Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “seek,” “likely,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report to conform such statements to actual results or to changes in our expectations.
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption “Risk Factors.”
Risk factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: volatility in our revenues and results of operations; changing conditions in the financial markets; matters related to our investment in Freedom VCM Holdings, LLC (“Freedom VCM”) and developments related to our prior business relationship with Brian Kahn (the former CEO of Freedom VCM); the receipt by the Company and Bryant Riley of subpoenas from the SEC; material weaknesses in internal control over financial reporting; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; failure to successfully compete in any of our businesses; our dependence on communications, information and other systems and third parties; the potential loss of financial institution clients; the illiquidity of, and additional potential losses from, our proprietary investments; changing economic and market conditions, including inflation and any actions by the Federal Reserve to address inflation, and the possibility of recession or an economic downturn; the effects of tariffs and other governmental initiatives, and related impacts including supply chain disruptions, labor shortages and increased labor costs; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; loss of key personnel; our ability to borrow under our credit facilities; failure to comply with the terms of our credit agreements or senior notes; the level of our indebtedness; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on divestiture -related issues; the impact of legal proceedings, including in respect of matters related to Freedom VCM and Brian Kahn; the activities of short sellers and their impact on our business and reputation; and the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine and conflicts in the Middle East. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Except as otherwise required by the context, references in this Quarterly Report to the “Company,” “B. Riley,” “B. Riley Financial,” “we,” “us” or “our” refer to the combined business of B. Riley Financial, Inc. and all of its subsidiaries.
Overview
Description of the Company
B. Riley Financial, Inc. (NASDAQ: RILY) (the “Company”) is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. We operate through several consolidated subsidiaries (collectively, “B. Riley”) that provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.
The Company also opportunistically invests in and acquires companies or assets with attractive risk-adjusted return, with a focus on making operational improvements within these companies in an effort to maximize free cash flow.
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We are headquartered in Los Angeles, California and maintain offices throughout the U.S. including in New York, Chicago, Metro District of Columbia, Boston, Memphis, Miami, San Francisco, Boca Raton, and Palm Beach, as well as additional offices located in Canada, Europe, Asia, and Australia.
Our Business Segments
We report our activities in five reportable business segments: Capital Markets, Wealth Management, Communications, Consumer, and E-Commerce segment. The descriptions below illustrate the businesses that comprise our segments.
We maintain a diverse composition of businesses that operate in five reportable segments. Management evaluates many different financial and non-financial metrics to assess the individual performance of each of these various businesses. However, across most businesses, management primarily assesses each business’s financial performance based upon each of the businesses revenues and operating profits generated excluding non-cash charges and the impact of gains and losses related to securities and other investments held. Management believes that gains and losses on individual investments are generally impacted by individual characteristics specific to each investment and although this has an impact on our overall financial performance the impact of these gains and losses may not be indicative of the overall strength or weakness in each of our business operations. Additionally, in evaluating the financial performance of each of our businesses, management monitors the increase or decrease in operating results from period to period while factoring in the relative volatility inherent in each industry in which these businesses operate. Management recognizes that some of the Company’s businesses exhibit more volatile results.
Capital Markets – We provide investment banking, equity research and institutional brokerage services to publicly traded and privately held companies, institutional investors, and financial sponsors; fund and asset management services to institutional and high-net-worth individual investors; and direct lending services to middle market companies. We also trade equity securities as a principal for our account, including investments in funds managed by our subsidiaries. We maintain an investment portfolio comprised of public and private equities and debt securities. We also opportunistically provide loans to our clients, and we engage in securities-based lending which involves the borrowing and lending of equity and fixed income securities.
Our investment approach is value-oriented and represents a core competency of our capital markets strategy. We act as an advisor to our clients, which at times involves complex transactions consistent with our value-oriented investment philosophy. We often provide consulting, capital raising, or investment banking services for companies in which B. Riley may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both.
Wealth Management – We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers. Our experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions.
Communications Segment – We own a number of businesses that comprises our Communications Segment that we have acquired for attractive risk-adjusted investment return characteristics. We may pursue future acquisitions to expand this portfolio of businesses which currently includes: Lingo Management, LLC ("Lingo"), a global cloud/unified communications and managed service provider that includes the operations of BullsEye Telecom, Inc. ("BullsEye"), a single source communications and cloud technology provider (previously merged into Lingo); Marconi Wireless Holdings, LLC ("Marconi Wireless"), a mobile virtual network operator that provides mobile phone voice, text, and data services and devices; magicJack VoIP Services, LLC ("magicJack"), a VoIP cloud-based technology and communications provider that offers related devices and subscription services; and United Online, Inc. ("UOL"), an Internet access provider that offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands.
Consumer Products Segment – This segment is comprised of Tiger US Holdings, Inc. ("Targus"), which is a multinational company that, together with its subsidiaries, designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries. The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories.
E-Commerce Segment – This segment is comprised of Nogin, Inc. ("Nogin"), which is a technology platform operating e-commerce stores that delivers CaaS solutions for apparel brands and other retailers. The Company manages clients’
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front-to-back-end operations of the e-commerce stores and also provides marketing services to their clients. The Company’s business model is based on providing a comprehensive e-commerce solution to its customers on a revenue sharing basis.
Our operating results are primarily comprised of the operations of these businesses within our five reportable operating segments. However, we also generate revenues from other businesses that we may acquire with the goal to expand their operations, drive growth, and create operational efficiencies to improve cash flows to reinvest across other business operations in our platform. These businesses are typically in fragmented markets and include the operations of a regional environmental services business, and bebe which operates rent-to-own stores.
In prior years, we also generated operating revenues from our majority owned subsidiary that licenses the trademarks and intellectual properties from our ownership of six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore, and we generated other income from dividends we receive from our equity ownership of investments that range from 10% to 50% in companies that license the trademark and intellectual property of the Hurley, Justice, and Scotch & Soda brands and bebe and Brookstone brands (equity ownership of bebe stores, inc., our majority owned subsidiary). We also reported fair value adjustments from these equity investments since we elected to account for these equity investments using the fair value method of accounting. These operating results are included in discontinued operations and are expected to be deconsolidated as a result of the Sale by bebe and completion of the Secured Financing of the Brand Interests as discussed in Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements.
Securities and Other Investments Owned Portfolio – We have a portfolio of securities and other investments owned that consists of public equity securities, private equity securities, corporate bonds, other fixed income securities, and partnership interests and other investments as follows at March 31, 2025 and December 31, 2024:
March 31,
2025 December 31,
2024
Public Equity Securities:
Badcock & Wilcox Enterprises, Inc. - common stock $ 18,455 $ 45,012
Badcock & Wilcox Enterprises, Inc. - preferred stock 1,066 1,528
Double Down Interactive Co., Ltd - common stock 41,820 43,706
Synchronoss Technologies, Inc. - common stock 3,377 7,200
Other public equities 14,952 27,446
Total public equity securities 79,670 124,892
Private Equity Securities:
Other private equities 97,747 107,616
Total private equity securities 97,747 107,616
Total equity securities 177,417 232,508
Corporate bonds 30,808 29,027
Other fixed income securities 2,390 4,923
Partnership interest and other 21,145 15,867
Total securities and other investments owned $ 231,760 $ 282,325
Securities and other investments owned was $231.8 million and $282.3 million as of March 31, 2025 and December 31, 2024. Of this amount, the carrying value of equity securities totaled $177.4 million and $232.5 million as of March 31, 2025 and December 31, 2024. Of these amounts, public equity securities totaled $79.7 million and $124.9 million as of March 31, 2025 and December 31, 2024, and private equity securities totaled $97.7 million and $107.6 million as of March 31, 2025 and December 31, 2024.
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The carrying value of Badcock & Wilcox Enterprises, Inc. - common stock held as of held as of March 31, 2025 and December 31, 2024 was $18.5 million and $45.0 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was due to a decrease in the public share price during the period.
The carrying value of our Double Down Interactive Co., Ltd common stock held as of March 31, 2025 and December 31, 2024 was $41.8 million and $43.7 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was primarily due to a decrease in the public share price during the period.
The carrying value of our investments in other public equities held as of March 31, 2025 and December 31, 2024 was $15.0 million and $27.4 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was driven by sales of certain other public equity securities and, to a lesser extent, decreases in the public share prices during the period.
The carrying value of our investments in other private equities held as of March 31, 2025 and December 31, 2024 was $97.7 million and $107.6 million, respectively. The decrease in the carrying value for the three months ended March 31, 2025 was driven by sales of certain private securities and, to a lesser extent, decreases in fair values during the period.
Recent Developments
Wealth Management
On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s (W-2) Wealth Management business to Stifel for estimated net consideration based on the number of advisors that join Stifel at closing, among other things. Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $26.0 million, representing 36 financial advisors whose managed accounts represent approximately $4.0 billion, or 23.6%, of assets under management ("AUM") as of March 31, 2025.
Exchange of Senior Notes
As discussed in more detail in Note 11 - Senior Notes Payable, from April 7, 2025 to July 11, 2025, we completed four private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $29.5 million of the 5.50% Senior Notes due March 2026, $2.1 million of the 6.50% Senior Notes Payable due September 2026, $109.7 million of the 5.00% Senior Notes due December 2026, $51.1 million of the 6.00% Senior Notes due January 2028, and $39.5 million of the 5.25% Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $140.7 million aggregate principal amount of 8.00% Senior Secured Second Lien Notes due 2028 (the "New Notes"), whereupon the Exchanged Notes were cancelled.
Sale of GlassRatner and Farber
On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber. The aggregate cash consideration paid by the Buyers for the interests of GlassRatner and shares of Farber was $117.8 million, which is based on a target closing working capital amount that is subject to adjustment within 180-days following the sale date. In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services.
Targus/FGI Credit Agreement
On August 20, 2025, the Targus ("Targus Borrower") and certain of its direct and indirect subsidiaries (the “FGI Loan Parties”) entered into a Revolving Credit, Receivables Purchase, Security and Guaranty Agreement (the “Targus/FGI Credit Agreement”) with FGI Worldwide LLC (“FGI”), as agent and for a three-year $30.0 million revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the existing Targus Credit Agreement (as more fully discussed in Note 10 — Term Loans and Revolving Credit Facility) with PNC Bank, National Association ("PNC"). The final maturity date of the Targus/FGI Credit Agreement is August 20, 2028. The Targus/FGI Credit Agreement is a revolving line of credit facility with a receivables purchase feature under which the purchase of eligible receivables is on a full recourse basis with each borrower retaining the risk of non-payment. The revolving loans bear interest at the greater of (a) 5.25% per annum or (b) 3.00% above the term Secured Overnight Financing Rate for a period of 1 month plus 10 basis points, plus (c) 0.30% per month collateral management fee. The Targus/FGI Credit Agreement is secured by (i) a first priority perfected security interest in and a lien upon all of the assets of the FGI Loan Parties, and (ii) a
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pledge of all of the equity interests of the Borrower and its direct and indirect subsidiaries. The Targus/FGI Credit Agreement contains certain covenants, including those limiting the FGI Loan Parties' ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Targus/FGI Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement. As required under the Targus/FGI Credit Agreement, B. Riley Commercial Capital, LLC ("BRCC"), a wholly owned subsidiary of the Company, entered into an amendment to an existing intercompany loan and security agreement to extend an additional subordinated loan to the Targus Borrower at the closing of the Targus/FGI Credit Agreement in the amount of $5.0 million increasing the aggregate principal amount of such loan from $5.0 million to $10.0 million.
On November 11, 2025, the Company announced that it will change its name to BRC Group Holdings, Inc., effective on January 1, 2026.
Critical Accounting Estimates
The preparation of our unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities, and reported amounts of revenue and expense during the reporting period. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may significantly differ from those estimates. Critical accounting estimates represent the areas where more significant judgments and estimates are used in the preparation of our unaudited condensed consolidated financial statements. A discussion of such critical accounting estimates, which include fair value measurements, goodwill and other intangible assets, and accounting for income tax valuation allowances can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Results of Operations
The following period to period comparisons of our financial results and our interim results are not necessarily indicative of future results.
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
Condensed Consolidated Statements of Operations
(Dollars in thousands)
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Three Months Ended March 31, Change
2025 2024 Amount %
Revenues:
Services and fees $ 158,839 $ 214,081 $ (55,242) (25.8) %
Trading gains (losses), net (16,171) (17,667) 1,496 (8.5) %
Fair value adjustments on loans (8,096) (12,201) 4,105 (33.6) %
Interest income - loans 3,196 22,135 (18,939) (85.6) %
Interest income - securities lending 840 37,809 (36,969) (97.8) %
Sale of goods 47,455 53,433 (5,978) (11.2) %
Total revenues 186,063 297,590 (111,527) (37.5) %
Operating expenses:
Direct cost of services 42,700 59,670 (16,970) (28.4) %
Cost of goods sold 36,733 38,827 (2,094) (5.4) %
Selling, general and administrative expenses 167,388 178,940 (11,552) (6.5) %
Restructuring charge — 789 (789) (100.0) %
Interest expense - Securities lending and loan participations sold 719 35,383 (34,664) (98.0) %
Total operating expenses 247,540 313,609 (66,069) (21.1) %
Operating loss (61,477) (16,019) (45,458) n/m
Other income (expense):
Interest income 1,486 663 823 124.1 %
Dividend income 135 3,004 (2,869) (95.5) %
Realized and unrealized losses on investments (14,500) (34,924) 20,424 (58.5) %
Change in fair value of financial instruments and other 922 — 922 — %
Gain on sale and deconsolidation of businesses 80,841 314 80,527 n/m
Gain on senior note exchange 10,532 — 10,532 100.0 %
Loss from equity investments (552) (4) (548) n/m
Loss on extinguishment of debt (10,427) — (10,427) (100.0) %
Interest expense (29,964) (35,665) 5,701 (16.0) %
Loss from continuing operations before income taxes (23,004) (82,631) 59,627 (72.2) %
Benefit from income taxes 3,042 21,330 (18,288) (85.7) %
Loss from continuing operations (19,962) (61,301) 41,339 (67.4) %
Income from discontinued operations, net of income taxes 3,395 13,347 (9,952) (74.6) %
Net loss (16,567) (47,954) 31,387 (65.5) %
Net (loss) income attributable to noncontrolling interests (6,592) 1,211 (7,803) n/m
Net loss attributable to B. Riley Financial, Inc. (9,975) (49,165) 39,190 (79.7) %
Preferred stock dividends 2,015 2,015 — — %
Net loss available to common shareholders $ (11,990) $ (51,180) $ 39,190 (76.6) %
n/m - Not applicable or not meaningful.
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Revenues
The table below and the discussion that follows are based on how we analyze our business.
Three Months Ended March 31, Change
2025 2024 Amount %
Services and fees:
Capital Markets segment $ 25,205 $ 60,347 $ (35,142) (58.2) %
Wealth Management segment 46,666 51,182 (4,516) (8.8) %
Communications segment 63,173 81,070 (17,897) (22.1) %
E-Commerce segment
3,469 — 3,469 100.0 %
All Other 20,326 21,482 (1,156) (5.4) %
Subtotal 158,839 214,081 (55,242) (25.8) %
Trading gains (losses), net:
Capital Markets segment (16,783) (18,267) 1,484 (8.1) %
Wealth Management segment 612 600 12 2.0 %
Subtotal (16,171) (17,667) 1,496 (8.5) %
Fair value adjustments on loans:
Capital Markets segment (8,096) (12,201) 4,105 (33.6) %
Interest income - loans:
Capital Markets segment 3,196 22,135 (18,939) (85.6) %
Interest income - securities lending:
Capital Markets segment 840 37,809 (36,969) (97.8) %
Sale of goods:
Communications segment 1,301 1,296 5 0.4 %
Consumer Products segment 42,103 51,522 (9,419) (18.3) %
E-Commerce segment
3,528 — 3,528 100.0 %
All Other 523 615 (92) (15.0) %
Subtotal 47,455 53,433 (5,978) (11.2) %
Total revenues $ 186,063 $ 297,590 $ (111,527) (37.5) %
_______________________________________________
n/m - Not applicable or not meaningful.
Total revenues decreased $111.5 million to $186.1 million during the three months ended March 31, 2025 from $297.6 million during the three months ended March 31, 2024. The decrease in revenues during the three months ended March 31, 2025 was primarily due to decreases in revenues from services and fees of $55.2 million, interest income from securities lending of $37.0 million, interest income from loans of $18.9 million, sale of goods of $6.0 million, partially offset by increases in revenue from fair value adjustments on loans of $4.1 million, and in the fair value of the portfolio of securities and other investments owned of $1.5 million. The $4.1 million favorable variance in fair value adjustments related to loans was primarily driven by $17.5 million related to the loan to Vintage Capital Management, LLC ("VCM"), $3.1 million related to the loan to Freedom VCM Receivables, Inc. ("Freedom VCM"), partially offset by unfavorable variances of $8.5 million related to the loan to Core Scientific, Inc. ("Core Scientific"), $2.9 million related to the loan to Exela Technologies, Inc. ("Exela"), $2.8 million related to the loan to Conn’s, Inc. ("Conn's"), and $2.3 million from all other
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loans receivable. The decrease in revenue from services and fees in the three months ended March 31, 2025 consisted of decreases in revenue of $35.1 million in the Capital Markets segment, and $17.9 million in the Communications segment, $4.5 million in the Wealth Management segment, and $1.2 million in All Other, partially offset by an increase in revenue of $3.5 million in the E-Commerce segment.
Revenues from services and fees in the Capital Markets segment decreased $35.1 million to $25.2 million during the three months ended March 31, 2025 from $60.3 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in revenue of $32.4 million in corporate finance, consulting, and investment banking fees, $2.9 million in commission fees, $1.0 million in dividends, $0.9 million in interest income, $0.3 million in other income and $0.2 million in asset management fees, partially offset by an increase of $2.7 million in contingent accrued management fees. The decrease in investment banking revenues is related to the episodic nature of this business and the decline in business due to the late SEC filings of the parent company. The decreases in investment banking revenues were $11.3 million in mergers and acquisitions advisory fees, $10.6 million in at the market fees, $7.6 million in investment banking underwriting fees, and $3.7 million in private placement fees.
Revenues from the Wealth Management segment are comprised of the following:
Three Months Ended
March 31,
2025 2024
Revenues - Services and fees
Brokerage revenues $ 18,346 $ 23,669
Advisory revenues 16,434 19,350
Other 11,886 8,163
Total services and fees revenue 46,666 51,182
Trading income 612 600
Total revenues $ 47,278 $ 51,782
Revenues from services and fees in the Wealth Management segment decreased $4.5 million to $46.7 million during the three months ended March 31, 2025 from $51.2 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in revenue of $8.8 million from wealth and asset management fees due to a reduction in AUM in December 2024, driven by a loss of headcount, $0.3 million in other income, and $0.3 million in commission fees, partially offset by an increase of $4.9 million in contingent accrued management fees for companies in the process of going public. Total assets under management were approximately $18.4 billion, $20.7 billion, and $25.8 billion at March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Of these amounts, advisory assets under management totaled approximately $6.5 billion at March 31, 2025, and $6.9 billion at December 31, 2024, and $8.0 billion at March 31, 2024. Advisory revenues were 0.25% and 0.24% of average advisory assets under management during the three months ended March 31, 2025 and 2024, respectively. The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management. Broker revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets. Other revenues is primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed.
Revenues from services and fees in the Communications segment decreased $17.9 million to $63.2 million during the three months ended March 31, 2025 from $81.1 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in subscription revenue of $17.6 million, $12.4 million of which related to divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024. Of the remaining $5.2 million decrease in subscription revenue, $2.9 million was from Lingo, $1.1 million was from magicJack, $1.0 million was from Marconi Wireless, and $0.2 million was from UOL. We expect Lingo, magicJack, Marconi Wireless and UOL subscription revenue to continue to decline year-over-year as landline and VoIP technologies are older and cellular services have a higher customer acquisition cost than profitability.
Revenues from services and fees in the E-Commerce segment were $3.5 million during the three months ended March 31, 2025. These revenues consisted of commission fees from Nogin which we acquired in the second quarter of 2024.
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Revenues from services and fees in All Other decreased $1.2 million to $20.3 million during the three months ended March 31, 2025 from $21.5 million during the three months ended March 31, 2024. These revenues include merchandise rental fees and sales from bebe and the operations of a regional environmental services business. Revenues from services and fees in All Other decreased by $1.8 million related to merchandise rental fees from bebe, and $0.5 million due to the operations of a regional environmental services business, partially offset by increases in revenues of $1.1 million in other income.
Trading gains (losses), net decreased $1.5 million to a loss of $16.2 million during the three months ended March 31, 2025 compared to loss of $17.7 million during the three months ended March 31, 2024. The loss of $16.2 million during the three months ended March 31, 2025 was primarily due to realized and unrealized losses on investments made in our proprietary trading accounts, primarily $15.1 million on B&W driven by a decrease in share price.
In our Capital Markets segment, we have a portfolio of loans receivable that are measured at fair value with changes in fair value reported in our results of operations. The loan portfolio and fair value adjustments on loans consisted of the following:
Fair Value Adjustments on Loans
Loans Receivable, at Fair Value Three Months Ended
March 31,
Industry or Type of Loan March 31, 2025 December 31, 2024
2025 2024
Related Party Loans:
Vintage Capital Management, LLC Retail / consumer $ 2,334 $ 2,057 $ 276 $ (17,238)
Freedom VCM Receivables, Inc. Consumer receivable portfolio — 3,913 1,393 (1,681)
Conn's, Inc. Retail / consumer 15,000 38,826 (4,065) (1,254)
W.S. Badcock Corporation Consumer receivable portfolio — 2,169 250 551
Great American Holdings, LLC Professional Services 27,898 — — —
GA Joann Retail Partnership Professional Services 14,184 — — —
Other related party loans Professional Services, Industrials, Oil & Gas 1,900 4,937 — 497
Total related party 61,316 51,902 (2,146) (19,125)
Exela Technologies, Inc. Technology 27,563 32,136 (2,677) 213
Core Scientific, Inc. Technology — — — 8,473
Norlin EV Limited Real Estate 6,142 6,065 (227) 28
Other loans Various 3,575 — (3,046) (1,790)
Total $ 98,596 $ 90,103 $ (8,096) $ (12,201)
The fair value adjustments on loans receivable for the three months ended March 31, 2025 and 2024, were $(8.1) million and $(12.2) million, respectively. During the three months ended March 31, 2025 and 2024, fair value adjustments for loans receivable from related parties totaled $(2.1) million and $(19.1) million, respectively. During the three months ended March 31, 2025 and 2024, fair value adjustments for other loans receivable totaled $(6.0) million and $6.9 million, respectively.
The $4.1 million favorable variance in fair value adjustments related to loans was primarily driven by $17.5 million related to the loan to VCM, $3.1 million related to the loan to Freedom VCM, partially offset by unfavorable variances of $8.5 million related to the loan to Core Scientific, $2.9 million related to the loan to Exela, $2.8 million related to the loan to Conn's, and $2.3 million from all other loans receivable.
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Interest income from loans decreased $18.9 million to $3.2 million during the three months ended March 31, 2025 from $22.1 million during the three months ended March 31, 2024. The decrease was primarily due to non-accrual of interest on the following adjusted loans: $6.1 million for VCM, $4.1 million for Conn's, $2.2 million for Freedom VCM, which was sold in February 2025, and $1.8 million for Nogin, as well as a reduction in loan receivable balances from $452.5 million as of March 31, 2024 to $98.6 million as of March 31, 2025.
Interest income from securities lending decreased $37.0 million to $0.8 million during the three months ended March 31, 2025 from $37.8 million during the three months ended March 31, 2024. The decrease was due to a decrease in the securities borrowed balance from $2.1 billion as of March 31, 2024 to $40.9 million as of March 31, 2025 and decreases of revenue from business decline due to counterparties constraining their business activity.
Revenues from the sale of goods decreased $6.0 million to $47.5 million during the three months ended March 31, 2025 from $53.4 million during the three months ended March 31, 2024. The decrease in revenues from sale of goods was attributable to decreases of $9.4 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide due to market conditions and $0.1 million in All Other, consisting of sale of goods from bebe, partially offset by an increase of $3.5 million from the E-Commerce segment consisting of sale of goods from Nogin, which we acquired in the second quarter of 2024.
Operating Expenses
Direct cost of services
Direct cost of services decreased $17.0 million to $42.7 million during the three months ended March 31, 2025 from $59.7 million during the three months ended March 31, 2024. The decrease in direct cost of services was primarily attributable to decreases of $16.2 million from the Communications segment, $13.4 million of which was attributable to divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024, and $2.3 million from All Other consisting of $0.7 million from bebe, and $1.6 million from the regional environmental services business, partially offset by an increase of $1.6 million from the E-Commerce segment consisting of Nogin, which we acquired in the second quarter of 2024.
Cost of goods sold
Cost of goods sold for the three months ended March 31, 2025 decreased $2.1 million to $36.7 million from $38.8 million during the three months ended March 31, 2024. The decrease in cost of goods sold was primarily attributable to decreases of $5.3 million in the Consumer Products segment, due to lower sales volume, $0.2 million in the Communications segment and $0.1 million from All Other consisting of bebe, partially offset by an increase of $3.1 million from the E-Commerce segment, consisting of Nogin which we acquired in the second quarter of 2024.
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Selling, general and administrative expenses
Selling, general and administrative expenses during the three months ended March 31, 2025 and 2024 were comprised of the following:
Three Months Ended
March 31, 2025 Three Months Ended
March 31, 2024 Change
Amount % Amount % Amount %
Capital Markets segment $ 41,837 25.1 % $ 53,995 30.2 % $ (12,158) (22.5) %
Wealth Management segment 45,554 27.2 % 50,103 28.0 % (4,549) (9.1) %
Communications segment 20,657 12.3 % 23,874 13.3 % (3,217) (13.5) %
Consumer Products segment 15,615 9.3 % 17,522 9.8 % (1,907) (10.9) %
E-Commerce segment
8,428 5.0 % — — % 8,428 100.0 %
Corporate and All Other
35,297 21.1 % 33,446 18.7 % 1,851 5.5 %
Total selling, general & administrative expenses $ 167,388 100.0 % $ 178,940 100.0 % $ (11,552) (6.5) %
Total selling, general and administrative expenses decreased by $11.6 million to $167.4 million during the three months ended March 31, 2025 from $178.9 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $12.2 million in the Capital Markets segment, $4.5 million in the Wealth Management segment, $3.2 million in the Communications segment, and $1.9 million in the Consumer Products segment, partially offset by increases of $8.4 million in the E-Commerce segment and $1.9 million in Corporate and All Other.
Capital Markets
Selling, general and administrative expenses in the Capital Markets segment decreased by $12.2 million to $41.8 million during the three months ended March 31, 2025 from $54.0 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $16.8 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, share based compensation and other payroll expenses largely related to reduced revenue and loss of headcount, and $0.1 million in other expenses, partially offset by increases of $3.4 million in write-offs of receivables and $1.3 million in professional services.
Wealth Management
Selling, general and administrative expenses in the Wealth Management segment decreased by $4.5 million to $45.6 million during the three months ended March 31, 2025 from $50.1 million during the three months ended March 31, 2024. The decrease was primarily due to a decrease of $6.8 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, bonuses and other payroll expenses due to a decrease in headcount, which aligns with the decrease in revenue, partially offset by increases of $1.8 million in arbitration settlements and $0.4 million in other expenses.
Communications
Selling, general and administrative expenses in the Communications segment decreased $3.2 million to $20.7 million for the three months ended March 31, 2025 from $23.9 million for the three months ended March 31, 2024. The decrease was primarily due to decreases of $2.0 million in employee compensation and benefit related expenses due to lower headcount, lower commissions and sale of the Lingo carrier business in the third quarter of 2024, and $1.2 million in depreciation and amortization expenses due to items being fully amortized in 2024.
Consumer Products
Selling, general and administrative expenses in the Consumer Products segment decreased $1.9 million to $15.6 million for the three months ended March 31, 2025 from $17.5 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $0.6 million in professional fees partially due to nonrecurring legal expenses in the prior year, $0.5 million in employee compensation and benefit related expenses due to reduced headcount, and $0.5 million in marketing costs, and $0.3 million in other expenses due to efforts to reduce costs.
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E-Commerce
Selling, general and administrative expenses in the E-Commerce segment consisted of $8.4 million during the three months ended March 31, 2025 from Nogin which was acquired in the second quarter of 2024. Of the $8.4 million, $3.2 million was in employee compensation and benefit related expenses, $2.5 million was in other selling general and administrative expenses, and $2.1 million was in professional services.
Corporate and All Other
Selling, general and administrative expenses for Corporate and All Other increased $1.9 million to $35.3 million during the three months ended March 31, 2025 from $33.4 million for the three months ended March 31, 2024. The increase was primarily due to increases of $6.0 million in transaction costs, of which $4.4 million were from the regional environmental services business which was sold this quarter, $1.5 million in foreign currency fluctuation, and $0.9 million in legal settlements, partially offset by decreases of $3.6 million in employee compensation and benefit related expenses primarily driven by a decrease in share based compensation, $2.0 million in occupancy-related costs, $0.6 million in professional services and $0.3 million in other expenses.
Interest Expense - Securities Lending and Loan Participations Sold. Interest expense - securities lending and loan participations sold decreased $34.7 million to $0.7 million during the three months ended March 31, 2025 from $35.4 million for the three months ended March 31, 2024. The decrease was due to a decrease in the securities loaned and loan participations sold balances from $2.0 billion as of March 31, 2024 to $33.0 million as of March 31, 2025.
Other Income (Expense). Other income included interest income of $1.5 million and $0.7 million during the three months ended March 31, 2025 and 2024, respectively. Dividend income was $0.1 million during the three months ended March 31, 2025 compared to $3.0 million during the three months ended March 31, 2024.
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Realized and unrealized losses on investments was a loss of $14.5 million during the three months ended March 31, 2025 compared to a loss of $34.9 million during the three months ended March 31, 2024, which is comprised of the following:
Realized and Unrealized Gains (Losses)
Three Months Ended
March 31,
2025 2024
Other income (Expense) - Realized & Unrealized Gains (Losses)
Public Equity Securities:
Babcock & Wilcox Enterprises, Inc. - common stock $ (11,488) $ (4,875)
Babcock & Wilcox Enterprises, Inc. - preferred stock (462) 276
Alta Equipment Group, Inc. - common stock — (3,537)
Double Down Interactive Co., Ltd - common stock (2,077) 14,147
Synchronoss Technologies, Inc. - common stock — 2,520
LifeMD, Inc. - Common Stock — (1,015)
Other public equities (208) 2,204
Subtotal (14,235) 9,720
Private Equity Securities:
Freedom VCM Holdings, LLC — (32,655)
Kanaci Technologies, LLC — (7,096)
CSL Completions Co-Invest-A, LLC — (11,541)
Other private equities (1,622) 6,223
Subtotal (1,622) (45,069)
Corporate bonds 1,357 467
Partnership interest and other — (42)
Total $ (14,500) $ (34,924)
The $20.4 million favorable variance was primarily due to unfavorable fair value adjustments recorded in the prior year quarter and no fair value adjustments recorded in the current quarter of $32.7 million in our investment in Freedom VCM Holdings, LLC, which was written off in the fourth quarter of the prior year, $11.5 million in our investment in CSL Completions Co-Invest-A, LLC, $7.1 million in our investment in Kanaci Technologies, LLC, and $3.5 million in our investment in Alta Equipment Group, Inc., the three of which were sold prior to March 31, 2025. These favorable increases were partially offset by unfavorable variances between the comparative reporting periods of $16.2 million related to our investment in Double Down Interactive Co. Ltd and $7.4 million related to our investment in Babcock & Wilcox Enterprises, Inc., both of which were driven by favorable changes in their respective stock prices in the prior year quarter, other private equities of $7.8 million, and other public equities of $3.9 million.
Other income (expense) also includes change in fair value of financial instruments and other was a gain of $0.9 million during the three months ended March 31, 2025 and a gain on sale and deconsolidation of businesses of $80.8 million during the three months ended March 31, 2025 primarily related to $52.4 million net gain on the sale of Atlantic Coast Recycling and $28.4 million net gain on the disposition of Nogin. The gain on senior note exchange was $10.5 million during the three months ended March 31, 2025. The loss on extinguishment of debt was $10.4 million during the three months ended March 31, 2025.
Interest expense was $30.0 million during the three months ended March 31, 2025 compared to $35.7 million during the three months ended March 31, 2024. The decrease in interest expense was due to lower average debt balances during the three months ended March 31, 2025 when compared to the same period in the prior year. The decreases in interest expense primarily consisted of $4.1 million from the Nomura term loan, $2.8 million from the issuance of senior notes,
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$1.4 million from the Lingo term loan, $0.5 million from the Nomura revolving credit facility, and $0.5 million and $0.4 million from the Targus term loan and revolver, respectively, partially offset by increases in interest expense of $3.2 million from the Oaktree term loan, $0.5 million from the BRPAC term loan, and $0.4 million from the Nogin secured convertible promissory note.
Benefit from Income Taxes. Benefit from income taxes was $3.0 million during the three months ended March 31, 2025 compared to a benefit from income taxes of $21.3 million during the three months ended March 31, 2024. The benefit for income taxes in 2025 is primarily limited to the reversal of tax reserves due to the expiration of stature of limitations since the Company has a valuation allowance for deferred taxes. In the prior year period the benefit for income taxes approximated the effective rate for income taxes prior to establishing a valuation allowance at June 30, 2024 due to losses incurred in 2024. The effective income tax rate was 13.2% for the three months ended March 31, 2025 as compared to 25.8% for the three months ended March 31, 2024.
Income from Discontinued Operations, Net of Income Taxes. On October 25, 2024, we and our subsidiary bebe stores, inc. (“bebe”) completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the three months ended March 31, 2024. Income from discontinued operations, net of tax for Brands Transaction was $13.1 million during the three months ended March 31, 2024. The income from discontinued operations is primarily due to realized and unrealized losses incurred on the brand equity investments during the three months ended March 31, 2024 from the planned securitization transaction and Sale of equity investments by the Company’s majority owned subsidiary bebe, as more fully discussed in Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements.
On November 15, 2024, we completed the sale of our Great American Group and its results have been presented as discontinued operations for the three months ended March 31, 2024. Loss from discontinued operations, net of tax for Great American Group was $3.2 million during the three months ended March 31, 2024. Refer to Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements for additional information.
On June 27, 2025, we signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber and their results have been presented as discontinued operations for the three months ended March 31, 2025 and 2024. Income from discontinued operations, net of tax for GlassRatner and Farber was $3.4 million for the three months ended March 31, 2025 and 2024. Refer to Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements for additional information.
Preferred Stock Dividends . Preferred stock dividends were $2.0 million for the three months ended March 31, 2025 and 2024. Dividends on the Series A preferred paid during the three months ended March 31, 2024 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the three months ended March 31, 2024 were $0.4609375 per depository share. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A and B Preferred Stock. Unpaid dividends will accrue until paid in full.
Liquidity and Capital Resources
Our operations are funded through a combination of existing cash on hand, cash generated from operations, investment portfolio liquidity, borrowings under our senior notes payable, term loans and credit facilities, other financing arrangements, and obligations under operating leases. During the three months ended March 31, 2025 and 2024, we generated a net loss attributable to the Company of $10.0 million and $49.2 million, respectively. The Company operates several businesses in its segments that provide cash flows and operating income throughout the year.
As of March 31, 2025, we had $138.3 million of unrestricted cash and cash equivalents, $1.4 million of restricted cash, $231.8 million of securities and other investments owned, $98.6 million of loans receivable, at fair value, $1.6 billion of borrowings outstanding, and approximately $64.0 million of obligations under operating leases. The Company expects to collect approximately $72.5 million of loans at fair value in the next twelve months and has approximately $80.2 million of level 1 securities and other investments owned that are available for sale during the next twelve months.
The Company expects to utilize existing cash balances, cash generated from investments, cash proceeds from the sale of certain businesses described below, available borrowing capacity under our existing revolving credit facility and cash generated from operations to fund debt service obligations over the next twelve months which includes amounts coming due on the Company’s senior notes payable as discussed in Note 11 - Senior Notes Payable. The Company may also explore various funding options in the future that may include additional debt exchanges, refinancing of existing senior
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notes and other debt, equity capital raises, the sale of operating companies, or the liquidation of securities and investments owned to provide liquidity to meet future debt obligations as they become due.
The following summarizes key liquidity events.
We completed the sale of (a) the Company’s majority owned subsidiary Atlantic Coast Recycling, LLC on March 3, 2025 for proceeds of approximately $68.6 million (the “Atlantic Coast Transaction”); (b) the sale of part of Wealth Management business for $26.0 million (the “Wealth Transaction”) as more fully described in Note 3; and (c) the sale of the Company’s financial consulting business on June 27, 2025 for $117.8 million. In addition to the sale of these businesses, approximately $30.0 million of investments and loans were sold during the three months ended March 31, 2025 and approximately $14.0 million of investments were sold from April 1, 2025 through October 31, 2025. Approximately $34.0 million in repayments of loans receivable, fair value were received during the three months ended March 31, 2025 and approximately $44.0 million in repayments of loans receivable, fair value were received from April 1, 2025 through October 31, 2025. The sale of additional investments in the next twelve months will vary based upon the realization of the investments providing the best economic value or as liquidity needs arise for the Company.
As discussed in more detail in Note 11 - Senior Notes Payable, from April 7, 2025 to July 11, 2025, we completed four private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $29.5 million of the 5.50% Senior Notes due March 2026, $2.1 million of the 6.50% Senior Notes Payable due September 2026, $109.7 million of the 5.00% Senior Notes due December 2026, $51.1 million of the 6.00% Senior Notes due January 2028, and $39.5 million of the 5.25% Senior Notes due August 2028 of the Company’s Exchanged Notes owned by the investors were exchanged for approximately $140.7 million aggregate principal amount of New Notes, whereupon the Exchanged Notes were cancelled.
The borrowings outstanding of $1.6 billion as of March 31, 2025 included $1.4 billion from the issuance of series of senior notes that are due at various dates ranging from March 31, 2026 to August 31, 2028 with interest rates ranging from 5.00% to 8.00%, $184.1 million in term loans borrowed pursuant to the Oaktree Capital Management, L.P. ("Oaktree") and BRPI Acquisition Co LLC (“BRPAC”) credit agreements, and $13.8 million of revolving credit facility under the Targus credit facility. Of the senior notes outstanding, after the completion of the four private exchange transactions discussed above, there is $101.6 million of senior notes due in the next twelve months and $1.2 billion thereafter. The $205.5 million of term loans outstanding includes $83.0 million that is expected to be repaid in the next twelve months and $122.5 million thereafter. Of the approximately $64.0 million of obligations due under operating lease, approximately $22.0 million is due in the next twelve months and approximately $42.0 million is due thereafter. For additional information regarding our debt offerings and related agreements, refer to Note 9 - Notes Payable, Note 10 - Term Loans and Revolving Credit Facility, and Note 11 - Senior Notes Payable to the unaudited condensed consolidated financial statements.
We believe that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, cash expected to be generated from operating activities and proceeds received from the Wealth Management Transaction and the sale of the Company’s GlassRatner and Farber financial consulting business will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements. We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan.
Dividends
From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. During the three months ended March 31, 2025, we did not pay any cash dividends on our common stock. During the year ended December 31, 2024, we paid cash dividends on our common stock of $33.7 million. In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors.
A summary of common stock dividend activity for the three months ended March 31, 2025 and the year ended December 31, 2024 was as follows:
Date Declared Date Paid Stockholder Record Date Amount
May 15, 2024 June 11, 2024 May 27, 2024 $ 0.50
February 29, 2024 March 22, 2024 March 11, 2024 0.50
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Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of March 31, 2025, dividends in arrears in respect of the Depositary Shares were $2.0 million. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full.
Holders of Series B Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of March 31, 2025, dividends in arrears in respect of the Depositary Shares were $1.3 million. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series B Preferred Stock. Unpaid dividends will accrue until paid in full.
A summary of preferred stock dividend activity for the three months ended March 31, 2025 and the year ended December 31, 2024 was as follows:
Stockholder Preferred Dividend per Depositary Share
Date Declared Date Paid Record Date Series A Series B
October 16, 2024 October 31, 2024 October 28, 2024 $ 0.4296875 $ 0.4609375
July 9, 2024 July 31, 2024 July 22, 2024 0.4296875 0.4609375
April 9, 2024 April 30, 2024 April 22, 2024 0.4296875 0.4609375
January 9, 2024 January 31, 2024 January 22, 2024 0.4296875 0.4609375
Our principal sources of liquidity to finance our business are our existing cash on hand, cash flows generated from operating activities, funds available under revolving credit facilities and special purpose financing arrangements.
Cash Flow Summary
Three Months Ended
March 31,
2025 2024
(Dollars in thousands)
Net cash provided by (used in):
Operating activities $ 184 $ 135,357
Investing activities 59,181 18,278
Financing activities (172,529) (190,933)
Effect of foreign currency on cash (465) (3,962)
Net decrease in cash, cash equivalents and restricted cash $ (113,629) $ (41,260)
Cash provided by operating activities was $0.2 million during the three months ended March 31, 2025 compared to cash provided by operating activities of $135.4 million during the three months ended March 31, 2024. The reduction of $135.2 million in net cash provided by operating activities in the first quarter of 2025 was primarily due to $143.4 million less cash generated from securities and other investments owned, as fewer securities positions were sold to provide liquidity to fund operations and repayment of the 6.375% Senior Notes due February 28, 2025. Cash provided by operating activities for the three months ended March 31, 2025 consisted of the impact of net loss of $16.6 million, noncash items of $40.9 million, and changes in operating assets and liabilities of $57.7 million. The negative cash flow impact from noncash items of $40.9 million included gain on sale and deconsolidation of business of $80.8 million, gain on senior note exchange of $10.5 million, gain on sale or disposal of fixed assets and other of $1.4 million, and net foreign currency gains of $0.2 million, partially offset by positive impact from loss on extinguishment of debt of $10.4 million, depreciation and amortization of $10.1 million, deferred income taxes of $9.0 million, fair value and remeasurement adjustments of $8.4 million, non-cash interest and other of $4.5 million, share-based compensation of $3.6 million, depreciation of rental merchandise of $3.4 million, provision for losses on accounts receivable of $2.1 million, loss from equity investments of
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$0.6 million and dividends from equity investments of $0.1 million. Cash provided by operating activities for the three months ended March 31, 2024 consisted of the impact of net loss of $48.0 million, noncash items of $19.8 million, and changes in operating assets and liabilities of $163.5 million. The positive cash flow impact from noncash items of $19.8 million included fair value and remeasurement adjustments of $13.7 million, depreciation and amortization of $11.1 million, share-based compensation of $8.7 million, depreciation of rental merchandise of $4.2 million, provision for losses on accounts receivable of $0.4 million, income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests of $0.3 million, net foreign currency losses of $0.3 million, partially offset by deferred income taxes of $16.0 million, non-cash interest and other of $2.7 million, and gain on sale of business and other of $0.3 million.
Cash provided by investing activities was $59.2 million during the three months ended March 31, 2025 compared to cash provided by investing activities of $18.3 million for the three months ended March 31, 2024. The increase of $40.9 million in net cash provided by investing activities in the first quarter of 2025 was primarily due to $68.9 million in proceeds received from the sale of the Atlantic Coast Recycling business, partially offset by a $27.3 million reduction in net proceeds from loans receivable, which were used in the first quarter of 2024 to create additional liquidity and facilitate the repayment of 6.375% Senior Notes due February 28, 2025. During the three months ended March 31, 2025, cash provided by investing activities consisted of cash provided by sale of business, net of cash sold and other of $68.9 million, loans receivable repayment of $46.8 million, proceeds from sale of property, equipment, intangible assets, and other of $7.2 million, sale of loans receivable of $6.8 million, proceeds from sale of loan participations of $4.0 million, and consolidation of VIE of $0.4 million , partially offset by cash used in purchases of loans receivable of $61.5 million, purchases of property, equipment and intangible assets of $6.7 million, and purchases of equity and other investments of $6.6 million. During the three months ended March 31, 2024, cash provided by investing activities consisted of cash received from loans receivable repayment of $39.5 million, and sale of loan receivable of $22.8 million, partially offset by cash used for purchases of loans receivable of $42.9 million, purchases of property and equipment of $0.9 million, and sale of business, net of cash sold and other of $0.2 million.
Cash used in financing activities was $172.5 million during the three months ended March 31, 2025 compared to cash used in financing activities of $190.9 million during the three months ended March 31, 2024. The reduction of $18.4 million in net cash used in financing activities in the first quarter of 2025 was primarily due to the suspension of dividends, compared to $18.0 million paid in common stock and preferred dividends in the first quarter of 2024. During the three months ended March 31, 2025, cash used in financing activities primarily consisted of $239.3 million used in the repayment of term loan, $145.3 million used to redeem senior notes, $24.1 million used in payment of revolving line of credit, $12.8 million used to repay our notes payable and other, and $8.9 million used to pay debt issuance and offering costs, partially offset by cash provided by $235.6 million in proceeds from term loan, $21.5 million in proceeds from revolving line of credit, and $0.9 million in proceeds from notes payable. During the three months ended March 31, 2024, cash used in financing activities primarily consisted of $115.5 million used to redeem senior notes, $39.3 million used in repayment of revolving line of credit, $30.0 million used in the repayment of term loan, $16.0 million used to pay dividends on our common shares, $5.4 million used to repay our notes payable and other, $2.0 million used to pay dividends on our preferred shares, $1.5 million in distributions to noncontrolling interests, $1.2 million used in payment of employment taxes on vesting of restricted stock, $0.2 million used in the payment of debt issuance and offering costs, and $0.1 million used in the payment of contingent consideration, partially offset by cash provided by $17.7 million in proceeds from revolving line of credit and $2.5 million in contributions from noncontrolling interests.
Recent Accounting Standards
See Note 2(s) - Recent Accounting Standards to the accompanying unaudited condensed consolidated financial statements for recent accounting standards.
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