# DEMPSEY FINANCIAL NETWORK, INC. X-17A-5 (2022-03-28) — Broker-dealer annual report - Company: DEMPSEY FINANCIAL NETWORK, INC. - Form: X-17A-5 - Filed: 2022-03-28 - Period: 2021-12-31 - Accession: 0000943698-22-000001 - CIK: 943698 - File #: 8-48194 - Type: Broker-dealer - Material weakness: No - Auditor: Rubio CPA, PC - Auditor location: Atlanta, GA - Contact: Carol Ann Kinzer - Phone: 678-525-0992 - Email: ckinzer@brokerageconsulting.com - Website: brokerageconsulting.com - Signed by: s. Kay Dempsey (President and CEO) Original filing: https://www.sec.gov/Archives/edgar/data/943698/000094369822000001/dfnpublic2021.pdf --- {0}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington., D.C. 20549 | 0MB APPROVAL | |---------------------------| | 0MB Number: 3235-0123 | | Expires: Oct. 31, 2023 | | Estimated average burden | | hours per response:
12 | ## ANNUAL REPORTS FORM X-17A-5 PARTIII | SEC FILE NUMBER | | |-----------------|--| | 8-48194 | | #### **FACING PAGE** Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934 | FILING FOR THE PERIOD BEGINNING __ | ___
0_1'---/0_1_/2_0_2_1 | AND ENDING __ | 1__,2/,__3_1_,_/2_0_2_1 | __
_ | |----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|-------------------------------------------|-------------------------|---------------------------------| | | MM/00/YY | | MM/00/YY | | | A. REGISTRANT IDENTIFICATION | | | | | | NAME OF FIRM: ___ | D_e_m__.p,__s_e_._y_F_in_a_n __ c_ia_l_N_e_tw_o_rk_,;,,_l_nc_. | ______________ | | _ | | TYPE OF REGISTRANT (check all applicable boxes):
Qg Broker-dealer
Security-based swap de\der~
D Check here if respondent is also an OTC derivatives dealer | | Major security"'.'.ga~d ftlap participant | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | | 2951 Piedmont Road, Suite 200 | | | | | | | (No. and Street) | | | | | Atlanta | GA | | 30305 | | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | Carol Ann Kinzer | 678-525-0992 | | | ckinzer@brokerageconsulting.com | | (Name} | (Area Code - Telephone Number) | | (Email Address) | | | B. ACCOUNTANT IDENTIFICATION | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | Rubio CPA PC | | | | | | | (Name-if individual, state last, first, and middle name) | | | | | 2727 Paces Ferry Rd. SE, Ste 2-1680 | Atlanta | | GA | 30339 | | (Address) | (City) | | (State)
(Zip Code) | | | 05/05/2009 | | 3514 | | | | (rt• of Registration with PCAOB)(if applicable) :FOR OFFICIAL USE ONLY | I
(PCAOB Registration Number, if applicable) | | | | | | | | | | | * 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 ' f facts and circumstances relied on as the basis of the exemption. See 17
CFR 240.17a-S(e){1)(ii), if applicable. | | - | | | | Persons who are to respond to the collectlon of i formation contained in this form are not required to respond unless the form | | | | | | displays a currently valid 0MB control number. | | | | | {1}------------------------------------------------ #### **OATH OR AFFIRMATION** | | S. Kay Dempsey | | |--|----------------|--| | | | | 1, S. Kay Dempsey swear (or affirm) that, to the best of my knowledge and belief, the financial report pertaining to the firm of Dempsey Financial Network, Inc. , as of December 31 , 2\_\_Dll, 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 customer. ![](_page_1_Picture_4.jpeg) ![](_page_1_Picture_5.jpeg) # ❖ '; **This filing\*\* contains (check all applicable bd** - ~ (a) Statement of financial condition. - (b) Notes to consolidated statement of financial condition. - □ (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) Statement of cash flows. - (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - □ (f) Statement of changes in liabilities subordinated to claims of creditors. - □ (g) Notes to consolidated financial statements. - □ (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.lSa-l, as applicable. - □ {i) Computation of tangible net worth under 17 CFR 240.18a-2. - □ (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - (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. - D (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - D (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - D (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. - □ (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l, 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. - □ (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - ~ (q) Oath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D {s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable. - □ {t) Independent public accountant's report based on an examination of the statement of financial condition. - □ (u} Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - □ M Independent public accountant's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - □ (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. - □ {x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le or 17 CFR 240.17a-12, as applicable. - D (y) 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 240.17a-12(k}. □ {z) Other: \_\_\_\_\_\_\_\_\_\_\_\_ ..1,-.. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - - \*\*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}------------------------------------------------ # DEMPSEY FINANCIAL NETWORK, INC. December 31, 2021 With For the Year Ended Report of Independent Registered Public Accounting Firm Financial Statements This report is filed in accordance with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT. {3}------------------------------------------------ CERTIFIED PUBLIC ACCOUNTANTS **RUBIO CPA, PC** 2727 Paces Ferry Road SE Building 2, Suite 1680 Atlanta, GA 30339 Office: 770 690-8995 Fax: 770 838-7123 ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder of Dempsey Financial Network, Inc. #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Dempsey Financial Network, Inc. (the "Company") as of December 31 , 2021 , and the related notes. In our opinion, the aforementioned financial statement presents fairly, in all material respects, the financial position of the Company as \_of December 31 , 2021 , in conformity with accounting principles generally accepted in the United States of America. · #### Basis of Opinion This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company'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 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 statement is free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perfonn, 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 opinion. Our audit included performing procedures to assess the risks of material misstatement to 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 2002. March 28, 2022 Atlanta, Georgia ~ **CJ)A I Pc..** Rubio CPA, PC {4}------------------------------------------------ ## STATEMENT OF FINANCIAL CONDITION December 31, 2021 DEMPSEY FINANCIAL NETWORK, INC. ### ASSETS | Cash
Accounts Receivable | \$
1,006,982
111,516 | |--------------------------------------|----------------------------| | Prepaid expenses | 18,402 | | Property and equipment, net of | | | accumulated depreciation of \$19,572 | - | | Total Assets | \$
1,136,900 | ## LIABILITIES AND STOCKHOLDER'S EQUITY | LIABILITIES
Reserve for Chargebacks | 10,000 | |--------------------------------------------|-----------------| | TOTAL LIABILITIES | 10,000 | | Stockholder's Equity | 1,126,900 | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$
1,136,900 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ #### DEMPSEY FINANCIAL NETWORK, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2021 #### NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Description of Business: The Company is a registered broker-dealer organized under the laws of the state of Georgia that began business in 1995. The Company is registered with the Securities and Exchange Commission, the securities commissions of appropriate states and is a member of the Financial Industry Regulatory Authority. The Company provides market support and product placement services on behalf of certain insurance carriers that issue variable securities products. The Company is a "sub-wholesaler" for issuers of variable life and variable annuity products. Cash: The Company maintains its bank accounts at a high credit quality financial institution. The balances at times may exceed federally insured limits. Income Taxes: The Company has elected to be taxed as an S corporation. Therefore, the income or losses of the Company flow through to its stockholder and no income taxes are recorded in the accompanying financial statements. The Company has adopted the provisions of FASB Accounting Standards Codification 740-10 ("ASC 740-10"), Accounting for Uncertainty in Income Taxes. Under ASC 740-10, the Company is required to evaluate each of its tax positions to determine if they are more likely than not to be sustained if the taxing authority examines the respective position. A tax position includes an entity's status, including its status as a pass-through entity, and the decision not to file a tax return. The Company has evaluated each of its tax positions and has determined that no provision or liability for income taxes is necessary. Estimates: Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could vary from the estimates that were assumed in preparing the financial statements. Date of Management's Review – Subsequent events were evaluated through the date the financial statements were issued. Revenue Recognition – Revenue from contracts with customers includes commission income. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company's progress under the contract; whether revenue should be presented gross or net of certain costs; and whether constraints on variable consideration should be applied due to uncertain future events. {6}------------------------------------------------ #### DEMPSEY FINANCIAL NETWORK, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2021 #### NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES #### Revenue Recognition (continued) The Company recognizes commission revenue upon issuance or renewal of an insurance policy as this satisfies the only performance obligation identified by the Company. Reserve for Chargebacks – Commissions earned from certain policies sold by the Company are subject to chargeback/refund for a period of time in the event that the policyholder elects to cancel or reduce coverage. The Company has evaluated its exposure to chargebacks and provided a reserve on the accompanying Statement of Financial Condition. Property and Equipment – Property and equipment are recorded at cost. Depreciation is provided by use of straight-line methods over the estimated useful lives of the respective assets. Accounts Receivable – Accounts receivable are non-interest bearing, uncollateralized obligations receivable in accordance with the terms agreed upon with each customer. The Company regularly reviews its accounts receivable for any uncollectible amounts. The review for uncollectible amounts is based on an analysis of the Company's collection experience, customer credit worthiness, and current economic trends. Based on management's review, no allowance for credit losses is considered to be necessary. #### NOTE B – NET CAPITAL The Company, as a registered broker-dealer, is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of a minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. At December 31, 2021, the Company had net capital of \$996,982, which was \$991,982 in excess of its required minimum net capital of \$5,000 and the ratio of aggregate indebtedness to net capital was 0.01 to 1.00. #### NOTE C – RELATED PARTY TRANSACTIONS The Company has an expense sharing agreement with a sister company owned by the Company's stockholder. The sister company provides the Company with administrative staff, office space and allocates other related operating expenses. The office facilities occupied by the sister company that are shared with the Company are leased from the common stockholder. Expenses are payable monthly and allocated to the Company based on estimated relative costs and benefits of services provided under this agreement. Amounts expensed by the Company under the agreement for 2021 were approximately \$102,180. Financial position and results of operations might differ from the amounts in the accompanying financial statements if these related party transactions did not exist. {7}------------------------------------------------ #### DEMPSEY FINANCIAL NETWORK, INC. NOTES TO FINANCIAL STATEMENTS December 31, 2021 #### NOTE D – CONCENTRATIONS Most of the Company's revenues are earned from business introduced to the Company by a sister company, which is an insurance agency (See Note C). Approximately 93% of commission revenues earned during 2021 were from two insurance carriers. At December 31, 2021, approximately 99.8% of accounts receivable were due from one insurance carrier. #### NOTE E - CONTINGENCIES The Company is exposed to litigation in the normal course of business. There is no litigation in progress at December 31, 2021. #### NOTE F – ECONOMIC RISKS In March 2020, the World Health Organization (WHO) declared COVID-19 a global pandemic. This pandemic event has resulted in significant business disruption and uncertainty in both global and U.S. markets. While management believes the Company is in an appropriate position to sustain the potential short-term effects of these world-wide events, the direct and long-term impact to the Company and its financial statements is undetermined at this time. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.