# HENNEPIN PARTNERS LLC X-17A-5 (2022-03-29) — Broker-dealer annual report - Company: HENNEPIN PARTNERS LLC - Form: X-17A-5 - Filed: 2022-03-29 - Period: 2021-12-31 - Accession: 0001483462-22-000001 - CIK: 1483462 - File #: 8-68498 - Type: Broker-dealer - Material weakness: No - Auditor: Mayer Hoffman McCann P.C. - Auditor location: Minneapolis, MN - Contact: Neil Weinstein - Phone: 612-604-2066 - Email: nweinstein@hennepinpartners.com - Website: hennepinpartners.com - Signed by: Neil Weinstein (Managing Director) Original filing: https://www.sec.gov/Archives/edgar/data/1483462/000148346222000001/HennepinPublic21.pdf --- {0}------------------------------------------------ Hennepin Partners LLC Report Pursuant to Rule 17a-5 of The Securities and Exchange Commission Including Report of Independent Registered Public Accounting Firm As of December 31, 2021 {1}------------------------------------------------ #### **- - - '"(#".//4276:** -- ,\$)2ϯϮϯϱͲϬϭϮϯ /' )\*2KĐƚ͘ϯϭ͕ϮϬϮϯ \*+ \$+-),)% &,)\*'))\*'&%\*2 #### **-- 038-07 -** 8-68498 **- -** **"#&!(#"%)&)&')"((#) '3807.38034."3908)"&()&(',"-(#3:56** |

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| | | | | Neil Weinstein
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| | | | | :# \$*&)/\$'+ &%)&\$+)(, )\$%++++%%,#)'&)+*&-)0+)'&)+*&% %'%%+',# | | | | | &,%+%+\$,\*+\*,''&)+0\*++\$%+&+\*% ),\$\*+%\*)# &%\*+\* \*&+/\$'+ &%3<@ =>;3<@5?898<98 91 ''# #3 **&'#"'+#&(#&'\$#"(#(# (#"#"#&!(#"#"(""('#&!&"#(&%)&(#&'\$#")" ''(#&! '\$ -')&&"( -\* #"(&# ")!&/** {2}------------------------------------------------ ## **OATH OR AFFIRMATION** | Neil Weinstein
I, | swear (or affirm) that, to the best of my knowledge and belief, the | |---------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------| | financial report pertaining to the firm of | Hennepin Paiiners LLC
, as of | | December 31 | 2.Jg!_, 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 | | fa customer.
as th t
Melissa M Sjolander
State of Minnesota
Notary Public
My Commission Expires 01/31/2025 | Signature: | | JyiS,of~~ | | | Notary Public 1 | | | |-----------------|--|--| | | | | # **This filing\*\* contains (check all applicable boxes):** - IXI (a) Statement of financial condition. - Ix] (b) Notes to consolidated statement of financial condition. - D (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§ 210.1-02 of Regulation S-X) . - D (d) Statement of cash flows. - D (e) Statement of changes in stockholders' or partners' or sole proprietor's equity. - D (f) Statement of changes in liabilities subordinated to claims of creditors. - D (g) Notes to consolidated financial statements. - D (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable. - D (i) Computation of tangible net worth under 17 CFR 240.18a-2. - D (j) Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3. - D (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. - □ (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. - D (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-l, 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. - D (p) Summary of financial data for subsidiaries not consolidated in the statement of financial condition. - IXI (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. - □ (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - IXI (t) Independent public accountant's report based on an examination of the statement of financial condition. - D (u) Independent public accountant's report based on an examination of the financial report or financial statements under 17 CFR 240.17a-5, 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. - D (w) Independent public accountant's report based on a review of the exemption report under 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable. - D (x) Supplemental reports on applying agreed-upon procedures, in accordance with 17 CFR 240.15c3-le 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). D(z) Other: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ \_ - - *\*\*To* request confidential treatment of certain portions of this filing, see 17 CFR 240.17a-5(e}{3} or 17 CFR 240.18a-7(d)(2}, as applicable. {3}------------------------------------------------ # Hennepin Partners LLC # Table of Contents | Report of Independent Registered Public Accounting Firm | | |---------------------------------------------------------|-----| | Statement of Financial Condition | | | Notes to Statement of Financial Condition | 3-6 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) Mayer Hoffman McCann P.C. 1000 Campbell Mithun Tower, 222 S. Ninth St. ▪ Minneapolis, MN 55402 Main: 612.339.7811 ▪ Fax: 612.339.9845 ▪ www.mhmcpa.com # Report of Independent Registered Public Accounting Firm To the Managing Directors and Members of Hennepin Partners LLC # Opinion on the Financial Statements We have audited the accompanying statement of financial condition of Hennepin Partners LLC ("Company") as of December 31, 2021, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, 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 audits. 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 our audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Hennepin Partners LLC 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 entity'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 our audit provide a reasonable basis for our opinion. Mayer Hoffman McCann P.C We have served as the Company's auditor since 2022. Minneapolis, Minnesota March 29, 2022 ![](_page_4_Picture_15.jpeg) {5}------------------------------------------------ # HENNEPIN PARTNERS LLC STATEMENT OF FINANCIAL CONDITION As of December 31, 2021 | ASSETS | | |---------------------------------------|-----------------| | Cash | \$
4,265,404 | | Accounts receivable | 344,530 | | Prepaid expenses | 36,670 | | Security deposit | 20,729 | | Right-of-use asset | 347,098 | | Property and equipment, net | 199,319 | | TOTAL ASSETS | \$
5,213,750 | | | | | LIABILITIES AND MEMBER'S EQUITY | | | Accounts payable and accrued expenses | \$
511,031 | | Lease liability | 365,621 | | Deferred revenue | 363,333 | | TOTAL LIABILITIES | 1,239,985 | | | | | Member's equity | 3,973,765 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
5,213,750 | See accompanying notes to financial statement. {6}------------------------------------------------ ### (1) Nature of business and significant accounting policies Nature of business - Hennepin Partners LLC (the Company), formerly known as Quetico Partners LLC, provides investment banking and financial advisory services to corporate clients. The member experiences limited liability to the extent of its capital balance. A summary of the Company's significant accounting policies follows: Cash – The Company maintains its cash in bank deposit accounts, which at times, may exceed federally insured limits. The Company has not experienced any losses on such accounts. The Company believes it is not exposed to any significant credit risk on cash. Accounts receivable – Accounts receivable are customer obligations due under normal trade terms requiring payment within 30 days of the invoice date. Unpaid accounts receivable which are past due are not charged a monthly service fee. Accounts receivable are stated at the amount billed to the customer. Customer account balances with invoices dated over 90 days old are considered delinquent. The Company's accounts receivable are generally unsecured. No allowance for doubtful accounts was considered necessary as of December 31, 2021. If accounts receivable are determined uncollectible, they are charged to expense in the year that determination is made. Management reviews all accounts receivable balances and determines the appropriate course of action on a delinquent account. 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 guidance 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. Revenue from contracts with customers includes fees from investment banking and financial advisory services. The recognition and measurement of revenue is based on the assessment of individual contract terms. Significant judgement 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. Revenue from investment banking success fees are generally recognized at the point in time that performance under the arrangement is completed (the closing date of the transaction). Revenue from financial advisory retainer fees are generally recognized over time in which the performance obligations are simultaneously provided by the Company and consumed by the customer. Revenue from financial advisory valuation fees are generally recognized at the point in time that performance under the arrangement is completed. Retainers and other fees received from customers prior to recognizing revenue are reflected as deferred revenues. As of December 31, 2021, deferred revenues were \$363,333. Disaggregation can be found on the statement of operations for the year ended December 31, 2021. {7}------------------------------------------------ #### (1) Nature of business and significant accounting policies (continued) Depreciation and amortization – Depreciation and amortization are computed by using straight-line methods over estimated useful lives of five to seven years. Leasehold improvements are amortized over the shorter of the lease term or estimated useful life. Income taxes – The Company is a disregarded entity for federal and state income tax purposes. The Company's taxable income or loss is taxed on the member's income tax returns. No provision or liability for federal or state income taxes has been included in the financial statements. The Company has adopted FASB Accounting Standards Codification 740 for accounting for uncertain tax positions. The standard prescribes how an entity should measure, recognize, present and disclose positions that it has taken or expects to take on its income tax returns. The Company regularly reviews and evaluates its tax positions taken in previously filed information returns and as reflected in its financial statements and believes that in the event of an examination by taxing authorities, its positions would prevail based upon the technical merits of such positions. Therefore, the Company has concluded that no tax benefits or liabilities are required. The Company's sole member's tax return remains subject to examination by the appropriate taxing jurisdiction for tax years ending after December 31, 2018. 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 financial statements, and the reported amounts of revenues during the reporting period. Actual results could differ from those estimates. ## (2) Property and equipment Property and equipment consisted of the following as of December 31, 2021: | Computers and equipment | S | 211,415 | |-----------------------------|---|----------| | Leasehold improvements | | 79,117 | | Total cost | | 290,532 | | Accumulated depreciation | | (91,213) | | Property and equipment, net | S | 199,319 | Depreciation expense charged to operations for the year ended December 31, 2021 was \$31,495. #### (3) Concentrations The Company had two contracts with clients that generated approximately 28% of total annual revenues for the year ended December 31, 2021. #### (4) Net Capital requirements The Company is required to maintain a minimum net capital, as defined in Rule 15c3-1 under the Securities Exchange Act of 1934 (as amended), equivalent to the greater of \$5,000 or 1/15 of aggregate indebtedness. Net capital and aggregate indebtedness may vary from day to day. As of December 31, 2021, the Company had net capital of \$3,372,517 which was \$3,312,991 in excess of its required net capital of \$59,526. The Company's net capital ratio was .26 to 1 as of December 31, 2021. {8}------------------------------------------------ #### Lease commitments (5) In accordance with ASC 842, "Leases", the Company's leases with terms longer than twelve months are recorded on the statement of financial condition. The Company leases office space which is classified as an operating lease. The lease for office space provides for increases in future minimum rental payments. The lease also includes real estate taxes and maintenance charges, which are excluded from the minimum lease payments. ### (5) Lease commitments (continued) The Company had \$347,098 of operating lease right-of-use asset as of December 31, 2021. The Company had \$365,621 in lease liability as of December 31, 2021. Future minimum lease payments as of December 31, 2021 are as follows: | Years Ending December 31, | | |--------------------------------|------------| | 2022 | \$ 98,440 | | 2023 | 102,145 | | 2024 | 105,849 | | 2025 | 90,780 | | Total future lease payments | 397,214 | | Imputed interest | (31,593) | | Net liability as of 12/31/2021 | \$ 365,621 | Total rental expense was \$148,376 for the year ended December 31, 2021. Total non-cash additions to right-of-use asset and lease liability arising from lease amendment was \$99,068. #### (6) Exemption from Rule 15c3-2 The Company amended its membership agreement with FINRA on November 19, 2020 and will not claim exemption from the provisions of Rule 15c3-3 of the SEC, in reliance on footnote 74 to SEC Release 34-70073. #### (7) Subsequent events The Company has evaluated subsequent events occurring through March 29, 2022, the date that the financial statements were available to be issued, for events requiring recording or disclosure in the Company's financial statements. #### (8) Paycheck Protection Program On April 23, 2020, the Company received loan proceeds in the amount of \$629,190 under the Paycheck Protection Program ("PPP") which was established as part of the Coronavirus Aid, Relief and Economic Security ("CARES") Act and is administered through the Small Business Administration ("SBA"). The PPP provides loans to qualifying businesses in amounts up to 2.5 times their average monthly payroll expenses and was designed to provide a direct financial incentive for qualifying businesses to keep their workforce employed during the Coronavirus crisis. PPP loans are uncollateralized and guaranteed by the SBA and are forgivable after a "covered period" (eight or twenty-four weeks) as long as the borrower maintains its payroll levels and uses the loan proceeds for eligible expenses, including payroll, benefits, mortgage interest, rent, and utilities. The forgiveness amount will be reduced if the borrower terminates employees or reduces salaries and wages more than 25% during the covered period. {9}------------------------------------------------ ### (8) Paycheck Protection Program (continued) Any unforgiven portion is payable over 2 years if issued before, or 5 years if issued after, June 5, 2020 at an interest rate of 1% with payments deferred until the SBA remits the borrower's loan forgiveness amount to the lender, or, if the borrower does not apply for forgiveness, ten months after the end of the covered period. PPP loan terms provide for customary events of default, including payment defaults, breaches of representations and warranties, and insolvency events and may be accelerated upon the occurrence of one or more of these events of default. Additionally, PPP loan terms do not include prepayment penalties. The Company met the PPP's loan forgiveness requirements, and received legal release on May 21, 2021. The Company recorded the amount forgiven as forgiveness income within its statement of operations. The SBA reserves the right to audit any PPP loan, regardless of size. These audits may occur after forgiveness has been granted. In accordance with the CARES Act, all borrowers are required to maintain their PPP loan documentation for six years after the PPP loan was forgiven or repaid in full and to provide that documentation to the SBA upon request. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.