Binah Capital Group, Inc.(BCG) - 2024 Q1 - Quarterly Report

Financial Performance - For the period ended March 31, 2024, Binah Capital reported a net loss of approximately $1.6 million and total revenue of approximately$41.0 million, compared to a net income of $1.1 million and total revenue of approximately$43.0 million for the same period in 2023[117]. - Total revenues for the period ended March 31, 2024, were $41,449,000, a decrease of 4.5$43,385,000 in 2023[131]. - Gross profit for the period ended March 31, 2024, was $7.0 million, a decrease of 12.5$8.0 million for the same period in 2023[125]. - EBITDA for the period ended March 31, 2024, was $(0.0) million, compared to$2.8 million for the same period in 2023[126]. - Net income (loss) for the period ended March 31, 2024, was $(1,536,000), a decrease of 243.3$1,072,000 in 2023[131]. Assets and Liabilities - Total advisory and brokerage assets served were $24.9 billion at March 31, 2024, an increase from$22.8 billion at March 31, 2023[117]. - The company experienced net new assets of $(1.5) billion for the period ended March 31, 2024, compared to$(1.1) billion for the same period in 2023[118]. - Brokerage assets increased to $22.7 billion for the period ended March 31, 2024, compared to$20.6 billion in 2023[137]. - Trail-eligible assets included in brokerage assets were $14.8 billion for the period ended March 31, 2024, up from$14.4 billion in 2023[137]. - The total contractual obligations as of March 31, 2024, amounted to $38.83 million, including long-term debt obligations of$20.89 million and interest payments of $8.11 million[176]. Revenue Breakdown - Commission revenue decreased by 2.6$34,395,000 for the period ended March 31, 2024, down from $35,321,000 in 2023[136]. - Sales-based commission revenue increased by 3.2$15,767,000, while trailing commission revenue decreased by 7.0% to $18,628,000[136]. - Advisory fees increased by approximately 3$42,846,000, an increase of 1.9% compared to $42,028,000 in 2023[131]. - Professional fees increased by$3.5 million for the period ended March 31, 2024, due to transaction costs associated with a Business Combination[150]. Financing Activities - The Company reported a net cash used in operating activities of $3.1 million for the period ended March 31, 2024, a decrease of approximately$3.5 million or 921% compared to a net cash provided of $0.4 million for the same period in 2023[172]. - The net cash provided by financing activities was approximately$1.7 million for the period ended March 31, 2024, compared to cash used of approximately $0.8 million for the same period in 2023[174]. - As of March 31, 2024, the outstanding balance under the Senior Credit Facility with Oak Street Funding, LLC was$20.2 million, with a prime interest rate of 8.50% plus 2.25%[159]. Corporate Actions - The company completed a merger on March 15, 2024, resulting in Wentworth becoming a wholly-owned subsidiary of Binah Capital[112]. - Binah Capital entered into a Subscription Agreement for the purchase of 1,500,000 shares of Series A Redeemable Convertible Preferred Stock at $9.60 per share, totaling$14.4 million[115]. - The Holdings Series A Stock carries a cumulative dividend rate of 9% per annum, payable quarterly[163]. Market Conditions - The U.S. economy grew at an annualized pace of 1.6% in Q1 2024, with the unemployment rate averaging 3.8%[128]. - The S&P 500 returned 10.6% during the first quarter of 2024, reflecting a rebound in equity markets[129]. Tax and Compliance - The effective income tax rate decreased to (7.0)% for the period ended March 31, 2024, compared to 21.0% in 2023, related to transaction expenses from the Reverse Recapitalization[156]. - The Company was in compliance with all financial-related covenants as of March 31, 2024[161]. Risk and Accounting - No material changes in market risk were reported compared to the Annual Report for the fiscal year ended December 31, 2023[189]. - The Company will accrue the most likely amount of potential losses when a loss is probable and can be estimated[186]. - Recent accounting pronouncements or changes that may be significant are discussed in the notes to the consolidated financial statements[187].