# TANDEM SECURITIES, INC. X-17A-5 (2024-03-27) — Broker-dealer annual report - Company: TANDEM SECURITIES, INC. - Form: X-17A-5 - Filed: 2024-03-27 - Period: 2023-12-31 - Accession: 0001360503-24-000002 - CIK: 1360503 - File #: 8-67321 - Type: Broker-dealer - Material weakness: No - Auditor: Ohab and Company, PA - Auditor location: Maitland, FL - Contact: Carl Lindner - Phone: 919-321-0716 - Signed by: Kristopher Miller (President) Original filing: https://www.sec.gov/Archives/edgar/data/1360503/000136050324000002/2023_P_chrome.pdf --- {0}------------------------------------------------ | PUBLIC | UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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hours per response: 12 | |--------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|-----------------------------------------------------------------------------------------------------------------------| | | ANNUAL REPORTS | | SEC FILE NUMBER | | | FORM X-17A-5 | | | | | PART III | | | | | 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 | 25 | AND ENDING | 12/3/12-5 | | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | | | | | | TYPE OF REGISTRANT (check all applicable boxes): | 🇿 Broker-dealer
O Check here if respondent is also an OTC derivatives dealer | | | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) | | | | | 706 SW 10peka Blvd Ste | | | | | (No. and Street) | | | | ope Ka | నె | | Colora | | (City) | (State) | | (Zip Code) | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | instopher Miller | (785) 266-853 | | | | (Name) | (Area Code - Telephone Number) | (Email Address) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | OHAB AND COMPANY, PA | | | | | | (Name - if individual, state last, first, and middle name) | | | | | 100 E SYBELIA AVENUE, SUITE 130 MAITLAND | FL | 32751 | | (Address) | (City) | (State) | (Zip Code) | | JULY 28, 2004 | | 1838 | | | (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 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)(1)(ii), if applicable. displays a currently valid OMB control number. {1}------------------------------------------------ #### OATH OR AFFIRMATION 1, \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ March 2022, 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_3.jpeg) Signature; Title: Notary Public ### This filing\*\* contains (check all applicable boxes): - = (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). - O (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 240.18a-1, as applicable. - 0 (i) Computation of tangible net worth under 17 CFR 240.18a-2. - 口 (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. - [] (I) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3. - □ (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. - O (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 capible net worth under 17 CFR 240.15c3-1, 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. - □ (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - (t) Independent public accountant's report based on an examination of the statement of financial condition. - 口 (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. - 口 (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 accordance with 17 CFR 240.17a-12, as applicable. - (y) Report describing any material inadequacies 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). - O (z) Other: - \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e/(3) or 17 CFR 240.18c-7(d)(2), as applicable. {2}------------------------------------------------ Financial Statements for the Year Ended December 31, 2023 and Report of Independent Registered Public Accounting Firm {3}------------------------------------------------ ![](_page_3_Picture_0.jpeg) 100 E. Sybelia Ave. Suite 130 Maitland, FL 32751 Certified Public Accountants Email: pam(@ohabco.com Telephone 407-740-7311 Fax 407-740-6441 ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Tandem Securities, Inc. #### Opinion on the Financial Statement We have audited the accompanying statement of financial condition of Tandem Securities, Inc. as of December 31, 2023, 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 Tandem Securities, Inc. 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 Tandem Securities, Inc.'s management. Our responsibility is to express an opinion on Tandem Securities, Inc.'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 Tandem Securities, Inc. 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 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 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. We have served as Tandem Securities, Inc.'s auditor since 2016. Maitland, Florida March 21, 2024 {4}------------------------------------------------ ### **Statement of Financial Position December 31, 2023** ### **Assets** | Cash
Accounts receivable
Prepaid expenses | \$
10,983
14,463
10,967 | |------------------------------------------------------|----------------------------------| | Total assets | \$
36,413 | | | | | Liabilities and Stockholder's Equity | | | Liabilities: | | | Commissions payable | \$
13,584 | | Total liabilities | 13,584 | | Stockholder's equity: | | | Common stock, no par value, 5,000 shares authorized, | | | 1,000 shares issued and outstanding | \$
15,000 | | Additional paid-in capital | 101,140 | | Retained earnings (deficit) | (93,311) | | Total stockholder's equity | 22,829 | | Total liabilities and stockholder's equity | \$
36,413 | The accompanying notes are an integral part of these financial statements. {5}------------------------------------------------ # **Notes to Financial Statements December 31, 2023** ## **Note 1 - Summary of Significant Accounting Policies** ### Organization Tandem Securities, Inc. (the Company) is a broker-dealer registered with the Securities and Exchange Commission and Financial Industry Regulatory Authority (FINRA). The Company was organized on March 15, 2006 and was granted membership in FINRA effective October 25, 2006. The Company concentrates in the marketing of mutual funds and annuities covering the State of Kansas. ### Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. ### Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all cash and investments with an original maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2023. ### Accounts Receivable The Company uses the allowance for doubtful accounts method of valuing doubtful accounts receivable, which is based on historical experience coupled with a review of the current status of existing receivables. Based upon its review, management considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. ### Property and Equipment Property and equipment are recorded at cost and consist of items with original cost greater than \$1,000 and a useful life greater than one year. The Company's property and equipment consists of computer equipment and a website. Depreciation is provided on the straight-line method over the estimated useful lives of assets, which are generally three to five years. Assets acquired under capital leases are capitalized and amortized over a period not in excess of applicable lease terms. Expenditures for major renewals and improvements are capitalized. Expenditures for maintenance and repair are charged to expense as incurred: When equipment is retired or otherwise disposed of, the related costs and accumulated depreciation or amortization are removed from the accounts, and any gain or loss is reflected in income. {6}------------------------------------------------ # **Notes to Financial Statements December 31, 2023** ## **Note 1 - Summary of Significant Accounting Policies** (continued) Property and equipment are summarized by major classifications as follows: | | December 31, 2023 | | | |-------------------------------|-------------------|--|--| | Equipment | \$
18,184 | | | | Website | 7,534 | | | | | 25,718 | | | | Less accumulated depreciation | (25,718) | | | | Net property and equipment | \$
- | | | Depreciation expense was \$1,481 for the year ended December 31, 2023. ### Income Taxes The Company, with the consent of its stockholder, has elected to be taxed as a pass-through entity under sections of federal and Kansas income tax law, which provide that, in lieu of corporation income taxes, the stockholder separately accounts for his pro rata shares of the Company's items of income, deductions, losses and credits. As a result of this election, no income taxes have been recognized in the accompanying financial statements. The Company's policy is to evaluate uncertain tax positions annually. Management evaluated the Company's tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements. The Company files income tax returns with the U.S. federal jurisdiction, Kansas, and various other state jurisdictions. The Company is generally not subject to income tax examinations for tax years before 2020. ### Subsequent Events The Company has evaluated those events and transactions that occurred through the date the financial statements were available to be issued. No material events or transactions have occurred during this period which would render the financial statements to be misleading. ## **Note 2 – Revenue from Contracts with Customers** The Company may receive commissions that are paid by the fund or variable annuity up front, over time, upon the investor's exit from the fund or variable annuity (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Fixed commission amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, the uncertainty is dependent on the value of the shares at future points in time and may be dependent on the length of time the investor remains in the fund or {7}------------------------------------------------ # **Notes to Financial Statements December 31, 2023** ## **Note 2 – Revenue from Contracts with Customers (continued)** variable annuity, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund or variable annuity and the investor activities are known, which are usually monthly or quarterly. A liability to the Company's representatives for commissions payable related to those policies, if any, is recognized with the recognition of the revenue from these policies. Distribution fees - The Company enters into arrangements with managed accounts or other pooled investment vehicles (funds) to distribute shares to investors. The Company may receive distribution fees paid by the fund up front, over time, upon the investor's exit from the fund (that is, a contingent deferred sales charge), or as a combination thereof. The Company believes that its performance obligation is the sale of securities to investors and as such this is fulfilled on the trade date. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are usually monthly or quarterly. Distribution fees recognized in the current period are primarily related to performance obligations that have been satisfied in prior periods. ## **Note 3 - Net Capital Requirements** The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC 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. Rule 15c3-1 also provides that equity capital may not be withdrawn, or cash dividends paid if the resulting net capital ratio would exceed 10 to 1. As of December 31, 2023, the Company had net capital of \$11,862 which was \$6,862 in excess of its required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital was 1.15 to 1. ## **Note 4 – Related Party Transactions** The Company has an expense sharing agreement with T&M Financial, Inc. (T&M). T&M is an entity owned by an immediate family member of the Company's shareholder and President. T&M agrees to pay 100% of the rent for the shared space which includes cleaning, utilities, meeting room access, copy and supply access, reception of clients and parking. The Company is billed for actual postage and photocopying costs. {8}------------------------------------------------ # **Notes to Financial Statements December 31, 2023** # **Note 4 – Related Party Transactions** (continued) The Company's portion of shared payroll and benefits expenses was 50% for the President (and Shareholder) and his assistant for the year ended December 31, 2023. In addition, the Company's portion of shared payroll and benefits expenses for two shared employees was 100% for the year ended December 31, 2023. These percentages are an estimate of time these employees spent on Company operations. The total amounts incurred by the Company to T&M during 2023 were \$41,551 related to payroll and benefits, and \$2,912 for postage and photocopying. There was no amount due to T&M Financial at December 31, 2023. Amounts incurred to the President of the Company and family members of the President of the Company in commissions during 2023 was \$302,287. The amount due to the President of the Company and family members of the President of the Company at December 31, 2023 was \$4,479 in commissions payable. # **Note 5 – Lease Commitments** The Company leases software under the terms of a month-to-month operating lease that is cancellable at any time. Software lease expense for 2023 was \$8,400. # **Note 6 – Concentrations** Commission income generated through one carrier constituted approximately 83% of total revenues for the year ended December 31, 2023. # **Note 7 – Commitments and Contingencies** The Company has no other commitments and contingencies except as noted above in Note 5. # **Note 8 – Credit Losses** The Company follows 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 Company 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 had accounts receivable as of December 31, 2022 and 2023 of \$10,387.62 and \$14,463.63 respectively. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.