# REEF RESOURCES, LLC X-17A-5 (2023-01-30) — Broker-dealer annual report - Company: REEF RESOURCES, LLC - Form: X-17A-5 - Filed: 2023-01-30 - Period: 2022-12-21 - Accession: 0001310594-23-000001 - CIK: 1310594 - File #: 8-66748 - Type: Broker-dealer - Material weakness: No - Auditor: Spicer Jeffries LLP - Auditor location: Denver, CO - Contact: Jeffrey K. Feinglas - Phone: (206) 686-6661 - Website: spicerjeffries.com - Signed by: Jeffrey K. Feinglas (Chief Compliance Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1310594/000131059423000001/2022reefafs5.pdf --- {0}------------------------------------------------ FINANCIAL STATEMENTS AND SUPPLEMENTAL INFORMATION DECEMBER 31, 2022 {1}------------------------------------------------ | | Page | |--------------------------------------------------------------|------| | FACING PAGE 1-3 | | | | | | OATH OR AFFIRMATION 4 | | | | | | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 5-6 | | | STATEMENT OF FINANCIAL CONDITION 7 | | |--------------------------------------------|--| | STATEMENT OF INCOME 8 | | | STATEMENT OF CHANGES IN MEMBER'S EQUITY 9 | | | STATEMENT OF CASH FLOWS 10 | | | NOTES TO FINANCIAL STATEMENTS 11 and 12 | | | SCHEDULE I COMPUTATION OF NET CAPITAL PURSUANT TO RULE 15c3-1 13 | | |--------------------------------------------------------------------------------------------|--| | SCHEDULE II RECONCILIATION BETWEEN THE COMPUTATION OF NET CAPITAL PER THE | | | BROKER'S UNAUDITED FOCUS REPORT, PART IIA, AND THE AUDITED COMPUTATION OF | | | NET CAPITAL 14 | | | | | | REPORT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON THE
EXEMPTION REPORT 15 | | | | | {2}------------------------------------------------ | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 | 0MB APPROVAL
0MB Number: 3235-0123
Expires: October 31, 2023
Estimated average burden | |----------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------| | ANNUAL AUDITED REPORT | hours per response 12.00 | | FORM X-17A-5 | SEC FILE NUMBER | | PART Ill | 8-66748 | | 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 ________ J __ a nu __ a_ry__.1. __ 2 __ 0__ 22 ____ AND ENDING ---=D_ec=e m=b=e.:r =-31 , | | | 2022
MM/DD/VY | MM/DD/VY | | A. REGISTRANT IDENTIFICATION | | | NAME OF BROKER-DEALER: REEF RESOURCES, LLC | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | FIRM I.D.NO. | | 140
LAKESIDE | AVENUE | | WA
SEATTLE | 98122 | | (City)
(State) | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
JEFF FEINGLAS | (206) 686-6661 | | | (Area Code - Telephone | | Number)
B. ACCOUNTANT IDENTIFICATION | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report*
Spicer,
Jeffries, | LLP | | (Name - if individual, state last, first, middle name) | | | 4601 OTC Blvd., STE 700
Denver, | co | | 80237
(City)
(Address)
Code) | (State)
(Zip | | CHECK ONE:
~ Certified Public Accountant
D
Public Accountant | | | D
Accountant not resident in United States or any of its possessions. | | | FOR OFFICIAL USE ONLY | | | | | | *Claims far 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 fads and circumstances relied on as the basis far the exemption. See Section 240.17 a-5(e)(2) SEC 141 O (06.02) **Potential persons who are to respond to the collection** {3}------------------------------------------------ of Information contained in this form are not required to respond unless the form displays a currently valid 0MB control number. {4}------------------------------------------------ #### **OATH OR AFFIRMATION** I, \_\_\_\_\_ J"""E"-F,\_F-'-' FE=IN'--'-=G=LA-'-=S'-------------------' swear (or affirm) t hat, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of REEF RESOURCES LLC as of DECEMBER 31. 2022. are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: | ~IN'JII\. ~ k.-G'C. 1:1'<--i~~,5 }for{,,,)°') ,)/'2-_}:~°), ;;);,JJ
JEFFR
EY A CURRIER
Notary Public
State of Washington
Lic ense Nu
mber 181758
My Com
mission Expires
November 04, 2023
Financial & Operations
Principal
Title | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | This report ** contains (check all applicable boxes):
[X]
(a)
Facing Page.
Statement of Financial Condition.
[X]
(b)
Statement of Income (Loss).
[X]
(c)
Statement of Changes in Financial Condition.
[X]
(d)
(CASH FLOWS)
Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietors' Capital.
[X]
(e}
D (f}
Statement of Changes in Liabilities Subordinated to Claims of Creditors.
(NOT
APPLICABLE)
Computation of Net Capital.
(g)
[X]
0
Computation for Determination of Reserve Requirements Pursuant to Rule 1 Sc3-3.
(NOT
(h)
APPLICABLE)
D (i)
Information Relating to the Possession or Control Requirements Under Rule 1 Sc3-3. | | (NOT APPLICABLE)
A Reconciliation, including appropriate explanation of the Computation of Net Capital
[X]
U)
Under Rule 1 Sc3-3 and the
Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 1 Sc3
-3.*
D (k) A Reconciliation between the audited and unaudited Statements of Financial Condition with
respect to methods of consolidation.
(NOT APPLICABLE)
(I) An Oath or Affirmation.
[X]
0
(m) A copy of the SIPC Supplemental Report.
(NOT APPLICABLE)
D (n) A report describing any material inadequacies found to exist or fou
nd to have existed since t
he
date of the previous audit.
(NOT APPLICABLE) | | *
RESERVE REQUIREMENT IS NOT APPLICABLE
For conditions of confidential treatment of certain portions of this filing, see section 240. 7 7
**
a-5(e)(3). | [X] (o) Exemption Report Requited by Rule 17a-5 {5}------------------------------------------------ ![](_page_5_Picture_0.jpeg) 4601 DTC BOULEVARD • SUITE 700 DENVER, COLORADO 80237 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 www.spicerjeffries.com # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Reef Resources, LLC ## **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Reef Resources, LLC (the "Company") as of December 31, 2022, the related statements of income, changes in member's equity 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, the financial condition of the Company as of December 31, 2022, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 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 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 as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. ![](_page_5_Picture_9.jpeg) {6}------------------------------------------------ # **Supplemental Information** The Computation of Net Capital has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statements. The supplemental information is the responsibility of the Company'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 test 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 Computation of Net Capital is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as Reef Resources, LLC's auditor since 2020. Denver, Colorado January 21, 2023 {7}------------------------------------------------ # STATEMENT OF FINANCIAL CONDITION December 31, 2022 | Cash | \$ 9,377 | |---------------------------------------|-----------| | Prepaid expenses | 5,975 | | Total Assets | \$ 15,352 | | | | | LIABILITIES | | | Accounts Payable | 0 | | Total Liabilities | 0 | | | | | MEMBER'S EQUITY | | | Member's equity | \$ 15,352 | | Total Liabilities and Member's Equity | \$ 15,352 | {8}------------------------------------------------ # STATEMENT OF INCOME For the Year Ended December 31, 2022 | Revenue | | |------------------------|----------| | Fee income | \$0 | | Expenses | | | Regulatory fees | 6,415 | | Taxes | 300 | | Professional fees | 8,500 | | Insurance | 624 | | Miscellaneous expenses | 25 | | Total Expenses | (15,864) | | Net Loss | (15,864) | {9}------------------------------------------------ # STATEMENT OF CHANGES IN MEMBER'S EQUITY For the Year Ended December 31, 2022 | Balance, December 31, 2021 | \$ 18,205 | |----------------------------------|--------------------| | Net Loss
Member Contributions | (15,864)
13,011 | | Balance, December 31, 2022 | \$15,352 | {10}------------------------------------------------ ### STATEMENT OF CASH FLOWS #### For the Year Ended December 31, 2022 | Cash Flows from Operating Activities | | |---------------------------------------------------------------------------------|------------| | Net Loss | \$(15,864) | | Adjustments to reconcile net income to net cash flows from operating activities | | | Change in prepaid expenses | (620) | | Change in Accounts Payable | (245) | | Net cash flows from operating activities | \$(16,729) | | Cash Flow from Financing Activity | | | Member Contributions | 13,011 | | Net decrease in cash | (3,718) | | Cash, beginning of year | 13,095 | | | 9,377 | {11}------------------------------------------------ ## **NOTES TO FINANCIAL STATEMENTS** ## **Note 1. Organization and Significant Accounting Policies** ## **Organization** Reef Resources, LLC ("the Company") is a securities broker and dealer as approved by the Securities and Exchange Commission ("SEC") and the Financial Industry Regulatory Authority. The Company's offices are located in Seattle, Washington. The Company locates investors for other companies and refers customers to other companies. The Company has claimed an exemption from Securities Exchange Act of 1934 Rule 15c3-3(k) by meeting the exemptive provisions of Footnote 74 during the year ended December 31, 2022. The Company is a limited liability company (or "LLC"), and as an LLC, the liability to the owner is generally limited to amounts invested. ## **Estimates** 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 during the reporting period. Actual results could differ from the estimates that were used. ## **Revenue Recognition** The Company enters into arrangements with investment fund managers to introduce potential investors to the manager. To the extent the referred investor becomes an investor in the fund, the Company is entitled to receive fees from the manager based on the management and performance fees received by the manager for so long as the referred client maintains an investment in the manager's fund. The Company recognizes income from these arrangements in the quarter with respect to which the management and performance fees are earned by the fund manager at which point it becomes probable that significant reversal of the revenue recognized will not occur. The Company believes that its performance obligation under these arrangements is satisfied on the date the investor actually invests in the referred fund. The Company has no further obligations to the manager or the investor once the investment in the fund is made by the referred investor. Receivables from contracts with customers are recognized in Accounts Receivable in the statement of financial condition when the underlying performance obligations have been satisfied and the Company has the right per the contract to bill the customer. Accounts receivable are stated at principal amounts and are primarily comprised of amounts contractually due from referral services. The Company provides an allowance for doubtful accounts based on an evaluation of customer past due account balances. When an account is deemed uncollectible, it is generally written off against the allowance. In determining whether to record an allowance for a specific customer, the Company considers a number of factors, including prior payment history and financial information for the customer. As of December 31, 2022, the Company has determined that no allowance for doubtful accounts is necessary. The Company has no incremental costs to obtain or fulfill contracts. {12}------------------------------------------------ # **Cash** Cash includes cash in banks. On occasion, the Company has deposits in excess of federally insured limits. ## **Income Taxes** As an LLC, the Company is not taxed at the reporting level. Instead, its items of income, loss, deduction, and credit are passed through to its member owner. The Company does not file federal tax returns at the Company level as it is owned by a single member. Considering the tax status of the Company and its ultimate parent, and applicable guidance from ASC 740, *Income Taxes*, and ASC 272, *Limited Liability Entities*, regarding single member LLCs that are disregarded for tax purposes, no federal or state income tax provision, or deferred tax asset or liability will be presented or recognized in these financial statements. ## **Subsequent Events** The Company has evaluated subsequent events through the date these financial statements were issued, which was January 21, 2023. ## **Note 2. Related Party Transactions** The Company has an expense sharing agreement with its member owner whereby the member owner pays for the majority of the Company's general and administrative expenses, including occupancy and payroll expenses. In accordance with the terms of the agreement and due to limited activity in 2022, there were no charges to the Company in 2022. The expense sharing agreement also states the member owner will pay certain expenses for the Company (filing fees and direct operating expenses) for which he will be reimbursed. The Company did not owe the member owner any amounts under this arrangement at December 31, 2022. # **Note 3. Commitments, Contingencies, and Guarantees** Management of the Company believes that there are no commitments, contingencies, or guarantees that may result in a loss or future obligation as of December 31, 2022. ## **Note 4. Net Capital Requirements** The Company is subject to the SEC Uniform Net Capital Rule (Rule 15c3-1). Accordingly, the Company is required to maintain a minimum level of net capital (as defined) of 6 2/3% of total aggregate indebtedness or \$5,000, whichever is greater. At December 31, 2022, the required minimum net capital was \$5,000. The Company had computed net capital of \$9,377 at December 31, 2022, which was in excess of the required net capital level by \$4,377. In addition, the Company is not allowed to have a ratio of aggregate indebtedness to net capital (as defined) in excess of 15 to 1. At December 31, 2022, the Company's ratio of aggregate indebtedness to net capital was 0.00 to 1. There were no material differences to the filed Focus reports. {13}------------------------------------------------ #### S U P P L E M E N T A L I N F O R M A T I O N {14}------------------------------------------------ # SCHEDULE I COMPUTATION OF NET CAPITAL PURSUANT TO RULE 15c3-1 December 31, 2022 ### **COMPUTATION OF NET CAPITAL** | Member's equity | \$15,352 | | |---------------------|----------|--| | Deductions | | | | Prepaid expenses | (5,975) | | | Net capital | 9,377 | | | Minimum net capital | 5,000 | | | Excess net capital | \$4,377 | | ### **COMPUTATION OF AGGREGATE INDEBTEDNESS** | Accounts payable and total | | |----------------------------|-----| | aggregate indebtedness | \$0 | #### **COMPUTATION OF BASIC NET CAPITAL REQUIREMENT** | Minimum net capital required (6 | | |------------------------------------|-----------| | 2/3% of total aggregate | | | indebtedness or \$5,000, | | | whichever is greater) | \$5,000 | | Percentage of aggregate | | | indebtedness to net capital | 0% | | Ratio of aggregate indebtedness to | | | net capital | 0.00 to 1 | | | | Reef Resources, LLC is exempt from the computation of reserve requirements pursuant to Footnote 74 of Rule 15c3-3. See Report of Independent Registered Public Accounting Firm. There were no material differences between the above computation and the Company's corresponding unaudited form X-17A-5 Part II filing as of December 31, 2022. {15}------------------------------------------------ # SCHEDULE II RECONCILIATION BETWEEN THE COMPUTATION OF NET CAPITAL PER THE BROKER'S UNAUDITED FOCUS REPORT, PART IIA, AND THE AUDITED COMPUTATION OF NET CAPITAL December 31, 2022 Net capital per the Company's unaudited Focus Report, Part IIA, and net capital per Schedule I \$ 9,377 {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) 4601 DTC BOULEVARD • SUITE 700 DENVER, COLORADO 80237 TELEPHONE: (303) 753-1959 FAX: (303) 753-0338 www.spicerjeffries.com # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Reef Resources, LLC We have reviewed management's statements, included in the accompanying management statement regarding compliance with Footnote 74 of SEC Release 34-70073 in which (1) Reef Resources, LLC (the "Company") identified the provisions of Footnote 74 under which the Company is not required to claim an exemption from 17 C.F.R. 240.15c3-3 and (2) the Company stated that the Company met the identified provisions of Footnote 74 throughout the most recent fiscal year without exception. The Company's management is responsible for compliance with Footnote 74 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 the Company'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 not 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 Footnote 74 of SEC Release 34-70073. *LLP* Denver, Colorado January 21, 2023 ![](_page_16_Picture_9.jpeg) {17}------------------------------------------------ ![](_page_17_Picture_0.jpeg) ### **Reef Resources LLC's Exemption Report – 2022** I, Jeffrey K. Feinglas, the Chief Compliance Officer of Reef Resources LLC (the "Company") represent the following: - (1) The Company claims an exemption from 17 C.F.R. Section 240.15c3-3 in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company does not fit one of the exemptive provisions, but it only engages in securities private placements and does not hold customer funds or securities. - (2) The Company met this exemption from 17 C.F.R. 240.15c3-3 throughout the most recent fiscal year ending December 31, 2022 without exception; and - (3) There were no exceptions during the most recent fiscal year in meeting the exemption from 17 C.F.R. 240.15c3-3. I, Jeffrey K. Feinglas, affirm that, to the best of my knowledge and belief, this Exemption Report is true and correct. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ By: Jeffrey K. Feinglas, Chief Compliance Officer \_\_\_\_\_\_\_\_\_\_\_\_ inglas, C ``` _____________________________ Date January 18th, 2023 ``` Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.