# SEQUENCE FINANCIAL SPECIALISTS LLC X-17A-5 (2024-03-22) — Broker-dealer annual report - Company: SEQUENCE FINANCIAL SPECIALISTS LLC - Form: X-17A-5 - Filed: 2024-03-22 - Period: 2023-12-31 - Accession: 0001303465-24-000003 - CIK: 1303465 - File #: 8-66657 - Type: Broker-dealer - Material weakness: No - Auditor: Phillip V. George, PLLC - Auditor location: Celeste, TX - Contact: W. Michael Grady - Phone: 843-863-8222 - Email: mgrady@sequencefinancialspecialists.com - Website: sequencefinancialspecialists.com - Signed by: W. Michael Grady (Maning Principal) Original filing: https://www.sec.gov/Archives/edgar/data/1303465/000130346524000003/2023sequencepublicaudit-.pdf --- {0}------------------------------------------------ OMB APPROVAL **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** OMB Number:323S-0123 Expires:Nov.30,2026 Estimated average burden hours per response: 12 **ANNUAL REPORTS FORM X-17A-5 PART III** SEC FILE NUMBER 8-66657 **FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** 01/01/2023 12/31/2023 **FILING FOR THE PERIOD BEGINNING AND ENDING** MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION NAME OF FIRM:**Sequence Financial Specialists LLC **TYPE OF REGISTRANT (check all applicable boxes): 0 Broker-dealer Security-based swap dealer Major security-based swap participant** Check here if respondent is also an OTC derivatives dealer **ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)** 181 E Evans St, Suite C-1 (No. and Street) Florence SC 29506 (City) (State) (Zip Code) **PERSON TO CONTACT WITH REGARD TO THIS FILING** W. Michael Grady 843-853-8222 mgrady@sequencefinancialspecialists.com (Name) (Area Code -Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\*** Phillip V. George, PLLC (Name -if individual,state last,first,and middle name) 5179 CR 1026 Celeste TX 75423 (Address) (City) (State) (Zip Code) 02/24/2009 3366 (Date of Registration with PCAOB)(if applicable) (PCAOB Registration Number,if applicable) **FOR OFFICIAL USE ONLY** \* 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-5(e)(l)(ii),if applicable. Persons who are to respond tothe collection of information containedin this form are notrequired to respond unless the form displays a currently valid OMB control number. {1}------------------------------------------------ #### **OATH OR AFFIRMATION** |
( | swear (or affirm) that,
the best of my knowledge and belief,
W. Michael
to
the
Grady | | | | | | |------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|--|--|--|--| | | j as of
financial report pertaining to
the firm of Sequence Financial Specialists LLC | | | | | | | | 12/31
, is true and correct. Ifurther
swear (or affirm) that neither the company nor any
22023 | | | | | | | | partner,officer,
or equivalent person,
director,
as the case may be,
has any proprietary interest in any account classified solely | | | | | | | | as that of a customergTATE
OF SOUTH CAROLINA | | | | | | | | COUNTY OF FLORENCE | | | | | | | | Signature:
Sworn to (or affirmed)
and sybscribed before me
1, | | | | | | | | 20^
,
this jfZ
day of

Title: | | | | | | | | by
Managing Principal | | | | | | | | | | | | | | | | AT
Notary Public | | | | | | | | My CommissionExp | | | | | | | | contains (check all applicable boxes):
This filing** | | | | | | | B | (a) Statement of financial condition. | | | | | | | B | (b) Notes to consolidated statement of financial condition. | | | | | | | | there is other comprehensive income in the period(s) presented,
(c) Statement of income (loss) or,if
a statement of | | | | | | | | comprehensive income (as defined in § 210.1-02 of Regulation S-X). | | | | | | | | (d) Statement of cash flows. | | | | | | | | or partners'
or sole proprietor's
(e) Statement of changes in stockholders'
equity. | | | | | | | | (f) Statement of changes in liabilities subordinated to claims of creditors. | | | | | | | | l
l
(g) Notes to consolidated financial statements. | | | | | | | | ,
as applicable.
(h) Computation of net capital under 17 CFR 240.15c3-
or 17 CFR 240.18a- | | | | | | | | (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. | | | | | | | | for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.
(I) Computation | | | | | | | | (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | | | | | | (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. | | | | | | | | l
l
(o) Reconciliations,including
appropriate explanations,
of the FOCUS Report with computation of net capital or tangible net | | | | | | | | or 17 CFR 240.18a-2,as
,
,
applicable,
17 CFR 240.18a-
and the reserve requirements under 17
worth under 17 CFR 240.15c3- | | | | | | | | material differences exist,
as applicable,if
CFR 240.15c3-3 or 17 CFR 240.18a-4,
or a statement that no material differences | | | | | | | | exist. | | | | | | | | (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
17 CFR 240.17a-12,
or 17 CFR 240.18a-7,
(q) Oath or affirmation in accordance with 17 CFR 240.17a-5, | | | | | | | B | as applicable.
(r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7,
as applicable. | | | | | | | | (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7,
as applicable. | | | | | | | B | Independent public accountant's
(t)
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. | | | | | | | | (v) 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
or 17 CFR 240.17a-12,
accordance with 17 CFR 240.15c3-le | | | | | | | | as applicable. | | | | | | | | (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: | | | | | | *\*\*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}------------------------------------------------ # **SEQUENCE FINANCIAL SPECIALISTS LLC** # **AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023** **PUBLIC REPORT** {3}------------------------------------------------ # **SEQUENCE FINANCIAL SPECIALISTS LLC AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2023** | TABLE
OF
CONTENTS | Page | |---------------------------------------------------------------------------|-------| | Report
of
Independent
Registered
Public
Accounting
Firm | 1 | | Statement
of
Financial
Condition | 2 | | Notes
to the
Financial
Statements | 3 - 8 | {4}------------------------------------------------ #### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Managing Member Sequence Financial Specialists LLC #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Sequence Financial Specialists LLC as of December 31, 2023, and the related notes (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of Sequence Financial Specialists LLC as of December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. #### Basis for Opinion This financial statement is the responsibility of Sequence Financial Specialists LLC's management. Our responsibility is to express an opinion on Sequence Financial Specialists 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 Sequence Financial Specialists LLC in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assessthe 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 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 our opinion. PHILLIP V. GEORGE, PLLC We have served as Sequence Financial Specialists LLC auditor since 2021. Celeste, Texas March 19, 2024 ![](_page_4_Picture_12.jpeg) {5}------------------------------------------------ # **SEQUENCE FINANCIAL SPECIALISTS LLC STATEMENT OF FINANCIAL CONDITION DECEMBER 31, 2023** # ASSETS | Cash | \$
209,014 | |------------------------------------------------------------------------|---------------| | Accounts receivable | 148,306 | | Prepaid expenses | 71,299 | | Property and equipment,
net of accumulated depreciation of \$53,048 | 4,458 | | Right of use asset | 36,892 | | Total Assets | \$
469,969 | ### **LIABILITIES AND MEMBER'S EQUITY** | LIABILITIES | | | |----------------------------------------|----|---------| | Accounts payable | \$ | 21,093 | | Accrued compensation and related costs | | 130,301 | | Accrued expenses | | 20,842 | | Operating lease liability | | 36,892 | | Total Liabilities | | 209,128 | | MEMBER'S
EQUITY | | 260,841 | | Total Liabilities and Member's Equity | \$ | 469,969 | See accompanying notes to financial statements. {6}------------------------------------------------ #### **1. ORGANIZATION AND NATURE OF BUSINESS** #### **Organization and Nature of Business** Sequence Financial Specialists LLC (the "Company"), was organized in April 2005 as a South Carolina limited liability company. TheCompany is a wholly owned subsidiary of Sequence Holdings,LLC(the "Parent"), a South Carolina limited liability company.The Company is registered as a broker-dealerwith the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. ("FINRA") and Securities Investor Protection Corp.("SIPC"). The Company is considered a Non-Covered Firm exempt from 17 C.F.R. § 240.15c3-3 relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5. The Company limits its business activities exclusively to (1) effecting securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company and (2) receiving transaction-based compensation for identifying potential merger and acquisition opportunities for clients and 3) referring securities transactions to other broker-dealers. The Company specializes in working with small to middle -market companies throughout the United States. The Company's operations consists of participating in the distribution of securities in private placement offerings, providing merger & acquisition and advisory services, serving as an administrative service provider to direct pooled investments for EB-5 transactions; and serving as referring broker dealer for EB5 transactions involving foreign investors. ### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** #### **Use of Estimates** The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of the 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 those estimates. #### **Property and Equipment** Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using accelerated methods over estimated useful lives of related assets. #### **Current Expected Credit Losses** The Company accounts for estimated credit losses on financial assets measured at an amortized cost basis and certain off-balance sheet credit exposures in accordance with FASB ASC 326-20, *Financial Instruments*—*Credit Losses.* FASB ASC 326-20 requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the balance sheet that adjusts the asset's amortized cost basis. Changes in the allowance for credit losses are reported in Credit Loss expense. {7}------------------------------------------------ #### **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED** #### **Revenue Recognition** 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. The majority of the Company's revenue arrangements generally consist of a single performance obligation. The Company participates in the distribution of securities in private placement offerings on a best-efforts basis. Each time a customer enters into a buy transaction, the Company charges a commission. Commissions are recognized at closing. The Company believes that the performance obligation is satisfied at closing because that is when the underlying private placement interest isidentified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to the customer. Revenue for merger and acquisition services is generally recognized at the point in time that performance under the arrangement is completed, generally the closing date of the transaction. Fees for transactions under the U.S. Citizenship and Immigrations Services Immigrant Investor Program ("EB-5 Program") are recognized by the Company over time as the performance obligations are simultaneously provided by the Company and consumed by the customers. #### **Advertising** The Company expenses advertising and promotion costs as they are incurred. For the year ended December 31, 2023, the Company had \$44,281 in promotion expenses. {8}------------------------------------------------ # **2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED** ### Leases The Company leases office space under noncancelable leases. The determination of whether an arrangement is a lease is made at the lease's inception. Under ASC842, a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. The office space lease is included in operating lease right-of-use (ROU) asset and operating lease liability in the statement of financial condition. There are currently no finance leases. ROU asset represents the right to use the underlying asset for the lease term, and lease liability represents the obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since the Company's lease does not provide an implicit rate, to determine the present value oflease payments,management usesthe Company'sincremental borrowing rate based on the information available at lease commencement. Operating lease ROU asset also includes any lease payments made and excludes any lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain the option will be exercised. The office lease agreement includes provisions for variable rent payments, which are adjusted periodically for inflation. The office lease agreement does not contain any material residual value guarantees. The Company has elected to apply the short-term lease exception to all leases with a term of one year or less. #### Income Taxes The Company is a single member limited liability company and is disregarded for federal income tax purposes. The Company's taxable income or loss is included in the Partnership tax return of its Parent, resulting in all the federal tax liabilities or benefits relating to the operations of the Company passing through to the members of the Parent; therefore, federal income taxes are not payable by, or provided for, the Company. {9}------------------------------------------------ #### **3. PROPERTY AND EQUIPMENT** Property and equipment at December 31, 2023 are as follows: | Software | 8,456
\$ | |------------------------------|-------------| | Office equipment & furniture | 49,050 | | | 57,506 | | Accumulated depreciation | (53,048) | | Net property and equipment | 4.458
S | # **4. NET CAPITAL REQUIREMENTS** The Company issubject to the SEC Uniform Net Capital Rule (SEC Rule 15c3-l),which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined,shall not exceed 15 to 1. Rule 15c3-l 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, 2023, the Company had net capital of \$53,168, which was \$41,686 in excess of its net capital requirement of \$11,482. The Company's net capital ratio was 3.24 to 1. ### **5. COMMITMENTS AND CONTINGENCIES** #### Office Lease The Company leases office space under noncancelable operating leases through September 2025. The following summarizes the line items in the statement of financial condition which include amounts for the office space lease as of December 31, 2023: | Operating
Lease | | | |--------------------|--|--| | Right-of-use-asset | | | | Lease
liability | | | The discount rate used on the operating lease was 0%. {10}------------------------------------------------ # **5. COMMITMENTS AND CONTINGENCIES - CONTINUED** # Office Lease - Continued The maturities of the lease liability as of December 31, 2023, were as follows: | 2024 | \$
27,541 | |----------------------------------------------|--------------| | 2025 | 9,351 | | Thereafter | | | Total
payments
lease | 36,892 | | Less:
interest | IQ) | | Present
value
of
lease
liability | \$
36.892 | Operating lease expense totaled \$64,754 for the year ended December 31, 2023, and is reflected in the accompany statement of operations as occupancy and equipment costs. #### Contingencies There are currently no asserted claims or legal proceedings against the Company, however, the nature of the Company's business subjects it to various claims, regulatory examinations, and other proceedings in the ordinary course of business. The ultimate outcome of any such action against the Company could have an adverse impact on the financial condition, results of operations, or cash flows of the Company #### **6. CONCENTRATION OF CREDIT RISK AND REVENUE** At various times during the year the Company maintains cash balances at one national bank in excess of federally insured amounts. Cash balances fluctuate on a daily basis. At December 31, 2023, there was no cash held in excess of the FDIC insurance. The Company has accounts receivable due from three customers totaling \$99,315, or approximately 67% of total accounts receivable and 21% of total assets, at December 31, 2023. During the year ended December 31, 2023, the Company earned 42% of its revenue from two EB5 customers and 14% of its revenue from one private placement customer. Due to the nature of the Company's business, the loss of a customer or the default on receivables due from customers could have an adverse effect on the Company's results of operations and financial condition. # **7. EMPLOYEE BENEFIT PLAN** The Company has a defined contribution plan covering substantially all employees. The Company and eligible employees both may contribute to the Plan. {11}------------------------------------------------ # **8. SUBSEQUENT EVENTS** Management has evaluated the effect subsequent events would have on the financial statements of the Company at December 31, 2023, through March 19, 2024, which isthe date the financial statements were available to issue. There were no material subsequent events requiring recognition or additional disclosure in these financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.