BCG 10-K & 10-Q changes, risk factors and insider trading
Binah Capital Group, Inc. (also BCGWW) · Nasdaq · Finance Services · CIK 1953984 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “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. These risks and uncertainties include, but are not limited to, the following:”
New heading “Business and Industry Risks”
New heading “Regulatory and Compliance Risks”
New heading “Data Privacy and Cybersecurity Risks”
New heading “Public Company and Securities Market Risks”
New heading “We are currently operating in a period of economic uncertainty and geopolitical instability. 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.”
New heading “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.”
Removed heading “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. 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:”
Removed heading “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.”
Largest changes
“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.”see in full comparison
U.S. and global markets are experiencing volatility and disruption following the escalation of geopoliticalsee in full comparisontensions,tensions in multiple regions of theinvasionworld.ofRecently,UkraineinternationalbyrelationsRussiabetweenintheFebruary 2022U.S. andthe Israel-Hamas war. In response to the invasion of Ukraine byRussia,thecertainNorthMiddleAtlanticEasternTreatynationsOrganizationas(“NATO”)welldeployedasadditionalcertainmilitaryotherforcescountries,tohaseasternbeenEurope,strained, andthe 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. Certain countries, including the United States, have also provided andthey may continue toprovidedeterioratemilitary aid or other assistance to Ukraine and Israel during the ongoing military conflicts, increasing geopolitical tensions. 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.further. Although the length and impact of the ongoing militaryconflictconflictsin Ukraine and Israel isare 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. 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.
“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. …”see in full comparison
“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. 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:”see in full comparison
“We are currently operating in a period of economic uncertainty and geopolitical instability. 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.”see in full comparison
“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. These risks and uncertainties include, but are not limited to, the following:”see in full comparison
Full comparison: every changed paragraph (21)
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. These risks and uncertainties include, but are not limited to, the following:
Business and Industry Risks
Regulatory and Compliance Risks
Data Privacy and Cybersecurity Risks
Public Company and Securities Market Risks
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. 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:
We are currently operating in a period of economic uncertainty and geopolitical instability. 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.
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.
U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions,tensions in multiple regions of the invasionworld. ofRecently, Ukraineinternational byrelations Russiabetween inthe February 2022U.S. and the Israel-Hamas war. In response to the invasion of Ukraine by Russia, thecertain NorthMiddle AtlanticEastern Treatynations Organizationas (“NATO”)well deployedas additionalcertain militaryother forcescountries, tohas easternbeen Europe,strained, 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. Certain countries, including the United States, have also provided andthey may continue to providedeteriorate military aid or other assistance to Ukraine and Israel during the ongoing military conflicts, increasing geopolitical tensions. 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.further. Although the length and impact of the ongoing military conflictconflicts in Ukraine and Israel isare 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. 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.
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. 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. 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.
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. 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. 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. 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. 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. 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. 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. 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 could be adversely affected by changes in applicable tax laws, regulations, or administrative interpretations thereof. For example, the U.S. federal tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”), enacted in December 2017, resulted in fundamental changes to the Internal Revenue Code (“Code”), including, among many other things, a reduction to the federal corporate income tax rate, a limitation on the deductibility of business interest expense, a limitation on the deductibility of certain director and officer compensation expense, limitations on the use of net operating loss carrybacks and carryovers and changes relating to the scope and timing of U.S. taxation on earnings from international business operations. Subsequent legislation, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted on March 27, 2020, relaxed certain of the limitations imposed by the TCJA for certain taxable years, including the limitation on the use and carryback of net operating losses and the limitation on the deductibility of business interest expense. The exact impact of the TCJA and the CARES Act for future years is difficult to quantify, but these changes could materially adversely affect holders of our common stock. In addition, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which among other things, imposes a 1% excise tax on the fair market value of stock repurchased by “covered corporations” beginning in 2023. Other changes could be enacted in the future to increase the corporate tax rate, limit further the deductibility of interest or effect other changes that could have a material adverse effect on our business, results of operations and financial condition. 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.
Our Amended and Restated CertificatedCertificate 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. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act, and accordingly, both state and federal courts have jurisdiction to entertain such Securities Act claims. 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. 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 enforceability of similar choice of forum provisions in other companies’ certificates of incorporation and bylaws has been challenged in legal proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our Charter and Bylaws to be inapplicable or unenforceable in such action.
TakingWe advantageare ofa “smaller reporting company” and the reduced public company reporting and disclosure requirements applicable to “emergingsmaller growthreporting companies” may make the Company’sour common stock less attractive to investors.
We currently qualify as “smaller reporting company,” as defined in the Exchange Act. For 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:
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.
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. 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.
The JOBS Act provides that, so long as a company qualifies as an “emerging growth company,” it will, among other things:
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. 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. 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. 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. 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
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 ana emerging“smaller growthreporting 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. As a result of the complexity involved in complying with the rules and regulations applicable to public companies, our management’s attention may be diverted from other business concerns, which could harm our business, operating results, and financial condition. Although we have already engaged additional resources to assist us in complying with these requirements, our finance team is small and we may need to hire more employees in the future, or engage outside consultants, which will increase our operating expenses.
Management's Discussion & Analysis (MD&A)
Largest changes
“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.”see in full comparison
“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. 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.”see in full comparison
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 businesssee in full comparisoncombinationcombination, costs related to the re-financing of the senior credit facility, andre-financingshare-based compensation costs. 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. 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.
“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. 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 other comprehensive income (loss) (“OCI”) and included on the consolidated statements of other comprehensive income (loss).”see in full comparison
Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations. Interest expense decreased bysee in full comparison$1.1$1.9 million for the year ended December 31,20242025 as compared to20232024,resultingasfromatheresult of scheduled repaymentsandas well as the restructuring oftherelated party debt obligations ofBMS.BMS, re-financing of the senior credit facility and the reduction of interest rates that occurred during the second half of 2025.
Additionally, the Holdings Series A Stock carries a cumulative dividend at a rate of nine percent (9%) 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 A Stock at a value of $10 per share. 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. For thesee in full comparisonyearyears ended December 31, 2025 and 2024, the Company paid dividends under the Series APIPEStock in the amount of approximately$1.1$1.4 millionof which $0.56 million was paid in cashand$0.55$1.1wasmillion,paid in-kind.respectively.
Full comparison: every changed paragraph (33)
Results for the year ended December 31, 20242025 includedinclude 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, which compares to net income and total revenue of $0.5 million and approximately $168.0 million, respectively, for the year ended December 31, 2023.2024.
Total advisory and brokerage assets served were $29.9 billion at December 31, 2025, compared to $27.1 billion at December 31, 2024, compared to $23.9 billion at December 31, 2023.2024. 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, compared to $(3.6) billion for the same period in 2023.2024.
Net new advisory assets were $0.0 million for the year ended December 31, 2024,2025, compared to $(0.5)$0.0 million infor 2023.the year ended December 31, 2024. Advisory assets were $2.5$2.9 billion at December 31, 2024,2025, which is an increase of approximately 21%16% from the $2.1$2.5 billion at December 31, 2023.2024.
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, compared to $(3.1) billion in 2023.2024. Brokerage assets were $27.0 billion at December 31, 2025, an increase of approximately 10% from $24.5 billion at December 31, 2024, an increase of approximately 12% from $21.8 billion at December 31, 2023.2024.
Gross profit, a non-GAAP financial measure, was $32.0$37.8 million for the year ended December 31, 2024,2025, an increase of 0.6%approximately 12% from $31.8$33.7 million for the year ended December 31, 2023.2024. See the “Key Performance Metrics and Non-GAAP Financial Measures” section for additional information on gross profit.
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 combinationcombination, costs related to the re-financing of the senior credit facility, and re-financingshare-based compensation costs. 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. 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.
Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the United States financial markets. 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.
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. 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.
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 2024,2025, Fed policymakers maintainedlowered the target range for the federal funds rate atto 4.25%a range of 3.50% to 4.50%.3.75%.
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 itits obligations. 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, 2024,2025, and 20232024 for further details regarding our commission revenue by product category.
Sales based revenue decreasedincreased by approximately $11.7$8.4 million or 15.7%13.4% for the year ended December 31, 20242025 as compared to 2023.2024. Trailing based revenue increased by approximately $16.2$5.6 million or 19.0%7.3% for the year ended December 31, 20242025 as compared to 2023.2024. The decreaseincrease in sales based revenue for the year ended December 31, 20242025 as compared to 20232024 is attributable to aan decreaseincrease in the generation of transactional based products. The increase in the trailing based revenues is primarily due to volatility driven increases in trail eligible assets.
The decreaseincrease in interest and other income for the year ended December 31, 2024,2025, compared to 20232024, is primarily related to certainthe non-recurringincrease in the interest income itemsit earnedearns duringwith 2023.the Company’s clearing brokers.
For the year ended December 31, 2024,2025, the payout rate decreasedremained consistent as compared to 2023 as a result of the reduction in non-recurring commission products that carried a payout at 90%.2024.
Employee compensation and benefits for the year ended December 31, 20242025 increased by $2.2approximately $3.3 million which is directly related to the additional personnel costs attributed to the Company now operating as a public company.
Rent and occupancy remained relativerelatively consistent for the year ended December 31, 20242025 compared to 2023,2024, decreasing by 3.3%0.8% or $0.04$0.01 million.
Professional fees includes costs incurred related to legal and accounting services. Professional fees for the year ended December 31, 20242025 as compared to 20232024 increaseddecreased by $2.3$4.7 million which is directly related to non-recurring transaction costs associated with the Business Combination,Combination that was incurred during the re-financingyear ofended theDecember senior31, credit facility and specific costs related to the Company now operating as a public company.2024.
Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs. Technology fees decreasedincreased by $1.2approximately $1.7 million for the year ended December 31, 20242025 as compared to 2023.2024.
Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations. Interest expense decreased by $1.1$1.9 million for the year ended December 31, 20242025 as compared to 20232024, resultingas froma theresult of scheduled repayments andas well as the restructuring of the related party debt obligations of BMS.BMS, re-financing of the senior credit facility and the reduction of interest rates that occurred during the second half of 2025.
Other expense includes insurance, legal and regulatory settlements, travel-related expenses, office expenses, marketing and other miscellaneous expenses.
Our effective income tax rate was (45.09)%10.6% and (17.4945.1)% for the years ended December 31, 20242025 and 2023,2024, respectively. The change in our effective tax rate was primarily related to generation of taxable income for the changeyear inending deferredDecember adjustments.31, 2025 as opposed to a taxable loss incurred during the year ending December 31, 2024.
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 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.costs, respectively.
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. 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 amountamounts outstanding under the Non-Revolving Loan or Letters of Credit.
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 December 31, 2025 and 2024, the effective interest rate was 8.3%.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. 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.
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. 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 other comprehensive income (loss) (“OCI”) and included on the consolidated statements of other comprehensive income (loss).
The Term Loan must bewas used by BMS to refinance Existing Credit Facilities (as defined in the Credit Agreement) and the Non-Revolving Loans must be used solely to reimburse the Lender with respect to any Letters of Credit issued to BMS. The Term Loan refinanced and retired the previous Oak Street Funding Facility.
Additionally, the Holdings Series A Stock carries a cumulative dividend at a rate of nine percent (9%) 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 A Stock at a value of $10 per share. 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. For the yearyears ended December 31, 2025 and 2024, the Company paid dividends under the Series A PIPEStock in the amount of approximately $1.1$1.4 million of which $0.56 million was paid in cash and $0.55$1.1 wasmillion, paid in-kind.respectively.
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 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. 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, which is payable as of December 31, 2024.respectively.
Also,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. These subordinated promissory notes had a maturity date of May 30, 2023, and accrued interest at a rate of 10% annually. The interest on these notes continued to accrue until such time as these notes were paid or restructured.
In connection with the closing of the Business Combination, the Company paid approximately $3.5 million on these notes. In addition to the paydown, the noteholders agreed to forgive the remaining accrued but unpaid interest of approximately $3.8 million and entered into new promissory notes in the principal amount of approximately $5.3 million in the aggregate.aggregate, which remain outstanding as of December 31, 2025 and 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. AsRelated ofinterest was approximately $0.5 million and $0.4 million for the years ended December 31, 2024, there was approximately $0.1 interest that was accrued2025 and paid2024, subsequent to December 31, 2024.respectively.
Cash Flows from Operating Activities. 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 wasof $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 2023,2024, representing aan decreaseincrease of approximately $3.2$5.7 million or 124%.934%. The decreaseincrease was primarily attributable to the decrease in the net incomeloss offsetincurred byfor increasesthe inyear accountsended payable,December accrued31, expenses2024 andof commissionsapproximately payable.$6.4 million.
Cash Flows from Investing Activities. Net cash used in investing activities was $0.09approximately $0.06 million for the year ended December 31, 20242025 consistent with the $0.08 million for the year ended December 31, 2023.2024.
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 wasof 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, 2023.2024. 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 obligationsobligations, andprincipal thepayments re-financingrelated ofto the senior credit facility.facility and the payment of dividends to the Class A and Class B preferred stockholders.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the information previously disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
Sales-based revenue increased by approximately $2.3 million and decreased by approximatelysee in full comparison$2.6$0.3 million or12.5%15.0% and (1.0)% for the three-month and six-month period endedMarchJune31,30, 2026, as compared to 2025. Trailing based revenue increased by approximately$1.3$1.7 million and $3.0 million or6.1%9.0% and 7.6% for the three-month and six-month period endedMarchJune31,30, 2026, as compared to 2025. Thedecreaseincrease in sales-based revenue for the three-month period endedMarchJune31,30, 2026 is primarily related to an increase in the sales of insurance products and the slight decrease for the six-month period ended June 30, 2026 as compared to 2025 is attributable to a decrease in investment banking revenue from the prioryear.year, which is primarily offset by the increase in the sales of insurance based products. The increase in the trailing-based revenues is due to the increase in trail-based assets resulting from positive market volatility and positive net asset flows. Commission revenue is generated from brokerage assets. The following tables summarize the brokerage assets for the three-month and six-month periods endedMarchJune31,30, 2026 and 2025 (in billions):
Cash Flows from Operating Activities. Net cash provided by operating activities wassee in full comparison$0.5$1.7 million for thethree-monthsix-month period endedMarchJune31,30, 2026, compared to net cash provided by operating activities of $1.1 million for thethree-monthsix-month period endedMarchJune31,30, 2025, representingaandecreaseincrease of approximately $0.5 million or48.9%.46.5%. Thedecreaseincrease was primarily attributable to the increase in share-based compensation of $0.2 million and an increase in net income of approximately $1.8 million offset by a decrease in accounts payable, accrued expenses and other liabilities of approximately$2.4$2.8million, the increase in share-based compensation of $0.4 million and an increase in net income of approximately $0.9 million to net income of $1.9.million.
“Employee compensation and benefits for the three month period ended March 31, 2026 increased by approximately $0.6 million as compared to March 31, 2025, which is directly related to additional personnel costs attributed to the Company now operating as a public company, specifically the issuance and recognition of non-cash compensation awards to officers and directors during the period ended March 31, 2026.”see in full comparison
Results for thesee in full comparisonthree-monththree and six-month period endedMarchJune31,30, 2026 included net income of approximately$1.9$0.3 million and $2.2 million and total revenue of approximately$48.7$46.5 million and $95.2 million, respectively, which compares to a net incomeof approximately $1.0 million(loss) and total revenue of $(0.7) million and $0.4 million and approximately$48.9$41.5 million and $90.4 million, respectively, for thethree-monththree and six-month period endedMarchJune31,30, 2025.
“According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew by approximately 2% in the first quarter of 2026. The U.S. economy added roughly two hundred fifty thousand jobs in the first quarter of 2026, while the unemployment rate was 4.6% in the first quarter of 2026.”see in full comparison
“Employee compensation and benefits has remained stable during the three and six month periods ended June 30, 2026 decreasing by approximately $0.2 million for the three months ended June 30, 2026 and increasing by approximately $0.4 million for the six months ended June 30, 2026 as compared to June 30, 2025.”see in full comparison
Full comparison: every changed paragraph (43)
Results for the three-monththree and six-month period ended MarchJune 31,30, 2026 included net income of approximately $1.9$0.3 million and $2.2 million and total revenue of approximately $48.7$46.5 million and $95.2 million, respectively, which compares to a net income of approximately $1.0 million(loss) and total revenue of $(0.7) million and $0.4 million and approximately $48.9$41.5 million and $90.4 million, respectively, for the three-monththree and six-month period ended MarchJune 31,30, 2025.
Total advisory and brokerage assets served were $29.0$31.6 billion at MarchJune 31,30, 2026, compared to $25.7$27.8 billion at MarchJune 31,30, 2025. Total net new assets were $0.5$(2.2) billion and $(1.7) billion for the three-monththree and six-month period ended MarchJune 31,30, 2026, respectively, compared to $(0.20.9) billion and $(1.1) billion for the same period in 2025.
Net new advisory assets were $0.1$(0.1) billion and $0.0 billion for the three-month and six-month period ended MarchJune 31,30, 2026 compared to $0.1$(0.1) billion and $0.0 billion for the same period in 2025. Advisory assets were $2.8$3.3 billion at MarchJune 31,30, 2026, which is an increase of 13.9%20.5% as compared to $2.5$2.7 billion at MarchJune 31,30, 2025.
Net new brokerage assets were $0.4$(2.1) billion and $(1.7) for the three-monththree and six-month period ended MarchJune 31,30, 2026, compared to $(0.30.8) billion and $(1.1) billion for the same period in 2025. Brokerage assets were $26.2$28.3 billion at MarchJune 31,30, 2026, up 12.8%12.7% from $23.2$25.1 billion at MarchJune 31,30, 2025.
Gross profit, a non-GAAP financial measure, was $10.2$9.8 million and $20.0 million for the three-month and six-month period ended MarchJune 31,30, 2026, an increase of 18.5%12.6% and 15.3% from $8.6$8.8 million and $17.4 million for the same period in 2025. See the “Key Performance Metrics and Non-GAAP Financial Measures” section for additional information on gross profit.
According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew by approximately 2% in the first quarter of 2026. The U.S. economy added roughly two hundred fifty thousand jobs in the first quarter of 2026, while the unemployment rate was 4.6% in the first quarter of 2026.
Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Federal Reserve Board policy. During the NovemberJune 20252026 meeting, Federal Reserve Board policymakers held interest rates steady keeping to a target range for the federal funds rate in the 3.5% to 3.75% range. The equity markets decreasedincreased during the firstsecond quarter of 2026 resulting in the S&P 500 decreasingincreasing 4.3%.15.2%.
The following presents an analysis of our results of operations for the three and six month periods ended MarchJune 31,30, 2026 and 2025 (in thousands):
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 itits obligations. Accordingly, total commission revenue is reported on a gross basis. See Note 3 - Revenues From Contracts with Customers within the notes to the condensed consolidated financial statements for the three-monththree and six month periods ended MarchJune 31,30, 2026, and 2025 for further details regarding our commission revenue by product category.
The following tables sets forth the components of our commission revenue for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 (in thousands):
Sales-based revenue increased by approximately $2.3 million and decreased by approximately $2.6$0.3 million or 12.5%15.0% and (1.0)% for the three-month and six-month period ended MarchJune 31,30, 2026, as compared to 2025. Trailing based revenue increased by approximately $1.3$1.7 million and $3.0 million or 6.1%9.0% and 7.6% for the three-month and six-month period ended MarchJune 31,30, 2026, as compared to 2025. The decreaseincrease in sales-based revenue for the three-month period ended MarchJune 31,30, 2026 is primarily related to an increase in the sales of insurance products and the slight decrease for the six-month period ended June 30, 2026 as compared to 2025 is attributable to a decrease in investment banking revenue from the prior year.year, which is primarily offset by the increase in the sales of insurance based products. The increase in the trailing-based revenues is due to the increase in trail-based assets resulting from positive market volatility and positive net asset flows. Commission revenue is generated from brokerage assets. The following tables summarize the brokerage assets for the three-month and six-month periods ended MarchJune 31,30, 2026 and 2025 (in billions):
Advisory fees increased by approximately 5.7%11.0% and 8.3% for the three-monththree and six-month period ended MarchJune 31,30, 2026, as compared to the same period in MarchJune 31,30, 2025, due to positive returns in the market for the year ended December 31, 2025. Substantially all of our advisory fees are billed quarterly in advance and therefore the pricing of those assets were based on the results of the market as of December 31, 2025, which was an increase over the same period for the prior year.
The following tables summarizes the advisory assets as of MarchJune 31,30, 2026 and 2025 (in billions):
The following table summarizes activity impacting advisory assets for the periods ended MarchJune 31,30, 2026 and 2025 (in billions):
Interest and other income remained relatively stable during the three-month period ended June 30, 2026 as compared to same period in the prior year, increasing $0.1 million. The increase in interest and other income for the three-monthsix-month period ended MarchJune 31,30, 2026, compared to 2025 is related to a gain contingency that was realized during the periodfirst endedquarter March 31,of 2026 in the amount of $0.7 million.
For the three-month period ended MarchJune 31,30, 2026 the payout rate remained consistent, increasing by approximately 0.1%. For the six-month period ended June 30, 2026, the payout rate decreased by approximately 2.0%1.1% which is directly related to the investment banking revenue that was earned during the period ended MarchJune 31,30, 2025 that included a commission pay-out percentage of 90% to the advisors associated with such revenue.
Employee compensation and benefits has remained stable during the three and six month periods ended June 30, 2026 decreasing by approximately $0.2 million for the three months ended June 30, 2026 and increasing by approximately $0.4 million for the six months ended June 30, 2026 as compared to June 30, 2025.
Employee compensation and benefits for the three month period ended March 31, 2026 increased by approximately $0.6 million as compared to March 31, 2025, which is directly related to additional personnel costs attributed to the Company now operating as a public company, specifically the issuance and recognition of non-cash compensation awards to officers and directors during the period ended March 31, 2026.
Rent and occupancy remained relatively consistent for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026 as compared to MarchJune 31,30, 2025.
Professional fees includes costs incurred related to legal and accounting services. Professional fees for the three-monththree and six-month period ended MarchJune 31,30, 2026 as compared to same period in 2025 decreased by approximately 1.3%$0.2 million representing the stabilization of the professional fees associated with operating as a public company.
Technology fees primarily represent infrastructure costs that support the Company’s technology and communications costs. Technology fees increased by $0.06$0.1 million for the three-monththree and six-month period ended MarchJune 31,30, 2026, as compared to the same period in 2025.
Interest expense primarily includes interest associated with the Company’s credit facility and other debt obligations. Interest expense decreased by $0.05$0.03 million and $0.07 million for the three-monththree and six-month period ended MarchJune 31,30, 2026, as compared to the same period in 2025 resulting from the decrease in the interest rate associated with our senior credit facility.
Our effective income tax rate was approximately 28%20% for the three-month period ended MarchJune 31,30, 2026 and 27% for the six-month period ended June 30, 2026 as compared to 23%(17)% and 58% for the same periodperiods in 2025. The increasechange in our effective tax rate was related to the increase in net income generated for the three-month period ended MarchJune 31,30, 2026 and changes in state taxes, warrant revaluations, and other permanent differences for the six-month period ended June 30, 2026.
As of MarchJune 31,30, 2026, we had $17.2$16.7 million outstanding under our Credit Agreement with Byline Bank, net of unamortized debt issuance costs. The associated debt facilities are as follows:
On December 23, 2024 (the “Credit Agreement Closing Date”), BMS entered into a Credit Agreement (the “Credit Agreement”) with Byline Bank, as lender (the “Lender”), pursuant to which the Lender agreed, at BMS’s request, to (i) make to BMS a term loan in the original principal amount of $20.3 million (the “Term Loan”), which was funded on the Credit Agreement Closing Date; (ii) make to BMS, from time to time, certain non-revolving loans (the “Non-Revolving Loans”) in an aggregate principal amount of up to $1.0 million (the “Non-Revolving Loan Commitment”), to be funded through, but excluding, the Maturity Date (as defined below); and (iii) issue to BMS, from time to time, letters of credit (the “Letters of Credit” and together with the Term Loan and Non-Revolving Loans, the “Loans”) until the earliest to occur of (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 MarchJune 31,30, 2026 and December 31, 2025, the outstanding balance under the Term Loan was $17.2$16.7 million and $17.7 million, respectively, net of unamortized debt issuance costs.
Under the terms of the Credit Agreement, to the extent that BMS requests a Letter of Credit, the Non-Revolving Loan Commitment shall be permanently reduced in an amount equal to the amount of such Letter of Credit. The Non-Revolving Loans may not be requested by BMS and may only be advanced in connection with a repayment of a Letter of Credit (“LC Payment”). As of MarchJune 31,30, 2026 and December 31, 2025, the amounts outstanding under the Non-Revolving Loan or Letter of Credit was $0.05 million and $0.00 million, respectively. The Letters of Credit were issued to support two office leases. The Letters of Credit are due on demand and carry an interest rate at the same rate as the Term Loan as outlined below.
The Loans (both principal and interest) made by the Lender to BMS is scheduled to mature and become immediately due and payable in full on December 23, 2029 (“Maturity Date”). The obligations under the Credit Agreement shall bear interest (i) as to the Term Loan, a per annum variable interest rate equal to the Applicable Margin (as defined in the Credit Agreement) plus the greater of (x) the Term Secured Overnight Financing Rate (“SOFR”) (as defined in the Credit Agreement) and (y) one percent (1.00%) (the “Term Loan Interest Rate”); (ii) as to the Non-Revolving Loans or any reimbursement obligations relating to a Letter of Credit, at an interest rate equal to the Term SOFR plus four percent (4.00%) per annum; and (iii) if any other obligations is created under the Loan Documents (as defined in the Credit Agreement), at the Term Loan Interest Rate. As of MarchJune 31,30, 2026 and December 31, 2025, the effective interest rate was approximately 7.7%7.5% and 7.9%, respectively.
As of MarchJune 31,30, 2026 and December 31, 2025, the interest rate swap had a fair value liability of $0.07 and $0.2 million, respectively and is included in accounts payable, accrued expenses and other liabilities on the consolidated statement of financial conditions. 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”) and included on the Condensed Consolidated Statement of Other Comprehensive Income.Income (Loss).
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, which commenced with its fiscal quarter ended on March 31, 2025, (1i) 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 MarchSeptember 31,30, 2026,2025, 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.
Also, in accordance with the Credit Agreement, BMS deposited $1.0 million into an A/P Reserve Account and is classified as restricted cash. During the period ended MarchJune 31,30, 2026, $0.5 million was released from the A/P Reserve Account and accordingly the balance of the A/P Reserve Account as of MarchJune 31,30, 2026 is $0.5 million.
The minimum calendar maturities of the Term Loan as of MarchJune 31,30, 2026, are as follows (in thousands):
As of MarchJune 31,30, 2026 and December 31, 2025, the Company accrued 50% of the dividend to be paid in cash in the approximate amount of $0.2 million and paid an in-kind dividend in the approximate amount of $0.2 million.
The Company, at its option, may redeem the Series A Stock on any anniversary of the Funding Date up to anand including the fourth anniversary of the Funding Date at the following redemption prices:
Additionally, the Series B Stock carries a cumulative dividend at a rate of nineseven 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 MarchJune 31,30, 2026 and December 31, 2025, 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 subsequently to MarchJune 31,30, 2026 and December 31, 2025.
The Company may, at its option, in whole, or part, redeem the Holdings Series B Stock any time after the first anniversary of the date of the Subscription Agreement at a redemption price equal to the greater of (i) $12.00 per share of Holdings Series B Stock, plus accrued but unpaid dividends or (A) 1.20 multiplied by (B) the volume weighted average price for 20 trading days during the 30-day period immediately prior to the redemption; provided that such price shall not be greater than $20.00.
In connection with the restructuring of these notes, 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 MarchJune 31,30, 2026 and December 31, 2025 was $5.3 million. 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 $0.1 million for the three months ended MarchJune 31,30, 2026 and 2025 and $0.3 million for the six months ended June 30, 2026 and 2025.
The following table sets forth a summary of cash flows for the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025:
Cash Flows from Operating Activities. Net cash provided by operating activities was $0.5$1.7 million for the three-monthsix-month period ended MarchJune 31,30, 2026, compared to net cash provided by operating activities of $1.1 million for the three-monthsix-month period ended MarchJune 31,30, 2025, representing aan decreaseincrease of approximately $0.5 million or 48.9%.46.5%. The decreaseincrease was primarily attributable to the increase in share-based compensation of $0.2 million and an increase in net income of approximately $1.8 million offset by a decrease in accounts payable, accrued expenses and other liabilities of approximately $2.4$2.8 million, the increase in share-based compensation of $0.4 million and an increase in net income of approximately $0.9 million to net income of $1.9.million.
Cash Flows from Investing Activities. Net cash used in investing activities was $0.01 million for the three-monthsix-month period ended MarchJune 31,30, 2026, compared with the $0.01 million for the three-monthsix-month period ended MarchJune 31,30, 2025.
Cash Flows from Financing Activities. Net cash used in financing activities was approximately $0.7$1.4 million for the three-monthsix-month periodperiods ended MarchJune 31,30, 2026 compared to net cash used in financing activities of approximately $0.7 million for the three-month period ended March 31,and 2025.
The following table summarizes our contractual obligations and other commitments as of MarchJune 31,30, 2026:
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 3 in the condensed consolidated financial statements as of and for the three-month periods ended March 31, 2026 and 2025.
For additional information see Note 3 in the condensed consolidated financial statements as of and for the three and six-month periods ended June 30, 2026 and 2025.
BCG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 3 Form 4 filings (2 insiders, 2 trade dates, 9,000 shares, about $13.9K) and open-market sales in 0 filings. Net open-market shares: 9,000 (purchases minus sales); net value about $13.9K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-04 | Gould Craig |
Open-market purchase | 3,000 | $1.30 | $3.9K |
| 2026-05-19 | Gould Craig |
Open-market purchase | 3,000 | $1.68 | $5.0K |
| 2026-05-19 | Shane David M. |
Open-market purchase | 3,000 | $1.66 | $5.0K |
Well-known investors holding BCG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 26,702 | $53.7K | — | Sold out |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 32,395 | $49.9K | 0.0% | New position |