# DAK CAPITAL, LLC X-17A-5 (2019-02-26) — Broker-dealer annual report - Company: DAK CAPITAL, LLC - Form: X-17A-5 - Filed: 2019-02-26 - Period: 2018-12-31 - Accession: 0001419568-19-000001 - CIK: 1419568 - File #: 8-67764 - Material weakness: No - Auditor: Sobel & Co, LLC - Auditor location: Livingston, NJ - Contact: Alan Scharfstein - Phone: 201-712-9555 - Website: sobclcollc.com - Signed by: Alan Scharfstein (President) Original filing: https://www.sec.gov/Archives/edgar/data/1419568/000141956819000001/dec18_audit_dakcapital2.pdf --- {0}------------------------------------------------ UNITED ST ATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL **0MB Number:** 3235-0123 Expires: August 31, 2020 Estimated average burden hours **r** res nse ... 12.00 > SEC FILE NUMBER 8-67764 #### **ANNUAL AUDITED REPORT FORM X-17A-5 PARTID** #### **FACING PAGE** #### **Information Required or Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | _,,0'-"l/"""0"""l/'-'-1"""8 | | 12/31/18
MM/DD/YY | |-----------------------------|-----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | | | | | | | | | | | OFFICIAL USE ONLY | | | | FIRM ID. NO. | | | | | | | | | | | | | | | | | | | | (Zip Code) | | | | | | | | (201) 712-9555 | | | | (Area Code -
Telephone No.) | | | | | | | | | | | | | | | | | | | | | | | | | | (City) | | (Zip Code) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ___
MM/DD/YY
(No. and Street)
(State)
293 Eisenhower Parkway. Suite 209, Livingston, NJ 07039 | __
AND ENDING
A. REGISTRANT IDENTIFICATION
ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)
NAME AND TELEPHONE NUMBER OF PERSON TO CONT ACT IN REGARD TO THIS REPORT
B. ACCOUNTANT IDENTIFICATION
INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report*
(Name - if individual, state last, first, middle name)
(Slate)
Accountant not resident in United States or any of its possessions.
FOR OFFICIAL USE ONLY | *\*Claims for exemption from rhe requiremem rhar rhe annual reporr be covered by the opinion of an independenr public accounronr must be supporred by a sraremenr offacrs and circ,11nsrances relied on as the basis for the txemption. See section 240. Ila 5(e)(2).* SEC 1410 (06-02) {1}------------------------------------------------ #### **OATH OR AFFIRMATION** I, Alan Scharfstein, swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statements and supporting schedules pertaining to the firm of OAK Capital, LLC, as of December 31, 2018, 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: ![](_page_1_Figure_2.jpeg) **This report contains (check all applicable boxes):** - **(x)** (a) Facing page. - (x) (b) Statement of Financial Condition. - (x) (c) Statement of Income (Loss). - (x) (d) Statement of Cash Flows. - (x) (e) Statement of Changes in Stockholders' Equity. - ( ) (f) Statement of Changes in Subordinated Liabilities (not applicable) - (x) (g) Computation of Net Capital Pursuant to Rule l 5c3-l under the Securities Exchange Act of 1934. - ( ) (h) Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule I 5c3-3 under the Securities Exchange Act of 1934. (not applicable) - ( ) (i) Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934 (not applicable). - ( ) G) A Reconciliation, including Appropriate Explanations, of the Computation of Net Capital Under Rule l 5c3-l and the Computation for Determination of the Reserve Requirements Under Rule 15c3-3 - ( ) **(k)** A Reconciliation Between the Audited and Unaudited Consolidated Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - (x) (I) An Oath or Affirmation. - ( ) (m) A Copy of the SIPC Supplemental Report. - (x) (n) Report on management's assertion letter regarding 15c3-3 Exemption Report - (x) (o) Management's assertion letter regarding I5c3-3 Exemption Report {2}------------------------------------------------ # DAK CAPITAL, LLC Financial Statements and Supplemental Information For the Year Ended December 31, 2018 {3}------------------------------------------------ | Report of Independent Registered Public Accounting Firm | 1 | |----------------------------------------------------------------------------------------------------------------------------------------------------------|-----| | Financial statements: | | | Statement of financial condition | 2 | | Statement of operations | 3 | | Statement of changes in member's equity | 4 | | Statement of cash flows | 5 | | Notes to financial statements | 6-8 | | Supplemental information: | | | Report of Independent Registered Public Accounting Firm on Supplementary
Information Required by Rule 17a-S under the Securities Exchange Act of 1934 | 9 | | Computation of net capital pursuant to Rule l 5c3-l of the
Securities and Exchange Commission | 10 | | Report oflndependent Registered Public Accounting Firm
Regarding Rule 15c3-3 Exemption | 11 | | Rule 15c3-3 Exemption Report | 12 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) 293 Ei~cnhom.:r Park11 ,w Livingston, NJ 07039-17 1 i Olncc: 973.994.9494 f3x; 973.994.1 571 www.SobclCoLLC.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member DAK Capital, LLC #### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of DAK Capital, LLC as of December 31, 2018, the related statements of operations, changes in member's equity, and cash flows for the year ended December 31, 2018, and the related notes and schedule (collectively, referred to as the "financial statements"). In our opinion, the financial statements presents fairly, in all material respects, the financial position of DAK Capital, LLC as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** These financial statements are the responsibility of DAK Capital, LLC's management. Our responsibility is to express an opinion on DAK Capital LLC'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 DAK Capital, 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 or our on· ·pn. > *·C.Uc* " *I* ublic Accountants We have served as DAK Capital, LLC's auditors since 2007. Livingston, New Jersey February 25, 2019 ![](_page_4_Picture_11.jpeg) {5}------------------------------------------------ # **DAK CAPITAL, LLC** STATEMENT OF FINANCIAL CONDITION December 31, 2018 ## **ASSETS** | Cash | \$
20,773 | |----------------------------------------------------------------------------------------------------|-----------------------------| | Total assets | \$
20,773 | | LIABILITIES AND MEMBER'S EQUITY | | | LIABILITIES:
Accounts payable and accrued expenses
Due to related party
Total liabilities | \$
700
2,129
2,829 | | COMMITMENTS AND CONTINGENCIES | | | MEMBER'S EQUITY | 17,944 | | Total liabilities and member's equity | \$
20,773 | {6}------------------------------------------------ # **DAK CAPITAL, LLC** STATEMENT OF OPERATIONS For the Year Ended December 31, 2018 | REVENUE: | | |----------------------------|----------------| | Commission revenue | \$ | | | | | | | | | | | OPERATING EXPENSES: | | | Professional services | 10,200 | | Compensation and benefits | 20,100 | | Occupancy | 4,272 | | Licenses and registration | 3,090 | | General and administrative | 1,226 | | Total Operating Expenses | 38,888 | | | | | | | | | | | NET LOSS | (38,888)
\$ | | | | {7}------------------------------------------------ # **DAK CAPITAL, LLC** STATEMENT OF CHANGES IN MEMBER'S EQUITY For the Year Ended December 31, 2018 | Balance, December 31, 2018 | \$
17,944 | |----------------------------|--------------| | Net loss | (38,888) | | Capital addition -
cash | 35,000 | | Balance, January 1, 2018 | \$
21,832 | {8}------------------------------------------------ # **DAK CAPITAL, LLC** STATEMENT OF CASH FLOWS For the Year Ended December 31, 2018 #### CASH FLOWS PROVIDED BY (USED FOR): | OPERATrNG ACTIVITIES:
Net loss | \$
(38,888) | |--------------------------------------------|----------------| | Changes in certain assets and liabilities: | | | Due to related party | (6,752) | | Net Cash Used for Operating Activities | (45,640) | | FrNANCING ACTIVITfES: | | | Capital addition | 35,000 | | Net Cash Provided by Financing Activities | 35,000 | | NET DECREASE IN CASH | (10,640) | | CASH: | | | Beginning of year | 31,413 | | End of year | \$
20,773 | {9}------------------------------------------------ ## **DAK CAPITAL, LLC** NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 ### NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: #### *Organization:* DAK Capital, LLC ("Company") was formed in 2007 in the state of New Jersey for the purpose of registering as a mergers and acquisitions broker. The Company is headquartered in Rochelle Park, New Jersey. The Company is registered with the Securities and Exchange Commission ("SEC"). The Company is also a member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation ("SIPC"). The Company specializes in mergers and acquisitions advisory services. ### *Basis of Accounting:* The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. ### *Use of 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 amount of assets and liabilities and disclosures 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 Company is treated as a partnership for federal and state income tax purposes; therefore, the taxable income or loss from the Company's operations is allocated to the Company's member. The Company follows accounting standards that provide clarification on accounting for uncertainty in income taxes recognized in the Company's financial statements. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and, also provides guidance on derecognition, classification, interest and penalties, disclosure and transition. At December 31, 2018, there were no significant income tax uncertainties that are expected to have a material impact on the Company's financial statements. In addition, no penalties or interest were incurred during 2018. {10}------------------------------------------------ ## **DAK CAPITAL, LLC** NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 ### NOTE I -ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued) ### *Revenue Recognition:* Adoption of New Accounting Standards: On January 1, 2018, the Company adopted, the Financial Accounting Standards Board (FASB), ASU 2014-09, Revenue from Contracts with Customers (Topic 606), requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in accounting principles generally accepted in the United States of America (US GAAP) and permits the use of either a full retrospective or retrospective with cumulative effect transition method. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 one year making it effective for annual reporting periods beginning after December 15, 2017. Accordingly, the Company does not expect this guidance to have a material impact on its financial or regulatory capital. The Company provides advisory services on mergers and acquisitions (M&A). Revenue for advisory arrangements is generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transactions) or the contract in cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgement is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as contract liabilities. The Company applies the modified retrospective method of adoption which resulted in no adjustment to member's equity as of January 1, 2018. #### *Subsequent Events:* The Company has evaluated its subsequent events and transactions occurring after December 31, 2018, through February 25, 2019, the date that the financial statements were available to be issued. #### NOTE 2 - COMMITMENTS AND CONTINGENCIES: The Company leases office space and equipment from the Company's member pursuant to a signed lease agreement. The lease is for one year and automatically renews each year. The lease calls for monthly rental payments of \$356. Lease payments under these operating leases totaled approximately \$4,272 for the year ended December 31, 2018. {11}------------------------------------------------ ## **DAK CAPITAL, LLC** NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2018 ### NOTE 3 - NET CAPITAL REQUIREMENTS: The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-l), which 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 the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to 1). At December 31, 2018, the Company's net capital is as follows: | Net capital | \$ 17,944 | |---------------------------------------|-----------| | Net capital requirement | 5,000 | | Excess Net Capital | \$12,944 | | Aggregate Indebtedness to Net Capital | 15.77% | The Company is not required to furnish the "computation of reserve requirements" under Rule 15c3-3 of the Securities and Exchange Commission due to the fact that it qualifies for, and complies, with the exemptive provision k(2)(i) of Rule 15c3-3. This provision exempts brokers or dealers who do not hold funds for securities for, or owe money or securities to, customers :from having to furnish the "computation of reserve requirements". ### NOTE 4 - CONCENTRATIONS OF CREDIT RISK: There were no concentrations of credit during the year end December 31, 2018. ### NOTE 5 - RELATED PARY TRANSACTIONS: Under the terms of an expense sharing agreement, certain expenses of the Company are paid by The OAK Group, Ltd, a related party through common ownership, on behalf of the Company. For the year ended December 31, 2018, expenses related to the expense sharing agreement amounted to approximately \$25,500. At December 31, 2018, the amount due to the related party is \$2,129. {12}------------------------------------------------ ![](_page_12_Picture_0.jpeg) 29:\ Eim ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON SUPPLEMENTARY INFORMATION REQUIRED BY RULE 17a-5 UNDER THE SECURITIES EXCHANGE ACT OF 1934** To the Member DAK Capital, LLC We have audited the financial statements of DAK Capital, LLC as of and for the year ended December 31, 2018, and have issued our report thereon dated February 25, 2019, which contains an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission, contained on page 10, has been subjected to audit procedures performed in conjunction with the audit of DAK Capital, LLC's financial statements. The supplementary information is the responsibility ofDAK Capital, LLC's management. Our audit procedures included determining whether the supplementary 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 supplementary information. In forming our opinion on the supplementary information, we evaluated whether the supplementary 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 Under Rule 15c3-1 of the Securities and Exchange Commission is fairly stated, in all material respects, in relation to the financial statements as a whole. *:c.* {il*l* ~ fied Public Accountants Livingston, New Jersey February 25, 2019 ![](_page_12_Picture_8.jpeg) {13}------------------------------------------------ # **DAK CAPITAL, LLC** SUPPLEMENTARY INFORMATION COMPUTATION OF NET CAPITAL UNDER RULE l 5c3-l OF THE SECURITIES AND EXCHANGE COMJ\.1ISSION As ofDecember 31, 2018 | NET CAPITAL:
Total member's equity qualified for net capital | \$
17,944 | |------------------------------------------------------------------------------------------------------------------------------|--------------| | Deductions and charges:
Nonallowable assets: | | | Total Nonallowable Assets | | | Tentative Net Capital
Haircuts on Securities Position | 17,944 | | NET CAPITAL | \$
17,944 | | AGGREGATE INDEBTEDNESS:
Items included in statements of financial condition:
Accounts payable and due to related party | \$
2,829 | | TOTAL AGGREGATE INDEBTEDNESS | \$
2,829 | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENTS:
Net capital requirement | \$
5,000 | | Excess net capital | \$
12,944 | | Net capital less 120% of net capital requirement | \$
11,944 | | Ratio: aggregate indebtedness to net capital | 15.77% | ### Statement Pursuant to Paragraph (d)-(4) of Rule 17a-5 There were no differences between the computation of net capital and the corresponding computation prepared by DAK Capital, LLC and included in the Company's unaudited Part IIA FOCUS Report filing as of December 31, 2018. {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) 293 Ei5l'nhowcr P.1rkwa1' Li,ing~to11 , NJ 07039-17 1 i Office: 973.994.9494 Fax: 973.994.1571 www.SobdCoLLC.com ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member DAK Capital, LLC We have reviewed management's statements, included in the accompanying Exemption Report in which (1) DAK Capital, LLC identified the following provisions of 17 C.F.R. §15c3-3(k) under which OAK Capital, LLC claimed an exemption from 17 C.F.R. §240.15c3-3: (k)(2)(ii) ("exemption provisions"), and (2) OAK Capital, LLC stated that DAK Capital, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. DAK Capital, LLC'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 DAK Capital, LLC'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 paragraph (k)(2)(ii) of Rule 15c3-3 under the Securities Exchange Act of 1934. ified Public Accountants Livingston, New Jersey February 25, 2019 ![](_page_14_Picture_10.jpeg) {15}------------------------------------------------ #### **Computation** for **Determination of Reserve Requirements Under Rule** 15c3-3 **of the Securities and Exchange Commission December 31, 2018** OAK Capital, LLC asserts, to the best of its knowledge and belief the following: - l. OAK Capital, LLC claims an exemption from 240. l 5c3-3 under section (k)(2)(i). - 2. OAK Capital, LLC met such exemption provisions in 240.15c3-3 (k)(2)(i) throughout the period January I, 2018 through December 31, 2018. ~ *~-fitp* , Alan Scharfstein, Presidnt Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.