# HAMPTONROCK PARTNERS, LLC X-17A-5 (2023-03-24) — Broker-dealer annual report

- Company: HAMPTONROCK PARTNERS, LLC
- Form: X-17A-5
- Filed: 2023-03-24
- Period: 2022-12-31
- Accession: 0001795990-23-000002
- CIK: 1795990
- File #: 8-70461
- Type: Broker-dealer
- Material weakness: No
- Auditor: McBee & Co., PC
- Auditor location: dallas, TX
- Contact: Ivana Shumberg
- Phone: 713-582-4897
- Email: ishumberg@hamptonrock.com
- Website: hamptonrock.com
- Signed by: Stuart Brown (CEO)

Original filing: https://www.sec.gov/Archives/edgar/data/1795990/000179599023000002/hrockpartners2022.pdf

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

| ANNUAL REPORTS |
|----------------|
| FORM X-17A-5   |
| PART III       |

OMB APPROVAL OMB Number: 3235-0123 Expires: Oct. 31, 2023 Estimated average burden hours per response: 12

SEC FILE NUMBER 8-70461

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 04/28/2022

MM/DD/YY

MM/DD/YY

12/31/22

A. REGISTRANT IDENTIFICATION

# NAME OF FIRM: HamptonRock Partners LLC

TYPE OF REGISTRANT (check all applicable boxes):

□ Broker-dealer Check here if respondent is also an OTC derivatives dealer

ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)

# 2021 McKinney Ave, Ste 1200

|                                                                                              | (No. and Street)                                           |                 |                           |  |
|----------------------------------------------------------------------------------------------|------------------------------------------------------------|-----------------|---------------------------|--|
| Dallas                                                                                       | IX                                                         |                 | 75201                     |  |
| (City)                                                                                       | (State)                                                    |                 | (Zip Code)                |  |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                 |                                                            |                 |                           |  |
| Ivana Shumberg                                                                               | 713-582-4897                                               |                 | ishumberg@hamptonrock.com |  |
| (Name)                                                                                       | (Area Code - Telephone Number)                             | (Email Address) |                           |  |
|                                                                                              | B. ACCOUNTANT IDENTIFICATION                               |                 |                           |  |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*<br>McBee & Co., PC |                                                            |                 |                           |  |
|                                                                                              | (Name - if individual, state last, first, and middle name) |                 |                           |  |
| 718 Paulus Avenue                                                                            | Dallas                                                     | Texas           | 75214                     |  |
| (Address)                                                                                    | (City)                                                     | (State)         | (Zip Code)                |  |
| 9/22/2009                                                                                    |                                                            |                 |                           |  |
|                                                                                              |                                                            | 3631            |                           |  |

#### FOR OFFICIAL USE ONLY

\* Claims for exemption from the requirement that the annual 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.

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#### OATH OR AFFIRMATION

| L,<br>Stuart Brown |  |
|--------------------|--|
|--------------------|--|

-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------financial report pertaining to the firm of HamptonRock Partners LLC as of 12/31

-- - 2022\_\_ , 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 nimm tile helder the conparily not any
as that of a customer as that of a customer.

![](_page_1_Picture_4.jpeg)

Signature Title: CEO

## This filing \*\* contains (check all applicable boxes):

- (a) Statement of financial condition.
- [ (b) Notes to consolidated statement of financial condition.
- comprehensive income (as defined in § 210.1-02 of Regulation S-X).
- (d) Statement of cash flows.
- = (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 consolidated financial statements.
- (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240.18a-1, as applicable.
- [ (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- □ (i)Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
□ < ( V C
- [ (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.
- [ (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.
- □ (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.
- (o) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net capital or tangible net worth under 17 CFR 240.15c3-1, 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.
- = (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.
- = (s) Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- □ (t) Independent public accountant's report based on an examination of the statement of financial condition.
- = (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- O (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.
- = (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.
- □ (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-5(e)(3) or 17 CFR 240.18a-7(d)(2), as applicable.

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**HamptonRock Partners LLC** 

**Financial Statements And Supplemental Information As of December 31, 2022 and for the period From April 28, 2022 to December 31, 2022** 

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## **HamptonRock Partners LLC Table of Contents December 31, 2022**

|                                                                         | Page(s) |
|-------------------------------------------------------------------------|---------|
| Report of Independent Registered Public Accounting Firm                 | 1       |
| Financial Statements                                                    |         |
| Statement of Financial Condition                                        | 2       |
| Statement of Operations                                                 | 3       |
| Statement of Changes in Member's Equity                                 | 4       |
| Statement of Cash Flows                                                 | 5       |
| Notes to Financial Statements                                           | 6-9     |
| Supplemental Information                                                | 10      |
| Schedule I - Computation of Net Capital Under Rule 15c3-1 of the        |         |
| Securities and Exchange Commission                                      | 11      |
| Schedule II – Statement regarding Customer Reserve Requirements         |         |
| and Possession or Control Requirements                                  | 12      |
| Exemption                                                               | 13      |
| Report of Independent Registered Public Accounting Firm on Management's |         |
| Exemption Report                                                        | 14      |
| Management's Exemption Report                                           | 15      |

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**McBee & Co., PC**  tĞŚĂǀĞƐĞƌǀĞĚĂƐ,ĂŵƉƚŽŶZŽĐŬWĂƌƚŶĞƌƐ>>͛ƐĂƵĚŝƚŽƌƐŝŶĐĞϮϬϮϮ͘ ĂůůĂƐ͕dĞdžĂƐ DĂƌĐŚϭϳ͕ϮϬϮϯ

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

## **HamptonRock Partners LLC Statement of Financial Condition December 31, 2022**

| Assets                                   |                  |
|------------------------------------------|------------------|
| Cash                                     | \$<br>570,137    |
| Prepaid expenses and other assets        | 4,504            |
| Total Assets                             | \$<br>574,641    |
| Liabilities and Member's Equity          |                  |
| Liabilities                              |                  |
| Accounts payable and accrued liabilities | \$<br>18,<br>125 |
| Total Liabilities                        | 18,125           |
| Member's Equity                          | 556,516          |
| Total Liabilities and Member's Equity    | \$<br>574,641    |
|                                          |                  |

*The accompanying notes are an integral part of these financial statements.*

{6}------------------------------------------------

# **HamptonRock Partners LLC Statement of Operations For the Period from April 28, 2022 to December 31, 2022**

| Revenues                            |                 |
|-------------------------------------|-----------------|
| Advisory fees                       | \$<br>4,235,517 |
| Other income                        | 2,500           |
|                                     |                 |
| Total Revenues                      | \$<br>4,238,017 |
|                                     |                 |
| Expenses                            |                 |
| Salaries and payroll taxes          | 1,599,505       |
| Legal and professional fees         | 37,706          |
| Regulatory fees and expenses        | 3,916           |
| Office and administrative services  | 18,192          |
| General and administrative services | 770             |
|                                     |                 |
| Total Expenses                      | 1,660,089       |
|                                     |                 |
| Net Income                          | \$<br>2,577,928 |

*The accompanying notes are an integral part of these financial statements.* 

{7}------------------------------------------------

# **HamptonRock Partners LLC Statement of Changes in Member's Equity For the Period from April 28, 2022 to December 31, 2022**

| Balance at April 28, 2022    | \$<br>-       |
|------------------------------|---------------|
| Capital contributions        | 260,000       |
| Capital distributions        | (2,281,412)   |
| Net income                   | 2,577,928     |
| Balance at December 31, 2022 | \$<br>556,516 |

*The accompanying notes are an integral part of these financial statements.*

{8}------------------------------------------------

# **HamptonRock Partners LLC Statement of Cash Flows For the Period from April 28, 2022 to December 31, 2022**

 

| Cash flows from operating activities:                                                                               |                 |
|---------------------------------------------------------------------------------------------------------------------|-----------------|
| Net income                                                                                                          | \$<br>2,577,928 |
| Adjustments to reconcile net income to net cash used in operating activities:<br>Changes in assets and liabilities: |                 |
| Increase in prepaid expenses and other assets                                                                       | (4,504)         |
| Increase in accounts payable and accrued liabilities                                                                | 18,125          |
| Net cash provided by operating activities                                                                           | 2,591,549       |
| Cash flows from financing activities:                                                                               |                 |
| Capital contributions                                                                                               | 260,000         |
| Capital distributions                                                                                               | (2,281,412)     |
| Net cash used in financing activities                                                                               | (2,021,412)     |
| Net increase in cash                                                                                                | 570,137         |
| Cash, beginning of period                                                                                           | -               |
| Cash, end of period                                                                                                 | \$<br>570,137   |
|                                                                                                                     |                 |

*The accompanying notes are an integral part of these financial statements.* 

{9}------------------------------------------------

## Note 1 – General and Summary of Significant Accounting Policies

## *General*

HamptonRock Partners LLC (the "Company") was formed on October 25, 2019, as an limited liability company in accordance with the laws of the State of Delaware. The Company became a registered broker / dealer with the Securities and Exchange Commission ("SEC") on April 28, 2022 and is a member of the Financial Industry Regulatory Authority ("FINRA") and Securities Investor Protection Corporation ("SIPC"). The Company is a wholly owned subsidiary of Johnswood, LLC, a Delaware LLC ("Parent"). The period of the financial statements is from April 28, 2022, the date that FINRA approved the registration, to December 31, 2022.

The Company's principal business activity and purposes of the Company is to conduct business as a placement agent of securities, as well as mergers and acquisitions.

The Company will not claim an exemption from SEA Rule 15c3-3, in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company has represented that it does not and will not, (1) directly or indirectly receive, hold, or otherwise owe funds of securities for or to customers, (2) does not and will not carry accounts of or for the customers and (3) does not and will not carry PAB accounts.

### **(a) Basis of Presentation**

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP").

## **(b) Estimates**

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

### **(c) Cash and Cash Equivalents**

For purposes of the Statement of Cash Flows, the Company has defined cash equivalents as highly liquid investments, with original maturities of less than three months when purchased, which are not held for sale in the ordinary course of business. At December 31, 2022, the Company had no such investments.

The Company may, during the ordinary course of business, maintain account balances with banks in excess of federally insured limits. At December 31, 2022, cash and cash equivalents were held in a non-interest bearing account at a financial institution totaling \$570,137, leaving \$320,137 uninsured. See note 6 for subsequent event risk exposure.

{10}------------------------------------------------

## **HamptonRock Partners LLC Notes to Financial Statements (cont'd) December 31, 2022**

## **(d)Revenue Recognition**

Revenue from contracts with customers includes fee income related to advisory services. The recognition and measurement of revenue under Financial Accounting Standards ("FASB") Accounting Standards Codification ("ASC") ASC 606, *Revenue from Contracts with Customers*, is based on the assessment of individual contract terms. Significant judgment is required to determine whether performance obligations are satisfied at the 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 related agreement; and whether constraints on variable consideration should be applied due to uncertain future events.

The Company provides advisory services for raising private capital and mergers and acquisitions (M&A) to private companies. The Company is engaged by clients to provide advisory services and manage the related processes of these transactions. Revenue from advisory arrangements is generally recognized at the point in time that performance under the agreement is completed (the closing date of the transaction) or the contract is cancelled. However, for certain contracts, revenue is recognized over time for advisory arrangements in which the performance obligations are simultaneously provided by the Company and consumed by the customer. In some circumstances, significant judgment is needed to determine the timing and measure of progress appropriate for revenue recognition under a specific contract. Retainers and other fees received from customers prior to recognizing revenue are reflected as deferred income.

## **(e) Income Taxes**

The Company is a single member limited liability company and is therefore treated as a disregarded entity for federal income tax purposes. Income taxes are calculated and paid at the member level. Therefore, no provision or liability for federal or state income taxes has been included in the financial statements.

## Note 2 – Net Capital Requirement

The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (SEC Rule 15c3-1), which requires the maintenance of minimum net capital, as defined under such provisions. Net capital and the related net capital ratio may fluctuate on a daily basis. At December 31, 2022, the Company had net capital of \$552,012 and was \$547,012 in excess of its required net capital of \$5,000. The Company does have \$18,125 in indebtedness, therefore; the ratio between aggregate indebtedness to Net Capital is .03 to 1.00.

Capital contributions and distributions to the members can be made under a capital policy approved by the Company's member. Periodic contributions and/or distributions approved by the member may be made in order to enable the member to effectively manage the Company.

{11}------------------------------------------------

## **HamptonRock Partners LLC Notes to Financial Statements (cont'd) December 31, 2022**

## Note 3 – Related Party Transactions

The Company has an Office and Administrative Services Agreement in place, with effective date of July 1, 2022, with its Parent whereby the Parent charges the Company for administrative functions, including but not limited to office and secretarial services, accounting oversight, use of office facilities and equipment, employee compensation and related employee benefits, liability insurance, technology, and other indirect expenses of operations. This agreement remains in force until either party submits a notice of termination. Under this Agreement, the Company incurred \$18,192 in fees for the period from July 1, 2022, to December 31, 2022. The existence of this association may create operating results and a financial position significantly different than if the companies were autonomous.

## Note 4 – Recent Accounting Pronouncements

Recently issued accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position or results of operations. The Company plans to adopt any new standards in accordance with the standards.

## Note 5 – Commitments and Contingencies

There are currently no asserted claims or legal proceedings against the Company, however, the nature of the Company's business subjects it to various claims, regulatory examinations, and other proceedings in the ordinary course of business. The Company has no significant commitments or contingencies at December 31, 2022. The ultimate outcome of any such action against the Company could have an adverse impact on the financial condition, results of operations, or cash flows of the Company.

### Note 6 – Subsequent Event

Management has evaluated all subsequent events through March 17, 2023, the date on which these financial statements were available to be issued and determined that there are no subsequent events to record or disclose outside of the noted below.

Silicon Valley Bank ("SVB"), Santa Clara, California, was closed on March 10, 2023, by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara ("DINB"). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of SVB.

The Company had significant deposits with SVB over the FDIC limit. In March 2023, the Company transferred a significant portion of the funds from SVB to Wells Fargo Bank in response to the

{12}------------------------------------------------

## **HamptonRock Partners LLC Notes to Financial Statements (cont'd) December 31, 2022**

closure. The Company still has deposits in SVB over the FDIC limit as of March 17, 2023, however the Federal Government announced that customers of SVB will have full access to their deposits providing a back stop for the uninsured amounts.

{13}------------------------------------------------

**Supplemental Information**

{14}------------------------------------------------

## **HamptonRock Partners LLC Schedule I Computation of Net Capital Under Rule 15c3-1 of the Securities and Exchange Commission December 31, 2022**

# **COMPUTATION OF NET CAPITAL**

| Total member's equity qualified for net capital<br>Deductions and/or charges:<br>Non-allowable assets                | \$<br>556,516 |
|----------------------------------------------------------------------------------------------------------------------|---------------|
| Prepaid Expenses and Other assets                                                                                    | 4,504         |
| Net Capital Before Haircuts on Securities Positions                                                                  | 552,012       |
| Haircuts on Securities Positions                                                                                     | -             |
| Net Capital                                                                                                          | \$<br>552,012 |
| AGGREGATE INDEBTEDNESS                                                                                               |               |
| Items included in statement of financial condition:                                                                  |               |
| Accounts payable and accrued liabilities                                                                             | \$<br>18,125  |
| Total aggregate indebtedness                                                                                         | \$<br>18,125  |
| COMPUTATION OF BASIC NET CAPITAL REQUIREMENT                                                                         |               |
| Minimum net capital required (12.5% of aggregate indebtedness)                                                       | \$<br>2,266   |
| Minimum dollar net capital requirement of reporting broker or dealer                                                 | \$<br>5,000   |
| Net capital requirement (greater of above two minimum                                                                |               |
| requirement amounts)                                                                                                 | \$<br>5,000   |
| Net capital in excess of required minimum                                                                            | \$<br>547,012 |
| Net capital less greater of 10% of total aggregate indebtedness<br>or 120% of minimum dollar net capital requirement |               |
| Ratio: aggregate indebtedness to net capital                                                                         | .03 to 1      |
|                                                                                                                      |               |

## **Statement Pursuant to Rule 17a-5(d)(4)**

There were no material differences between the net capital reported in the Company's unaudited Form X-17a-5 as of December 31, 2022 and the Company's audited financial statements as of December 31, 2022. Accordingly, no reconciliation is necessary

## STATEMENT OF CHANGES IN LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS

No statement is required as no subordinated liabilities existed at any time during the year.

{15}------------------------------------------------

## **HamptonRock Partners LLC SCHEDULE II STATEMENT REGARDING CUSTOMER RESERVE REQUIREMENTS AND POSSESSION OR CONTROL REQUIREMENTS December 31, 2022**

The Computation for Determination of the Reserve Requirements and Information relating to Possession or Control Requirements for Brokers and Dealers is not applicable to the Company. The Company does not claim an exemption from SEA Rule 15c3-3 but is in reliance on footnote 74 to SEC Release 34-70073, and as discussed in Q&A 8 of the related FAQ issued by SEC staff. The Company is exempt from SEA Rule 15c3-3 as a non-covered firm because its business activities are limited to investment banking. As a result, 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; (2) did not carry accounts of or for customers; and (3) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the period from April 28, 2022 to December 31, 2022

See accompanying report of independent registered public accounting firm

{16}------------------------------------------------

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**McBee & Co., PC**  ĂůůĂƐ͕dĞdžĂƐ DĂƌĐŚϭϳ͕ϮϬϮϯ

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## EXEMPTION REPORT

HamptonRock Partners LLC (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 17C.F.R. §240.17a-5(d)(1) and (4). To the best of its knowledge and belief, the Company states the following:

(1) The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240. 15c3-3, and

(2) No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because the Company limits its business activities exclusively to: (a) private placements of securities, and (b) merger and acquisition. The Company (i) 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); (ii) did not carry accounts of or for customers; and (iii) did not carry PAB accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception.

(3) HamptonRock Partners LLC stated that HamptonRock Partners LLC met the identified exemption provisions throughout the most recent fiscal year without exception.

I, Stuart Brown, swear (or affirm) that, to my best knowledge and belief, this Exemption Report is true and correct.

Sign:

Stuart Brown HamptonRock Partners LLC 2021 McKinney Ave, Ste 1200 Dallas, Texas 75201 SEC filing # 8-70461


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