# THE SILVERFERN GROUP, INC. X-17A-5 (2021-03-01) — Broker-dealer annual report - Company: THE SILVERFERN GROUP, INC. - Form: X-17A-5 - Filed: 2021-03-01 - Period: 2020-12-31 - Accession: 0001166366-21-000001 - CIK: 1166366 - File #: 8-65167 - Material weakness: No - Auditor: Citrin Cooperman & Company, LLP - Auditor location: New York, NY - Contact: Kathy Efrem - Phone: 212-897-1686 - Signed by: Clive Holmes (Chief Executive Officer) Original filing: https://www.sec.gov/Archives/edgar/data/1166366/000116636621000001/20sil2.pdf --- {0}------------------------------------------------ Statement of Financial Condition Pursuant to Rule 17a-5 under the Securities Exchange Act of 1934 December 31, 2020 (With Report of Independent Registered Public Accounting Firm Thereon) {1}------------------------------------------------ **UNITED STATES SECURITIESAND EXCHANGE COMMISSION Washington, D.C. 20549** | | 0MB APPROVAL | | |-------------|----------------------------|------------------------------| | 0MB Number: | | 3235-0123 | | | Expires: October 31 . 2023 | | | | Estimated average burden | | | | | hours per response ___ 12_00 | | | | SEC FILE NUMBER | | | 8 - 65167 | | # **ANNUAL AUDITED REPORT FORM X-17 A-5 PART** Ill # **FACING PAGE Information Required** *cl* **Brokers and Dealers Pursuant to Section 17** *cl* **the Securities Exchange Act of 1934 and Rule 17a-5 Thereunder** | REPORT FOR THE PERIOD BEGINNING | 1/1/2020 | AND ENDING | 12/31/2020 | |----------------------------------------------------------------------------------------|----------------------------------------------------------|------------|---------------------------| | | MMIDD/YY | | MMIDD/YY | | | A. REGISTRANT I DENTI Fl CATI ON | | | | NAME OF BROKER-DEALER | | | | | The Silvertern Group, Inc. | OFFICIAL USE ONLY | | | | ADDRESS OF PRINCIPAL PLACE OF BUSI NESS: (Do not u93 P.O. Box No.) | | | FIRM ID_ NO_ | | | 599 Lexington Avenue, 47th Floor | | | | | (No and Srret) | | | | New York | New York | | 10022 | | (City) | (3cie) | | (Zip Cede) | | NAME AND TELEPHONE NUMBER OF PERSON TO CONTACT IN REGARD TO THIS REPORT
Kathy Efrem | | | 212-897-1686 | | | | | (Area Code- TeJephcneNo.) | | | B. ACCOUNT ANT I DENTI Fl CATI ON | | | | INDEPENDENT PUBLIC ACCOUNTANT whoseopinion isoontaina:.I in this Report* | | | | | | Citrin Cooperman & Company, LLP | | | | | (Name - if individual, state last, fir:i, rriddle narre) | | | | 529 Fifth Avenue | New York | NY | 10017 | | (Address) | (City) | (Sae) | (Zip Code) | | CHECK ONE:
0 Catifia:.I Public Accounta,t | | | | | D Publ
ic Accounta,t | | | | | 0 Accounta,t not resident in Uni ta:! States or a,y of its poS935Sons | | | | | | FOR OFRCIAL USE ONLY | | | | | | | | \* C/ai ms for exerrption from the requi remant that the annual report be covered by the opinion of an independent pub/ ic acrountant rrus be svpported by a saterrmt of facts and circumstances relied on as the bass for the exerrption. Sse !xJdion 240.17a-5(e)(2). SEC 1410 (06-02) **Potential perSJ11s** *who* **are** *to* **respond to** *the* **oo/lection d information contained in this form are nd req.iired** *to* **respond unless the form cl!ipla-ys a current/yva/idOMB control number.** {2}------------------------------------------------ ## **This report\*\* contains (check all applicable boxes):** - [x] Report of Independent Registered Public Accounting Firm. - [x] Facing Page. - [x] Statement of Financial Condition. - [ ] Statement of Operations. - [ ] Statement of Changes in Member's Equity. - [ ] Statement of Cash Flows. - [ ] Statement of Changes in Liabilities Subordinated to Claims of General Creditors (not applicable). - [ ] Computation of Net Capital for Brokers and Dealers Pursuant to Rule 15c3-l - under the Securities Exchange Act of 1934. - [ ] Computation for Determination of Reserve Requirements for Brokers and Dealers - Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934. - [ ] Information Relating to the Possession or Control Requirements for Brokers and Dealers Pursuant to Rule 15c3-3 under the Securities Exchange Act of 1934 (not - applicable). - [ ] A Reconciliation, including appropriate explanations, of the Computation of Net Capital Pursuant to Rule l 5c3-l and the Computation for Determination of Reserve Requirements Under Rule 15c3-3. - [ ] A Reconciliation Between the Audited and Unaudited Statements of Financial Condition With Respect to Methods of Consolidation (not applicable). - [ x] An Oath or Affirmation. - [ ] A copy of the SIPC Supplemental Report. - [ ] A report describing any material inadequacies found to exist or found to have existed since the date of the previous audit (Supplemental Report on Internal Control). - [ ] Independent Auditors' Report on Internal Control Required by SEC Rule l 7a-5(g)(l). - [ ] Independent Auditors' Report Regarding Rule 15c3-3 Exemption. - [ ] Rule 15c3-3 Exemption Report {3}------------------------------------------------ # **Affirmation** I, Clive Holmes, affirm that, to the best of my knowledge and belief, the accompanying financial statement pertaining to The Silverfern Group, Inc. for the period ended December 31, 2020, is true and correct. I further affirm that neither the Company nor any officer or director has any proprietary interest in any account classified solely as that of a customer. Signature **Chief Executive Officer** Title Subscribed and sworn to before me L. LINDSI:¥ **0 e~@@N** NOTARY PUBLIC·STATE OF NEW YORK No. 01 BR6229395 Qualified in New Yo}k County My Commission Expires 10-l2-2022 {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) ## **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Stockholder The Silverfern Group, Inc. #### **Opinion on the Financial Statement** We have audited the accompanying statement of financial condition of The Silverfern Group, Inc. 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 The Silverfern Group, Inc. as of December 31, 2020, in conformity with accounting principles generally accepted in the United States of America. #### **Basis for Opinion** This financial statement is the responsibility of The Silverfern Group, Inc.'s management. Our responsibility is to e."press an opinion on The Silverfern Group, Inc.'s financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to The Silverfern Group, Inc. 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 co 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 statement. 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 statement. We believe that our audit provides a reasonable basis for our opinion. We have served as The Silverfern Group, Inc.'s auditor since 2017. New York, New York March 1, 2021 {5}------------------------------------------------ # **STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31, 2020** # **ASSETS** | Cash | \$ | |------------------------------------------------------------|----| | Due from affiliate
Prepaid Asset | | | Accounts receivable | | | TOTAL ASSETS | \$ | | LIABILITIES AND STOCKHOLDER'S EQUITY | | | LIABILITIES | | | Accounts Payable | \$ | | TOTAL LIABILITIES | \$ | | STOCKHOLDER'S EQUITY | | | Common stock, no par value, 20,000 shares authorized | | | 1,600 shares issued and outstanding
Accumulated deficit | | | | | | TOTAL STOCKHOLDER'S EQUITY | \$ | | TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY | \$ | | | | {6}------------------------------------------------ # **NOTES TO THE STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31 , 2020** ## Note 1 -Organization The Silverfern Group, Inc. (the "Company") is a broker-dealer registered with the Securities and Exchange Commission ("SEC") and is a member of the Financial Industry Regulatory Authority ("FINRA"). The Company provides merchant banking and related financial advisory services to institutional clients and certain other investors. The Company does not hold customers' cash or securities. It operates from an office in the New York City metropolitan area. ## Note 2 -Summary of Significant Accounting Policies ## Basis of Presentation This financial statement is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"}, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. ## Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification, Topic 606, Revenue from Contracts with Customers, which requires that an entity recognize 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. ## Advisory The Company provides advisory services in connection with sales of investment partnership interests. Revenue for advisory arrangements is generally recognized based on the services provided or when the transaction is consummated. 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 would be reflected as contract liabilities (deferred revenue in the statement of financial condition). The Company had an outstanding receivable balance of \$73,663 at January 1, 2020 and had an outstanding receivable balance of \$1,681 at December 31 , 2020. {7}------------------------------------------------ # **NOTES TO THE STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31 , 2020** #### Note 2 -Summary of Significant Accounting Policies (continued) #### Income Taxes The Company follows an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on the enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce the deferred income tax assets to the amount expected to be realized. The determination of the Company's provision for income taxes requires significant judgment, the use of estimates, and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of certain tax positions are recorded in the Company's financial statement only after determining a more-likely-than-not probability that the uncertain tax positions will withstand challenge, if any, from tax authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes in the financial statement as appropriate. Accrued interest and penalties related to income tax matters are classified as a component of income tax expense. In accordance with U.S. GAAP, the Company is required to determine whether a tax position is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. De-recognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce stockholder's equity. Management's conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. At December 31, 2019, management has determined that the Company had no uncertain tax positions that would require financial statement recognition. No interest expense or penalties have been recognized as of and for the year ended December 31 , 2020. The Company files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. state and local jurisdictions. Any potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, state and local tax laws. The Company's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. #### Note 3 - Income Taxes No current or deferred income tax expense was recognized in 2020. At December 31 , 2020, the Company has recorded a deferred tax asset of approximately \$57,000. A full valuation allowance which increased by approximately \$105,000 during 2020 has been recognized against these deferred tax assets as the ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, estimation of which is not reasonably possible. {8}------------------------------------------------ # **NOTES TO THE STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31 , 2020** #### Note 4 -Concentrations The Company maintains all of its cash balances in one financial institution. The Company has not experienced any losses in such accounts and believes it is not subject to any significant credit risk. A significant portion of the Company's assets are reflected in a receivable from its affiliate. Substantially, all the Company's 2020 advisory revenues are from commissions on one contract. #### Note 5 -Regulatory Requirements The Company is subject to the SEC Uniform Capital Rule (Rule 15c3-1 ) which requires the maintenance of a minimum net capital, as defined, of the greater of \$5,000 or 6-2/3 percent of aggregate indebtedness, whichever is greater, as these terms are defined. The rule also requires that equity capital may not be withdrawn if certain net capital requirements are not met. At December 31 , 2020, the Company had net capital deficiency of \$(22,738), noting that the company did not conduct any business during that time. The Company does not handle customer cash or securities. Accordingly, it had no obligations under SEC Rule 15c3-3. ## Note 6 - Related Party Transactions The Company has entered into a management service agreement with The Silverfern Group MGMT, LLC, a New York limited liability company ("SGM"). The agreement calls for SGM to provide the Company with employees, and property and equipment to fulfill its day-to-day operations. In addition, the Company has also entered into agreements with certain affiliates to provide consulting and management services on specific engagements of the Company. An analysis of these amounts for the year ended December 31 , 2020 is as follows: | Total | \$ | 2,627,250 | |-----------------------|------------|-----------| | Rent Ex~ense | | 30,129 | | Other office expenses | ,225
21 | | | Payroll Expense | 100,896 | | | Management Services | \$ | 2,475,000 | Due from affiliate represents amounts advanced for future expenses. The amounts recognized in the Statement of Operations are not necessarily the amounts that would have been recognized by the Company had it incurred said expenses with unrelated third parties. The Company has also received \$55,000 in advisory services from an affiliate during 2020. ## Note 7 - Liquidity Accounting Standards Update 2014-15 requires that management evaluate conditions or events that might raise substantial doubt about the Company's ability to continue as a going concern. Management has evaluated the Company's financial condition and as a result of its operations has determined that it has earned a modest amount of net income during 2020. The Company's sole shareholder has committed to provide the Company with funding should it be necessary through March 31 , 2022. {9}------------------------------------------------ # **NOTES TO THE STATEMENT OF FINANCIAL CONDITION** # **DECEMBER 31 , 2020** ## Note 8 - New Accounting Pronouncement In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the FASB's guidance on the impairment of financial instruments. The ASU adds to U.S. GAAP, an impairment model (known as the current expected credit loss ("CECL") model) that is based on expected losses rather than incurred losses. Under the new guidance, the Company recognizes as an allowance, its estimate of lifetime expected credit losses, which the FASB believes will result in more timely recognition of such losses, if any. The ASU is also intended to reduce the complexity of U.S. GAAP by decreasing the number of credit impairment models that entities use to account for debt instruments. Further, the ASU makes targeted changes to the impairment model for available-for-sale debt securities. The new CECL standard became effective on January 1, 2020, and the Company applied the modified retrospective method of adoption which resulted in no adjustment to the Company's accumulated deficit as of the effective date. #### Note 9 - COVID 19 During the 2020 calendar year, the World Health Organization has declared COVID- 19 to constitute a "Public Health Emergency of International Concern". This pandemic has disrupted economic markets and the economic impact, duration and spread of the COVID-19 virus is uncertain at this time. The financial performance of the Company is subject to future developments related to the COVID-19 outbreak and possible government advisories and restrictions placed on the financial markets and business activities. The impact on financial markets and the overall economy, all of which are highly uncertain, cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period the Company's results may be materially affected. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. #### Note 10 - Subsequent Events The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events and has noted no additional events that require disclosure or adjustment to the financial statement. The Company is currently back in compliance with net capital requirements. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.