What changed in this filing

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Item 1. Financial Statements

2024-08-15 compared with 2024-05-24 · 73 added, 66 removed, 412 unchanged (25% of the section changed)

3 unchanged sentences

(in thousands except for share and per share amounts)

March 31, 2024

June 30, 2024

December 31, 2023

9 unchanged sentences

Operating lease liability

Notes payable, net of unamortized debt issuance costs of $ 619 and $ 645 as of March 31, 2024 and December 31, 2023, respectively

Notes payable, net of unamortized debt issuance costs of $ 594 and $ 645 as of June 30, 2024 and December 31, 2023, respectively

Promissory notes-affiliates

2 unchanged sentences

Mezzanine Equity:

Redeemable Series A Convertible Preferred Stock, par value $ 0.0001 , 2,000,000 shares authorized, 1,500,000 shares outstanding at March 31, 2024

Redeemable Series A Convertible Preferred Stock, par value $ 0.0001 , 2,000,000 shares authorized, 1,519,500 shares outstanding at June 30, 2024

Stockholders’ Equity and Members’ Equity:

Common stock, $ 0.0001 par value, 55,000,000 authorized, 16,565,885 issued and outstanding at March 31, 2024

Common stock, $ 0.0001 par value, 55,000,000 authorized, 16,602,460 issued and outstanding at June 30, 2024

Additional paid-in-capital

7 unchanged sentences

(in thousands except for share and per share amounts)

Three months ended March 31,

Three Months Ended June 30,

Six months ended June 30,

Revenue from Contracts with Customers:

15 unchanged sentences

Net loss attributable to Binah Capital Group, Inc.

Net income loss per share basic and diluted

Net loss per share basic and diluted

Weighted average shares:

4 unchanged sentences

(in thousands except for share and per share amounts)

FOR THE THREE MONTHS ENDED MARCH 31, 2024

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2024

For the Three and Six Months Ended June 30, 2024

Redeemable Convertible Preferred Stock

13 unchanged sentences

Balance March 31, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2023

Equity Attributed to

Legacy Wentworth

Management Services

Total Members’

Balance January 1, 2023

Distribution of capital

Balance March 31, 2023

Issuance of redeemable convertible preferred stock

Dividend - redeemable convertible preferred stock

Issuance of common stock in connection with exercise of warrants

Balance June 30, 2024

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

2 unchanged sentences

(in thousands except for share and per share amounts)

For the three months ended March 31,

For the six months ended June 30,

Cash Flows From Operating Activities

6 unchanged sentences

Capitalized interest - due to members

Loss on disposal of property and leasehold improvements

Changes in operating assets and liabilities:

2 unchanged sentences

Other receivables

Accounts payable, accrued expenses and other liabilities

Accounts payable and accrued expenses

Commissions payable

Operating lease liabilities

Operating lease liability

Net Cash (Used in) Provided By Operating Activities

5 unchanged sentences

Repayment of promissory notes-affiliates

Proceeds from borrowings from members

Repayment of borrowings from members

Net payments for reverse merger and recapitalization

Proceeds from redeemable convertible preferred stock issuance (“PIPE Financing”)

Net payment for reverse merger and recapitalization

Proceeds from redeemable convertible preferred stock

Proceeds from exercise of warrants

Distribution of capital

4 unchanged sentences

Cash Paid During the Period for:

Supplemental Disclosure of Non-Cash Financing Activities

During the period ended June 30, 2024, the Company paid an in-kind dividend to the Preferred Stockholder in the amount of $ 195,000 .

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

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2024

June 30, 2024 1

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

37 unchanged sentences

Operations prior to the business combination will be those of Wentworth in future reports of Holdings (See Note 3 – Mergers and Recapitalization).

Unaudited Interim Financial Statements

The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

The condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

Basis of Presentation

These unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), which requires the Company to make estimates and assumptions regarding the valuation and impairments of intangible assets and deferred income taxes, allowance for credit losses, contingencies, and other matters that affect the condensed consolidated financial statements and related disclosures.

The condensed consolidated financial statements reflect all adjustments which are in the opinion of management, necessary to represent fairly the results of operations for the interim periods presented.

Actual results could differ from those estimates under different assumptions and the differences may be material to the condensed financial statements.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued)

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2023.

The unaudited consolidated interim financial statements do not include all the information and footnotes required by GAAP for complete financial statements.

The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the entire year ending December 31, 2024.

The accompanying unaudited consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented.

Principles of Consolidation

12 unchanged sentences

Restricted cash represents cash held by the Company’s lender related to its credit facility.

As of March 31, 2024, and December 31, 2023 restricted cash amounted to approximately $ 0.4 million.

As of June 30, 2024 and December 31, 2023 restricted cash amounted to approximately $ 0.4 million.

The Company regularly maintains cash, cash equivalents and restricted cash that exceed Federal Deposit Insurance Corporation limits.

3 unchanged sentences

All receivables are uncollateralized.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial Instruments – Credit Losses .

4 unchanged sentences

Changes in the allowance for credit losses are reported in credit loss expense, if applicable.

Management believes its risk of loss on currently recorded receivables is minimal and accordingly an allowance for credit losses has been recorded as of March 31, 2024, and December 31, 2023, and January 1, 2023 in the amount of $ 0.2 million.

Management believes its risk of loss on currently recorded receivables is minimal and accordingly an allowance for credit losses has been recorded as of June 30, 2024, and December 31, 2023, and January 1, 2023 in the amount of $ 0.67 million, $ 0.2 million and $ 0.2 million, respectively.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Goodwill and Other Intangible Assets

2 unchanged sentences

An impairment loss will be recognized if a reporting unit’s carrying amount exceeds its fair value, to the extent that it does not exceed the total carrying amount of goodwill.

No impairment of goodwill was recognized for the periods ended March 31, 2024, and 2023.

No impairment of goodwill was recognized for the periods ended June 30, 2024 and 2023.

Intangible assets that are deemed to have definite lives are amortized over their useful lives, generally ranging from 5 to 10 years .

2 unchanged sentences

If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value.

There was no impairment of intangible assets recognized for the periods ended March 31, 2024 and 2023.

There was no impairment of intangible assets recognized for the periods ended June 30, 2024 and 2023.

For the periods prior to the Reverse Merger and Recapitalization, Wentworth was treated as a partnership for income tax purposes and therefore not subject to federal taxes.

16 unchanged sentences

A valuation allowance may be established to reduce deferred tax assets, if it is more likely than not that all, or some portion, of such deferred tax assets will not be realized.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accounts for taxes in accordance with the asset and liability method of accounting for income taxes.

1 unchanged sentence

The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net Loss Per Share

18 unchanged sentences

No liability is recognized for those matters which, in management’s judgment, the determination of a reasonable estimate of potential loss is not possible, or for which a potential loss is not determined to be probable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Emerging Growth Company Status

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012, and it thus may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recently Issued Accounting Pronouncements

12 unchanged sentences

Recently Adopted Accounting Pronouncements

There were no new accounting pronouncements during the three months ended March 31, 2024 that materially impacted the Company’s condensed consolidated financial statements and related disclosures.

There were no new accounting pronouncements during the three months ended June 30, 2024 that materially impacted the Company’s condensed consolidated financial statements and related disclosures.

MERGER AND RECAPITALIZATION

1 unchanged sentence

As a result of the Business Combination, Wentworth bec a me an indirect, wholly-owned subsidiary of Holdings.

MERGER AND RECAPITALIZATION (continued)

Additionally, on the Closing Date, Holdings entered into a Subscription Agreement with an investor for the purchase of 1,500,000 shares of Holdings’ Series A Redeemable Convertible Preferred Stock (the “ Holdings Series A Stock ”) in a private placement at $ 9.60 per share, for an aggregate purchase price of $ 14,400,000 (the “ Series A PIPE ”).

The Holdings Series A Stock may be converted into shares of Holdings Common Stock after the second anniversary of the closing of the Series A PIPE, which such conversion shall initially be 1.5 shares of Holdings Common Stock for each share of Series A Convertible Preferred Stock, subject to certain adjustments provided in the Certificate of Designations.

MERGER AND RECAPITALIZATION (continued)

Holdings applied to have the Holdings Common Stock and Holdings Warrants listed on the Nasdaq Global Market (the “ Nasdaq ”) under the symbols BCG and BCG.W , respectively.

18 unchanged sentences

The constraint is removed once the investment holdings value can be determined.

REVENUES FROM CONTRACTS WITH CUSTOMERS (continued)

Advisory Fees

8 unchanged sentences

The Company is the principal in these arrangements and recognizes advisory revenues on a gross basis, as the Company is responsible for satisfying the performance obligations and has control over determining the fees.

The following table presents total revenue from contracts with customers disaggregated by investment product for the three months ended March 31 (in thousands) :

REVENUES FROM CONTRACTS WITH CUSTOMERS (continued)

The following table presents total revenue from contracts with customers disaggregated by investment product for the periods ended June 30 (in thousands) :

Three Months Ended

Six Months Ended

Revenue From Contracts With Customers

5 unchanged sentences

Total Revenue From Contracts With Customers

The following tables presents sales-based and trailing revenues disaggregated by product category for the periods ended March 31 (in thousands) :

The following tables presents sales-based and trailing revenues disaggregated by product category for the periods ended June 30 (in thousands) :

Three Months Ended

Six Months Ended

Sales-based (Point in time)

4 unchanged sentences

Total Sales Based Revenues

Three Months Ended

Six Months Ended

Trailing (Over time)

5 unchanged sentences

Total Revenue From Contracts With Customers

REVENUES FROM CONTRACTS WITH CUSTOMERS (continued)

Contract Balances

3 unchanged sentences

Alternatively, when payment precedes the provision of the related services, the Company records deferred revenues (a contract liability) until the performance obligations are satisfied.

As of March 31, 2024, and December 31, 2023, the Company had receivables from contracts with customers totaling approximately $ 9.1 million and $ 8.9 million, respectively.

As of June 30, 2024, and December 31, 2023, the Company had receivables from contracts with customers totaling approximately $ 9.3 million and $ 8.9 million, respectively.

The opening balance of receivables from contracts with customers was approximately $ 8.9 million and $ 8.6 million as of January 1, 2024, and January 1, 2023, respectively.

As of March 31, 2024, and December 31, 2023, the Company had no liabilities from contracts with customers.

As of June 30, 2024, and December 31, 2023, the Company had no liabilities from contracts with customers.

Interest and Other Income

11 unchanged sentences

On April 2, 2020, the Company entered into a Credit Agreement (the “Credit Agreement”) with Oak Street Funding LLC (“Oak Street”) in the amount of $ 25 million.

This note payable bears interest at the prime rate (“Prime”) ( 8.50 % as of March 31, 2024) plus 2.25 % and has a 10 -year term and a 3 -month interest only repayment provision.

As of March 31, 2024 and December 31, 2023, the outstanding balance of the Oak Street note, net of unamortized debt issuance costs was $ 17.2 million and $ 17.6 million, respectively.

This note payable bears interest at the prime rate (“ Prime ”) ( 8.50 % as of June 30, 2024) plus 2.25 % and has a 10 -year term and a 3 -month interest only repayment provision.

As of June 30, 2024 and December 31, 2023, the outstanding balance of the Oak Street note, net of unamortized debt issuance costs was $ 16.7 million and $ 17.6 million, respectively.

On April 25, 2021, the Company entered into an additional promissory note with Oak Street in the amount of $ 4.1 million related to the acquisition of WEG (“WEG Note”).

This note payable bears interest at Prime plus 2.25 % and has a 10 -year term.

As of March 31, 2024 and December 31, 2023, the outstanding balance of this note, net of unamortized debt issuance costs was $ 3.1 million and $ 3.2 million, respectively.

DEBT (continued)

As of June 30, 2024 and December 31, 2023, the outstanding balance of this note, net of unamortized debt issuance costs was $ 3.0 million and $ 3.2 million, respectively.

Under the Oak Street notes, the Company is subject to certain covenants as defined in the agreements.

As of March 31, 2024 and December 31, 2023, the Company was in compliance with all financial related covenants.

The minimum payments and maturities of the Oak Street notes as of March 31, 2024, are as follows (in thousands) :

As of June 30, 2024 and December 31, 2023, the Company was in compliance with all financial related covenants.

The minimum payments and maturities of the Oak Street notes as of June 30, 2024, are as follows (in thousands) :

In connection with the closing of the Business Combination, the Company entered into an amendment to the Credit Agreement with Oak Street providing for, among other things, consenting to the Business Combination, and the payoff and restructuring of certain debt obligations.

Additionally, the rate of interest being charged will increase at rate of .15 % per annum until the interest rate reaches a maximum of 15.00 %, provided that in no event the interest rate will not be less than 10.75 % (the “Floor”).

Additionally, in connection with the amendment the Company has agreed to pay a fee equal to $ 0.14 million (the “Deferred Fee”), which is due and payable in the amounts of $ 0.025 million and $ 0.115 million on June 12, 2024 and August 12, 2024, respectively.

If the obligations under this Credit Agreement are paid in full prior to the respective deferral fee dates, the respective deferral fees would be waived.

Additionally, in connection with the amendment the Company has agreed to pay a fee equal to $ 0.14 million (the “Deferred Fee”), which is due and payable in the amounts of $ 0.025 , which was paid on June 12, 2024 and $ 0.115 , which is due and payable on August 12, 2024, respectively.

If the obligations under this Credit Agreement are paid in full prior to August 12, 2024, the remaining deferred fee would be waived.

DEBT (continued)

The amended Credit Agreement also includes a guarantee provision whereby each of the Company, KWAC, Holdings and MHC Securities, LLC are guarantors under the Credit Agreement.

9 unchanged sentences

As of December 31, 2023, the amount of principal and accrued interest related to these promissory notes was approximately $ 12.2 million.

Related interest expense was approximately $ 0 million and $ 0.2 million for the periods ended March 31, 2024 and 2023, respectively.

Related interest expense was approximately $ 0 million and $ 0.3 million for the six months ended June 30, 2024 and 2023, respectively.

In connection with the closing of the Business Combination, the Company paid approximately $ 3.5 million on these notes.

1 unchanged sentence

The terms of these new promissory notes provide for maturity on May 15, 2027 and carries an interest rate of Prime plus 1.00 %, but no less than 7.50 % per annum.

Related interest expense was approximately $ 0.1 and $ 0 for the six months ended June 30, 2024 and 2023, respectively.

DUE TO MEMBERS

8 unchanged sentences

At the discretion of Holdings, the payment may be made in cash or up to 50 % of the amount due, in duly authorized, validly issued, fully paid and non-assessable share of Holdings Series A Stock at a value of $ 10 per share.

As of June 30, 2024, the Company accrued 50 % of the dividend to be paid in cash in the amount of $ 0.2 million and paid an in-kind dividend in the amount $0.2 million.

REDEEMABLE CONVERTIBLE PREFERRED STOCK (continued)

The Holdings Series A Stock has liquidation preferences in the event of a voluntary or involuntary liquidation as follows:

9 unchanged sentences

If the Series A Stock have not previously been redeemed or converted, the Series A Stock will be redeemed by Holdings on the fourth anniversary of the Funding Date.

The following table summarizes the warrants outstanding as of March 31, 2024:

The following table summarizes the warrants outstanding as of June 30, 2024:

Class of Warrants

11 unchanged sentences

The Warrants are classified as derivative liabilities under ASC Topic 480 or ASC Topic 815.

At March 31, 2024 , the fair value of the warrant liabilities is approximately $ 0.5 million and is included in accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated statements of financial condition.

At June 30, 2024 , the fair value of the warrant liabilities is approximately $ 0.5 million and is included in accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated statements of financial condition.

As a result of the Reverse Recapitalization, Binah Capital Group, Inc.

6 unchanged sentences

Therefore, these consolidated financial statements include an income tax provision for the taxable entities only.

The effective tax rate was approximately ( 7 ) % for the period ended March 31, 2024.

The effective income tax rate for the period ended March 31, 2024 differed significantly from the statutory rate primarily due to transaction costs that were incurred as a result of the Reverse Recapitalization.

The effective tax rate was approximately ( 15 )% for the six months ended June 30, 2024.

The effective income tax rate for the period ended June 30, 2024 differed significantly from the statutory rate primarily due to transaction costs that were incurred as a result of the Reverse Recapitalization.

The tax provision is related to the activities of the taxable entities including the PKSH Entities, Cabot Entities and WEG.

7 unchanged sentences

Management determined that EPS was not presented for periods prior to the Merger as it was not considered to be meaningful.

The computation of loss per share and weighted average of the Company’s common stock outstanding for the period from the date of transaction close through March 31, 2024 is as follows (in thousands) :

Net (loss) attributable to common stock for basic and diluted loss per share

Weighted-average shares for basic and diluted loss per share

The computation of loss per share and weighted average of the Company’s common stock outstanding for the period from the date of transaction close through June 30, 2024 is as follows (in thousands) :

ended June 30,

Ended June 30,

Basic and diluted weighted average shares outstanding, common stock

Basic and diluted loss per share of common stock

15 unchanged sentences

However, accruals are reviewed regularly and are adjusted to reflect management’s estimates of the impact of developments, rulings, advice of counsel and any other information pertinent to a particular matter.

COMMITMENTS AND CONTINGENCIES (continued)

Because of the inherent difficulty in predicting the ultimate outcome of legal and regulatory actions, management cannot predict with certainty the eventual loss or range of loss related to such matters.

8 unchanged sentences

The Company, through its clearing broker, seeks to control the risk associated with its customers’ activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines.

As of March 31, 2024, and December 31, 2023, management of the Company had not been notified by any clearing brokers, nor were they otherwise aware of any potential losses relating to this indemnification.

As of June 30, 2024, and December 31, 2023, management of the Company had not been notified by any clearing brokers, nor were they otherwise aware of any potential losses relating to this indemnification.

COMMON STOCK, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

The Company is authorized to issue 57,000,000 shares consisting of the following:

● 2,000,000 shares of Preferred Stock, par value $ 0.0001 per share, 1,500,000 shares issued and outstanding as of March 31, 2024;

● 55,000,000 shares of Common Stock, par value $ 0.0001 per share, 16,565,885 shares issued and outstanding as of March 31, 2024.

● 2,000,000 shares of Preferred Stock, par value $ 0.0001 per share, 1,519,500 shares issued and outstanding as of June 30, 2024;

● 55,000,000 shares of Common Stock, par value $ 0.0001 per share, 16,602,460 shares issued and outstanding as of June 30, 2024.

NET CAPITAL REQUIREMENTS

1 unchanged sentence

This requires the Company to maintain certain minimum net capital requirements.

As of and for the periods ended March 31, 2024 and December 31, 2023, all broker-dealers had net capital in excess of the required minimums.

As of and for the periods ended June 30, 2024 and December 31, 2023, all broker-dealers had net capital in excess of the required minimums.

CREDIT RISK AND CONCENTRATIONS

3 unchanged sentences

SUBSEQUENT EVENTS

The Company evaluated subsequent events that occurred after the balance sheet date up to May 23, 2024.

The Company evaluated subsequent events that occurred after the balance sheet date up to August 14, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements