# ALVARIUM MB (US) BD, LLC X-17A-5 (2023-02-28) — Broker-dealer annual report - Company: ALVARIUM MB (US) BD, LLC - Form: X-17A-5 - Filed: 2023-02-28 - Period: 2022-12-31 - Accession: 0001784825-23-000002 - CIK: 1784825 - File #: 8-70387 - Type: Broker-dealer - Material weakness: No - Auditor: Kaufman, Rossin & CO., P.A. - Auditor location: Miami, FL - Contact: Jamie Grossman - Phone: 212-396-5915 - Signed by: Jamie Grossman (Principal) Original filing: https://www.sec.gov/Archives/edgar/data/1784825/000178482523000002/alvariums.pdf --- {0}------------------------------------------------ #### **Alvarium MB (US) BD, LLC** Statement of Financial Condition December 31, 2022 With Report of Independent Registered Public Accounting Firm {1}------------------------------------------------ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 OMB APPROVAL OMB Number: Expires: Estimated average burden hours per response: SEC FILE NUMBER ## ANNUAL REPORTS FORM X-17A-5 PART III 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) | FOR OFFICIAL USE ONLY | (PCAOB Registration Number, if applicable) | 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}------------------------------------------------ | Jamie Grossman | swear (or affirm) that, to the best of my knowledge and belief, the | |------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | tinancial report pertaining to the firm of Alvarium MB (US) BD, LLC
as of | | 12/31 | 2 022 | | | partner, officer, director, or equivalent person, as the case may be, has any proprietary interest in any account classified solely | | as that of a customer. | | | | MARYROSE MERCADO
Signature.
NOTARY PUBLIC, STATE OF NEW YORK
Registration No. 01ME6423025
Qualified in Queens County
Title:
Commission Expires October 4, 20_0
Principal | - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ #### **Alvarium MB (US) BD, LLC** #### **Table of Contents** | | Page | |---------------------------------------------------------|-------| | Report of Independent Registered Public Accounting Firm | 1 | | Financial Statement: | | | Statement of Financial Condition | 3 | | Notes to the Financial Statement | 4 ‐ 9 | {4}------------------------------------------------ ### **REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM** To the Member of Alvarium MB (US) BD, LLC #### *Opinion on the Financial Statement* We have audited the accompanying statement of financial condition of Alvarium MB (US) BD, LLC as of December 31, 2022, 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 Alvarium MB (US) BD, LLC as of December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. #### *Basis for Opinion* This financial statement is the responsibility of Alvarium MB (US) BD, LLC's management. Our responsibility is to express an opinion on Alvarium MB (US) BD, 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 Alvarium MB (US) BD, 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. Kaufman, Rossin & Co., P.A. We have served as Alvarium MB (US) BD, LLC's auditor since 2021. Miami, Florida February 27, 2023 ![](_page_4_Picture_13.jpeg) {5}------------------------------------------------ #### **Alvarium MB (US) BD, LLC** Statement of Financial Condition December 31, 2022 #### **Assets** | Cash
Accounts receivable
Prepaid expenses
Other assets | \$ 340,781
56,000
4,698
3,372 | |-----------------------------------------------------------------|------------------------------------------------------------| | Total assets | \$ 404,851 | | Liabilities and Member's Equity | | | Liabilities: | | | Accounts payable and accrued expenses | \$ 103,961 | | Due to related parties | 62,212 | | Total liabilities | \$ 166,173 | | Member's equity | 238,678 | | Total liabilities and member's equity | \$ 404,851 | 3 The accompanying notes are an integral part of this financial statement. {6}------------------------------------------------ #### **1. Organization and Summary of Significant Accountant Policies** Alvarium MB (US) BD, LLC (the "Company") is a Delaware limited liability company formed on November 12, 2019. The Company is a limited purpose broker‐dealer registered with the Securities and Exchange Commission ("SEC") and a member of the Financial Industry Regulatory Authority ("FINRA"). The Company's registration with FINRA was effective as of June 19, 2020. The Company is a wholly‐owned subsidiary of Alvarium Investments Limited (the "Parent"). The Company does not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3‐3, and is relying on Footnote 74 of the SEC Release No. 34‐70073. The company does not effect transactions for anyone defined as a customer under Rule 15c3‐3. The primary purpose of the Company is to expand the Alvarium family of companies' business and product offerings into the Unites States. Specifically, a primary focus area is providing capital markets and investment banking advisory services to U.S. companies primarily in the (i) commercial and residential real estate, and (ii) technology, media and consumer industries. In addition, the Company provides services to investment managers of funds and receives management fees, as well as a portion of the carried interest from the sponsor of the fund ("Carry Vehicle") based upon the performance of the fund. Following is a description of the significant accounting policies and practices followed by the Company in the preparation of the accompanying financial statement. These policies conform to accounting principles generally accepted in the United States of America. #### **Government and Other Regulation** The Company is subject to significant regulation by various governmental agencies and self‐ regulatory organizations. Such regulation includes, among other things, periodic examinations by these regulatory bodies to determine whether the Company is conducting and reporting its operations in accordance with the applicable requirements of these organizations. #### **Basis of Preparation** The Company prepares its financial statement on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America ("GAAP"). #### **Revenue Recognition** The Company recognizes revenues in accordance with Accounting Standards Updated ("ASU") 2014‐09, *Revenue from Contracts with Customers*, which has been codified in Accounting Standards Codification ("ASC") Topic 606. The guidance has a five‐step model for recognizing revenue, that requires additional disclosure about the nature, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgements and changes in judgements. {7}------------------------------------------------ #### **1. Organization and Summary of Significant Accountant Policies (continued)** #### *Investment Banking* Contingent Fee Investment Banking Services consists of investment banking services with the goal of assisting the client in consummating a transaction. The transaction fee for Contingent Investment Banking Services generally consists of nonrefundable retainers, a contingent transaction fee, and expense reimbursements. The nonrefundable retainers and expense reimbursements are collected at the beginning and throughout the contract term, whereas, the contingent transaction fee is collected only upon the close of a transaction. Contract costs, which consist of labor (base salary, fringes, and bonus) and out‐of‐pocket expenses, are deferred to the extent of nonrefundable retainers and expense reimbursements, which are reported as deferred revenue. Because there is a single performance obligation, all revenue, including the nonrefundable retainers, transaction fee and expense reimbursements are recognized as revenue at the date the transaction closes. Should the engagement be terminated, or should a transaction not be consummated, the nonrefundable retainers and expense reimbursements are recognized as revenue at the termination of the Company's services. Deferred contract costs are amortized when the transaction closes or the engagement is terminated. Consulting Fee Based Services consist of an agreement with the client to provide a unique deliverable. The consulting fee consists of a single fixed fee and the reimbursement of out‐of‐ pocket expenses. Invoices are sent to customers periodically during the contract, including expense reimbursements. Revenue is recognized at a point in time when the Company has fulfilled its obligations to the client, which occurs upon completion of the unique deliverable. No allocation of the consulting fee is necessary because there in only a single performance obligation. As of December 31, 2022 and 2021 there are no deferred contact costs or retainers. #### *Management Fees* Management fees are calculated based on a percentage of invested capital as of the end of each quarter and are recognized when the performance obligation is satisfied. #### *Carried Interest* Carried Interest is earned when the Carry Vehicle receives any distribution of Carried Interest, which is recognized over time when the performance obligation is satisfied. The Company is entitled to a percentage of the total Carried Interest distributed to the Carry Vehicle. #### **Income Taxes** The Company has elected to be taxed as a corporation for federal and state income tax purposes. The Company accounts for income taxes under the liability method whereby deferred tax assets and liabilities are provided for the future tax consequence attributable to {8}------------------------------------------------ #### **1. Organization and Summary of Significant Accountant Policies (continued)** temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered. Deferred tax assets, net of a valuation allowance, are recorded when management believes it is more likely than not that the tax benefits will be realized. Realization of the deferred tax assets is dependent upon generating sufficient taxable income in the future. The amount of deferred tax asset considered realizable could change in the near term if estimates of future taxable income are modified. The Company assesses its tax positions in accordance with *Accounting for Uncertainties in Income Taxes* as prescribed by ASC 740, *Income Taxes*, which provides guidance for financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a tax return for open tax years that remain subject to examination by the Company's major tax jurisdictions. The Company assesses its tax positions and determines whether it has any material unrecognized liabilities for uncertain tax positions. The Company records these liabilities to the extent it deems them more likely than not to be incurred. At December 31, 2022, the Company had no liability for unrecognized tax positions. The Company believes that its income tax positions would be sustained upon examination and does not anticipate any adjustments that would result in a material change to its financial position or results of operations. Federal and state income tax returns remain open for examination by the U.S. and state tax authorities for all years subsequent to 2019. ### **Use of Estimates** The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date. Management regularly reviews and evaluates its estimates and assumptions, including, but not limited to those that relate to taxes and accruals. Actual results could differ from those estimates or assumptions. ### **Cash** Cash consists of cash held in bank at a U.S. financial institution. From time to time, cash balances exceed federally insured limits. #### **Accounts Receivable and Credit Policy** Accounts receivable are uncollateralized customer obligations due under normal trade terms. The carrying amount of accounts receivable may be reduced by an allowance that reflects management´s best estimate of the amounts that will not be collected. Management individually {9}------------------------------------------------ #### **1. Organization and Summary of Significant Accountant Policies (continued)** reviews all accounts receivable balances and based on an assessment of current credit worthiness, estimated the portion, if any, of the balance that will not be collected. At December 31, 2021, there are no accounts receivable recorded. As management believes that the accounts receivables recorded are fully collectable and are therefore stated at net realizable value, at December 31, 2022 and 2021 management has no allowance for doubtful accounts. ### **2. Member's Equity** The Company's operations are guided by the limited liability agreement dated November 14, 2019 entered into by Alvarium Investments Limited, as the sole member of the Company. ### **3. Net Capital Requirements** The Company is a member of FINRA and is subject to the Securities and Exchange Commission Uniform Net Capital Rule 15c3‐1. This Rule requires the maintenance of minimum net capital equal to the greater of \$5,000 or 6‐2/3% of aggregate indebtedness and that the ratio of aggregate indebtedness to net capital, shall not exceed 15 to 1. At December 31, 2022, the Company's net capital amounted to \$174,608, which was \$163,530 in excess of its minimum net capital requirement of \$11,078. At December 31, 2022, the ratio of "Aggregate Indebtedness" to "Net Capital" was .95 to 1. ### **4. Income Taxes** A summary of deferred tax assets (liabilities) as of December 31, 2022 is as follows: | Net deferred tax asset | \$
530,374 | |------------------------------|---------------| | Less: valuation allowance | (530,374) | | | | | Total net deferred tax asset | | As of December 31, 2022, the Company has a net deferred tax asset, principally related to its federal and state net operating loss carryforwards, of approximately \$1,788,500. Based on an assessment of all available evidence including, but not limited to, the Company's limited operating history and lack of profitability and on‐boarding of current and potential customers, the Company has concluded that it is more likely than not that these net operating loss carryforwards will not be realized and, as a result, a full deferred income tax valuation allowance has been recorded against these assets. The federal and state net operating loss carryforwards have an indefinite carryforward period, as the losses occurred after the Tax Cuts and Jobs Act of 2017 (the "2017 Tax Act") was enacted. {10}------------------------------------------------ #### **5. Related Party Transactions** Alvarium CI (US), LLC ("ACI US") is an entity related by common ownership. During the year ended December 31, 2021, ACI US paid for certain operating expenses on behalf of the Company. The amount, totaling \$324, is included in due to related parties on the accompanying statement of financial condition. Alvarium Group Operations Limited ("AGO"), is an entity related by common ownership. During the year ended December 31, 2022, AGO paid for certain system related expenses on behalf of the Company. The amount, totaling \$942, is included in due to related parties on the accompanying statement of financial condition. The Company maintained a shared services agreement with Alvarium Investment Advisors (US), Inc. ("AIA US"), an entity related by common ownership. During the year ended December 31, 2022, AIA US paid for wages, health insurance and benefits on behalf of the Company. The amount, totaling \$59,704, is included in due to related parties on the accompanying statement of financial condition. Alvarium MB (UK) Ltd ("AMB UK"), is an entity related by common ownership. During the year ended December 31, 2022, AMB UK paid for certain operating expenses on behalf of the Company. The amount, totaling \$1,242, is included in due to related parties on the accompanying statement of financial condition. #### **6. Risks and Uncertainties** COVID‐19 is not expected to have a significant impact on the Company. Management has determined that there is no material uncertainty that casts doubt on the Company's ability to continue as a going concern, as it relates to COVID‐19. It expects that COVID‐19 might have some impact, though not significant, for example, in relation to expected future performance, or the effects on some future asset valuations. #### **7. Going Concern** The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The ability to continue as a going concern is dependent upon the existing cash on hand, capital contributions from the Parent and/or cash flows from operating activities. The Parent has provided a support letter to the Company committing that the Parent will provide the required funding of the Company over the twelve‐month period following issuance of these financial statements. {11}------------------------------------------------ #### **8. Subsequent Events** The Company has evaluated subsequent events through February 27, 2023, which is the date the accompanying financial statements were issued and determined there are no subsequent events that require disclosure. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.