# HENNEPIN PARTNERS LLC X-17A-5 (2024-03-28) — Broker-dealer annual report - Company: HENNEPIN PARTNERS LLC - Form: X-17A-5 - Filed: 2024-03-28 - Period: 2023-12-31 - Accession: 0001483462-24-000001 - 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 Member) Original filing: https://www.sec.gov/Archives/edgar/data/1483462/000148346224000001/HennepinPublic23.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, 2023** {1}------------------------------------------------ **UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549** > **ANNUAL REPORTS FORM X-17A-5 PART III** OMB APPROVAL OMB Number: ϯϮϯϱͲϬϭϮϯ Expires: EŽǀ͘ϯϬ͕ϮϬϮϲ Estimated average burden hours per response: SEC FILE NUMBER 8-68498 **FACING PAGE Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934** FILING FOR THE PERIOD BEGINNING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ AND ENDING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ MM/DD/YY MM/DD/YY **A. REGISTRANT IDENTIFICATION** NAME OF FIRM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ TYPE OF REGISTRANT (check all applicable boxes): ܆ Broker-dealer ܆ Security-based swap dealer ܆ 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.) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (No. and Street) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (City) (State) (Zip Code) PERSON TO CONTACT WITH REGARD TO THIS FILING \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Name) (Area Code – Telephone Number) (Email Address) **B. ACCOUNTANT IDENTIFICATION** INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing\* \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Name – if individual, state last, first, and middle name) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Address) (City) (State) (Zip Code) \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (Date of Registration with PCAOB)(if applicable) (PCAOB Registration Number, if applicable) **FOR OFFICIAL USE ONLY** 01/01/23 12/31/23 Hennepin Partners LLC ■ 730 Second Avenue South, Suite 285 Minneapolis MN 55402 Neil Weinstein 612-604-2066 nweinstein@hennepinpartners.com Mayer Hoffman McCann P.C. 222 S Ninth Street, Suite 1000 Minneapolis MN 55402 10/22/2003 199 \* 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)(1)(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 OMB control number.** {2}------------------------------------------------ ![](_page_2_Picture_3.jpeg) - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # **Hennepin Partners LLC Table of Contents** | Report of Independent Registered Public Accounting Firm | 1 | |---------------------------------------------------------|-----| | Statement of Financial Condition | 2 | | Notes to Statement of Financial Condition | 3-6 | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **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, 2023*,* 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, 2023, 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. We have served as the Company's auditor since 2022. Mayer Hoffman McCann P.C Minneapolis, Minnesota March 25, 2024 **Mayer Hoffman McCann P.C. An Independent CPA Firm** 222 S. Ninth Street, Suite 1000 Minneapolis MN 55402 Phone: 612.339.7811 Fax: 612.339.9845 **mhmcpa.com** A member of Kreston Global – a global network of accounting firms {5}------------------------------------------------ ## HENNEPIN PARTNERS LLC STATEMENT OF FINANCIAL CONDITION As of December 31, 2023 | ASSETS | | |---------------------------------------|-----------------| | Cash | \$
3,400,941 | | Accounts receivable | 450,335 | | Prepaid expenses | 72,007 | | Security deposit | 23,704 | | Right-of-use asset | 165,158 | | Property and equipment, net | 120,449 | | TOTAL ASSETS | \$
4,232,594 | | | | | LIABILITIES AND MEMBER'S EQUITY | | | Accounts payable and accrued expenses | \$
674,773 | | Lease liability | 180,674 | | Deferred revenue | 197,410 | | TOTAL LIABILITIES | 1,052,857 | | | | | Member's equity | 3,179,737 | | TOTAL LIABILITIES AND MEMBER'S EQUITY | \$
4,232,594 | 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. The Company is a broker-dealer registered with the U.S. Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority, Inc. (FINRA). 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, 2023. 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. **Allowance for credit losses**– In June 2016, the FASB issued guidance (FASB ASC 326) which significantly changed how entities will measure credit losses for most financial assets and certain other instruments that aren't measured at fair value through net income. The most significant change in this standard is a shift from the incurred loss model to the expected loss model. Under the standard, disclosures are required to provide users of the financial statements with useful information in analyzing an entity's exposure to credit risk and the measurement of credit losses. Financial assets held by the Company that are subject to the guidance in FASB ASC 326 were trade accounts. We adopted the standard effective January 1, 2023. The impact of the adoption was not considered material to the financial statements and primarily resulted in new/enhanced disclosures only. **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. {7}------------------------------------------------ #### (1) **Nature of business and significant accounting policies (continued)** **Revenue recognition** – 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, 2023, deferred revenues were \$197,410. Disaggregation can be found on the statement of operations for the year ended December 31, 2023. **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 to be recognized. The Company's sole member's tax return remains subject to examination by the appropriate taxing jurisdiction for tax years ending after December 31, 2020. **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) **Concentrations** The Company had two contracts with clients that generated approximately 21% of total annual revenues for the year ended December 31, 2023. ### (3) **Property and equipment** Property and equipment consisted of the following as of December 31, 2023: {8}------------------------------------------------ ### (3) **Property and equipment (continued)** | Computers and equipment | \$ 211,415 | |-----------------------------|------------| | Leasehold improvements | 79,117 | | Total future lease payments | 290,532 | | | | | Accumulated depreciation | (170,083) | | | | | Property and equipment, net | \$ 120,449 | Depreciation expense charged to operations for the year ended December 31, 2023 was \$39,435. ### (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, 2023, the Company had net capital of \$2,513,242 which was \$2,454,062 in excess of its required net capital of \$59,180. The Company's net capital ratio was 0.35 to 1 as of December 31, 2023. #### (5) **Lease commitments** 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 leases for office space provides for increases in future minimum rental payments. The leases also includes real estate taxes and maintenance charges, which are excluded from the minimum lease payments. The Company had \$165,158 of operating lease right-of-use asset as of December 31, 2023. The Company had \$180,674 in lease liability as of December 31, 2023. Future minimum lease payments as of December 31, 2023 are as follows: | Years Ending December 31, | | |--------------------------------|------------| | 2024 | \$105,849 | | 2025 | 90,780 | | Total future lease payments | 196,629 | | Imputed interest | (15,955) | | Net liability as of 12/31/2023 | \$ 180,674 | The weighted average discount rate is 4.11%. The weighted average lease term is 1.69 years. Total rental expense was \$237,249 for the year ended December 31, 2023. #### (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. {9}------------------------------------------------ #### (7) **Commitments and Contingencies** The Company is not aware of any commitments, guarantees or contingencies including arbitration or other litigation claims that may result in a loss or future obligation. The Company is not aware of any threats or other circumstances that may lead to the assertion of a claim at a future date. #### (8) **Subsequent events** The Company has evaluated subsequent events occurring through March 25, 2024, the date that the financial statements were available to be issued, for events requiring recording or disclosure in the Company's financial statements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.