# FAIRMOUNT PARTNERS LP X-17A-5 (2021-02-24) — Broker-dealer annual report - Company: FAIRMOUNT PARTNERS LP - Form: X-17A-5 - Filed: 2021-02-24 - Period: 2020-12-31 - Accession: 0001428008-21-000001 - CIK: 1428008 - File #: 8-67839 - Material weakness: No - Auditor: Sanville & Company - Auditor location: Abington, PA - Contact: Christina Halliday - Phone: 6102606274 - Signed by: Christina Halliday (CFO & VP) Original filing: https://www.sec.gov/Archives/edgar/data/1428008/000142800821000001/FPLPAuditReport2020CBS.pdf --- {0}------------------------------------------------ **Fairmount Partners LP Statement of Financial Condition December 31, 2020** {1}------------------------------------------------ # Fairmount Partners LP TABLE OF CONTENTS December 31, 2020 | ANNUAL AUDITED FOCUS REPORT FACING PAGE | | |---------------------------------------------------------------------------------------|--| | REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON THE FINANCIAL STATEMENT | | | FINANCIAL STATEMENT | | | Statement of Financial Condition | | | Notes to Financial Statement | | {2}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response . . . . 12.00 # ANNUAL AUDITED REPORT FORM X-17A-5 PART III | | SEC FILE NUMBER | | |--|-----------------|--| | | | | # 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 | 01/01/2020 | AND ENDING | 12/31/2020 | |-----------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|------------|-----------------------------| | | MM/DD/YY | | MM/DD/YY | | | A. REGISTRANT IDENTIFICATION | | | | NAME OF BROKER - DEALER: | | | OFFICIAL USE ONLY | | Fairmount Partners LP | | | | | | | | FIRM ID. NO. | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | 100 Four Falls Corporate Center, Suite 660 | | | | | | (No. and Street) | | | | West Conshohocken | PA | | 19428 | | (City) | (State) | | (Zip Code) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | Christina Halliday | | | (610) 260-6274 | | | | | (Area Code - Telephone No.) | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | Sanville & Company | | | | | | (Name - if individual, state last, first, middle name) | | | | 1514 Old York Road | Abington | PA | 19001 | | (Address) | (City) | (State) | (Zip Code) | | CHECK ONE:
X Certified Public Accountant
Public Accountant
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 240.17a-5(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 displays a currently valld OMB control number. {3}------------------------------------------------ # OATH OR AFFIRMATION I, Christina Halliday swear swear (or affirm) that, to the best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of Fairmount Partners LP , as of December 31 , 2020, are true and correct. I further swear (or affirm) that neither the company nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of a customer, except as follows: Sworn to and subscribed before me Chis 34 " day of February 20 01 Principal Financial Officer Title Notary Public Commonwealth of Pennsylvania - Notary Seal MARIA A. INNOCENTI, Notary Public Montgomery County My Commission Expires April 25, 2021 Commission Number 1132564 This report\*\* contains (check all applicable boxes): (a) Facing page. X (b) Statement of Financial Condition. (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement of Comprehensive Income (as defined in s210.1-02 of Regulation S-X). (d) Statement of Changes in Financial Condition. (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. (f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. (g) Computation of Net Capital. 2 (h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3, O (i) A Reconciliation, including appropriate explanation of the Computation of Net Capital Under Rule 15c3-1 and the Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. N/A [] (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of consolidation. X (1) An Oath or Affirmation. [(m) A copy of the SIPC Supplemental Report. N/A [ (n) A report describing any material inadequacies found to have existed since the date of the previous audit. 2(0) Exemption Report. \*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e)(3). {4}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: 3235-0123 Expires: October 31, 2023 Estimated average burden hours per response . . . . 12.00 8-49104 SEC FILE NUMBER # ANNUAL AUDITED REPORT FORM X-17A-5 PART III # 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 | 01/01/2020 | AND ENDING | 12/31/2020 | |-----------|--------------------------------------------------------------------------|--------------------------------------------------------|------------|-----------------------------| | | | MM/DD/YY | | MM/DD/YY | | | | | | | | | | A. REGISTRANT IDENTIFICATION | | | | | NAME OF BROKER - DEALER: | | | OFFICIAL USE ONLY | | | Fairmount Partners LP | | | | | | | | | FIRM ID. NO. | | | ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.) | | | | | | 100 Four Falls Corporate Center, Suite 660 | | | | | | | (No. and Street) | | | | | West Conshohocken | PA | | 19428 | | | (City) | (State) | | (Zip Code) | | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT | | | | | | Christina Halliday
(610) 260-6274 | | | | | | | | | (Area Code - Telephone No.) | | | | B. ACCOUNTANT IDENTIFICATION | | | | | | | | | | | INDEPENDENT PUBLIC ACCOUNTANT whose opinion is contained in this Report* | | | | | | | | | | | | Sanville & Company | (Name - If individual, state last, first, middle name) | | | | | 1514 Old York Road | Abington | PA | 19001 | | (Address) | | (City) | (State) | (Zip Code) | | | CHICK ONE: | | | | | | X Certified Public Accountant | | | | | | Public Accountant | | | | | | 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 240.17a-5(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 displays a currently valld OMB control number. {5}------------------------------------------------ # OATH OR AFFIRMATION | I, Christina Halliday | swear (or affirm) swear (or affirm) that, to the | |-------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------| | best of my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of | | | Fairmount Partners LP
December 31 | . as of | | nor any partner, proprietor, principal officer or director has any proprietary interest in any account classified solely as that of | , 2020, are true and correct. I further swear (or affirm) that neither the company | | a customer, except as follows: | | | | | | | | | | | | | | | | | | Submito and subscribed beforemo | | | this 34 m day of Februged of | | | | | | | Principal Financial Officer | | | Title | | Notary Public | | | Commonwealth of Pennsylvania - Notary Seal | | | MARIA A. INNOCENTI, Notary Public
Montgomery County | | | My Commission Expires April 25, 2021
Commission Number 1132564 | | | | | | This report ** contains (check all applicable boxes): | | | (a) Facing page. | | | (b) Statement of Financial Condition. | ] (c) Statement of Income (Loss) or, if there is other comprehensive income in the period(s) presented, a Statement of | | Comprehensive Income (as defined in s210.1-02 of Regulation S-X). | | | (d) Statement of Changes in Financial Condition. | | | (e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. | | | [(f) Statement of Changes in Liabilities Subordinated to Claims of Creditors. | | | (g) Computation of Net Capital.
(h) Computation for Determination of Reserve Requirements Pursuant to Rule 15c3-3. | | | [ (i) Information Relating to the Possession or Control Requirements Under Rule 15c3-3. | | | | ] (i) A Reconciliation, including appropriate explanation of Net Capital Under Rule 15c3-1 and the | | Computation for Determination of the Reserve Requirements Under Exhibit A of Rule 15c3-3. | | | consolidation. | ] (k) A Reconciliation between the audited Statements of Financial Condition with respect to methods of | | X (1) An Oath or Affirmation. | | | (m) A copy of the SIPC Supplemental Report. | | | | [(n) A report describing any material inadequacies found to have existed since the date of the previous audit. | | (o) Exemption Renort | | \*\* For conditions of confidential treatment of certain portions of this filing, see section 240.17a-5(e){3). {6}------------------------------------------------ ROBERT F. SANVILLE, CPA MICHAEL T. BARANOWSKY, CPA *Sanville & Company* CERTIFIED PUBLIC ACCOUNTANTS JOHN P. TOWNSEND, CPA 1514 OLD YORK ROAD ABINGTON, PA 19001 (215) 884-8460 • (215) 884-8686 FAX MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 100 WALL STREET, 8th FLOOR NEW YORK, NY 10005 (212) 709-9512 # **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** Board of Directors Fairmount Partners LP #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of Fairmount Partners LP (the "Company") as of December 31, 2020, and the related notes (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of the Company as of December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. #### **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 statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. We have served as the Company's auditor since 2008 Abington, Pennsylvania February 18, 2021 {7}------------------------------------------------ # **Fairmount Partners LP Statement of Financial Condition December 31, 2020** # **Assets** | Cash and cash equivalents
Fees receivable
Securities owned, at fair value
Prepaid expenses | \$
2,992,891
27,500
171,526
360 | |-----------------------------------------------------------------------------------------------------|---------------------------------------------| | Total assets | \$
3,192,277 | | Liabilities and Partners' Capital | | | Liabilities
Accounts payable and accrued expenses
Due to affiliate | \$
27,890
1,974,506 | | Total liabilities | 2,002,396 | | Partners' Capital | 1,189,881 | | Total liabilities and partners' capital | \$
3,192,277 | {8}------------------------------------------------ ### **1. Organization** Fairmount Partners LP (the "Company") is a broker-dealer located in West Conshohocken, Pennsylvania. The Company is registered with the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA). The Company's business consists of merger and acquisition and financial advisory services. The Company may also privately place securities. The Company, like other broker dealers and investment advisors, is directly affected by general economic and market conditions, including fluctuations in volume and price level of securities, changes in interest rates and securities brokerage services, all of which have an impact on the Company's liquidity. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ # **2. Summary of Significant Accounting Policies** # *The following are the significant accounting policies followed by the Company:* *Cash and Cash Equivalents and Concentration of Credit Risks* - The Company considers its investments in financial instruments with original maturities of less than ninety 90 days when issued to be cash equivalents. The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk related to cash. *Fee Revenues -* Fee revenue includes fees earned from providing merger and acquisition and financial advisory services. Under ASC 606, these fee revenues are recognized when earned based on the terms of the related contracts. Fee revenue related to financial transactions is recognized when the transaction closes. *Income Taxes -* The Company is treated as a partnership for federal and state income tax purposes and therefore, does not record a provision for income taxes. Accordingly, the individual partners report their share of the Company's income or loss on their personal income tax returns. The Company recognizes and discloses uncertain tax positions in accordance with accounting principles generally accepted in the United States of America (GAAP). As of, and during the year ended December 31, 2020 the Company did not have liability for unrecognized tax benefits. The Company is no longer subject to examination by federal and state taxing authorities prior to 2017. *Fees Receivable -* The Company carries its fees receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its fees receivable and establishes an allowance for doubtful accounts based on a history of past write-offs and collections and current credit conditions. Accounts are written-off as uncollectible once the Company has exhausted its collection means. There was no allowance for doubtful accounts as of December 31, 2020. *Fair Value Hierarchy -* FASB ASC 820 defines fair value, establishes a framework for measuring fair value, and establishes a hierarchy of fair value inputs. 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. {9}------------------------------------------------ ### **2. Summary of Significant Accounting Policies (Continued)** The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2. Inputs other than quoted prices included within level 1 that are observable for the asset or liability either directly or indirectly. Level 3. Unobservable inputs for the asset or liability. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety. *Process and Structure-* The Company's chief financial officer (CFO) in conjunction with the chief executive officer (CEO), discuss the current status of firm investments. They review the most recently available financial statements of the firm investments along with any recent rounds of financing to determine the fair value of the investments. The following table summarizes the valuation of the Company's investments by the above fair value hierarchy levels as of December 31, 2020: | Securities Owned: | Level 1 | Level 2 | Level 3 | |-------------------|---------|---------|---------------| | Common Stocks | \$
- | \$
- | \$
171,526 | | | | | | The following table sets forth a summary of the changes in the fair value of the Fund's level 3 investments for the year ended December 31, 2020: | | Investments | |------------------------|---------------| | Balance beginning year | \$
171,526 | | Changes to investments | - | | Balance end of year | \$
171,526 | | | | {10}------------------------------------------------ | | Balance at
December 31, | Valuation | Significant Unobservable Input(s):
Sensitivity of the Fair Value to | | |--------|----------------------------|-----------------------|--------------------------------------------------------------------------------------|-----------------------------| | Assets | 2020 | Technique(s) | Changes in the Unobservable Inputs | Range | | Equity | \$171,526 | Comparable
Pricing | Comparable companies in same industry
Multiple of revenues and liquidity discount | 1x-3x
revenue
30%-50% | \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ # **2. Summary of Significant Accounting Policies (Continued)** *Use of estimates -* 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 amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates and assumptions. *Subsequent events* - Management has evaluated the impact of all subsequent events through February 24, 2021 the date the financial statements were available to be issued and has determined that there were no subsequent events requiring disclosure in these financial statements. # **3. Net capital requirement** 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 15 to 1. At December 31, 2020, the Company's net capital was \$1,001,495 which was \$868,002 in excess of its minimum requirement of \$133,493. The Company's net capital ratio was 2.00 to 1. # **4. Exemption from Rule 15c3-3** The Company is exempt from SEC Rule 15c3-3 because the Company has no possession or control obligations under SEA Rule 15c3-3(b) or reserve deposit obligations under SEA Rule 15c3-3(e) because its business is limited to mergers and acquisitions, private placements and financial advisory services. # **5. Transactions with affiliates** The Company leases its employees from an affiliate. The Company records the actual compensation and benefits that are paid to the employees and pays the affiliate a service fee. The Company also leases its offices from the affiliate on a month to month basis. At December 31, 2020, the Company owed the affiliate \$1,974,506. {11}------------------------------------------------ #### **6. Coronavirus** On January 30, 2020, the World Health Organization declared the coronavirus outbreak a "Public Health Emergency of International concern" and on March 11, 2020 declared it to be a pandemic. Actions taken around the world to help mitigate the spread of the coronavirus include restrictions on travel, and quarantines in certain areas, and forced closures for certain types of public places and businesses. The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to have an adverse impact on the economies and financial markets of many countries, including the geographical area in which the Company operates. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide emergency assistance for individuals, families and businesses affected by the coronavirus pandemic. It is unknown how long the adverse conditions associated with the coronavirus will last and what the complete financial effect will be to the company. \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.