# MARWOOD GROUP LLC X-17A-5 (2021-03-11) — Broker-dealer annual report

- Company: MARWOOD GROUP LLC
- Form: X-17A-5
- Filed: 2021-03-11
- Period: 2020-12-31
- Accession: 0001146183-21-000001
- CIK: 1146183
- File #: 8-53573
- Material weakness: No
- Auditor: KWM CPAs LLP
- Auditor location: Jericho, NY
- Contact: Thomas J. Modzelewski
- Phone: 212-532-3651
- Signed by: Thomas J. Modzelewski (COO)

Original filing: https://www.sec.gov/Archives/edgar/data/1146183/000114618321000001/MGAPublic.pdf

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| UNITED STA TES                     |  |  |  |  |  |
|------------------------------------|--|--|--|--|--|
| SECURITIES AND EXCHANGE COMMISSION |  |  |  |  |  |
| Washington, D.C. 20549             |  |  |  |  |  |

| 0MB Number:         |                         | 3235-0123        |
|---------------------|-------------------------|------------------|
| Expires:            |                         | October 31, 2023 |
|                     | stimated average burden |                  |
| /Hours per response |                         | 12.00            |

8- **53573** 

### ANNUAL AUDITED REPORT

### FORM X-17A-5

### PART Ill

#### **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                                           | ___<br>0_1_/0_1/_2_02_0<br>Mt,.,1/0DYY | ___<br>AND ENDING | 12/31/2020                     |  |
|---------------------------------------------------------------------------|----------------------------------------|-------------------|--------------------------------|--|
|                                                                           | A. REGISTRANT IDENTIFICATION           |                   |                                |  |
| :'-l"AME OF BROKER-DEALER:                                                |                                        |                   | OFFICIAL USE ONLY              |  |
| Manvood Group, LLC                                                        |                                        |                   | FIRM 1.0. NO.                  |  |
| ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use P.O. Box No.)         |                                        |                   |                                |  |
| 733 Third A venue, 11th Floor                                             |                                        |                   |                                |  |
|                                                                           | (No. and S1reer)                       |                   |                                |  |
| New York                                                                  | NY                                     |                   | 10017                          |  |
| (Cily)                                                                    |                                        |                   | (Zip Code)                     |  |
| NAME AND TELEPHONE NUMBER OF PERSON TO CONT ACT IN REGARD TO THIS REPORT  |                                        |                   |                                |  |
| Thomas J. Modzelewski                                                     |                                        |                   | 212-532-3651                   |  |
|                                                                           |                                        |                   | (Arco Code - Telephone Number) |  |
|                                                                           | B. ACCOUNTANT IDENTIFCATION            |                   |                                |  |
| INDEPENDENT PUBLIC ACCOUNT ANT whose opinion is contained in this Report* |                                        |                   |                                |  |
| KWMCPAsLLP                                                                |                                        |                   |                                |  |
| (Name - ,f 1,1</n-ldual, ~,a,,: fc,sr, Jirs1. nuutlle name)               |                                        |                   |                                |  |
| 100 Jericho Quadrangle, Suite 220                                         | Jericho                                | NY                | 11753-1024                     |  |
| (Address)                                                                 | (Cily)                                 | (Sia1e)           | (Zip Godel                     |  |
| CHECK ONE:                                                                |                                        |                   |                                |  |
| Certified Public Accountant<br>r8J                                        |                                        |                   |                                |  |
| D<br>Public Accountant                                                    |                                        |                   |                                |  |
| D<br>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 staiement of/acts and circumstances relied on as the basis for the exemption. See Seclion 2-J0. /7a-5(e)(2).* 

> 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 valid 0MB control number.

SEC 1410 (06-02)

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## **OATH OR AFFIRMATION**

| Thomas J. :\lodzelcwski<br>, swear (or affinn) that, to the best of<br>I, |                                                                                                |                                                                                                                                                                                                                 |
|---------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                           |                                                                                                | my knowledge and belief the accompanying financial statement and supporting schedules pertaining to the firm of                                                                                                 |
|                                                                           | i\tarwood Group, LLC                                                                           | --------"-------------------------------<br>---·<br>as                                                                                                                                                          |
|                                                                           | of December 31                                                                                 | -<br>-<br>----<br>, are true and correct. I fwthcr swear (or affirm) that<br>20<br>, 20<br>-                                                                                                                    |
|                                                                           | classified solely as that of a customer, except as follows:                                    | neither the company nor any partner. proprietor. principal officer or director has any proprietary interest in any account                                                                                      |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           | MARY JOYCE MARTINEZ                                                                            |                                                                                                                                                                                                                 |
|                                                                           | Notary Public - State of New York<br>NO. 01MA6264166                                           | Signature                                                                                                                                                                                                       |
|                                                                           | Qualified in Richmond ~                                                                        |                                                                                                                                                                                                                 |
|                                                                           | My Commission Expires<br>/J.                                                                   | coo                                                                                                                                                                                                             |
|                                                                           |                                                                                                | Title                                                                                                                                                                                                           |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           |                                                                                                |                                                                                                                                                                                                                 |
|                                                                           | This report** contains (check all applicable boxes):                                           |                                                                                                                                                                                                                 |
| fgl (a)                                                                   | Facing page.                                                                                   |                                                                                                                                                                                                                 |
| fgl (b)                                                                   | Statement of Financial Condition.                                                              |                                                                                                                                                                                                                 |
| D (c)                                                                     | Statement oflncome (Loss).                                                                     |                                                                                                                                                                                                                 |
|                                                                           | 0 (d) Statement of Changes in Financial Condition.                                             |                                                                                                                                                                                                                 |
|                                                                           | D ( e) Statement of Changes in Stockholders' Equity or Partners' or Sole Proprietor's Capital. |                                                                                                                                                                                                                 |
|                                                                           | D ( f) Statement of Changes in Liabilities Subordinated to Claims of Creditors.                |                                                                                                                                                                                                                 |
|                                                                           | D (g) Computation of~et Capital.                                                               |                                                                                                                                                                                                                 |
|                                                                           | D (h) Computation for Determination of Reserve Requirements Pursuant to Rule I 5c3-3.          |                                                                                                                                                                                                                 |
|                                                                           | 0 ( i) lnfonnation Relating to the Possession or Control Requirements under Rule 1 Sc3-3.      |                                                                                                                                                                                                                 |
| 0 (j)                                                                     |                                                                                                | A Reconciliation, including appropriate explanation. of the Computation of Net Capital Under Rule l 5c3-l and<br>the Computation for Determination of the Reserve Requirements Under Exhibit A of Ruic l 5c3-3. |
|                                                                           | consolidation.                                                                                 | 0 (k) A Reconciliation between the audited and unaudited statements of Financial Condition with respect to methods of                                                                                           |
| fgl (l)                                                                   | An Oath or Affirmation.                                                                        |                                                                                                                                                                                                                 |
|                                                                           | D (m) A copy of the SIPC Supplemental Report.                                                  |                                                                                                                                                                                                                 |
| 0 (n)                                                                     | previous audit.                                                                                | A report describing any material inadequacies found to exist or found to have existed since the date of the                                                                                                     |

*\*\*For condirions of confidential rreatmenl of cerrain portions of thisfiling, see section 240.17a-5(e)(3).* 

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FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION (Confidential Per Rule 17a-5(e)(3))

FOR THE YEAR ENDED DECEMBER 31, 2020

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# CONTENTS

| Independent Auditor's Report     |  |
|----------------------------------|--|
| Financial Statements             |  |
| Statement of Financial Condition |  |
| Notes to Financial Statements    |  |

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![](_page_4_Picture_0.jpeg)

### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Member of Marwood Group LLC

#### Opinion on the Financial Statement

We have audited the accompanying statement of financial condition of Marwood Group LLC as of December 31, 2020, and the related notes (collectively referred to as the "financial statement"). In our opinion, the financial statement presents fairly, in all material respects, the financial position of Marwood Group LLC 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 Marwood Group LLC's management. Our responsibility is to express an opinion on Marwood Group LLC'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 Marwood Group LLC 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.

#### Emphasis of Matter

As discussed in Note 9 to the financial statements, the Company has suffered recurring losses from operations. Management's evaluation of the events and conditions and management's plans to mitigate those matters are also described in Note 9. Our opinion is not modified with respect to that matter.

We have served as Marwood Group LLC's auditor since 2014.

Jericho, NY February 26, 2021

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| 7RWDO\$VVHWV                                                          |              |  |
| /LDELOLWLHVDQG0HPEHU<br>V(TXLW\                                       |              |  |
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| 7RWDO/LDELOLWLHV                                                      |              |  |
| &RQWLQJHQFLHV                                                         |              |  |
| 0HPEHU<br>V(TXLW\                                                     |              |  |
| 7RWDO/LDELOLWLHVDQG0HPEHU<br>V(TXLW\                                  |              |  |

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

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

## NOTES TO FINANCIAL STATEMENTS

# FOR THE YEAR ENDED DECEMBER 31, 2020

### Note 2 - Summary of Significant Accounting Policies (Continued)

### Revenue Recognition and Deferred Revenue (Continued)

Consulting fees consist primarily of retainer fees. These fees are determined in accordance with the terms of the related contracts and are recognized ratably over time to match the continued delivery of the performance obligations to the customer over the life of the contract.

Advisory services consist of fees earned for financial advisory services performed in connection with identifying potential targets and advising the clients regarding the sale, transfer, exchange or other disposition of all or a portion of certain types of the targets' health plans to the clients. These fees are determined in accordance with the terms of the related contracts and are recognized ratably over time to match the continued delivery of the performance obligations to the clients over the life of the contract. Amounts received from clients in advance of when earned are recorded as deferred revenue and recognized ratably over time based on the terms of the contract.

Success fees consist of fees earned by the Company for advisory services related to potential purchasers of, or investors in, a client's business. Success fees are recognized at an amount expected to be received for these services when the Company satisfies the performance obligations at a point in time.

| Timing of Revenue Regognition                                            | Consulting Fees/<br>Advisory Services |            | Success<br>Fees |              | l otal |                    |
|--------------------------------------------------------------------------|---------------------------------------|------------|-----------------|--------------|--------|--------------------|
| Services transferred over time<br>Services tranferred at a point in time | ಕೊ                                    | 113,725 \$ |                 | 187,500      | କ୍ଟ    | 113,725<br>187,500 |
|                                                                          | ಕ                                     | 113,725 \$ |                 | 187,500 \$ = |        | 301,225            |

Various economic factors affect revenues and cash flows. Consulting fees and advisory services are billed over time (monthly, quarterly or annually) in advance of providing the service and are generally collected within 60 days. Success fees are billed after services have been provided and are generally collected within 30 days.

# Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Statement of Financial Condition. Amounts are billed in accordance with agreed-upon terms at periodic intervals (monthly, quarterly, or annually) for consulting fees and advisory services or at a point in time for success fees. Generally, billing of consulting fees and advisory services occurs prior to revenue recognition, resulting in contract liabilities.

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

### NOTES TO FINANCIAL STATEMENTS

### FOR THE YEAR ENDED DECEMBER 31, 2020

### Note 5 - Retirement Plan

The Company has established a 401(k) plan. Employees are fully vested on 401(k) salary deferrals. Substantially all employees are eligible to participate. The Company matches employee contributions at the rate of 50% of the first 6% that is contributed. Company contributions were \$8,250 for the year ended December 31, 2020.

### Note 6 - Net Capital Requirements

The Company is subject to the SEC Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, to not exceed 15 to 1. At December 31, 2020, the Company had net capital of \$105,213 which was \$100,213 in excess if its required net capital of \$5,000. The Company's ratio of aggregate indebtedness to net capital was .061 to 1 at December 31, 2020.

#### Note 7 - Recent Accounting Pronouncements

#### Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments --Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. For public companies, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. The new standard included trade receivables and introduced the current expected credit losses (CECL) methodology for the measurement of credit losses on financial assets measured on an amortized cost basis, replacing the previous incurred loss methodology. The updated standard provides for application based on a modified-retrospective basis through a cumulative-effect adjustment to opening member's equity as of the date adoption. The adoption by the Company of this accounting guidance in 2020 did not have a material impact on the financial statements for the year ended December 31, 2020.

#### Accounting Pronouncements Not Yet Adopted

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying financial statements.

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

### NOTES TO FINANCIAL STATEMENTS

### FOR THE YEAR ENDED DECEMBER 31, 2020

### Note 8 - Concentration of Credit Risk

The Company maintains its cash with TD Bank N.A. Deposits with TD Bank N.A. are insured under the Federal Deposit Insurance Corporation for up to \$250,000. At times, during the year ended December 31, 2020, the Company maintained cash balances that exceeded the federally insured limits. However, at December 31, 2020, the balance in the bank did not exceed the federally insured limit. The Company has not incurred any losses related to this investment and believes the potential risk of loss to be minimal.

#### Note 9 - Going Concern and Related Party

Currently and over the last several years, the Company has incurred recurring losses and negative cash flows from operations. The major part of the Company's working capital requirements are provided by capital contributions from its Parent. As explained further in Note 3 - Related Party Transactions, the Company is also a party to an expense sharing agreement with its Parent.

The Parent has stated to the Company that their support through capital contributions will continue for the foreseable future. Additionally, the Company has taken certain actions, such as hiring additional sales personnel to increase revenue and improve operating cash flows.

Having considered the above and having made due inquiries, management of the Company continues using the going concern basis in preparing the financial statements which assumes that the Company will continue in operation for the foreseeable future.

### Note 10 - Commitments and Contingencies

### Effects of COVID-19

On March 11, 2020, the World Health Organization declared the new strain of the coronavirus (COVID-19) a global pandemic. Federal, state, and local governments have since implemented various restrictions, including travel restrictions, border closings, restrictions on public gatherings, quarantining of people who may have been exposed to the virus, shelter-in-place restrictions and limitations on business operations. For the year ended December 31, 2020, management believes the COVID-19 pandemic did not have a material effect on the Company's operations. Subsequent to December 31, 2020, management believes that the related financial impact of this situation cannot be reasonably estimated at this time.

#### Note 11 - Subsequent Events

The Company has evaluated subsequent events through February 26, 2021, the date the financial statements were available to be issued, and has concluded that no such events or transactions took place that would require disclosure herein.


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