# CARL M. HENNIG, INC. X-17A-5/A (2025-01-07) — Broker-dealer annual report - Company: CARL M. HENNIG, INC. - Form: X-17A-5/A - Filed: 2025-01-07 - Period: 2024-09-30 - Accession: 0000046902-25-000009 - CIK: 46902 - File #: 8-14509 - Type: Broker-dealer - Material weakness: Yes - Auditor: Tuttle & Bond, PLLC - Auditor location: Fredricksburg, TX - Contact: Scot Harenburg - Phone: 9202316630 - Email: sharenburg@cmhennig.com - Website: cmhennig.com - Signed by: Scot Harenburg (President) Original filing: https://www.sec.gov/Archives/edgar/data/46902/000004690225000009/shortform6.pdf --- {0}------------------------------------------------ # **CONFIDENTIAL** **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** | 0MB APPROVAL | |--------------------------| | 0MB Number: 3235-0123 | | Expires: Nov. 30, 2026 | | Estimated average burden | | hours per response: 12 | | | # **ANNUAL REPORTS FORM X-17A-5 PART** Ill | SEC FILE NUMBER | | |-----------------|--| | 8-14509 | | **FACING PAGE** **Information Required Pursuant to Rules 17a-S, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING **10/01 /23** AND ENDING **09/30 /24** MM/DD/VY MM/DD/VY **A. REGISTRANT IDENTIFICATION** # NAME OF FIRM: CARL M. HENNIG, INC. TYPE OF REGISTRANT (check all applicable boxes): [!] Broker-dealer O Security-based swap dealer 0 Major security-based swap participant □ Check here if respondent is also an OTC derivatives dealer ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.) # 206 NORTH **MAIN** STREET | | (No. and Street) | | | | | | | |---------------------------------------------------------------------------|---------------------------------------------------------|-------------------------|--|--|--|--|--| | OSHKOSH | WI | 54901 | | | | | | | (City) | (State) | (Zip Code) | | | | | | | PERSON TO CONTACT WITH REGARD TO THIS FILING | | | | | | | | | SCOTHARENBURG | 92~231~630 | sharenburg@cmhennig.com | | | | | | | (Name) | (Area Code -Telephone Number} | (Email Address) | | | | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing* | | | | | | | | | Tuttle & Bond, PLLC | | | | | | | | | | (Name-ifindividual, state last, first, and middle name) | | | | | | | | 2954 Goehmann Lane | Fredericksburg | TX
78624 | | | | | | | (Address} | (City} | (State} | (Zip Code) | |--------------------------------------------------|-----------------------|---------|--------------------------------------------| | 03/19/2019 | | 6543 | | | (Date of Registration with PCAOB)(if applicable) | | | (PCAOB ReRistration Number, if applicable) | | | FOR OFFICIAL USE ONLY | | | • Claims for exemption from the requirement that the annual reports be covered by the reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption, See 17 CFR 240.17a-5(e)(l)(ii), if applicable. **Persons who are to respond to the collection of information contained in this form are not required to respond unless the form** displays a currently valid 0MB control number. {1}------------------------------------------------ # **C9NFIDENTIAL** #### **OATH OR AFFIRMATION** | | swear (or affirm) that, to the best of my knowledge and belief, the
I, SCOT HARENBURG | |--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | as of
financial report pertaining to the firm of CARL M. HENNIG, INC.
9/30
2 2024
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. | | | ~~c~W~~\V\ | | | | | | 9/~
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Iii (a) Statement offinancial condition.
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□ (b) Notes to consolidated statement of financial condition.
\ | | | Iii (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statemllifi3ft
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comprehensive income (as defined in§ 210.1-02 of Regulation S-X). | | l!!i!I | (d) Statement of cash flows. | | | Iii (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 eemseliElat;eel financial statements. | | l!!i!I | Iii (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. | | | | | D | (i) Computatiq,n of tangible net worth under 17 CFR 240.18a-2. | | | □ 0) 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. | | D | (I) Computation for Determination of PAB Requirements under Exhibit A to§ 240.15c3-3. | | | Iii (m) Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3. | | D | (n) Information relating to possession or control requirements for security-based swap customers under 17 CFR | | | 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable. | | l!!i!I | (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net | | | worth under 17 CFR 240.1Sc3-1, 17 CFR 240.18a-1, or 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. | | l!!i!I | (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. | | | D (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. | | l!!i!I | (s) Exemption report in accordance with 17 CFR 240.17a-S or 17 CFR 240.18a-7, as applicable. | | | □ (t) Independent public accountant's report based on an examination of the statement of financial condition. | | l!!i!I | (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17
CFR 240.17a-S, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable. | | D | (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. | | l!!i!I | (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-S or 17 | | | CFR 240.18a-7, as applicable. | | | Iii (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-1e or 17 CFR 240.17a-12, | | | as applicable. | | | □ (y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or | | | a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k). | | | ____________________________________
□ (z) Other:
_ | \*\*To request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-S(e}{3) or 17 CFR 240.18a-7(d){2), as applicable. {2}------------------------------------------------ # **CONFIDENTIAL** **CARL M. HENNIG, INC.** Financial Statements and Report of Independent Registered Public Accounting Firm Pursuant to Rule 17a-5 For the Year Ended September 30, 2024 {3}------------------------------------------------ # **CONFIDENTIAL** ## **CARL M. HENNIG, INC. Table of Contents September 30, 2024** | | Page | |---------------------------------------------------------|-------| | Report of Independent Registered Public Accounting Firm | 1 | | Flnanclal Statements | | | Statement of Financial Condition | 2 | | Statement of Comprehensive Income | 3 | | Statement of Changes in Stockholders' Equity | 4 | | Statement of Cash Flows | 5 | | Notes to Financial Statements | 6 -10 | | Supplemental Information | | | Computation of Net Capital | 11 | | Possession or Control | 11 | | Exemptive Provisin | 11 | | | | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) #### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To Directors and Shareholders of Carl M. Hennig, Inc. ### **Opinion on The Financial Statements** We have audited the accompanying statement of financial condition of Carl M. Hennig, Inc. (the "Company") as of September 30, 2024, and the related notes, statement of comprehensive income, stockholder's equity and cash flows for the year then ended (collectively referred to as "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024, 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 the Company's management. Our responsibility is to express an opinion on the Company'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 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 of these financial statements 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 from material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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 the audit provides a reasonable basis for our opinion. ### **Report on Supplementary Information** The accompanying infonnation, including Net Capital Computations, Determination of Reserve Requirements and Possession & Control Requirements ("Supplemental Information Section") has been subjected to audit procedures performed in conjunction with the audit of the Company's financial statement. The supplemental information is the responsibility of the Company'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 Rule l 7a-5 under the Securities Exchange Act of 1934 and, if applicable, under Regulation 1.10 under the Commodity Exchange Act. In our opinion, the information contained in the Supplementary Information section is fairly stated, in all material respects, in relation to the financial statements as a whole. *?oat/'(;.* & *i\$'cwd,* P *LL* ti Giddings, Texas 12/31/2024 We have served as the auditor for Carl M. Hennig, Inc. since 2024. ![](_page_4_Picture_14.jpeg) {5}------------------------------------------------ # **CONFIDENTIAL CARL M. HENNIG, INC.** # **Statement of Financial Condition As of September 30, 2024** ## **ASSETS** | ASSETS | | |-------------------------------------|-----------------| | Cash | \$
91,032 | | Receivable from Broker/Dealer | 234,890 | | Securities Owned, at Fair Value | 695,645 | | Prepaids | 945 | | Furniture, Equipment, and Leasehold | | | Improvements, at Cost, Net of | | | \$260,711 Accumulated Depreciation | | | and Amortization | 182 | | Goodwill | 125,000 | | Deferred Tax Asset | 6,150 | | TOT AL ASSETS | \$
1,153,844 | ## **LIABILITIES AND STOCKHOLDERS' EQUITY** | LIABILITIES | | |------------------------------------------------------|-----------------| | Accounts Payable | \$
44,180 | | Compensation and Commissions Payable | 275,315 | | Accrued Profit Sharing Contribution | 94,565 | | Income Tax Payable | 272 | | Total Liabilities | 414,332 | | STOCKHOLDERS' EQUITY | | | Common Stock, No Par Value, 2,000 Shares Authorized, | | | 800 Shares Issued and Outstanding | 80,000 | | Additional Paid-in Capital | 225,000 | | Retained Earnings | 455,794 | | Accumulated Other Comprehensive Loss | (21,282) | | Total Stockholders' Equity | 739,512 | | TOT AL LIABILITIES AND | | | STOCKHOLDERS' EQUITY | \$
1,153,844 | {6}------------------------------------------------ # **CONFIDENTIAL CARL M. HENNIG, INC.** # **Statement of Comprehensive Income For the Year Ended September 30, 2024** | REVENUE | | |-------------------------------------------------------|-----------------| | General Securities Commissions | \$
1,148,262 | | 12b-1 Revenue | 121,465 | | Interest and Income | 242,726 | | Advisory Fees | 211,916 | | Net Dealer Trading and Investment Losses | 106,573 | | Other Income | 80,291 | | Total Revenue | 1,911,233 | | EXPENSES | | | Commissions, Other Compensation, and Related Benefits | 1,502,512 | | Clearing and Execution Charges | 54,538 | | Occupancy | 52,800 | | Communications and Quotation Expense | 64,488 | | Other Expenses | 157,555 | | Total Expenses | 1,831,893 | | Income Before Income Tax Provision | 79,340 | | Income Tax Provision | (24,315) | | NET INCOME | 55,025 | | OTHER COMPREHENSIVE LOSS | | | Unrealized Loss on Securities | (21,282) | | COMPREHENSIVE INCOME | \$
33,743 | {7}------------------------------------------------ # Statement of Changes in Stockholders' Equity For the Year Ended September 30, 2024 | | | Common
Stock | Additional
Paid-In
Capital | Retained
Earnings | Accumulated
Other
Comprehensive
Loss | | Total
Stockholders'
Equity | | |-------------------------------|----|-----------------|----------------------------------|----------------------|-----------------------------------------------|----------|----------------------------------|----------| | BALANCE • SEPTEMBER 30, 2023 | \$ | 80,000 | \$ 225,000 | \$ 400,769 | \$ | | \$ | 705,769 | | Unrealized Loss on Securities | | | | | | (21,282) | | (21,282) | | Net Income | | | | 55,025 | | | | 55,025 | | BALANCE • SEPTEMBER 30, 2024 | \$ | 80,000 | \$ 225,000 | \$ 455,794 | \$ | {21,282} | \$ | 739,512 | {8}------------------------------------------------ # **CONFIDENTIAL CARL M. HENNIG, INC.** # **Statement of Cash Flows For the Year Ended September 30, 2024** | CASH FLOWS FROM OPERATING ACTIVITIES
Net Income
Adjustments to Reconcile Net Income to Net
Cash Flows From Operating Activities | \$
55,025 | |------------------------------------------------------------------------------------------------------------------------------------------|--------------| | Depreciation and Amortization | 33 | | (Increase) decrease in: | | | Receivable from Broker/Dealer | (132,555) | | Securities Owned, at Fair Value | (140,979) | | Prepaids | (945) | | Deferred Tax Asset | 20,225 | | Increase (decrease) in: | | | Accounts Payable | (15,819) | | Compensation and Commissions Payable | 111,078 | | Accrued Profit Sharing Contribution | 26,584 | | Income Tax Payable | (9,141} | | Total Adjustments | {141,519} | | Net Cash Flows Provided by Operating Activities | {86,494} | | NET DECREASE IN CASH | (86,494) | | CASH • BEGINNING OF YEAR | 177,526 | | CASH - END OF YEAR | \$
91,032 | | SUPPLEMENT AL DISCLOSURES | | | Cash Paid During the Year for: | | | Interest | \$
226 | | Taxes | \$
13,231 | | | | {9}------------------------------------------------ #### **Note 1** - **Nature of Operations and Summary of Significant Accounting Policies** #### **Nature of Operations** Cari M. Hennig, Inc. (the "Company") was incorporated in the state of Wisconsin on December 9, 1968. The Company is registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FlNRA). The Company's principal business activity is the sale of securities. #### **Basis of Presentation** The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GMP). #### **Securities Transactions** Securities transactions of the Company, induding commission revenue, 12b-1 revenue, and related expenses, are recorded on a trade date basis, which is the same business day as the transaction date. #### **Cash** For the purposes of the statement of cash flows, cash is defined as demand deposits including checking accounts. #### **Receivables** The Company reviews the receivables for collectability on a regular basis. The allowance for doubtful accounts reflects management's best estimate of probable losses determined principally on the basis of historical experience. There was no allowance for doubtful accounts as of September 30, 2024. #### **Depreciation and Amortization** Depreciation of furniture and equipment is provided for using various methods over five to seven-year period~. Amortization of leasehold improvements is provided based on estimated life. #### **Intangible Assets** The Company values all intangible and identifiable intangible assets acquired and liabilities assumed in business combination transactions. Goodwill represents the unidentifiable assets that are implicitly included in the consideration exchanged for the acquired business. The Company has elected the following accounting alternatives relative to goodwill and related impairment testing: - The Company, as part of goodwill, includes customer related intangibles that were acquired in connection with any business transactions. - The Company has elected to test goodwill for impairment upon the occurrence of a triggering event or circumstance that indicates the fair value of the reporting unit is less than the carrying amount, including goodwill. - The Company evaluates whether triggering events or changes in circumstances have occurred by considering the facts and circumstances that exist as of the end of the reporting period. The Company has evaluated the intangible assets as of the reporting period and have concluded there is no impairment of goodwill as of September 30, 2024. #### **Use of Estimates** The preparation of financial statements in conformity with GAAP 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. #### **Advisory Fees** Advisory fees are recognized based on the ending balance of the previous quarter and are paid in arrears. {10}------------------------------------------------ #### **Note 1** - **Nature of Operations and Summary of Significant Accounting Policies (Continued)** #### **Income Taxes** The Company accounts for any potential interest or penalties related to possible future liabilities for unrecognized income tax benefits as other expense. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, including net operating losses. Future tax benefits are recognized only to the extent that realization of such benefits, in the opinion of management, is more likely than not. Deferred taxes are provided on differences between financial reporting and income tax basis of accounting. The differences arise primarily from differing methods used to account for unrealized gain or losses on securities owned. The Company is no longer subject to examination by tax authorities for Federal, state, or local income taxes for periods before 2020. #### **Advertising Costs** Expenditures for advertising and sales promotion are expensed as incurred. Advertising and promotion expense was \$2,807 for the year ended September 30, 2024. #### **Significant Judgments** 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. #### **Note 2** - **Recognition of Revenue** The Company adopted ASU 2014-09, Revenue from Contracts with Customers, (codified in ASC 606). The Company recognizes revenue when services are transferred to clients. Revenue is recognized based on the amount of consideration that management expects to receive in exchange for these services in accordance with the terms of the contract with the client. To determine the amount and timing of revenue recognition, the Company must (1) identify the contract with the client, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when the Company satisfies a performance obligation. The Company has entered into a clearing agreement with a clearing broker whereby it introduces customers and receives revenue. Customers enter into a customer agreement with the clearing broker which establishes the terms under which the customer agrees to compensate the parties for transactions provided, including the purchase and sale of financial products and fees for account maintenance. The transaction price is determined by the market and may include a commission or markup ("transaction fees") added by the Company. The Company or clearing affiliate may charge/earn fees for margin lending, balances held, and sundry services ("other services"), as set forth in the customer agreement, which fees may be shared with the Company. All services are satisfied, and transaction and other fees are recognized, on the transaction date; the date in which the undertying financial instrument is purchased or sold, the purchaser or seller is identified, pricing is agreed, risk and rewards of ownership or dispossession has occurred and transferred, and other transaction services have been provided. The Company has entered into one or more selling agreements with investment companies and/or insurance companies ("the fund") whereby it receives service fee revenue in the form of 12b-1 fees for providing ongoing customer service to investors. The amount of 12b-1 fees due the Company is set forth in the selling agreement between the Company and the fund's sponsor. The Company meets its performance obligation by servicing the customer. The amount of 12b-1 fees due to the Company is calculated based on the average assets under management for the period in which the 12b-1 fee is calculated, which is unknown to the Company until receipt of a statement from the fund's sponsor, at which time 12b-1 service fee revenue is recognized. {11}------------------------------------------------ #### **Note 2** - **Recognition of Revenue (Continued)** The Company has entered into an agreement as a broker or dealer with a clearing organization. which sets forth the rights and obligations of the parties. The tenns of the agreement set forth the performance obligations of the parties, which includes settling transactions initiated by the Company. The Company determines the price at which it will execute transactions, however execution is dependent on market conditions. Upon settlement of transactions the parties have met their contractual obligations. Realized capital gains or losses are recognized after settlement, interest and/or dividends are recognized upon receipt, and unrealized gains or losses are recorded as other comprehensive income until the position is closed. #### **Note 3** - **Leases** On October 1, 2019, the Company adopted ASU 2016-02 Leases- (Topic 842). ASU 2016-02 requires the recognition of lease assets and lease liabilities on the balance sheet related to the rights and obligations created by lease agreements, including those leases classified as operating leases under previous GAAP, along with the disclosure of key information about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018. The Company has elected not to recognize leases with terms of 12 months or less. This standard had no material impact on the Company's financial position and results of operations. #### **Note 4** - **Securities Owned** FASB ASC 820 defines fair value, creates a framework for measuring fair value and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income, or cost approach, as specified by FASB ASC 820, are used to measure fair value. The levels are: Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model based valuation techniques which all significant assumptions are observable in the market. Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect the Company's own estimates of assumptions market participants would use in pricing the asset or liability. Valuation techniques include use of discounted cash flow models, option pricing models and similar techniques. The components of securities owned are as follows at September 30, 2024: | | Level 1 | | Level2 | | Le-.el 3 | Total | | | |-------------------|---------------|----|--------|----|----------|-------|---------|--| | Equity Securities | \$
229,524 | \$ | | \$ | | \$ | 229,524 | | | Treasury Note | 59,457 | | | | | | 59,457 | | | Money Market Fund | 406,664 | | | | | | 406,664 | | | Total Investments | \$
695,645 | \$ | | \$ | | \$ | 695,645 | | No valuation techniques have been applied to any other assets or liabilities included in the statement of financial condition. Due to the nature of these items, all have been recorded at their historical value. #### **Note 5** - **Related Party Transactions** The shareholders and officers of the Company have provided office space to the Company during the year ended September 30, 2024 and charged the Company \$48,000 for this service. There is no written agreement for this office lease. The tenns are on a month-to-month basis. {12}------------------------------------------------ #### **Note 6** - **Lease Commitments** The Company leases office space at two locations under month-to-month leases, including the main lease disclosed in Note 5. Rent expense for both locations was \$52,800 for the year ended September 30, 2024. #### **Note 7** - **Shareholder Agreement** An agreement exists between the shareholders in which the majority shareholder has the first right to buy all the shares of the minority shareholder at a price equal to book value, should the minority shareholder decide to sell their shares. ### **Note 8 -Profit-Sharing Plan** The Company has a discretionary profit-sharing plan covering substantially all of its employees. For the year ended September 30, 2024, the Company incurred \$99,467 of expense associated with this plan. #### **Note 9** - **Contingencies** The Company, from time to time, is involved in certain claims and arbitrations incidental to its business operations. The Company is not in a position currently to provide an evaluation of the likelihood of an unfavorable outcome or an estimate of the amount or range of potential loss, if any, to the Company. #### **Note 10-Clearing Agreement with Off-Balance Sheet Risk** The Company sells securities it does not currently own (short sales) and will therefore be obligated to purchase such securities at a future date. The Company records these obligations in its financial statements at the market values of the related securities and will incur a loss if the market value of the securities increases subsequent to the financial statement date. As of September 30, 2024, the Company had no short sales recorded in its statement of financial condition. The company also enters into these transactions to meet the needs of its customers, to conduct trading activities, and to manage market risks. In order to facilitate the aforementioned transactions, as well as other transactions on behalf of its customers, the Company has entered into an agreement with another broker/dealer (Clearing Broker/Dealer) whereby the Company forwards (introduces) customer securities transactions to the Clearing Broker/Dealer, fully disclosing the customer name and other information. The processing and, if applicable, any financing pertaining to the introduced transactions, are performed by the Clearing Broker/Dealer. The customer account is therefore maintained and recorded in the books and records of the Clearing Broker/Dealer on the Company's behalf. Either party may terminate the agreement without cause upon ninety days prior written notice. Pursuant to terms of the agreement, the Company is prohibited from entering into any other similar agreement unless it receives prior written approval from the Clearing Broker/Dealer. The agreement expires on March 1, 2025. To assure the Company's performance under this agreement, the Company is required to maintain a \$50,000 deposit with the Clearing Broker/Dealer. The deposit is held in a Treasury Note and included in "Securities Owned, at Fair Value" item on the Balance Sheet. The Company is also required to maintain a \$120,000 broker/dealer fidelity bond. Additional provisions of the agreement state that the Company is to be held responsible for any losses arising when the customers introduced by the Company to the Clearing Broker/Dealer fail to meet their contractual commitments pertaining to the purchase, sale, and possible financing of securities transactions. The Company may therefore be exposed to off-balance sheet risk in the event the customer is unable to fulfill its contracted obligations and it is necessary for the Clearing Broker/Dealer to purchase or sell the securities at a loss. The Company's exposure to risk would consist of the amount of the loss realized on the purchase or sale and any additional expenses incurred pertaining to the transaction or other customer activity. {13}------------------------------------------------ ![](_page_13_Picture_0.jpeg) #### **Note 11** - **Net Capital Requirements** The Company is a member of the FINRAand is subject to the SEC Uniform Net Capital Rule 15c3-1. This rule requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 1500% (15:1), or, during its first year ofoperations, 800% (8:1). Net capital and the related net capital ratio may fluctuate on a daily basis. At September 30, 2024, the Company had net capital of \$560,966 which was \$460,966 in excess of its required net capital of \$100,000. The Company's ratio of aggregate indebtedness to net capital was 73.86%. The Company has elected to use the basic computation method, as is pennitted by the rule, which requires that the Company maintain minimum Net Capital pursuant to a fixed dollar amount or 6-2/3% percent of total aggregate indebtedness, as defined, whichever is greater, and does not, therefore, calculate its net capital requirement under the alternative reserve requirement method. #### **Note 12** - **Reserve Requirements** The Company operates pursuant to an exemption from 15c3-3, or no exemption purusant to footnote 74 of SEC Release 34-70073, and does not take possession of customer funds or securities, therefore, the Company is not required to compute the determination of customer reserve requirements. #### **Note 13** - **Possession and Control** The Company operates pursuant to an exemption from 15c3-3, or no exemption purusant to footnote 74 of SEC Release 34-70073, and therefore has no possession or control of customer funds or securities. There were no exceptions in adhering to the Company's operating exemption and/or no exemption, as applicable, pursuant to. #### **Note 14** - **Concentrations of Credit Risk** The Company is engaged in various trading and brokerage activities in which the counterparties primarily include broker/dealers, banks, other financial institutions, and the Company's own customers. In the event the counterparties do not fulfill their obligations, the Company may be exposed to risk. The risk of default depends on the creditworthiness of the counterparty or issuer of the instrument. It is the Company's policy to review, as necessary, the credit standing of each counterparty. In addition, most of the Company's cash is on deposit at one financial institution and the balance at times may exceed the federally insured limit. The Company believes it is not exposed to any significant credit risk to cash. # **Note 15-Furniture, Equipment, and Leasehold Improvements** Furniture, equipment, and leasehold improvements as of September 30, 2024 consists of: | Furniture & Fixtures | \$
76,820 | |-------------------------------------------------|--------------| | Office Equipment | 21,523 | | Leasehold lmprmiements | 162,550 | | | 260,893 | | Less: Accumulated Depreciation and Amortization | 260,711 | | Net | \$
182 | #### **Note 16-Subsequent Events** The Company has evaluated subsequent events for potential recognition and/or disclosure through the date which the financial statements were issued, noting none. {14}------------------------------------------------ # **CONFIDENTIAL** #### **Supplemental Information** Pursuant to SEA Rule 17 a-5 of the Securities and Exchange Act of 1934 As of and for the year ended September 30, 2024 The Company is exempt from the provisions of SEC Rule 15c3-3 under the Securities Exchange Act of 1934 as the Company's activities are limited to those set forth in the conditions for exemption appearing in paragraph (k)(2)(ii) of Rule 15c3-3 and those contemplated by Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. *§* 240.17a-5. {15}------------------------------------------------ ![](_page_15_Picture_0.jpeg) ## **CARL M. HENNIG, INC. Schedule 1 - Computation of Net Capital Pursuant to SEA Rule 17a-5 of the Securities and Exchange Act of 1934 As of and for the Year Ended September 30, 2024** #### **Computation of Net Capital** | Total Stockholder's Equity | \$
739,512 | |---------------------------------------------------------------------------------------|---------------| | Allowable Subordinated Loans
Non-Allowable Assets | 143,269 | | Haircuts on Securities Positions
Securities Haircuts | 35,277 | | Undue Concentration Charges | | | Net Allowable Capital | \$
560,966 | | Computation of Net Capital Requirement | | | Minimum Net Capital Required as a Percentage of Aggregate Indebtedness | \$
27,624 | | Minimum Dollar Net Gapital Requirement of Reporting Broker/Dealer | \$
100,000 | | Net Gapital Requirement | \$
100,000 | | Excess Net Capital | \$
460,966 | | Computation of Aggregate Indebtedness | | | Total Aggregate Indebtedness | \$
414,332 | | Percentage of Aggregate Indebtedness to Net Gapital | 73.86% | | Computation of Reconciliation of Net Capital | | | Net Gapital Computed and Reported on FOCUS HA as of September 30, 2024
Adjustments | \$
679,704 | | Increase (Decrease) in Equity | (138,503) | | Increase (Decrease) in Subordinated Loans | | | (Increase) Decrease in Non-Allowable Assets | 19,279 | | (Increase) Decrease in Securities Haircuts | 486 | | (Increase) Decrease in Undue Concentration Charges | | | Net Capital per Audit | \$
560,966 | | Reconciled Difference | \$ | {16}------------------------------------------------ ![](_page_16_Picture_0.jpeg) ## Carl M. Hennig, Inc. Supplementary Statements Pursuant to SEA Rule 17a-5 of the Securities and Exchange Act of 1934 As of and for the year ended September 30, 2024 ## Statement Related to Uniform Net Capital Rule The Company is a member of the FINRA and is subject to the SEC Uniform Net Capital Rule 15c3-1. This rule requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 1500% (15:1), or, during its first year of operations, 800% (8:1). Net capital and the related net capital ratio may fluctuate on a daily basis. At September 30, 2024, the Company had net capital of \$560,966, which was \$460.966 in excess of its required net capital of \$100,000. The Company's ratio of aggregate indebtedness to net capital was 73.86%. The Company has elected to use the basic computation method, as is permitted by the rule, which requires that the Company maintain minimum Net Capital pursuant to a fixed dollar amount or 6-2/3% percent of total aggregate indebtedness, as defined, whichever is greater, and does not, therefore, calculate its net capital requirement under the alternative reserve requirement method. ## Statement Related to Exemptive Provision (Possession and Control) The Company operates pursuant to an exemption from 15c3-3, or no exemption pursuant to footnote 74 of SEC Release 34-70073, and therefore has no possession or control of customer funds or securities. There were no exceptions in adhering to the Company's operating exemption and/or no exemption, as applicable, pursuant to 15c3-3(k)(2)(ii) and footnote 74 of SEC Release 34-70073, respectivly. ## Statement Related to Reserve Requirement The Company operates pursuant to an exemption from 15c3-3, or no exemption pursuant to footnote 74 of SEC Release 34-70073, and does not take possession of customer funds or securities; the Company is not required to compute the determination of customer reserve requirements. ## Statement Related to SIPC Reconciliation SEA Rule 17a-S(e)(4) requires a registered broker-dealer not exempt from SIPC membership with gross revenues in excess of \$500,000, or firm's that file Form SIPC-3, to file an Agreed Upon Procedures Report (AUP Report). SIPC members with gross revenues below \$500,000 are not required to file an AUP Report. If an AUP Report is required, the AUP Report may be included within this Supplemental Information section or filed with SIPC under separate cover. {17}------------------------------------------------ earl M. Hennig, Inc. 206 North Main Street Oshkosh,Wl54901 Carl M. Hennig, lnc.'s Exemption Report To: Tuttle & Bond PLLC Re: 17 C.F.R. § 2.40.15c3-3(k) Carl M. Hennig, Inc. (the "Company") is a registered broker-dealer subject to Rule 17a-5 promulgated by the Securities and Exchange Commission (17 C.F.R. §240.17a-5, "Reports to be made by certain brokers and dealers"). This Exemption Report was prepared as required by 17 C.F.R. § Z40.17a-5(d)(l) and (4). To the best of its knowledge and belief, the Company states the following: - 1. The Company claimed an exemption from 17 C.F.R. § 240.15c3-3 under the following provisions of 17 C.F.R. § 240.15c3-3 **(k): (k)(2)(ii}.** - 2. The Company met the identified exemption provisions in 17 C.F.R. § 240.15c3-3(k) throughout the most recent audit period, October 01, 2023 through September 30, 202.4, 'A'.ithout exception. - 3. The Company is also filing this Exemption Report relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a0 5 because the Company limits its business activities related thereto exclusively to - (1) proprietary trading; and - (2) 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. The Company (1) 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 15c2-4 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); (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3} throughout the most recent fiscal year, October 01, 2023 through September 30, 2024, without exception. earl M. Hennig, Inc. I, Scot Harenburg, do hereby affirm that to rpy best knowledge and belief this Exemption Report is true and correct. President {18}------------------------------------------------ ![](_page_18_Picture_0.jpeg) #### **Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the Securities and Exchange Act of 1934 For the Year-End September 30, 2024** **Report of Independent Registered Public Accounting Firm Exemption Review Report Pursuant to lSc:3-3** Operating Pursuant to: 15c3-3(k)(2)(ii) Scot Harenburg Carl M. Hennig, Inc. 206 North Main Street Oshkosh, **WI** 54901 Certified Public Accountants Dear Scot Harenburg: We have reviewed management's statements, included in the accompanying Exemption Report in which (1) Carl **M.** Hennig, Inc. identified the following provision of 17 C.F.R. §240.15c3-3(k) under which Carl M. Hennig, Inc. claimed the following exemption from 17 C.F.R. §240.15c3-3 15c3-3(k)(2)(ii) and (2) Carl M. Hennig, Inc. stated that Carl M. Hennig, Inc. met the identified exemption throughout the most recent fiscal year without exception. Carl M. Hennig, Inc. is also filing this Exemption Report because the Company's other business activities contemplated by adopting amendments to 17 C.F.R. § 17a-5 are limited to proprietary trading and effecting securities via subscriptions on a subscription way basis where funds are payable to the issuer or its agent and not to the Company. In addition, Carl **M.** Hennig, Inc. did not, directly or indirectly receive, hold, or owe funds or securities for or to customers other than funds received and promptly transmitted in compliance with paragraphs (a) or (b)(2) of Rule 15c2-4, 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 Carl **M.** Hennig, Inc.; nor did Carl M. Hennig, Inc. carry accounts of or for customers and did not carry proprietary accounts of brokers (PAB) as defined in Rule 15c3-3, throughout the most recent fiscal year without exception. Carl M. Hennig, Inc.'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 Carl M. Hennig, Inc.'s 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 my review, I am 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 Rule l 5c3-3 under the Securities Exchange Act of 1934. Giddings, Texas 12/31/2024 ![](_page_18_Picture_11.jpeg) {19}------------------------------------------------ The following report can be filed separately with SIPC. {20}------------------------------------------------ ![](_page_20_Picture_0.jpeg) II Tuttle & Bond, PLLC Certified Public Accountants # **Carl M. Hennig, Inc.** ## **Supplementary Schedules Pursuant to SEA Rule 17a-5 Of the securities and Exchange Act. of 1934** As of **and for the Year-Ended September 30, 2024** ## **Report of Independent Registered Public Accounting** Finn **on Applving Agreed Upon Procedures Pursuant to SEA Rule 17a-S(e)(4) FonnSIPC-7** Carl **M.** Hennig, Inc. is a member of the Securities Investor Protection Corporation (SIPC). In accordance with Rule l 7a-5(e)(4) under the Securities Exchange Act of 1934, we have performed the procedures enumerated below with respect to the accompanying Schedule of Assessments and Payments, Forms SIPC-7 to the Securities Investor Protection Corporation (SIPC) for the periods through September 30, 2024, which were agreed to by Carl **M.** Hennig, Inc. and the Securities and Exchange Commission, Financial Industry Regulatory Authority and the SIPC, solely to assist you and other specified parties in evaluating Carl **M.** Hennig, Inc.' s compliance with the applicable instructions of the Assessment Reconciliation Forms SIPC 7. Carl M. Hennig, Inc.' s management is responsible for Carl M. Hennig, Inc.' s compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and the Public Company Accounting Oversight Board (United States). 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 were performed, and our findings are as follows: - 1. Compared the listed assessment payments represented on Form SIPC 6 & 7 with the respective cash disbursements record entries, noting no differences. - 2. Compared audited Total Revenue for the period of October 01, 2023 through September 30, 2024 (fiscal year-end) with the amounts reported on Forms SIPC-7, noting no differences. - 3. Compared any adjustments reported on Form SIPC-7 with supporting schedules and work papers, to the extent such exists, noting no differences. - 4. Proved the arithmetical accuracy of the calculations reflected on Form SIPC-7, noting no differences. - 5. If applicable, 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 are not engaged to and did not conduct an examination for which the objective would be to express an opinion on compliance. Accordingly, we do not express such an opinion. Had we performed additional procedures other matters might have come to our attention that would have been reported. This report is intended solely for the information and use of the specified parties listed above and is not intended to be and should not be used by anyone other than these specified parties. Giddings, Texas 12/31/2024 ![](_page_20_Picture_15.jpeg) rutti.e &. Bond, PUC 29\$-d GOl'.'h."'tl◊M l..at.e {21}------------------------------------------------ ![](_page_21_Picture_0.jpeg) Carl M Hennig, Inc. September 3 , 2024 **SIPC 7 Reconciliation** | Gross Revenues for SIPC-7 (line 3) \$ 1,889,885 | | | | | |-------------------------------------------------|---------------|------------------|-----|------------| | Total Deductions for SIPC-7 (line 6) \$ | 284,572 | | | | | SIPC Net Assessable Revenues | \$1,605,313 | | | | | 0.0015
General As: | \$
2,408 | | | | | Overpayment Credit Applied | \$
15 | | | | | Payments and credits | \$
1,119 | | | | | Assessment Bala nee Due After All Credits a \$ | 1,274 | | | | | Late Payment Interest (if any) | \$ | | | | | Amount Due on SIPC-7 with Interest | \$
1,274 | | | | | | | Date Paid: | ~ | &li.d.JQ;_ | | Paid with SIPC 6 | \$
1,119 | April 18, 2024 | ACH | SIPC | | Paid with SIPC 7 | \$ | Accounts Payable | ACH | SIPC | | Total Paid | \$
1,119 | | | | | Overpayment (Underpayment) | \$
(1,274) | | | | Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.