Binah Capital Group, Inc. 10-Q

Item 1. Financial Statements. BINAH CAPITAL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (in thousands except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unaudited ​ ​ ​ September 30, 2024 December 31, 2023 ASSETS ​ ​ ​ ​ ​ ​ Assets: ​ ​ ​ ​ ​ ​ Cash, cash equivalents and restricted cash ​ $ 7,253 ​ $ 7,621 Receivables: ​ ​ Commission receivable ​ 9,652 ​ 8,220 Due from clearing broker ​ 941 ​ 631 Other ​ 1,341 ​ 1,587 Property and equipment, net ​ 672 ​ 974 Right of use asset ​ 3,883 ​ 4,332 Intangible assets, net ​ 1,146 ​ 1,580 Goodwill ​ 39,839 ​ 39,839 Other assets ​ 2,236 ​ 2,626 ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS ​ $ 66,963 ​ $ 67,410 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ Accounts payable, accrued expenses and other liabilities ​ $ 10,242 ​ $ 9,082 Commissions payable ​ 10,816 ​ 10,676 Operating lease liability ​ 3,963 ​ 4,381 Notes payable, net of unamortized debt issuance costs of $ 568 and $ 645 as of September 30, 2024 and December 31, 2023, respectively ​ 19,142 ​ 20,822 Promissory notes-affiliates ​ 5,313 ​ 12,177 Due to members ​ — ​ 5,169 ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES ​ 49,476 ​ 62,307 ​ ​ ​ ​ ​ ​ ​ Mezzanine Equity: ​ ​ Redeemable Series A Convertible Preferred Stock, par value $ 0.0001 , 2,000,000 shares authorized, 1,536,400 shares outstanding at September 30, 2024 ​ 14,764 ​ — Stockholders’ Equity and Members’ Equity: ​ ​ Series B Convertible Preferred Stock, par value $ 0.0001 , 500,000 shares authorized, 150,000 shares outstanding at September 30, 2024 ​ ​ 1,500 ​ ​ — Common stock, $ 0.0001 par value, 55,000,000 authorized, 16,602,460 issued and outstanding at September 30, 2024 ​ — ​ — Additional paid-in-capital ​ 23,381 ​ — Accumulated deficit ​ ( 22,158 ) ​ — Members’ Equity attributed to Legacy Wentworth Management Services LLC ​ — ​ 5,103 Total Stockholders' Equity, Mezzanine Equity and Members’ Equity Attributable to Wentworth Management Services LLC ​ 17,487 ​ 5,103 ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY ​ $ 66,963 ​ $ 67,410 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 1 Table of Contents BINAH CAPITAL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended September 30, Nine months ended September 30, ​ 2024 2023 2024 2023 Revenues: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue from Contracts with Customers: ​ ​ ​ ​ ​ ​ ​ ​ ​ Commissions ​ ​ 34,780 ​ ​ 35,469 ​ $ 102,836 ​ $ 104,112 Advisory fees ​ 6,247 ​ 5,448 ​ ​ 18,250 ​ ​ 16,334 Total Revenue from Contracts with Customers ​ 41,026 ​ 40,917 ​ ​ 121,085 ​ ​ 120,446 Interest and other income ​ 1,170 ​ 1,933 ​ ​ 3,209 ​ ​ 6,227 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenues ​ 42,197 ​ 42,850 ​ ​ 124,295 ​ ​ 126,673 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commissions and fees ​ 33,832 ​ 35,865 ​ ​ 100,839 ​ ​ 103,863 Employee compensation and benefits ​ 3,937 ​ 3,088 ​ ​ 10,988 ​ ​ 9,875 Rent and occupancy ​ 285 ​ 284 ​ ​ 870 ​ ​ 900 Professional fees ​ 1,120 ​ 697 ​ ​ 6,059 ​ ​ 2,412 Technology fees ​ 386 ​ 598 ​ ​ 1,228 ​ ​ 1,543 Interest ​ 775 ​ 1,249 ​ ​ 2,632 ​ ​ 3,895 Depreciation and amortization ​ 268 ​ 303 ​ ​ 862 ​ ​ 913 Other ​ 2,207 ​ 766 ​ ​ 3,394 ​ ​ 1,539 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total expenses ​ 42,810 ​ 42,849 ​ ​ 126,872 ​ ​ 124,939 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before provision/(benefit) for income taxes ​ ( 613 ) ​ 1 ​ ​ ( 2,577 ) ​ ​ 1,734 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision/(Benefit) for income taxes ​ 537 ​ ( 242 ) ​ ​ 890 ​ ​ 289 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 1,150 ) ​ $ 243 ​ $ ( 3,467 ) ​ $ 1,445 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Legacy Wentworth Management Services LLC members ​ — ​ ​ ​ ​ 730 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to Binah Capital Group, Inc. ​ $ ( 1,150 ) ​ ​ ​ ​ ​ ( 4,197 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss per share basic and diluted ​ $ ( 0.07 ) ​ ​ ​ $ ( 0.25 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average shares: basic and diluted ​ 16,602 ​ ​ ​ ​ 16,588 ​ ​ ​ ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ ​ 2 Table of Contents BINAH CAPITAL GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited) (in thousands except for share and per share amounts) 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 Common Stock ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ Members’ Equity Attributed to ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stockholders’ ​ ​ Legacy Wentworth ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity, Mezzanine Equity and ​ ​ Management Services ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional Paid- ​ Accumulated ​ Members’ ​ ​ LLC Units Amount Units Amount Units Amount in Capital Deficit Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance January 1, 2024 ​ $ 5,103 — ​ $ — ​ ​ — ​ $ — — ​ $ — ​ $ — ​ $ — ​ $ 5,103 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributions ​ ( 85 ) — ​ — ​ ​ — ​ ​ — — ​ — ​ — ​ — ​ ( 85 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income prior to transaction ​ 730 — ​ — ​ ​ — ​ ​ — — ​ — ​ — ​ — ​ 730 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Reverse merger and recapitalization of legacy Wentworth Management Services LLC ​ ( 5,748 ) — ​ — ​ ​ — ​ ​ — 16,566 ​ — ​ 23,693 ​ ( 17,961 ) ​ ( 16 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Mezzanine Equity - Shares Issued in connection with PIPE financing ​ — 1,500 ​ 14,400 ​ ​ — ​ ​ — — ​ — ​ — ​ — ​ 14,400 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributable to Binah Capital Group, Inc. post transaction ​ — — ​ — ​ ​ — ​ ​ — — ​ — ​ — ​ ( 2,311 ) ​ ( 2,311 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance March 31, 2024 ​ $ — 1,500 ​ $ 14,400 ​ $ — ​ $ — 16,566 ​ $ — ​ $ 23,693 ​ $ ( 20,272 ) ​ $ 17,821 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Class A redeemable convertible preferred stock ​ ​ — ​ 20 ​ ​ 195 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 195 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends - Class A redeemable convertible preferred stock ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 390 ) ​ ​ — ​ ​ ( 390 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock in connection with exercise of warrants ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ 37 ​ ​ — ​ ​ 416 ​ ​ — ​ ​ 416 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 736 ) ​ ​ ( 736 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance June 30, 2024 ​ ​ — ​ 1,520 ​ $ 14,595 ​ $ — ​ $ — ​ 16,603 ​ $ — ​ $ 23,719 ​ $ ( 21,008 ) ​ $ 17,306 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Class A redeemable convertible preferred stock ​ ​ — ​ 17 ​ ​ 169 ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of Class B convertible preferred stock ​ ​ — ​ — ​ ​ — ​ ​ 150 ​ ​ 1,500 ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,500 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividends - Class A redeemable convertible preferred stock ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ ( 338 ) ​ ​ — ​ ​ ( 338 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Loss ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ — ​ — ​ ​ — ​ ​ — ​ ​ ( 1,150 ) ​ ​ ( 1,150 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance September 30, 2024 ​ $ — ​ 1,537 ​ $ 14,764 ​ ​ 150 ​ $ 1,500 ​ 16,603 ​ $ — ​ $ 23,381 ​ $ ( 22,158 ) ​ $ 17,487 ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ ​ 3 Table of Contents BINAH CAPITAL GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands except for share and per share amounts) ​ ​ ​ ​ ​ ​ ​ ​ ​ For the nine months ended September 30, ​ ​ 2024 2023 Cash Flows From Operating Activities ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ ( 3,467 ) ​ $ 1,445 Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: ​ ​ ​ Depreciation and amortization ​ 754 ​ 826 Amortization of debt issuance costs ​ 77 ​ 54 Non-cash lease expense ​ 449 ​ 337 Capitalized interest - promissory notes-affiliates ​ — ​ 457 Capitalized interest - due to members ​ — ​ 323 Loss on disposal of property and leasehold improvements ​ — ​ 51 Changes in operating assets and liabilities: ​ ​ ​ Due from clearing broker ​ ( 310 ) ​ 274 Commissions receivable ​ ( 1,432 ) ​ ( 287 ) Other receivables ​ 246 ​ ( 73 ) Other assets ​ 406 ​ ( 497 ) Accounts payable, accrued expenses and other liabilities ​ 1,160 ​ ( 981 ) Commissions payable ​ 140 ​ ( 1,257 ) Operating lease liability ​ ( 418 ) ​ ( 310 ) Net Cash (Used in) Provided By Operating Activities ​ ( 2,411 ) ​ 362 ​ ​ ​ ​ ​ ​ ​ Cash Flows From Investing Activities ​ ​ Purchases of property and equipment ​ ( 18 ) ​ ( 88 ) Net Cash Used In Investing Activities ​ ( 18 ) ​ ( 88 ) ​ ​ ​ ​ ​ ​ ​ Cash Flows From Financing Activities ​ ​ Repayment - notes payable ​ ( 1,757 ) ​ ( 1,619 ) Repayment of promissory notes-affiliates ​ ( 6,864 ) ​ — Repayment of borrowings from members ​ ( 5,169 ) ​ — Proceeds from borrowings from members ​ ​ — ​ ​ 9 Net payment for reverse merger and recapitalization ​ ( 16 ) ​ — Proceeds from Series B Convertible Preferred Stock ​ ​ 15,900 ​ — Dividends - Series A Redeemable Convertible Preferred Stock ​ ​ ( 364 ) ​ ​ — Proceeds from exercise of warrants ​ ​ 416 ​ ​ — Distribution of capital ​ ( 85 ) ​ ( 241 ) Net Cash Provided by (Used In) Financing Activities ​ 2,061 ​ ( 1,851 ) ​ ​ ​ ​ ​ ​ ​ Net Change in Cash, Cash Equivalents and Restricted Cash ​ ( 368 ) ​ ( 1,577 ) ​ ​ ​ ​ ​ ​ ​ Cash, Cash Equivalents and Restricted Cash - Beginning of Period ​ $ 7,621 ​ $ 7,849 ​ ​ ​ ​ ​ ​ ​ Cash, Cash Equivalents and Restricted Cash - End of Period ​ $ 7,253 ​ $ 6,272 ​ ​ ​ ​ ​ ​ ​ Supplemental Disclosure of Non-Cash Financing Activities ​ ​ ​ ​ ​ ​ 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: ​ ​ Interest ​ $ 2,632 ​ $ 3,106 Income taxes ​ $ — ​ $ — ​ The accompanying notes are an integral part of these unaudited condensed financial statements. ​ 4 Table of Contents BINAH CAPITAL GROUP, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2024 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Binah Capital Group, Inc. (“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 (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”): o Purshe Kaplan Sterling Investments, Inc. (“PKSI”), incorporated in the State of New York, is an independent broker-dealer registered with the Securities and Exchange Commission (“SEC”) and is a member of the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investors Protection Corporation (“SIPC”). o PKS Advisory Services, LLC (“PKSA”), a New York limited liability company, is an independent investment advisory firm, registered with the SEC, which provides advisory services to clients. o PKS Financial Services, Inc. (“PKSF”), incorporated in the State of New York, is an insurance entity providing financial services to clients. o Representatives Indemnity Company, Inc. (“Repco”), incorporated in the British Virgin Islands, holds a general business insurance license for the purpose of providing professional liability insurance coverage for affiliated entities. ● Cabot Lodge Securities LLC maintains offices in New York, New York and branch offices throughout the United States of America and includes the following entities. o Cabot Lodge Securities, LLC (“CLS”), a Delaware Limited Liability Company, is a broker-dealer registered with the SEC and is a member of FINRA and SIPC. o CL Wealth Management, LLC (“CLWM”), a Virginia Limited Liability Company, is an investment advisory firm, registered with the SEC, which provides advisory services to clients. o Wentworth Financial Partners (“WFP”) (f/k/a CL General Agency), a Delaware Limited Liability Company is an insurance entity providing financial services to clients. ​ ​ 5 Table of Contents 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) ● Michigan Securities, Inc. (“MSI”) maintains offices in Albany, New York and includes the following entities: o MSI, (d/b/a as Broadstone Securities, Inc., “Broadstone”), incorporated in the State of Michigan, is a financial services firm, and is a broker-dealer registered with the SEC and is a member of FINRA. o Michigan Advisors, Inc., (“MAI”) incorporated in the State of Michigan, was a SEC registered investment advisor. MAI withdrew its registration in September 2021. o Insurance Audit Agency, Inc. (“IAA”), incorporated in the state of Michigan, is an insurance agency. ● World Equity Group, Inc. (“WEG”), incorporated in the State of Illinois, is registered as a broker-dealer and investment advisor with the SEC and is a member of FINRA and SIPC. WEG maintains offices in Schaumburg, Illinois and has branch offices throughout the United States of America. Basis of Presentation 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 BMS. 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 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 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 BMS in future reports of Holdings (See Note 3 – Mergers and Recapitalization). 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. ​ 6 Table of Contents 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Principles of Consolidation The accompanying consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries. Significant inter-company transactions and balances were eliminated in consolidation. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates and Assumptions The preparation of the consolidated 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 at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the valuation and impairments of intangible assets and deferred income taxes, allowance for credit losses, and contingencies. Revenue Recognition Revenues from contracts with customers are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. For additional information see Note 4 - Revenues From Contracts with Customers. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist primarily of cash on deposit and money market funds all of which have original maturities of three months or less. Restricted cash represents cash held by the Company’s lender related to its credit facility. 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. The Company has not experienced any losses and does not believe it is exposed to any significant credit risk from cash. Receivables Receivables, which amounted to approximately $ 10.3 million and $ 10.5 million as of January 1, 2024, and 2023, respectively, represent amounts due to the Company from its clearing brokers, clients, financial institutions and other. Receivables consists of unconditional amounts due and are reported at amortized costs. All receivables are uncollateralized. Financial Instruments – Credit Losses . The Company accounts for estimated credit losses on financial assets measured at an amortized cost basis and certain off-balance sheet credit exposures in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326-20, Financial Instruments-Credit Losses . FASB ASC 326-20 requires the Company to estimate expected credit losses over the life of its financial assets and certain off-balance sheet exposures as of the reporting date based on relevant information about past events, current conditions, and reasonable and supportable forecasts. The Company records the estimate of expected credit losses as an allowance for credit losses. For financial assets measured at an amortized cost basis the allowance for credit losses is reported as a valuation account on the statement of financial condition that adjusts the asset’s amortized cost basis. 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 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. ​ 7 Table of Contents 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Goodwill and Other Intangible Assets Goodwill is tested annually for impairment or if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment test will be performed. 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 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 . They are reviewed for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated. 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 September 30, 2024 and 2023. Income Taxes 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 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. tax laws, and any taxable income or loss is passed through and included in the taxable income or loss of its members, including KWAC. 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 BMS. Additionally, Binah Capital Group, Inc., a corporation, is subject to U.S. federal income taxes, in addition to state and local income taxes. KWAC, the PKSH Entities, Cabot Entities and WEG are taxable entities subject to federal, state, and local income taxes. Therefore, these consolidated financial statements include an income tax provision for the taxable entities only. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company periodically evaluates deferred tax assets and net operating loss carryforwards to determine their recoverability based primarily on the Company’s ability to generate future taxable income. 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. The Company accounts for taxes in accordance with the asset and liability method of accounting for income taxes. Under this method, the Company must recognize the tax benefit from an uncertain tax position only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. 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. ​ 8 Table of Contents 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Net Loss Per Share Basic earnings per share of common stock is computed by dividing net income attributable to the Company by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted net income per share of common stock is computed by dividing net income attributable to the Company by the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive securities. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options and warrants and conversion of the Company’s preferred stock. Net income (loss) per share is not presented for periods prior to the Merger as such amounts would not be meaningful to users of the financial statements because the equity structure materially changed in connection with the Merger. Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company does not hold or issue financial instruments for speculative or trading purposes. As a result of the Reverse Recapitalization, the Company has issued and has outstanding warrants. The Company evaluates the warrants, to determine if such instruments should be considered stock-based compensation, pursuant to ASC Topic 718, and if not in the scope of ASC 718, if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480 and ASC Topic 815. The determination of whether the instrument should be classified as stock-based compensation or a derivative instrument, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Warrants issued to non-employees (the “Non-employee Warrants”) were not classified as stock-based compensation as there is no condition of employment such that the granting of the shares does not represent compensation. The Non-employee Warrants are classified as derivative liabilities under ASC Topic 480 or ASC Topic 815. Public Warrants to non-employees are measured at fair value on recurring basis, using the market approach based upon the quoted market price of Binah Capital Group, Inc.’s Public Warrants at the end of each reporting period. Private Placement Warrants issued to non-employees are measured at fair value on a recurring basis based upon the quoted price for similar liabilities (Public Warrants issued to non-employees) in active markets as of the end of each period. Contingent Liabilities The Company recognizes liabilities for contingencies when there is an exposure that, when fully analyzed, indicates potential losses become probable and can be reasonably estimated. Whether a potential loss is probable and can be reasonably estimated is based on currently available information and is subject to significant judgment, a variety of assumptions and uncertainties. When a potential loss is probable and the loss or range of loss can be estimated, the Company will accrue the most likely amount within that range. 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. 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. ​ 9 Table of Contents 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Recently Issued Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency of income tax disclosures relating to the rate reconciliation, disclosure of income taxes paid, and certain other disclosures. The ASU should be applied prospectively and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact on the related disclosures; however, it does not expect this update to have an impact on its financial condition or results of operations. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve the disclosures about reportable segments and include more detailed information about a reportable segment’s expenses. This ASU also requires that a public entity with a single reportable segment, like the Company, provide all of the disclosures required as part of the amendments and all existing disclosures required by Topic 280. The ASU should be applied retrospectively to all prior periods presented in the consolidated financial statements and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact on the related disclosures; however, it does not expect this update to have an impact on its financial condition or results of operations. Recently Adopted Accounting Pronouncements 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. ​ 3. 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 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 ”). 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. ​ 10 Table of Contents 3. 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. Prior to the mergers, the KWAC Class A Common Stock and KWAC Public Warrants were listed on the OTC Exchange under the symbols “KWAC” and “KWAC.WS,” respectively. On March 26, 2024, Holdings received approval for Holding’s securities to be listed on the Nasdaq Stock Market LLC. Holdings common stock is listed on the Nasdaq Global Market and its warrants will be listed on the Nasdaq Capital Market under the symbols “BCG” and “BCG.W”, respectively. 4. REVENUES FROM CONTRACTS WITH CUSTOMERS Revenues from contracts with customers are recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenues are analyzed to determine whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenues on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations before the good or service is transferred and discretion in establishing the price. Commissions Commission revenues represent sales commissions generated by advisors for their clients’ purchases and sales of securities on exchanges and over-the-counter, as well as purchases of other investment products. The Company views the selling, distribution and marketing, or any combination thereof, of investment products to such clients as a single performance obligation to the product sponsors. The Company is the principal for commission revenues, as it is responsible for the execution of the clients’ purchases and sales and maintains relationships with the product sponsors. Advisors assist the Company in performing its obligations. Accordingly, total commission revenues are reported on a gross basis. The Company generates two types of commission revenues: sales-based commissions that are recognized at the point of sale on the trade date and trailing commissions that are recognized over time as earned. Sales-based commission revenues vary by investment product and are based on a percentage of an investment product’s current market value at the time of purchase. Trailing commission revenues are generally based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets, and are recognized over the period during which services, such as ongoing support, are performed. As trailing commission revenues are based on the market value of clients’ investment holdings, the consideration is variable, and an estimate of the variable consideration is constrained due to dependence on unpredictable market impacts. The constraint is removed once the investment holdings value can be determined. Advisory Fees Advisory fees represent fees charged to advisors’ clients’ accounts on the Company’s corporate advisory platform. The Company provides ongoing investment advice, brokerage and execution services on transactions, and performs administrative services for these accounts. This series of performance obligations transfers control of the services to the client over time as the services are performed. These revenues are recognized ratably over time to match the continued delivery of the performance obligations to the client over the life of the contract. The advisory revenues generated from the Company’s corporate advisory platform are based on a percentage of the market value of the eligible assets in the clients’ advisory accounts. As such, the consideration for these revenues is variable and an estimate of the variable consideration is constrained due to dependence on unpredictable market impacts on client portfolio values. The constraint is removed once the portfolio value can be determined. The Company provides advisory services to clients on its corporate advisory platform through the advisor. 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. ​ 11 Table of Contents 4. REVENUES FROM CONTRACTS WITH CUSTOMERS (continued) 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 ​ Nine Months Ended ​ ​ September 30, ​ September 30, Revenue From Contracts With Customers 2024 2023 2024 2023 Variable annuities and other insurance commissions ​ $ 24,873 ​ $ 26,614 ​ $ 74,943 ​ $ 77,455 Mutual fund commissions ​ 5,129 ​ 4,149 ​ 15,037 ​ 13,860 Securities commissions ​ 3,201 ​ 3,165 ​ 8,790 ​ 8,737 Alternative investments ​ 1,577 ​ 1,541 ​ 4,065 ​ 4,060 Advisory fees ​ 6,246 ​ 5,448 ​ 18,250 ​ 16,334 Total Revenue From Contracts With Customers ​ $ 41,026 ​ $ 40,917 ​ $ 121,085 ​ $ 120,446 ​ The following tables presents sales-based and trailing revenues disaggregated by product category for the periods ended September 30 (in thousands) : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, Sales-based (Point in time) 2024 2023 2024 2023 Variable annuities and other insurance commissions ​ $ 10,796 ​ $ 13,051 ​ $ 31,826 ​ $ 39,461 Mutual fund commissions ​ 946 ​ 1,198 ​ 3,471 ​ 3,982 Securities commissions ​ 3,201 ​ 3,165 ​ 8,790 ​ 8,737 Alternative investments ​ 1,498 ​ 1,526 ​ 3,971 ​ 4,004 Total Sales Based Revenues ​ $ 16,441 ​ $ 18,939 ​ $ 48,058 ​ $ 56,184 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ Nine Months Ended ​ ​ September 30, ​ September 30, Trailing (Over time) 2024 2023 2024 2023 Variable annuities and other insurance commissions ​ $ 14,077 ​ $ 13,564 ​ $ 43,117 ​ $ 37,994 Mutual fund commissions ​ 4,183 ​ 2,951 ​ 11,566 ​ 9,878 Advisory fees ​ 6,246 ​ 5,448 ​ 18,250 ​ 16,334 Alternative investments ​ 80 ​ 15 ​ 95 ​ 56 Total Trailing Revenues ​ 24,585 ​ 21,978 ​ 73,027 ​ 64,262 Total Revenue From Contracts With Customers ​ $ 41,026 ​ $ 40,917 ​ $ 121,085 ​ $ 120,446 ​ Contract Balances The timing of revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. The Company records a contract asset when the Company has recognized revenue prior to payment but the Company’s right to payment is conditional on something other than the passage of time. 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 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 September 30, 2024, and December 31, 2023, the Company had no liabilities from contracts with customers. Interest and Other Income The Company earns interest income from client margin accounts and cash equivalents This revenue is not generated from contracts with customers. Additionally, the Company receives marketing fees and sponsorship income. ​ 12 Table of Contents 5. FAIR VALUE The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard establishes the following hierarchy used in fair value measurements and expands the required disclosures of assets and liabilities measured at fair value: ● Level 1 - Inputs use quoted unadjusted prices in active markets for identical assets or liabilities that the Company can access. ● Level 2 - Fair value measurements use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals. ● Level 3 - Inputs that are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability. The inputs or methodology used for valuing assets and liabilities are not necessarily an indication of the risk associated with investing in those assets and liabilities. Certain financial instruments are carried at cost on the statement of financial condition, which approximates fair value due to their short-term, highly liquid nature. The carrying value of debt approximates their fair value since the interest rates on these obligations represent current market rates. 6. DEBT 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 ”) ( 8.00 % 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 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 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) : ​ ​ ​ ​ 2024 $ 598 2025 ​ 2,596 2026 ​ 2,950 2027 ​ 3,344 2028 ​ 3,788 Thereafter ​ 6,434 Total ​ $ 19,710 ​ 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 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. 13 Table of Contents 6. 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. Additionally, certain of the members of the Company provide guarantees under the Credit Agreement. ​ 7. PROMISSORY NOTES – AFFILIATES 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, 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. These subordinated promissory notes had a maturity date of May 30, 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. 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 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. In addition to the paydown, the noteholders agreed to forgive the remaining accrued but unpaid interest of approximately $ 3.8 million and entered into new promissory notes in the principal amount of approximately $ 5.3 million in the aggregate. 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 $ 0.3 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively. 8. DUE TO MEMBERS 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. The notes carried an interest at the rate of 10 % and were due on demand. 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. ​ 9. 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. Additionally, the Holdings Series A Stock carries a cumulative dividend at a rate of nine percent ( 9 %) per annum, payable and compounded quarterly on the last day of each quarter. 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 September 30, 2024, the Company paid an in-kind dividend in the amount $ 0.4 million. ​ 14 Table of Contents 9. 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: ● The greater of $ 12.50 per share of Holdings Series A Stock if such liquidation occurs prior to the first anniversary of the Funding Date; ● $ 13.00 per share of Holdings Series A Stock if such liquidation occurs prior to the second anniversary of the Funding Date; ● $ 15.00 per share of Holdings Series A Stock if such liquidation occurs prior to the third anniversary of the Funding Date; ● $ 16.00 per share of Holdings Series A Stock if such liquidation occurs prior to the fourth anniversary of the Funding Date. Holdings, at its option, may redeem the Series A Stock on any anniversary of the Funding date up to an including the fourth anniversary of the Funding date at the following redemption prices: ● $ 11.50 per share of Series A Stock on the first anniversary of the Funding Date; ● $ 13.00 per share of Series A Stock on the second anniversary of the Funding Date; ● $ 15.00 per share of Series A Stock on the third anniversary of the Funding Date; ● $ 16.00 per share of Series A Stock on the fourth anniversary of the Funding Date; 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. ​ 10. 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. 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 B Stock at a value of $ 10 per share. 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 . ​ 15 Table of Contents 11. WARRANTS The following table summarizes the warrants outstanding as of September 30, 2024: ​ ​ ​ Class of Warrants Number Outstanding Public warrants 8,588,425 Private placement warrants 6,559,533 Total warrants outstanding 15,147,958 ​ Each whole Warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 per share. A holder may exercise its warrants only for a whole number of shares of Class A common stock. No fractional warrants will be issued upon separation of the units and only whole warrants will trade. The Company may redeem the Public Warrants at a price of $ 0.01 per share if the closing price of the Company’s Class A common stock equals or exceeds $ 18.00 per share for any 20 trading days within a 30 -trading day period. The Private Warrants cannot be redeemed, even if sold or transferred to a non-affiliate. The Warrants will expire five years after the Closing Date or earlier upon redemption or liquidation. Except as described in this section, the Private Warrants have terms and provisions that are identical to those of the Public Warrants, except the Private Warrants are not subject to redemption, and do not become subject to redemption after transfer to a non-affiliate (a distinction from other private placement warrants issued in connection with SPAC transactions). The Warrants are classified as derivative liabilities under ASC Topic 480 or ASC Topic 815. 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. ​ 12. INCOME TAXES As a result of the Reverse Recapitalization, Binah Capital Group, Inc. 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. BMS is treated as a partnership for U.S. federal income tax purposes. KWAC, the PKSH Entities, Cabot Entities and WEG are taxable entities and are subject to federal, state, and local income taxes. Therefore, these consolidated financial statements include an income tax provision for the taxable entities only. 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. The Company files income tax returns, including returns for its subsidiaries, with federal and state jurisdictions. The Company is generally not subject to examinations for its federal and state returns for any periods prior to the 2019 tax year. The Company is not currently under examination for any tax years. ​ 16 Table of Contents 13. NET LOSS PER SHARE 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 September 30, 2024 is as follows (in thousands) : ​ ​ ​ ​ ​ ​ ​ ​ Three months ​ Nine Months ​ ​ ended September 30, ​ Ended September 30, ​ 2024 2024 Net (loss) $ ( 1,150 ) ​ ( 4,197 ) Basic and diluted weighted average shares outstanding, common stock ​ 16,602 ​ 16,588 Basic and diluted loss per share of common stock ​ $ ( 0.07 ) ​ ( 0.25 ) ​ The following table details the securities that have been excluded from the calculation of weighted-average shares for diluted earnings per share for the period presented as they were anti-dilutive (in thousands) . ​ ​ ​ ​ Warrants ​ 15,148 ​ ​ ​ 17 Table of Contents 14. COMMITMENTS AND CONTINGENCIES Litigation Certain conditions may exist as of the date the consolidated financial statements are issued which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the accompanying consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. The Company is a defendant or respondent in various pending and threatened arbitrations, administrative proceedings and lawsuits seeking compensatory damages. Claim amounts are infrequently indicative of the actual amounts the Company will be liable for, if any. Many of these claimants also seek, in addition to compensatory damages, punitive or treble damages, and all seek interest, costs and fees. These matters arise in the normal course of business. The Company intends to vigorously defend itself in these actions, and the ultimate outcome of these matters cannot be determined at this time. In many lawsuits, arbitrations, and regulatory proceedings, it is not possible to determine whether a liability has been incurred or to estimate the amount of that liability until the matter is close to resolution. 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. 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. The Company believes, based upon current information, that the outcome of any such legal proceeding, claim, dispute, or investigation will not have a material effect on the Company’s financial position, results of operations or cash flows. However, the actual outcomes of such legal proceedings, claims, disputes, or investigations could be material to the Company’s operating results and cash flows for a particular future period as additional information is obtained. Indemnification The activities of the Company’s customers are transacted on either a cash or margin basis through the facilities of its clearing broker. In margin transactions, the clearing broker extends credit to the customers, subject to various regulatory and margin requirements, collateralized by cash and securities in the customer’s account. In connection with these activities, the clearing broker may also execute and clear customer transactions involving the sale of securities not yet purchased. These transactions may expose the Company to significant off-balance sheet risk in the event margin requirements are not sufficient to fully cover losses which the customers may incur. In the event the customers fail to satisfy their obligations to the clearing broker, the Company may be required to compensate the clearing broker for losses incurred on behalf of the customers. 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 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. ​ 18 Table of Contents 15. 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 Series A Preferred Stock, par value $ 0.0001 per share, 1,536,400 shares issued and outstanding as of September 30, 2024; and ● 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; and ● 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. 16. NET CAPITAL REQUIREMENTS The Company operates four registered broker-dealers that are subject to the SEC Uniform Net Capital Rule (Rule 15c3-1). This requires the Company to maintain certain minimum net capital requirements. 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. 17. CREDIT RISK AND CONCENTRATIONS Financial instruments that subject the Company to credit risk consist principally of receivables and cash and cash equivalents. 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 credit losses and, consequently, believes that its receivables credit risk exposure beyond such allowances is limited. 18. SUBSEQUENT EVENTS The Company evaluated subsequent events that occurred after the balance sheet date up to November 14, 2024. ​ ​ 19 Table of Contents