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Item 1. Financial Statements

2024-11-14 compared with 2024-08-15 · 103 added, 79 removed, 406 unchanged (31% of the section changed)

3 unchanged sentences

(in thousands except for share and per share amounts)

June 30, 2024

September 30, 2024

December 31, 2023

9 unchanged sentences

Operating lease liability

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

Notes payable, net of unamortized debt issuance costs of $ 568 and $ 645 as of September 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, 1,519,500 shares outstanding at June 30, 2024

Redeemable Series A Convertible Preferred Stock, par value $ 0.0001 , 2,000,000 shares authorized, 1,536,400 shares outstanding at September 30, 2024

Stockholders’ Equity and Members’ Equity:

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

Series B Convertible Preferred Stock, par value $ 0.0001 , 500,000 shares authorized, 150,000 shares outstanding at September 30, 2024

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

Additional paid-in-capital

7 unchanged sentences

(in thousands except for share and per share amounts)

Three Months Ended June 30,

Six months ended June 30,

Three Months Ended September 30,

Nine months ended September 30,

Revenue from Contracts with Customers:

10 unchanged sentences

Total expenses

Income (loss) before provision for income taxes

Provision for income taxes

Income (loss) before provision/(benefit) for income taxes

Provision/(Benefit) for income taxes

Net income (loss)

8 unchanged sentences

(in thousands except for share and per share amounts)

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

Equity Attributed to

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2024

For the Three and Nine Months Ended September 30, 2024

Class A Redeemable Convertible Preferred Stock

Class B Convertible Preferred Stock

Members’ Equity Attributed to

Stockholders’

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Balance March 31, 2024

Issuance of redeemable convertible preferred stock

Dividend - redeemable convertible preferred stock

Issuance of Class A redeemable convertible preferred stock

Dividends - Class A redeemable convertible preferred stock

Issuance of common stock in connection with exercise of warrants

Balance June 30, 2024

Issuance of Class A redeemable convertible preferred stock

Issuance of Class B convertible preferred stock

Dividends - Class A redeemable convertible preferred stock

Balance September 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 six months ended June 30,

For the nine months ended September 30,

Cash Flows From Operating Activities

11 unchanged sentences

Other receivables

Accounts payable and accrued expenses

Accounts payable, accrued expenses and other liabilities

Commissions payable

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Repayment of promissory notes-affiliates

Proceeds from borrowings from members

Repayment of borrowings from members

Proceeds from borrowings from members

Net payment for reverse merger and recapitalization

Proceeds from redeemable convertible preferred stock

Proceeds from Series B Convertible Preferred Stock

Dividends - Series A Redeemable Convertible Preferred Stock

Proceeds from exercise of warrants

4 unchanged sentences

Cash, Cash Equivalents and Restricted Cash - End of Period

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 .

During the period ended September 30, 2024, the Company paid an in-kind dividend to the Series A Redeemable Convertible Preferred Stockholder in the amount of $ 364 .

Cash Paid During the Period for:

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

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2024 1

September 30, 2024

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

1 unchanged sentence

(“Binah Capital”, “Holdings” or the “Company,” representing the consolidated group.), is a Delaware Corporation, formed on June 27, 2022 that serves as a holding company for its wholly-owned subsidiaries operating in the retail wealth management business.

Binah Capital through its wholly owned subsidiary Wentworth Management Services LLC (“Wentworth”) operates multiple businesses in the financial services industry as follows:

Binah Capital through its wholly owned subsidiary Wentworth Management Services LLC (dba, Binah Management Services, “BMS”) operates multiple businesses in the financial services industry as follows:

● PKS Holdings, LLC (“PKSH”) is headquartered in Albany, New York and branch offices throughout the United States of America, and includes the following entities (the “PKSH Entities”):

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Reverse Recapitalization

On March 15, 2024 (the “Closing Date”), Binah Capital consummated the transactions contemplated by that certain Agreement and Plan of Merger, dated July 7, 2022 (as amended, the “Merger Agreement” and the consummation of such contemplated transactions, the “Closing”), by and among Kingswood Acquisition Corp, a Delaware corporation (“KWAC”), Binah Capital, Kingswood Merger Sub, Inc., a Delaware corporation (“Kingswood Merger Sub”), Wentworth Merger Sub, LLC, a Delaware limited liability company (“Wentworth Merger Sub”), and Wentworth Management Services LLC, a Delaware limited liability company (“Wentworth”).

Binah Capital, Kingswood Merger Sub and Wentworth Merger Sub were newly formed entities that were formed for the sole purpose of entering into and consummating the transaction set forth in the Merger Agreement.

Binah Capital was a wholly-owned direct subsidiary of KWAC and both Kingswood Merger Sub and Wentworth Merger Sub were wholly-owned direct subsidiaries of Binah Capital.

On the Closing Date, Kingswood Merger Sub merged with and into KWAC, with KWAC continuing as the surviving entity as a wholly-owned subsidiary of Binah Capital and Wentworth Merger Sub merged with and into Wentworth, with Wentworth continuing as the surviving entity as a wholly-owned subsidiary of Binah Capital.

Following the Wentworth merger, KWAC acquired, and Binah Capital contributed to KWAC all of the common units of Wentworth directly held by Binah Capital after the Wentworth merger, such that, following the Binah Capital contribution, Wentworth became a wholly-owned subsidiary of KWAC.

On the Closing Date, Kingswood Merger Sub merged with and into KWAC, with KWAC continuing as the surviving entity as a wholly-owned subsidiary of Binah Capital and Wentworth Merger Sub merged with and into BMS, with BMS continuing as the surviving entity as a wholly-owned subsidiary of Binah Capital.

Following the BMS merger, KWAC acquired, and Binah Capital contributed to KWAC all of the common units of BMS directly held by Binah Capital after the BMS merger, such that, following the Binah Capital contribution, BMS became a wholly-owned subsidiary of KWAC.

Notwithstanding the legal form of the Merger pursuant to the Business Combination Agreement, the Merger is accounted for as a reverse recapitalization.

Under this method of accounting, KWAC is expected to be treated as the “acquired” company for financial reporting purposes.

Accordingly, for accounting purposes, the consolidated financial statements of Binah Capital will represent a continuation of the consolidated financial statements of Wentworth with the business combination treated as the equivalent of the Wentworth issuing shares for the net assets of KWAC, accompanied by a recapitalization.

Accordingly, for accounting purposes, the consolidated financial statements of Binah Capital will represent a continuation of the consolidated financial statements of BMS with the business combination treated as the equivalent of the BMS issuing shares for the net assets of KWAC, accompanied by a recapitalization.

The net assets of KWAC will be stated at historical cost, with no goodwill or other intangible assets recorded.

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

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

Basis of Presentation

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

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

As of September 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.

9 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 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.

Management believes its risk of loss on currently recorded receivables is minimal and accordingly an allowance for credit losses has been recorded as of September 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)

3 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 June 30, 2024 and 2023.

No impairment of goodwill was recognized for the periods ended September 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 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.

Wentworth was subject to certain state and local income taxes.

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

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

BMS was subject to certain state and local income taxes.

Additionally, KWAC was treated as a corporation and subject to U.S.

federal income taxes, in addition to state and local income taxes.

Subsequent to the Reverse Merger and Recapitalization, KWAC, a wholly-owned subsidiary of Holdings, is the parent company of Wentworth, which is treated as a partnership for federal income tax purposes.

As a partnership, Wentworth is itself generally not subject to U.S.

Subsequent to the Reverse Merger and Recapitalization, KWAC, a wholly-owned subsidiary of Holdings, is the parent company of BMS, which is treated as a partnership for federal income tax purposes.

As a partnership, BMS is itself generally not subject to U.S.

federal income tax under current U.S.

1 unchanged sentence

KWAC is subject to U.S.

federal income taxes, in addition to state and local income taxes, with respect to its distributive share of the items of the net taxable income or loss and any related tax credits of Wentworth.

federal income taxes, in addition to state and local income taxes, with respect to its distributive share of the items of the net taxable income or loss and any related tax credits of BMS.

Additionally, Binah Capital Group, Inc., a corporation, is subject to U.S.

47 unchanged sentences

Recently Adopted Accounting Pronouncements

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.

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

MERGER AND RECAPITALIZATION

Upon the consummation of the Business Combination, (i) the holders of shares of KWAC’s common stock (“ KWAC Common Stock ”) issued and outstanding immediately prior to the effective time of the Business Combination (other than any redeemed shares) receive d one share of common stock of Holdings (“ Holdings Common Stock ”) in exchange for each share of KWAC Common Stock held by them, subject to adjustment as more fully described herein, (ii) 1,100,000 shares of Holdings Common Stock issued to Sponsor was placed by Holdings into an escrow account and will not be released to the Sponsor unless the dollar volume-weighted average price of Holdings Common Stock exceeds $ 12.00 for 20 trading days within any 30 - day trading period during the four-year period following the consummation of the Business Combination, (iii) the holders of each whole warrant to purchase KWAC Class A Common Stock receive d one warrant to purchase Holdings Common Stock at an exercise price of $ 11.50 per share, (iv) 12 million shares of Holdings Common Stock, subject to adjustment as more fully described herein, was issued to the equity holders of Wentworth in proportion to their ownership interests in Wentworth, (v) an additional 1,100,000 shares of Holdings Common Stock was issued to certain equity holders of Wentworth, (vi) 3,084,450 KWAC Private Placement Warrants held by Sponsor were forfeited immediately prior to the effective time of the Business Combination, and (vii) 3,084,450 warrants to purchase Holding Common Stock at an exercise price of $ 11.50 per share were issued to the equity holders of Wentworth in proportion to their ownership interests in Wentworth.

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

Upon the consummation of the Business Combination, (i) the holders of shares of KWAC’s common stock (“ KWAC Common Stock ”) issued and outstanding immediately prior to the effective time of the Business Combination (other than any redeemed shares) receive d one share of common stock of Holdings (“ Holdings Common Stock ”) in exchange for each share of KWAC Common Stock held by them, subject to adjustment as more fully described herein, (ii) 1,100,000 shares of Holdings Common Stock issued to Sponsor was placed by Holdings into an escrow account and will not be released to the Sponsor unless the dollar volume-weighted average price of Holdings Common Stock exceeds $ 12.00 for 20 trading days within any 30 - day trading period during the four-year period following the consummation of the Business Combination, (iii) the holders of each whole warrant to purchase KWAC Class A Common Stock receive d one warrant to purchase Holdings Common Stock at an exercise price of $ 11.50 per share, (iv) 12 million shares of Holdings Common Stock, subject to adjustment as more fully described herein, was issued to the equity holders of BMS in proportion to their ownership interests in BMS, (v) an additional 1,100,000 shares of Holdings Common Stock was issued to certain equity holders of BMS, (vi) 3,084,450 KWAC Private Placement Warrants held by Sponsor were forfeited immediately prior to the effective time of the Business Combination, and (vii) 3,084,450 warrants to purchase Holding Common Stock at an exercise price of $ 11.50 per share were issued to the equity holders of BMS in proportion to their ownership interests in BMS.

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

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 ”).

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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) :

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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 June 30 (in thousands) :

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

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Sales-based (Point in time)

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Trailing (Over time)

10 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 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.

As of September 30, 2024, and December 31, 2023, the Company had receivables from contracts with customers totaling approximately $ 10.6 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 June 30, 2024, and December 31, 2023, the Company had no liabilities from contracts with customers.

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

Interest and Other Income

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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 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.

This note payable bears interest at the prime rate (“ Prime ”) ( 8.00 % as of September 30, 2024) plus 2.25 % and has a 10 -year term and a 3 -month interest only repayment provision.

As of September 30, 2024 and December 31, 2023, the outstanding balance of the Oak Street note, net of unamortized debt issuance costs was $ 16.2 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 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.

As of September 30, 2024 and December 31, 2023, the outstanding balance of this note, net of unamortized debt issuance costs was $ 2.9 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 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) :

As of September 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 September 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 , 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.

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

On August 12, 2024, the Company and Oak Street entered into a Letter Agreement Regarding the Deferred Fee which provided for the extension of the August Deferred Fee Date from August 12, 2024 to September 30, 2024.

Under the Letter Agreement Regarding the Deferred Fee, the amount of the fee was adjusted to $ 0.15 million.

As of September 30, 2024, the Company had not paid in full its obligations and accordingly paid Oak Street the Deferred Fee.

As of and subsequent to September 30, 2024, the Company continues to operate under the Credit Agreement as amended and outlined above.

DEBT (continued)

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PROMISSORY NOTES – AFFILIATES

On November 30, 2017, Wentworth issued subordinated promissory notes in the aggregate principal amount of approximately $ 3.6 million to certain sellers in connection with the acquisition of the PKSH Entities.

On November 30, 2017, BMS issued subordinated promissory notes in the aggregate principal amount of approximately $ 3.6 million to certain sellers in connection with the acquisition of the PKSH Entities.

These notes had a maturity date of May 17, 2023 and accrued interest at a rate of 10 % annually.

The interest on these notes continued to accrue until such time as these notes were paid or restructured.

Additionally, in connection with the acquisition of the PKSH Entities, Wentworth agreed to pay contingent consideration in the amount of $ 5.0 million to certain sellers.

Additionally, in connection with the acquisition of the PKSH Entities, BMS agreed to pay contingent consideration in the amount of $ 5.0 million to certain sellers.

The conditions related to this contingency were met on November 30, 2018, and thus the notes had been issued to the sellers.

2 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 $ 0.3 million for the six months ended June 30, 2024 and 2023, respectively.

Related interest expense was approximately $ 0 million and $ 0.3 million for the nine months ended September 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.

Related interest expense was approximately $ 0.3 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively.

DUE TO MEMBERS

Wentworth had entered into promissory notes with certain of its members to provide for working capital.

BMS had entered into promissory notes with certain of its members to provide for working capital.

As of December 31, 2023, the amount of principal and accrued interest related to these notes were approximately $ 5.2 million.

1 unchanged sentence

In connection with the closing of the Business Combination, the noteholders agreed to satisfy all outstanding obligations, including the payment of principal and interest, in exchange for an amount of cash equal to approximately $ 0.9 million, forgiveness of certain other obligations owed to a noteholder and the issuance of 357,000 shares of Common Stock of Binah Capital Group, Inc.

REDEEMABLE CONVERTIBLE PREFERRED STOCK

On March 15, 2024 (the “Funding Date”), in connection with the consummation of the Business Combination, Holdings and Wentworth 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 ”).

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK

On March 15, 2024 (the “Funding Date”), in connection with the consummation of the Business Combination, Holdings and BMS 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.

1 unchanged sentence

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)

As of September 30, 2024, the Company paid an in-kind dividend in the amount $ 0.4 million.

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK (continued)

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

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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 June 30, 2024:

SERIES B CONVERTIBLE PREFERRED STOCK

On September 4, 2024, the Company entered into a Subscription Agreement with certain investors for the purchase of 150,000 shares of Holdings’ Series B Convertible Preferred Stock, par value $ .0001 (the “ Holdings Series B Stock ”) in a private placement at $ 10.00 per share, for an aggregate purchase price of $ 1,500,000 ).

The Holdings Series B Stock may be converted into shares of Holdings Common Stock, at the option of the investor at a rate equal to the quotient of (i) $ 10.00 divided, by (ii) the product of (A) .80 multiplied by, (B) the volume weighted average price for the 20 trading days during the 30 -day period immediately prior to such conversion, provided that in no event shall the denominator be less than $ 6.00 per share (the “Conversion Rate”).

Additionally, the Holdings Series B Stock carries a cumulative dividend at a rate of nine percent ( 7 %) per annum, payable and compounded quarterly on the last day of each quarter.

The Company may, at its option, in whole, or part, redeem the Holdings Series B Stock any time after the first anniversary of the date of the Subscription Agreement at a redemption price equal to the greater of (i) $ 12.00 per share of Holdings Series B Stock, plus accrued but unpaid dividends or (A) 1.20 multiplied by (B) the volume weighted average price for 20 trading days during the 30 -day period immediately prior to the redemption;

provided that such price shall not greater than $ 20.00 .

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

Class of Warrants

11 unchanged sentences

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

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.

At September 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.

is the parent company of KWAC, which is the parent company of Wentworth.

is the parent company of KWAC, which is the parent company of BMS.

KWAC is a corporation and subject to U.S.

federal and certain state and local taxes.

Wentworth is treated as a partnership for U.S.

BMS is treated as a partnership for U.S.

federal income tax purposes.

1 unchanged sentence

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

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 effective tax rate was approximately ( 46 )% for the nine months ended September 30, 2024.

The effective income tax rate for the period ended September 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.

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NET LOSS PER SHARE

The Series A Preferred Stock does not have similar economic rights to the common stock and management does not consider them to be in substance common shares for earnings per share (“EPS”) purposes.

As a result, the weighted average Series A Preferred Stock outstanding during the period was not included in the calculation of weighted average common stock outstanding.

The Series A and Series B Preferred Stock does not have similar economic rights to the common stock and management does not consider them to be in substance common shares for earnings per share (“EPS”) purposes.

As a result, the weighted average Series A and Series B Preferred Stock outstanding during the period was not included in the calculation of weighted average common stock outstanding.

The Public and Private Warrants were considered in diluted EPS under the treasury stock method, if dilutive.

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 June 30, 2024 is as follows (in thousands) :

ended June 30,

Ended June 30,

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 September 30, 2024 is as follows (in thousands) :

ended September 30,

Ended September 30,

Basic and diluted weighted average shares outstanding, common stock

26 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 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.

As of September 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 57,500,000 shares consisting of the following:

● 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.

● 2,000,000 shares of Series A Preferred Stock, par value $ 0.0001 per share, 1,536,400 shares issued and outstanding as of September 30, 2024;

● 500,000 shares of Series B Preferred Stock, par value $ 0.0001 per share, 150,000 shares issued and outstanding as of September 30, 2024;

● 55,000,000 shares of Common Stock, par value $ 0.0001 per share, 16,602,460 shares issued and outstanding as of September 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 June 30, 2024 and December 31, 2023, all broker-dealers had net capital in excess of the required minimums.

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

CREDIT RISK AND CONCENTRATIONS

1 unchanged sentence

The Company performs certain credit evaluation procedures and does not require collateral for financial instruments subject to credit risk.

The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its counterparties and, based upon factors surrounding the credit risk of its counterparties, establishes an allowance for uncollectible accounts and, consequently, believes that its receivables credit risk exposure beyond such allowances is limited.

The Company believes that credit risk is limited because the Company routinely assesses the financial strength of its counterparties and, based upon factors surrounding the credit risk of its counterparties, establishes an allowance for credit losses and, consequently, believes that its receivables credit risk exposure beyond such allowances is limited.

SUBSEQUENT EVENTS

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

The Company evaluated subsequent events that occurred after the balance sheet date up to November 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