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United States securities and exchange commission logo
October 18, 2023
Michael Nessim
Chief Executive Officer
Binah Capital Group, Inc.
17 Battery Place, Room 625
New York, New York 10004
Re: Binah Capital
Group, Inc.
Amendment No. 3 to
Registration Statement on Form S-4
Filed September 22,
2023
File No. 333-269004
Dear Michael Nessim:
We have reviewed your amended registration statement and have the
following
comment(s).
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe a comment applies to your
facts and circumstances
or do not believe an amendment is appropriate, please tell us why in
your response.
After reviewing any amendment to your registration statement and
the information you
provide in response to this letter, we may have additional comments.
Unless we note otherwise,
any references to prior comments are to comments in our May 31, 2023
letter.
Amendment #3 to the Form S-4 Filed September 22, 2023
Summary of the Proxy Statement / Prospectus
Wentworth Management Services LLC, page 22
1. We note your changed
disclosure on the cover page clarifying that Wentworth owns ten
entities, four of which
are broker-dealers. Please similarly revise your disclosure here and
elsewhere, as
applicable.
Non-GAAP Financial Measures, page 97
2. We note your response
to comment 3 and revised disclosures on pages 98-99 removing
the term "pro forma"
from your non-GAAP measure descriptions. However, we also note
your prior response to
comment 4 to our comment letter dated February 24, 2023, in
which you state that
the non-GAAP measures are presented as if the World Equity Group,
Inc. ("WEG")
acquisition, which closed in May 2021 had occurred on January 1, 2019.
Michael Nessim
FirstName LastNameMichael Nessim
Binah Capital Group, Inc.
Comapany
October 18,NameBinah
2023 Capital Group, Inc.
October
Page 2 18, 2023 Page 2
FirstName LastName
Accordingly, it is unclear how this presentation and amounts prepared,
on a pro forma
basis, comply with the Non-GAAP Financial Measures Compliance &
Disclosure
Interpretations ("Non-GAAP Financial Measure C&DI"). Please consider
revising your
presentation of non-GAAP financial measures such that you do not
present the
information and amounts as if the WEG acquisition had occurred on
January 1, 2019, or
tell us why you believe this presentation is appropriate.
3. We note your response to comment 4. In addition to the above comment,
please revise
your disclosures to ensure that the items presented in table on page
98 agree to related line
items provide in your financial statements. In this regard we note
that Total Revenue and
Cost of Revenue on page 98 for 2021 do not agree to the amount in the
audited
Consolidated Statements of Operations on page F-63. Please revise your
disclosures to
ensure your presentation for these line items (e.g., Revenues, Cost of
Revenues, etc.) starts
with and includes a reconciliation to the nearest GAAP measures in the
Company's
financial statements. Refer to Question 102.10(b) of the Non-GAAP
Financial Measures
C&DI.
4. We note your response to comment 5 and revised disclosure in footnote
3 on page 99 that
the column for Post Close Year Ended December 31, 2022 includes
estimated public
company costs that will burden the Company. Given that these appear to
be hypothetical
and estimated future public company costs that have not yet been
incurred in the historical
financial statements, it is unclear how this presentation complies
with the Non-GAAP
Financial Measure C&DI. Please consider revising to remove this
presentation, or tell us
why you believe this presentation complies with the non-GAAP C&DI.
5. Please tell us your consideration, or consider revising, to include
your non-GAAP
financial measures and information for the six months ended June 30,
2023 and 2022.
Unaudited Pro Forma Condensed Combined Financial Information
Unaudited Pro Forma Condensed Combined Statement of Operations for the Year
Ended
December 31, 2022, page 130
6. We note your response to comment 9 as well as your revised disclosure
on page 133
stating that the underlying effective tax rate of the combined group
for the year ended
December 31, 2022, and the period ended June 30, 2023 would have been
0.0%.
Considering that the Company is presenting a positive income before
income tax for the
year ended December 31, 2022, please tell us and revise your
disclosure to explain why
you have determined that the effective tax rate for the year ended
December 31, 2022
would have been 0.0%.
Management's Discussion and Analysis of Financial Condition and Results of
Operations of
Wentworth Results of Operations
Commissions, page 164
7. We note your response to comment 11 and reissue the comment. Please
tell us and revise
Michael Nessim
FirstName LastNameMichael Nessim
Binah Capital Group, Inc.
Comapany
October 18,NameBinah
2023 Capital Group, Inc.
October
Page 3 18, 2023 Page 3
FirstName LastName
your disclosures to more clearly describe the contractual arrangement
terms of the trailing
commission revenues, and a more fulsome explanation as to how your
accounting policy
addresses those contractual terms and complies with ASC 606 citing the
specific
authoritative literature. In addition, please revise to disclose your
average commission fee
rates by product type, for both sales-based and trailing, for the
periods your financial
statements are presented, or tell us where you have included this
disclosure.
8. We note that total commissions revenue for the years ended December
31, 2022 and 2021
on page 165 do not agree with the amounts for these periods as
disclosed on page 163 and
page F-63, as it appears these amounts also include your advisory fee
revenues. Please
revise your disclosure accordingly.
9. We note your response to comment 13 and reissue the comment in part.
Please quantify
the amount of trail eligible assets at the end of each reporting
period. If these assets are
included in or are classified as brokerage assets, please revise your
disclosures to clarify
and further, quantify which amounts of the brokerage assets relate to
sales-based vs.
trailing commissions. In addition, revise to include a discussion of
changes in the balance
of the trail eligible assets and brokerage assets from period to
period and for each of the
periods presented in the filing. For example, quantify the impact and
explain the change
due to inflows, outflows, market appreciation (depreciation), business
combination and
other material items.
Advisory Fees, page 165
10. Please revise to disclose the advisory assets at December 31, 2022 and
December 31,
2021. In addition, revise to include a discussion of the movements
changes in your
advisory assets from period to period and for each of the periods
presented in the filing.
For example, quantify the impact of the change due to inflows,
outflows, market
appreciation (depreciation), business combination and other material
items.
Notes to the Consolidated Financial Statements
3. Business Combinations, page F-70
11. We note your response to comment 18 stating that the supplemental pro
forma disclosure
on pages F-70 and F-71 of the Amendment includes WEG revenue only.
However, we
note that this appears to be inconsistent with the paragraph preceding
the table on page F-
71, which states that the information represents revenue and earnings
of the combined
entity had the acquisition date been January 1, 2021, as well as the
requirements in ASC
805-10-50-2(h)(3) which require disclosure of the revenue and earnings
of the combined
entity. Please consider revising your presentation to present
supplemental pro forma
information of the combined entity rather than WEG only.
Signatures, page II-9
12. Please provide the second signature block as required by Form S-4.
Michael Nessim
Binah Capital Group, Inc.
October 18, 2023
Page 4
General
13. We note the disclosure on the cover page regarding the potential
purchase of up to
1,500,000 shares of Series A Convertible Preferred Stock, which under
certain conditions
will be convertible into shares of Holdings Common Stock, in a private
placement in
connection with the closing of the Business Combination. Please
highlight material
differences between the terms and prices of securities issued at the
time of the IPO as
compared to private placements at the time of the business
combination. Disclose if the
SPAC's sponsors, directors, or officers will participate in the
private placement. Please
also refer to our prior comment 14 in our letter to you dated February
24, 2023.
Please contact Michael Henderson at 202-551-3364 or Robert Klein at
202-551-3847 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Susan Block at 202-551-3210 or John Dana Brown at 202-551-3859 with any
other
questions.
FirstName LastNameMichael Nessim Sincerely,
Comapany NameBinah Capital Group, Inc.
Division of
Corporation Finance
October 18, 2023 Page 4 Office of Finance
FirstName LastName