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What changed in Binah Capital Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Binah Capital Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+160 added−154 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Binah Capital Group, Inc.'s 2025 10-K

160 paragraphs added · 154 removed · 127 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeMaterial Legal Proceedings From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business.
Biggest changeWe are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
The independent broker-dealer is a commission based on a smaller percentage of a branch’s commission-based 3 Table of Contents revenues from securities brokerage transactions conducted through our brokerage firms, and the fee-based revenue for asset management services provided by our corporate RIAs. Competition The wealth management industry is highly competitive.
The independent broker-dealer is a commission based on a smaller percentage of a branch’s commission-based revenues from securities brokerage transactions conducted through our brokerage firms, and the fee-based revenue for asset management services provided by our corporate RIAs. 3 Table of Contents Competition The wealth management industry is highly competitive.
Our network enables highly qualified professionals to run their businesses efficiently and effectively through end-to-end resources and support, including: ● Clearing capabilities through major clearing and custodial firms ● Ability to maintain their identity and enhance their brand ● Flexibility to choose independent or corporate registered investment advisors ● Knowledge and services sharing across the community ● Seamless integration 4 Table of Contents ● Enterprise relationships Growth Strategy As advisors and assets under management continue to migrate from traditional wirehouse brokerage and commission-based platforms to hybrid and independent models, we believe we are well-positioned to expand our existing network and to grow through acquisitions.
Our network enables highly qualified professionals to run their businesses efficiently and effectively through end-to-end resources and support, including: ● Clearing capabilities through major clearing and custodial firms ● Ability to maintain their identity and enhance their brand ● Flexibility to choose independent or corporate registered investment advisors ● Knowledge and services sharing across the community ● Seamless integration ● Enterprise relationships 4 Table of Contents Growth Strategy As advisors and assets under management continue to migrate from traditional wirehouse brokerage and commission-based platforms to hybrid and independent models, we believe we are well-positioned to expand our existing network and to grow through acquisitions.
With a track record of building a platform capable of significant scale along with strategic initiatives to drive its growth via access to public capital, Binah’s features include: ● A national wealth management platform supporting more than 1,900 individuals working within the financial services industries ● Tech-enabled capabilities that allows for seamless integration and provides advisors with end-to-end services enhancing efficiency 1 Table of Contents ● Open architecture that offers access to an array of solutions for advisors and their clients via expanded product offerings and shared services ● A highly attractive financial model that is expected to experience organic growth, highly recurring revenues and expanding margins Each of our independent advisory and brokerage firms provides full support services to its financial advisors, including access to stock, bond, exchange-traded fund (“ ETF ”) and options execution; products such as insurance, mutual funds, alternative investments such as non-traded real estate investment trusts, unit trusts and fixed and variable annuities; and research, compliance, supervision, accounting and related services.
With a track record of building a platform capable of significant scale along with strategic initiatives to drive its growth via access to public capital, Binah’s features include: ● A national wealth management platform supporting more than 1,600 individuals working within the financial services industries ● Tech-enabled capabilities that allows for seamless integration and provides advisors with end-to-end services enhancing efficiency 1 Table of Contents ● Open architecture that offers access to an array of solutions for advisors and their clients via expanded product offerings and shared services ● A highly attractive financial model that is expected to experience organic growth, highly recurring revenues and expanding margins Each of our independent advisory and brokerage firms provides full support services to its financial advisors, including access to stock, bond, exchange-traded fund (“ ETF ”) and options execution; products such as insurance, mutual funds, alternative investments such as non-traded real estate investment trusts, unit trusts and fixed and variable annuities; and research, compliance, supervision, accounting and related services.
Corporate Structure Founded in March 2016 as a limited liability company under the Delaware Limited Liability Company Act, BMS, through four wholly-owned registered broker dealer subsidiaries and their affiliated entities, provides investment management services to clients via three advisor business models: Hybrid Business Model: The Purshe Kaplan Sterling Entities PKS Holdings, LLC (“ PKSH ”) is headquartered in Albany, New York with branch offices throughout the United States of America, more than 1700 registered individuals working within the financial services industries, and includes the following entities (the “ PKSH Entities ”): ● Purshe Kaplan Sterling Investments, Inc.
Corporate Structure Founded in March 2016 as a limited liability company under the Delaware Limited Liability Company Act, BMS, through four wholly-owned registered broker dealer subsidiaries and their affiliated entities, provides investment management services to clients via three advisor business models: Hybrid Business Model: The Purshe Kaplan Sterling Entities PKS Holdings, LLC (“ PKSH ”) is headquartered in Albany, New York with branch offices throughout the United States of America, more than 1,300 registered individuals working within the financial services industries, and includes the following entities (the “ PKSH Entities ”): ● Purshe Kaplan Sterling Investments, Inc.
Our Internet website and the content contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. The SEC maintains an Internet website at www.sec.gov, which also contains reports, proxy and information statements and other information that we file electronically with the SEC. We routinely post important information on our website, www.gettyimages.com.
Our Internet website and the content contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K. The SEC maintains an Internet website at www.sec.gov, which also contains reports, proxy and information statements and other information that we file electronically with the SEC. We routinely post important information on our website, www.binahcap.com.
Copies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 may also be obtained by stockholders without charge upon written request to: Binah Capital Group Inc., 80 State Street, Albany, NY 12207, ATTN: Investor Relations. 6 Table of Contents
Copies of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 may also be obtained by stockholders without charge upon written request to: Binah Capital Group Inc., 80 State Street, Albany, NY 12207, ATTN: Investor Relations. 6 Table of Contents
The unauthorized access, use, theft or destruction of client or employee personal, financial or other data could expose us to potential financial penalties and legal liability. 5 Table of Contents Human Capital As of December 31, 2024, the Company’s workforce was comprised of approximately 150 employees and substantially all employees are salaried.
The unauthorized access, use, theft or destruction of client or employee personal, financial or other data could expose us to potential financial penalties and legal liability. 5 Table of Contents Human Capital As of December 31, 2025, the Company’s workforce was comprised of approximately 150 employees and substantially all employees are salaried.
Independent Business Model: the Cabot Lodge Entities and the World Equity Group Cabot Lodge Securities LLC (“ CLS ”) maintains offices in New York, New York with branch offices throughout the United States of America, more than 100 registered advisors. and includes the following entities (the “ Cabot Entities ”): ● CLS, a Delaware limited liability company, is a broker-dealer registered with the SEC and is a member of FINRA and SIPC. ● CL Wealth Management LLC (“ CLWM ”), a Virginia limited liability company, is an investment advisory firm, registered with the SEC and provides advisory services to clients. ● Wentworth Financial Partners LLC (“ WFP ”) (f/k/a CL General Agency), a Delaware limited liability company, is an insurance entity providing financial services to clients.
Independent Business Model: the Cabot Lodge Entities and the World Equity Group Cabot Lodge Securities LLC (“ CLS ”) maintains offices and branch offices throughout the United States of America, more than 100 registered advisors, and includes the following entities (the “ Cabot Entities ”): ● CLS, a Delaware limited liability company, is a broker-dealer registered with the SEC and is a member of FINRA and SIPC. ● CL Wealth Management LLC (“ CLWM ”), a Virginia limited liability company, is an investment advisory firm, registered with the SEC and provides advisory services to clients. ● Wentworth Financial Partners LLC ( dba, Binah Financial Partners “ WFP ” or “ BFP ”) (f/k/a CL General Agency), a Delaware limited liability company, is an insurance entity providing financial services to clients.
Business Overview The Company is a leading consolidator of retail wealth management businesses that owns and operates ten entities, four of which are broker-dealers, three of which are registered investment advisors, and three of which are insurance entities, that have over 1900 registered individuals working within the financial services industries.
Business Overview The Company is a leading platform provider for retail wealth management businesses that owns and operates ten entities, four of which are broker-dealers, three of which are registered investment advisors, and three of which are insurance entities, that have over 1,600 registered individuals working within the financial services industries.
(“ Repco ”), incorporated in the British Virgin Islands, holds a general business insurance license for the purpose of providing professional liability insurance coverage for affiliated BMS entities.
(dba, Binah Capital Insurance, “ PKSF ” or “ BCI ”), incorporated in the State of New York, is an insurance entity providing financial services to clients. ● 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 BMS entities.
During the year ended December 31, 2024, WFP began to operate under the dba Binah Financial Partners. 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.
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.
A significant portion of our workforce is comprised of compliance, operations, finance and other administrative personnel. None of our employees are represented by a labor union. We have never experienced any work stoppages and we believe that our employee relations are positive.
A significant portion of our workforce is comprised of compliance, operations, finance and other administrative personnel. None of our employees are represented by a labor union. Effective January 1, 2025, BMS entered into Management Services Agreement’s (“MSA”) with its operating subsidiaries whereby BMS will provide personnel and payroll management services to the Company.
Removed
(“ PKSF ”), incorporated in the State of New York, is an insurance entity providing financial services to clients. During the year ended December 31, 2024, PKSF began to operate under the dba Binah Capital Insurance. ● Representatives Indemnity Company, Inc.
Added
In accordance with the MSA, expenses related to payroll and benefits are allocated to the operating subsidiaries. The allocation of the compensation and benefits is based upon the specific personnel assigned to the operating subsidiaries as well as other personnel providing services to the operating subsidiaries.
Removed
WEG maintains offices in Schaumburg, Illinois and has branch offices throughout the United States of America.
Added
The allocation methodology includes a direct allocation for personnel assigned to the respective operating subsidiaries and additional allocation for certain personnel based upon various factors including job responsibilities and estimated amount of time associated with each operating subsidiary. We desire to offer a competitive total compensation offering to our employees that includes not only compensation but benefits and other programs.
Removed
We are committed to building a diverse and inclusive workforce where ideas and innovation can flourish and where individuals from every community feel a true sense of belonging. We are committed to this through how we hire, develop and recognize our talent.
Added
Our compensation is performance based and competitive based upon the geographies in which we operate. We strive to provide equality of pay to ensure are compensation programs are fair and equitable across the Company. We offer an array of benefits intended to meet the needs of our employees and their eligible dependents.
Removed
Our employees are a significant asset, and we aim to create an environment that is equitable, inclusive and representative in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current and future business goals.
Added
We offer comprehensive benefits to all full-time employees and part-time employees working at least 30 hours per week. Our health and welfare benefits include, among other things: medical coverage; dental and vision coverage; healthcare and dependent-care flexible spending accounts; Health Savings Accounts; accident and critical illness coverage; life and accidental death and dismemberment insurance; and short-term and long-term disability insurance.
Removed
We value agility, passion and teamwork, and are building a diverse environment where our employees can thrive and one that inspires exceptional contributions and professional and personal development to achieve our goal of being a natural destination for financial advisors and assets in motion as the hybrid broker-dealer of choice.
Added
As a company focused on growth, talent drives the success of the Company. We are focused on attracting and retaining our employees. To attract a diverse pool of talent, we are in the marketplace and utilize various methods of recruiting to provide for a diverse and dedicated group of employees.
Removed
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Added
The Company’s senior executives receive a portion of their total compensation in Company equity and subject to a cap, we match the contribution of all our employees to our retirement savings plan. Material Legal Proceedings From time to time, we may become involved in litigation or other legal proceedings.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

41 edited+16 added−17 removed163 unchanged
Biggest changeThe JOBS Act provides that, so long as a company qualifies as an “emerging growth company,” it will, among other things: ● be exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that its independent registered public accounting firm provide an attestation report on the effectiveness of its internal control over financial reporting; 18 Table of Contents ● be exempt from the “say on pay” and “say on golden parachute” advisory vote requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “ Dodd-Frank Act ”); ● be exempt from certain disclosure requirements of the Dodd-Frank Act relating to compensation of its executive officers and be permitted to omit the detailed compensation discussion and analysis from proxy statements and reports filed under the Exchange Act; and ● be exempt from any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or be required to deliver a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis).
Biggest changeFor as long as we continue to be a smaller reporting company, we may choose to take advantage of certain exemptions from various reporting requirements or scaled disclosure requirements applicable to other public companies but not to smaller reporting companies, which includes, among other things: ● being permitted to have only two years of audited financial statements and only two years of management discussion and analysis of financial condition and results of operations disclosure; ● an exemption from the auditor attestation requirements under Section 404(b) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); 20 Table of Contents ● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation; ● reduced disclosure obligations regarding executive compensation, among other things, in our periodic reports and proxy statements; and ● exemptions from the requirements of holding non-binding stockholder votes on executive compensation arrangements and stockholder approval of any golden parachute payments not previously approved.
Risk Factors ” or presented elsewhere in this proxy statement/prospectus, and, among others, the following: ● our operating and financial performance, quarterly or annual earnings relative to similar companies; 14 Table of Contents ● publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; ● the public’s reaction to our press-releases, other public announcements and filings with the SEC; ● announcements by us or our competitors of acquisitions, business plans or commercial relationships; ● any major change in the Company Board or senior management; ● sales of our common stock by us, our directors, executive officers, principal shareholders; ● adverse market reaction to any indebtedness we may incur or securities we may issue in the future; ● short sales, hedging and other derivative transactions in our common stock; ● exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments; ● our creditworthiness, financial condition, performance and prospects; ● our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; ● perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; ● regulatory or legal developments; ● changes in general market, economic, and political conditions, such as inflationary pressures, rising interest rates, potential recession, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism; ● conditions or trends in our industry, geographies or customers; ● changes in accounting standards, policies, guidance, interpretations, or principles; and ● threatened or actual litigation or government investigations.
Risk Factors ” or presented elsewhere in this proxy statement/prospectus, and, among others, the following: ● our operating and financial performance, quarterly or annual earnings relative to similar companies; ● publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts; 16 Table of Contents ● the public’s reaction to our press-releases, other public announcements and filings with the SEC; ● announcements by us or our competitors of acquisitions, business plans or commercial relationships; ● any major change in the Company Board or senior management; ● sales of our common stock by us, our directors, executive officers, principal shareholders; ● adverse market reaction to any indebtedness we may incur or securities we may issue in the future; ● short sales, hedging and other derivative transactions in our common stock; ● exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments; ● our creditworthiness, financial condition, performance and prospects; ● our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; ● perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; ● regulatory or legal developments; ● changes in general market, economic, and political conditions, such as inflationary pressures, rising interest rates, potential recession, local and national elections, fuel prices, international currency fluctuations, corruption, political instability and acts of war or terrorism; ● conditions or trends in our industry, geographies or customers; ● changes in accounting standards, policies, guidance, interpretations, or principles; and ● threatened or actual litigation or government investigations.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ● our ability to maintain and attract new customers; ● the continued development and upgrading of our technology platform; ● the timing and success of new product, service, feature, and content introductions by us or our competitors or any other change in the competitive landscape of our market; ● pricing pressure as a result of competition or otherwise; 17 Table of Contents ● increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● the diversification and growth of our revenue sources; ● our ability to maintain gross margins and operating margins; ● system failures or breaches of security or privacy; ● adverse litigation judgments, settlements, or other litigation-related costs, including content costs for past use; ● changes in the legislative or regulatory environment, including with respect to insurance and consumer product regulations; ● changes in our effective tax rate; ● changes in accounting standards, policies, guidance, interpretations, or principles; and ● changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: ● our ability to maintain and attract new customers; ● the continued development and upgrading of our technology platform; ● the timing and success of new product, service, feature, and content introductions by us or our competitors or any other change in the competitive landscape of our market; ● pricing pressure as a result of competition or otherwise; ● increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; ● the diversification and growth of our revenue sources; 19 Table of Contents ● our ability to maintain gross margins and operating margins; ● system failures or breaches of security or privacy; ● adverse litigation judgments, settlements, or other litigation-related costs, including content costs for past use; ● changes in the legislative or regulatory environment, including with respect to insurance and consumer product regulations; ● changes in our effective tax rate; ● changes in accounting standards, policies, guidance, interpretations, or principles; and ● changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages.
Our Amended and Restated Certificated of Incorporation (the “Charter”) provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents or our stockholders, (3) any action asserting a claim against us or any director or officer arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), (4) any action to interpret, apply, enforce or determine the validity of our Charter or bylaws, or (5) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware or federal court located within the State of Delaware if the Court of Chancery does not have jurisdiction, in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants.
Our Amended and Restated Certificate of Incorporation (the “Charter”) provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum, to the fullest extent permitted by law, for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents or our stockholders, (3) any action asserting a claim against us or any director or officer arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), (4) any action to interpret, apply, enforce or determine the validity of our Charter or bylaws, or (5) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware or federal court located within the State of Delaware if the Court of Chancery does not have jurisdiction, in all cases subject to the court’s having jurisdiction over indispensable parties named as defendants.
Misconduct could include: ● recommending transactions that are not suitable for the client or in the client’s best interests; ● engaging in fraudulent or otherwise improper activity; ● binding us to transactions that exceed authorized limits; ● hiding unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses; ● improperly using or disclosing confidential information; ● failure, whether negligent or intentional, to effect securities transactions on behalf of clients; ● failure to perform reasonable diligence on a security, product or strategy; ● failure to supervise a financial advisor; ● failure to provide insurance carriers with complete and accurate information; ● engaging in unauthorized or excessive trading to the detriment of clients; 7 Table of Contents ● engaging in improper transactions with clients; or ● otherwise not complying with laws or our control procedures.
Misconduct could include: ● recommending transactions that are not suitable for the client or in the client’s best interests; ● engaging in fraudulent or otherwise improper activity; ● binding us to transactions that exceed authorized limits; ● hiding unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses; ● improperly using or disclosing confidential information; ● failure, whether negligent or intentional, to effect securities transactions on behalf of clients; ● failure to perform reasonable diligence on a security, product or strategy; ● failure to supervise a financial advisor; ● failure to provide insurance carriers with complete and accurate information; ● engaging in unauthorized or excessive trading to the detriment of clients; ● engaging in improper transactions with clients; or ● otherwise not complying with laws or our control procedures.
Non-compliance with the Truth-in-Lending Act or other laws and regulations could result in fines, sanctions, or other adverse consequences. 12 Table of Contents Changes in applicable tax laws, regulations or administrative interpretations thereof may materially adversely affect our financial condition, results of operations and cash flows.
Non-compliance with the Truth-in-Lending Act or other laws and regulations could result in fines, sanctions, or other adverse consequences. 14 Table of Contents Changes in applicable tax laws, regulations or administrative interpretations thereof may materially adversely affect our financial condition, results of operations and cash flows.
Our warrants were issued in registered form under a warrant agreement, which provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, and that all other modifications or amendments will require the vote or written consent of the holders of at least 50% of the then outstanding warrants, and, solely with respect to any amendment to the terms of the private placement warrants, a majority of the then outstanding private placement warrants.
Our warrants were issued in registered form under a warrant agreement, which provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, and that all other modifications or 22 Table of Contents amendments will require the vote or written consent of the holders of at least 50% of the then outstanding warrants, and, solely with respect to any amendment to the terms of the private placement warrants, a majority of the then outstanding private placement warrants.
Any violation of the FCPA, other applicable anti-corruption laws, or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal, or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on our reputation, 13 Table of Contents business, operating results, and prospects.
Any violation of the FCPA, other applicable anti-corruption laws, or anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, severe criminal, or civil sanctions and, in the case of the FCPA, suspension or debarment from U.S. government contracts, any of which could have a materially adverse effect on our reputation, business, operating results, and prospects.
To prevent having to litigate 16 Table of Contents claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, unless the Company consents in writing to the selection of an alternate forum, the federal courts will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, unless the Company consents in writing to the selection of an alternate forum, the federal courts will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Most of our advisors are classified as independent contractors for all purposes, including employment tax and employee benefit purposes. We cannot assure you that legislative, judicial, or regulatory (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change the employee/independent contractor classification of these firms’ financial advisors.
Most of our advisors are classified as independent contractors for all purposes, including employment tax and employee benefit purposes. We cannot assure you that legislative, judicial, or regulatory 12 Table of Contents (including tax) authorities will not introduce proposals or assert interpretations of existing rules and regulations that would change the employee/independent contractor classification of these firms’ financial advisors.
These factors could also make it more difficult for us to attract and retain qualified members of our Board and qualified executive officers. 19 Table of Contents We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our debt service and other obligations.
These factors could also make it more difficult for us to attract and retain qualified members of our Board and qualified executive officers. We are a holding company and rely on dividends, distributions and other payments, advances and transfers of funds from our subsidiaries to meet our debt service and other obligations.
Like other brokerage and financial services firms, our business and profitability are directly affected by elements that are beyond our control, such as economic and political conditions, broad trends in business and finance, changes in volume of securities and futures 9 Table of Contents transactions, changes in the markets in which such transactions occur and changes in how such transactions are processed.
Like other brokerage and financial services firms, our business and profitability are directly affected by elements that are beyond our control, such as economic and political conditions, broad trends in business and finance, changes in volume of securities and futures transactions, changes in the markets in which such transactions occur and changes in how such transactions are processed.
Changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology or require that we disclose our proprietary technology to our competitors, which could impair our competitive position and result in a material adverse effect on our business, results of operations and financial condition.
Changes to existing regulations, their interpretation or implementation, or new regulations could impede our use of this technology or require that we disclose our 13 Table of Contents proprietary technology to our competitors, which could impair our competitive position and result in a material adverse effect on our business, results of operations and financial condition.
Our subsidiaries also rely on various third parties to provide services, including managing and executing customer orders, and failure of these third parties to adequately perform these services may negatively impact customer experience, product performance, and our reputation and may also result in regulatory sanctions or litigation against us or our subsidiaries.
Our subsidiaries also rely on various third parties to provide services, including managing and executing customer orders, and failure of these third parties to adequately perform these services may negatively 10 Table of Contents impact customer experience, product performance, and our reputation and may also result in regulatory sanctions or litigation against us or our subsidiaries.
The Company’s Charter will not address or apply to claims that arise under the Exchange Act; however, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
The Company’s Charter will not address or apply to claims that arise under the Exchange Act; however, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought 18 Table of Contents to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
We have no direct operations and derive all of our cash flow from our subsidiaries. Because we conduct our operations through our subsidiaries, we depend on those entities for dividends and other payments or distributions to meet any existing or future debt service and other obligations.
We have no direct operations and derive all of our cash flow from our subsidiaries. Because we conduct our operations through our subsidiaries, we depend on those entities for dividends and other payments or distributions to meet any existing or future debt service 21 Table of Contents and other obligations.
Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
Our management team may not 17 Table of Contents successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. 15 Table of Contents Our management team has limited experience managing a public company.
A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. Our management team has limited experience managing a public company.
These clients can terminate their relationships, reduce the aggregate amount of assets under management or shift their funds to other types of accounts with different rate structures for any number of reasons, including investment performance, changes in prevailing interest rates, financial market performance, competitive pricing and personal client liquidity needs.
Our advisors’ clients control their assets maintained with us. These clients can terminate their relationships, reduce the aggregate amount of assets under management or shift their funds to other types of accounts with different rate structures for any number of reasons, including investment performance, changes in prevailing interest rates, financial market performance, competitive pricing and personal client liquidity needs.
Although the length and impact of the ongoing military conflict in Ukraine and Israel is highly unpredictable, the conflicts could lead to market disruptions, including significant volatility in energy and other commodity prices, credit and capital markets, as well as supply chain interruptions.
Although the length and impact of the ongoing military conflicts are highly unpredictable, the conflicts could lead to market disruptions, including significant volatility in energy and other commodity prices, credit and capital markets, as well as supply chain interruptions.
In addition, we will be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act when we cease to be an emerging growth company. We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.
In addition, we will be required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act when we cease to be a “smaller reporting company.” We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.
The CCPA provides civil penalties for violations, as well as a private right of action and statutory damages for data breaches that are expected to increase data breach litigation.
The CCPA provides civil penalties for violations, as well as a private right of action and statutory damages for data breaches that are expected to increase data breach litigation. The CCPA may increase our compliance costs and potential liability.
A weakness in securities markets, such as a slowdown causing reduction in trading volume in U.S. or foreign securities and derivatives, has historically resulted in reduced transaction revenues and would have a material adverse effect on our business, financial condition, and results of operations.
A weakness in securities markets, such as a slowdown causing reduction in trading volume in U.S. or foreign securities and derivatives, has historically resulted in reduced transaction revenues and would have a material adverse effect on our business, financial condition, and results of operations. 11 Table of Contents We are currently operating in a period of economic uncertainty and geopolitical instability.
The CCPA may increase our compliance costs and potential liability. 11 Table of Contents Any failure or perceived failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data (including by way of our algorithms).
Any failure or perceived failure to comply with these rules may result in regulatory fines or penalties including orders that require us to change the way we process data (including by way of our algorithms).
Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information. Taking advantage of the reduced disclosure requirements applicable to “emerging growth companies” may make the Company’s common stock less attractive to investors.
Furthermore, if we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed and investors could lose confidence in our reported financial information. We are a “smaller reporting company” and the reduced public company reporting and disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth, maintain minimum amounts of capital and to respond to business challenges could be significantly limited, and our business, results of operations and financial condition could be adversely affected. 10 Table of Contents We rely on the experience and expertise of our senior management team, key technical employees, and other highly skilled personnel.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth, maintain minimum amounts of capital and to respond to business challenges could be significantly limited, and our business, results of operations and financial condition could be adversely affected.
We cannot always deter misconduct by our advisors, and the precautions we take to prevent and detect this activity may not be effective in all cases. Also, our failure to properly investigate new and existing advisors may subject us to additional risks and liabilities.
We cannot always deter misconduct by our advisors, and the precautions we take to prevent and detect this activity may not be effective in all cases.
Our success depends upon the continued service of our senior management team, highly specialized experts, and key technical employees, as well as our ability to continue to attract and retain additional highly qualified personnel. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain, and integrate highly skilled personnel for all areas of our organization.
We rely on the experience and expertise of our senior management team, key technical employees, and other highly skilled personnel. Our success depends upon the continued service of our senior management team, highly specialized experts, and key technical employees, as well as our ability to continue to attract and retain additional highly qualified personnel.
Such changes could also include increases in state taxes and other changes to state tax laws to replenish state and local government finances depleted by costs attributable to the COVID-19 pandemic and the reduction in tax revenues due to the accompanying economic downturn.
Such changes could also include increases in state taxes and other changes to state tax laws to replenish state and local government finances depleted by costs attributable to the COVID-19 pandemic and the accompanying economic downturn. In addition, our effective tax rate and tax liability are based on the application of current income tax laws, regulations, and treaties.
Risks Relating to Cybersecurity and Technology Security incidents or real or perceived errors, failures or bugs in our systems or our website could impair our operations, result in loss of personal customer information, damage our reputation, and brand, and harm our business and operating results.
In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees. 15 Table of Contents Risks Relating to Cybersecurity and Technology Security incidents or real or perceived errors, failures or bugs in our systems or our website could impair our operations, result in loss of personal customer information, damage our reputation, and brand, and harm our business and operating results.
The loss of our founder or any other member of our senior management team or key personnel may significantly delay or prevent the achievement of our strategic business objectives and could harm our business. Competition in our industry for qualified employees is intense.
Our founder, executive officers, key technical personnel, and other employees could terminate his or her relationship with us at any time. The loss of our founder or any other member of our senior management team or key personnel may significantly delay or prevent the achievement of our strategic business objectives and could harm our business.
Additionally, these and any other military actions and any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.
Additionally, these and any other military actions and any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets. We may require additional capital to grow our business, which may not be available on terms acceptable to us or at all.
Poor performance of the investment products and services recommended or sold to our clients or competitive pressures on pricing of such products and services may have a material adverse effect on our business. Our advisors’ clients control their assets maintained with us.
Also, our failure to properly investigate new and existing advisors may subject us to additional risks and liabilities. 9 Table of Contents Poor performance of the investment products and services recommended or sold to our clients or competitive pressures on pricing of such products and services may have a material adverse effect on our business.
Similar sanctions may be imposed upon officers, directors, representatives, and employees. 8 Table of Contents Our subsidiaries have adopted, and regularly review and update, various policies, controls, and procedures designed for compliance with their regulatory obligations.
Administrative sanctions can include cease-and-desist orders, censure, fines, and disgorgement and may even result in the suspension or expulsion of the firm from the securities industry. Similar sanctions may be imposed upon officers, directors, representatives, and employees. Our subsidiaries have adopted, and regularly review and update, various policies, controls, and procedures designed for compliance with their regulatory obligations.
Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets.
These laws, regulations and treaties are complex, and the manner in which they apply to the Company and its diverse set of business arrangements is often open to interpretation. Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets.
We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.
The requirements of being a public company, including maintaining adequate internal control over our financial and management systems, may strain our resources, divert management’s attention, and affect our ability to attract and retain executive management and qualified board members.
Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. 20 Table of Contents We may amend the terms of the warrants in a manner that may be adverse to holders of our warrants with the approval by the holders of at least 50% of the then outstanding warrants.
Further, its stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism.
Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees. Moreover, if and when the stock options or other equity awards are substantially vested, employees under such equity arrangements may be more likely to leave, particularly when the underlying shares have seen a value appreciation.
Moreover, if and when the stock options or other equity awards are substantially vested, employees under such equity arrangements may be more likely to leave, particularly when the underlying shares have seen a value appreciation. Legal, Regulatory or Compliance Risks Legislative, judicial, or regulatory changes to the classification of independent contractors could increase our operating expenses.
It is possible that some investors will find our common stock less attractive as a result, which may result in a less active trading market for our common stock and higher volatility in our stock price.
If some investors find our common stock less attractive, there may be a less active trading market for our common stock and our stock price may be more volatile.
We may be subject to certain industry regulations, including the Truth-in-Lending Act. Our business may require compliance with certain regulatory regimes, including some applicable to consumer lending.
Such negative consequences could include additional expense and financial loss, which could be significant in amount. In addition, insurance claims may harm our reputation or divert management resources away from operating our business. We may be subject to certain industry regulations, including the Truth-in-Lending Act. Our business may require compliance with certain regulatory regimes, including some applicable to consumer lending.
Any of the abovementioned factors, or any other negative impact on the global economy, capital markets or other geopolitical conditions resulting from the Russian invasion of Ukraine, the Israel-Hamas war, and subsequent sanctions, could adversely affect the business and operations.
Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from military conflicts or any other geopolitical tensions. U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions in multiple regions of the world.
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ITEM 1A. RISK FACTORS Risk Factor Summary You should consider carefully all of the risks described below, together with the other information contained in this Annual Report, before making a decision to invest in our securities. This Annual Report also contains forward-looking statements that involve risks and uncertainties.
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ITEM 1A. RISK FACTORS Risk Factor Summary Our business is subject to risks and uncertainties, including those risks and uncertainties discussed at-length below, that could cause our actual results to differ materially from those projected.
Removed
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks described below. Such risks include, but are not limited to: Risks Related to Our Business and Industry Several risks are inherent in the independent broker-dealer business model.
Added
These risks and uncertainties include, but are not limited to, the following: Business and Industry Risks ● Advisors are generally not direct employees, creating supervisory and compliance oversight difficulties in a decentralized operating environment ● Difficult to detect and deter advisor misconduct including unsuitable recommendations, fraud, unauthorized trading, and misuse of confidential information ● Poor performance of recommended products or competitive pricing pressures could lead to client attrition and revenue loss ● As a relatively new market entrant, maintaining brand awareness and reputation is critical; negative publicity could diminish customer confidence ● Business profitability directly affected by securities market performance, trading volumes, geopolitical tensions , and economic downturns ● May require additional capital to support growth; future financing may not be available on acceptable terms and could result in shareholder dilution or restrictive covenants ● Success depends on retaining senior management, technical employees, and highly skilled personnel in a competitive labor market ● Subject to customer complaints, regulatory investigations, and litigation that could result in significant damages, operational changes, and reputational harm Regulatory and Compliance Risks ● Broker-dealer subsidiaries subject to extensive regulation, periodic examinations, and potential sanctions including fines, censure, or suspension ● Subsidiaries must maintain minimum net capital levels; failure could result in activity limitations, suspension, or liquidation ● Reliance on third-party clearing brokers for transaction processing; termination of clearing agreements could disrupt business operations ● Legislative or regulatory changes could reclassify advisors as employees, significantly increasing operating costs ● May be subject to Truth-in-Lending Act and similar laws; non-compliance could result in fines and sanctions ● Changes to tax laws, regulations, or interpretations could materially affect financial condition and operations ● Violations of the Foreign Corrupt Practices Act (“FCPA”), USA PATRIOT Act, and similar laws could result in severe penalties, suspension, or debarment 7 Table of Contents Data Privacy and Cybersecurity Risks ● Security incidents could expose confidential customer information, resulting in regulatory investigations, fines, litigation, and reputational damage ● Subject to CCPA and numerous other data privacy laws; non-compliance could result in fines, penalties, and private litigation ● Website and systems may contain errors, bugs, or vulnerabilities subject to cyber attacks, malware, ransomware, or denial-of-service attacks ● Third parties may scrape or misappropriate data through website scraping, robots, or copycat websites ● System failures, performance issues, or availability problems could harm reputation, impair operations, and result in customer loss ● Regulators may limit expansion, implementation, or require disclosure of proprietary technology to competitors Public Company and Securities Market Risks ● The market price of our common stock and warrants may fluctuate significantly based on operating performance, analyst reports, sales by insiders, market conditions, and other factors ● Our management team has limited experience managing a public company, which could divert attention from day-to-day operations ● The lack of analyst coverage or negative analyst reports could adversely impact stock price and trading volume ● Our status as a public company subjects us to additional laws, regulations, and listing standards, imposing significant costs and diverting management attention ● We are a “smaller reporting company” and we cannot be certain of the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors. 8 Table of Contents Risks Related to Our Business and Industry Several risks are inherent in the independent broker-dealer business model.
Removed
Administrative sanctions can include cease-and-desist orders, censure, fines, and disgorgement and may even result in the suspension or expulsion of the firm from the securities industry.
Added
Recently, international relations between the U.S. and Russia, certain Middle Eastern nations as well as certain other countries, has been strained, and they may continue to deteriorate further.
Removed
Our business, operations, and financial position may be materially adversely affected by the geopolitical conditions resulting from the invasion of Ukraine by Russia and the Israel-Hamas war, subsequent sanctions against related individuals and entities and the status of debt and equity markets, as well as protectionist legislation in our markets we operate.
Added
Our future success depends on our continuing ability to identify, hire, develop, motivate, retain, and integrate highly skilled personnel for all areas of our organization. If we are unable to attract the requisite personnel, our business and prospects may be adversely affected.
Removed
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions, the invasion of Ukraine by Russia in February 2022 and the Israel-Hamas war.
Added
Competition in our industry for qualified employees is intense. Our compensation arrangements, such as our equity award programs, may not always be successful in attracting new employees and retaining and motivating our existing employees.
Removed
In response to the invasion of Ukraine by Russia, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.
Added
Our insurance coverage may be expensive, and losses we incur may exceed the limits of our insurance coverage, or may not be covered at all. We are subject to claims in the ordinary course of business. These claims may involve substantial amounts of money and involve significant defense costs.
Removed
Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and Israel during the ongoing military conflicts, increasing geopolitical tensions.
Added
It is not always possible to prevent or detect activities giving rise to claims, and the precautions we take may not be effective in all cases. We maintain voluntary and required insurance coverage, including, among others, general liability, property, director and officer, excess Securities Investor Protection Corporation, business interruption, cyber and data breach, error and omission and fidelity bond insurance.
Removed
The invasion of Ukraine by Russia, the Israel-Hamas war and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union and other countries have created global security concerns that could have a lasting impact on regional and global economies.
Added
We have self-insurance for certain potential liabilities through REPCO, a wholly-owned captive insurance subsidiary. While we endeavor to self-insure and purchase coverage that is appropriate based on our assessment of our risk, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages.
Removed
The extent and duration of the Russian invasion of Ukraine, the Israel-Hamas war, resulting sanctions and any related market disruptions are impossible to predict, but could be substantial, particularly if current or new sanctions continue for an extended period of time or if geopolitical tensions result in expanded military operations on a global scale.
Added
Assessing the probability of a loss occurring and the timing and amount of any loss related to a regulatory matter or a legal proceeding is inherently difficult, and there are particular uncertainties and complexities involved when assessing the adequacy of loss reserves for potential liabilities that are self-insured by our captive insurance subsidiary.
Removed
Any such disruptions may also have the effect of heightening many of the other risks described elsewhere in this “Risk Factors” section, such as those related to the market for our securities. We may require additional capital to grow our business, which may not be available on terms acceptable to us or at all.
Added
The availability of coverage depends on the nature of the claim and the adequacy of reserves, which in turn depends in part on historical claims experience, including the actual timing and costs of resolving matters that begin in one policy period and are resolved in a subsequent period.
Removed
If we are unable to attract the requisite personnel, our business and prospects may be adversely affected. Our founder, executive officers, key technical personnel, and other employees could terminate his or her relationship with us at any time.
Added
Further to the difficulties noted above regarding assessing the probability of a loss occurring and the timing and amount of any loss related to a regulatory matter or a legal proceeding, such assessment requires complex judgments, which may include the procedural status of the matter and any recent developments; prior experience and the experience of others in similar matters; the size and nature of potential exposures; available defenses; the progress of fact discovery; the opinions of counsel and experts; potential opportunities for settlement and the status of any settlement discussions; as well as the potential for insurance coverage and indemnification, if available.
Removed
Legal, Regulatory or Compliance Risks Legislative, judicial, or regulatory changes to the classification of independent contractors could increase our operating expenses.
Added
In addition, certain types of potential claims for damages cannot be insured. Our business may be negatively affected if in the future unforeseen circumstances cause us to exceed the limits of our insurance coverage or some or all of our insurance proves to be unavailable to cover our liabilities related to legal or regulatory matters.
Removed
In addition, our effective tax rate and tax liability are based on the application of current income tax laws, regulations, and treaties. These laws, regulations and treaties are complex, and the manner in which they apply to the Company and its diverse set of business arrangements is often open to interpretation.
Added
We currently qualify as “smaller reporting company,” as defined in the Exchange Act.
Removed
In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Added
We will continue to be “smaller reporting company” if, as of the last business day of our most recently completed second quarter, (i) our public float is less than $250 million, or (ii) our annual revenues for the recently completed fiscal year are less than $100 million and we either have no public float or a public float of less than $700 million.
Removed
We currently intend to take advantage of each of the exemptions described above. Further, pursuant to Section 107 of the JOBS Act, as an emerging growth company, we have elected to take advantage of the extended transition period for complying with new or revised accounting standards until those standards would otherwise apply to private companies.
Added
As a result of the foregoing, the information we provide may be different than the information that is available with respect to other public companies. We cannot predict if investors will find our common stock less attractive if we rely on these exemptions.
Removed
As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.
Added
We may amend the terms of the warrants in a manner that may be adverse to holders of our warrants with the approval by the holders of at least 50% of the then outstanding warrants.
Removed
We could be an emerging growth company for up to five years following the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, though we may cease to be an emerging growth company earlier if (1) we have more than $1.07 billion in annual gross revenue, (2) we qualify as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, or (3) we issue, in any three-year period, more than $1.0 billion in non-convertible debt securities held by non-affiliates.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe checklist is periodically reviewed by the IT Department for lessons learned from both mock and actual incidents, and to assure compliance with most current industry best practices and latest regulatory developments. The incident response plan includes processes through which cybersecurity 21 Table of Contents incidents are escalated to the Company’s executive officers.
Biggest changeThe checklist is periodically reviewed by the IT Department for lessons learned from both mock and actual incidents, and to assure compliance with most current industry best practices and latest regulatory developments. The incident response plan includes processes through which cybersecurity incidents are escalated to the Company’s executive officers.
Through its cyber security policy and procedures, the Committee will ensure effective collaboration and coordination between affected departments and staff in identifying and responding to both privacy and cyber security risks and events.
Through its cyber security policy and procedures, the Committee will ensure effective 23 Table of Contents collaboration and coordination between affected departments and staff in identifying and responding to both privacy and cyber security risks and events.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMINE SAFETY DISCLOSURES Not applicable. ​ 22 Table of Contents PART II
Biggest changeMINE SAFETY DISCLOSURES Not applicable. ​ ​ ​ 24 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(f) Recent Sales of Unregistered Securities; The information required has been previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 22, 2024. (g) Use of Proceeds from Registered Offerings None. ITEM 6. [RESERVED]
Biggest change(f) Recent Sales of Unregistered Securities; The information required has been previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on March 22, 2024 and our Form 10-Q for the quarter ended September 30, 2025, filed with the U.S. Securities and Exchange Commission on November 13, 2025.
(b) Holders As of March 28, 2025, there were 29 shareholders of record of our common stock and 11 holders of record of our warrants to purchase our common stock.
(b) Holders As of March 31, 2026, there were 17 shareholders of record of our common stock and 11 holders of record of our warrants to purchase our common stock.
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(g) Use of Proceeds from Registered Offerings None. ITEM 6. [ RESERVED ] 25 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeITEM 6. [RESERVED] 23 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 23 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 37 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS 38
Biggest changeITEM 6. [RESERVED] 25 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 26 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 39 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO FINANCIAL STATEMENTS 40

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

65 edited+10 added−4 removed59 unchanged
Biggest changeHoldings, 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; 33 Table of Contents 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.
Biggest changeThe 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. 35 Table of Contents 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.
We consider our gross profit amounts to be non-GAAP financial measures that may not be comparable to those of others in our industry. We believe that gross profit amounts can provide investors with useful insight into our core operating performance before other costs that are general and administrative in nature.
We consider our gross profit amounts to be non-GAAP financial measures that may not be comparable to those of others in our industry. We believe that gross profit amounts can provide investors with useful insight into our core operating performance before other costs that are general and administrative in nature.
The Company presents EBITDA and Adjusted EBITDA because management believes that it can be a useful financial metric in understanding the Company’s earnings from operations.
The Company presents EBITDA and Adjusted EBITDA because management believes that it can be a useful financial metric in understanding the Company’s earnings from operations.
The revenues will not be recognized until it is probable that a significant reversal will not occur. The Company is principal for the commission revenue, 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 it obligations.
The revenues will not be recognized until it is probable that a significant reversal will not occur. The Company is principal for the commission revenue, 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.
Additionally, BMS is subject to 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 32 Table of Contents 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.
Additionally, BMS is subject to 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.
Accordingly, total commission revenue is reported on a gross basis. See Note 5 — Revenues From Contracts with Customers within the notes to the audited consolidated financial statements for the years ended December 31, 2024, and 2023 for further details regarding our commission revenue by product category.
Accordingly, total commission revenue is reported on a gross basis. See Note 5 — Revenues From Contracts with Customers within the notes to the audited consolidated financial statements for the years ended December 31, 2025, and 2024 for further details regarding our commission revenue by product category.
Management exercises judgment in determining whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenue on a net basis). For additional information see Note 5 in the consolidated financial statements as of and for the years ended December 31, 2024 and 2023.
Management exercises judgment in determining whether the Company is the principal (i.e., reports revenues on a gross basis) or agent (i.e., reports revenue on a net basis). For additional information see Note 5 in the consolidated financial statements as of and for the years ended December 31, 2025 and 2024.
Also, 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.
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.
The estimated fair values of the reporting units are derived based on valuation techniques we believe market participants would use for each of the reporting units. We performed our goodwill impairment test as of and for the years ended December 31, 2024, and 2023.
The estimated fair values of the reporting units are derived based on valuation techniques we believe market participants would use for each of the reporting units. We performed our goodwill impairment test as of and for the years ended December 31, 2025, and 2024.
The minimum calendar year payments and maturities of the Byline Term Loan as of December 31, 2024 were as follows ( in thousands ) : ​ ​ ​ ​ 2025 $ 2,030 2026 ​ ​ 2,030 2027 ​ ​ 3,045 2028 ​ ​ 3,045 2029 ​ ​ 10,150 Total $ 20,300 ​ 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 $14.4 million (the “ Series A PIPE ”).
The minimum calendar year payments and maturities of the Byline Term Loan as of December 31, 2025 were as follows ( in thousands ) : ​ ​ ​ ​ 2026 ​ ​ ​ ​ 2,030 2027 ​ ​ 3,045 2028 ​ ​ 3,045 2029 ​ ​ 10,149 Total ​ $ 18,269 ​ 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 $14.4 million (the “ Series A PIPE ”).
Business Overview The Company is a leading consolidator of retail wealth management businesses that owns and operates ten entities, four of which are broker-dealers, three of which are registered investment advisors, and three of which are insurance entities, that have over 1900 registered individuals working within the financial services industries.
Business Overview The Company is a leading consolidator of retail wealth management businesses that owns and operates ten entities, four of which are broker-dealers, three of which are registered investment advisors, and three of which are insurance entities, that have over 1,600 registered individuals working within the financial services industries.
The increase in the trailing based revenues is primarily due to volatility driven increases in trail eligible assets. 28 Table of Contents Commission revenue is generated from brokerage assets.
The increase in the trailing based revenues is primarily due to volatility driven increases in trail eligible assets. 30 Table of Contents Commission revenue is generated from brokerage assets.
The Non-Revolving Loans may not be requested by the Company and may only be advanced in connection with a repayment of a Letter of Credit (“ LC Payment ”). As of December 31, 2024 there are no amount outstanding under the Non-Revolving Loan or Letters of Credit.
The Non-Revolving Loans may not be requested by the Company and may only be advanced in connection with a repayment of a Letter of Credit (“ LC Payment ”). As of December 31, 2025 and 2024 there are no amounts outstanding under the Non-Revolving Loan or Letters of Credit.
See the “Key Performance Metrics and Non-GAAP Financial Measures” section for additional information on gross profit. 24 Table of Contents Key Performance Metrics and Non-GAAP Financial Measures We focus on several key metrics in evaluating the success of our business relationships and our resulting financial position and operating performance.
See the “Key Performance Metrics and Non-GAAP Financial Measures” section for additional information on gross profit. Key Performance Metrics and Non-GAAP Financial Measures We focus on several key metrics in evaluating the success of our business relationships and our resulting financial position and operating performance.
Recently Issued Accounting Pronouncements Refer to Note 3 - Summary of Significant Accounting Policies, within the notes to the consolidated financial statements for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us. 36 Table of Contents
Recently Issued Accounting Pronouncements Refer to Note 3 - Summary of Significant Accounting Policies, within the notes to the consolidated financial statements for a discussion of recent accounting pronouncements or changes in accounting pronouncements that are of significance, or potential significance, to us.
The advisory fees 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. Advisory fees increased by approximately 15% for the year ended December 31, 2024 as compared to December 31, 2023, due to the positive impact from the financial markets.
The advisory fees 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. Advisory fees increased by approximately 16% for the year ended December 31, 2025 as compared to December 31, 2024, due to the positive impact from the financial markets.
The following tables summarizes the advisory assets for the years ended December 31, 2024 and 2023 (in billions): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2024 2023 Advisory Assets 2.6 2.1 ​ 29 Table of Contents The following table summarizes activity impacting advisory assets for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2024 2023 Balance – Beginning of period 2.1 2.1 Net new advisory assets (1) (0.0) (0.6) Market impact (2) 0.5 0.6 Balance – End of period 2.6 2.1 (1) Net new advisory assets consist of total client deposits less client withdrawals from custodial accounts, plus dividends, plus interest, minus advisory fees.
The following tables summarizes the advisory assets for the years ended December 31, 2025 and 2024 (in billions): ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Advisory Assets 2.9 2.6 ​ 31 Table of Contents The following table summarizes activity impacting advisory assets for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Balance – Beginning of period 2.6 2.1 Net new advisory assets (1) 0.0 0.0 Market impact (2) 0.3 0.5 Balance – End of period 2.9 2.6 (1) Net new advisory assets consist of total client deposits less client withdrawals from custodial accounts, plus dividends, plus interest, minus advisory fees.
Employee compensation and benefits Employee compensation and benefits includes salaries, wages, benefits and related taxes for our employees. Employee compensation and benefits for the year ended December 31, 2024 increased by $2.2 million which is directly related to the additional personnel costs attributed to the Company now operating as a public company.
Employee compensation and benefits Employee compensation and benefits includes salaries, wages, benefits and related taxes for our employees. Employee compensation and benefits for the year ended December 31, 2025 increased by approximately $3.3 million which is directly related to the additional personnel costs attributed to the Company now operating as a public company.
A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measures appears below in the footnotes to the table of our key operating, business and financial metrics. ​ 25 Table of Contents Our key operating, business and financial metrics are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, Operating Metric (dollars in billions) 2024 2023 Advisory and Brokerage Assets ​ ​ ​ Brokerage assets ​ $ 24.5 ​ $ 21.8 Advisory assets ​ 2.5 ​ 2.1 Total Advisory and Brokerage Assets ​ $ 27.0 ​ $ 23.9 ​ ​ ​ ​ ​ ​ ​ Net New Assets ​ ​ ​ ​ Net new brokerage assets ​ $ (2.1) ​ $ (3.1) Net new advisory assets ​ 0.0 ​ (0.5) Total Net New Assets ​ $ (2.1) ​ $ (3.6) ​ ​ ​ ​ ​ ​ ​ Financial Metrics (dollars in millions) ​ ​ ​ ​ Total revenue ​ $ 169.0 ​ $ 168.0 Net (loss) income ​ $ (4.6) ​ $ 0.6 Non-GAAP Financial Metrics (dollars in millions) ​ ​ ​ ​ Gross Profit (1) ​ $ 32.0 ​ $ 31.8 EBITDA (2) ​ $ 1.9 ​ $ 6.8 Adjusted EBITDA (2) ​ $ 6.3 ​ $ 8.4 (1) Gross profit is a non-GAAP financial measure defined as total revenue less commissions paid to financial advisors and registered representatives and other fees that generate the revenue.
A reconciliation of our non-GAAP financial measures to their most directly comparable GAAP financial measures appears below in the footnotes to the table of our key operating, business and financial metrics. ​ 27 Table of Contents Our key operating, business and financial metrics are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the Years Ended December 31, Operating Metric (dollars in billions) ​ ​ ​ 2025 ​ ​ ​ 2024 Advisory and Brokerage Assets ​ ​ ​ ​ ​ Brokerage assets ​ $ 27.0 ​ $ 24.5 Advisory assets ​ 2.9 ​ 2.5 Total Advisory and Brokerage Assets ​ $ 29.9 ​ $ 27.0 ​ ​ ​ ​ ​ ​ ​ Net New Assets ​ ​ ​ ​ Net new brokerage assets ​ $ (1.9) ​ $ (2.1) Net new advisory assets ​ 0.0 ​ 0.0 Total Net New Assets ​ $ (1.9) ​ $ (2.1) ​ ​ ​ ​ ​ ​ ​ Financial Metrics (dollars in millions) ​ ​ ​ ​ Total revenue ​ $ 187.1 ​ $ 169.0 Net (loss) income ​ $ 2.3 ​ $ (4.6) Non-GAAP Financial Metrics (dollars in millions) ​ ​ ​ ​ Gross Profit (1) ​ $ 37.8 ​ $ 33.7 EBITDA (2) ​ $ 5.4 ​ $ 1.9 Adjusted EBITDA (2) ​ $ 6.5 ​ $ 6.3 (1) Gross profit is a non-GAAP financial measure defined as total revenue less commissions paid to financial advisors and registered representatives and other fees that generate the revenue.
Below is a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the periods presented (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, EBITDA Reconciliation 2024 2023 Net (loss) income ​ $ (4.6) ​ $ 0.6 Interest expense ​ 4.0 ​ 5.1 (Benefit) Provision for income taxes ​ 1.4 ​ (0.1) Depreciation and amortization ​ 1.0 ​ 1.2 EBITDA ​ $ 1.9 ​ $ 6.8 Business combination and re-financing costs ​ ​ 4.4 ​ ​ 1.6 Adjusted EBITDA (2) ​ $ 6.3 ​ $ 8.4 ​ 26 Table of Contents Economic Overview and Impact of Financial Market Events Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the United States financial markets.
Below is a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the periods presented (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, EBITDA Reconciliation ​ ​ ​ 2025 ​ ​ ​ 2024 Net (loss) income ​ $ 2.3 ​ $ (4.6) Interest expense ​ 2.1 ​ 4.0 Provision for income taxes ​ ​ 0.3 ​ ​ 1.4 Depreciation and amortization ​ 0.7 ​ 1.0 EBITDA ​ $ 5.4 ​ $ 1.9 Share based compensation ​ ​ 1.1 ​ ​ — Business combination and re-financing costs ​ ​ — ​ ​ 4.4 Adjusted EBITDA (2) ​ $ 6.5 ​ $ 6.3 ​ 28 Table of Contents Economic Overview and Impact of Financial Market Events Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the United States financial markets.
EBITDA is defined as net income plus interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus non-recurring costs related to our business combination as well as re-financing the senior credit facility costs.
EBITDA is defined as net income plus interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus non-recurring costs related to our business combination, costs related to the re-financing of the senior credit facility, and share-based compensation costs.
The following tables summarizes the brokerage assets for the years ended December 31, 2024 and 2023 (in billions): ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2024 2023 Brokerage Assets 24.5 21.8 ​ Included in the brokerage assets above are trail-eligible assets as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2024 2023 Trail-Eligible Assets 17.9 15.6 ​ The following table summarizes activity impacting brokerage assets for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ 2024 2023 Balance – Beginning of period 21.8 20.1 Net new brokerage assets (1) (2.1) (3.1) Market impact (2) 4.8 4.8 Balance – End of period 24.5 21.8 (1) Net new brokerage assets consist of total client deposits less client withdrawals from brokerage accounts, plus dividends, plus interest.
The following tables summarizes the brokerage assets for the years ended December 31, 2025 and 2024 (in billions): ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Brokerage Assets 27.0 24.5 ​ Included in the brokerage assets above are trail-eligible assets as follows: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Trail-Eligible Assets 18.5 17.9 ​ The following table summarizes activity impacting brokerage assets for the years ended: ​ ​ ​ ​ ​ ​ ​ ​ Years Ended ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Balance – Beginning of period 24.5 21.8 Net new brokerage assets (1) (1.9) (2.1) Market impact (2) 4.4 4.8 Balance – End of period 27.0 24.5 (1) Net new brokerage assets consist of total client deposits less client withdrawals from brokerage accounts, plus dividends, plus interest.
As a result of the 2024 and 2023 annual impairment tests, the fair value of the reporting units was approximately 270% and 257% greater than its carrying value, respectively.
As a result of the 2025 and 2024 annual impairment tests, the fair value of the reporting units was approximately 225% and 270% greater than its carrying value, respectively.
Net cash provided by financing activities was approximately $1.6 million for the year ended December 31, 2024 compared to cash used in financing activities of $2.7 million for the year ended December 31, 2023.
Cash Flows from Financing Activities. Net cash used in financing activities was approximately $2.9 million for the year ended December 31, 2025 compared to cash provided by financing activities of approximately $1.6 million for the year ended December 31, 2024.
Net new advisory assets were $0.0 million for the year ended December 31, 2024, compared to $(0.5) million in 2023. Advisory assets were $2.5 billion at December 31, 2024, which is an increase of approximately 21% from the $2.1 billion at December 31, 2023.
Net new advisory assets were $0.0 million for the year ended December 31, 2025, compared to $0.0 million for the year ended December 31, 2024. Advisory assets were $2.9 billion at December 31, 2025, which is an increase of approximately 16% from the $2.5 billion at December 31, 2024.
Sources of Liquidity As of December 31, 2024, we had $19.6 million outstanding under our Credit Agreement with Byline Bank, net of unamortized debt issuance costs.
Sources of Liquidity As of December 31, 2025, we had $17.7 million outstanding under our Credit Agreement with Byline Bank, net of unamortized debt issuance costs.
Rent and occupancy Rent and occupancy remained relative consistent for the year ended December 31, 2024 compared to 2023, decreasing by 3.3% or $0.04 million. Professional fees Professional fees includes costs incurred related to legal and accounting services.
Rent and occupancy Rent and occupancy remained relatively consistent for the year ended December 31, 2025 compared to 2024, decreasing by 0.8% or $0.01 million. Professional fees Professional fees includes costs incurred related to legal and accounting services.
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 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, which remain outstanding as of December 31, 2025 and 2024.
The Term Loan refinanced and retired the previous Oak Street Funding Facility. The Credit Agreement also includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by BMS and restricting BMS’s ability to make certain loans and investments.
The Credit Agreement also includes customary covenants for a transaction of this type, including covenants limiting the indebtedness that can be incurred by BMS and restricting BMS’s ability to make certain loans and investments.
If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is greater 35 Table of Contents than its carrying amount, then performing the two-step impairment test is not required.
If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing the two-step impairment test is not required. However, if we conclude otherwise, we are then required to perform the first step of the two-step impairment test.
(2) Represents the obligations under the amounts due to certain sellers of the PKSH entities. The amount includes accrued interest as of December 31, 2024 and the notes mature in March 2027. (3) Represents future minimum lease payments as of December 31, 2024, under non-cancelable office leases.
(2) Represents the obligations under the amounts due to certain sellers of the PKSH entities. The notes mature in March 2027. (3) Represents future minimum lease payments as of December 31, 2025, under non-cancellable office leases.
EBITDA and Adjusted EBITDA are not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP.
EBITDA and Adjusted EBITDA are not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is used in connection with the Company’s credit agreements, specifically in the calculation of financial-related covenants.
EBITDA and Adjusted EBITDA are not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP.
EBITDA and Adjusted EBITDA are not a measure of the Company’s financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is used in connection with the Company’s credit agreements, specifically in the calculation of financial related covenants.
Asset Trends Total advisory and brokerage assets served were $27.1 billion at December 31, 2024, compared to $23.9 billion at December 31, 2023. Total net new assets were $(2.1) billion for the year ended December 31, 2024, compared to $(3.6) billion for the same period in 2023.
Asset Trends Total advisory and brokerage assets served were $29.9 billion at December 31, 2025, compared to $27.1 billion at December 31, 2024. Total net new assets were $(1.9) billion for the year ended December 31, 2025, compared to $(2.1) billion for the year ended December 31, 2024.
The production levels begin at gross revenue of $15,000 up to $4,000,000 and up, and the payout rate starts at 50% and increases to a top payout rate of 94% for annual production of $4,000,000 and up. 30 Table of Contents The following table sets forth our payout rate, which is a statistical or operating measure and monitored to review that such costs of revenue remain consistent on a period over period basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ 2024 2023 Change Payout range 75.44 % 77.96 % (2.52) % ​ For the year ended December 31, 2024, the payout rate decreased as compared to 2023 as a result of the reduction in non-recurring commission products that carried a payout at 90%.
The production levels begin at gross revenue of $15,000 up to $4,000,000 and up, and the payout rate starts at 50% and increases to a top payout rate of 94% for annual production of $4,000,000 and up. 32 Table of Contents The following table sets forth our payout rate, which is a statistical or operating measure and monitored to review that such costs of revenue remain consistent on a period over period basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ Change Payout range 75.37 % 75.44 % (0.07) % ​ For the year ended December 31, 2025, the payout rate remained consistent as compared to 2024.
Below is a calculation of gross profit for the periods presented (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, Gross Profit 2024 2023 Total revenue ​ $ 169.0 ​ $ 168.0 Commission and fees ​ 137.0 ​ 136.2 Gross Profit ​ $ 32.0 ​ $ 31.8 (2) EBITDA and Adjusted EBITDA are non-GAAP financial measures.
Below is a calculation of gross profit for the periods presented (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, Gross Profit ​ ​ ​ 2025 ​ ​ ​ 2024 Total revenue ​ $ 187.1 ​ $ 169.0 Commission and fees ​ 149.3 ​ 135.3 Gross Profit ​ $ 37.8 ​ $ 33.7 (2) EBITDA and Adjusted EBITDA are non-GAAP financial measures.
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. As of December 31, 2024, there was approximately $0.1 interest that was accrued and paid subsequent to December 31, 2024.
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.
However, if we conclude otherwise, we are then required to perform the first step of the two-step impairment test. Goodwill impairment is determined by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not deemed to be impaired.
Goodwill impairment is determined by comparing the estimated fair value of a reporting unit with its respective carrying value. If the estimated fair value exceeds the carrying value, goodwill at the reporting unit level is not deemed to be impaired.
For the year ended December 31, 2024 total dividends related to the Holdings Series B Stock amounted to approximately $0.03 million, which is payable as of December 31, 2024.
For the year ended December 31, 2025 and 2024 total dividends related to the Holdings Series B Stock amounted to approximately $0.1 million and $0.03 million, respectively.
EBITDA and Adjusted EBITDA EBITDA is a non-GAAP financial measure defined as net income plus interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA, a non-GAAP measure, plus business combination and re-financing costs.
EBITDA and Adjusted EBITDA EBITDA is a non-GAAP financial measure defined as net income plus interest expense, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA, a non-GAAP measure, plus non-recurring costs related to our business combination, costs related to the re-financing of the senior credit facility, and share-based compensation costs.
Technology fees Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs. Technology fees decreased by $1.2 million for the year ended December 31, 2024 as compared to 2023. Interest expense Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations.
Technology fees increased by approximately $1.7 million for the year ended December 31, 2025 as compared to 2024. Interest expense Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations.
Net cash used in operating activities was $0.6 million for the year ended December 31, 2024 compared to net cash provided by $2.6 million for the year ended December 31 2023, representing a decrease of approximately $3.2 million or 124%.
Net cash provided by operating activities was approximately $5.1 million for the year ended December 31, 2025 compared to net cash used in operating activities of $0.6 million for the year ended December 31, 2024, representing an increase of approximately $5.7 million or 934%.
Executive Summary Financial Highlights Results for the year ended December 31, 2024 included a net loss of approximately $4.6 million and total revenue of approximately $168.9 million, which compares to net income and total revenue of $0.5 million and approximately $168.0 million, respectively, for the year ended December 31, 2023.
Executive Summary Financial Highlights Results for the year ended December 31, 2025 include net income of approximately $2.3 million and total revenue of approximately $187.1 million and a net loss of approximately $4.6 million and total revenue of approximately $168.9 million for the year ended December 31, 2024.
Trailing based revenue increased by approximately $16.2 million or 19.0% for the year ended December 31, 2024 as compared to 2023. The decrease in sales based revenue for the year ended December 31, 2024 as compared to 2023 is attributable to a decrease in the generation of transactional based products.
Trailing based revenue increased by approximately $5.6 million or 7.3% for the year ended December 31, 2025 as compared to 2024. The increase in sales based revenue for the year ended December 31, 2025 as compared to 2024 is attributable to an increase in the generation of transactional based products.
The change in our effective tax rate was related to the change in deferred adjustments. 31 Table of Contents Liquidity and capital resources We have established liquidity policies intended to support the execution of strategic initiatives, while meeting regulatory capital requirements and maintaining ongoing and sufficient liquidity.
The change in our effective tax rate was primarily related to generation of taxable income for the year ending December 31, 2025 as opposed to a taxable loss incurred during the year ending December 31, 2024. 33 Table of Contents Liquidity and capital resources We have established liquidity policies intended to support the execution of strategic initiatives, while meeting regulatory capital requirements and maintaining ongoing and sufficient liquidity.
Cash Flows The following table sets forth a summary of cash flows for the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) 2024 2023 Net cash (used in) provided by operating activities $ (617) $ 2,553 Net cash used in investing activities ​ ​ (85) ​ ​ (80) Net cash provided by (used in) financing activities ​ ​ 1,567 ​ ​ (2,701) Net change in cash flows ​ $ 865 ​ $ (228) 34 Table of Contents Cash Flows from Operating Activities.
Related interest was approximately $0.5 million and $0.4 million for the years ended December 31, 2025 and 2024, respectively. 36 Table of Contents Cash Flows The following table sets forth a summary of cash flows for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 Net cash provided by (used in) operating activities ​ $ 5,151 ​ $ (617) Net cash used in investing activities ​ ​ (61) ​ ​ (85) Net cash provided by (used in) financing activities ​ ​ (2,860) ​ ​ 1,567 Net change in cash flows ​ $ 2,230 ​ $ 865 ​ Cash Flows from Operating Activities.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by period ​ Total Less than 1 Year 1 - 3 Years 3 - 5 Years More than 5 Years Contractual obligations ​ (in thousands) Long-term debt obligations (1) $ 20,300 ​ $ 2,030 $ 8,120 $ 10,150 $ — Promissory notes – affiliates (2) ​ 5,442 129 ​ 5,313 ​ — ​ ​ — Operating lease obligations (3) ​ 4,405 777 ​ 2,228 ​ 1,400 ​ ​ — ​ $ 30,147 $ 2,936 $ 15,661 $ 11,550 $ — (1) Represents principal obligations related to the Byline Credit Agreement that was entered into during the years ended December 31, 2024.
Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by period ​ ​ ​ ​ Total ​ ​ ​ Less than 1 Year ​ ​ ​ 1 - 3 Years ​ ​ ​ 3 - 5 Years ​ ​ ​ More than 5 Years Contractual obligations ​ (in thousands) Long-term debt obligations (1) $ 18,269 ​ $ 2,030 ​ $ 6,090 ​ $ 10,149 ​ $ — Promissory notes – affiliates (2) ​ 5,313 ​ ​ — ​ ​ 5,313 ​ ​ — ​ ​ — Operating lease obligations (3) ​ 4,239 ​ ​ 899 ​ ​ 2,670 ​ ​ 670 ​ ​ — ​ $ 27,821 ​ $ 2,929 ​ $ 14,073 ​ $ 10,820 ​ $ — (1) Represents principal obligations related to the Byline Credit Agreement that was entered into during the years ended December 31, 2024.
As of December 31, 2024, the outstanding balance on the Term Loan was $19.6 million, net of debt issuance costs. Under the terms of the Credit Agreement, to the extent that the Company 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.
Under the terms of the Credit Agreement, to the extent that the Company 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.
Results of Operations The following presents an analysis of our results of operations for the years ended December 31, 2024 and 2023 ( in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ 2024 2023 % Change Revenues: ​ ​ ​ Revenue from Contracts with Customers: ​ ​ ​ ​ ​ Commissions ​ $ 139,452 ​ $ 138,191 0.9 % Advisory Fees ​ 24,939 ​ 21,668 15.1 % Total Revenue from Contracts with Customers ​ 164,391 ​ 159,859 ​ ​ Interest and other income ​ 4,512 ​ 8,096 (44.3) % Total revenues ​ 168,903 ​ 167,955 0.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ Expenses: 2024 2023 ​ Commissions and fees ​ ​ 136,932 ​ 136,169 ​ 0.6 % Employee compensation and benefits ​ ​ 15,544 ​ 13,385 ​ 16.1 % Rent and occupancy ​ ​ 1,150 ​ 1,189 ​ (3.3) % Professional fees ​ ​ 6,971 ​ 4,709 ​ 48.0 % Technology fees ​ ​ 1.292 ​ 2,457 ​ (47.4) % Interest ​ ​ 4,026 ​ 5,119 ​ (21.4) % Depreciation and amortization ​ ​ 1,019 ​ 1,216 ​ (16.2) % Other ​ ​ 5,116 ​ 3,225 ​ 58.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total expenses ​ ​ 172,050 ​ 167,469 ​ 2.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Loss) income before provision for income taxes ​ ​ (3,147) ​ 486 ​ (747.5) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (benefit) for income taxes ​ ​ 1,415 ​ (85) ​ (2,085.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net (loss) income ​ $ (4,562) ​ $ 571 ​ (946.8) % ​ 27 Table of Contents Revenues The Company’s primary source of revenue is from fees and commissions from products and advisory services offered by our advisors to their clients, a substantial portion of which we pay out to our advisors.
Results of Operations The following presents an analysis of our results of operations for the years ended December 31, 2025 and 2024 ( in thousands ): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ % Change Revenues: ​ ​ ​ ​ ​ ​ Revenue from Contracts with Customers: ​ ​ ​ ​ ​ ​ Commissions ​ $ 153,440 ​ $ 139,452 ​ 10.0 % Advisory Fees ​ ​ 28,601 ​ ​ 24,939 ​ 14.7 % Total Revenue from Contracts with Customers ​ ​ 182,041 ​ ​ 164,391 ​ ​ ​ Interest and other income ​ ​ 5,103 ​ ​ 4,512 ​ 13.1 % Total revenues ​ ​ 187,144 ​ ​ 168,903 ​ 10.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ Expenses: ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ Commissions and fees ​ ​ 149,277 ​ ​ 135,280 ​ 10.3 % Employee compensation and benefits ​ ​ 18,885 ​ ​ 15,544 ​ 21.5 % Rent and occupancy ​ ​ 1,141 ​ ​ 1,150 ​ (0.8) % Professional fees ​ ​ 2,265 ​ ​ 6,971 ​ (67.5) % Technology fees ​ ​ 2,963 ​ ​ 1,292 ​ 129.4 % Interest ​ ​ 2,119 ​ ​ 4,026 ​ (47.4) % Depreciation and amortization ​ ​ 697 ​ ​ 1,019 ​ (31.6) % Other ​ ​ 7,186 ​ ​ 6,768 ​ 6.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total expenses ​ ​ 184,533 ​ ​ 172,050 ​ 7.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income (loss) before provision for income taxes ​ ​ 2,611 ​ ​ (3,147) ​ 182.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision for income taxes ​ ​ 303 ​ ​ 1,415 ​ (78.6) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (loss) ​ $ 2,308 ​ $ (4,562) ​ 150.6 % ​ 29 Table of Contents Revenues The Company’s primary source of revenue is from fees and commissions from products and advisory services offered by our advisors to their clients, a substantial portion of which we pay out to our advisors.
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.
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.
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.
Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. 37 Table of Contents ​ 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.
The change is primarily related to the proceeds from the preferred financings offset by the repayments of the BMS related party debt obligations and the re-financing of the senior credit facility.
The change is primarily related to the proceeds from the preferred financings during the year ended December 31, 2024 offset by the repayments of the BMS related party debt obligations, principal payments related to the senior credit facility and the payment of dividends to the Class A and Class B preferred stockholders.
For the year ended December 31, 2024, the Company paid dividends under the Series A PIPE in the amount of approximately $1.1 million of which $0.56 million was paid in cash and $0.55 was paid in-kind.
For the years ended December 31, 2025 and 2024, the Company paid dividends under the Series A Stock in the amount of approximately $1.4 million and $1.1 million, respectively.
Please also refer to the section under heading “Special Note Regarding Forward-Looking Statements.” The information for the years ended December 31, 2024 and 2023 are derived from the Company’s audited consolidated financial statements and the notes thereto included elsewhere in this report. 23 Table of Contents Any reference to Binah Capital Group, Inc. refers to Binah Capital Group, Inc. and our consolidated subsidiaries on a forward-looking basis or as the context requires, to the historical results of BMS Management Services LLC.
Please also refer to the section under heading “Special Note Regarding Forward-Looking Statements.” The information for the years ended December 31, 2025 and 2024 are derived from the Company’s audited consolidated financial statements and the notes thereto included elsewhere in this report.
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.
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. 38 Table of Contents 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.
As of December 31, 2024, the effective interest rate was 8.3%. The Term Loan must be 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.
Changes in the effective portion of the swap’s fair value are recognized in other comprehensive income (loss) (“OCI”) and included on the consolidated statements of other comprehensive income (loss). 34 Table of Contents 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 decrease was primarily attributable to the decrease in net income offset by increases in accounts payable, accrued expenses and commissions payable. Cash Flows from Investing Activities. Net cash used in investing activities was $0.09 million for the year ended December 31, 2024 consistent with the $0.08 million for the year ended December 31, 2023. Cash Flows from Financing Activities.
The increase was primarily attributable to the decrease in the net loss incurred for the year ended December 31, 2024 of approximately $6.4 million. Cash Flows from Investing Activities. Net cash used in investing activities was approximately $0.06 million for the year ended December 31, 2025 consistent with the $0.08 million for the year ended December 31, 2024.
Gross Profit Trend Gross profit, a non-GAAP financial measure, was $32.0 million for the year ended December 31, 2024, an increase of 0.6% from $31.8 million for the year ended December 31, 2023.
Brokerage assets were $27.0 billion at December 31, 2025, an increase of approximately 10% from $24.5 billion at December 31, 2024. 26 Table of Contents Gross Profit Trend Gross profit, a non-GAAP financial measure, was $37.8 million for the year ended December 31, 2025, an increase of approximately 12% from $33.7 million for the year ended December 31, 2024.
Net new brokerage assets were $(2.1) billion for the year ended December 31, 2024, compared to $(3.1) billion in 2023. Brokerage assets were $24.5 billion at December 31, 2024, an increase of approximately 12% from $21.8 billion at December 31, 2023.
Net new brokerage assets were $(1.9) billion for the year ended December 31, 2025, compared to $(2.1) billion for the year ended December 31, 2024.
The decrease in interest and other income for the year ended December 31, 2024, compared to 2023 is primarily related to certain non-recurring income items earned during 2023.
The increase in interest and other income for the year ended December 31, 2025, compared to 2024, is primarily related to the increase in the interest income it earns with the Company’s clearing brokers.
Other expense Other expense includes insurance, travel-related expenses, office expenses, marketing and other miscellaneous expenses. Provision for Income Taxes Our effective income tax rate was (45.09)% and (17.49)% for the years ended December 31, 2024 and 2023, respectively.
Provision for Income Taxes Our effective income tax rate was 10.6% and (45.1)% for the years ended December 31, 2025 and 2024, respectively.
The following table sets forth the components of our commission revenue for years December 31, 2024 and 2023 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ​ 2024 ​ 2023 ​ $ Change ​ % Change Sales-based $ 62,827 $ 74,525 (11,698) (15.7) % Trailing ​ 101,564 ​ 85,334 16,230 19.0 % Total commission revenue ​ $ 164,391 ​ $ 159,859 4,532 2.8 % ​ Sales based revenue decreased by approximately $11.7 million or 15.7% for the year ended December 31, 2024 as compared to 2023.
The following table sets forth the components of our commission revenue for years December 31, 2025 and 2024 (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended December 31, ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ $ Change ​ ​ ​ % Change Sales-based ​ $ 71,225 ​ $ 62,827 ​ 8,398 ​ 13.37 % Trailing ​ ​ 82,215 ​ ​ 76,625 ​ 5,590 ​ 7.29 % Total commission revenue ​ $ 153,440 ​ $ 139,452 ​ 13,988 ​ 10.03 % ​ Sales based revenue increased by approximately $8.4 million or 13.4% for the year ended December 31, 2025 as compared to 2024.
Professional fees for the year ended December 31, 2024 as compared to 2023 increased by $2.3 million which is directly related to transaction costs associated with the Business Combination, the re-financing of the senior credit facility and specific costs related to the Company now operating as a public company.
Professional fees for the year ended December 31, 2025 as compared to 2024 decreased by $4.7 million which is directly related to non-recurring transaction costs associated with the Business Combination that was incurred during the year ended December 31, 2024. Technology fees Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs.
Interest expense decreased by $1.1 million for the year ended December 31, 2024 as compared to 2023 resulting from the repayments and restructuring of the related party debt obligations of BMS. Depreciation and amortization Depreciation and amortization relates to the use of property, equipment and leasehold improvements. Amortization also includes the amortization related to certain intangible assets.
Interest expense decreased by $1.9 million for the year ended December 31, 2025 as compared to 2024, as a result of scheduled repayments as well as the restructuring of related party debt obligations of BMS, re-financing of the senior credit facility and the reduction of interest rates that occurred during the second half of 2025.
Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy. During the fourth quarter of 2024, Fed policymakers maintained the target range for the federal funds rate at 4.25% to 4.50%.
The equity markets rose during the year ended December 31, 2025, with the S&P 500 and Russell 2000 index rising 17.9% and 12.8%, respectively. Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy.
Removed
According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew 2.8% in 2024, and at an annualized pace of 2.3% in the fourth quarter of 2024 after growing at an annualized pace of 2.8% in the third quarter of 2024.
Added
Any reference to Binah Capital Group, Inc. refers to Binah Capital Group, Inc. and our consolidated subsidiaries on a forward-looking basis or as the context requires, to the historical results of BMS Management Services LLC.
Removed
Although inflation, interest rates and volatile global markets were all headwinds the U.S. economy added roughly 500,000 jobs in the fourth quarter of 2024, while the unemployment rate averaged 4.2% in the fourth quarter of 2024, up slightly from the average in the prior quarter.
Added
During the fourth quarter of 2025, Fed policymakers lowered the target federal funds rate to a range of 3.50% to 3.75%.
Removed
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.
Added
Depreciation and amortization Depreciation and amortization relates to the use of property, equipment and leasehold improvements. Amortization also includes the amortization related to certain intangible assets. Other expense Other expense includes insurance, legal and regulatory settlements, travel-related expenses, office expenses, marketing and other miscellaneous expenses.
Removed
Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions.
Added
As of December 31, 2025 and 2024, the outstanding balance on the Term Loan was $17.7 million and $19.6 million, net of debt issuance costs, respectively.
Added
As of December 31, 2025 and 2024, the effective interest rate was 7.9% and 8.3%, respectively. On April 10, 2025, BMS entered into an interest rate swap agreement with a notional amount of $10 million in connection with the above-mentioned Credit Agreement.
Added
Under the terms of the swap, BMS pays a fixed rate of 3.98% plus four percent (4.00%) and receives a variable interest rate based on SOFR plus 4.00% as defined above. The swap agreement requires monthly payments to be made or received.
Added
The swap is designated as cash flow hedge of the variability of the SOFR-based interest payments on $10 million of BMS’s outstanding variable-rate debt. As of December 31, 2025, the interest rate swap liability had a fair value of $0.2 million and is included in accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition.
Added
The Company has adopted the shortcut method allowing it to assume perfect hedge effectiveness.
Added
As of December 31, 2025, the Company accrued 50% of the dividend to be paid in cash in the amount of $0.2 million and paid an in-kind dividend in the amount 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.
Added
As of December 31, 2025 and 2024, included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated statements of financial condition, is an accrued dividend in the amount $0.03 and $0.03, respectively, that was paid subsequent to December 31, 2025 and 2024.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeThe 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. ​ 37 Table of Contents
Biggest changeThe 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. ​ ​ 39 Table of Contents
As of December 31, 2024, $20.3 million of our outstanding debt was subject to floating interest rate risk.
As of December 31, 2025, $8.2 million of our outstanding debt was subject to floating interest rate risk.

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