# SIXTEEN SECURITIES, INC. X-17A-5 (2019-02-27) — Broker-dealer annual report

- Company: SIXTEEN SECURITIES, INC.
- Form: X-17A-5
- Filed: 2019-02-27
- Period: 2018-12-31
- Accession: 0001111299-19-000001
- CIK: 1111299
- File #: 8-52479
- Material weakness: No
- Auditor: M. Vail & Assiciates, PC
- Auditor location: Richardson, TX
- Contact: Steven Bender
- Phone: 6462907248
- Signed by: Gary Wiedman (CEO)

Original filing: https://www.sec.gov/Archives/edgar/data/1111299/000111129919000001/sixtannual2018.pdf

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|                                                                                                                       | Page  |
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| Facing Page to Form X-17 A-5                                                                                          | 1     |
| Affirmation                                                                                                           | 2     |
| Report of Independent Registered Public Accounting Firm                                                               | 3     |
| Financial Statements                                                                                                  |       |
| Statement of Financial Condition                                                                                      | 4     |
| Statement of Operations                                                                                               | 5     |
| Statement of Changes in Stockholder's Equity                                                                          | 6     |
| Statement of Cash Flows                                                                                               | 7     |
| Statement of Changes in Liabilities Subordinated to Claims of Creditors                                               | 8     |
| Notes to Financial Statements                                                                                         | 9-12  |
| Supplemental lnforma.tion Required by Rule 17a-5 of<br>the Securities and Exchange Commission                         |       |
| Schedule of Computation of Net Capital for Brokers<br>and Dealers Under SEC Rule 15c3<br>-1                           | 13    |
| Schedule of Reconciliation of Net Capital Per FOCUS<br>Report with Audit Report                                       | 14    |
| Information Relating to Possession or Control Requirements<br>Under SEC Rule l 5c3-3                                  | 15    |
| Computation for Deteirmination of the Reserve Requirements<br>Under SEC Rule l 5c3-3                                  | 16    |
| Report on Internal Control Required by SEC Rule l 7a-5 for a Broker-Dealer<br>Claiming Exemption From SEC Rule 15c3-3 | 17-18 |

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llN ITEU TATES [ClfR ITIESANOEX('lfAN(;E("OMMISSION Washinj!lon, l>.C. 211541)

# **ANNUAL AUDITED REPORT FORM X-17A-5 PART Ill**

r OMB APPROVAL OMB Number: 3235-0123 Expires. August 31, 2020 Estimated average burden h9Yr~ per response *...:..:...:...* 12 00

# SEC FILE NUMBER B-52479 \_J

#### FACING PAGE

lnformatiort Required of Brokers and Dea lers Pursuant to Section 17 o f the ccurities Exchange Act oft 934 and Rule I 7a-5 T l1er eunde <sup>r</sup>

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*•C/uims/or exemption.from* th~ *requirement thuJ the tmmwl report be cov.ered* hy *the opinion of an independent public accountant must be supp<>rted by a state me* 111 *cif facts cmd cin:um.wam:es relied* <sup>0</sup> <sup>11</sup>~ *rhe basis for the e .. xemption. See Section 2./0. I 7a-5(e)(2)* 

> Potential persons who are to respond to the collectlon of Information contained In this form are not required to respond unless the form displays a currently valid OMB control number.

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#### OATH OR AFFIRM AT ION

I. Gary Wiedman . sweiir (or amrm) that. to the best o f

my knowledge and belief the accompanying financial statement and support mg schedul cs pertaining to the firm of Sixteen Securities, Inc. \_\_\_\_ . as

of December 31 \_\_ . 20 18 \_ \_ \_ . aire true and correct. I further swear (or affirm) that

ncllher the ccmpan) nor an) panner. proprict or. principal officer or di rector has any pl'Opnetary mtercst in any account classified sol el) as that of a c~1stomcr. except as follows:

| 17<br>/ (<br>"')<br>NEALAUMAN<br>/; V,<br>Notary Public of New Jersey<br>,,4<br>/j_<br>__./I -<br>JD #2165766<br>N<br>Notal) Pub I 1c Commission Expires May 25, 2019                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                |
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| This report •• contains (check all applicable boxes):<br>0<br>(a) Facin& Pa&e·<br>0 (b) Statement of Financial Condition.<br>1ZJ (c) Statement of Income (Loss) or. if there 1s other comprehensive income in the penod(s) presented. a Statement<br>of Comprehensive Income (as defined in §210.<br>~ (d) Statement of Changes in Financial Condition.<br>0<br>(e) Statement of Changes in Stockholders' Equity or Partners· or Sole Proprietors· Capital<br>D (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors<br>§ (g) Computation of et C<br>apital.<br>(h) Computation for Determinauon of Reserve Requirements Pursuant Lo Rule I 5cJ-3.<br>(i) Information Relating to the Possession or Control Requirements Under Rule I 5c3-3.<br>0 (j) A Reeoncilia11on. including appropriate explanation of the Computation of et Cap11al Under Rule I Sc3-1 and the<br>Computation for Determination of the Reserve Requirements Under Exhibit A of Rule I 5c3-3 | 1-02 of Regulation S-X).                       |
| O (k) A Reconciliation between the audited and unaudited Statements of Financial Condition w11h respect to methods o<br>consolidation.<br>§<br>./'<br>(I) An Oath or Affirma1ion.<br>(m) A copy of the SIPC Supplemental Report.<br>(n} A report describing any material inadequacies found to exist or found to ha' e exist                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | f<br>ed s111cc the date of the previous audit. |

*••For conditions of confidentia/ treatmellf of certain* portions<~/ *this* fl *Jing, see section 2.JO I 7a-5(e)(J)* 

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![](_page_3_Picture_0.jpeg)

Michael G. \lad, CPA ~rlcsT.Gr~ CPA Don E. Graves, CPA Olnesh J. Pai, CISA

Members: Arncnan lnrotutc of C1'As TeMS Soc:~ty of CPAs

#### REPORT OF lNOEPENDENT REGISTERED PUBLIC ACCOUNTING Fl Rl\.1

To 1hc Board or Dircc1ors of Sixteen, Securities, Inc.

#### 01>inion on the Financial Statements

We have audited the accompanying Statement of Financial Condition of Sixteen, Socuritics. Inc. (the "Company") as of December 31 , 2018. and the related statements of operations, changes in stockholder's equity, cash flows, and liabilities subordinated to claims of creditors for the year ended December 31, 20 18, and tJ1e related notes (collectively referred to as. tJ1e financial statements). In our opinion, the financial statements present fairly. in all material respects, the financial position of the Compan y as of December 31 , 2018. and the results of its operations and its cash nows for the year ended December 31, 2018, in conformity with acc-0unting principles generally accepted in th c United States or America.

#### Basis for O pinion

These financial statements arc tllc rcsponsibili ty of the Compru1y's management. Our responsibility is to express an opinion on tJ1c Compan y's fincmcial statements based on our audit. We arc a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and arc required to be independent with respect to tJ1e Company in accordance with the U.S. federal securities laws and the applicable rules and rcgulat ions of the ScCtLritics and Excha ngc Commission and the PCAOB.

We conduct cd our audit in accordance with tJ1c standards of the PCAOB. Those stru1dards require tJ1at we plan and perform the audit to obtain reasonable assurance about whether the financial statements arc free of nnaterial misstatement. whether duie to error or fraud. The Company is not required to have, nor were we engaged to perform, ru1 audit of its iintcmal control over financial reporting. As part of our audit, wc ar.c required to obtain an understanding of internal control over financial reporting, but not for tile purpose of expressing an opinion on tJ1c effectiveness oftl1c Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess tlie risks of material misstatement or tJ1e [mancial stat ernents, whetJ1er due to error or fraud, and performing procedures that respond to those risks. Such procedures included examilling, on a test basis, evidence regarding tJ1c ru11ollnts and disclosures in tJ1c 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 otar opinion.

#### SuP1>lemen tat Information

The supplcrnental infonnation. including Sch cdulc of Computation of Net Capital for Brokers and Dcal<:rs Under SEC Ruic I 5c3-I, Schedule of Reconciliation of Net Ca.pita I Per FOCUS Report witJ1 Audit Repon, lnformation Relating to Possession or Control Requirements Under SEC Ruic I 5c1-3, and Computation I-Or Dctennination of the Reserve Requirements Under SEC Ruic I 5c3-3, has been subjected to audit procedures performed in conjunction witlll tJ1c audit oftJ1c Company's financial statements. The supplemcnta I information is tl1c responsibility of the Company's management. Our audit procedures included determining whctJ1cr 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 infom1ation. hu forming our opfoion on the supplcmcntaJ infonnation, we evaluated whether the supplemental information~ including its form and content, is presented in conformity with 17 C.F.R. §240. I 7a-5. ln our opinion, the supplemental information is fairly stated, in all material respects. in relation to tl1c financial statements as a whole.

We have served as tllc Company's auditor since 2017. Richardson, Texas February 25, 2019

> 1801 Gateway Blvd., Ste. 212, Richardson, TX 75080 Main: 214-660-2000 I Office: 972-234-33-33 I Fax: 972-234-3331 www.vailcpas.com

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# SIXTEE SECURITIES, INC. STATEMENT OF FINANCIAL CO NDITION DECEMBER 31 , 2018

# ASSETS

| Current assets                                                  |               |
|-----------------------------------------------------------------|---------------|
| Cash and cash equivalents                                       | 67,401        |
| Clearing deposit                                                | 501, 11<br>3  |
| Clearing firm -<br>other                                        | 15,91<br>5    |
| Prepaid expenses and other assets                               | 7,282         |
| Total current assets                                            | 591,711       |
| TOT AL ASSETS                                                   | \$<br>591,711 |
| LlABlLITIES AND MEMBER'S E<br>QUITY                             |               |
| Current liabilities                                             |               |
| Accounts payable and accrued expenses                           | \$<br>10,354  |
| Affiliated company payable                                      | 106,000       |
| Due to broker                                                   | 71 ,401       |
| rent liabilities<br>Total cur                                   | 187,755       |
| STOCKHOL<br>QUITY<br>DER<br>'S E                                |               |
| thorized; l 00,000 shares<br>Common Stock ( 1,000,000 shares au |               |
| issued and outstanding; No par value)                           | 1,000         |
| Additional paid-in capital                                      | 1,264,107     |
| Accumulated deficit                                             | (86l,151)     |
| TOTAL STOCKHOLDER'S EQUITY                                      | 403,956       |
| TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                      | \$<br>591,711 |

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# SIXTEEN SECURITIES, rNC. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2018

| Revenue                             |                 |
|-------------------------------------|-----------------|
| Commissions                         | 11,292<br>\$    |
| Interest income                     | 4,342           |
|                                     | 15,634          |
| Expenses                            |                 |
| Commissions and clearance paid      | 190,234         |
| Regulatory fees and expenses        | 11 ,840         |
| Professional Fees                   | 80,3<br>18      |
| Occupancy                           | 15,355          |
| Salaries                            | 382,500         |
| Technology expenses                 | 1,000           |
| General and administrative expenses | 14,971          |
|                                     |                 |
|                                     | 696,21<br>8     |
| Net Loss                            | (680,584)<br>\$ |

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#### SIXTEEN SECURITIES, INC. STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY FOR THE YEAR ENDED DECEMBER 31, 2018

|                              | Number of<br>Shares<br>Amount<br>Outstanding |    | Paid-In<br>Capital |    | Retained<br>Earnings | Total<br>Stockholder's<br>Equity |    |           |
|------------------------------|----------------------------------------------|----|--------------------|----|----------------------|----------------------------------|----|-----------|
| Balance at January l, 2018   | 100,000                                      | \$ | 1,000              | \$ | 584, I 07            | \$ ( 180,567)                    | \$ | 404,540   |
| Contributions                |                                              |    |                    |    | 680,000              |                                  |    | 680,000   |
| Distributions                |                                              |    |                    |    |                      |                                  |    |           |
| Net Loss                     |                                              |    |                    |    |                      | (680,584)                        |    | (680,584) |
| Balance at December 31, 2018 | 100,000                                      | \$ | 1,000              | \$ | 1,264, I 07          | \$ (861, 151)                    | \$ | 403,956   |

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# SIXTEE SECURITIES, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2018

| Cash flows from operating activities:              |                 |
|----------------------------------------------------|-----------------|
| Net Loss                                           | (680,584)<br>\$ |
| Adjustrnents to reconcile net income to net cash   |                 |
| flows used in operating activites:                 |                 |
| (Increase) decrease in operating assets:           |                 |
| Clearing deposit                                   | ( 100,443)      |
| Prepaid expenses                                   | (2,22 l)        |
| Other assets                                       | (15,916)        |
| lncrease (decrease) in operating liabiUties:       |                 |
| Accounts payable and accmed expenses               | ( 14,650)       |
| ted company Payable<br>Affilia                     | 106,000         |
| Due to broker                                      | {53)22)         |
| Total adju<br>stments                              | (80,952)        |
| Net cash used in operating activities              | (761 ,536)      |
| Cash flows from fioan cing activities:             |                 |
| Member Contributions                               | 680,000         |
| Net cash provided by f"uiaocing activities         | 680,000         |
| Net decrease in cash                               | (81 ,536)       |
| Cash, January 1, 2018                              | 148,937         |
| Cash, December 31, 2018                            | 67,401<br>\$    |
| Supplemental disclosures of cash flow information: |                 |
| Cash paid during the year for:                     |                 |
| Interest expense                                   | \$              |
| Income taxes                                       | \$              |
|                                                    |                 |

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# SIXTEEN SECURITIES, INC. STATEMENT OF CHANGES TN LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS FOR THE YEAR ENDED DECEMBER 31, 2018

| \$ |
|----|
|    |
|    |
| \$ |
|    |

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#### SIXTEEN SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

#### 1. ORGANIZATION AND NATURE OF BUSINESS:

#### Business

Sixteen Securities, Inc, (the "Company"), formerly Tryco Securities, lnc» is a broker-dealer registered with the Securities a11d Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FfNRA"). The Company is a whole-owned subsidiary of Sixteen Markets, Inc. ("Parent") and remains a registered broker dealer. Tt is authorized to engage in transactions in listed and over-the-counter corporate equities securities. The Company introduces its accounts on a fully-disclosed basis.

# 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLlCIES

# Basis of Presentation

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).

#### Commissions

Commissions and related clearing expenses are recorded on a trade-date basis as securities transactions occur.

#### Income Taxes

The Company provides for income taxes for the tax effects of transactions reported in the financial statements.

#### Estimates

The preparation of financial statements in conformity with GAAP 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. Actual results could differ from these estimates.

#### 3. FAIR VALUES OF MEASURMENT

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which. prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a Liability in an or<lerly transaction between market participants at the measurement date. A fair va Jue measurement assumes that the transaction to see the assets or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure fair value.

The fa ir value hierarchy prioritizes thie inputs to valuation techniques used to measure fair value into three broad levels:

Level -0ne inputs arc quoted prices (unadjusted) in active markets for identical assets or liabilities the Company has access to.

Level two inputs are iinputs (other than quoted prices included in level One) that are observable for the asset or liability, either directly or indirectly.

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#### SIXTEEN SECURITIES, INC. NOTES TO FINANCIAL ST ATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

Level three inputs are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pridng the asset or liability

The carry amounts of :assets in the baLance sheet approximate fair value.

### 4. RECEIVABLES AND PAYABLES FROM BROKERS

### Clearing Deposit

The Company has a clearing agreement under which it is req11ired to maintai n a cash deposi t with a clearing organization in the amount of \$500,000. This amount was not required at year-end as the Company had not commenced transactions with foreign customers. This clearing deposit shall remain oa deposit with the clearing organizatiolll for a period no later than thirty (30) days subsequent to the tennination of the agreement.

### 5. NET CAPITAL REQULREMENT

The Company is subject to the SEC Unifonn Ne1 Capi1al Rule (Rule I 5c3- 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 l5 to 1. Rule 15c3- I also provides that equity capita l may not be withdrawn or cash div idends paid if the resulting net capital ratio would exceed I 0 to I. At December 31, 2018, the Company had net capital of\$396,674, which was \$384,157 in excess of its required net capital of \$12,517. The Company's ratio of aggregate indebtedness to net capital was 0.47 to I.

### 6. EXEMPTION FROM RULE 1SC3-3

The Company is exempt from the Securities and Exchange Commission Rule J 5c3-3 and tbereforc is not required to maintain Special Reserve Bank Account for the Exclusive Benefit of Customers.

### 7. GUARANTEES

FASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. F ASB ASC 460 defines guarantees as contracts and indemnification agreements that conti11gently require a guarantor to make payments to the guaranteed party based on changes in an underlying factor (such as an interest rate or foreign exchange rate, security or commodity price, and index or the occurrence or nonoccurrence of a specified event) related to an asset, liability or equity security of a guaranteed party. This guidance .also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees or indebtedness of others.

The Company has issued no guarantees at December 31 , 20 I 8 or during the year then ended.

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#### SIXTEEN SECURITIES, fNC. NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

# 8. COMMITMENTS AND CONTINGENCIES

#### *Commitments*

The Company had no commitments, no contingent liabilities and had not been named as a defendant in any lawsuit at December 31, 20 18 or during the year then ended.

#### 9. RECENTLY ISSUED ACCOUNTING STANDARDS

The Financial AccouJ1ting Standards Board (the "FASB") has established the Accounting Standards Codification ("Codification" or "ASC") as the authoritative source of generally accepted accounting principles ("GAAP") recognized by the F ASB. The principles embodied in the Codification are to be applied by nongoverru11ental entities in the preparation of financial statements in accordance with GAAP in the United States. New accounting pronouncements are incorporated into the ASC through the issuance of Accounting Standards Updates ("ASUs").

For the year ending December 3 1, 2018, various AS Us issued by the FASB were either newly issued or had effective implementation dates that would require their provisions to be reflected in the financial statements for the year then ended. The Company has either evaluated or is currently evaluating the implications, if any, of each of these pronouncements and the possible impact they may have on the Company's financial statements. In n10st cases, management has detennined that the pronouncement has either limited or no application to t he Company and, in a ll cases, implementation would not have a material impact on the financial statements taken as a whole.

#### JO. RELATED-PARTY TRANSACTIONS

The Company is allocated the salary expense of personnel who are compensated by its Parent and also charged a technology fee. For the year ended December 31 , 2018 the company had allocated salary expense of \$382,500 and technology of \$1,000. At December 31, 2018 the Company owed the Parent \$106,000.

### 11. SUBSEQUENT EVENTS

The Company has evaluated events subsequent to the financial issuance date for items requiring recording or disclosure in the financial statements. The evaluation was perfom1ed through the date the financial statements were available to be issued. Based upon this review, the Company has determined that there were no events which took place that would have a material impact on its financial statements.

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# SIXTEEN SECURITIES, INC. SCHEDULE OF COMPUTATION OF NET CAPITAL FOR BROKERS AND DEALERS UNDER SEC RULE 15c3-1 FOR THE YEAR ENDED ECEMBER 31, 2018

| Total stockholder's equity                                                                                     | \$<br>403,956 |
|----------------------------------------------------------------------------------------------------------------|---------------|
| Non-allowable assets, deductions and charges:<br>Prepaid expenses<br>7,282                                     |               |
| Total non-allowable assets, deduction<br>s and charges                                                         | 7,282         |
| Net capital                                                                                                    | \$<br>396,674 |
| et capital requirements<br>Computation of basic n                                                              |               |
| Minimum net capital required (6 2/3%<br>of aggregate indebtedness of\$187,755)                                 | \$<br>12,517  |
| Minimum dollar net capital requirement                                                                         | 5,000         |
| Minimum capital required                                                                                       | 12,517        |
| Excess net capital                                                                                             | \$<br>384,157 |
| Net capital less greater of 10% of aggregate indebtedness or<br>120% of minimum dollar net capital requirement | \$<br>377,899 |
| tion of aggregate indebtedness<br>Computa                                                                      |               |
| Total aggregate indebtedness in the statement<br>of financial condition                                        | \$<br>187,755 |
| Percentage of aggregate indebtedness to net capital                                                            | 47%           |
| Ratio of aggregate indebtedness to net capital                                                                 | 0.47 to I     |

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# SIXTEEN SECURJTJ ES, INC. SCHEDULE OF RECONCILIATION OF NET CAPITAL PER FOCUS REPORT WITH AUDIT REPORT FOR THE YEAR ENDED DECEMBER 31, 2018

| Net capital, as reported in Company's Part TIA unaudited Focus Repor1 | \$<br>396,674 |
|-----------------------------------------------------------------------|---------------|
| Net capital, per report pursuant to Rule I 7a -<br>5(d)               | \$<br>396,674 |

Reconciliation With The Company's Computations:

A reconciliation is not necessary pursuant to rule l 7a-5(d)( 4) since there were no material differe ce~ between the computations of aggregate indebtedness and net capital as computed above and the computatfon by the Company included in Form X-17A-5 as of December 31, 2018, filed on January 25, 20 19.

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The Company is exempt from SEC Rule 15c3-3 under paragraph (k)(2)(ii) of t]1at rule.

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# SIXTEEN SECURITIES, INC. COMPUTATION FOR DETERMINATION OF THE RESERVE REQUIREMENTS UNDER SEC RULE 1Sc3-3 FOR THE YEAR ENDED DECEMBER 31, 2018

T he Company js exempt from SEC Rule l5c3-3 under paragraph (k)(2)(ii) of that rule.

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Michael G. \lad, CPA ~rlcsT.Gr~ CPA Don E. Graves, CPA Olnesh J. Pai, CISA

Members: Arncnan lnrotutc of C1'As TeMS Soc:~ty of CPAs

#### REPORT OF lNOEPENDENT REGISTERED PUBLIC ACCOUNTING Fl Rl\.1

To 1hc Board or Dircc1ors of Sixteen, Securities, Inc.

We have reviewed managcJncnt's statements, included in the accompanying Sixtcc11. Securities. Inc. (the "Company") Exemption Report, in which ( I) the Compan y identified the following provisions of 17 C.f .R. §I 5c3-3(k) under which the Company claimed an exemption from 17 C.F.R. §240. I 5c3-3: (k)(2)(ii) (the "exemption provisions") and (2) the Company stated tJ1a1 the Company met tJ1e identified exemption provisions tJ1roughou1 the most recent fiscal year witJ1out exception. the Company's management is responsible for compliance with the cxemprion provisions arld its statements.

Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United Stales) and. accordingly, included imquiries and other required procedures to obtain evidence about the Company's compliance with tJie exemption provisions. A review is substantially less in scope than an examination. 111 e objective of which is tJ1e expression of an opinion on managemem's statements. Accordingly, we do not express such an opinion.

Based on our review, we arc 111ot 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 Ruic I 5c3-3 under the Securities Exchange Act of 1934.

Richardson. Texas February 25. 2019

1801 Gateway Blvd., Ste. 212, Richardson, TX 75080 Main: 214-660-2000 I Office: 972·234-33-33 I Fax: 972-234-3331 www.vailcpas.com

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#### SIXTEEN SECURITIES, INC.

#### 5790 SUNSET DRIVE

#### SOUTH MlAMI, FL33143

#### Exemption Repoll't

Sixteen Securities, Inc. is a registered broker-dealer subject to Rule I 7a-5 promulgated by Securities and Exchange Commission (17 C.F.R. 240. l 7a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. 240.17a-5(dXI) and (4). To the best of its knowledge and belief, the C<>mpany states the following;

- I. The Company claimed an exemption from 17 C.F.R. 240. I ScJ-3 under the following provisions of 17 C.F .R. 240. I 5c3-3(k)(2Xii).
- 2. The Company met the identified exemption provisions in 17 C.F .R. 240 J Sc3-3(kX2)(ii) throughout the period January I, 2018 to December 3, I, 2018 without exception.

Sixteen Securities, Inc.

I, Gary Wiedman, swear (or affinn) that, to my best knowledge and belief, this Exemption Report is true and correct. Q ,

I By: ,, *c£o ( kb fi,,\_,ei* D zo1:i \_\_

NEAL AUMAN Notary Public of New Jersey ID #2165766 Commission Expjres May 25, 2019


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