Binah Capital Group, Inc. Liquidation Value

Binah Capital Group (BCG) is a retail wealth management consolidator operating four broker-dealers, three RIAs, and three insurance entities. Under a liquidation lens, the company presents a deeply negative recovery posture to common equity. MFFAIS reports a cash liquidation value of approximately negative $9.8 million and a liquid liquidation value of approximately $2.6 million as of the period end March 31, 2026. These figures reflect the structural reality of BCG's balance sheet: the tangible asset base is thin relative to the liability stack, and the vast majority of balance-sheet value is goodwill and other intangibles, which receive a zero recovery haircut under this lens.

The liability stack is substantial and multi-layered. Identified fixed obligations total $27.4 million: (1) $17.8 million in Byline Bank term loan principal maturing December 2029 at approximately 7.7% effective rate, with $10.2 million back-loaded to the 2029 bullet; (2) $5.3 million in affiliate promissory notes maturing May 2027 at Prime plus 1% (floor 7.5%); and (3) $4.3 million in operating lease obligations extending through the 3-5 year bucket. These obligations are carried at face value in a liquidation scenario and do not extinguish without full satisfaction.

Above common equity in the capital structure sits 1,644,000 shares of Series A Redeemable Convertible Preferred Stock with liquidation preferences escalating to $15.00/share prior to the third anniversary of the March 2024 funding date (i.e., the current period), equating to a liquidation claim of approximately $24.7 million at the $15.00 tier, before any accrued dividends. An additional 9% cumulative cash/PIK dividend is compounding quarterly. Series B Preferred (150,000 shares) adds a further redemption feature at $12.00/share minimum plus accrued dividends. The Series A preferred liquidation preference alone materially exceeds any plausible net tangible asset recovery, leaving common equity with no realistic recovery in a liquidation scenario.

Compared to the prior filing (10-K for year ended December 31, 2025), the current quarter shows modest debt paydown on the term loan ($17.7M to $17.2M net of issuance costs) and $0.5M release of restricted cash from the A/P Reserve Account. Series A shares outstanding increased from 1,626,000 to 1,644,000, reflecting continued PIK dividend issuance, which incrementally increases the preferred liquidation claim. Operating cash generation was $0.5M for Q1 2026, down from $1.1M in Q1 2025, reflecting working capital drag. The goodwill impairment test as of year-end 2025 showed fair value approximately 225% above carrying value using guideline public company method, but this is a going-concern measure with no relevance to liquidation recovery. Filing discusses goodwill and intangible asset impairment testing in MD&A but does not separately tag goodwill or intangible asset carrying values in the Q1 2026 XBRL submission.