us Report with computation of net capital or tangible net worth under 17 CFR 240. I 5c3-I. 17 CFR 240 I 8a-l. or 17 CFR 240. I 8a-2. as applicable. and the reserve requ1remen1c; under 17 CFR 2-W. I 5c3-3 or 17 CFR 240.1 Su-4. as applicable. if material differences exist. or a statement that no material differences exist. - D (p) Summary of linancial data for subsidiaries not consolidated in the statement of financial condition. - CEJ (q) Oath or affirmation in accordance with 17 crR 240. I 7a-5. 17 CFR 240. I 7a-l 2. or 17 CFR 2-W. I 8a-7. as applicable. - D (rl Compliance report in accordance with 17 Cl· R 240. I 7a-5 or 17 CFR 240.1 Sa-7. as applicable. - D (s) Exemption report in accordance with 17 CFR 240. I 7a-5 or 17 CFR 240. I 8a-7. as applicable. - CEJ (t) Independent public accountant's repon based on an examination of the statemem of financial condition. D ( u) Independent punt ic accountant's report based on an examination of the financial report or financial statements under 17 Cl· R 240. I 7a-5. 17 CFR 240.18a-7. or 17 CFR 240. I 7a-12. as applicable. - D (v) Independent puolic accountant's report based on an examination of certain statements in the compliance report under 17 (TR 240. I 7a-5 or 17 CFR ~40. I 8a-7. as applicable. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240. I 7a-5 or 17 CFR 240. l 8a-7. as applicable. - D (,) Supplemental reports on applying agreed-upon procedures. in accordance with 17 CFR 240.15c3- Je or 17 CfR '.240. I 7a- I 2. as applicable. - D *())* Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit. or a statement that no material inadequacies exist. under 17 CFR 240. I 7a- I 2(k ). D (Z) Other:-------------------------------------- - *\*\*To* requf.!,\I c1111/iclellf *ial 1realme111 of,·ertain port iom of tl,i,\ .filing. see 17 CFR 2-10. I* 7 *a-5* (e) ( *3) or 17 ('FR 2-IO. l 8a-7 (d) (2), as applic:ahle.* {3}------------------------------------------------ STATEMENT OF FINANCIAL CONDITION AND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM SEPTEMBER 30, 2022 {4}------------------------------------------------ #### **CONTENTS** | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-----| | Financial Statement | | | Statement of Financial Condition | 2 | | Notes to Financial Statement | 3-5 | | | | {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Board of Directors and Stockholder of Gordian Knot Inc. ### Opinion on **the Financial Statement** We have audited the accompanying statement of financial condition of Gordian Knot Inc. (the "Company") as of September 30, 2022, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company as of September 30, 2022, in conformity with accounting principles generally accepted in the United States of America. #### Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company relies on its Parent for funding. In December 2021 , the Parent increased its share capital by \$10 million by issuing further shares to existing shareholders. Much of the cash in connection with this issuance had been received in advance, including \$3.33 million received in July 2021 . As of September 30, 2022, the Parent was owed a further \$4.1 million in connection with this share issuance, \$560 thousand of which has since been paid. This issuance has allowed the Parent to continue to comply with its regulatory capital and liquidity requirements with the Financial Conduct Authority ("FCA") in the United Kingdom. It has also provided the Parent with the necessary funds to continue its efforts to develop a new business venture. However, the launch date and success of the new business venture remains uncertain. This condition, among others, raises substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion has not been modified with respect to this matter. #### **Basis for Opinion** This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this 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 overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2015. New York, New York December 15, 2022 WithumSmith+Brown, PC 1 .. 11 Broa Jway, 91'1 Floor, New York New York 100'8-3496 T 12121751 Accounts payable and accrued expenses | \$ | 4,560
4,560 | | Stockholder's equity
Common stock, \$.01 par value,
authorized, issued, and outstanding 10,000 shares
Additional paid-in capital
Retained earnings | | 100
27,591
33,443 | | Total stockholder's equity | | 61,134 | | | \$ | 65,694 | {7}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** #### **Year Ended September 30, 2022** #### **1. Nature of business** Gordian Knot Inc. (the "Company") is a broker dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company is a wholly owned subsidiary of Gordian Knot Limited. (the "Parent"), a private limited company incorporated under the laws of England and Wales. The Company was established to engage in brokerage activity in connection with the sale of securities to customers for which the Parent provides investment management services. #### **2. Going concern** There is substantial doubt about the Company's ability to continue as a going concern within one year after the date these financial statements are available to be issued. The Company relies on its Parent for funding. In December 2021, the Parent increased its share capital by US\$10 million by issuing further shares to existing shareholders. Much of the cash in connection with this issuance had been received in advance, including US\$ 3.33 million received in July 2021. As of September 30, 2022, the Parent was owed a further US\$ 4.1 million in connection with this share issuance, US\$ 560 thousand of which has since been paid. This issuance has allowed the Parent to continue to comply with its regulatory capital and liquidity requirements with the Financial Conduct Authority ("FCA") in the United Kingdom. It has also provided the Parent with the necessary funds to continue its efforts to develop a new business venture. However, the launch date and success of the new business venture remains uncertain. This condition, among others, raises substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. #### **3. Summary of significant accounting policies** #### Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). ### Revenue Recognition The Company follows ASC topic 606, "Revenue from Contracts with Customers" which requires the Company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. The Company's only income is a servicing fee which is recognized under terms outlined in a contract with Gordian Knot Limited ("the Parent"). Under this servicing agreement, the Parent pays a fee to the Company for services to certain customers of the Parent equal to approximately 105% of the expenses attributable to such activities, excluding income taxes. The servicing fee income is recorded when the related expenses are incurred. The Company believes the performance obligation for providing these services is satisfied over time because the services are provided and consumed over time. These fees are determined on a monthly basis and payment is made on presentation of the invoice. For the year ended September 30, 2022, servicing fees amounted to \$171,506 and are included as servicing fee income in the statement of operations. As of September 30, 2022, and October 1, 2021 , the Company had \$4,266 due from its Parent and \$12,174 due to its Parent, respectively. {8}------------------------------------------------ #### **NOTES TO FINANCIAL STATEMENTS** #### **Year Ended September 30, 2022** #### **3. Summary of significant accounting policies (continued)** #### Contract Assets and Liabilities As of September 30, 2022 and October 1, 2021 the Company did not have any contract assets or contract liabilities. #### Income Taxes The Company follows an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized. The determination of the Company's provision for income taxes requires significant Judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company's financial statements only after determining a more-likely than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statements as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. At September 30, 2022, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. In accordance with GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. This policy also provides guidance on thresholds, measurement, de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide better financial statement comparability among different entities. Management's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company files its income tax returns in the U.S. federal and various state and local jurisdictions. Any potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, state and local tax laws. The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. {9}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ### **Vear Ended September 30, 2022** ## **3. Summary of significant accounting policies (continued)** ### Use of Estimates The preparation of financial statements in conformity with GAAP 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 reported period. Actual results could differ from those estimates. The Company maintains significantly all of its cash with one financial institution. The Company has not experienced any loss in this account and believes it is not subject to any significant credit risk. The revenue that the Company receives under the servicing agreement represents substantially all of the Company's revenue. ### **4. Employee benefit plan** The Company maintains a retirement plan (the "Plan"), pursuant to Section 401 (k) of the Internal Revenue Code, for eligible participants to make voluntary contributions of a portion of their annual compensation, on a deterred basis, subject to limitations provided by the Internal Revenue Code. The Company makes a base contribution of 7% to the Plan. In addition, the Company may also match employee contributions, up to a set percentage, at the discretion of the Board of Directors. ### **5. Net capital requirements** The Company, as a member of FINRA, is subject to the SEC Uniform Net Capital Rule 15c3-1 . This rule 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 to 1, and that equity capital may not be withdrawn if the resulting net capital ratio would exceed 1 O to 1. At September 30, 2022, the Company's net capital was approximately \$50,000, which was approximately \$45,000 in excess of its minimum requirement of \$5,000. Its aggregate indebtedness was approximately \$5,000 resulting in the ratio of aggregate indebtedness to net capital falling well below the limit. ### **6. Rule 15c3-3** The Company does not handle cash or securities on behalf of customers and therefore it is not impacted at all by Rule 15c3-3. ### **7. Off-balance sheet risk** The accounting standard for guarantor's accounting and disclosure requirements for guarantees, including indirect guarantees of indebtedness of others requires the disclosure of representations and warranties which the Company enters into which may provide general indemnifications to others. The Company in its normal course of business may enter into legal contracts that contain a variety of these representations and warranties which provide general indemnifications. The Company's maximum exposure under these arrangements is unknown as this would Involve future claims that may be against the Company that have not yet occurred. However, based on its experience, the Company expects the risk of loss to be remote. The Company currently is not obligated under any guarantee agreements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.