Binah Capital Group, Inc.

Previous wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the sections entitled “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024; “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Report on Form 10-Q for the period ended March 31, 2025; and “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for the period ended June 30, 2025.

Current wording

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the sections entitled “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024; “Part I, “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2025 and June 30, 2025; and “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q for the period ended September 30, 2025.

Previous wording

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.

Current wording

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 1,900 registered individuals working within the financial services industries.

Previous wording

Results for the three and six-month period ended June 30, 2025 included a net loss and net income of approximately $(0.7) million and $0.4 million and total revenue of approximately $41.5 million and $90.4 million, respectively, which compares to a net loss and total revenue of $(0.7) million and $(2.3) million and approximately $40.6 million and $82.1 million, respectively, for the three and six-month period ended June 30, 2024.

Current wording

Results for the three and nine-month period ended September 30, 2025 included net income of approximately $1.8 million and $2.1 million, respectively and total revenue of approximately $46.2 million and $136.6 million, respectively, which compares to a net loss and total revenue of $(1.2) million and $(3.5) million and approximately $42.2 million and $124.3 million, respectively, for the three and nine-month period ended September 30, 2024.

Previous wording

Total advisory and brokerage assets served were $27.8 billion at June 30, 2025, compared to $25.1 billion at June 30, 2024. Total net new assets were $(0.9) billion and $(1.1) billion for the three and six-month period ended June 30, 2025, respectively, compared to $(0.8) billion and ($2.1) billion for the same period in 2024.

Current wording

Total advisory and brokerage assets served were $29.9 billion at September 30, 2025, compared to $26.9 billion at September 30, 2024. Total net new assets were $(0.2) billion and $(1.3) billion for the three and nine-month period ended September 30, 2025, respectively, compared to $0.4 billion and ($1.8) billion for the same period in 2024.

Previous wording

Net new advisory assets were $(0.1) billion and $0.0 billion for the three and six-month period ended June 30, 2025, respectively, compared to $0.0 billion and 0.0 billion for the same period in 2024. Advisory assets were $2.7 billion at June 30, 2025, which is an increase of 18% as compared to the $2.3 billion at June 30, 2024.

Current wording

Net new advisory assets were $0.0 billion and $0.0 billion for the three and nine-month period ended September 30, 2025, respectively, compared to $0.0 billion and (0.1) billion for the same period in 2024. Advisory assets were $2.9 billion at September 30, 2025, which is an increase of 16% as compared to the $2.5 billion at September 30, 2024.

Previous wording

Net new brokerage assets were $(0.8) billion and $(1.1) billion for the three and six-month period ended June 30, 2025, compared to $(0.8) billion and $(2.1) billion for the same period in 2024. Brokerage assets were $25.1 billion at June 30, 2025, up 10% from $22.8 billion at June 30, 2024.

Current wording

Net new brokerage assets were $(0.2) billion and $(1.3) billion for the three and nine-month period ended September 30, 2025, compared to $0.4 billion and $(1.7) billion for the same period in 2024. Brokerage assets were $27.0 billion at September 30, 2025, up 10% from $24.5 billion at September 30, 2024.

Previous wording

Gross profit, a non-GAAP financial measure, was $8.8 million and $17.4 million for the three and six-month period ended June 30, 2025, respectively, an increase of 20% and 15% from $7.3 million and $15.1 million for the same period in 2024. See the*“Key Performance Metrics and Non-GAAP Financial Measures”* section for additional information on gross profit.

Current wording

Gross profit, a non-GAAP financial measure, was $9.0 million and $26.4 million for the three and nine-month period ended September 30, 2025, respectively, an increase of 7.5% and 12.5% from $8.4 million and $23.5 million for the same period in 2024. See the*“Key Performance Metrics and Non-GAAP Financial Measures”* section for additional information on gross profit.

Previous wording

According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew by 3.0% in the second quarter of 2025. Although inflation, interest rates and volatile global markets were all headwinds, the U.S. economy added roughly 190,00 jobs in the second quarter of 2025, while the unemployment rate was 4.1% in the second quarter of 2025, which is consistent with the prior quarter. The unemployment rate has remained in a narrow range of 4.0% to 4.2 since May 2024.

Current wording

According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew by approximately 3% in the third quarter of 2025. The U.S. economy added roughly sixty-six thousand jobs in the third quarter of 2025, while the unemployment rate was 4.3% in the third quarter of 2025, which is an increase over the previous quarter’s 4.1%.

Previous wording

Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy. During the second quarter of 2025, Fed policymakers maintained the target range for the federal funds rate in the 4.25% to 4.5% range. The equity markets increased during the second quarter of 2025 resulting in the S&P 500 increasing 10.3%.

Current wording

Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy. During the third quarter of 2025, Fed policymakers cut interest rates by 0.25% to a target range for the federal funds rate in the 4.00% to 4.25% range. The equity markets increased during the third quarter of 2025 resulting in the S&P 500 increasing 8.1%, bringing the year-to-date performance to approximately 14.8%.

Previous wording

The following presents an analysis of our results of operations for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):

Current wording

The following presents an analysis of our results of operations for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

Previous wording

The Company generates two types of commission revenues: sales-based commissions that are recognized at the point of sale on the trade date and trailing commissions that are recognized over time as earned. Sales-based commission revenues vary by investment product and are recognized on the trade date or the transaction date, which represents the completion of the Company’s performance obligation because that is when the underlying financial instrument or purchaser is identified, the pricing is agreed upon, and the risks and rewards of ownership have been transferred to/from the customer at a point in time. The rates at which commissions are charged to the customers range from 1% to 7% based on the investment product. Trailing commission revenues which are preliminarily related to the sales of mutual funds and variable annuities held by clients of the Company’s advisors are generally based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets, and are recognized over the time the client owns the investment or holds the contract and is generally based on a fixed rate applied, generally twenty-five to fifty basis points (25-50 bps) of the current market value of the clients’ holdings. Trailing commissions are generally received monthly or quarterly. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and the client’s investment hold period and the Company does not believe that it can overcome such constraints until the market value of the fund and the investor activities are known. The revenues will not be recognized until it is probable that a significant reversal will not occur.

Current wording

the customers range from 1% to 7% based on the investment product. Trailing commission revenues which are preliminarily related to the sales of mutual funds and variable annuities held by clients of the Company’s advisors are generally based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets, and are recognized over the time the client owns the investment or holds the contract and is generally based on a fixed rate applied, generally twenty-five to fifty basis points (25-50 bps) of the current market value of the clients’ holdings. Trailing commissions are generally received monthly or quarterly. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and the client’s investment hold period and the Company does not believe that it can overcome such constraints until the market value of the fund and the investor activities are known. The revenues will not be recognized until it is probable that a significant reversal will not occur.

Previous wording

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. Accordingly, total commission revenue is reported on a gross basis. See Note 4 - Revenues From Contracts with Customers within the notes to the condensed consolidated financial statements for the three and six-month periods ended June 30, 2025, and 2024 for further details regarding our commission revenue by product category.

Current wording

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. Accordingly, total commission revenue is reported on a gross basis. See Note 4 - Revenues From Contracts with Customers within the notes to the condensed consolidated financial statements for the three and nine-month periods ended September 30, 2025, and 2024 for further details regarding our commission revenue by product category.

Previous wording

The following tables sets forth the components of our commission revenue for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):

Current wording

The following tables sets forth the components of our commission revenue for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

Previous wording

Sales-based revenue decreased by approximately $1.0 million and increased approximately $3.7 million or (6.2)% and 11.6% for the three and six-month period ended June 30, 2025, respectively, as compared to 2024. Trailing based revenue increased by approximately $1.3 million and $3.4 million or 7.4% and 9.4% for the three and six-month period ended June 30, 2025, respectively, as compared to 2024. The decrease in sales-based revenue for the three month period ended June 30, 2025 as compared to 2024 is attributable to a decrease in the sales of insurance related products. The increase in sales-based revenue for the six-month period ended June 30, 2025, as compared to 2024 is attributable to an increase in the generation of transactional based products, specifically alternative investment products. The increase in the trailing based revenues is due to the increase in trail-based assets resulting from inflows of assets and positive market volatility. Commission revenue is generated from brokerage assets. The following tables summarize the brokerage assets for the three and six-month periods ended June 30, 2025 and 2024 (in billions):

Current wording

Sales-based revenue decreased by approximately $0.1 million and increased approximately $3.5 million or (0.6)% and 7.4% for the three and nine-month period ended September 30, 2025, respectively, as compared to 2024. Trailing based revenue increased by approximately $2.7 million and $6.1 million or 14.6% and 11.1% for the three and nine-month periods ended September 30, 2025, respectively, as compared to 2024. The decrease in sales-based revenue for the three-month period ended September 30, 2025 as compared to 2024 is attributable to a decrease in the sales of insurance related products. The increase in sales-based revenue for the nine-month period ended September 30, 2025, as compared to 2024 is attributable to an increase in the generation of transactional based products, specifically alternative investment products. The increase in the trailing based revenues is due to the increase in trail-based assets resulting from positive market volatility. Commission revenue is generated from brokerage assets. The following tables summarize the brokerage assets for the three and nine-month periods ended September 30, 2025 and 2024 (in billions):

Previous wording

Advisory fees increased by approximately 4.9% and 12.8% for the three and six month periods ended June 30, 2025, respectively, as compared to the same period in June 30, 2024, due to positive returns in the market from the period of June 30, 2024 to the period ending June 30, 2025.

Current wording

Advisory fees increased by approximately 18.6% and 14.8% for the three and nine month periods ended September 30, 2025, respectively, as compared to the same period in September 30, 2024, due to positive returns in the market from the period of September 30, 2024 to the period ending September 30, 2025.

Previous wording

The increase in interest and other income for the three month period ended June 30, 2025, compared to 2024 is primarily related to the increase in the interest income shared with the Company’s clearing brokers. The decrease in interest and other income for the six-month period ended June 30, 2025 is primarily related to a non-recurring income item that was earned during the same period in 2024.

Current wording

The increase in interest and other income for the three month period ended September 30, 2025, compared to 2024 is primarily related to the increase in the interest income shared with the Company’s clearing brokers. The decrease in interest and other income for the nine-month period ended September 30, 2025 is primarily related to a non-recurring income item that was earned during the same period in 2024.

Previous wording

Employee compensation and benefits for the three and six-month period ended June 30, 2025 increased by approximately $1.4 million and $2.2 million as compared to June 30, 2024, which is directly related to the additional personnel costs attributed to the Company now operating as a public company, including issuance of non-cash compensation awards to officers and directors during the period ended June 30, 2025.

Current wording

Employee compensation and benefits for the three and nine-month period ended September 30, 2025 increased by approximately $0.7 million and $3.0 million as compared to September 30, 2024, which is directly related to the additional personnel costs attributed to the Company now operating as a public company, including issuance of non-cash compensation awards to officers and directors during the period ended September 30, 2025.

Previous wording

Rent and occupancy remained relatively consistent for the three and six-month period ended June 30, 2025 as compared to June 30, 2024 decreasing slightly by approximately 2.0%.

Current wording

Rent and occupancy remained relatively consistent for the three and nine-month period ended September 30, 2025 as compared to September 30, 2024.

Previous wording

Professional fees includes costs incurred related to legal and accounting services. Professional fees for the three month period ended June 30, 2025 as compared to 2024 increased by approximately $0.1 which is related to an increase in SEC filings in the current period. Professional fees for the six-month period ended June 30, 2025, as compared to 2024, decreased by $3.7 million, which is directly related to the non-recurring transaction costs associated with the closing of the Business Combination that were incurred during the period ended June 30, 2024.

Current wording

Professional fees includes costs incurred related to legal and accounting services. Professional fees for the three-month period ended September 30, 2025 as compared to 2024 decreased by approximately $0.6 million. Professional fees for the nine-month period ended September 30, 2025, as compared to 2024, decreased by $4.3 million, which is directly related to the non-recurring transaction costs associated with the closing of the Business Combination that were incurred during the period ended September 30, 2024.

Previous wording

Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs. Technology fees increased by $0.2 million and $0.7 million and for the three and six-month period ended June 30, 2025, respectively, as compared to 2024.

Current wording

Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs. Technology fees increased by $0.2 million and $1.0 million and for the three and nine-month period ended September 30, 2025, respectively, as compared to 2024.

Previous wording

Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations. Interest expense decreased by $0.2 million and $0.7 million for the three and six-month period ended June 30, 2025, respectively, as compared to 2024 resulting from the repayment and restructuring of the related party debt obligations of BMS and the re-financing of the senior credit facility.

Current wording

Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations. Interest expense decreased by $0.1 million and $1.0 million for the three and nine-month period ended September 30, 2025, respectively, as compared to 2024 resulting from the repayment and restructuring of the related party debt obligations of BMS and the re-financing of the senior credit facility.

Previous wording

Our effective income tax rate was approximately 22% for the six-month period ended June 30, 2025 as compared to (15.2)% for the same period in 2024. The increase in our effective tax rate was related to the net income generated for the six-month period ended June 30, 2025.

Current wording

Our effective income tax rate was approximately 22% for the nine-month period ended September 30, 2025 as compared to (26)% for the same period in 2024. The increase in our effective tax rate was related to the net income generated for the nine-month period ended September 30, 2025.

Previous wording

As of June 30, 2025, we had $18.6 million outstanding under our Credit Agreement with Byline Bank, net of unamortized debt issuance costs. The associated debt facilities are as follows:

Current wording

As of September 30, 2025, we had $18.2 million outstanding under our Credit Agreement with Byline Bank, net of unamortized debt issuance costs. The associated debt facilities are as follows:

Previous wording

On December 23, 2024 (the “Credit Agreement Closing Date”), BMS, entered into a Credit Agreement (the “Credit Agreement”) with Byline Bank, as lender (the “Lender”), pursuant to which the Lender agreed, at the BMS’s request, to (i) make to BMS a term loan in the original principal amount of $20.3 million (the “Term Loan”), which was funded on the Credit Agreement Closing Date; (ii) make to BMS, from time to time, certain non-revolving loans (the “Non-Revolving Loans”) in an aggregate principal amount of up to $1.0 million (the “Non-Revolving Loan Commitment”), to be funded through, but excluding, the Maturity Date (as defined below); and (iii) issue to BMS, from time to time, letters of credit (the “Letters of Credit” and together with the Term Loan and Non-Revolving Loans, the “Loans”) until the earliest to occur of (a) the one year from the Credit Agreement Closing Date and (b) the date on which the Non-Revolving Loans are fully drawn. As of June 30, 2025 and December 31, 2024, the outstanding balance on the Term Loan was $18.6 million and $19.6 million, net of debt issuance costs, respectively.

Current wording

On December 23, 2024 (the “Credit Agreement Closing Date”), BMS, entered into a Credit Agreement (the “Credit Agreement”) with Byline Bank, as lender (the “Lender”), pursuant to which the Lender agreed, at the BMS’s request, to (i) make to BMS a term loan in the original principal amount of $20.3 million (the “Term Loan”), which was funded on the Credit Agreement Closing Date; (ii) make to BMS, from time to time, certain non-revolving loans (the “Non-Revolving Loans”) in an aggregate principal amount of up to $1.0 million (the “Non-Revolving Loan Commitment”), to be funded through, but excluding, the Maturity Date (as defined below); and (iii) issue to BMS, from time to time, letters of credit (the “Letters of Credit” and together with the Term Loan and Non-Revolving Loans, the “Loans”) until the earliest to occur of (a) the one year from the Credit Agreement Closing Date and (b) the date on which the Non-Revolving Loans are fully drawn. As of September 30, 2025 and December 31, 2024, the outstanding balance on the Term Loan was $18.2 million and $19.6 million, net of debt issuance costs, respectively.

Previous wording

Under the terms of the Credit Agreement, to the extent that BMS requests a Letter of Credit, the Non-Revolving Loan Commitment shall be permanently reduced in an amount equal to the amount of such Letter of Credit. The Non-Revolving Loans may not be requested by BMS and may only be advanced in connection with a repayment of a Letter of Credit (“LC Payment”). As of June 30, 2025 and December 31, 2024, there are no amount outstanding under the Non-Revolving Loan or Letters of Credit.

Current wording

Under the terms of the Credit Agreement, to the extent that BMS requests a Letter of Credit, the Non-Revolving Loan Commitment shall be permanently reduced in an amount equal to the amount of such Letter of Credit. The Non-Revolving Loans may not be requested by BMS and may only be advanced in connection with a repayment of a Letter of Credit (“LC Payment”). As of September 30, 2025 and December 31, 2024, there are no amounts outstanding under the Non-Revolving Loan or Letters of Credit.

Previous wording

The Loans (both principal and any remaining unpaid interest) made by the Lender to BMS are scheduled to mature and become immediately due and payable in full on December 23, 2029 (“Maturity Date”). The obligations under the Credit Agreement shall bear interest (i) as to the Term Loan, a per annum variable interest rate equal to the Applicable Margin (as defined in the Credit Agreement) plus the greater of (x) the Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Credit Agreement) and (y) one percent (1.00%) (the “Term Loan Interest Rate”); (ii) as to the Non-Revolving Loans or any reimbursement obligations relating to a Letter of Credit, at an interest rate equal to SOFR plus four percent (4.00%) per annum; and (iii) if any other obligations is created under the Loan Documents (as defined in the Credit Agreement), at the Term Loan Interest Rate. As of June 30, 2025 and December 31, 2024, the effective interest rate was 8.3%.

Current wording

The Loans (both principal and any remaining unpaid interest) made by the Lender to BMS are scheduled to mature and become immediately due and payable in full on December 23, 2029 (“Maturity Date”). The obligations under the Credit Agreement shall bear interest (i) as to the Term Loan, a per annum variable interest rate equal to the Applicable Margin (as defined in the Credit Agreement) plus the greater of (x) the Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Credit Agreement) and (y) one percent (1.00%) (the “Term Loan Interest Rate”); (ii) as to the Non-Revolving Loans or any reimbursement obligations relating to a Letter of Credit, at an interest rate equal to SOFR plus four percent (4.00%) per annum; and (iii) if any other obligations is created under the Loan Documents (as defined in the Credit Agreement), at the Term Loan Interest Rate. As of September 30, 2025 and December 31, 2024, the effective interest rate was approximately 8.2% and 8.3%, respectively.

Previous wording

During the period ending June 30, 2025, BMS entered into an interest rate swap agreement with a notional amount of $10 million in connection with the above-mentioned Credit Agreement. 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. 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.

Current wording

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. 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. 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.

Previous wording

As of June 30, 2025, the interest rate swap had a fair value of $0.15 million and was recorded as a liability and included in accounts payable, accrued expenses and other liabilities on the consolidated statement of financial condition. The Company has adopted the shortcut method allowing it to assume perfect hedge effectiveness. Changes in the effective portion of the swap’s fair value are recognized in accumulated other comprehensive income (“AOCI”).

Current wording

As of September 30, 2025, the interest rate swap had a fair value of $0.2 million and was recorded as a liability and included in accounts payable, accrued expenses and other liabilities on the condensed consolidated statement of financial condition. The Company has adopted the shortcut method allowing it to assume perfect hedge effectiveness. Changes in the effective portion of the swap’s fair value are recognized in accumulated other comprehensive income (“AOCI”).

Previous wording

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. 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

Current wording

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. 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.

Previous wording

Additionally, the Holdings Series B Stock carries a cumulative dividend at a rate of nine percent (7%) per annum, payable and compounded quarterly on the last day of each quarter. At the discretion of Holdings, the payment may be made in cash or up to 50% of the amount due, in duly authorized, validly issued, fully paid and non-assessable share of Holdings Series B Stock at a value of $10 per share. As of June 30, 2025 and December 31, 2024, included in accounts payable, accrued expenses and other liabilities on the accompanying consolidated statement of financial condition is an accrued dividend in the amount of $0.03 million that was paid subsequent to June 30, 2025 and December 31, 2024.

Current wording

Additionally, the Holdings Series B Stock carries a cumulative dividend at a rate of nine percent (7%) per annum, payable and compounded quarterly on the last day of each quarter. At the discretion of Holdings, the payment may be made in cash or up to 50% of the amount due, in duly authorized, validly issued, fully paid and non-assessable share of Holdings Series B Stock at a value of $10 per share. As of September 30, 2025 and December 31, 2024, included in accounts payable, accrued expenses and other liabilities on the accompanying condensed consolidated statements of financial condition is an accrued dividend in the amount of $0.03 million that was paid subsequent to September 30, 2025 and December 31, 2024.

Previous wording

In connection with the closing of the Business Combination, the Company paid approximately $3.4 million on these notes. In addition to the paydown, the noteholders (all of whom are stockholders and/or key employees) agreed to forgive the remaining accrued but unpaid interest of approximately $3.8 million and entered into new promissory notes in the principal amount of approximately $5.3 million in the aggregate. The amounts outstanding as of June 30, 2025 was $5.3 million. The amount outstanding as of December 31, 2024 was $5.4 million which included accrued interest that was paid subsequently. The terms of these new promissory notes provide for maturity on May 15, 2027 and carries an interest rate of Prime plus 1.00%, but no less than 7.50% per annum. Related interest expense was approximately $0.3 and $0.1 for the six-months ended June 30, 2025 and 2024, respectively.

Current wording

In connection with the closing of the Business Combination, the Company paid approximately $3.4 million on these notes. In addition to the paydown, the noteholders (all of whom are stockholders and/or key employees) agreed to forgive the remaining accrued but unpaid interest of approximately $3.8 million and entered into new promissory notes in the principal amount of approximately $5.3 million in the aggregate. The amounts outstanding as of September 30, 2025 was $5.3 million. The amount outstanding as of December 31, 2024 was $5.4 million which included accrued interest that was paid subsequently. The terms of these new promissory notes provide for maturity on May 15, 2027 and carries an interest rate of Prime plus 1.00%, but no less than 7.50% per annum. Related interest expense was approximately $0.4 million and $0.3 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The following table sets forth a summary of cash flows for the six-month periods ended June 30, 2025 and 2024:

Current wording

The following table sets forth a summary of cash flows for the nine-month periods ended September 30, 2025 and 2024:

Previous wording

Cash Flows from Operating Activities. Net cash provided by operating activities was $1.1 million for the six-month period ended June 30, 2025, compared to net cash used in of $2.1 million for the six-month period ended June 30, 2024, representing an increase of approximately $3.2 million or 150%. The increase was primarily attributable to the decrease in the net loss of approximately $2.3 million to net income of $0.4 million or a change of $2.7 million.

Current wording

Cash Flows from Operating Activities. Net cash provided by operating activities was $2.0 million for the nine-month period ended September 30, 2025, compared to net cash used in of $2.4 million for the nine-month period ended September 30, 2024, representing an increase of approximately $4.5 million or 185%. The increase was primarily attributable to the decrease in the net loss of approximately $3.5 million to net income of $2.1 million or a change of $5.5 million.

Previous wording

Cash Flows from Investing Activities. Net cash used in investing activities was $0.01 million for the six-month period ended June 30, 2025, compared with the $0.01 million for the six-month period ended June 30, 2024.

Current wording

Cash Flows from Investing Activities. Net cash used in investing activities was $0.1 million for the nine-month period ended September 30, 2025, compared with the $0.02 million for the nine-month period ended September 30, 2024.

Previous wording

Cash Flows from Financing Activities. Net cash used in financing activities was approximately $1.4 million for the six-month period ended June 30, 2025 compared to cash provided by financing activities of approximately $1.5 million for the six-month period ended June 30, 2024. The change is primarily related to the proceeds received from the Redeemable Convertible Preferred Financing and the exercise of warrants offset by the repayments of the BMS related party debt obligations.

Current wording

Cash Flows from Financing Activities. Net cash used in financing activities was approximately $2.1 million for the nine-month period ended September 30, 2025 compared to cash provided by financing activities of approximately $2.1 million for the nine-month period ended September 30, 2024. The change is primarily related to the proceeds received from the Redeemable Convertible Preferred Financing and the exercise of warrants offset by the repayments of the BMS related party debt obligations.

Previous wording

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. 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 4 in the consolidated financial statements as of and for the three and six-months periods ended June 30, 2025 and 2024.

Current wording

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. 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 4 in the condensed consolidated financial statements as of and for the three and nine-months periods ended September 30, 2025 and 2024.

Previous wording

Goodwill and other intangible assets are tested annually for impairment or if certain events occur indicating that the carrying amounts may be impaired. We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. 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. 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. If the estimated fair value is below carrying value, however, further analysis is required to determine the amount of the impairment. Additionally, if the carrying value of a reporting unit is zero or a negative value and it is determined that it is more likely than not the goodwill is impaired, further analysis is required. 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.

Current wording

Goodwill and other intangible assets are tested annually for impairment or if certain events occur indicating that the carrying amounts may be impaired. We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. 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. 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. If the estimated fair value is below the carrying value, however, further analysis is required to determine the amount of the impairment. Additionally, if the carrying value of a reporting unit is zero or a negative value and it is determined that it is more likely than not the goodwill is impaired, further analysis is required. 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.