# PEAKSTONE SECURITIES, LLC X-17A-5 (2020-02-11) — Broker-dealer annual report - Company: PEAKSTONE SECURITIES, LLC - Form: X-17A-5 - Filed: 2020-02-11 - Period: 2019-12-31 - Accession: 0001515901-20-000001 - CIK: 1515901 - File #: 8-68835 - Material weakness: No - Auditor: Rubio CPA PC - Auditor location: Atlanta, GA - Contact: Stephen Sleigh - Phone: 312-204-7300 - Signed by: Stephen Sleigh (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1515901/000151590120000001/peakaud.pdf --- {0}------------------------------------------------ UNITED STATES SEC.URITIESA.lliffi EXCHANGE"COMMISSION W~shington, D."C. 20549 # **ANNUAL AUDITED R E.POR.T ·FOR.M X·1'?A-&** ~ART **Ill** OMS-APPROVAL OMB·N·umber; 3~35·0123 Expires: Au9.~sn1; 20~ *b* Estrmated a·verage burden ho.urs'p\_et response ....•.. 12 .. 00 | · SECFILE. NUMBER | |-------------------| | 8-68835- | RACING PAGE l~{orin~tion Required of B!!oke.i's and Dealer~ ·Pursu;l,n.t" to Sectio.n 17 .o.f th\_e Securities Exc ang~ Act· of 1934 and: Rpl~ 17a-5 Tliereu 4~r | REPORT. FOR THE PERIODBE<::HNN)No0 | 1/01/t9 | . .ENPING.;___ .12{3
AWb. | ___ _
______
:1/19
MMIDDIYY | | | |-------------------------------------------------------------------------------------------------------|------------------------------------------------------------|------------------------------|----------------------------------------------------|--|--| | | | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME.OFBROKER-DEALER: PEAKSTONE SECURITIES, ~LC | | | OFFICIAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF"BUSINESS~ (Do not use P O~ Hox No
) | | | FIRM 1.0 . NO. | | | | 445·N Wells S.t., :Suite 404 | | | | | | | | (No. and Street) | | | | | | Chicago | JL | | 60654 | | | | {City)· | '(State;} | | ·.(zip Code) | | | | NAME AND TELEPHONE·NVtv1B"ER OF PERSOi-{TO CONTACT.IN REGARD TO TIHIS REPORT
S:T.EPHEN SLEiGH
. | . | . . | (3i 2i 204 7300
(Area Co~e-Telepholle Numbc;.r) | | | | | B. Ac.cou:NTANT ID£NTiFICATioN | | | | | | INDEP.ENDENT PUBLIC ACCOUNTANT wliose bpin_io·ri is contai ~~;!. ln. this Report*
.RUBIO CPA, PC | | | | | | | | (Name-'o-.·if individllal,·state last. flrsi, middle name) | | | | | | 2727 Paces Ferry Ro SE, Suite,2-:1.6SO | ATLANTA | GA | 30339 | | | | (Address) | | _( State) | (Zip Cod~) | | | | -CIIECK.O;N.:E: | | | | | | | l V [
Certi.fied p·ublic Accountant | | | | | | | O
Public Accounta.nt | | | | | | | O
Acc()untalltnot r:esi~ent in tlni~e | States or a~y ofits po | e;ssion\$ | | | | | | FOR "OFFICIAL .USE ONLY | | | | | | I | | | | | | | | | | | | | *•Clai.ms jor.e.u,piionfrol!t'"the rqquirement that-the annZ{a/.ceport be covered* by the opini n*of an independent piiPiic* a~c untant *musi be SltP.P?r.te.d i)y a.-statement of facts. qndcircumstances relied on·aS the baSi\$ for the" exemption. Set; \$eCtion* 240.1 a-5(~}(~) > Potentrai .persons who are to r~s ond to the ~lleotlon of ln~qrma ion contain~d in thl~ form ~re n.9t requlr~d to respond unle•s th.e form splay~ a. ~~rrent!y vali49MI:l c·ontrP.I ~mber ,. SEC ~ 4.10 (06·02) {1}------------------------------------------------ ## **OATH OR AFFIRMATION** 1, STEPHEN SLEIGH , swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of PEAKSTONE SECURITIES, LLC ---------------------------------------------------------------------------------------- , as of DECEMBER 31 2019 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_6.jpeg) (n) A report describing any material inadequacies found to exist or found to have existed since the date of the previo us audit. •• *For conditions of confidential treatment of certain portions of this filing, see section 2 .J0.17a-5(e){3).* {2}------------------------------------------------ Peakstone Securities, LLC Financial Statements, Supplementary Information With Report of Registered Independent Accounting Firm December 31, 2019 {3}------------------------------------------------ **RUBIO CPA, PC** CERTIFIED PUBLIC ACCOUNTANTS 2727 Paces Ferry Road SE Building 2, Suite 1680 Aflanfa, GA 30339 Office: 770 690-8995 Fax: 770 838-71 23 ## **REPORT OF INDEPENDENT REGISTERED** PUBLI~ **ACCOUNTING FIRM** To the Members of Peakstone Securities, LLC ## Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Peakstone Securities, LLC (the "Company" ) as of December 3 1, 201 9, the related statements of operations, changes in members' equity, and cash flows for the year then ended and the related notes (collectively referred to as the " financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 3 I, 20 19, and the results of its operations and its cash flows fo r the year then ended in confonn ity with accounting principles gene rally 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 finn registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and a re 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 perfonn the audit to obtain reasonable assurance about whether the financial statements a re free of mate rial misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company 's internal control over financial reporting. Accordingly, we express no such opin ion. Our audit included performing procedures to assess the risks of material misstatement to the financial statements, whether due to error or fraud, and pe rfonn ing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. O ur aud it 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 of our opinion. ## Supplemental Information The infonnation contained in Schedules I, II and HI has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statemc::nts. The supplemental information is the responsibility of the Company 's management. Our audit procedures included detennining whether the informa tion in Schedules I, II and Ill 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 {4}------------------------------------------------ information presented in the accompanying schedules. In forming our opinion on the accompany ing schedules, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.1 7a-5. In out· opinion, the aforementioned supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole. We have served as the Company' s auditor since 2016. February 7, 2020 Atlanta, Georgia Rubio CPA, PC {5}------------------------------------------------ ## Peakstone Securities, LLC Statement of Financial Condition December 31, 2019 #### Assets | Cash
Prepaid expenses and deposits | \$
28,970
10,590 | |-----------------------------------------------------|------------------------| | Total Assets | \$
39,560 | | Liabilities and Members' Equity | | | Liabilities
Accounts payable
Due to affiliate | \$
2,412
6,953 | | Total Liabilities | 9,365 | | Members' equity | 30,195 | | Total Liabilities and Members' Equity | \$
39,560 | {6}------------------------------------------------ ## Peakstone Securities, LLC Statement of Operations Year ended December 31 , 2019 | Net Loss | \$
{89!486} | |----------------------------------|----------------| | Total Expenses | 89,486 | | Other expenses | 16,627 | | Technology and communications | 8,091 | | Occupancy | 10,754 | | Licenses and registration | 16,000 | | Professional fees | 38,014 | | Expenses | | | Total Revenue | | | Investment banking; M&A Advisory | \$ | | Revenue | | {7}------------------------------------------------ | Peakstone Securities, LLC | |-----------------------------------------| | Statement of Changes in Members' Equity | | Year ended December 31 , 2019 | | | | Contributed
Capital | Retained
Earnings (Deficit) | | Total | | |-----------------------------|----|------------------------|--------------------------------|-----------|---------------|--| | Balance, December 31 , 2018 | \$ | 255,000 | \$ | (225,319) | \$
29,681 | | | Members' contributions | | 90,000 | | | 90,000 | | | Net loss | | | | (89,486) | (89,486) | | | Balance, December 31 , 2019 | \$ | 345,000 | \$ | {314,805} | \$
30! 195 | | {8}------------------------------------------------ ## Peakstone Securities, LLC Statement of Cash Flows y ,ear ended December 31 , 2019 | Cash flows from operating activities: | | |-----------------------------------------------------------------------------|----------------| | Net loss | \$
(89,486) | | Adjustments to reconcile net loss to net cash used by operating activities: | | | Change in prepaid expenses and deposits | 823 | | Change in due to affiliate | 4,278 | | Net cash used by operating activities: | (84,385) | | Cash flows from financing activities: | | | Members' contributions | 90,000 | | Net cash provided by financing activities: | 90,000 | | Net increase in cash: | 5,615 | | Cash-
December 31 , 2018 | 23,355 | | Cash - December 31, 2019 | \$
28 970 | {9}------------------------------------------------ ## PEAKSTONE SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December31 , 2019 #### Note (1) Nature of O perations and Summary of Significant Accounting Po licies ### A. Nature of Operat ions Peakstone Securities, LLC (the "Company") is an Illinois limited liability company established on February 17, 2011 , and is a registered broker-dealer under the Securities Exchange Act of 1934. As a limited liability company, the members' liability is limited to their investment. The Company is registered with the Securities and Exchange Commission (SEC), the Financial Industry Regulation Authority (FINRA) and the securities commissions of appropriate states. The Company received approval to operate as a licensed broker-dealer on March 2, 2012. The Company's primary business is investment banking services, and it operates under the provisions of paragraph (k)(2)(i) of Rule 1 Sc3-3 of the Securities Exchange Act of 1934. The Company operates from offices located in Chicago, Illinois. #### B. Accounts Receivable The Company uses the allowance method to account for uncollectible accounts receivable. Management continually monitors the collectability of its customer accounts; when indications arise that an amount is not likely to be collected, it is charged to the allowance for doubtful accounts. Accounts are considered past due when they are 30 days old. #### C. Cash Balances in Excess of Insured Amounts The Company maintains its cash in an account in a high credit quality institution which, at times, may exceed federally insured limits. The Company has not experienced any losses due to these limits. #### D. Revenue Recognition Investment banking revenue includes fees earned from providing merger and acquisition and other advisory services to clients. Revenue is recognized when earned, which generally occurs as services are performed or upon consummation of a transaction. Revenue from Contracts with Customers Standard (ASU 2014-09) core principle is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014- 09 prescribes a five-step process to accomplish this core principle, including: - Identification of the contract with the customer; - Identification of the performance obligation(s) under the contract; - Determination of transaction price; - Allocation of the transaction price to the identified performance obligation(s); and - Recognition of revenue as (or when) an entity satisfies the identified performance obligation(s). The Company recognizes revenue upon completion of a success fee-based transaction as this satisfies the only performance obligation identified in accordance with this standard. {10}------------------------------------------------ ## **PEAKSTONE SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December31 , 2019** #### **Note ( 1) Nature of Operations and Summary of Significant Accounting Policies - Continued** #### **E. Income Taxes** The Company has elected to be taxed as a partnership under the provisions of the Internal Revenue Code and, accordingly, is not subject to income taxes. Instead, Members are liable for federal and state income taxes on their respective share of the taxable income of the Company. Accordingly, no provision for income tax has been provided for in the accompanying funancial statements. The Company is subject to the Illinois 1.5% replacement tax on income. There is no replacement tax for 2019. #### **F. 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 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. While actual results may differ from those estimates, management does not expect the differences, if any, to have a material effect on the financial statements. #### **G. Date of Management's Review** Subsequent events were evaluated through the date the financial statements were issued. #### **Note (2) Net Capital Requirement** The Company is subject to SEC Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of a minimum net capital, as defined, equal to the greater of \$5,000 or 6 2/3% of aggregate indebtedness. At December 31, 2019, the Company had net capital of \$19,605 which was \$14,605 in excess of its required net capital of \$5,000. The Company's percentage of aggregate indebtedness to net capital was 47.77%. The Company is exempt from the provision of Rule 15c3-3 under the Securities Exchange Act of 1934 pursuant to Paragraph (k)(2)(i). #### **Note** (3) **Related Party** The Company has entered into an expense sharing arrangement with The Peakstone Group, LLC, an affiliated entity, for occupancy and certain general and administrative expenses provided to the Company. The Company's share of expenses is calculated based on estimated usage. Allocated expenses under the agreement amounted to approximately \$27,259 for the year ended December 31, 2019. The balance due to affiliate of \$6,953 on the accompanying statement of financial condition arose from this agreement. Amounts due to affiliate are not interest bearing and have no specified due date. #### **Note (4) Contingencies** The Company is subject to litigation in the normal course of business. The Company has no litigation in progress at December 31 , 2019. {11}------------------------------------------------ ## **PEAKSTONE SECURITIES, LLC NOTES TO FINANCIAL STATEMENTS December31 , 2019** #### **Note (5) Net Loss** The Company incurred a loss for 2019 and was dependent upon capital contributions from its members for working capital and net capital. The Company's members have represented that they intend to continue to make capital contributions as needed, to ensure the Company's survival through at least one year subsequent to the date of the report of the independent registered public accounting firm. Management expects the Company to continue as a going concern and the accompanying financial statements have been prepared on a going-concern basis without adjustments for realization in the event that the Company ceases to continue as a going concern. {12}------------------------------------------------ ## Peakstone Securities, LLC Schedule I Computation of Net Capital Pursuant to Rule 15c3-1 Of the Securities and Exchange Commission Act of 1934 As of December 31, 2019 | Total members' equity | \$
30,195 | |----------------------------------------------------------------|--------------| | Deductions and/or charges | | | Prepaid expenses and deposits | 10,590 | | Total deductions and/or charges | 10,590 | | Net capital before haircuts | 19,605 | | Less haircuts | | | Net capital | \$
19,605 | | Minimum net capital requirement | 5,000 | | (greater of \$5,000 or 6 2/3% of total aggregate indebtedness) | | | Excess net capital | \$
14 605 | | Aggregate indebtedness | | | Accounts payable | 2,412 | | Due to affiliate | 6,953 | | Total aggregate indebtedness | \$
9,365 | | Percentage of aggregate indebtedness to net capital | 47.77% | Note: Reconciliation with Company's computation of net capital included in Part IIA of Form X-17A-5 as of December 31 , 2019. There was no significant difference between net capital in the FOCUS Part IIA form and the computation above. {13}------------------------------------------------ ## Peakstone Securities, LLC ## SCHEDULE II COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31 , 2019 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(2)(i) of the rule. ## SCHEDULE Ill INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF DECEMBER 31 , 2019 The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934, pursuant to paragraph (k)(2)(i) of the rule. {14}------------------------------------------------ ![](_page_14_Picture_0.jpeg) Peakstone Securities, LLC 445 N Wells St, Suite 404 Chicago, IL 60654 ## **EXEMPTION REPORT SEA RULE 17a-S(d)(4}** January 29, 2020 Rubio CPA, PC 2727 Paces Ferry Road SE Building 2, Suite 1680 Atlanta, Georgia 30339 The below information is designed to meet the Exemption Report criteria pursuant to SEC !Rule 17a-S(d)(4): Peakstone Securities, LLC is a broker/dealer registered with the SEC and FINRA. Pursuant to paragraph k(2)(i) of SEA Rule 15c3-3, the Company is claiming an exemption from SEA Rule 15c3-3 for the fiscal year ended December 31, 2019. The Company has met the identified exemption provisions throughout the most recent fiscal year without exception. The above statement is true and correct to the best of my and the Company's knowledge. Name: Stephen Sleigh Title: CEO {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) Building 2, Suite 1680 Atlanta, GA 30339 Office: 770 690-8995 Fax: 770 838-7123 ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Members of Peakstone Securities, LLC We have reviewed management's statements, included in the accompanying Broker Dealers Annual Exemption Report in which (I) Peakstone Securities, LLC identified the following provisions of 17 C.F.R. § 15c3-3(k) under which Peakstone Securities, LLC claimed an exemption from 17 C.F.R. § 240.15c3-3: (k)(2)(i) (the "exemption provisions"); and, (2) Peakstone Securities, LLC stated that Peakstone Securities, LLC met the identified exemption provisions throughout the most recent fiscal year without exception. Peakstone Securities, 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 Peakstone Securities, 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)(i), of Rule 15c3-3 under the Securities Exchange Act of 1934. February 7, 2020 Atlanta, GA Rubio CPA, PC Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.