# TENEO SECURITIES LLC X-17A-5 (2020-02-27) — Broker-dealer annual report - Company: TENEO SECURITIES LLC - Form: X-17A-5 - Filed: 2020-02-27 - Period: 2019-12-31 - Accession: 0001714418-20-000003 - CIK: 1469724 - File #: 8-68354 - Material weakness: No - Auditor: BDO USA, LLP - Auditor location: New York, NY - Contact: Michael Stupay - Phone: 212-897-1692 - Signed by: Jack Leventhal (Chief Officer and Investment Banking Principal) Original filing: https://www.sec.gov/Archives/edgar/data/1469724/000171441820000003/teneo2019s2.pdf --- {0}------------------------------------------------ # **Teneo Securities LLC** (A wholly owned subsidiary of Teneo Capital Corporation) Statement of Financial Condition Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2019 {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 0MB APPROVAL 0MB Number: 3235-0123 Expires: August 31, 2020 Estimated average burden hours per response ... 12.00 8-68354 SEC FILE NUMBER ## **ANNUAL AUDITED REPORT FORM X-17A-5 PART IIl** #### **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 | | ~~
O-l~/0-1_/1~9~~-----
MM/DD/YY | ANDENDING | 12/31/19
MM/DD/YY | |---------------------------------------------------------------------------|------------------|--------------------------------------------------------|-----------|----------------------------------| | | | A. REGISTRANT IDENTIFICA TIO | | | | NAME OF BROKER ~ DEALER: | | | | | | Teneo Securities LLC | | | | OFFICIAL USE ONLY
FlRMlD. NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | | 280 Park A venue | | | | | | (No. and Street) | | | | | New York | NY | | | 10017 | | (City) | (State) | | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | Michael Stupay | | | | (212) 897-1692 | | | | | | (Area Code -
Telephone No.) | | | | B. ACCOUNTANT IDENTIFICATION | | | | INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* | | | | | | | BDOUSA LLP | | | | | | | (Name - if individual, state last, first, middle name) | | | | 100 Park A venue | New York | | | NY
10017 | | (Address) | (City) | | (State) | (Zip Code) | | CHECK ONE: | | | | | | [!] Certified Public Accountant | | | | | | D
Public Accountant | | | | | | D
Accountant not resident in United States or any of its possessions. | | | | | | | | FOR OFFICIAL USE ONLY | | | | | | | | | | | | | | | *\*Claims for exemption from the requirement that the annual report be covered by the opinion of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis for the exemption. See section 240. I 7a-5(e)(2).SEC* 1410 (3-91) {2}------------------------------------------------ ## **Teneo Securities LLC (A wholly owned subsidiary of Teneo Capital Corporation) TABLE OF CONTENTS** #### **This report\*\* contains (check all applicable boxes):** - [x] Report of Independent Registered Public Accounting Firm - [x] Facing Page. - [x] Statement of Financial Condition. - [ ] Statement of Operations. - [ ] Statement of Changes in Member's Equity. - [ ] Statement of Cash Flows. - [ ] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [] Computation ofNet Capital for Brokers and Dealers Pursuant to Rule 15c3-l under the Securities Exchange Act of 1934. - [ ] Computation for Determination of Reserve Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934. - [ ] Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange **Act** of 1934 - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule **l** 5c3-l (included with item (g)) and the Computation for Determination of Reserve Requirements Under Rule 15c3-3 (included in item (g)). - [ ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - [x] An Affirmation. - [ ] A copy of the SIPC Supplemental Report. - [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control). - [ ] Independent Auditors' Report Regarding Rule 15c3-3 exemption - [ ] Rule l 5c3-3 Exemption Report - \*\* *For conditions of confidential treatment of certain portions of th is filing, see section 2 4 0.17 a-5 (e)(3).* {3}------------------------------------------------ #### AFFIRMATION I, Jack Leventhal, affirm that, to the best of my knowledge and belief, the accompanying statement of financial condition pertaining to Teneo Securities LLC at December 31, 2019, is true and correct. I further affirm that neither the Company nor any officer or director has any proprietary interest in any account classified solely as that of a customer. hief Officer and Investment itle *2/21/zo* 'NEVALE . • ATE OF NEW YORK No. 02CA4858566 ©ualified in New York Count MVCommission Expires 06-16-:022 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Fax: 212-697-1299 www.bdo.com #### Report of Inde pendent Registered Public Accounting Firm Managers and Member Teneo Securities LLC New York, NY #### **Opinion on Financial Statement** We have audited the accompanying statement of financial condition of Teneo Securities LLC (the "Company") as of December 31 , 2019, and the related notes (collectively referred to as the "the financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of the Company at December 31, 2019, in conformity with accounting principles generally accepted in the United States of America. #### **Basis** for Opinion The financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and 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 statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the statement of financial condition. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2015. New York, NY February 27, 2020 {5}------------------------------------------------ ## **Teneo Securities LLC (A wholly owned subsidiary of Teneo Capital Corporation)** ## **Statement of Financial Condition December 31, 2019** | Assets | | | |---------------------------------------------|-----------------|--| | Cash | 1,580,242
\$ | | | Accounts receivable | 4 17,378 | | | Other assets | 8,677 | | | Total assets | 2,006,297
\$ | | | Liabilities and M
r's Equity
mbe
e | | | | Accounts payable and accrued expenses | 59,761
\$ | | | Due to Parent | 6,718 | | | Total liabilities | 66,479 | | | Member's equity | 1,939,818 | | | Total liabilities and member's equity | \$
2,006,297 | | The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ ## **Teneo Securities LLC (A wholly owned subsidiary of Teneo Capital Corporation)** ## **Notes to Statement of Financial Condition December 31, 2019** #### **1. Organization and Business** Teneo Securities LLC (the "Company"), a wholly owned subsidiary of Teneo Capital Corporation (the "Parent"), is a limited liability company and was formed under the laws of Delaware. The Company is a broker-dealer registered with the Securities and Exchange Commission (the "SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The primary business of the Company is to act as a broker-dealer providing financial and strategic advice on mergers and acquisitions, divestitures, restructurings, financings, capital raising and other similar transactions. #### **2. Summary of Significant Accounting Policies** #### **Basis of Presentation** These financial statements were prepared in conformity with accounting principles generally accepted in the United States of America which 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 amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. #### **Revenue Recognition** The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard requires an entity to follow a five-step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when (or as) the entity satisfies a performance obligation. In determining the transaction price, an entity may include variable consideration only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. #### Significant judgments: Revenue from contracts with customers includes success fees and advisory fees. 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; and whether constraints on variable consideration should be applied due to uncertain future events. #### Success fees: The Company earns revenue by way of transaction success fees that are recognized at the point in time that performance under the arrangement is completed. The Company has determined that this date is the appropriate point in time to recognize revenue for success fees as the performance obligation has been satisfied, there are no significant actions which the Company needs to take subsequent to this date and the purchaser obtains the control and benefit of the proceeds at that point. Payment for revenue is due upon closing. {7}------------------------------------------------ ## **Teneo Securities LLC** **(A wholly owned subsidiary of Teneo Capital Corporation)** ## **Notes to Statement of Financial Condition December 31, 2019** #### **2. Summary of Significant Accounting Policies (continued)** #### Advisory fees: The Company provides advisory services on mergers and acquisitions, restructurings, capital raising and other strategic transactions. Revenue for advisory arrangements is recognized over the time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Payment for revenue is due upon invoicing. #### Contract asseL5 and liabilities: Contract assets represent the Company's right to consideration in exchange for goods or services that the Company has transferred to a customer, excluding unconditional rights to consideration that are presented as receivables. Contract liabilities represent the Company's obligation to deliver products or provide data to customers in the future for which cash has already been received. #### **Cash** All cash deposits are held by one financial institution and therefore are subject to the credit risk at that financial institution and may at times exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and does not believe there to be any significant credit risk with respect to these deposits. #### **Accounts Receivable** Accounts receivable include retainer and success fees due from clients. Management reviews all accounts receivable balances, determines a course of action on any delinquent amounts, and provides an allowance for amounts which collection is considered to be doubtful. At December 3 l, 20 l 9, management believed no valuation allowance was warranted. #### **Income Taxes** The Company is a single member limited liability company and is treated as a disregarded entity for federal income tax reporting purposes. The Internal Revenue Code ("IRC") provides that any income or loss is passed through to the ultimate beneficial individual member for federal, state and certain local income taxes. Accordingly, the Company has not provided for federal and state income taxes. At December 31 , 2019, management has detennined that the Company had no uncertain tax positions that would require financial statement recognition. This determination will be subject to ongoing reevaluation as facts and circumstances may require. Interest and penalties assessed, if any, are recorded as income tax expense. The Parent's federal and state income tax returns are generally open for examination for years subsequent to 2016. {8}------------------------------------------------ ## **Teneo Securities LLC (A wholly owned subsidiary of Teneo Capital Corporation)** ## **Notes to Statement of Financial Condition December 31, 2019** #### **3. Transactions with Related Parties** The Company maintains an administrative services agreement (the "Expense Sharing Agreement") with Teneo Capital LLC ("TCLLC") whereby TCLLC, an owner of the Parent, provides accounting, administrative, office space, human resources and other services to the Company. Such services also include billing and collection of all reimbursable expenses related to contracts with customers. The Company does not have any obligation, direct or indirect, to reimburse or otherwise compensate TCLLC for any or all shared costs that the TCLLC has paid on behalf of the Company. The terms of these arrangements may not be the same as those that would otherwise exist or result from agreements and transactions among unrelated parties. #### **4. Regulatory Requirements** The Company is subject to SEC Uniform Net Capital Rule I 5c3-l under the Securities Exchange Act of l 934, 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. At December 31, 2019, the Company had net capital of \$1 ,513,763 which exceeded the required net capital of \$100,000 by \$1,413,763. The Company does not hold customers' cash or securities and, has no requirements under SEC Rule 15c3-3 and therefore does not claim an exemption under paragraph (k). #### **5. New accounting pronouncement** In June 2016, the Financial Accounting Standards Board ("F ASB") issued Accounting Standards Update ("ASU") 2016-13, *Financial Instruments* - *Credit Losses (Topic 326): Measurement of Credit losses on Financial Instruments,* which amends the F ASB 's guidance on the impairment of financial instruments. The ASU adds to United States generally accepted accounting principles ("U.S. GAAP") an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses. The ASU is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the ASU makes targeted changes to the impairment model for available-for-sale debt securities. The new CECL standard is effective for annual reporting periods beginning after December 15, 2019, and interim periods therein. Management is currently evaluating the effect of adopting the new standard and expects that the impact to the Company's financial statements will be minimal. #### 6. **Subsequent Events** Management of the Company has evaluated events or transactions that may have occurred since December 31, 2019 and determined that there are no material events that would require disclosure in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.