5 unchanged sentences
Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:
−Removed: • Our revenues and results of operations are volatile and difficult to predict.
−Removed: • Conditions in the financial markets and general economic conditions, including increased inflation and a rising interest rate environment, have impacted and may continue to impact our ability to generate business and revenues, which may cause significant fluctuations in our stock price.
+Added: • Our revenues and results of operations are volatile and difficult to predict and have been impacted by recent divestiture transactions.
+Added: • Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs, retaliatory measures and the resulting consequences, may have adverse impacts on our business, results of operations, and financial condition.
• Our exposure to legal liability is significant and could lead to substantial damages.
−Removed: • Events and developments arising out of our investment in Freedom VCM and our prior business relationship with Brian Kahn has had and may continue to have adverse effects on our business, results of operations, reputation, and stock price.
−Removed: • Financial services firms have been subject to increased scrutiny over the last several years, increasing the risk of financial liability and reputational harm resulting from adverse regulatory actions.
−Removed: • We have identified material weaknesses in internal control over financial reporting which exposes us to additional risks and uncertainties and could cause the market value of our securities to decline or impact our ability to access the capital markets.
+Added: • Recent events and developments related to our investment in Freedom VCM and our prior business relationship with Brian Kahn and related to the SEC subpoenas we received have had and may continue to have adverse effects on our business, results of operations, reputation, and stock price.
+Added: • We may incur losses as a result of ineffective risk management processes and strategies.
+Added: • If we cannot meet our future capital requirements, we may be unable to develop and enhance our services, take advantage of business opportunities and respond to competitive pressures.
+Added: • We may suffer losses if our reputation is harmed.
• Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our financial condition, results of operations and business and the price of our common stock and other securities.
1 unchanged sentence
• Our corporate finance and strategic advisory engagements are singular in nature and do not generally provide for subsequent engagements.
+Added: • We are subject to net capital and other regulatory capital requirements;
+Added: failure to comply with these rules would significantly harm our business.
• We have made and may make investments in relatively high-risk, illiquid assets that often have significantly leveraged capital structures, and we may fail to realize any profits from these activities for a considerable period of time or lose some or all of the principal amount we invest in these activities.
• We are exposed to credit risk from a variety of our activities, including loans, lines of credit, guarantees and backstop commitments, and we may not be able to fully realize the value of the collateral securing certain of our loans.
−Removed: • We may incur losses as a result of “guarantee” based engagements that we enter into in connection with our auction and liquidation solutions business.
+Added: • We have had and may experience write downs of our investments and other losses related to the valuation of our investments and volatile and illiquid market conditions.
• We depend on financial institutions as primary clients for our financial consulting business.
Consequently, the loss of any financial institutions as clients may have an adverse impact on our business.
−Removed: • Poor investment performance may decrease assets under management and reduce revenues from and the profitability of our asset management business.
−Removed: • Dial-up and DSL pay accounts may decline faster than expected and adversely impact our business.
−Removed: • Our consumer businesses purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.
−Removed: • The failure of our licensees to sell products that generate royalties to us, to pay us royalties pursuant to their license agreements with us, or to renew these agreements could negatively affect our results of operations and financial condition.
+Added: • If we are unable to attract and retain qualified personnel, we may not be able to compete successfully in our industry.
• Significant disruptions of information technology systems, breaches of data security, or unauthorized disclosures of sensitive data or personally identifiable information could adversely affect our business, and could subject us to liability or reputational damage.
−Removed: • Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control and could also limit the market price of our stock.
−Removed: • Because of their significant stock ownership, some of our existing stockholders will be able to exert control over us and our significant corporate decisions.
−Removed: • Our common stock price may fluctuate substantially, and your investment could suffer a decline in value.
−Removed: • We may not pay dividends regularly or at all in the future.
+Added: • Our Chairman and Co-Chief Executive Officer is a party to a credit agreement pursuant to which he has pledged as collateral the substantial majority of his common stock in our Company to a bank, and any foreclosure on such stock or the sale or attempted sale of such common stock, could adversely impact the price of our common stock and result in negative publicity.
+Added: • We did not pay dividends with respect to shares of our preferred stock and common stock and may not pay dividends regularly or at all in the future.
• Our level of indebtedness, and restrictions under such indebtedness, could adversely affect our operations and liquidity.
−Removed: • The price of our securities may be adversely affected by third parties who raise allegations about our Company.
+Added: • Our publicly traded senior notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future.
+Added: • The indenture under which our senior notes were issued contains limited protection for holders of our publicly traded senior notes.
+Added: • We have and may continue to issue additional notes.
+Added: • The rating for the 5.00% 2026 Notes, 5.25% 2028 Notes, 6.50% 2026 Notes, 5.50% 2026 Notes, or 6.00% 2028 Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
Risks Related to Global and Economic Conditions and International Operations
−Removed: Our revenues and results of operations are volatile and difficult to predict.
+Added: Our revenues and results of operations are volatile and difficult to predict and have been impacted by recent divestiture transactions.
Our revenues and results of operations fluctuate significantly from quarter to quarter, due to a number of factors.
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• Our ability to attract new clients and obtain additional business from our existing client base;
−Removed: • The number, size and timing of mergers and acquisition transactions, capital raising transactions and other strategic advisory services where we act as an adviser on our Auction and Liquidation and investment banking engagements;
+Added: • The number, size and timing of M&A transactions, capital raising transactions and investment banking engagements;
• The extent to which we acquire assets for resale, or guarantee a minimum return thereon, and our ability to resell those assets at favorable prices;
−Removed: • Variability in the mix of revenues from the Auction and Liquidation and Financial Consulting businesses;
+Added: • Variability in the mix of revenues from the Financial Consulting businesses;
• The rate of decline we experience from our dial-up and DSL Internet access pay accounts in our UOL business as customers continue to migrate to broadband access which provides faster Internet connection and download speeds offered by our competitors;
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We rely on projections of revenues in developing our operating plans for the future and will base our expectations regarding expenses on these projections and plans.
−Removed: If we inaccurately forecast revenues and/or earnings, or fail to accurately project expenses, we may be unable to adjust our spending in a timely manner to compensate for these inaccuracies and, as a result, may suffer operating losses and such losses could have a negative impact on our financial
−Removed: condition and results of operations.
+Added: If we inaccurately forecast revenues and/or earnings, or fail to accurately project expenses, we may be unable to adjust our spending in a timely manner to compensate for these inaccuracies and, as a result, may suffer operating losses and such losses could have a negative impact on our financial condition and results of operations.
If, for any reason, we fail to meet company, investor or analyst projections of revenue, growth or earnings, the market price of the common stock could decline and you may lose all or part of your investment.
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• Our opportunity to act as underwriter or placement agent could be adversely affected by a reduction in the number and size of capital raising transactions or by competing sources of equity.
−Removed: • The number and size of mergers and acquisitions transactions or other strategic advisory services where we act as adviser could be adversely affected by continued uncertainties in valuations related to asset quality and creditworthiness, volatility in the equity markets, and diminished access to financing.
+Added: • The number and size of M&A transactions or other strategic advisory services where we act as adviser could be adversely affected by continued uncertainties in valuations related to asset quality and creditworthiness, volatility in the equity markets, and diminished access to financing.
• Market volatility could lead to a decline in the volume of transactions that we execute for our customers and, therefore, to a decline in the revenue we receive from commissions and spreads.
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As a result of the international nature of our business, we are subject to the risks arising from adverse changes in global economic and political conditions.
−Removed: Uncertainty about the effects of current and future economic and political conditions, including acts of war, aggression or terrorism, on us, our customers, suppliers and partners makes it difficult for us to forecast operating results and to make decisions about future investments.
+Added: An unpredictable or volatile political environment in the United States or globally, reductions in government spending, concerns related to the U.S.
+Added: debt ceiling, the imposition of tariffs and retaliatory responses, and uncertainty about the effects of current and future economic and political conditions, including acts of war, aggression or terrorism, on us, our customers, suppliers and partners, makes it difficult for us to forecast operating results and to make decisions about future investments.
Deterioration in economic conditions in any of the countries in which we do business could result in reductions in sales of our products and services and could cause slower or impaired collections on accounts receivable, which may adversely impact our liquidity and financial condition.
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We focus principally on certain sectors of the economy in our investment banking operations, and deterioration in the business environment in these sectors or a decline in the market for securities of companies within these sectors could harm our business.
−Removed: Volatility in the business environment in the industries in which our clients operate or in the market for securities of companies within these industries could adversely affect our financial results and the market value of our common stock.
+Added: Volatility in the business environment in the industries in which our clients operate or in the market for securities of companies within these industries could adversely affect our financial results and the market value of our preferred stock, common stock and senior notes.
The business environment for companies in some of these industries has been subject to high levels of volatility in recent years, and our financial results have consequently been subject to significant variations from year to year.
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Further, our ability to sell assets may be impaired if other market participants are seeking to sell similar assets at the same time.
−Removed: Our clients engaging us with respect to mergers and acquisitions often rely on access to the secured and unsecured credit markets to finance their transactions.
+Added: Our clients engaging us with respect to M&A often rely on access to the secured and unsecured credit markets to finance their transactions.
The lack of available credit and the increased cost of credit could adversely affect the size, volume and timing of our clients’ merger and acquisition transactions-particularly large transactions-and adversely affect our investment banking business and revenues.
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New regulations or guidance relating to climate change, as well as the perspectives of regulators, stockholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.
−Removed: The risks associated with, and the perspective of regulators, shareholders, employees and other stakeholders regarding, climate change are continuing to evolve rapidly, which can make it difficult to assess the ultimate impact on us of climate change-related risks and uncertainties, and we expect that climate change-related risks will increase over time.
+Added: The risks associated with, and the perspective of regulators, shareholders, employees and other stakeholders regarding, climate change are continuing to evolve rapidly and in some cases greatly diverge, which can make it difficult to assess the ultimate impact on us of climate change-related risks and uncertainties, and we expect that climate change-related risks will increase over time.
Our third-party contract manufacturers are located across several countries in Asia, which could expose us to risks associated with doing business in those geographic areas.
−Removed: All of our production is performed by third-party contract manufacturers, including original design manufacturers, in Taiwan, China, Thailand, Vietnam, Cambodia, India, Korea and Philippines.
+Added: All of our production is performed by third-party contract manufacturers, including original design manufacturers, in Taiwan, China, Thailand, Vietnam, Cambodia, India, South Korea and Philippines.
Our global manufacturing suppliers in Asia and other countries could be adversely affected by changes in the interpretation and enforcement of legal standards, strains on available labor pool, changes in labor costs and other employment dynamics, high turnover among skilled employees, infrastructure issues, import-export issues, cross-border intellectual property and technology restrictions, currency transfer restrictions, natural disasters, regional or global pandemics, conflicts or disagreements between the United States and some other countries, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe.
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Any material interruption in the manufacture of our products could likely result in delays in shipment, lost sales and revenue, and damage to our reputation in the market, all of which would harm our business and results of operations.
−Removed: Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs and the resulting consequences, may have adverse impacts on our business, results of operations, and financial condition.
+Added: Changes in trade policy and regulations in the United States and other countries, including changes in trade agreements and the imposition of tariffs, retaliatory measures and the resulting consequences, may have adverse impacts on our business, results of operations, and financial condition.
In recent years, the U.S.
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Given our contract manufacturing and logistic providers in those countries, policy or regulations changes in the United States or other countries present particular risks for us.
−Removed: New or increased tariffs could adversely affect many of our products.
−Removed: There also are risks associated with retaliatory tariffs and resulting trade wars.
+Added: The new administration has imposed, and has indicated it plans to continue to impose, tariffs on various U.S.
+Added: trading partners, and those trading partners have retaliated or threatened to retaliate with tariffs on U.S.
+Added: New or increased tariffs, retaliatory tariffs and resulting trade wars could adversely affect many of our products.
We cannot predict future trade policy and regulations in the United States and other countries, the terms of any renegotiated trade agreements or treaties, or tariffs and their impact on our business.
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In addition, future results of operations could be adversely affected if reserves relating to these legal liabilities are required to be increased or legal proceedings are resolved in excess of established reserves.
−Removed: Events and developments arising out of our investment in Freedom VCM and our prior business relationship with Brian Kahn has had and may continue to have adverse effects on our business, results of operations, reputation, and stock price.
−Removed: On August 21, 2023, we completed the FRG take-private transaction, as further described in Item 1.
−Removed: Business – Recent Developments – FRG Take-Private and Related Transactions.
+Added: Recent events and developments related to our investment in Freedom VCM and our prior business relationship with Brian Kahn and related to the SEC subpoenas we received have had and may continue to have adverse effects on our business, results of operations, reputation, and stock price.
+Added: On August 21, 2023, we completed the FRG take-private transaction.
In November 2023, we learned from news reports that Mr.
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While we had no involvement with, or knowledge of, any of the alleged misconduct concerning that hedge fund (and each of the separate review and investigations undertaken by the Audit Committee of our Board of Directors confirmed this), as a result of these matters we have experienced and will likely continue to experience adverse impacts on our business, results of operations, reputation, and/or stock price.
−Removed: These adverse impacts arise and will likely continue to arise out of current and future legal proceedings initiated since the November 2023 news reports, the many continuing unfounded allegations by short sellers and others, the substantial short pressure on our stock price (for further information, see the Risk Factor “— The price of our securities may be adversely affected by third parties who raise allegations about our Company ” below), and the resulting damage to certain business relationships and employee morale, among others.
+Added: These adverse impacts have arisen and will likely continue to arise out of current and future legal proceedings initiated since the November 2023 news reports, the many continuing unfounded allegations by short sellers and others, the substantial short pressure on our stock price (for further information, see the Risk Factor “—The price of our securities may be adversely affected by third parties who raise allegations about our Company” below), and the resulting damage to certain business relationships and employee morale and increased employee attrition, among others.
We have incurred and will continue to incur expenses in connection with these matters and any future legal proceedings arising out of these matters, which expenses may be material and, in some cases, are not or will not be covered by insurance.
−Removed: We are also subject to risks as a result of the concentration of investments in Freedom VCM given (i) our ownership of a 31% equity interest in Freedom VCM, (ii) the $200.5 million amended and restated promissory note secured by Freedom VCM equity interests (the “Amended and Restated Note”), and (iii) the Freedom Receivables Note.
−Removed: Accordingly, we may suffer adverse impacts on our financial condition or results of operations as a result of Freedom VCM and its subsidiary FRG performing worse than we expect;
−Removed: the development of their strategies, including the possible disposition of additional businesses and further de-leveraging of their balance sheet, taking longer than expected;
−Removed: the risks associated with consumer-facing businesses described elsewhere in these Risk Factors;
−Removed: and current and future claims, demands, and legal proceedings arising out of the FRG take-private transaction itself and for Mr.
−Removed: Kahn’s ownership of and involvement with Freedom VCM and FRG and related expenses which may be material.
−Removed: For example, as it relates to the $2 00.5 million Amende d and Restated Note, the Company has determined that the repayment of the Note will be primarily from the cash distributions from Freedom VCM or the foreclosure on the underlying collateral provided by Mr.
−Removed: Kahn and his spouse being in the Freedom VCM equity interests.
−Removed: In addition, in light of Mr.
−Removed: Kahn’s alleged involvement with the alleged
−Removed: misconduct concerning Prophecy Asset Management LP, we can provide no assurances that we will not be subject to claims asserting an interest in the Freedom VCM equity interests owned by Mr.
−Removed: Kahn, including those that collateralize the Amended and Restated Note.
−Removed: If a claim were successful, it would diminish the value of the collateral which could impact the carrying value of the loan.
−Removed: If such claims are made, however, we believe we have valid defenses from any such claim and any such claim would be without merit.
−Removed: For further information regarding existing litigation, please refer to the matters disclosed under the heading “Item 3.
−Removed: Legal Proceedings”.
+Added: In addition, on November 3, 2024, FRG, its operating businesses, and certain other affiliates, including Freedom VCM, filed the FRG Chapter 11 Cases under chapter 11 of the Bankruptcy Code.
+Added: As a result, on November 4, 2024, we concluded that we were required to record an additional impairment with respect to the Freedom VCM Investment and the Vintage Loan Receivable.
+Added: As a result of such additional impairment, we have ascribed no value to the Freedom VCM Investment as of December 31, 2024 and a value of $1.3 million to the Vintage Loan Receivable as of September 16, 2025.
+Added: For the year ended December 31, 2024, non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivables were $221.0 million and $222.9 million respectively.
+Added: Prior to the filing of the FRG Chapter 11 Cases in November 2024, Conn’s and certain of its subsidiaries filed voluntary petitions for relief (the “Conn's Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code.
+Added: FRG, pursuant to a transaction consummated in January 2024, acquired a substantial equity investment in Conn’s, and in December 2023, the
+Added: Company loaned $108.0 million to Conn’s subsequently reduced to $93.0 million due to principal repayments.
+Added: The fair value of this loan receivable was $19.1 million at December 31, 2024.
+Added: We expect that the Company may be subject to lawsuits and other claims related to the FRG Chapter 11 Cases and the Conn's Chapter 11 Cases (see "Recent Developments - Conn's and FRG").
+Added: These events and developments have exacerbated, and they and additional similar events and developments including additional litigation and claims will continue to exacerbate, the risk that we will continue to:
+Added: (i) incur expenses in connection with these matters, which expenses may be material and, in some cases, are not or will not be covered by insurance;
+Added: (ii) harm our reputation and negatively impact employee morale, retention and hiring;
+Added: (iii) lose customers or negatively impact on our ability to attract new customers and increased competition for new clients and business;
+Added: and (iv) result in additional write-downs, which may be material.
We may incur losses as a result of ineffective risk management processes and strategies.
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Our failure to deal appropriately with conflicts of interest could damage our reputation and adversely affect our business.
−Removed: As we have expanded the number and scope of our businesses, we increasingly confront potential conflicts of interest relating to our and our funds’ and clients’ investment and other activities.
+Added: We confront potential conflicts of interest relating to our and our funds’ and clients’ investment and other activities.
Certain of our funds have overlapping investment objectives, including funds which have different fee structures, and potential conflicts may arise with respect to our decisions regarding how to allocate investment opportunities among ourselves and those funds.
For example, a decision to acquire material non-public information about a company while pursuing an investment opportunity for a particular fund gives rise to a potential conflict of interest when it results in our having to restrict the ability of the Company or other funds to take any action.
−Removed: In addition, there may be conflicts of interest regarding investment decisions for funds in which our officers, directors and employees, who have made and may continue to make significant personal investments in a variety of funds, are personally invested.
+Added: In addition, there may be conflicts of interest regarding investment decisions for funds in which our officers, directors and employees, who have made and may continue to make significant personal investments in a variety of funds, are
+Added: personally invested.
Similarly, conflicts of interest may exist or develop regarding decisions about the allocation of specific investment opportunities between the Company and the funds.
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Financial services firms have been subject to increased scrutiny over the last several years, increasing the risk of financial liability and reputational harm resulting from adverse regulatory actions.
−Removed: Firms in the financial services industry have been operating in a difficult regulatory environment which we expect will become even more stringent in light of recent well-publicized failures of regulators to detect and prevent fraud.
+Added: Firms in the financial services industry have been operating in a difficult regulatory environment which we expect may become even more stringent in light of recent well-publicized failures of regulators to detect and prevent fraud.
The industry has experienced increased scrutiny from a variety of regulators, including the SEC, the NYSE, FINRA and state attorneys general.
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In the equity and fixed income markets, regulatory requirements and the increased use of electronic trading and alternative trading systems has resulted in greater price transparency, leading to increased price competition and decreased trading margins.
−Removed: The trend toward using alternative trading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce our participation in the trading markets and our ability to access market information, and lead to the creation of new and stronger competitors.
+Added: The trend toward using alternative trading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce our participation in the trading
+Added: markets and our ability to access market information, and lead to the creation of new and stronger competitors.
In the equity markets, we utilize certain market centers to execute orders on our behalf in exchange for payment for our order flow.
−Removed: Market centers are selected based on their ability to provide liquidity, price improvement, and timely execution for
−Removed: client orders.
+Added: Market centers are selected based on their ability to provide liquidity, price improvement, and timely execution for client orders.
Increased regulatory scrutiny of payment for order flow may result in a decrease in this type of revenue.
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The Company may be limited to the amount of net operating loss carryforwards that may be utilized in future taxable years depending on the Company’s actual taxable income.
−Removed: As of December 31, 2023, the Company believes that its net operating loss carryforwards, net of any existing allowances provided, will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets.
−Removed: However, to the extent that the Company is unable to utilize such net operating losses, it may have a material adverse effect on the Company’s financial condition and results of operations.
+Added: As of December 31, 2024, the Company has recorded a valuation allowance for what it believes that its net operating loss carryforwards that are available to be utilized in future tax periods since it is more likely than not that future taxable earnings will be sufficient to utilize the net operating loss carryforwards before they expire.
Changes in tax laws or regulations, or to interpretations of existing tax laws or regulations, to which we are subject could adversely affect our financial condition and cash flows.
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In addition, the Exchange Act requires that we file annual, quarterly and current reports.
−Removed: Our failure to prepare and disclose this information in a timely manner or to otherwise comply with applicable law could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing.
−Removed: In addition, the Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for
−Removed: financial reporting and disclosure purposes.
+Added: Our failure to prepare and disclose this information in a timely manner or to otherwise comply with applicable law could subject us to penalties
+Added: under federal securities laws, expose us to lawsuits and restrict our ability to access financing.
+Added: In addition, the Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting and disclosure purposes.
Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules.
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In addition, our Capital Markets operations depend to a large extent on our relationships with our clients and reputation for integrity and high-caliber professional services to attract and retain clients.
+Added: As noted above under, “Recent events and developments related to our investment in Freedom VCM and our prior business relationship with Brian Kahn and related to the SEC subpoenas we received have had and may continue to have adverse effects on our business, results of operations, reputation, and stock price” , damage to our reputation from the matters described in that risk factor have led to negative impacts on our business relationships particularly in B.
+Added: Riley Securities, Inc.'s ("BRS'") Capital Markets segment and could continue to have a negative impact on our business relationships.
As a result, if a client is not satisfied with our services, it may be more damaging in our business than in other businesses.
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In addition, opportunities may arise to acquire or invest in other businesses that are related or unrelated to our current businesses.
−Removed: To the extent we make strategic investments or acquisitions, enter into strategic relationships or joint ventures or enter into new lines of business, we will face numerous risks and uncertainties, including risks associated with the required
−Removed: investment of capital and other resources and with combining or integrating operational and management systems and controls and managing potential conflicts.
+Added: To the extent we make strategic investments or acquisitions, enter into strategic relationships or joint ventures or enter into new lines of business, we will face numerous risks and uncertainties, including risks associated with the required investment of capital and other resources and with combining or integrating operational and management systems and controls and managing potential conflicts.
Entry into certain lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk.
1 unchanged sentence
In the case of joint ventures, we are subject to additional risks and uncertainties in that we may be dependent upon, and subject to liability, losses or reputational damage relating to, systems, controls and personnel that are not under our control.
−Removed: Risks Related to Our Capital Markets Activities
+Added: Risks Related to BRS' Capital Markets Activities
Our corporate finance and strategic advisory engagements are singular in nature and do not generally provide for subsequent engagements.
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However, our computer systems and software are subject to unauthorized access, computer viruses or other malicious code, inadvertent, erroneous or intercepted transmission of information (including by e-mail), and other events that have had an information security impact.
−Removed: If one or more of such events occur, this potentially could jeopardize our or our clients’ or counterparties’ confidential and other information processed and stored in, and transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our clients’, our counterparties’ or third parties’ operations.
+Added: If one or more of such events occur, this potentially could jeopardize our or our clients’ or counterparties’ confidential and other information processed and stored in, and
+Added: transmitted through, our computer systems and networks, or otherwise cause interruptions or malfunctions in our, our clients’, our counterparties’ or third parties’ operations.
We may be required to expend significant additional resources to modify our protective measures or to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us.
−Removed: A disruption in the infrastructure that supports our business due to fire, natural disaster, health emergency (for example, the COVID-19 pandemic), power or communication failure, act of terrorism or war may affect our ability to
−Removed: service and interact with our clients.
+Added: A disruption in the infrastructure that supports our business due to fire, natural disaster, health emergency (for example, the COVID-19 pandemic), power or communication failure, act of terrorism or war may affect our ability to service and interact with our clients.
If we are not able to implement contingency plans effectively, any such disruption could harm our results of operations.
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In the case of fund or similar investments, our investments may be illiquid until such investment vehicles are liquidated.
−Removed: expect that there will be restrictions on our ability to resell the securities that we acquire for a period of up to one year after we acquire those securities.
+Added: We expect that there will be restrictions on our ability to resell the securities that we acquire for a period of up to one year after we acquire those securities.
Thereafter, a public market sale may be subject to volume limitations or dependent upon securing a registration statement for an initial and potentially secondary public offering of the securities.
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We incur credit risk through loans, lines of credit, guarantees and backstop commitments issued to or on behalf of businesses and individuals, and other loans collateralized by a variety of assets, including securities.
−Removed: We have experienced credit losses and bear increased credit risk because we have made loans and commitments to borrowers or issuers engaged in emerging businesses or who lack access to conventional financing who, as a group, may be uniquely or disproportionately affected by economic or market conditions.
+Added: We have experienced credit losses and bear increased credit risk because we have made loans and commitments to borrowers or issuers engaged
+Added: in emerging businesses or who lack access to conventional financing who, as a group, may be uniquely or disproportionately affected by economic or market conditions.
For example, we have made loans to borrowers in the cryptocurrency industry and have incurred losses as cryptocurrency prices have declined and participants in the cryptocurrency industry have experienced liquidity issues and we expect to incur further losses in the event that the cryptocurrency market experiences further volatility or liquidity issues or further declines or fails to recover.
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The liquidity and value of the collateral could be impaired as a result of changing economic conditions, competition, and other factors, including the availability of suitable buyers.
−Removed: We may experience write downs of our investments and other losses related to the valuation of our investments and volatile and illiquid market conditions.
+Added: For example, in December 2023, the Company loaned $108.0 million to Conn’s which loan amount was subsequently reduced to $93.0 million due to principal repayments.
+Added: The fair value of this loan receivable was $19.1 million at December 31, 2024 given that in July 2024, Conn’s and certain of its subsidiaries filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code.
+Added: In addition, on November 3, 2024, FRG, its operating businesses, and certain other affiliates, including Freedom VCM, filed the FRG Chapter 11 Cases under chapter 11 of the Bankruptcy Code.
+Added: As a result, on November 4, 2024, we concluded that we were required to record an additional impairment with respect to the Freedom VCM Investment and the Vintage Loan Receivable.
+Added: As a result of such additional impairment, we have ascribed no value to the Freedom VCM Investment as of December 31, 2024 and a value of $1.3 million to the Vintage Loan Receivable as of September 16, 2025.
+Added: For the year ended December 31, 2024, non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivable were $221.0 million and $222.9 million, respectively.
+Added: We have had and may experience write downs of our investments and other losses related to the valuation of our investments and volatile and illiquid market conditions.
In our proprietary investment activities, our concentrated holdings, illiquidity and market volatility may make it difficult to value certain of our investment securities.
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A substantial portion of our cash flows and net income are dependent upon payments from our investments in consumer finance receivables.
−Removed: We have a related party loan receivable with a fair value of approximately $20.6 million from home-furnishing retailer W.S.
+Added: We have a related party loan receivable with a fair value of approximately $2.2 million as of December 31, 2024 , from home-furnishing retailer W.S.
Badcock Corporation (“Badcock”) that is collateralized by consumer finance receivables of Badcock.
These consumer finance receivables were acquired from Badcock in multiple purchases beginning in December 2021.
−Removed: On December 18, 2023, Badcock was sold by Freedom VCM to Conn’s.
−Removed: and now operates as a wholly owned subsidiary of Conn’s.
+Added: On December 18, 2023, Badcock was sold by Freedom VCM to Conn’s and now operates as a wholly owned subsidiary of Conn’s.
This continues to be reported as a related party loan receivable due to the Company’s related party relationship with Freedom VCM and Freedom VCM’s ability to exercise influence over Conn’s as a result of the equity consideration Freedom VCM received from the sale of Badcock to Conn’s on December 18, 2023.
−Removed: The Company also has a related party loan receivable from a Freedom VCM affiliate with a fair value of approximately $42.2 million, the Freedom Receivables Note (see Part I, Item 1 above).
+Added: The Company also has a related party loan receivable from a Freedom VCM affiliate with a fair value of approximately $3.9 million as of December 31, 2024, the Freedom Receivables Note (see Part I, Item 1 above).
The Freedom Receivables Note resulted from the sale of BRRII to a Freedom VCM affiliate and the collateral for this note includes the collection of certain consumer finance receivables by the Freedom VCM affiliate.
−Removed: The collectability and repayment of the principal
−Removed: balance and interest on these loans receivable, which total $62.8 million, are a function of many factors including the ultimate collection of the consumer finance receivables that collateralize the loans, criteria used to select the consumers that were issued credit, the pricing of the credit products, the lengths of the relationships, general economic conditions, the rate at which consumers repay their accounts or become delinquent, and the rate at which consumers borrow funds.
+Added: The collectability and repayment of the principal balance and interest on these loans receivable, which total $45.8 million, are a function of many factors including the ultimate collection of the consumer finance receivables that collateralize the loans, criteria used to select the consumers that were issued credit, the pricing of the credit products, the lengths of the relationships, general economic conditions, the rate at which consumers repay their accounts or become delinquent, and the rate at which consumers borrow funds.
Deterioration in these factors would adversely impact our business.
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• a reduction in our ability or willingness to invest in receivables arising under loans to certain consumers, such as military personnel.
−Removed: Risks Related to our Auction and Liquidation Activities
−Removed: We may incur losses as a result of “guarantee” based engagements that we enter into in connection with our auction and liquidation solutions business.
−Removed: In many instances, in order to secure an engagement, we are required to bid for that engagement by guaranteeing to the client a minimum amount that such client will receive from the sale of inventory or assets.
−Removed: Our bid is based on a variety of factors, including:
−Removed: our experience, expertise, perceived value added by engagement, valuation of the inventory or assets and the prices we believe potential buyers would be willing to pay for such inventory or assets.
−Removed: An inaccurate estimate of any of the above or inaccurate valuation of the assets or inventory could result in us submitting a bid that exceeds the realizable proceeds from any engagement.
−Removed: If the liquidation proceeds, net of direct operating expenses, are less than the amount we guaranteed in our bid, we will incur a loss.
−Removed: Therefore, in the event that the proceeds, net of direct operating expenses, from an engagement are less than the bid, the value of the assets or inventory decline in value prior to the disposition or liquidation, or the assets are overvalued for any reason, we may suffer a loss and our financial condition and results of operations could be adversely affected.
−Removed: Losses due to any auction or liquidation engagement may cause us to become unable to make payments due to our creditors and may cause us to default on our debt obligations.
−Removed: We have three engagement structures for our auction and liquidation services:
−Removed: (i) a “fee” based structure under which we are compensated for our role in an engagement on a commission basis, (ii) purchase on an outright basis (and take title to) the assets or inventory of the client, and (iii) “guarantee” to the client that a certain amount will be realized by the client upon the sale of the assets or inventory based on contractually defined terms in the auction or liquidation contract.
−Removed: We bear the risk of loss under the purchase and guarantee structures of auction and liquidation contracts.
−Removed: If the amount realized from the sale or disposition of assets, net of direct operating expenses, does not equal or exceed the purchase price (in purchase transaction), we will recognize a loss on the engagement, or should the amount realized, net of direct operating expenses, not equal or exceed the “guarantee,” we are still required to pay the guaranteed amount to the client.
−Removed: We could incur losses in connection with outright purchase transactions in which we engage as part of our auction and liquidation solutions business.
−Removed: When we conduct an asset disposition or liquidation on an outright purchase basis, we purchase from the client the assets or inventory to be sold or liquidated and therefore, we hold title to any assets or inventory that we are not able to sell.
−Removed: In other situations, we may acquire assets from our clients if we believe that we can identify a potential buyer and sell the assets at a premium to the price paid.
−Removed: We store these unsold or acquired assets and inventory until they can be sold or, alternatively, transported to the site of a liquidation of comparable assets or inventory that we are conducting.
−Removed: If we are forced to sell these assets for less than we paid, or are required to transport and store assets multiple times, the related expenses could have a material adverse effect on our results of operations.
−Removed: We could be forced to mark down the value of certain assets acquired in connection with outright purchase transactions.
−Removed: In most instances, inventory is reported on the balance sheet at its historical cost;
−Removed: however, according to U.S.
−Removed: Generally Accepted Accounting Principles, inventory whose historical cost exceeds its market value should be valued
−Removed: conservatively, which dictates a lower value should apply.
−Removed: Accordingly, should the replacement cost (due to technological obsolescence or otherwise), or the net realizable value of any inventory we hold be less than the cost paid to acquire such inventory (purchase price), we will be required to “mark down” the value of such inventory held.
−Removed: If the value of any inventory held on our balance sheet is required to be written down, such write down could have a material adverse effect on our financial position and results of operations.
−Removed: We frequently use borrowings under credit facilities in connection with our guaranty engagements, in which we guarantee a minimum recovery to the client, and outright purchase transactions.
−Removed: In engagements where we operate on a guaranty or purchase basis, we are typically required to make an upfront payment to the client.
−Removed: If the upfront payment is less than 100% of the guarantee or the purchase price in a “purchase” transaction, we may be required to make successive cash payments until the guarantee is met or we may issue a letter of credit in favor of the client.
−Removed: Depending on the size and structure of the engagement, we may borrow under our credit facilities and may be required to issue a letter of credit in favor of the client for these additional amounts.
−Removed: If we lose any availability under our credit facilities, are unable to borrow under credit facilities and/or issue letters of credit in favor of clients, or borrow under credit facilities and/or issue letters of credit on commercially reasonable terms, we may be unable to pursue large liquidation and disposition engagements, engage in multiple concurrent engagements, pursue new engagements or expand our operations.
−Removed: We are required to obtain approval from the lenders under our existing credit facilities prior to making any borrowings thereunder in connection with a particular engagement.
−Removed: Any inability to borrow under our credit facilities, or enter into one or more other credit facilities on commercially reasonable terms may have a material adverse effect on our financial condition, results of operations and growth.
−Removed: Defaults under our credit agreements could have an adverse impact on our ability to finance potential engagements.
−Removed: The terms of our credit agreements contain a number of events of default.
−Removed: Should we default under any of our credit agreements in the future, lenders may take any or all remedial actions set forth in such credit agreement, including, but not limited to, accelerating payment and/or charging us a default rate of interest on all outstanding amounts, refusing to make any further advances or issue letters of credit, or terminating the line of credit.
−Removed: As a result of our reliance on lines of credit and letters of credit, any default under a credit agreement, or remedial actions pursued by lenders following any default under a credit agreement, may require us to immediately repay all outstanding amounts, which may preclude us from pursuing new liquidation and disposition engagements and may increase our cost of capital, each of which may have a material adverse effect on our financial condition and results of operations.
−Removed: Risks Related to Our Financial Consulting Activities
−Removed: We depend on financial institutions as primary clients for our financial consulting business.
−Removed: Consequently, the loss of any financial institutions as clients may have an adverse impact on our business.
−Removed: A majority of the revenue from our financial consulting business is derived from engagements by financial institutions.
−Removed: As a result, any loss of financial institutions as clients of our valuation and advisory services, whether due to changing preferences in service providers, failures of financial institutions or mergers and consolidations within the finance industry, could significantly reduce the number of existing, repeat and potential clients, thereby adversely affecting our revenues.
−Removed: In addition, any larger financial institutions that result from mergers or consolidations in the financial services industry could have greater leverage in negotiating terms of engagements with us, or could decide to internally perform some or all of the financial consulting services which we currently provide to one of the constituent institutions involved in the merger or consolidation or which we could provide in the future.
−Removed: Any of these developments could have a material adverse effect on our financial consulting business.
−Removed: We may face liability or harm to our reputation as a result of a claim that we provided an inaccurate appraisal or valuation and our insurance coverage may not be sufficient to cover the liability.
−Removed: We could face liability in connection with a claim by a client that we provided an inaccurate appraisal or valuation on which the client relied.
−Removed: Any claim of this type, whether with or without merit, could result in costly litigation, which could divert management’s attention and company resources and harm our reputation.
−Removed: Furthermore, if we are found to be liable, we may be required to pay damages.
−Removed: While our appraisals and valuations are typically provided only for the benefit of our clients, if a third party relies on an appraisal or valuation and suffers harm as a result, we may become subject to a legal claim, even if the claim is without merit.
−Removed: We carry insurance for liability resulting from errors or omissions in connection
−Removed: with our appraisals and valuations;
−Removed: however, the coverage may not be sufficient if we are found to be liable in connection with a claim by a client or third party.
−Removed: Risks Related to our Asset Management Business
+Added: Risks Related to our Wealth Management Business
Poor investment performance may decrease assets under management and reduce revenues from and the profitability of our asset management business.
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In addition, investment performance is one of the most important factors in retaining existing investors and competing for new asset management business.
−Removed: Investment performance may be poor as a result of the current or future difficult market or economic conditions, including changes in interest rates or inflation, acts of war, aggression or terrorism, widespread outbreaks of disease, such as the COVID-19 pandemic or similar pandemics, or political uncertainty, our investment style, the particular investments that we make, and other factors.
+Added: Investment performance may be poor as a result of the current or future difficult market or economic conditions, including changes in interest rates or inflation, acts of war, aggression or terrorism,
+Added: widespread outbreaks of disease, such as the COVID-19 pandemic or similar pandemics, or political uncertainty, our investment style, the particular investments that we make, and other factors.
Poor investment performance may result in a decline in our revenues and income by causing (i) the net asset value of the assets under our management to decrease, which would result in lower management fees to us, (ii) lower investment returns, resulting in a reduction of incentive fee income to us, and (iii) investor redemptions, which would result in lower fees to us because we would have fewer assets under management.
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In addition, cash held by our funds with the custodian will not be segregated from the custodian’s own cash, and the funds will therefore rank as unsecured creditors in relation thereto.
−Removed: We manage debt investments that involve significant risks and potential additional liabilities.
−Removed: GACP I., L.P.
−Removed: and GACP II, L.P., both direct lending funds of which our wholly owned subsidiary GACP is the general partner, and which are managed by WhiteHawk Capital Partners, L.P., a limited partnership controlled by Mr.
−Removed: Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer, pursuant to an investment advisory services agreement, may invest in secured debt issued by companies that have or may incur additional debt that is senior to the secured debt owned by the fund.
−Removed: In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of any such company, the owners of senior secured debt (i.e., the owners of first priority liens) generally will be entitled to receive proceeds from any realization of the secured collateral until they have been reimbursed.
−Removed: At such time, the owners of junior secured debt (including, in certain circumstances, the fund) will be entitled to receive proceeds from
−Removed: the realization of the collateral securing such debt.
+Added: We manage debt investments that involve significant risks.
+Added: We have and may invest in secured and unsecured debt issued by companies that have or may incur additional debt that is senior to the such debt.
+Added: In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of any such borrower, the owners of senior secured debt (i.e., the owners of first priority liens) generally will be entitled to receive proceeds from any realization of the secured collateral until they have been reimbursed.
+Added: At such time, the owners of junior secured debt (including, in certain circumstances, the Company or an affiliate) will be entitled to receive proceeds from the realization of the collateral securing such debt.
There can be no assurances that the proceeds, if any, from the sale of such collateral would be sufficient to satisfy the loan obligations secured by subordinate debt instruments.
−Removed: To the extent that the fund owns secured debt that is junior to other secured debt, the fund may lose the value of its entire investment in such secured debt.
−Removed: In addition, the fund may invest in loans that are secured by a second lien on assets.
+Added: To the extent that the Company or an affiliate owns secured debt that is junior to other secured debt, the Company or such affiliate may lose the value of its entire investment in such debt.
+Added: In addition, the Company may invest in loans that are secured by a second lien on assets.
Second lien loans have been a developed market for a relatively short period of time, and there is limited historical data on the performance of second lien loans in adverse economic circumstances.
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Our dial-up Internet access services of our UOL business also rely on their compatibility with other third-party systems, products and features, including operating systems.
−Removed: Incompatibility with third-party systems and products could adversely affect our ability to deliver our services or a user’s ability to access our services and could also adversely impact the distribution channels for our services.
+Added: Incompatibility with third-party systems and products could
+Added: adversely affect our ability to deliver our services or a user’s ability to access our services and could also adversely impact the distribution channels for our services.
Our dial-up Internet access services are dependent on dial-up modems and an increasing number of computer manufacturers, including certain manufacturers with whom we have distribution relationships, do not pre-load their new computers with dial-up modems, requiring the user to separately acquire a modem to access our services.
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The imposition of any such additional regulatory fees, charges, taxes and regulations on VoIP communications services could materially increase our costs and may limit or eliminate our competitive pricing advantages.
−Removed: We offer our magicJack products and services in other countries, and therefore could also be subject to regulatory risks in each such foreign jurisdiction, including the risk that regulations in some jurisdictions will prohibit us from providing
−Removed: our services cost-effectively or at all, which could limit our growth.
+Added: We offer our magicJack products and services in other countries, and therefore could also be subject to regulatory risks in each such foreign jurisdiction, including the risk that regulations in some jurisdictions will prohibit us from providing our services cost-effectively or at all, which could limit our growth.
Currently, there are several countries where regulations prohibit us from offering service.
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The credit card processor may also prohibit us from billing discounts annually or for any other reason.
−Removed: Any increases in the credit card fees paid by our communications businesses could adversely affect our results of operations, particularly if we elect not to raise our service rates to offset the increase.
+Added: Any increases in the credit card fees paid by our communications businesses could adversely affect our results of operations, particularly if we elect not to raise
+Added: our service rates to offset the increase.
The termination of our ability to process payments on any major credit or debit card, due to high chargebacks or otherwise, would significantly impair our ability to operate our business.
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We are dependent on those direct sales channel partners to distribute and sell our products to indirect sales channel partners and ultimately to consumers.
−Removed: The sales and business practices of all such sales channel partners, their compliance with laws and regulations, and their reputations - of which we may or may not be aware - may affect our business and our reputation.
+Added: The sales and business practices of all such sales channel partners, their
+Added: compliance with laws and regulations, and their reputations - of which we may or may not be aware - may affect our business and our reputation.
Our sales channel partners also sell products offered by our competitors and in the case of retailer house brands and original equipment manufacturers, may also be our competitors.
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As such, declines in the overall demand for personal computers and tablet devices can directly impact the demand for our accessory products as often our products are sold as an attachment to the original equipment manufacturer device that is being sold.
−Removed: Risks Related to Our Brands Portfolio
−Removed: The failure of our licensees to sell products that generate royalties to us, to pay us royalties pursuant to their license agreements with us, or to renew these agreements could negatively affect our results of operations and financial condition.
−Removed: Our brand investment portfolio revenues are dependent on royalty payments made to us under our license agreements.
−Removed: Although some of our license agreements guarantee a minimum royalty payment to us each year, the failure of our licensees to satisfy these or the other obligations under their agreements with us, their decision to not renew their agreements with us or their inability to grow or maintain their sales of products bearing our brands or their businesses generally could cause our revenues to decline.
−Removed: These events or circumstances could occur for a variety of reasons, many of which are outside our control, including business and operational risks that impact our licensees’ ability to make payments and sell products generally, such as obtaining and maintaining desirable store locations and consumer acceptance and presence;
−Removed: retaining key personnel, including the specific individuals who work on sales and marketing for products bearing our brands;
−Removed: and liquidity and capital resources risks.
−Removed: The failure by any of our key licensees or the concurrent failure by several licensees to meet their financial obligations to us or to renew their respective license agreements with us could materially and adversely impact our results of operations and our financial condition.
+Added: The Company performs interim and year end impairment assessments of goodwill and intangible assets utilizing qualitative and quantitative analyses surrounding Targus' financial performance, market conditions in which it operates in, and other financial and non-financial factors.
+Added: As a result of these assessments, the Company has recognized aggregate impairments to goodwill and intangible assets of $31.7 million and $68.6 million for the years ended December 31, 2024 and 2023, respectively.
Risks Related to Competition
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We face competition with respect to all of our service and product areas.
−Removed: The level of competition depends on the particular service or product area and, in the case of our asset and liquidation services, the category of assets being liquidated or appraised.
−Removed: We compete with other companies and investment banks to help clients with their corporate finance and capital needs.
−Removed: In addition, we compete with companies and online services in the bidding for assets and inventory to be liquidated.
−Removed: The demand for online solutions continues to grow and our online competitors include other e-commerce providers, auction websites such as eBay, as well as government agencies and traditional liquidators and auctioneers that have created websites to further enhance their product offerings and more efficiently liquidate assets.
−Removed: We expect the market to become even more competitive as the demand for such services continues to increase and traditional and online liquidators and auctioneers continue to develop online and offline services for disposition, redeployment and remarketing of wholesale surplus and salvage assets.
−Removed: In addition, manufacturers, retailers and government agencies may decide to create their own websites to sell their own surplus assets and inventory and those of third parties.
−Removed: We also compete with other providers of valuation and advisory services.
−Removed: Competitive pressures within the Financial Consulting and other Advisory Services and real estate services markets, including a decrease in the number of engagements and/or a decrease in the fees which can be charged for these services, could affect revenues from our Financial Consulting and other Advisory Services and real estate services as well as our ability to engage new or repeat clients.
−Removed: We believe that given the relatively low barriers to entry in the Financial Consulting and other Advisory Services and real estate services markets, these markets may become more competitive as the demand for such services increases.
+Added: The level of competition depends on the particular service or product area.
Some of our competitors may be able to devote greater financial resources to marketing and promotional campaigns, secure merchandise from sellers on more favorable terms, adopt more aggressive pricing or inventory availability policies and devote more resources to website and systems development than we are able to do.
−Removed: Any inability on our part to effectively compete could have a material adverse effect on our financial condition, growth potential and results of operations.
+Added: Any inability on our part to
+Added: effectively compete could have a material adverse effect on our financial condition, growth potential and results of operations.
We compete with specialized investment banks to provide financial and investment banking services to small and middle-market companies.
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Competitors to our Consumer Products segment may be able to respond more quickly to changes in retailer, wholesaler and consumer preferences and devote greater resources to brand acquisition, development and marketing.
+Added: In addition, our competitors may be larger, more diversified, better funded, and have access to more advanced technology, including artificial intelligence (AI).
+Added: These competitive advantages may enable our competition to innovate better and more quickly, to compete more effectively on quality and price, causing us to lose business and profitability.
+Added: Burgeoning interest in AI may increase our competition and disrupt our business model.
+Added: AI may lower barriers to entry in our industry and we may be unable to effectively compete with the products or services offered by new competitors.
+Added: AI-related changes to the products and services on offer may affect our customers’ expectations, requirements, or tastes in ways we cannot adequately anticipate or adapt to, causing our business to lose sales, market share, or the ability to operate profitably and sustainably.
If we are unable to attract and retain qualified personnel, we may not be able to compete successfully in our industry.
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We face competition for management from other companies and organizations;
−Removed: therefore, we may not be able to retain our existing personnel or fill new positions or vacancies created by expansion or turnover at existing compensation levels.
+Added: therefore, we may not be able to retain our existing personnel or fill new positions or
+Added: vacancies created by expansion or turnover at existing compensation levels.
Although we have entered into employment agreements with key members of the senior management team, there can be no assurances such key individuals will remain with us.
+Added: Recently, we have failed to retain the services of certain key personnel which may adversely affect our business and prospects.
The loss of any of our executive officers or other key management personnel would disrupt our operations and divert the time and attention of our remaining officers and management personnel which could have an adverse effect on our results of operations and potential for growth.
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Significant disruptions of information technology systems, breaches of data security, or unauthorized disclosures of sensitive data or personally identifiable information could adversely affect our business, and could subject us to liability or reputational damage.
−Removed: Our business is increasingly dependent on critical, complex, and interdependent information technology (“IT”) systems, including Internet-based systems, some of which are managed or hosted by third parties, to support business
−Removed: processes as well as internal and external communications.
+Added: Our business is increasingly dependent on critical, complex, and interdependent information technology (“IT”) systems, including Internet-based systems, some of which are managed or hosted by third parties, to support business processes as well as internal and external communications.
The size and complexity of our IT systems make us vulnerable to, and we have experienced, IT system breakdowns, malicious intrusion, and computer viruses, which may result in the impairment of our ability to operate our business effectively.
1 unchanged sentence
Such data security breaches could lead to the loss of confidential information, trade secrets or other intellectual property, or could lead to the public exposure of personal information (including personally identifiable information) of our employees, customers, business partners, and others.
−Removed: For example, on April 5, 2024, Targus discovered that a threat actor gained unauthorized access to certain of Targus’ file systems.
−Removed: This matter, as well as our cybersecurity policies and procedures, is discussed in greater detail in Item 1C of Part I, “Cybersecurity”.
In addition, the increased use of social media by our employees and contractors could result in inadvertent disclosure of sensitive data or personal information, including but not limited to, confidential information, trade secrets and other intellectual property.
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The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the United States, enhances enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the infringer, whichever is greater.
−Removed: In addition, the California Consumer Privacy Act effective since January 1, 2020 applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.
+Added: In addition, the California Consumer Privacy Act ("CCPA") effective since January 1, 2020 applies to for-profit businesses that conduct business in California and meet certain revenue or data collection thresholds.
The CCPA established new requirements regarding handling of personal data to entities serving or employing California residents, and gave consumers the right to request disclosure of information collected about them, and whether that information has been sold or shared with others, the right to request deletion of personal information (subject to certain exceptions), the right to opt out of the sale of the consumer’s personal information, and the right not to be discriminated against for exercising these rights.
Such rights were expanded under the California Privacy Rights Act (“CPRA”) which went into effect on January 1, 2023.
−Removed: In addition, similar laws have and may be adopted by other states where the Company does business.
+Added: addition, similar laws have and may be adopted by other states where the Company does business.
The impact of the CCPA and other state privacy laws on the Company’s business is yet to be determined.
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We hold various United States patents and pending applications, together with corresponding patents and pending applications from other countries.
−Removed: Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technology that is similar ours.
+Added: Our means of protecting our proprietary rights may not be adequate and our competitors may independently develop technology that is similar to ours.
Legal protections afford only limited protection for our technology.
1 unchanged sentence
Despite our efforts to protect our proprietary rights, unauthorized parties have in the past attempted, and may in the future attempt, to copy aspects of our products or to obtain and use information that it regards as proprietary.
−Removed: Third parties may also design around
−Removed: our proprietary rights, which may render our protected products less valuable if the design around is favorably received in the marketplace.
+Added: Third parties may also design around our proprietary rights, which may render our protected products less valuable if the design around is favorably received in the marketplace.
In addition, if any our products or the technology underlying our products is covered by third-party patents or other intellectual property rights, we could be subject to various legal actions.
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We are also governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.
−Removed: The foregoing and other provisions in our amended and restated certificate of incorporation, our bylaws, as amended, and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors, including delaying or impeding a merger, tender offer, or proxy contest or other change of control transaction involving our company.
+Added: The foregoing and other provisions in our amended and restated certificate of incorporation, our bylaws, as amended, and Delaware law could
+Added: make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors, including delaying or impeding a merger, tender offer, or proxy contest or other change of control transaction involving our company.
Any delay or prevention of a change of control transaction or changes in our board of directors could prevent the consummation of a transaction in which our stockholders could receive a substantial premium over the then current market price for their shares.
9 unchanged sentences
• discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of our company.
+Added: Our Chairman and Co-Chief Executive Officer is a party to a credit agreement pursuant to which he has pledged as collateral the substantial majority of his common stock in our Company to a bank, and any foreclosure on such stock or the sale or attempted sale of such common stock, could adversely impact the price of our common stock and result in negative publicity.
+Added: As reported by Mr.
+Added: Riley in his Schedule 13D filed with the SEC, he has pledged as collateral the substantial majority of his shares of Company common stock beneficially owned by him as well as other personal assets in favor of a bank lender (the “Lender”), pursuant to a Credit Agreement and Pledge Agreement, each dated as of March 19, 2019, as amended (collectively, the “Loan Agreements”).
+Added: Pursuant to the Loan Agreements, Mr.
+Added: Riley has pledged a total of 5,804,124 shares of Company common stock in exchange for a loan of $21.4 million (as of September 16, 2025) which loan is currently due on April 1, 2026.
+Added: The Loan Agreements permit the Lender, under certain specified circumstances (including upon the occurrence and during the continuance of an event of default), to exercise its rights to foreclose on, and dispose of, the pledged shares and other collateral, in each case, in accordance with the Loan Agreements.
+Added: An event of default may occur if, upon the satisfaction of loan-to-collateral value ratios including as a result of a decline in our stock price, Mr.
+Added: Riley was unable to pre-pay a requisite portion of the loan amount or post additional collateral.
+Added: Any such foreclosure or disposition of shares of our common stock, or any attempt by the Lender to exercise such remedies, could cause the price of our common stock to decline and result in negative publicity for the Company.
Our common stock price may fluctuate substantially, and your investment could suffer a decline in value.
12 unchanged sentences
We may not pay dividends regularly or at all in the future.
−Removed: While we currently pay dividends quarterly, our Board of Directors may reduce or discontinue dividends at any time for any reason it deems relevant and there can be no assurances that we will continue to generate sufficient cash to pay dividends, or that we will continue to pay dividends with the cash that we do generate.
−Removed: For example, while we paid regular quarterly dividends of $1.00 per share of common stock in 2023 and 2022, in the first quarter of 2024 we reduced our dividend to $0.50 per share.
−Removed: The determination regarding the payment of dividends is subject to the discretion of our Board of Directors, and there can be no assurances that we will continue to generate sufficient cash to pay dividends, or that we will pay dividends in future periods.
+Added: During 2024, we suspended paying dividends on our preferred stock and common stock, and we may not pay dividends in the near future.
+Added: Even if we were to reinitiate dividends, our Board of Directors may reduce or discontinue dividends at any time for any reason it deems relevant and there can be no assurances that we will continue to generate sufficient cash to pay dividends, or that we will continue to pay dividends with the cash that we do generate.
+Added: The determination regarding the payment of dividends is subject to the discretion of our Board of Directors and compliance with applicable laws, and there can be no assurances that we will generate sufficient cash to pay dividends, or that we will pay dividends in future periods.
Our level of indebtedness, and restrictions under such indebtedness, could adversely affect our operations and liquidity.
Together with our subsidiaries, we have a significant amount of indebtedness and substantial debt service requirements.
−Removed: As of December 31, 2023, we had approximately $2,356.4 million of outstanding indebtedness.
+Added: As of December 31, 2024, we had approximately $1.8 billion of outstanding indebtedness.
The terms of the instruments governing such indebtedness contain various restrictions and covenants regarding the operation of our business, including, but not limited to, restrictions on our ability to merge or consolidate with or into any other entity.
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(ii) causing us to use a larger portion of our cash flows to fund interest and principal payments, thereby reducing the availability of cash to fund working capital, capital expenditures and other business activities;
−Removed: (iii) making it more difficult for us to take advantage of significant business opportunities, such as
−Removed: acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions;
+Added: (iii) making it more difficult for us to take advantage of significant business opportunities, such as acquisition opportunities or other strategic transactions, and to react to changes in market or industry conditions;
and (iv) limiting our ability to borrow additional monies in the future to fund working capital, capital expenditures, acquisitions and other general corporate purposes as and when needed, which could force us to suspend, delay or curtail business prospects, strategies or operations.
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These alternative strategies may not be affected on satisfactory terms, if at all, and they may not yield sufficient funds to make required payments on our indebtedness.
+Added: During 2024 and the first half of 2025, we engaged in a number of assets sales the proceeds of which were largely used to repay indebtedness.
If, for any reason, we are unable to meet our debt service and repayment obligations, we would be in default under the terms of the agreements governing our debt, which could allow our creditors at that time to declare certain outstanding indebtedness to be due and payable or exercise other available remedies, which may in turn trigger cross acceleration or cross default rights in other agreements.
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Even if new financing were then available, it may not be on terms that are acceptable to us.
−Removed: Our senior notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future.
−Removed: Our senior notes are not secured by any of our assets or any of the assets of our subsidiaries.
+Added: Our publicly traded senior notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future.
+Added: Our publicly traded senior notes are not secured by any of our assets or any of the assets of our subsidiaries.
As a result, our senior notes are effectively subordinated to any secured indebtedness that we or our subsidiaries have currently outstanding or may incur in the future (or any indebtedness that is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.
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In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of our senior notes.
−Removed: Our senior notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
−Removed: Our senior notes are obligations exclusively of the Company and not of any of our subsidiaries.
+Added: Our publicly traded senior notes are structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
+Added: Our publicly traded senior notes are obligations exclusively of the Company and not of any of our subsidiaries.
None of our subsidiaries is a guarantor of our senior notes, and our senior notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future.
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Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such subsidiary senior to our claims.
−Removed: Consequently, our senior notes will be structurally subordinated to all indebtedness and other liabilities (including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise.
+Added: Consequently, our senior notes will be structurally subordinated to all indebtedness and other liabilities (including trade payables and the New Notes) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise.
The indenture governing our senior notes does not prohibit us or our subsidiaries from incurring additional indebtedness in the future.
In addition, future debt and security agreements entered into by our subsidiaries may contain various restrictions, including restrictions on payments by our subsidiaries to us and the transfer by our subsidiaries of assets pledged as collateral.
−Removed: The indenture under which our senior notes were issued contains limited protection for holders of our senior notes.
−Removed: The indenture under which our senior notes were issued offers limited protection to holders of our senior notes.
+Added: On March 26, 2025, the Company completed a private exchange transaction with an institutional investor pursuant to which the investor exchanged approximately $86.3 million aggregate principal amount of the Company’s 5.50% Senior Notes due March 2026 and approximately $36.7 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026 owned by it for approximately $87.8 million aggregate principal amount of New Notes, whereupon the exchanged notes were cancelled.
+Added: The New Notes were issued pursuant to the Indenture between the Company, certain subsidiaries of the Company, as guarantors, and the Trustee, GLAS Trust Company LLC, a New Hampshire limited liability company, and the New Notes are unconditionally guaranteed jointly and severally by all direct and indirect wholly-owned restricted subsidiaries of the Company, subject to certain excluded subsidiaries (collectively, the "Guarantors").
+Added: The New Notes are secured on a second lien basis, junior to the obligations under the Company’s credit agreement, by substantially all of the assets of the Company and the Guarantors.
+Added: The New Notes are subordinated in right of payment to the payment in full of the obligations under the Company’s credit agreement, dated as of February 26, 2025, with Oaktree Fund Administration, LLC, as administrative agent and as collateral agent, as amended.
+Added: On April 7, 2025, the Company completed a private exchange transaction with a certain institutional investor pursuant to which the such investor exchanged approximately $22.0 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for approximately $10.0 million aggregate principal amount of the New Notes.
+Added: On May 21, 2025, the Company completed a private exchange transaction with certain institutional investors pursuant to which such investors exchanged approximately $139.1 million aggregate principal amount of the Company’s 5.50% Senior Notes due March 2026, 5.00% Senior Notes due December 2026 and 6.00% Senior Notes due January 2028 for approximately $93.1 million aggregate principal amount of the New Notes.
+Added: On June 30, 2025, the Company entered into a private exchange transaction with a certain institutional investor pursuant to which such investor exchanged approximately $28.0 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for $13.0 million aggregate principal amount of the New Notes.
+Added: On July 11, 2025, the Company entered into a private exchange transaction with a certain institutional investor pursuant to which such investor exchanged approximately $42.8 million aggregate principal amount of the Company’s 6.50% Senior Notes due September 2026, 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for $24.6 million aggregate principal amount of the New Notes.
+Added: The indenture under which our senior notes were issued contains limited protection for holders of our publicly traded senior notes.
+Added: The indenture under which our publicly traded senior notes were issued offers limited protection to holders of such senior notes.
The terms of the indenture and our senior notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate transactions, circumstances or events that could have an adverse impact on the holders of our senior notes.
In particular, the terms of the indenture and our senior notes do not place any restrictions on our or our subsidiaries’ ability to:
−Removed: • issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to our senior notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of
−Removed: payment to our senior notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to our senior notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to our senior notes with respect to the assets of our subsidiaries;
+Added: • issue debt securities or otherwise incur additional indebtedness or other obligations, including (1) any indebtedness or other obligations that would be equal in right of payment to our senior notes, (2) any indebtedness or other obligations that would be secured and therefore rank effectively senior in right of payment to our senior notes to the extent of the values of the assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more of our subsidiaries and which therefore is structurally senior to our senior notes and (4) securities, indebtedness or obligations issued or incurred by our subsidiaries that would be senior to our equity interests in our subsidiaries and therefore rank structurally senior to our senior notes with respect to the assets of our subsidiaries;
• pay dividends on, or purchase or redeem or make any payments in respect of, capital stock or other securities subordinated in right of payment to our senior notes;
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Our ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of our senior notes may have important consequences for the holders of our senior notes, including making it more difficult for us to satisfy our obligations with respect to our senior notes or negatively affecting the trading value of our senior notes.
−Removed: Other debt we issue or incur in the future could contain more protections for its holders than the indenture and our senior notes, including additional covenants and events of default.
−Removed: The issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of our senior notes.
+Added: Other current debt contain, or debt we may issue or incur in the future could contain, more protections for its holders than the indenture and our senior notes, including additional covenants and events of default.
+Added: The additional issuance or incurrence of any such debt with incremental protections could affect the market for and trading levels and prices of our senior notes.
An increase in market interest rates could result in a decrease in the value of our senior notes and increase our future borrowing costs.
In general, as market interest rates rise, notes bearing interest at a fixed rate decline in value.
−Removed: Following the increase in market interest rates over the last two years, the market value of our senior notes has declined.
−Removed: We cannot predict the future level of market interest rates, but to the extent market interest rates continue to rise, the market value of our existing senior notes can be expected to further decline.
−Removed: Additionally, if interest rates continue to rise, we may be required to refinance existing lower interest rate indebtedness with indebtedness bearing a higher rate of interest, and our issuance of new indebtedness at higher interest rates would likely cause the market value of our existing indebtedness that we do not refinance to decline.
+Added: The increase in market interest rates over the last several years contributed to the decline in the market value of our senior notes.
+Added: We cannot predict the future level of market interest rates, but to the extent market interest rates rise, the market value of our existing
+Added: senior notes can be expected to further decline.
+Added: Additionally, if interest rates rise, we may be required to refinance existing lower interest rate indebtedness with indebtedness bearing a higher rate of interest, and our issuance of new indebtedness at higher interest rates would likely cause the market value of our existing indebtedness that we do not refinance to decline.
We cannot predict the future level of market interest rates.
An active trading market for our senior notes may not develop, which could limit the market price of our senior notes or the ability of our senior note holders to sell them.
−Removed: The 5.00% 2026 Notes are quoted on NASDAQ under the symbol “RILYG,” the 5.25% 2028 Notes are quoted on NASDAQ under the symbol “RILYZ,” the 6.75% 2024 Notes are quoted on NASDAQ under the symbol “RILYO,” the 6.50% 2026 Notes are quoted on NASDAQ under the symbol “RILYN,” the 6.375% 2025 Notes are quoted on NASDAQ under the symbol “RILYM,” the 5.50% 2026 Notes are quoted on the NASDAQ under the symbol “RILYK” and the 6.00% 2028 Notes are quoted on NASDAQ under the symbol “RILYT”.
+Added: The 5.00% 2026 Notes are quoted on NASDAQ under the symbol “RILYG,” the 5.25% 2028 Notes are quoted on NASDAQ under the symbol “RILYZ,” the 6.50% 2026 Notes are quoted on NASDAQ under the symbol “RILYN,” the 5.50% 2026 Notes are quoted on the NASDAQ under the symbol “RILYK” and the 6.00% 2028 Notes are quoted on NASDAQ under the symbol “RILYT”.
We cannot provide any assurances that an active trading market will develop for our senior notes or that our senior note holders will be able to sell their senior notes.
−Removed: If the senior notes are traded after their initial issuance, they may trade at a discount from their initial offering price depending on prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial
−Removed: condition, performance and prospects and other factors.
−Removed: Accordingly, we cannot assure our senior note holders that a liquid trading market will develop for our senior notes, that our senior note holders will be able to sell our senior notes at a particular time or that the price our senior note holders receive when they sell will be favorable.
+Added: Since issuance, our senior notes have traded at times at a discount from their initial offering price due to prevailing interest rates, the market for similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors.
+Added: We cannot assure our senior note holders that a liquid trading market will develop for our senior notes, that our senior note holders will be able to sell our senior notes at a particular time or that the price our senior note holders receive when they sell will be favorable.
To the extent an active trading market does not develop, the liquidity and trading price for our senior notes may be harmed.
Accordingly, our senior note holders may be required to bear the financial risk of an investment in our senior notes for an indefinite period of time.
−Removed: We may issue additional notes.
+Added: We have and may continue to issue additional notes.
Under the terms of the indenture governing our senior notes, we may from time to time without notice to, or the consent of, the holders of our senior notes, create and issue additional notes which will be equal in rank to our senior notes.
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federal income tax purposes.
−Removed: The rating for the 5.00% 2026 Notes, 5.25% 2028 Notes, 6.75% 2024 Notes, 6.50% 2026 Notes, 6.375% 2025 Notes, 5.50% 2026 Notes, or 6.00% 2028 Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
−Removed: We have obtained a rating for the 5.00% 2026 Notes, 5.25% 2028 Notes, 6.75% 2024 Notes, 6.50% 2026 Notes, 6.375% 2025 Notes, 5.50% 2026 Notes, and 6.00% 2028 Notes (collectively, the “Rated Notes”).
+Added: From March 26, 2025 through July 11, 2025, the Company completed five private exchange transactions with certain institutional investors pursuant to which the investors exchanged approximately $355.0 million of our outstanding publicly traded senior notes for approximately $228.4 million aggregate principal amount of the New Notes.
+Added: The New Notes are unconditionally guaranteed jointly and severally by all direct and indirect wholly-owned restricted subsidiaries of the Company, subject to certain excluded subsidiaries and are secured on a second lien basis, junior to the obligations under the Company’s credit agreement, by substantially all of the assets of the Company and the Guarantors.
+Added: The rating for the 5.00% 2026 Notes, 5.25% 2028 Notes, 6.50% 2026 Notes, 5.50% 2026 Notes, or 6.00% 2028 Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
+Added: We have obtained a rating for the 5.00% 2026 Notes, 5.25% 2028 Notes, 6.50% 2026 Notes, 5.50% 2026 Notes, and 6.00% 2028 Notes (collectively, the “Rated Notes”).
Ratings only reflect the views of the issuing rating agency or agencies and such ratings could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
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In the event of a bankruptcy, liquidation, dissolution or winding-up of the affairs of the Company, the Company’s assets will be available to pay obligations on the 6.875% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) and the 7.375% Series B Cumulative Perpetual Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock” and, together with the Series A Preferred Stock, the “Existing Preferred Stock”), which ranks in parity with the Series A Preferred Stock, only after all of the Company’s indebtedness and other liabilities have been paid.
−Removed: The rights of holders of the Existing Preferred Stock to participate in the distribution of the
−Removed: Company’s assets will rank junior to the prior claims of the Company’s current and future creditors and any future series or class of preferred stock the Company may issue that ranks senior to the Existing Preferred Stock.
−Removed: In addition, the Existing Preferred Stock effectively ranks junior to all existing and future indebtedness and other liabilities of (as well as any preferred equity interests held by others in) the Company’s existing subsidiaries and any future subsidiaries.
+Added: The rights of holders of the Existing Preferred Stock to participate in the distribution of the Company’s assets will rank junior to the prior claims of the Company’s current and future creditors and any future series or class of preferred stock the Company may issue that ranks senior to the Existing Preferred Stock.
+Added: In addition, the Existing Preferred Stock effectively ranks junior to all existing and future indebtedness and other liabilities of (as well as any preferred equity interests held by others) the Company’s existing subsidiaries and any future subsidiaries.
The Company’s existing subsidiaries are, and any future subsidiaries would be, separate legal entities and have no legal obligation to pay any amounts to the Company in respect of dividends due on the Existing Preferred Stock.
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As a result, the Company may not have sufficient funds remaining to satisfy its dividend obligations relating to the Existing Preferred Stock if the Company incurs additional indebtedness.
+Added: In January 2025, the Company suspended payment of cash dividends on its 6.875% Series A and 7.375% Series B preferred shares.
Future offerings of debt or senior equity securities may adversely affect the market price of the Depositary Shares.
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However, the use of depositary shares enables the Company to issue significant amounts of preferred stock, notwithstanding the number of shares authorized by the Company’s certificate of incorporation.
−Removed: The issuance of additional shares of Existing Preferred Stock and additional series of parity preferred stock could have the effect of reducing the amounts available to the Existing Preferred stockholders upon the Company’s liquidation or dissolution or the winding up of the Company’s affairs.
+Added: The issuance of additional shares of Existing Preferred Stock and additional series of parity preferred stock could have the effect of reducing the amounts available to the Existing Preferred
+Added: stockholders upon the Company’s liquidation or dissolution or the winding up of the Company’s affairs.
It also may reduce dividend payments on the Existing Preferred Stock issued and outstanding if the Company does not have sufficient funds to pay dividends on all Existing Preferred Stock outstanding and other classes of stock with equal priority with respect to dividends.
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The conversion feature may not adequately compensate the holders, and the conversion and redemption features of the Existing Preferred Stock and the Depositary Shares may make it more difficult for a party to take over the Company and may discourage a party from taking over the Company.
−Removed: Upon the occurrence of a Delisting Event or Change of Control (each as defined in the certificate of designation for each series of the Existing Preferred Stock, respectively), holders of the Depositary Shares will have the right (unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each as defined in the certificate of designation for each series of the Existing Preferred Stock, respectively), as applicable, the Company has provided or provide notice of the Company’s election to redeem such series of Existing Preferred Stock) to direct the depositary to convert some or all of such series of Existing Preferred Stock underlying their Depositary Shares into the Company’s common stock (or equivalent value of alternative consideration), and under these circumstances the Company will also have a special optional redemption right to redeem such series of Existing Preferred Stock.
+Added: Upon the occurrence of a Delisting Event or Change of Control (each as defined in the certificate of designation for each series of the Existing Preferred Stock, respectively), holders of the Depositary Shares will have the right (unless, prior to the Delisting Event Conversion Date or Change of Control Conversion Date (each as defined in the certificate of
+Added: designation for each series of the Existing Preferred Stock, respectively), as applicable, the Company has provided or provide notice of the Company’s election to redeem such series of Existing Preferred Stock) to direct the depositary to convert some or all of such series of Existing Preferred Stock underlying their Depositary Shares into the Company’s common stock (or equivalent value of alternative consideration), and under these circumstances the Company will also have a special optional redemption right to redeem such series of Existing Preferred Stock.
Upon such a conversion, the holders will be limited to a maximum number of shares of the Company’s common stock equal to the Share Cap (as defined in the certificate of designation for each series of the Existing Preferred Stock, respectively) multiplied by the number of shares of such series of Existing Preferred Stock converted.
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For example, in early 2023, a short-focused research firm raised allegations regarding our investment portfolio, accounting practices, and other matters, and announced that they had taken a significant short position regarding our common stock, leading to public scrutiny and significant volatility in the price of our securities.
−Removed: This firm, as well as additional short sellers, have raised additional allegations over the course of 2023 and 2024, particularly around our relationship with Brian Kahn and the FRG take-private as further described in Item 1.
−Removed: Business – Recent Developments – FRG Take-Private and Related Transactions.
+Added: This firm, as well as additional short sellers, have raised additional allegations over the course of 2023 and 2024, particularly around our relationship with Brian Kahn and the FRG take-private transaction.
These reports and allegations have caused and may continue to cause significant volatility in the price of our common stock and other securities that may cause the value of a securityholder’s investment to decline rapidly.
−Removed: We have received, and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including on X (fka “Twitter”), other forms of social media, articles, message boards and other media.
+Added: We have received, and may continue to receive, a high degree of media coverage that is published or otherwise disseminated by third parties, including on X, other forms of social media, articles, message boards and other media.
This includes coverage that is not attributable to statements made by our directors, officers, employees or agents.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.