# BLUE SAND SECURITIES LLC X-17A-5 (2021-06-30) — Broker-dealer annual report - Company: BLUE SAND SECURITIES LLC - Form: X-17A-5 - Filed: 2021-06-30 - Period: 2021-03-31 - Accession: 0001385342-21-000005 - CIK: 1385342 - File #: 8-67514 - Material weakness: No - Auditor: Bauer & Company LLC - Auditor location: Austin, TX - Contact: Jeffrey Heller - Phone: 9736694744 - Website: bouerondcompany.com - Signed by: Nelson Cooney (Managing Partner) Original filing: https://www.sec.gov/Archives/edgar/data/1385342/000138534221000005/bluesandaudit321sec.pdf --- {0}------------------------------------------------ #### UNITEDSTAT£S SEClJRITIESANDEXCHANGECOMMISSJON Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours er res )Onse .. .. .. 12.00 > SEC FILE NUMBER 8-67514 # **ANNUAL AUDITED REPORT FORM X-17A-5 PARTIII** | FACING PAGE | | |-------------|--| Information Required of Brokers and Dealers Pursuant to Section 17 of the Securities Exchange Act of 1934 and **Rule** 17a-5 Thereunder | REPORT FOR THE PERIOD BEGINNING. | _f2_0 ____
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_ _ | |----------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|------------|-----------------------------------| | | MMIDD/YY | | MMIDD/YY | | | A. REGISTRANT IDEl'iT IFICATION | | | | NAME or BROKER-DEALER: Blue Sand Securities LLC | | | OFFICIAL USE ONLY | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.,l
900 Olney Sandy Spring Rd., Ste 28 | | | FIRM 1.D. NO. | | | (No. and Street) | | | | Sandy Spring | MD | | 20860 | | (Cit y) | (Stl !C) | | (Zip Code) | | NA ME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | | | (Arca Code - Tclcpho11e :slumber) | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report·• | | | | | Bauer & Company LLC | | | | | | (N;n nc - ({imliwdunl, scnre la.rr. fir.rt, m frfD | | | | | | | | J | | _____________
c__ | FO_R_O_F_F_I_C_IA_L_U_S_E_O_ N_L_Y | __________ | _ | | | | | | *' Ciai11J s for exemplio11 Ji·om the req11ire111e11t* r/w; *the w1111wl report be covered by 1he opimon of an i11depe11de111 public accnw,rw,r 11111st be s11ppo1·1ed* /;\_\' *a sta1eme111 offacrs mu/ circ11ms1w1ces relied 011 as lhe basis fnr the e.~e111prio11. See Section 240. I 7a-j(e)(2)* SEC 1410 (11-05) Potential persons who are to respond to the collection of Information contained in this form are not required to respond unless the form d isplays a currently valid 0MB control number. {1}------------------------------------------------ #### **OATH OR AFFIR!VIA TION** | my knowl edge and belief the accompanyingJfinancial statement and .rnpporting .~
chedulcs pcrwining to the firm of
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Signature
SOUDA HENG
Notary Public· State of Maryland
Montgomery County
My Commission Expir~s Aug '4, 2023
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Notary Publi c
This report"* contains (check all applicable boxes):
EJ (a) Facing Page.
EJ (b) Statement of Financial Condition.
EJ (c) St:.ncmcnt of Income (LoHi or. if there is orhcr comprehensive income in the perioof Comprchcnsi vc Income (a~ defined in §2 I 0.1-02 of Regulation S-X).
(d)
Statcm'.:nt of Changes in Financial Condition.
Statement of Changes in S1ockholdcrs' Equity or Parrnas
(c )
' or Sole Propridors · Capit;1l.
D
St.itemcnt or Changes in Liabiliti
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es Subordinated to Claims of Creditors.
Computation of Net Capital.
(g)
(h)
Computation for Determination of Reserve Requircmc111s Purwan1 10 Ruic I 5c3-3 .
(i)
[nformaLiun Rcla1ing to the Possession or Control Rcquiren1c1ns U11dcr Ruic 15c3 -3 .
0 (j)
t\ Reconc ili arion. including appropriate explanation of the Com putation of Net Capital Under Rule J 5c3- 1 and the
Computation for Dctcrmination or lhc Reserve Rcq
uircm::nrs Under Exhibit A of Ruic! I 5c3-3.
D (k) A Reconciliation bctwccn ihe autlilcconsolidation.
(I) An Oath or Affirmation.
(m-, A copy of Lhc SIPC Supplem.:ntal Report.
(n) A report dl!scribing :11:y matcriul inadcquucies found to exist or found to have existed since the date of the previous audit. | jUc? /_c; c:, ···
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r. | (.__,:c; c. ,,,e 0 | . swear (or affirm) that. ro lhc best of | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|--------------------|------------------------------------------| | | Blue Sand Securities LLC | | . as | | | of | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [B | | | | | | | | | | | | | | | | | | | | ~ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | "'• *For -:.:01Jditio11s of con(idenliui treatment o.f certain portions of r/,isfiling, see section 14ri. I ia-5(e){3).* {2}------------------------------------------------ (A LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES FOR THE YEAR ENDED March 31, 2021 WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM {3}------------------------------------------------ (A LIMITED LIABILITY COMPANY) ### **Table of Contents** | Report of Independent Registered Public Accounting Firm 1 | | |-----------------------------------------------------------------------------------------------------------------|--| | Financial Statements | | | Statement of Financial Condition 2 | | | Statement of Operations 3 | | | Statement of Changes in Members' Equity 4 | | | Statement of Cash Flows 5 | | | Notes to Financial Statements 6 | | | Supplementary Schedule I - Computation of Net Capital. 12 | | | Supplementary Schedules II & Ill. 13 | | | Independent Accountants' Report on Exemption 14 | | | Exemption Report 15 | | | Independent Accountants' Agreed-Upon Procedures Report
Related to SIPC Assessment Reconciliation . 16 | | | SIPC General Assessment Reconciliation Form SIPC-7 17 | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Member of Blue Sand Securities, LLC ### **Opinion on the Financial Statements** We have audited the accompanying statement of financial condition of Blue Sand Securities, LLC as of March 31, 2021, the related statements of operations, changes in member's equity, and cash flows for the year then ended, and the related notes and schedules ( collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Blue Sand Securities, LLC as of March 31 , 2021, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. ### **Basis for Opinion** These financial statements are the responsibility of Blue Sand Securities, LLC's management. Our responsibility is to express an opinion on Blue Sand Securities, LLC's financial statements 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 Blue Sand Securities, 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 statements are 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 statements, 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. ### **Auditor's Report on Supplemental Information** The Computation of Net Capital and Aggregate Indebtedness Pursuant to Rule 15c3-l of the Securities and Exchange Commission (Schedule I), the Computation for Determination of Reserve Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule II) and the Information Relating to the Possessions or Control Requirements Under Rule 15c3-3 of the Securities and Exchange Commission (Schedule III) (the "Supplemental Information") has been subjected to audit procedures performed in conjunction with the audit of Blue Sand Securities, LLC's financial statements. The supplemental information is the responsibility of Blue Sand Securities, LLC's management. Our audit procedures included determining whether 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 information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with 17 C.F.R. §240.l?a-5. In our opinion, the Supplemental Information is fairly stated, in all material respects, in relation to the financial statements as a whole. **BAUER** & **COMPANY, LLC** We have served as Blue Sand Securities, LLC's auditor since 2015. Austin, Texas June 30, 2021 Bauer & Company, LLC P.O. Box 27887 Austin, TX 78755 Tel 512.73 1.35 18 / www.bauerandc ompany .com {5}------------------------------------------------ (A LIMITED LIABILITY COMPANY) #### **STATEMENT OF FINANCIAL CONDITION March 31 , 2021** ### **ASSETS** | CURRENT ASSETS: | | |---------------------------|------------------| | Cash and cash equivalents | 1,564,547
\$ | | Accounts receivable | 2,229,357 | | Prepaid expense | 5,943 | | TOTAL CURRENT ASSETS | 3,799,847 | | | I | | Net fixed assets | I
7,437 | | Other assets: | | | Deposits | 173,545 | | TOTAL OTHER ASSETS | I
173,545 | | TOTAL ASSETS | I\$
3,980,829 | | | | ### **LIABILITIES AND MEMBERS' EQUITY** | CURRENT LIABILITIES:
Commissions payable | \$ | 1,883,175 | |---------------------------------------------|-----|-----------| | Accrued expenses | | 33,355 | | PPP loan | | 132,916 | | Pension payable | | 534,821 | | TOTAL CURRENT LIABILITIES | I | 2,584,267 | | MEMBERS' EQUITY | I | 1,396,562 | | TOTAL LIABILITIES AND MEMBERS' EQUITY | I\$ | 3,980,829 | | | | | {6}------------------------------------------------ (A LIMITED LIABILITY COMPANY) | FOR THE YEAR ENDED MARCH 31, 2021 | | | |-----------------------------------------------|-----|-----------| | | | | | REVENUE
Management fee | | | | Retainer | \$ | 7,881,606 | | Total revenue | | 378,000 | | | I | 8,259,606 | | OPERATING EXPENSES: | | | | Commission expense | | 6,591,398 | | Insurance | | 19,424 | | Consulting | | 383,873 | | Pension | | 610,083 | | Payroll | | 338,258 | | Professional fees | | 352,318 | | Travel and entertainment | | 66,849 | | Rent | | 109,963 | | Regulatory fees | | 64,240 | | Other expenses | | 12,028 | | Dues and subscriptions | | 32,731 | | Utilities | | 3,111 | | Depreciation | | 1,378 | | Total operating expenses | I | 8,585,654 | | Net loss before other income and income taxes | I | (326,048) | | Other income: | | | | Interest income | | 3,446 | | Net loss before income taxes | I | (322,602) | | Income tax expense | | 127,028 | | NET LOSS | I\$ | (449,630) | # **STATEMENT OF OPERATIONS** {7}------------------------------------------------ (A LIMITED LIABILITY COMPANY) #### **STATEMENT OF CHANGES IN MEMBERS' EQUITY** FOR THE **YEAR ENDED MARCH 31, 2021** | MEMBERS' EQUITY, APRIL 1, 2020 | \$ | 4,201,126 | |---------------------------------|-----|--------------------------| | Net loss
Member withdrawals | | (449,630)
(2,354,934) | | MEMBERS' EQUITY, MARCH 31, 2021 | I\$ | 1,396,562 | | | | | {8}------------------------------------------------ (A LIMITED LIABILITY COMPANY) #### **STATEMENT** OF **CASH FLOWS** FOR THE **YEAR ENDED MARCH 31 , 2021** | OPERA TING ACTIVITIES: | | | |----------------------------------------------------------------------------------------------------|----------|--------------| | Net loss | \$ | (449,630) | | Adjustments to reconcile net loss to net cash | | | | used by operating activities: | | | | Depreciation | | 1,378 | | Changes in operating assets and liabilities: | | | | Increase in accounts receivable | | (1,152,086) | | Decrease in prepaid expenses | | 26,021 | | Increase in commission payable | | 1,655,198 | | Increase in pension payable | | (93,379) | | Decrease in accrued expenses | | (34,304) | | Total adjustments | | 402,828 | | | | | | Net cash used by operating activities | I | (46,802) | | FINANCING ACTIVITES: | | | | Proceeds from PPP loan | | 132,916 | | Member withdrawals | | (2,354,934) | | Net cash used by financing activities | I | (2,222,018) | | | | | | NET DECREASE IN CASH AND CASH EQUIVALENTS | | (2,268,820) | | | I | | | CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | | 3,833,367 | | CASH AND CASH EQUIVALENTS AT END OF YEAR | \$ | 1,564,547 | | Non Cash Investing and Financing Activity:
Cash paid for income taxes
Cash paid for interest | \$
\$ | 193,596
- | The accompanying notes to the financial statements are integral part of these financial statements 5 {9}------------------------------------------------ ### BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMP ANY) NOTES TO FINANCIAL ST A TEMENTS March 3 1, 2021 #### **(1) Description of business** Blue Sand Securities, LLC (the "Company") is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority, Inc. (" FINRA"). The Company is a Delaware Limited Liability Company ("LLC") formed on August 30, 2006. The Company does not claim an exemption from Rule 15c3-3 in reliance upon footnote 74 of SEC Release No. 34-70073 dated July 30, 2013, and as discussed in Question 8 on the related FAQ released by SEC staff. The Company is a third-patty marketer of hedge funds, introducing institutional and accredited investors to hedge funds with which the Company has entered into marketing agreements. The Company's offices are located in, Florida, Maryland, Arizona, New York, and Massachusetts. The Company does not carry security accounts for customers or perform custodial functions relating to customer securities. #### **(2) Summary of significant accounting policies** Basis of preparation - These financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America. Estimates - The preparation of the 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 reported amounts of revenue and expenses during the repo,ted period. Actual results could differ from those estimates. Revenue Recognition -Revenue from contracts with customers includes management fees and retainers. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significantuudgement[JtJ 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; and whether constraints on variable consideration should be applied due to uncettain future events. *Managemenlfees-Management* feees are typically received quarterly but are recognized as earned on a pro rata basis over the term of the contract. The Company provides management advisory services on a daily basis. The Compamy believes the performance obligation for providing the management advisory services is satisfied over time because the clent is receiving and consuming benefits as they are provided by the Company. Fee arrangements are based upon a percentage applied to the client's assets under management. *Relainer* /ees-Reteainer fees are recognized on an accrual basis and included 111 mcome upon completion of the performance obligation in accordance with the contract. Cash and cash equivalents - The Company considers all highly liquid investments with an original maturity of less than three months, and not held for sale in the ordinary course of business, to be cash and cash equivalents. Accounts receivable - Accounts receivable represents management fee and retainers due for services provided to its customers. The Company does not require collateral for accounts receivable arising from the nonnal course of business. Management routinely assesses the financial strength of its customers and, {10}------------------------------------------------ # BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMP ANY) NOTES TO FINANCIAL STATEMENTS ### March 31, 2021 as a consequence believes accounts receivable are stated at the net realizable value and credit risk exposure is limited. If amounts become uncollectible, they are charged to operations when that detennination is made. The Company provides an allowance for uncollectible accounts based on prior experience and management's assessment of the collectability of existing specific accounts. Management believes that all accounts receivable as of March 3 I, 2021 are collectible, and therefore no allowance has been provided for uncollectible accounts. Fixed assets - Fixed assets are recorded at cost and are depreciated using the straight-line depreciation method over their estimated useful lives. Furniture, fixtures and equipment are depreciated over 7 years. Upon disposal, property and equipment and the related accumulated depreciation and amortization are removed from the accounts and the resulting gain or loss is reflected in the statement of operations. Income taxes - The Company, with the consent of its members, is organized as a limited liability company for income tax purposes and has elected to be taxed as a partnership. The members of the Company are responsible for income taxes on the Company's taxable income. Accordingly, no provision or liability for federal income taxes has been included in the accompanying financial statements. The Company's policy is to make cash distributions for the payment of taxes by the members. The Company is subject to Massachusetts state and New York City local taxes, which are based on income earned. The Company has recorded income tax expense of \$168,207 for the year ended March 31 , 2021 The Company accounts for unce1tain tax positions in accordance with F ASB ASC 740, *Income Taxes.* F ASB ASC 740 provides guidance for how uncertain tax provisions should be recognized, measured, presented and disclosed in the financial statements. FASB ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions would "more-likely-than-not" be sustained if challenged by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has evaluated any tax positions taken or expected to be taken in the course of preparing the Company's tax returns to determine whether the tax positions would "more-likely-than-not" be sustained if challenged by the applicable tax authority. Management is unaware of any unrecognized tax positions in existence as of March 3 I, 2021 Fair Value Measurements - The fair value of the Company's financial instruments reflects the amounts that the Company estimates to receive in connection with the sale of an asset or paid in connection with the transfer of a liability in an orderly transaction between market pa1ticipants at the measurement date ( exit price). The fair value hierarchy that prioritizes the use of inputs used in valuation techniques is as follows: Level I - quoted prices in active markets for identical assets and liabilities; Level 2 - observable inputs other than quoted prices **in** active markets, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and {11}------------------------------------------------ # BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMPANY) NOTES TO FINANCIAL ST A TEMENTS March 31, 2021 ### **(2) Summary of significant accounting policies (continued)** Liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data; Level 3 - unobservable inputs reflecting management's assumptions, consistent with reasonably available assumptions made by other market pa1ticipants. These valuations require significant judgment. The carrying amounts of the Company's financial instruments, which include cash and cash equivalents, accounts receivable, prepaid expense, investments, commission's payable and accrued expenses, approximate their fair values due to their short maturities. Recent Accounting Pronouncements -Accounting standards that have been issued or proposed by the Financial Accounting Standards Board or other standard setting bodies are not expected to have a material impact on the Company's financial position, redults of operations or cash flows. #### **(3) Fixed Assets** Fixed assets consist of the following at March 31 , 2021: | Furniture, fixtures and equipment | \$37,586 | |-----------------------------------|----------| | Less accumulated depreciation | 30 149 | | Total | \$ 7,437 | Depreciation expense charged to operations was \$1 ,378 for the year ended March 3 I, 2021. #### **(4) Prepaid expenses** Prepaid expenses consist of advance payment of regulatory fees and other expenses that will be expensed within a year. The balance was \$5,943 as of March 31, 2021 . #### (5) **Net capital requirements** The Company is subject to the SEC Uniform Net Capital Rule (SEC Rule I 5c3- I), 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 I (and the rule of the "applicable" exchange also provides that equity capital may not be withdrawn or cash dividends paid if the resulting net capital ratio would exceed 10 to I). The Company does not hold or receive customer securities. As a result, the Company operates pursuant to a minimum net capital requirement of \$5,000. {12}------------------------------------------------ ### BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMP ANY) NOTES TO FINANCIAL STATEMENTS March 31, 2021 At March 3 I, 2021 , the Company had net capital of \$996,371 which was \$824,086 in excess of its required net capital of \$172,285. The ratio of aggregated indebtedness to net capital at March 31, 2021 was 2.5937 to I #### **(6) Commitments and contingencies** #### Operating Lease Agreements The Company leases office space under several operating leases, with maturity dates ranging from May, 2021 through July, 2021. The Company also has several month to month leases that can be canceled anytime. The Company recognizes rent expense on a straight line basis over the lease term. Total rent expense under the leases was \$109,963 for the year ending March 31 , 2021 . The Company has future minimum lease payments of\$3,750 for the year ending March 31 , 2021. #### Litigation The Company from time to time may be involved in litigation relating to claims arising out of its ordinary course of business. Management believes that there are no claims or actions pending or threatened against the Company, the ultimate disposition of which would have a material impact on the Company's financial position, results of operations or cash flows. #### Risk Management The Company maintains various forms of insurance that the Company's management believes are adequate to reduce the exposure to these risks to an acceptable level. On March 11 , 2020, the World Health Organization declared the novel strain of coronavirus (Covid-19) a global pandemic and recommended containment and mitigation measures worldwide. The Covid-19 pandemic has continued to spread and has already caused severe global disruptions. The extent of Covid- l 9 's affect on our operational and finance performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are unce1tain and difficult to predict considering the rapidly evolving landscape. As of the date of the independent registered public accounting firm report, the Company cannot reasonable estimate the length or severity of this pandemic, or the extent to which thje disruption may materially impact the Company's financial position, results of operations, and cash flows in fiscal year 2021. #### (7) **Concentration risks** The Company maintains its cash and cash equivalents in a bank account which at times may exceed federally insured limits. The Company does not believe it is exposed to any significant credit risk in such account. The Company is engaged in contract agreements with various counterpaities. In the event counterpa1ties do not fulfill their obligations, the Company may be exposed to some risk. The risk of default depends on the creditworthiness of the counterparty. It is the Company's policy to review, as necessary, the credit standing of each counterpa1ty on a case by case basis. {13}------------------------------------------------ # BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMP ANY) NOTES TO FINANCIAL STATEMENTS March 31, 2021 The Company had three customers that represented approximately 21 %, 16% and 7% respectively of the Company's revenues for the year ended March 31 , 2021 and approximately 29%, 34% and 6% respectively of total accounts receivable as of March 3 1, 2021 . #### **(8) Pension Plan** In 2014, the Company adopted a defined benefit pension plan. All employees and partners not excluded by class are eligible to enter on the January 1 or July I coincident with or following the completion of one year of service and reaching the age of 21. Pa11icipants are fully vested upon completing three years of service, excluding years with less than 1,000 hours. The pension benefit is payable for the life of the participant and begins on the normal retirement date, which is 62 years old. Selected financial information for the pension plan is as follows: | Change in projected benefit liability | | |---------------------------------------|-------------| | Liability at April I, 2020 | \$2,672,216 | | Interest cost | 134,511 | | Employer contributions | 469,075 | | Liability at March 31, 2021 | \$3,275,802 | | Change in fair value of plan assets | | | Fair value at April I, 2020 | \$2,044,016 | | Actual return on plan assets | 218,770 | | Employer contributions | 478,200 | | Fair value at March 31, 2021 | \$2.740,986 | | Funded status | \$(534,816) | The components of benefit expense are as fol lows for the year ended March 3 1, 2021 : | Components of benefit expense: | | |--------------------------------|--------------------| | Service Cost | \$197,807 | | Ii:iterest cost | 412,276 | | Benefit expense | _\$_fil_Q_,.Q_8_3_ | {14}------------------------------------------------ ### BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMPANY) NOTES TO FINANCIAL STATEMENTS March 31, 2021 The following table provides the weighted-average assumptions used to determine projected benefit liability and benefit expense for the pension plan as of March 31, 2021: | Weighted-average ass um pt ions | | |---------------------------------|-------| | Liability discount rate | 6.07% | | Expected return on plan assets | 5.5% | | Plan Assets | | The pension plan investment strategy includes the use of actively managed securities and is reviewed periodically in conjunction with plan liabilities, an evaluation of market conditions, tolerance for risk and cash requirements for benefit payments. The investment objective is to ensure that funds are available to meet the plan's benefit obligations when they become due. The overall investment strategy is to prudently invest plan assets in a well-diversified po1tfolio of equity and high-quality debt securities to achieve the long-term expectations. The expected long-term rate of return on plan assets is 5.5%. Plan assets measured at fair value as of March 3 I, 2021 are categorized consistently by level as follows: | | Total | Level I | Levef 2 | Level 3 | |----------------------------|----------------------|-------------------------|---------|------------| | U.S. Government securities | \$1 ,851
,810 \$1 | ,851
,810 | \$ - | \$ - | | Hedge fund | 889.176 | | | 889 176 | | Total | | \$2,740.986 \$1,851,810 | | \$ 889.176 | The changes in Level 3 plan assets are as follows during the year ended March 31 , 2021: Beginning balance at April I, 2020 \$ 558,221 Purchases 163,489 Unrealized gain 167.466 Ending balance at March 31 , 2021 \$ 889. 176 #### **(9) Subsequent events** The Company has evaluated subsequent events through June 30, 2021 which was the date the financial statements were available to be issued, and has determined that, there are no subsequent events. In May, 2021 , the Company entered into a new operating lease. The new lease begins in July, 2021 through July , 2024. In May, 2021 the PPP loan was forgiven. {15}------------------------------------------------ # BLUE SAND SECURITIES, LLC (A LIMITED LIABILITY COMP ANY) NOTES TO FINANCIAL STATEMENTS March 31, 2021 ### **(10) Payroll Protection Program ("PPP") Loan** In May 2020, the Company received a PPP loan from the United States Small BusinessAdministration for \$132,916. The PPP loan has an interest rate of I% and is due in 2 years. However, if the Company meets ce1tain criteria related to the use of funds and maintains employment levels, then potentially all of the loan principal and accrued interest will be forgiven and no repayment will be requited. Unforgiven principal and interest payments were anticipated to begin November 2020. The loan was forgiven in May, 2021. {16}------------------------------------------------ (A LIMITED LIABILITY COMPANY) #### **COMPUTATION OF NET CAPITAL UNDER RULE 15c3-1 OF THE SECURITIES AND EXCHANGE COMMISSION AS OF MARCH 31, 2021** | | I
SCHEDULE I | |-----------------------------------------------------------|------------------| | | | | TOTAL MEMBERS' EQUITY QUALIFIED FOR NET
CAPITAL | I\$
1,396,562 | | | | | DEDUCTIONS AND/OR CHARGES:
Non-allowable assets: | 533,107 | | ADDITIONS | | | PPP loan forgivenedss | 132,916 | | NET CAPITAL | I\$
996,371 | | AGGREGATE INDEBTEDNESS: | | | Total aggregate indebtedness | I\$
2,584,267 | | COMPUTATION OF BASIC NET CAPITAL REQUIREMENT: | | | Minimum net capital required (6-2/3% of A.I.) | I\$
172,285 | | Excess net capital | I\$
824,086 | | Net capital in excess of the greater of: 10% of aggregate | | | indebtedness or 120% of minimum net capital requirement | I\$
737,944 | | Percentage of aggregate indebtedness to net capital | I
259.37 | There is no difference in the above computation and the Company's net capital as reported in the Company's amended Part IIA (unaudited) FOCUS report as of March 31 , 2021 filed on June 30, 2021 . {17}------------------------------------------------ (A LIMITED LIABILITY COMPANY) #### **SCHEDULE** II #### **COMPUTATION FOR DETERMINATION OF RESERVE REQUIREMENTS UNDER RULE 15C3-3 OF** THE **SECURITIES AND EXCHANGE COMMISSION** The Company does not claim an exemption from SEA Rule 15c3-3, in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company does not (1) directly or indirectly receive, hold, or otherwise owe fudns or securities for or to customers, (2)does not carry accounts of or for customers and (3) does not carry PAB accounts. #### **SCHEDULE** Ill #### **INFORMATION RELATING TO THE POSSESSION OR CONTROL REQUIREMENTS UNDER RULE 15c3-3 OF THE SECURITIES AND EXCHANGE COMMISSION** The Company does not claim an exemption from SEA Rule 15c3-3, in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company does not (1) directly or indirectly receive, hold, or otherwise owe fudns or securities for or to customers, {2)does not carry accounts of or for customers and (3) does not carry PAB accounts. {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Member of Blue Sand Securities, LLC We have reviewed management's statements, included in the accompanying Exemption Report Year Ended March 3 I, 2021, in which Blue Sand Securities, LLC does not claim an exemption under paragraph (k) of 17 C.F.R § 240. **l** 5c3-3 in reliance on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240. **l** 7a-5. The Company's management is responsible for compliance with the exemption provisions and its statements. Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included inquiries and other required procedures to obtain evidence about Blue Sand Securities, LLC, compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion. Based on our review, we are not 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 footnote 74 of SEC Release No. 34-70073 dated July 30, 2013, and as discussed in Question 8 of the related FAQ released by SEC staff. **BAUER & COMPANY, LLC** Austin, Texas June 30, 2021 Bauer & Company, LLC P.O. Box 27887 Austin. TX 78755 Tel 512.731.3518 / www.bauerandcompany.com {19}------------------------------------------------ June 30, 2021 Blue Sand Securities LLC Exemption Report Year Ended March 31, 2021 Blue Sand Securities LLC, (the "Company") is a registered broker-dealer subject to Rule l 7a-5 promulgated by the 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. l 7a-5( d)( 1) and ( 4). To the best of its knowledge and belief, the Company states the following: The Company does not claim an exemption under paragraph (k) of 17 C.F.R. §240. 15c3-3, and the Company is filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34- 70073 adopting amendments to 17 C.F.R. § 240. l 7a-5 because the Company limits its business activities exclusively to 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; receiving transaction-based compensation for identifying potential investors for clients, referring securities transactions to other broker-dealers; participating in distributions of securities in accordance with the requirements of paragraphs(a) or (b)(2) of Rule 15c2-4, and the Company did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, ( other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b )(2) of Rule l 5c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to the Company); did not carry accounts of or for customers; and did not carry P AB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. I, Nelson Cooney, swear that, to my best knowledge and belief, this Exemption Report is true and correct. Nelson Cooney, Managing Member 90 0 O L NE Y SANDY S PRI NG RD . , ST E. 2 8• SAN DY S PRI NG , MD • 20860 PH ONE: 212 . 46 1.6004 {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) ### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON APPL YING AGREED-UPON PROCEDURES To the Board of Directors and Member of Blue Sand Securities, LLC We have performed the procedures included in Rule 17a-5(e)(4) under the Securities Exchange Act of 1934 and in the Securities Investor Protection Corporation ("SIPC") Series 600 Rules, which are enumerated below and were agreed to by Blue Sand Securities, LLC and the SIPC, solely to assist you and SIPC in evaluating Blue Sand Securities, LLC's compliance with the applicable instructions of the General Assessment Reconciliation (Form SIPC-7) for the year ended March 31 , 2021. Blue Sand Securities, LLC's management is responsible for its Form SIPC-7 and for its compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with standards established by the Public Company Accounting Oversight Board (United States) and in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. The procedures we performed and our findings are as follows: - 1) Compared the listed assessment payments in Form SIPC-7 with respective cash disbursement records entries, noting no differences; - 2) Compared the Total Revenue amounts reported on the Annual Audited Report Form X-l 7A-5 Part III for the year ended March 31, 2021 with the Total Revenue amount reported in Form SIPC-7 for the year ended March 31, 2021, noting no differences; - 3) Compared any adjustments reported in Form SIPC-7 with supporting schedules and working papers, noting no differences; - 4) Recalculated the arithmetical accuracy of the calculations reflected in Form SIPC-7 and in the related schedules and working papers supporting the adjustments, noting no differences; and - 5) Compared the amount of any overpayment applied to the current assessment with the Form SIPC-7 on which it was originally computed, noting no differences. We were not engaged to and did not conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on Blue Sand Securities, LLC's compliance with the applicable instructions of the Form SIPC-7 for the year ended March 31, 2021. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of Blue Sand Securities, LLC and the SIPC and is not intended to be and should not be used by anyone other than these specified parties. **BAUER & COMPANY, LLC** Austin, Texas June 30, 2021 Bouer & Company, LLC P.O. Box 27887 Austin. TX 78755 Tel 512.73 1.3518 / www.bouerondcompany.com {21}------------------------------------------------ | SIPC-7 | | |-----------------|--| | (36-REV f 2/18) | | SECURITIES INVESTOR PROTECTION CORPORATION P.O. Box 92185 Washington, D.C. 20090-2185 202-371-8300 General Assessment Reconciliation **SIPC-7** (36-REV 12/18) For the fiscal year ended **3/31 /21** \_ (Read carefully the inslructions in your Working Copy before completing this Form) #### TO BE FILED BY ALL SIPC MEMBERS WITH FISCAL YEAR ENDINGS 1. Name or Member, address, Designated Examining Aulhority, 1934 Act regislration no. and month in which fiscal year ends for purposes or the audit requirement of SEC Rule 17a-5: | | I
Blue Sand Securities LLC | 7 | Note: If any of the information shown on the
maifing label requires correction, please e-mail | |-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------------------------------------------------------------------------------------| | | 900 Olney Sandy Spring Rd., Ste 2B | | any corrections to form@sipc.org and so
indicate on the form filed. | | | Sandy Spring, MD 20860 | | Name and telephone number of person to
contact respecting this form. | | | L | | | | 2. A. | General Assessment (item 2e from page 2) | | \$12389.41 | | | B. Less payment made with SIPC-6 filed (exclude interest) | | ( 750.00 | | | Date Paid | | | | | C. Less prior overpayment applied | | 13485.40 | | | D. Assessment balance due or (overpayment) | | 8,154.01 | | | E. Interest computed on late payment (see instruction E) for ______ days at 20% per annum | | | | | F. Total assessment balance and interest due (or overpayment carried forward) | | \$8154.01 | | | 'Y the box
;;:i<
G. PAYMENT:
Check mailed to P.O. BoxO Funds Wired~ ACH D
Total (must be same as F above)
\$ | 8,154.01 | | | | \$(
H. Overpayment carried forward | ________ | _ | | | 3. Subsidiaries (SJ and predecessors (P) included in this form (give name and 1934 Act registration number): | | | | | The SIPC member submitting this form and the
person by whom it is executed represent thereby
that all information contained herein is true, correct | | Blue Sand Securities LLC | | | | | (Name or Corpo,ation. Parlncr5hip or othor organizalion) | and complete. Dated the.21L\_ day of June , 20-11.... ,J~o,i~ cco (Tille} This 1orm and the assessment payment is due 60 days after the end of the fiscal year. Retain the Working Copy o1 this form for a period of not less than 6 years, the latest 2 years in an easily accessible place. | ~
LU
LU
0:: | f5 Dates: | | | | | |----------------------|----------------|-------------------------------|----------|--------------------------|--------------------------| | | | Postmarked | Received | Reviewed | | | | | > Calculations __
_ | | __
Documentation
_ | ___
Forward Copy
_ | | | c, Exceptions: | | | | | | c | | en Disposition of exceptions: | | | | | | | | | 1 | | {22}------------------------------------------------ ### DETERMINATION OF "SIPC NET OPERATING REVENUES" AND GENERAL ASSESSMENT | | Amounts for the fiscal period | |--------------------------------------|----------------------------------------| | | beginning .:0;.;4/.:.01;.;/2:;0'------ | | a nd ending .,.Q,,,3/.,,_31JL/_21,__ | __
_ | | Item No.
2a. Total revenue (FOCUS Line 12/Parl IIA Line 9, Code 4030) | | Eliminate cents
\$8,263,052 | |-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|--------------------------------| | | | | | 2b. Additions :
(1) Total revenues from the securities business of subsidiaries (except fo reign subsidiaries) and
predecessors not included above. | | | | (2) Net loss from principal transactions in securities in trading accounts. | | | | (3) Net loss from principal transactions in commodities in trading accounts. | | | | (4) Interest and dividend expense deducted in determining item 2a. | | | | (5) Net Joss lrom management of or participation in the underwriting or distribution of securities. | | | | (6) Expenses other than adverlising, printing, registration fees and legal fee s deducted in delermining net
profit from management of or participation in underwriting or distribution of securities. | | | | (7) Net loss lrom securities in investment accounts. | | | | Total additions | | | | 2c. Deductions :
(1} Revenues from the distribution ot sha res of a registered open end investment company or unit
investment trust, trom the sale of variable annuities, from the business of insurance, from investment
advisory services rendered lo registered investment companies or insurance company separate
accounts, and from transactions in security futures products. | | | | (2) Revenues from commodity transactions. | | | | (3) Commissions, floor brokerage and clearance paid to other SIPC members in connection with
securities transactions . | | | | (4) Reimbursements for pos1age in connec tion with proxy solicitation. | | | | (5) Net gain from securities in investment accounts. | | | | (6) 100% of commissions and markups earned from transactions in (i) certificates of deposit and
(ii} Treasury bills, bankers acceptances or commercial paper that mature nine months or less
from issuance date. | | | | (7) Direct expenses of printing advertising and legal fees incurred in connection with other revenue
re la led to the securities business (revenue defined by Section t 6(9}(L} ol the Act). | | | | (8) Other revenue not related either directly or indirectly to the securities business.
{See Instruction C): | | | | Interest income | | 3,446 | | (Deductions in excess of \$100,000 require documentation) | | | | {9} {i) Total interest and dividend expense (FOCUS Line 22/PART IIA Line 13,
Code 4075 plus line 2b(4} above} but nol in excess
of total interest and dividend income.
(ii) 40% of margin interest earned on customers securities | __________
_
\$.
__________ | | | accoun1s (40% of FOCUS line 5, Code 3960).
Enter the greater of line (i} or (ii) | \$
_ | | | Total deductions | | | | | | \$8,259,606 | | 2d. SIPC Net Operating Revenues | | \$12,389.41 | | 2e. General Assessment @ .0015 | | (lo page 1, line 2.A.) | | | | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.