# SOUTHERN WEALTH SECURITIES, LLC X-17A-5 (2024-04-01) — Broker-dealer annual report

- Company: SOUTHERN WEALTH SECURITIES, LLC
- Form: X-17A-5
- Filed: 2024-04-01
- Period: 2023-12-31
- Accession: 0001721687-24-000001
- CIK: 1721687
- File #: 8-70048
- Type: Broker-dealer
- Material weakness: No
- Auditor: ADKF PC
- Auditor location: San Antonio, TX
- Contact: thomas shea
- Phone: 8157821250
- Signed by: Thomas Gile (CEO)

Original filing: https://www.sec.gov/Archives/edgar/data/1721687/000172168724000001/publicv3.pdf

---

{0}------------------------------------------------

# **SOUTHERN WEAL TH SECURITIES, LLC**

**Audited Financial Statement** 

**December 31, 2023** 

{1}------------------------------------------------

#### **SOUTHERN WEALTH SECURITIES, LLC Table of Contents December 31, 2023**

| Audited Financial Statement:                            |   |
|---------------------------------------------------------|---|
| Report of Independent Registered Public Accounting Firm |   |
| Balance Sheet                                           | 2 |
| Notes to Audited Financial Statement                    | 3 |

{2}------------------------------------------------

![](_page_2_Picture_0.jpeg)

**with you all the way** 

Member of the AICPA &. TXCPA.

Registered with Public Company Accounting Oversight Board.

# **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Member Southern Wealth Securities, LLC San Antonio, Texas

#### *Opinion on the Financial Statements*

We have audited the accompanying balance sheet of Southern Wealth Securities, LLC ("SWS" or "Company") 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 the Company as of December 31, 2023 in conformity with U.S. generally accepted accounting principles.

#### *Basis for Opinion*

This 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 financial statement. We believe that our audit provides a reasonable basis for our opinion.

- 1 -

*A-bKr;/Je,* 

ADKF, P.C. San Antonio, Texas March 29, 2024

We have served as the Company's auditor since 2019

**MAIN OFFICE:** 

9601 McAllister FWY, STE 800 672 Ridge Hill Dr.,STE B San Antonio, Texas 78216 New Braunfels, TX 78130

Phone: 210.829.1300 Fax: 210.829.4080 Phone: 830.387.4441

616 E. Blanco, STE 300e Boerne, TX 78006 Phone: 830.815.1100

![](_page_2_Picture_19.jpeg)

{3}------------------------------------------------

# **SOFl'HERN WEALTH SECUR[TJES, LLC Balance Sheet December 31, 2023**

| ASSETS                                    |   | 2023      |
|-------------------------------------------|---|-----------|
| Current Assets:                           |   |           |
| Cash and cash equivalents                 | s | :222, 104 |
| FINRi\. !lex-fonding account              |   | 2,500     |
| Prepaid expenses and other current assets |   | 9,919     |
| Total current assets                      |   | 234,523   |
| Total Assets                              |   |           |
| LIABILITIES AND MEMBER'S EQUITY           |   |           |
| Current Liabilities:                      |   |           |
| Due to related party                      | s | 5,716     |
| Total current liabilities                 |   | 5,716     |
| Member's Equity                           |   | 228,807   |
| Total I Jabilities and Member's Equity    | s |           |

*See notes to auditedfi.nancial statements.* 

{4}------------------------------------------------

# **NOTE A - SUMMARY OF SIGNIFICANT ACCOlJNTING PO 1,1crns**

*Nature of Operations:* Southern Wealth Securities, LLC (SWS) was created in the state of Texas on August 31, 2017 and became a registered broker-dealer \Vith the Securities and Exchange Comrnission (SEC) effective June 19, 2018. S\VS is a member of the Financial lndustr? Regulatory Authority (FINRA).

SWS deals almost exclusively in the sale of life insurance products, including Variable Universal Life (\TL) products. T11e SEC and fINRA consider the sale of VUL 's to fall under the same laws and regulations as selling stocks and bonds. SY:VS retains all cornrnissions and makes no payrnents of any kind to agents.

*Basis qf Accounting:* The financial statements have been prepared on the accrual basis of accounting m accordance with U.S. generally accepted accounting principles.

*Revenue Recognition:* The only source of revenues for S\VS is from acting as a broker in the sale of life insurance policies. The Company has identified the performance obligation for these revenues as <le.fined under ASC 606 to be satisfied at the execution of the policy as no further services are required or perfonned by S\VS. The Cornpany has no obligations to service the policy in any way subsequent to the initial sale. Initial comrnissions paid out at the time a policy is executed are recorded l 00( % as the amount is fixed and determinable. The policies also pay out commissions in varying amounts for the duration of the policies. These residual comn1issions have been identified by management as variable consideration to be estimated at the time revenue ls recognized under ASC 606. The commissions vary based on the prernium amounts, amounts funded by clients, changing comrnission rates throughout the policy term, and market returns for commissions calculated based on the CSV balances.

The recognition and rneasurement of revenue is based on the assessment of individual contract tenns. Significant judgement is required to deterrnine whether constraints on variable consideration should be applied due to uncertain future events. SYVS may receive commissions paid by the carrier at the inception of the policy as \Vell as over time for as long as the policy remains active. S\VS believes that its performance obligation ls the sale of a new policy and as such the performance obligation is fulfilled on the date of issuance. Any initial up-front (first-year) comrnissions are knm:vn fixed amounts and are recognized on the issuance date. Annual renev.ral corn.missions, which are variable amounts, are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. Uncertainties may relate to the cancellation of a policy prior to a certain period, the determination of a policy asset value at a point in time, or the amount and timing of funds contributed by the policy holder. The determination of policy asset values at a point in tirne is further dependent on the timing and arnount of contributions and returns on the underlying investments. SY:VS estirnates this variable consideration and records revenue when the performance obligation has been met. On December 31, 2023, commissions receivable reported on the balance sheet totaled S-0-. These commissions receivable represent revenues that have been accrued and are related to this variable consideration. No allowance for credit losses \:Vas necessary on Decernber 31, 2023. The balance of accounts receivable as of the beginning of the year totaled \$5,666.

*Cash and Cash Equivalents:* Cash and cash equivalents include all cash balances and highly liquid investments with an initial maturity of three months or less.

*income Ta;;:es:* .For federal income tax purposes, income and expenses of the Company are included in the tax return of the member. The Company is subject to the Texas margin tax. J\Janagement is not ,nvare of any tax positions that vrnuld have a significant impact on its financial position. Its federal tax returns since inception remain subject to examination.

{5}------------------------------------------------

#### **SOl,TIIERc"i WEALTH SEClillITIES, LLC Notes to Audited Financial Statement December 31, 2023**

### **NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POl,ICIES-continued**

*Concentration of Credit Risk:* financial instrurnents that potentially subject the Cornpany to concentrations of credit risk are principally cash and accounts receivable. The Cornpany performs on-going credit evaluations and generally requires no collateral from customers. The Company places its ternporary cash investments with major banks which, from time-to-time, may exceed foderally insured limits. The Company periodically assesses the financial condition and believes the risk ofloss ls minimal.

*Subsequent Events:* Subsequent events have been evaluated by managernent through the date of the independent registered public accounting firm's report Material subsequent events, if any, are disclosed in a separate footnote to these .financial statements.

*Use ofEstim(Jtes:* 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 assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported arnounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.

# **NOTE B - RELATKD PARTY TRANSACTIONS**

SWS has a management fee agreement with its sole member, Southern Wealth Management, LLP (SWlv!). The agreement automatically rene1vs each January 1 for the next 12-month period, unless rescinded by either party. Under the terms of this agreement, S\VS pays \$9,!J00 per month to S\N.M for substantially all of its general and adrninistrative, rnanagement and accounting services. Fees under this agreernent totaled \$108,000 in 2023.

### **NOTE C -REGELATORY REQUIREMENTS**

Pursuant to the Basic Uniform Ket Capital provisions of the Securities and Exchanges Comrnission, SYVS is required to maintain a minimum net capital, as defined in such provision. Further, the \_provisions require that the ratio of aggregate indebtedness, as defined, to net capital shall not exceed 15 to 1. Net capital and the related net capital ratio may fluctuate on a daily basis. On December 31, 2023, S\VS had net capital of\$216,387 and net capital requirements of \$5,000. The Company's aggregate indebtedness to net capital ratio was Oto 1 which is in cornpliance with the required ratio of 15 to 1.

### **NOTE D-RELATEDPARTYPAYABLE**

As of December 31, 2023, arnounts totaling \$5,716 \:Vere due to CAPFinancial Securities, LLC, the owner of Southern \:Vealth ::,vfanagement subsequent to i'v1ay 26, 2023. This payable represents residual funds collected bv SWS which arc payable to CAPFinancial Securities, LLC month Iv.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.