What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 199 added, 204 removed, 305 unchanged (57% of the section changed)

3 unchanged sentences

(in thousands except for share and per share amounts)

September 30, 2024

March 31, 2025

December 31, 2024

Cash, cash equivalents and restricted cash

Receivables, net:

Commission receivable

1 unchanged sentence

Property and equipment, net

Right of use asset

Right of use assets

Intangible assets, net

2 unchanged sentences

Commissions payable

Operating lease liability

Notes payable, net of unamortized debt issuance costs of $ 568 and $ 645 as of September 30, 2024 and December 31, 2023, respectively

Operating lease liabilities

Notes payable, net of unamortized debt issuance costs of $ 702 and $ 739 as of March 31, 2025 and December 31, 2024, respectively

Promissory notes-affiliates

Due to members

Total Liabilities

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

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

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

Redeemable Series A Convertible Preferred Stock, par value $ 0.0001 , 2,000,000 shares authorized, 1,572,000 and 1,555,000 shares outstanding at March 31, 2025 and December 31, 2024

Stockholders’ Equity:

Series B Convertible Preferred Stock, par value $ 0.0001 , 500,000 shares authorized, 150,000 shares outstanding at March 31, 2025 and December 31, 2024

Common stock, $ 0.0001 par value, 55,000,000 authorized, 16,602,460 issued and outstanding at March 31, 2025 December 31, 2024

Additional paid-in-capital

Accumulated deficit

Members’ Equity attributed to Legacy Wentworth Management Services LLC

Total Stockholders' Equity, Mezzanine Equity and Members’ Equity Attributable to Wentworth Management Services LLC

Total Stockholders’ Equity and Mezzanine Equity

TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

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

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

BINAH CAPITAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands except for share and per share amounts)

Three Months Ended September 30,

Nine months ended September 30,

(in thousands, except per share amounts)

Three months ended March 31,

Revenue from Contracts with Customers:

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Total expenses

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

Provision/(Benefit) for income taxes

Income (loss) before provision for income taxes

Provision for income taxes

Net income (loss)

Net income attributable to Legacy Wentworth Management Services LLC members

Net loss attributable to Binah Capital Group, Inc.

Net loss per share basic and diluted

Net income (loss) attributable to Binah Capital Group, Inc.

Net income (loss) per share basic and diluted

Weighted average shares:

basic and diluted

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

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

BINAH CAPITAL GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(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

Members’ Equity Attributed to

(in thousands)

For the Three Months Ended March 31, 2025

Redeemable Series A Convertible

Series B Convertible

Preferred Stock

Stockholders'

Balance January 1, 2025

Issuance of Class A redeemable convertible preferred stock

Dividends - Class A redeemable convertible preferred stock

Dividends - Class B convertible preferred stock

Balance, March 31, 2025

For the Three Months Ended March 31, 2024

Redeemable Series A Convertible Preferred

Equity Attributed to

Stockholders’

Legacy Wentworth

Equity, Mezzanine Equity and

Management Services

Additional Paid-

Additional Paid-in

Balance January 1, 2024

2 unchanged sentences

Reverse merger and recapitalization of legacy Wentworth Management Services LLC

Mezzanine Equity - Shares Issued in connection with PIPE financing

Net loss attributable to Binah Capital Group, Inc.

post transaction

Shares issued in connection with PIPE financing

Net loss attributable to Binah Capital Group post transaction

Balance March 31, 2024

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.

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

BINAH CAPITAL GROUP, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands except for share and per share amounts)

For the nine months ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the three months ended March 31,

Cash Flows From Operating Activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

Deferred income taxes

Amortization of debt issuance costs

Non-cash lease expense

Capitalized interest - promissory notes-affiliates

Capitalized interest - due to members

Loss on disposal of property and leasehold improvements

Changes in operating assets and liabilities:

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Other receivables

Accounts payable, accrued expenses and other liabilities

Accounts payable and accrued expenses

Commissions payable

Operating lease liability

Net Cash (Used in) Provided By Operating Activities

Operating lease liabilities

Net Cash Provided By (Used In) Operating Activities

Cash Flows From Investing Activities

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Repayment of borrowings from members

Proceeds from borrowings from members

Net payment for reverse merger and recapitalization

Proceeds from Series B Convertible Preferred Stock

Proceeds from Series A Redeemable Convertible Preferred Stock issuance

Dividends - Series A Redeemable Convertible Preferred Stock

Proceeds from exercise of warrants

Dividends - Series B Convertible Preferred Stock

Distribution of capital

Net Cash Provided by (Used In) Financing Activities

Net Cash (Used In) Provided By Financing Activities

Net Change in Cash, Cash Equivalents and Restricted Cash

1 unchanged sentence

Cash, Cash Equivalents and Restricted Cash - End of Period

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:

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

Supplemental Disclosure of Non-Cash Financing Activities

During the period ended March 31, 2024 and in connection with the reverse merger and recapitalization the Company extinguished amounts related to the promissory notes-affiliates in the approximate amount of $ 3,800 .

During the period ended March 31, 2024 and in connection with the reverse merger and recapitalization the Company extinguished amounts and issued stock in consideration to satisfy these obligations in the approximate amount of $ 4,300 .

For the period ended March 31, 2025, the Company paid an in-kind dividend to the Series A Redeemable Convertible Preferred Stock holder in the amount of $ 174 .

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

BINAH CAPITAL GROUP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

March 31, 2025

ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Binah Capital Group, Inc.

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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”):

● PKS Holdings, LLC (“PKSH”) maintains offices in Albany, New York, and branch offices throughout the United States of America, and includes the following entities (collectively, 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.

(“PKSI”), incorporated in the State of New York, is a 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 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.

(dba, Binah Capital Insurance), 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.

(“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 under BMS.

● 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 (collectively, the “Cabot 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.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued)

o Wentworth Financial Partners LLC (dba, Binah Financial Partners), a Delaware Limited Liability Company, is an insurance entity providing financial services to clients.

● Michigan Securities, Inc.

(“MSI”) maintains offices in Albany, New York and includes the following entities:

(“MSI”) maintains offices in Albany, New York and includes the following entities (collectively, the “MSI 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.

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WEG maintains offices in Schaumburg, Illinois and has branch offices throughout the United States of America.

ORGANIZATION, DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued)

Basis of Presentation

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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.

Following the Wentworth merger, KWAC acquired, and Binah Capital contributed to KWAC all of the common units of BMS directly held by Binah Capital after the Wentworth 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 was 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.

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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.

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued)

Unaudited Interim Financial Statements

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

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

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the fiscal year ended December 31, 2024.

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

The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results to be expected for the entire year ending December 31, 2025.

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

Principles of Consolidation

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.

The accompanying condensed consolidated financial statements include the accounts of Holdings and its wholly owned subsidiaries.

Significant inter-company transactions and balances have been eliminated in consolidation.

Reportable Segment

Management has determined that the Company operates in one segment, given the common nature of its operations, products and services, production and distribution process and regulatory environment.

For additional information, see Note 17 - Segment Information .

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.

The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Actual results could differ from those estimates.

6 unchanged sentences

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.

As of March 31, 2025 and December 31, 2024, restricted cash amounted to $ 1.0 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, 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 represent amounts due to the Company from its clearing brokers, clients, financial institutions and others.

Receivables consists of unconditional amounts due and are reported at amortized costs.

6 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 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)

Management believes its risk of loss on currently recorded receivables is minimal and accordingly an allowance for credit losses has been recorded as of March 31, 2025, and December 31, 2024, and January 1, 2024 in the amount of $ 0.7 million, $ 0.7 million and $ 0.2 million, respectively.

Goodwill and Other Intangible Assets

2 unchanged sentences

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

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

No impairment of goodwill was recognized for the periods ended March 31, 2025 and 2024.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 September 30, 2024 and 2023.

There was no impairment of intangible assets recognized for the periods ended March 31, 2025 and 2024.

Income taxes are accounted for under an asset and liability approach.

This process involves calculating the temporary and permanent differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The temporary differences result in deferred tax assets and liabilities, which are recorded on the consolidated balance sheet in accordance with FASB ASC 740, Income Taxes (“ASC 740”), which established financial accounting and reporting standards for the effects of income taxes.

The likelihood that deferred tax assets will be recovered from future taxable income must be assessed and, to the extent that recovery is not likely, a valuation allowance is established.

Changes in the valuation allowance in a period are recorded through the income tax provision in the condensed consolidated statements of operations.

ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on an income tax return.

Under ASC 740-10, the impact of an uncertain tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority.

An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained.

Additionally, ASC 740-10 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

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.

Additionally, Binah Capital Corp.

(fka, Kingswood Acquisition Corp.) 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.

Subsequent to the Reverse Merger and Recapitalization, Binah Capital Corp., a wholly-owned subsidiary of Holdings, is the parent company of BMS.

Subsequent to the Reverse Merger and Recapitalization, BMS elected to be treated as a corporation and 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.

Binah Capital Group, Inc., Binah Capital Corp., BMS, the PKSH Entities, Cabot Entities and WEG are taxable entities subject to federal, state, and local income taxes.

Therefore, these condensed 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.

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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.

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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Net Loss Per Share

Net Income (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.

1 unchanged sentence

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

1 unchanged sentence

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.

As a result of the Reverse Recapitalization, the Company had 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.

Warrants issued to non-employees (the “Non-employee Warrants”) are 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.

Warrants issued 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 warrants at the end of each reporting period.

Contingent Liabilities

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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.

The determination of these liability amounts requires significant judgment on the part of management See Note 13 - Commitments and Contingencies for additional information.

Emerging Growth Company Status

2 unchanged sentences

Recently Issued Accounting Pronouncements

In November 2024, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) :

Disaggregation of Income Statement Expenses , which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.

The ASU should be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, 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 December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

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however, it does not expect this update to have an impact on its financial condition or results of operations.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued ASU 2023 - 07, Segment Reporting (Topic 280):

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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.

The adoption during the year ending 2024 did not have an impact on the Company’s financial condition or results of operations.

See Note 17 - Segment Information for 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 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.

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 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.

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.

Holdings applied to have the Holdings common stock and Holdings warrants listed on the Nasdaq Global Market (the “ Nasdaq ”) under the symbols BCG and BCGWW , 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.

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 “BCGWW”, respectively.

REVENUES FROM CONTRACTS WITH CUSTOMERS

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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.

The indicators of which party exercises control include primary responsibility over performance obligations and risk before the good or service is transferred and discretion in establishing the price.

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.

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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.

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

Advisory Fees

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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 constraint is removed once the value of the clients’ investment holdings can be determined.

The Company provides advisory services to clients on its corporate advisory platform through the advisor.

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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 September 30 (in thousands) :

Three Months Ended

Nine Months Ended

September 30,

Revenue From Contracts With Customers

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

Variable annuities and other insurance commissions

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Total Revenue From Contracts With Customers

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,

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

Sales-based (Point in time)

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Total Sales Based Revenues

Three Months Ended

Nine Months Ended

September 30,

Trailing (Over time)

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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.

As of March 31, 2025, and December 31, 2024, the Company had receivables from contracts with customers totaling approximately $ 10.2 million and $ 10.1 million, respectively.

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

As of March 31, 2025, and December 31, 2024, 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.

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.

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.

FASB ASC 820, Fair Value Measurement 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:

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The carrying value of debt approximates their fair value since the interest rates on these obligations represent current market rates.

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) :

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.

On December 23, 2024 (the “ Credit Agreement Closing Date ”), BMS entered into a Credit Agreement (the “ Credit Agreement ”) with Byline Bank, as lender (the “ Lender ”), pursuant to which the Lender agreed, at BMS’s request, to (i) make to BMS a term loan in the original principal amount of $ 20.3 million (the “ Term Loan ”), which was funded on the Credit Agreement Closing Date;

(ii) make to BMS, from time to time, certain non-revolving loans (the “ Non-Revolving Loans ”) in an aggregate principal amount of up to $ 1.0 million (the “ Non-Revolving Loan Commitment ”), to be funded through, but excluding, the Maturity Date (as defined below);

and (iii) issue to BMS, from time to time, letters of credit (the “ Letters of Credit ” and together with the Term Loan and Non-Revolving Loans, the “ Loans ”) until the earliest to occur of (x) the one year from the Credit Agreement Closing Date and (b) the date on which the Non-Revolving Loans are fully drawn.

As of March 31, 2025 and December 31, 2024, the outstanding balance under the Term Loan was $ 19.1 million and $ 19.6 million, respectively, net of unamortized debt issuance costs.

Under the terms of the Credit Agreement, to the extent that BMS requests a Letter of Credit, the Non-Revolving Loan Commitment shall be permanently reduced in an amount equal to the amount of such Letter of Credit.

The Non-Revolving Loans may not be requested by BMS and may only be advanced in connection with a repayment of a Letter of Credit (“ LC Payment ”).

As of March 31, 2025 and December 31, 2024, there were no amounts outstanding under the Non-Revolving Loan or Letter of Credit.

The Loans (both principal and interest) made by the Lender to BMS is scheduled to mature and become immediately due and payable in full on December 23, 2029 (“Maturity Date”).

The obligations under the Credit Agreement shall bear interest (i) as to the Term Loan, a per annum variable interest rate equal to the Applicable Margin (as defined in the Credit Agreement) plus the greater of (x) the Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Credit Agreement) and (y) one percent ( 1.00 %) (the “ Term Loan Interest Rate ”);

(ii) as to the Non-Revolving Loans or any reimbursement obligations relating to a Letter of Credit, at an interest rate equal to the Term SOFR plus four percent ( 4.00 %) per annum;

and (iii) if any other obligations is created under the Loan Documents (as defined in the Credit Agreement), at the Term Loan Interest Rate.

As of March 31, 2025 and December 31, 2024, the effective interest rate was 8.3 %.

The Term Loan was used by BMS to refinance Existing Credit Facilities (as defined in the Credit Agreement) and the Non-Revolving Loans must be used solely to reimburse the Lender with respect to any Letters of Credit issued to BMS.

The Term Loan refinanced the previous Oak Street Funding Facility.

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.

The Credit Agreement also includes customary covenants for a transaction of this type, including financial covenants whereby BMS and its subsidiaries on a consolidated basis may not have, as of the last day of each fiscal quarter, commencing with fiscal quarter ending on March 31, 2025, (1) a fixed charge coverage ratio as of the last day of the fiscal quarter for the twelve (12) month period then ended of not less than 1.20 to 1.00;

(ii) a senior net leverage ratio as of the last day of such Fiscal Quarter for the twelve (12) month period then ended, of (A) for the fiscal quarter ended March 31, 2025 and each fiscal quarter through and including September 30, 2025, not more than 3.00 to 1.00;

and (B) for the fiscal quarter ended December 31, 2025 and each fiscal quarter ending thereafter, not more than 2.75 to 1.00;

or (iii) an annualized revenue received from custodians of at least $ 18.0 million.

The minimum calendar maturities of the Term Loan as of March 31, 2025, are as follows (in thousands) :

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.

On November 30, 2017, WMS 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 interest on these notes continued to accrue until such time as these notes were paid.

Additionally, in connection with the acquisition of the PKSH Entities, the Company 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.

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

In connection with the closing of the Business Combination, the Company paid approximately $ 3.4 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.

In addition to the paydown, the noteholders (all of whom are stockholders and/or key employees) 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 amounts outstanding as of March 31, 2025 and December 31, 2024 are $ 5.3 million and $ 5.4 million, respectively.

The amount outstanding as of December 31, 2024 includes accrued interest which was paid subsequently.

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.

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.

Related interest expense was approximately $ 0.1 and $ 0.02 for the three months ended March 31, 2025 and 2024, respectively.

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK

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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.

As of March 31, 2025, the Company accrued 50 % of the dividend to be paid in cash in the approximate amount of $ 0.2 million and paid an in-kind dividend in the approximate amount of $ 0.2 million.

As of December 31, 2024, the Company accrued 50 % of the dividend to be paid in cash in the approximate amount of $ 0.2 million.

SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK (continued)

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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 ).

On September 4, 2024, the Company entered into a Subscription Agreement with an investor 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 $ 1.5 million.

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”).

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As of March 31, 2025 and December 31, 2024, included in accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated statement of financial condition is an accrued dividend in the amount of $ 0.03 million that was paid subsequent to March 31, 2025 and December 31, 2024.

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:

The following table summarizes the warrants outstanding as of March 31, 2025:

Class of Warrants

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Public warrants

Private placement warrants

Total warrants outstanding

Each whole warrant entitles the registered holder to purchase one share of Class A common stock at a price of $ 11.50 per share.

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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 Company may redeem the 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 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.

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.

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.

At March 31, 2025 , the fair value of the warrant liabilities is approximately $ 0.6 million and is included in accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated statements of financial condition.

For the three months ended March 31, 2025 and 2024, included in other expenses on the condensed consolidated statement of operations is unrealized gain on the warrants in the amount of approximately $ 0.3 million and $ 1.1 million, respectively.

Prior to the closing the Business Combination, BMS was classified as a partnership for income tax purposes and is therefore not subject to federal, and certain state, and local income taxes.

Subsequent to the closing of the Business Combination, BMS elected to be taxed as a corporation and therefore subject to federal, state and local income taxes.

Binah Capital Group, Inc.

and Binah Capital Corp are also corporations and subject to federal, state and local income taxes.

PKSH elected to be taxed as a corporation.

The PKSH Entities and WEG are taxable entities and are subject to federal, state, and local income taxes.

The effective tax rate was approximately 23 % and ( 7 )% for the three months ended March 31, 2025 and 2024, respectively.

The effective income tax rate for the periods ended March 31, 2025 and 2024 differed significantly from the statutory rate primarily due to transaction costs that were incurred as a result of the Reverse Recapitalization, warrant revaluations, and other permanent differences.

The tax provision is related to the activities of the taxable entities including Binah Capital group, Inc., BMS, PKSH Entities, Cabot Entities and WEG.

NET INCOME (LOSS) PER SHARE

The Series A and Series B Preferred Stock do 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) :

ended September 30,

Ended September 30,

The warrants were considered in diluted EPS under the treasury stock method, if dilutive.

The computation of loss per share and weighted average of the Company’s common stock outstanding for the three months ended March 31, 2025 and 2024 is as follows (in thousands, except per share amounts) :

Net income (loss)

Basic and diluted weighted average shares outstanding, common stock

Basic and diluted loss per share of common stock

Basic and diluted income (loss) per share of common stock

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) .

COMMITMENTS AND CONTINGENCIES

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.

Certain conditions may exist as of the date the condensed 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.

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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.

COMMITMENTS AND CONTINGENCIES (continued)

Indemnification

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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.

As of March 31, 2025, and December 31, 2024, 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 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.

● 2,000,000 shares of Series A Preferred Stock, par value $ 0.0001 per share, 1,572,000 shares issued and outstanding as of March 31, 2025;

● 500,000 shares of Series B Preferred Stock, par value $ 0.0001 per share, 150,000 shares issued and outstanding as of March 31, 2025;

● 55,000,000 shares of Common Stock, par value $ 0.0001 per share, 16,602,460 shares issued and outstanding as of March 31, 2025.

NET CAPITAL REQUIREMENTS

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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.

As of March 31, 2025 and December 31, 2024, all broker-dealers had net capital in excess of the required minimums.

CREDIT RISK AND CONCENTRATIONS

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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.

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.

SEGMENT INFORMATION

Effective with the consummation of the Business Combination, the Board confirmed Craig Gould as Chief Executive Officer (“CEO”) and David Shane as Chief Financial Officer (“CFO).

The Company has concluded that the its Chief Operating Decision Maker (“CODM”) of the group includes the CEO and CFO of the Company.

Management of the Company has determined that it has one reportable segment, given the common nature of the Company’s operations, products and services, and regulatory environment.

The Company provides a platform of brokerage and investment advisory services to independent financial advisors and advisors at other financial services companies from which the Company derives its revenues and incurs expenses.

See Note 4 – Revenue from Contracts with Customers .

The CODM regularly reviews net income/(loss) before the provision or benefit for income taxes as presented in the Company’s condensed consolidated statements of operations for purposes of assessing performance and making decisions regarding the allocation of resources.

Expenses regularly reviewed by the CODM include those line items reported on the Company’s condensed consolidated statement of operations, the most significant of which includes commissions and fees, employee compensation and benefits and professional fees.

See the condensed consolidated statements of operations and Note 2 – Summary of Significant Accounts Policies for additional information about these lines items and the related accounting policies.

SUBSEQUENT EVENTS

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

The Company evaluated subsequent events that occurred after the balance sheet date up to the date that the condensed consolidated financial statements were available to be issued.

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