Binah Capital Group, Inc.(BCG) - 2024 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2024, the company reported a net loss of approximately $(1.2) million and total revenue of approximately$42.2 million, compared to a net income of $0.2 million and total revenue of$42.9 million for the same period in 2023[70]. - For the nine months ended September 30, 2024, total revenue was approximately $124.3 million, a slight decrease from$126.7 million for the same period in 2023[76]. - The company reported a net loss of $(3.5) million for the nine months ended September 30, 2024, compared to a net income of$1.4 million for the same period in 2023[76]. - Net income (loss) for the three months ended September 30, 2024, was $(1.150) million, a decline of 572.5$243 million in 2023[84]. - EBITDA for the three months ended September 30, 2024, was $0.4 million, down from$1.6 million for the same period in 2023[76]. Revenue Breakdown - Commission revenue for the three months ended September 30, 2024, was $34.780 million, a decrease of 1.9$35.469 million in 2023[88]. - Advisory fees increased by 14.7% to $6.247 million for the three months ended September 30, 2024, compared to$5.448 million in 2023[84]. - Advisory fees increased by approximately 14.7% and 11.7% for the three and nine-month periods ended September 30, 2024, respectively, compared to the same periods in 2023[92]. Assets and Brokerage - Total advisory and brokerage assets served were $26.9 billion at September 30, 2024, an increase of approximately 17.99$22.8 billion at September 30, 2023[71]. - Brokerage assets as of September 30, 2024, increased to $24.5 billion from$20.8 billion in 2023[89]. - Trail-eligible assets increased to $17.0 billion as of September 30, 2024, compared to$14.0 billion in 2023[89]. - The company experienced net new brokerage assets of $0.4 billion for the three months ended September 30, 2024, compared to$0.5 billion for the same period in 2023[71]. - Total net new assets for the nine months ended September 30, 2024, were $(1.8) billion, an improvement from$(3.2) billion for the same period in 2023[76]. Expenses and Compensation - Employee compensation and benefits increased by 27.5% to $3.937 million for the three months ended September 30, 2024, compared to$3.088 million in 2023[84]. - Total expenses for the three months ended September 30, 2024, were $42.810 million, a slight decrease of 0.1$42.849 million in 2023[84]. - Interest and other income decreased by 40.3% to $1.170 million for the three months ended September 30, 2024, compared to$1.933 million in 2023[84]. - Professional fees increased by $0.4 million and$3.6 million for the three and nine-month periods ended September 30, 2024, respectively, related to transaction costs associated with the Business Combination[102]. Financing and Debt - The Company 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[113]. - The Holdings Series B Convertible Preferred Stock was sold at $10.00 per share for an aggregate purchase price of$1.5 million, with a cumulative dividend rate of 7% per annum[115]. - As of September 30, 2024, the Company had $19.1 million outstanding under its Senior Credit Facility with Oak Street Funding, LLC[111]. - The new promissory notes issued in connection with the Business Combination have a maturity date of May 15, 2027, and carry an interest rate of Prime plus 1.00$3.5 million on promissory notes in connection with the Business Combination, with noteholders forgiving approximately $3.8 million in accrued but unpaid interest[116]. Cash Flow - Net cash used in operating activities for the nine-month period ended September 30, 2024, was$2.4 million, a decrease of approximately $2.7 million or 766$2.0 million for the nine-month period ended September 30, 2024, compared to cash used of approximately $1.9 million in the same period in 2023[119]. - Net cash used in investing activities was$0.02 million for the nine-month period ended September 30, 2024, compared to $0.1 million in the same period in 2023[119]. Company Operations - The company completed a merger on March 15, 2024, which involved the acquisition of Binah Management Services, enhancing its operational capabilities[66]. - The company has over 1,900 registered individuals working within its financial services entities, indicating a robust operational scale[65]. - The payout rate for financial advisors decreased to 82.42% for the three-month period and 83.26% for the nine-month period ended September 30, 2024, compared to 87.65% and 86.23% in 2023[99]. Economic Context - The U.S. economy grew at an annualized pace of 2.8% in the third quarter of 2024, with the unemployment rate averaging 4.1%[82].