# GRAY OAK CAPITAL, LLC X-17A-5 (2022-02-28) — Broker-dealer annual report - Company: GRAY OAK CAPITAL, LLC - Form: X-17A-5 - Filed: 2022-02-28 - Period: 2021-12-31 - Accession: 0001716623-22-000001 - CIK: 1716623 - File #: 8-70014 - Type: Broker-dealer - Material weakness: No - Auditor: Raich Ende Malter & Co. LLP - Auditor location: New York, NY - Contact: Mark Halvorsen - Phone: 203-987-0015 - Email: markh@grayoakcapital.com - Website: grayoakcapital.com - Signed by: Mark Halvorsen (CEO) Original filing: https://www.sec.gov/Archives/edgar/data/1716623/000171662322000001/gopub.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ## **ANNUAL REPORTS FORM X-17A-5 PART** Ill OMS APPROVAL OMS Number; 3235-0123 Expires; Oct. 31, 2023 Estimated avera1ge burden hours per response: 12 | SEC FILE NUMBER | |-----------------| | 8-70014 | FACING PAGE Information Required Pursuant t o Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING 1 /1 /21 | | AND ENDING 12/31 /21 | | | | | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------|----------------------|-----------------|--------------------------|--|--| | | ------~~~~~--
MM/DD/YY | | | MM/DD/ Y Y | | | | | A. REGISTRANT IDENTIFICATION | | | | | | | NAME oF FIRM: Gray Oak Capital, LLC | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes):
0 Security-based swap dealer
D Major security-based swap participant
!!ii Broker-dealer
D Check here if respondent is also an OTC derivatives dealer | | | | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | | | 537 Steamboat Road, Suite 200 | | | | | | | | | (No. and Street) | | | | | | | Greenwich | CT | | | 06830 | | | | (City) | (State) | | | (Zip Code) | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | Mark Halvorsen | (203) 987-0015 | | | markh@grayoakcapital.com | | | | (Name) | {Area Code - Telephone Number) | | (Email Address) | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | | Raich Ende Malter & Co. LLP | | | | | | | | | (Name - if individual, state last, first, and middle name) | | | | | | | 1375 Broadway, 15th Floor | New York | | NY | 10018 | | | | (Address) | (City) | | (State) | (Zip' Code) | | | | 6/23/04 | | 50 | | | | | | T'• of
Regl.Uotlon with PCAOB)(;f •OPU"'ble I | | | | | | | | | FOR OFFICIAL USE ON LY | | | | | | • Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-S(e)(l)(ii), if applicable. Persons w ho are to respond to t he collection of information cont ained in t his f orm are not required to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION | I, Mark Halvorsen | swear (or affirm) t hat, to the best of my knowledge and belief, the | |------------------------------------------------------------------|--------------------------------------------------------------------------------------| | financial report pertaining to the firm of Gray Oak Capital, LLC | as of | | December 31 | 2~ is true and correct. I further swear (or affirm) that neither the company nor any | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely as that of-a-cu tomer. ,,...----- / / I / Signat~/( ~---- Title: CEO ## This filing\*\* contdn'iif'{1Ml!!t1'rnttr.l't!~~.+w.e..,..m,..( - **ii!!** (a) Statement of financial condition. - **ii!!** (b) Notes to consolidated statement of financial condition. - D (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 (d) Statement of cash flows. - D (e) Statement of changes i;n stockholders' or partners' or sole propriet or's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - 0 (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFIR 240.1Sc3-1or17 CFR 240.18a-l, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.1Sc3-3. - D (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable. - 0 (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.1Sc3-3. - 0 (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - 0 (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.1Sc3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - 0 (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.ll5c3·1, 17 CFR 240.18a-1, or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFR 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist. - 0 (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - !! (q) Oath or affirmation in accordance w it h 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - 0 (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 0 (s) Exemption report in accordance with 17 CFR 240.17a-5or17 CFR 240.18a-7, as applicable. - **!!l** (t) Independent public accountant's report based on an examination of the statement of financial condition. - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - D (v) Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5or17 CFR 240.18a-7, as applicable. - 0 (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - 0 (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le o r 17 CFR 240.17a-12, as applicable. - 0 (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audlt, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). 0 (z) Other: \_ \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable. {2}------------------------------------------------ # **GRAY OAK CAPITAL, LLC** Statement of Financial Condition December 31 , 2021 Filed Pursuant to Rule 17a-5 Under the Securities and Exchange Act of 1934 PUBLIC DOCUMENT {3}------------------------------------------------ ## **GRAY OAK CAPITAL, LLC** | 2 | |-----| | 3-5 | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) **13.75 Broadway, 1 Sth Floor N ew Yor k, N ew York 1 001 8** 2 1 2.944.4433 2 1 2.944. 5404 t fax) .a®~ n·co com ## REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Members of Gray Oak Capital, LLC Greenwich, Connecticut ## Opinion on t he Financial] Statement We have audited the accompanying statement of financial condition of Gray Oak Capital, LLC as of December 31, 2021, 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 Gray Oak Capital, LLC as of December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. ### Basis for Opinion This financial statement is the responsibility of Gray Oak Capital, LLC's management. Our responsibility is to express an opinion on Gray Oak Capital, LLC'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 Gray Oak Capital, LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and tihe 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 financ ial statement. We believe that our audit provides a reasonable basis for our opinion. RAICH EN DE MALTER & CO. LLP We have served as Gray Oak Capital, LLC's auditor since 2019. New York, New York February 23, 2022 ![](_page_4_Picture_12.jpeg) Independent *Accounting Firms* {5}------------------------------------------------ ## **Gray Oak Capital, LLC** ## Statement of Financial Condition December 31 , 2021 | Assets | | |--------|--| | | | | Cash
Due from broker-dealer | | 26,214
100,000 | |-----------------------------------------------------------|----|-------------------| | Prepaid expenses and deposits | | 8,001 | | Total Assets | \$ | 134 215 | | Liabilities and Members' Equity | | | | Liabilities | | | | Accounts payable and accrued expenses
Due to affiliate | \$ | 3,022
610 | | Total Liabilities | | 3,632 | | Members' Equity | | 130,583 | | Total Liabilities and Members' Equity | \$ | 134 215 | See accompanying notes. {6}------------------------------------------------ Notes to Financial Statement December 31 , 2021 #### 1. ORGANIZATION AND NATURE OF BUSINESS Gray Oak Capital, LLC (the "Company") was organized in Delaware in February 2017. The Company is a securities broker-dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"), since April 2019. The Company's primary business is referring stock loan business to otlher broker-dealers and introducing customers to prime brokers. The Company operates under the provisions of paragraph (k)(2)(ii) of Rule 15c3-3 of the Securities Exchange Act of 1934. The Company does not hold funds or securities for customers and does not carry customer accounts. ## 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Presentation The accompanying financial statements have been prepared on an accrual basis in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). The accounting policies and reporting practices of the Company conform to the predominant practices in the broker-dealer industry. #### Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities at the date of the financial statements, as well as their related disclosures. Such estimates and assumptions also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. #### Government and Other Regulation A broker-dealer of securities business is subject to significant regulation by various governmental agencies and self-regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. As a registered broker-dealer, the Company is subject to the Securities and Exchange Commission's net capital rule (Rule 15c3-1) which requires that the Company maintain a minimum net capital, as defined. #### Cas h and Cash Equivalents Forr purposes of reporting the Statement of Cash Flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash balances in excess of FDIC and similar insurance coverage are subject to the usual banking risks associated with funds in excess of those limits. The Company did not have any cash and cash equivalent balances in excess of FDIC insurance limits. #### Due From Broker As of December 31 , 2021 , the Company has a cash balance with Interactive Brokers LLC in the amount of \$100,000. {7}------------------------------------------------ ## Gray Oak Capital, LLC Notes to Financial Statement December 31 , 2021 ## 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) #### Income Taxes The Company is treated as a partnership for federal income tax purposes and generally would not incur income taxes. Instead, its earnings and losses are included in the Federal tax returns of its members and taxed depending on the members' tax situation. However, the Company is subject to the Connecticut passthrough entity-tax. The Company adopted Accounting Standards Codification ("ASC") 740 which clarified the accounting and disclosures for uncertain tax positions related to income taxes recognized in the financial statements and addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be rrecorded in the financial statements. The Company did not have unrecognized tax benefits as of December 31, 2021 and does not expect this to change significantly over the next twelve months. The Company will recognize interest and penalties accrued on unrecognized tax benefits as a component of income tax expense. As of December 31 , 2021 , the Company had no accrued interest or penalties related to uncertain tax positions. #### Lease The Company follows the lease accounting guidance in Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASC Topic 842"). The Company has elected the package of practical expedients permitted in ASC Topic 842. Accordingly, the Company accounted for its existing operating lease as an operating lease under the new guidance, without reassessing (a) whether the contract contains a lease under ASC Topic 842, (b) whether classification of the operating lease would be different in accordance with ASC Topic 842, or (c) whether the unamortized initial direct costs before transition adjustments (as of December 31, 2019) would have met the definition of initial direct costs in ASC Topic 842 at lease commencement. The Company defines a short-term lease as a lease that, at the commencement date, has a lease term of 12 months or less and does not contain an option to purchase the underlying asset that the lease is reasonably certain to exercise. The Company elected to recognize short-term lease payments as an expense on a straight-line basis over the lease term. Related variable lease payments are recognized in the period in which the obligation is incurred. The Company's lease is month-to-month. #### Credit Losses Effective January 1, 2020, the Company adopted ASC Topic 326, Financial Instruments - Credit Losses ("ASC 326"). ASC 326 impacts the impairment model for certain financial assets by requiring a current expected credit loss ("CECL") methodology to estimate expected credit losses over the entire life of the financial asset. Under the accounting update, the Compainy has the ability to determine that there are no expected credit losses in certain circumstances (e.g., based on the credit quality of the customer). The Company identified investment banking fees as impacted by the new guidance. ASC 326 specifies that the Company adopt the new guidance prospectively by means of a cumulative-effect adjustment to the opening members' equity as of January 1, 2020. Accordingly, the Company recognized no adjustment upon adoption. The Company did not have any accounts receivable balances as of December 31, 2020, and 2021, respectively. ## 3. TRANSACTIONS WITH RELATED PARTIES The Company shares its office space as well as various administrative services with affiliates of the Company. The Company entered into an expense sharing agreement whereby all expenses associated with the operations of the Company paid by the affiliate entity were charged to the Company. Under the agreement, certain expenses of the affiliate entity such as rent and office expenses are allocated to the Company at cost as well as all direct expenses of the Company paid on behalf of the Company. The balance due to affiliate of \$610 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 {8}------------------------------------------------ ## **Gray Oak Capital, LLC** Notes to Financial Statement December 31 , 2021 ## **4. REGULATORY REQUIREMENTS** The Company, as a registered broker-dealer in securities, is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1 ), 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 , 2021 , the Company had net capital of \$122,582 which was \$22,582 in excess of its required net capital of \$100,000. At December 31 , 2021 , the percentage of aggregate indebtedness to net capital was 2.96%. The Company is exempt from the provisions of Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company does not hold customers' cash or securities. ## **5. COMMITMENTS AND CONTINGENCIES** The Company is exposed to unass·erted potential claims encountered in the normal course of business. The Company has no litigation in progress at December 31 , 2021. ## ~ **SUBSEQUENTEVENTS** Management has performed an evaluation of events that have occurred subsequent to December 31 , 2021 , and through February 23, 2022, the date this financial statement was available to be issued. There have been no material subsequent events that occurred during such period that would require disclosure in the financial statement or would be required to be recognized in the financial statements as of December 31 , 2021 . #### **7. GOING CONCERN** The accompanying statements have been prepared assuming the Company will continue as a going concern. The Company had a net loss from operations which raises substantial doubt about the Company's ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. However, the members of the company have pledged any required additional support to the Company to enable it to continue as a going concern and maintain required regulatory minimum net ca pita~ for at least the next twelve months from the date of this financial statement. ## **8. COVID-19** During the 2020 calendar year, the World Health Organization has declared COVID-19 to constitute a "Public Health Emergency of International Concern". This pandemic has disrupted economic markets and the economic impact, duration and spread of the COVID-1 9 virus is uncertain at this time. The financial performance of the Company is subject to future developments related to the COVID-19 outbreak and possible government advisories and restrictions placed on the financial markets and business activities. The impact on financial markets and the overall economy, all of which are highly uncertain, cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company's results may be materially affected. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.