What changed in this filing

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Item 1. Financial Statements

2026-01-14 compared with 2025-12-15 · 503 added, 489 removed, 1806 unchanged (35% of the section changed)

Financial Statements.

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value)

September 30,

2025 December 31,

3 unchanged sentences

Due from clearing brokers 148,291 30,713

Securities and other investments owned (includes $ 172,135 and $ 215,225 at fair value as of June 30, 2025 and December 31, 2024, respectively (1)

Securities and other investments owned (includes $ 245,475 and $ 215,225 at fair value as of September 30, 2025 and December 31, 2024, respectively (1) )

315,466 282,325

Securities borrowed 106,777 43,022

Accounts receivable, net of allowance for credit losses of $ 6,022 and $ 6,100 as of June 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 6,580 and $ 6,100 as of September 30, 2025 and December 31, 2024, respectively

63,457 68,653

Due from related parties 202 189

Loans receivable, at fair value (includes $ 19,370 and $ 51,902 from related parties as of June 30, 2025 and December 31, 2024, respectively)

Loans receivable, at fair value (includes $ 27,845 and $ 51,902 from related parties as of September 30, 2025 and December 31, 2024, respectively)

55,018 90,103

Prepaid expenses and other assets (includes $ 75 and $ 3,449 from related parties as of June 30, 2025 and December 31, 2024, respectively) (1)

Prepaid expenses and other assets (includes $ 118 and $ 3,449 from related parties as of September 30, 2025 and December 31, 2024, respectively) (1)

219,401 242,916

26 unchanged sentences

Commitments and contingencies (Note 17)

Riley Financial, Inc.

equity (deficit):

BRC Group Holdings, Inc.

Riley Financial, Inc.) equity (deficit):

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

4,563 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively;

and liquidation preference of $ 118,112 and $ 114,082 as of June 30, 2025 and December 31, 2024, respectively

4,563 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively;

and liquidation preference of $ 120,127 and $ 114,082 as of September 30, 2025 and December 31, 2024, respectively

Common stock, $ 0.0001 par value;

100,000,000 shares authorized;

30,597,066 and 30,499,931 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

30,597,066 and 30,499,931 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 596,320 589,387

1 unchanged sentence

Accumulated other comprehensive loss ( 6,654 ) ( 6,569 )

Riley Financial, Inc.

stockholders’ deficit ( 351,706 ) ( 488,175 )

Total Registrant stockholders’ deficit ( 260,460 ) ( 488,175 )

Noncontrolling interests (1)

2 unchanged sentences

Total liabilities and deficit $ 1,669,311 $ 1,783,263

(1) At June 30, 2025, the balance sheet includes cash of $ 365 , securities and other investments owned, at fair value of $ 503 , prepaid and other expenses of $ 3,800 , accrued expenses and other liabilities of $ 253 and noncontrolling interest of $ 3,826 of consolidated variable interest entities (Note 2 (o) ).

(1) At September 30, 2025, the balance sheet includes cash of $ 194 , securities and other investments owned, at fair value of $ 666 , prepaid and other expenses of $ 3,795 , accrued expenses and other liabilities of $ 10 and noncontrolling interest of $ 4,643 of consolidated variable interest entities (Note 2 (o) ).

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Loss)

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Services and fees (includes $ 5,121 and $ 3,119 for the three months ended June 30, 2025 and 2024 and $ 7,849 and $ 5,398 for the six months ended June 30, 2025 and 2024 from related parties, respectively)

Services and fees (includes $ 1,319 and $ 2,227 for the three months ended September 30, 2025 and 2024 and $ 9,168 and $ 7,802 for the nine months ended September 30, 2025 and 2024 from related parties, respectively)

$ 170,668 $ 174,573 $ 475,279 $ 591,563

Trading gains (losses), net 53,012 ( 1,238 ) 64,521 ( 50,226 )

Fair value adjustments on loans (includes $( 992 ) and $( 177,618 ) for the three months ended June 30, 2025 and 2024 and $( 3,137 ) and $( 196,743 ) for the six months ended June 30, 2025 and 2024 from related parties, respectively)

Fair value adjustments on loans (includes $( 49 ) and $( 68,768 ) for the three months ended September 30, 2025 and 2024 and $( 3,185 ) and $( 265,512 ) for the nine months ended September 30, 2025 and 2024 from related parties, respectively)

1,299 ( 71,477 ) ( 5,997 ) ( 259,260 )

Interest income - loans (includes $ 475 and $ 13,439 for the three months ended June 30, 2025 and 2024 and $ 1,171 and $ 27,403 for the six months ended June 30, 2025 and 2024 from related parties, respectively)

Interest income - loans (includes $ 647 and $ 7,472 for the three months ended September 30, 2025 and 2024 and $ 1,818 and $ 34,875 for the nine months ended September 30, 2025 and 2024 from related parties, respectively)

2,094 11,251 9,143 51,894

19 unchanged sentences

Income from equity investments 9,193 6 34,244 12

(Loss) gain on extinguishment of debt ( 10,266 ) 120 ( 20,693 ) 120

Loss on extinguishment of debt ( 950 ) ( 5,900 ) ( 21,643 ) ( 5,780 )

Interest expense ( 18,769 ) ( 32,996 ) ( 72,685 ) ( 102,195 )

2 unchanged sentences

Income (loss) from continuing operations 97,419 ( 150,611 ) 149,144 ( 661,063 )

Income from discontinued operations, net of income taxes 69,312 15,370 72,707 28,717

(Loss) income from discontinued operations, net of income taxes ( 1,866 ) ( 136,987 ) 70,841 ( 108,270 )

Net income (loss) 95,553 ( 287,598 ) 219,985 ( 769,333 )

Net income (loss) attributable to noncontrolling interests 4,470 ( 3,201 ) ( 594 ) ( 2,167 )

Net income (loss) attributable to B.

Riley Financial, Inc.

139,471 ( 433,604 ) 129,496 ( 482,769 )

Net income (loss) attributable to Registrant 91,083 ( 284,397 ) 220,579 ( 767,166 )

Preferred stock dividends 2,015 2,015 6,045 6,045

11 unchanged sentences

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

Change in cumulative translation adjustment ( 756 ) 3,981 ( 85 ) ( 1,135 )

Other comprehensive income (loss), net of tax 1,158 ( 1,244 ) 671 ( 5,116 )

Other comprehensive (loss) income, net of tax ( 756 ) 3,981 ( 85 ) ( 1,135 )

Total comprehensive income (loss) 94,797 ( 283,617 ) 219,900 ( 770,468 )

Comprehensive income (loss) attributable to noncontrolling interests 4,470 ( 3,201 ) ( 594 ) ( 2,167 )

Comprehensive income (loss) attributable to B.

Riley Financial, Inc.

$ 140,629 $ ( 434,848 ) $ 130,167 $ ( 487,885 )

Comprehensive income (loss) attributable to Registrant $ 90,327 $ ( 280,416 ) $ 220,494 $ ( 768,301 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

Condensed Consolidated Statements of Equity (Deficit)

(Dollars in thousands, except share and per share data)

For the Three Months Ended June 30, 2025 and 2024

For the Three Months Ended September 30, 2025 and 2024

Preferred Stock Common Stock Additional

4 unchanged sentences

Shares Amount Shares Amount

Balance, April 1, 2025 4,563 $ — 30,497,066 $ 3 $ 591,207 $ ( 1,080,971 ) $ ( 7,056 ) $ 42,847 $ ( 453,970 )

Common stock issued, in connection with employment agreement — — 100,000 — 295 — — — 295

Balance, July 1, 2025 4,563 $ — 30,597,066 $ 3 $ 595,432 $ ( 941,243 ) $ ( 5,898 ) $ 42,403 $ ( 309,303 )

Warrants issued — — — — 248 — — — 248

5 unchanged sentences

Other comprehensive loss — — — — — — ( 756 ) — ( 756 )

Balance, June 30, 2025

Balance, September 30, 2025

4,563 $ — 30,597,066 $ 3 $ 596,320 $ ( 850,129 ) $ ( 6,654 ) $ 47,369 $ ( 213,091 )

Balance, April 1, 2024 4,563 $ — 30,095,303 $ 3 $ 579,647 $ ( 347,558 ) $ ( 3,643 ) $ 71,208 $ 299,657

Vesting of restricted stock and other, net of shares withheld for employer taxes — — 167,725 — ( 1,966 ) — — — ( 1,966 )

Common stock issued upon exercise of warrants — — 200,000 — 653 — — — 653

Common stock issued in extinguishment of senior notes — — 36,903 — 1,011 — — — 1,011

Balance, July 1, 2024 4,563 $ — 30,499,931 $ 3 $ 585,493 $ ( 798,945 ) $ ( 4,887 ) $ 75,233 $ ( 143,103 )

Share based payments — — — — 2,658 — — — 2,658

Share based payments in equity of subsidiary — — — — 34 — — — 34

Dividends on common stock ($ 0.50 per share)

— — — — — ( 15,768 ) — — ( 15,768 )

Vesting of shares in equity of subsidiary — — — — ( 137 ) — — 137 —

Dividends on common stock, net of forfeitures — — — — — 629 — — 629

Dividends on Series A preferred stock ($ 0.4296875 per depository share)

5 unchanged sentences

Contributions from noncontrolling interests — — — — — — — 256 256

Acquisition of noncontrolling interests — — — — — — — 4,651 4,651

Other comprehensive loss — — — — — — ( 1,244 ) — ( 1,244 )

Balance, June 30, 2024

Other comprehensive income — — — — — — 3,981 — 3,981

Balance, September 30, 2024

4,563 $ — 30,499,931 $ 3 $ 588,048 $ ( 1,084,728 ) $ ( 906 ) $ 71,361 $ ( 426,222 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

For the Six Months Ended June 30, 2025 and 2024

For the Nine Months Ended September 30, 2025 and 2024

Preferred Stock Common Stock Additional

20 unchanged sentences

Other comprehensive loss — — — — — — ( 85 ) — ( 85 )

Balance, June 30, 2025

Balance, September 30, 2025

4,563 $ — 30,597,066 $ 3 $ 596,320 $ ( 850,129 ) $ ( 6,654 ) $ 47,369 $ ( 213,091 )

5 unchanged sentences

Share based payments in equity of subsidiary — — — — 106 — — — 106

Dividends on common stock ($ 1.00 per share)

Vesting of shares in equity of subsidiary — — — — ( 137 ) — — 137 —

Dividends on common stock ($ 1.00 per share), net of forfeitures

— — — — — ( 30,232 ) — — ( 30,232 )

3 unchanged sentences

— — — — — ( 2,391 ) — — ( 2,391 )

Net (loss) income — — — — — ( 482,769 ) — 1,034 ( 481,735 )

Net loss — — — — — ( 767,166 ) — ( 2,167 ) ( 769,333 )

Distributions to noncontrolling interests — — — — — — — ( 2,921 ) ( 2,921 )

2 unchanged sentences

Other comprehensive loss — — — — — — ( 1,135 ) — ( 1,135 )

Balance, June 30, 2024

Balance, September 30, 2024

4,563 $ — 30,499,931 $ 3 $ 588,048 $ ( 1,084,728 ) $ ( 906 ) $ 71,361 $ ( 426,222 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities (1) :

9 unchanged sentences

Depreciation of rental merchandise 9,898 11,718

Net foreign currency (gains) losses ( 481 ) 347

Net foreign currency gains ( 470 ) ( 297 )

Income from equity investments ( 34,244 ) ( 12 )

2 unchanged sentences

Impairment of goodwill and tradenames 1,500 27,681

Gain on disposal of discontinued operations ( 66,795 ) —

(Gain) loss on disposal of discontinued operations ( 66,795 ) 39,500

(Gain) loss on sale or disposal of fixed assets and other ( 1,298 ) 67

Gain on sale and deconsolidation of businesses ( 86,213 ) ( 790 )

(Loss) gain on extinguishment of debt 20,693 ( 120 )

Loss on extinguishment of debt 21,643 5,780

Gain on senior note exchange ( 67,208 ) —

17 unchanged sentences

137,744 105,331

Proceeds from sales of loans receivable (includes $ 6,611 and $ — from related parties for 2025 and 2024, respectively)

Proceeds from sale of loans receivable (includes $ 6,611 and $ — from related parties for 2025 and 2024, respectively)

10,415 22,785

4 unchanged sentences

Proceeds from sale of property, equipment, intangible assets, and other 7,587 —

Distributions from equity investment 34,869 —

Distributions from equity investments 37,536 —

Purchases of equity and other investments ( 6,621 ) ( 1,065 )

Consolidation of VIE 359 —

Proceeds from sale of discontinued operations, net of cash sold 114,032 —

Proceeds from sale of discontinued operations, net of $ 3,344 and $ — cash sold for 2025 and 2024, respectively

Net cash provided by investing activities 275,927 25,529

9 unchanged sentences

Payment of contingent consideration ( 1,424 ) ( 7,395 )

Payment of employment taxes on vesting of restricted stock — ( 3,136 )

ESPP and payment of employment taxes on vesting of restricted stock — ( 3,136 )

Common dividends paid — ( 33,627 )

Preferred dividends paid — ( 6,045 )

Distribution to noncontrolling interests ( 3,249 ) ( 3,173 )

Distributions to noncontrolling interests ( 3,604 ) ( 4,560 )

Contributions from noncontrolling interests — 3,213

1 unchanged sentence

Net cash used in financing activities ( 260,989 ) ( 354,722 )

Increase in cash, cash equivalents and restricted cash (1)

Decrease in cash, cash equivalents and restricted cash (1)

( 70,994 ) ( 62,899 )

1 unchanged sentence

( 183 ) ( 1,092 )

Net increase in cash, cash equivalents and restricted cash (1)

Net decrease in cash, cash equivalents and restricted cash (1)

( 71,177 ) ( 63,991 )

Cash, cash equivalents and restricted cash from continuing operations, beginning of period 248,651 218,546

10 unchanged sentences

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1 unchanged sentence

NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

Riley Financial, Inc.

and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, and 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.

BRC Group Holdings, Inc.

Riley Financial, Inc.) and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, and 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 has a portfolio of communication related businesses that provide consumer internet access and cloud communication services, Tiger US Holdings, Inc.

18 unchanged sentences

Net cash proceeds received as a result of the sale were net of adjustments for amounts allocated to non-controlling interests, repayment of contingent consideration, transaction costs and other items directly attributable to the closing of the transaction.

The Company recognized a gain of $ 52,430 in connection with the sale, which is included in the “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2025.

The Company determined that the assets and liabilities associated with the Atlantic Coast Recycling transaction met the criteria to be classified as held for sale, as discussed in Note 4 - Discontinued Operations and Assets Held for Sale, and were properly classified in the consolidated balance sheet as of December 31, 2024.

2 unchanged sentences

The aggregate cash consideration paid by the buyers for the interests of GlassRatner and shares of Farber was $ 117,800 , which is based on a target closing working capital amount that is subject to adjustment within 180 -days following the sale date.

Upon closing the transaction, the Company recognized a gain of $ 66,795 , which is included in the “Income from discontinued operations, net of income taxes” line item on the accompanying unaudited condensed consolidated statements of operations for the six months ended June 30, 2025.

The Company also entered into a transition services agreement with the buyer to provide certain services.

Management concluded that the sale of the GlassRatner business represented a strategic shift that had a major effect on the Company’s operations in 2025 and met the criteria for discontinued operations and, as such, have been excluded from continuing operations in the periods presented as more fully described in Note 4 - Discontinued Operations and Assets Held for Sale.

On November 11, 2025, the Company announced that our corporate name will be changed from B.

Riley Financial, Inc.

to BRC Group Holdings, Inc.

(the “Name Change”), effective on January 1, 2026.

Our trading symbol (“RILY”) and our CUSIP (05580M 108) will not change.

For the six months ended June 30, 2025, the Company generated net income of $ 129,496 .

During the six months ended June 30, 2025 the Company completed the sale of the Company’s majority owned subsidiary Atlantic Coast Recycling, LLC on March 3, 2025 for proceeds of approximately $ 68,638 , as more fully described above.

On January 1, 2026, the Company’s previously announced name change became effective.

The name of the Company is now BRC Group Holdings, Inc.

Our trading symbol (“RILY”) and our CUSIP (05580M108) remain the same.

For the nine months ended September 30, 2025, the Company generated net income of $ 220,579 .

During the nine months ended September 30, 2025, the Company completed the sale of the Company’s majority owned subsidiary Atlantic Coast Recycling, LLC on March 3, 2025 for proceeds of approximately $ 68,638 , as more fully described above.

The Company also completed (a) the sale of the Wealth Management Transaction for $ 26,037 on April 4, 2025, as more fully described in Note 4 - Discontinued Operations and Assets Held for Sale, and (b) the Company’s financial consulting business on June 27, 2025 for $ 117,800 as more fully described above.

As discussed in more detail in Note 12 - Senior Notes Payable, for the six months ended June 30, 2025, the Company completed four private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $ 115,844 of the 5.50 % Senior Notes due March 2026, $ 126,766 of the 5.00 % Senior Notes due December 2026, $ 46,429 of the 6.00 % Senior Notes due January 2028, and $ 23,096 of the 5.25 % Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $ 203,812 aggregate principal amount of 8.00 % Senior Secured Second Lien Notes due 2028 (the “New Notes”), whereupon the Exchanged Notes were cancelled.

On July 11, 2025, the Company completed private exchange transactions with institutional investors pursuant to which aggregate principal amounts of Exchanged Notes of approximately $ 2,061 of the 6.50 % Senior Notes Payable due September 30, 2026, $ 19,682 of the 5.00 % Senior Notes due December 2026, $ 4,706 of the 6.00 % Senior Notes due January 2028, and $ 16,389 of the 5.25 % Senior Notes due August 2028 owned by the investors were exchanged for approximately $ 24,611 aggregate principal amount of newly-issued New Notes, whereupon the Exchanged Notes were cancelled.

As discussed in more detail in Note 12 - Senior Notes Payable, during the nine months ended September 30, 2025, the Company completed five private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $ 115,844 of the 5.50 % Senior Notes due March 2026, $ 2,061 of the 6.50 % Senior Notes Payable due September 2026, $ 146,448 of the 5.00 % Senior Notes due December 2026, $ 51,135 of the 6.00 % Senior Notes due January 2028, and $ 39,485 of the 5.25 % Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $ 228,423 aggregate principal amount of 8.00 % Senior Secured Second Lien Notes due 2028 (the “New Notes”), whereupon the Exchanged Notes were cancelled.

After the completion of the Exchanged Notes described above, the Company has approximately $ 101,596 of 5.50 % Senior Notes due March 31, 2026, $ 178,471 of 6.50 % Senior Notes due September 30, 2026, and $ 178,266 of 5.00 % Senior Notes due December 31, 2026 as more fully described in Note 12 - Senior Notes Payable.

5 unchanged sentences

The Company filed its Form 10-K for the fiscal year ended December 31, 2024 on September 19, 2025 and its Q1 Report on November 18, 2025.

The basis for the November Determination

Letter was that the Company has not yet filed its Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Q3 Report”).

The Prior Determination Letter received on October 1, 2025 noted that, after the Staff’s review of the materials submitted by the Company on September 4, 2025 and September 19, 2025 (the “Updated Plan of Compliance”), it lacked the discretion within Nasdaq’s rules to grant the Company a further exception beyond the September 29, 2025 deadline that was previously granted to regain compliance with the Filing Rule.

The basis for the November Determination Letter was that the Company has not yet filed its Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Q3 Report”).

was previously granted to regain compliance with the Filing Rule.

The November Determination Letter and Prior Determination Letters did not result in the suspension of trading or delisting of the Company’s securities.

5 unchanged sentences

The Hearings Panel granted the Company’s request for continued listing on Nasdaq, subject to filing with the SEC on or before (i) November 21, 2025, the Q1 Report, (ii) December 23, 2025, the Q2 Report, and (iii) January 20, 2026, the Q3 Report.

The Company filed with the SEC the Q1 Report on November 18, 2025 and this Q2 Report on the filing date hereof.

The Company anticipates filing its Q3 Report with the SEC no later than January 20, 2026 (in accordance with the Decision Letter).

The Decision Letter also noted that, should the Company miss any such deadline, the Hearings Panel will delist the Company’s securities from the Exchange.

The Company filed with the SEC the Q1 Report on November 18, 2025, the Q2 Report on December 15, 2025 and this Q3 Report on the filing date hereof.

The Company believes it has met all deadlines requested by the Hearings Panel in the Decision Letter.

The Hearings Panel also made it a requirement during the exception period that the Company provides prompt notification of any significant events that occur during this time that may affect the Company’s compliance with Nasdaq requirements.

In addition, the Decision Letter advised that the Nasdaq Listing and Hearing Review Council (the “Listing Council”) may, on its own motion, determine to review any Hearings Panel decision within 45 calendar days after issuance of the written decision.

If the Listing Council determines to review this Decision Letter, it may affirm, modify, reverse, dismiss or remand the decision to the Hearings Panel.

As of the date of filing of this Q2 Report, the Company has received no communication from the Listing Council.

There can be no assurance that the Company will be able to file the Q3 Report timely or meet other Nasdaq continued listing requirements in the future.

There can be no assurance that the Company will be able to file future reports timely or meet other Nasdaq continued listing requirements in the future.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

( a) Principles of Consolidation and Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of B.

Riley Financial, Inc.

and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The unaudited condensed consolidated financial statements include the accounts of BRC Group Holdings, Inc.

Riley Financial, Inc.) and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

All intercompany accounts and transactions have been eliminated upon consolidation.

7 unchanged sentences

Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the

financial position and the results of operations for the periods presented have been included.

In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and the results of operations for the periods presented have been included.

The disclosures presented in our notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis.

These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The unaudited results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

The unaudited results of operations for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

(b) Risks and Uncertainties

17 unchanged sentences

Cash, cash equivalents and restricted cash consist of the following:

September 30,

2025 December 31,

3 unchanged sentences

(f) Supplemental Non-cash Disclosures

During the six months ended June 30, 2025, there was non-cash investing activity of $ 8,876 related to loans transferred to loans held for sale from loans receivable at fair value.

During the six months ended June 30, 2025, there was non-cash financing activity related to the Company’s exchange of its 5.50 % Senior Notes due March 2026 in the aggregate principal amount of $ 115,844 , its 5.00 % Senior Notes due December 2026 in the aggregate principal amount of $ 126,766 , its 5.25 % Senior Notes due August 2028 in the aggregate principal amount of $ 23,096 , and its 6.00 % Senior Notes due January 2028 in the aggregate principal amount of $ 46,429 for its New Notes in the aggregate principal amount of $ 247,468 for a net gain on exchange of senior notes of $ 54,986 .

There was also non-cash financing activity related to the recognition of capital from a noncontrolling interest of $ 12,494 upon the Company’s initial consolidation of a VIE, issuance of common stock in equity of subsidiary in the amount of $ 1,575 and the disposition of noncontrolling interests through the sale and deconsolidation of businesses of $ 2,918 , the reclassification of restricted stock awards from equity-classified awards in the amount of $ 2,138 , the issuance of warrants for a term loan of $ 7,860 , a derivative liability for the exit fee of that term loan of $ 11,244 , and warrants issued for senior notes of $ 1,600 .

During the six months ended June 30, 2024, there was non-cash investing activity related to the receipt of a note receivable in the amount of $ 2,000 related to the sale of certain assets, $ 42,077 related to a loan receivable, at fair value that converted into equity securities, and DIP loan conversion to purchase consideration equity for the purchase of Nogin, Inc.

(“Nogin”) in the amount of $ 37,700 .

During the nine months ended September 30, 2025, there was non-cash investing activity of $ 8,876 related to loans transferred to loans held for sale from loans receivable at fair value.

During the nine months ended September 30, 2025, there was non-cash financing activity related to the Company’s exchange of its 5.50 % Senior Notes due March 2026 in the aggregate principal amount of $ 115,844 , its 5.00 % Senior Notes due December 2026 in the aggregate principal amount of $ 146,448 , its 5.25 % Senior Notes due August 2028 in the aggregate principal amount of $ 39,486 , its 6.00 % Senior Notes due January 2028 in the aggregate principal amount of $ 51,134 , and its 6.50 % Senior Notes due September 2026 in the aggregate principal amount of $ 2,061 for its New Notes in the aggregate principal amount of $ 277,007 for a net gain on

exchange of senior notes of $ 67,208 .

There was also non-cash financing activity related to the recognition of capital from a noncontrolling interest of $ 12,494 upon the Company’s initial consolidation of a VIE, issuance of common stock in equity of subsidiary in the amount of $ 1,575 , the disposition of noncontrolling interests through the sale and deconsolidation of businesses of $ 2,918 , the reclassification of restricted stock awards from equity-classified awards in the amount of $ 2,138 , the issuance of warrants for a term loan of $ 7,860 , a derivative liability for the exit fee of that term loan of $ 11,244 , and warrants issued for senior notes of $ 1,848 .

During the nine months ended September 30, 2024, there was non-cash investing activity related to the receipt of a note receivable in the amount of $ 2,000 related to the sale of certain assets, $ 42,077 related to a loan receivable, at fair value that converted into equity securities, DIP loan conversion to purchase consideration equity for the purchase of Nogin, Inc.

(“Nogin”) in the amount of $ 37,700 , and $ 11,453 related to a loan receivable, at fair value that converted into equity securities.

There was also non-cash investing activity of $ 22,576 related to loans transferred to loans held for sale from loans receivable at fair value.

During the six months ended June 30, 2024, there was non-cash financing activity related to the Company’s redemption of its 6.375 % Senior Notes due 2025 in the aggregate principal amount of $ 1,130 in exchange for 36,903 shares of its common stock at fair value of $ 1,011 for a net gain on extinguishment of debt of $ 120 .

During the nine months ended September 30, 2024, there was non-cash financing activity related to the Company’s redemption of its 6.375 % Senior Notes due 2025 in the aggregate principal amount of $ 1,130 in exchange for 36,903 shares of its common stock at fair value of $ 1,011 for a net gain on extinguishment of debt of $ 120 .

(g) Accounts Receivable

18 unchanged sentences

Management evaluates the performance of the loan portfolio on a fair value basis.

Under the fair value option, loans receivable are measured at each reporting period based upon their exit value in an orderly transaction, and unrealized gains or losses are included in the “Fair value adjustments on loans” line item in the unaudited condensed consolidated statements of

At the time of origination, the Company’s loans receivable are collateralized by the assets of borrowers and other pledged collateral and may have guarantees to provide for protection of the payments due on loans receivable.

The fair value of loans receivable was $ 48,980 and $ 90,103 as of June 30, 2025 and December 31, 2024, respectively.

The Conn’s Term Loan described below represents 22.5 % and 43.1 % of total loans receivable, at fair value at June 30, 2025 and December 31, 2024, respectively.

The fair value of loans receivable was $ 55,018 and $ 90,103 as of September 30, 2025 and December 31, 2024, respectively.

The loan receivable with Great American Holdings, LLC (“GA Holdings”) described below represents 45.4 % and 1.9 % of total loans receivable, at fair value at September 30, 2025 and December 31, 2024, respectively.

The Company also has loans receivable from Exela Technologies, Inc.

that represents 60.5 % and 35.7 % of total loans receivable at fair value at June 30, 2025 and December 31, 2024, respectively.

that represents 45.8 % and 35.7 % of total loans receivable at fair value at September 30, 2025 and December 31, 2024, respectively.

The loans have various maturities through February

As of June 30, 2025 and December 31, 2024, the principal balances net of discounts of loans receivable accounted for under the fair value option was $ 373,224 and $ 446,004 , respectively.

The net principal balances of loans receivable exceeded the fair value of loans by $ 324,243 and $ 355,901 as of June 30, 2025 and December 31, 2024, respectively.

The Company recorded net realized and unrealized gains of $ 800 and losses of $ 7,296 during the three and six months ended June 30, 2025, respectively, and net realized and unrealized losses of $ 175,582 and $ 187,783 during three and six months ended June 30, 2024, respectively, on loans receivable.

As of September 30, 2025 and December 31, 2024, the principal balances net of discounts of loans receivable accounted for under the fair value option was $ 377,964 and $ 446,004 , respectively.

The net principal balances of loans receivable exceeded the fair value of loans by $ 322,946 and $ 355,901 as of September 30, 2025 and December 31, 2024, respectively.

The Company recorded net realized and unrealized gains of $ 1,299 and losses of $ 5,997 during the three and nine months ended September 30, 2025, respectively, and net realized and unrealized losses of $ 71,477 and $ 259,260 during three and nine months ended September 30, 2024, respectively, on loans receivable.

Net realized and unrealized gains and losses on loans receivable are reflected in the “Fair value adjustments on loans” line item on the accompanying unaudited condensed consolidated statements of operations.

Loans receivable, at fair value on non-accrual and 90 days or greater past due was $ 12,468 , which represented approximately 25.5 % of total loans receivable, at fair value as of June 30, 2025.

The principal balance of loans receivable on non-accrual and 90 days or greater past due was $ 319,822 as of June 30, 2025.

Loans receivable, at fair value on non-accrual and 90 days or greater past due was $ 1,303 , which represented approximately 2.4 % of total loans receivable, at fair value as of September 30, 2025.

The principal balance of loans receivable on non-accrual and 90 days or greater past due was $ 325,155 as of September 30, 2025.

Loans receivable, at fair value on non-accrual was $ 21,122 , which represents approximately 23.4 % of total loans receivable, at fair value as of December 31, 2024.

1 unchanged sentence

Interest income for loans on non-accrual and/or 90 days or greater past due is recognized separately from the “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations.

The amount of gains or (losses) included in earnings attributable to changes in instrument-specific credit risk were $ 800 and $( 176,078 ) during the three months ended June 30, 2025 and 2024, respectively, and $( 7,296 ) and $( 187,417 ) for the six months ended June 30, 2025 and 2024, respectively.

The amount of gains or (losses) included in earnings attributable to changes in instrument-specific credit risk was $ 1,316 and $( 71,746 ) during the three months ended September 30, 2025 and 2024, respectively, and $( 5,980 ) and $( 259,163 ) for the nine months ended September 30, 2025 and 2024, respectively.

The gains or losses attributable to changes in instrument-specific risk were determined by management based on an estimate of the fair value change during the period specific to each loan receivable.

1 unchanged sentence

The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients.

As of June 30, 2025, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc.

As of September 30, 2025, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc.

(“B&W”) as further described in Note 17(b) - Babcock & Wilcox Commitments and Guarantees.

In accordance with the credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures.

As of June 30, 2025, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

As of September 30, 2025, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

On June 18, 2025, an amendment was made to the Axos Guaranty whereby the Company’s obligations as guarantor were suspended until January 1, 2027.

12 unchanged sentences

Kahn resigned as CEO and a member of the board of directors of Freedom VCM.

In light of Mr.

Kahn’s alleged involvement with the alleged misconduct concerning Prophecy Asset Management LP (“Prophecy”).

On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 (“Chapter 11 Cases”) of Title 11 of the United States Bankruptcy Code (“Bankruptcy Code”), which impacted the collateral for this loan receivable.

To the extent the loan balance and accrued interest exceed the underlying collateral value of the loan an unrealized loss will be recorded in the unaudited condensed consolidated statements of operations.

On a quarterly basis, the Company will continue to obtain third party appraisals to evaluate the value of the collateral of the loan since the repayment of the loan and accrued interest will be paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying collateral.

The fair value of the VCM loan receivable was $ 1,468 and $ 2,057 as of June 30, 2025 and December 31, 2024, respectively.

The remaining principal balance was $ 224,968 and $ 224,968 and exceeded the fair value of the loan receivable by $ 223,500 and $ 222,911 as of June 30, 2025 and December 31, 2024, respectively.

On a quarterly basis, the Company will continue to obtain third party appraisals to evaluate the value of the collateral of the loan since the repayment of the loan

and accrued interest will be paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying collateral.

The fair value of the VCM loan receivable was $ 1,303 and $ 2,057 as of September 30, 2025 and December 31, 2024, respectively.

The remaining principal balance was $ 224,968 and $ 224,968 as of September 30, 2025 and December 31, 2024 and exceeded the fair value of the loan receivable by $ 223,665 and $ 222,911 , respectively.

On September 29, 2025, the SEC filed a complaint in the U.S.

District Court for the District of New Jersey against Prophecy, Prophecy’s CEO and Mr.

District Court for the District of New Jersey against Prophecy Asset Management LP (“Prophecy”), Prophecy’s CEO, and Mr.

Kahn alleging violations of certain of the antifraud provisions of federal securities laws.

2 unchanged sentences

Attorney’s Office has charged Kahn with securities fraud in connection with his activities as a Prophecy sub-adviser.

The charging document is not yet public, but an initial appearance, bond hearing, and plea agreement hearing was held on December 10, 2025 before the New Jersey District Court at which Mr.

On December 10, 2025, Mr.

Kahn plead guilty to one count of conspiracy to commit securities fraud.

17 unchanged sentences

In addition, subject to certain terms and conditions, FRG has agreed to guarantee the performance by WSBC of its obligations under the Master Receivables Purchase Agreements and the Servicing Agreement.

On February 7, 2025, the Company sold the two loans and recorded net realized losses of $ 38,100 which is included in the “Fair value adjustments on loans” line item in the unaudited condensed consolidated statements of operations for the six months ended June 30, 2025.

As such, the Company no longer owned the two loans as of June 30, 2025.

As such, the Company no longer owned the two loans as of September 30, 2025.

The fair value and remaining principal balances of the two loans in aggregate were $ 6,082 and $ 45,826 , respectively, as of December 31, 2024.

3 unchanged sentences

(“Conn’s”) whereby the Company loaned Conn’s $ 108,000 pursuant to the “Conn’s Term Loan” which bears interest at an aggregate rate per annum equal to the Term Secured Overnight Financing Rate (“SOFR”) Rate (as defined in the Conn’s Term Loan), subject to a 4.80 % floor, plus a margin of 8.00 % and matures on February 20, 2027.

Future collection of the Conn’s loan receivable is expected to be paid from the sale of assets and servicing of a pool of consumer receivables that serve as collateral for the loan where the Company has a second lien on these assets.

Future collection of the Conn’s loan receivable is expected to

be paid from the sale of assets and servicing of a pool of consumer receivables that serve as collateral for the loan where the Company has a second lien on these assets.

On July 23, 2024, Conn’s and certain of its subsidiaries filed voluntary positions for relief under Chapter 11 Cases of Title 11 of the Bankruptcy Code in the Southern District of Texas.

5 unchanged sentences

The loan receivable was paid in full on January 24, 2025.

The fair value of the Conn’s Term Loan was $ 11,000 and $ 19,065 as of June 30, 2025 and December 31, 2024, respectively.

The remaining principal balance was $ 89,000 and $ 93,000 with unamortized discounts of $ 2,705 as of June 30, 2025 and December 31, 2024, respectively.

The principal balances, net of discounts, exceeded the fair value of the loans receivable by $ 75,295 and $ 71,230 as of June 30, 2025 and December 31, 2024, respectively.

The fair value of the Conn’s Term Loan was zero and $ 19,065 as of September 30, 2025 and December 31, 2024, respectively.

The remaining principal balance was $ 78,000 and $ 93,000 with unamortized discounts of $ 2,705 as of September 30, 2025 and December 31, 2024, respectively.

The principal balances, net of discounts, exceeded the fair value of the loans receivable by $ 75,295 and $ 71,230 as of September 30, 2025 and December 31, 2024, respectively.

Torticity, LLC Loan Receivable

On November 2, 2023, B.

Riley Principal Investments, LLC (“BRPI”), a wholly owned subsidiary of the Company, along with other lenders entered into a loan receivable with Torticity, LLC for an aggregate principal amount of $ 25,000 , of which $ 15,000 was BRPI’s total principal commitment.

On November 20, 2023, BRPI transferred the promissory note to B.

Riley Commercial Capital, LLC (“BRCC”), another wholly owned subsidiary of the Company.

The loan receivable bears interest at 15.00 % per annum paid quarterly at 7.50 % per annum in cash and 7.50 % per annum payment-in-kind to be capitalized and added to the outstanding principal balance.

The principal balance of the loan receivable was $ 16,333 as of June 30, 2025 and December 31, 2024, with a maturity date of November 2, 2026.

The fair value of the entire loan receivable was zero at December 31, 2024.

Subsequent to December 31, 2024, there were amendments to the loan;

however, the entire loan remained impaired with no fair value at June 30, 2025, and there has been no interest income on the loan receivable during 2025.

On November 2, 2023, the Company, along with other lenders entered into a loan receivable with Torticity, LLC that had a first lien on assets for an aggregate principal amount of $ 25,000 with an original maturity date of November 2, 2026 (“First Lien Loan”), of which $ 15,000 was the Company’s total principal commitment.

The loan receivable prior to the amendment below bears interest at 15.00 % per annum paid quarterly at 7.50 % per annum in cash and 7.50 % per annum payment-in-kind to be capitalized and added to the outstanding principal balance.

On July 25, 2025, the Company entered into a separate bridge loan receivable with Torticity, LLC for an aggregate principal amount of $ 2,605 .

As the term of the amendment reached on September 4, 2025 described below, the bridge loan was repaid in full on September 10, 2025 along with interest income of $ 521 , representing 20 % of the principal balance, during the three months ended September 30, 2025.

On September 4, 2025, the Company received additional equity in Torticity, LLC that increased the Company’s ownership from 4.7 % to 19.0 % in exchange for the following amendments to the First Lien Loan:

(a) the First Lien Loan was subordinated to a new loan Torticity, LLC received from an unrelated third party, and the Company’s collateral was changed to have a second lien on all assets of Torticity, LLC, (b) the interest rate was reduced to 8 % with all interest payment-in-kind, and (c) the maturity date was extended to September 4, 2029 (“Second Lien Loan”).

The principal balance of both the Second Lien Loan and First Lien Loan was $ 16,333 as of September 30, 2025 and December 31, 2024.

The First Lien Loan was impaired with no fair value at December 31, 2024 and the Second Lien Loan remained impaired with no fair value at September 30, 2025.

There was no fair value assigned to the additional equity the Company received on September 4, 2024, and there has been no interest income recorded on the First Lien Loan or Second Lien Loan during 2025.

Great American Holdings, LLC Loan Receivable

On November 15, 2024, BRCC entered into a senior secured revolving credit and guaranty agreement with Great American Holdings, LLC (“GA Holdings”).

On November 15, 2024, BRCC entered into a senior secured revolving credit and guaranty agreement with GA Holdings.

On February 26, 2025, the senior secured revolving credit and guaranty agreement was transferred to BRF Finance Co., LLC (“BRF”), a wholly owned subsidiary of the Company.

2 unchanged sentences

The senior secured revolving credit bears interest at the Term SOFR rate, as defined in the agreement, plus an applicable rate of 4.75 % per annum.

The carrying value and outstanding principal balances of the GA Holdings loan receivable was $ 4,700 and $ 1,698 as of June 30, 2025 and December 31, 2024, respectively.

The carrying value and outstanding principal balances of the GA Holdings loan receivable was $ 25,000 and $ 1,698 as of September 30, 2025 and December 31, 2024, respectively.

On October 16, 2025, all outstanding amounts due and owing under this facility were repaid in full to BRF and the facility was terminated.

1 unchanged sentence

On February 27, 2025, BRF, along with other lenders, entered into a credit agreement with GA Joann Retail Partnership, LLC (“Joann Retail”) for an aggregate commitment of $ 52,000 , of which BRF is committed to $ 24,653 .

credit agreement bears interest at 10.00 % to be paid monthly as payment-in-kind and capitalized into the outstanding principal balance and has a maturity date of November 26, 2025.

The credit agreement bears interest at 10.00 % to be paid monthly as payment-in-kind and capitalized into the outstanding principal balance and has a maturity date of November 26, 2025.

This loan receivable was paid in full on April 7, 2025.

(k) Securities and Other Investments Owned and Securities Sold Not Yet Purchased

The Company’s securities and other investments owned and securities sold not yet purchased consisted of the following as of June 30, 2025 and December 31, 2024:

The Company’s securities and other investments owned and securities sold not yet purchased consisted of the following as of September 30, 2025 and December 31, 2024:

September 30,

2025 December 31,

21 unchanged sentences

However, the Company may have the ability to exercise significant influence over the investee when the Company owns less than 20% of the voting interests of the investee depending on the facts and circumstances that demonstrate that the ability to exercise influence is present, such as when the Company has representation on the board of directors of such investee.

In accordance with ASC 321, Investments - Equity Securities , unrealized gains (losses) on equity securities held at June 30, 2025, includes unrealized gains (losses) of $ 2,855 and $( 153,027 ) for the three months ended June 30, 2025 and 2024, respectively, and unrealized losses of $( 13,127 ) and $( 185,519 ) for the six months ended June 30, 2025 and 2024, respectively, which is included in the “Realized and unrealized gains (losses) on investments” line item on the accompanying unaudited condensed consolidated statements of operations.

In accordance with ASC 321, Investments - Equity Securities , unrealized gains (losses) on equity securities held at September 30, 2025 includes unrealized gains (losses) of $ 25,942 and $( 25,748 ) for the three months ended September 30, 2025 and 2024, respectively, and unrealized gains (losses) of $ 13,454 and $( 217,370 ) for the nine months ended September 30, 2025 and 2024, respectively, which is included in the “Realized and unrealized gains (losses) on investments” line item on the accompanying unaudited condensed consolidated statements of operations.

Securities and other investments owned also includes equity investments in nonpublic entities that do not have a readily determinable fair value.

1 unchanged sentence

Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer.

For these transactions to be considered observable price changes of the same issuer, the Company evaluates whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold.

The following table presents, as of June 30, 2025 and December 31, 2024, the carrying value of

equity securities measured under the measurement alternative and the related adjustments recorded during the periods presented for those securities with observable price changes:

For these transactions to be considered observable price changes of the same issuer, the Company evaluates whether these transactions have similar

rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold.

The carrying value of equity securities measured under the measurement alternative are as follows:

September 30,

2025 December 31,

Securities and other investments owned, carrying value $ 70,217 $ 67,100

Measurement alternative:

Carrying value $ 69,991 $ 67,100

The following table presents the related adjustments recorded during the three and nine months ended September 30, 2025 and 2024 for equity securities measured under the measurement alternative and for those securities with observable price changes:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Upward carrying value changes $ — $ — $ 1,732 $ 1,289

Downward carrying value changes/impairment $ ( 227 ) $ — $ ( 819 ) $ ( 2 )

The following table presents information on equity securities valued under the measurement alternative on a nonrecurring basis by level within the fair value hierarchy which were measured due to an observable price change or impairment during the periods below.

Fair Value Measurement Using

Total Quoted prices in active markets

for identical assets

(Level 1) Other observable inputs

(Level 2) Significant unobservable inputs

As of June 30, 2025

Equity securities valued under the measurement alternative $ 24,462 $ — $ 23,204 $ 1,258

The following table presents the carrying amounts of equity securities valued under the measurement alternative that were still held as of the balance sheet date for which a nonrecurring fair value measurement was recorded during the period.

Fair Value Level 2

As of September 30, 2025

Non-marketable equity securities measured using the measurement alternative $ 12,101 $ 12,101

As of December 31, 2024

Equity securities valued under the measurement alternative $ 7,294 $ — $ 7,294 $ —

Non-marketable equity securities measured using the measurement alternative $ 7,294 $ 7,294

Securities sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices.

Changes in the value of these securities are reflected currently in the results of operations.

As of June 30, 2025 and December 31, 2024, equity securities includes $ 17,853 and $ 29,562 respectively, of investments in public and private companies that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting as follows:

As of September 30, 2025 and December 31, 2024, equity securities include $ 18,938 and $ 29,562 respectively, of investments in public and private companies that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting as follows:

Freedom VCM Holdings, LLC Equity Interest and Take-Private Transaction

8 unchanged sentences

Following these transactions, the Company owned an equity interest of $ 281,144 (based on the FRG take-private transaction price) or 31 % of the outstanding equity interests in Freedom VCM.

Also in connection with the FRG take-private transaction, on August 21, 2023 all of the equity interests of BRRII were sold to a Freedom VCM affiliate, which resulted in a loss of $ 78 .

Also in connection with the FRG take-private transaction, on August 21, 2023 all of the equity interests of BRRII were sold to a Freedom VCM affiliate, which

resulted in a loss of $ 78 .

In connection with the sale, the Freedom VCM affiliate assumed the obligations with respect to the Pathlight Credit Agreement, and the Company entered into a non-recourse promissory note with another Freedom VCM affiliate in the amount of $ 58,872 , with a stated interest rate of 19.74 % and a maturity date of August 21, 2033 (the “Freedom Receivables Note”) with payments of principal and interest on the note limited solely to performance of certain receivables held by BRRII.

12 unchanged sentences

The bankruptcy filing resulted in the write-off of the equity investment.

The change in fair value of $ 180,964 and $ 223,369 for the three and six months ended June 30, 2024, respectively, is included in the “Realized and unrealized gains (losses) on investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The change in fair value of $ 63,674 and $ 287,043 for the three and nine months ended September 30, 2024, respectively, is included in the “Realized and unrealized gains (losses) on investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to Freedom VCM, included below for purposes of the disclosure a quarter in arrears (consolidated balance sheet amounts as of September 30, 2024 correspond to amounts as of December 31, 2024 of the Company;

income statement amounts during the three and six months ended March 31, 2024 correspond to amounts for the three and six months ended June 30, 2024 of the Company), which is the period in which the most recent financial information was available.

income statement amounts during the three and nine months ended June 30, 2024 correspond to amounts for the three and nine months ended September 30, 2024 of the Company), which is the period in which the most recent financial information was available.

September 30, 2024

4 unchanged sentences

Equity attributable to investee $ 510,977

Three Months Ended March 31, 2024 Six Months Ended March 31, 2024

Three Months Ended June 30, 2024 Nine Months Ended June 30, 2024

Revenues $ 767,404 $ 2,383,350

2 unchanged sentences

Net loss attributable to investees $ ( 111,881 ) $ ( 300,720 )

Babcock and Wilcox Enterprises, Inc.

Equity Investment

Babcock and Wilcox Enterprises, Inc, Equity Investment

The Company owns a 25 % voting interest in B&W whereby the Company has elected to account for this investment under the fair value option.

The following tables contain summarized financial information with respect to B&W included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2025 and September 30, 2024 correspond to amounts as of June 30, 2025 and December 31, 2024, respectively, of the Company;

income statement amounts during the three and six months ended March 31, 2025 and 2024 correspond to amounts during the three and six months ended June 30, 2025 and 2024, respectively, of the Company), which is the period in which the most recent financial information is available:

March 31, 2025 September 30, 2024

The following tables contain summarized financial information with respect to B&W included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2025 and September 30, 2024 correspond to amounts as of September 30, 2025 and December 31, 2024, respectively, of the Company;

income statement amounts during the three and nine months ended June 30, 2025 and 2024 correspond to amounts during the three and nine months ended September 30, 2025 and 2024, respectively, of the Company), which is the period in which the most recent financial information is available:

June 30, 2025 September 30, 2024

Current assets $ 526,901 $ 530,223

4 unchanged sentences

Noncontrolling interest $ 540 $ 576

Three Months Ended March 31, Six Months Ended March 31,

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

1 unchanged sentence

Cost of revenues $ 100,812 $ 179,152 $ 283,988 $ 509,779

Loss from continuing operations $ ( 7,763 ) $ ( 15,799 ) $ ( 79,081 ) $ ( 70,065 )

Net loss $ ( 21,989 ) $ ( 16,791 ) $ ( 85,010 ) $ ( 79,515 )

Net loss attributable to investees $ ( 22,007 ) $ ( 16,833 ) $ ( 85,072 ) $ ( 83,287 )

As of June 30, 2025 and December 31, 2024, the fair value of the investment in B&W totaled $ 26,406 and $ 45,012 , respectively, and is included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

(Loss) income from continuing operations $ ( 6,052 ) $ 25,222 $ ( 85,133 ) $ ( 44,843 )

Net (loss) income $ ( 58,492 ) $ 25,364 $ ( 143,502 ) $ ( 54,151 )

Net (loss) income attributable to investees $ ( 58,492 ) $ 25,315 $ ( 143,564 ) $ ( 57,972 )

As of September 30, 2025 and December 31, 2024, the fair value of the investment in B&W totaled $ 79,595 and $ 45,012 , respectively, and is included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

Other Public Company Equity Investments

1 unchanged sentence

(“Synchronoss”) and as a result, the Company no longer retained significant influence over the equity investment.

As of June 30, 2025, the Company had a voting interest of 3 % in Synchronoss.

As of September 30, 2025, the Company had a voting interest of 4 % in Synchronoss.

The Company has elected to account for this equity investment under the fair value option.

The following summarized income statement for Synchronoss is included below for purposes of disclosure a quarter in arrears whereas the three and six months ended March 31, 2024 correspond to amounts during the three and six months ended June 30, 2024 of the Company, which was the period in which the most recent financial information was available:

Three Months Ended March 31, 2024 Six Months Ended March 31, 2024

The following summarized income statement for Synchronoss is included below for purposes of disclosure a quarter in arrears whereas the three and nine months ended June 30, 2024 correspond to amounts

during the three and nine months ended September 30, 2024 of the Company, which was the period in which the most recent financial information was available:

Three Months Ended June 30, 2024 Nine Months Ended June 30, 2024

Revenues $ 43,458 $ 127,825

1 unchanged sentence

Net income (loss) attributable to investees $ 78 $ ( 32,582 )

As of June 30, 2025 and December 31, 2024, the fair value of the equity investment in Synchronoss was $ 1,970 and $ 7,200 , respectively.

As of September 30, 2025 and December 31, 2024, the fair value of the equity investment in Synchronoss Technologies, Inc.

was $ 2,488 and $ 7,200 , respectively.

These amounts are included in “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

Other Equity Investments

As of June 30, 2025, the Company had other equity investments where the Company is considered to have the ability to exercise influence since the Company has representation on the board of directors or the Company is presumed to have the ability to exercise significant influence since the investment is more than minor, and the limited liability company is required to maintain specific ownership accounts for each member.

As of September 30, 2025, the Company had other equity investments where the Company is considered to have the ability to exercise influence since the Company has representation on the board of directors or the Company is presumed to have the ability to exercise significant influence since the investment is more than minor, and the limited liability company is required to maintain specific ownership accounts for each member.

The Company has elected to account for these equity investments under the fair value option.

These equity investments are comprised of equity investments in three private companies as of June 30, 2025 and five as of December 31, 2024 and June 30, 2024.

The following table contains summarized financial information for these companies, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2025 and September 30, 2024 correspond to amounts as of June 30, 2025 and December 31, 2024, respectively, of the Company;

income statement amounts during the three and six months ended March 31, 2025 and 2024 correspond to amounts during the three and six months ended

June 30, 2025 and 2024, respectively, of the Company), which is the period in which the most recent financial information is available:

March 31, 2025 September 30, 2024

These equity investments are comprised of equity investments in three and five private companies as of September 30, 2025 and December 31, 2024, respectively.

The following table contains summarized financial information for these companies, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2025 and September 30, 2024 correspond to amounts as of September 30, 2025 and December 31, 2024, respectively, of the Company;

June 30, 2025 September 30, 2024

Current assets $ 20,941 $ 215,927

3 unchanged sentences

Equity attributable to investee $ 55,593 $ 596,172

For the Three Months Ended March 31, For the Six Months Ended March 31,

For the Three Months Ended June 30, For the Nine Months Ended June 30,

2025 2024 2025 2024

8 unchanged sentences

Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data.

Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are

not active and model-derived valuations whose inputs are observable and can be corroborated by market data.

Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

12 unchanged sentences

These partnership and investment fund interests are valued at net asset value (“NAV”) and are excluded from the fair value hierarchy in the table below in accordance with ASC 820, Fair Value Measurements .

As of June 30, 2025 and December 31, 2024, partnership and investment fund interests valued at NAV of $ 22,069 and $ 15,867 , respectively, are included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

As of September 30, 2025 and December 31, 2024, partnership and investment fund interests valued at NAV of $ 23,575 and $ 15,867 , respectively, are included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

The Company measures certain assets at fair value on a nonrecurring basis.

These assets include equity method investments for which the measurement alternative has been elected, adjusted to fair value based on observable price changes or impairment, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired.

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2025 and December 31, 2024.

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2025 and December 31, 2024.

Financial Assets and Liabilities Measured at Fair Value on a

Recurring Basis as of June 30, 2025 Using

Fair value as of June 30, 2025

Recurring Basis as of September 30, 2025 Using

Fair value as of September 30, 2025

Quoted prices in active markets

15 unchanged sentences

Total securities sold not yet purchased 22,375 18,132 4,243 —

Contingent consideration 4,608 — — 4,608

Liability-classified warrants 8,500 — — 8,500

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Total liabilities measured at fair value $ 10,213 $ — $ 5,675 $ 4,538

As of June 30, 2025 and December 31, 2024, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $ 77,735 and $ 130,619 , respectively, or 5.0 % and 7.3 %, respectively, of the Company’s total assets.

As of September 30, 2025 and December 31, 2024, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $ 83,995 and $ 130,619 , respectively, or 5.0 % and 7.3 %, respectively, of the Company’s total assets.

In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity.

The fair value for individual Level 3 financial assets and liabilities have various financial inputs which include multiple of sales, the market price of related securities, annualized volatility, discount rates, recovery rates and expected term inputs that may change at each reporting period and result in an increase or decrease in the valuation of Level 3 financial assets and liabilities.

The following table summarizes the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of June 30, 2025 and December 31, 2024:

Fair value at June 30,

The following tables summarize the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of September 30, 2025 and December 31, 2024:

Fair value at September 30,

2025 Valuation

2 unchanged sentences

Equity securities $ 24,117 Market approach Multiple of EBITDA (2)

4.5 x - 5.5 x

Multiple of sales 0.5 x - 6.0 x

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Loans receivable at fair value 53,715 Discounted cash flow Discount rate 7.3 % - 20.2 %

11,000 Liquidation approach Cash recovery rate 12.4 % 12.4 %

1,303 Market approach Market price of related security $ 6.08

Other assets 1,029 Market approach Market price of related security $ 1.47

Options pricing model Annualized volatility 90.4 % 90.4 %

Total level 3 assets measured at fair value $ 83,995

Contingent consideration $ 4,608 Discounted cash flow Revenue volatility 5.0 % - 7.5 %

Liability-classified warrants $ 8,500 Monte Carlo simulation and Black-Scholes option pricing model Annualized volatility 80.0 % 80.0 %

15 unchanged sentences

(1) Unobservable inputs were weighted by the relative fair value of the financial instruments.

The changes in Level 3 fair value hierarchy during the three months ended June 30, 2025 and 2024 were as follows:

The changes in Level 3 fair value hierarchy during the three months ended September 30, 2025 and 2024 were as follows:

Period Level 3 Changes During the Period Level 3

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Sales Settlements/ Repayments Transfer in

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Equity securities $ 27,726 $ 645 $ — $ 175,599 $ — $ ( 174,993 ) $ — $ 28,977 $ 644

3 unchanged sentences

Liability-classified warrants 4,160 4,340 — — — — — 8,500 ( 4,340 )

Embedded derivative 14,593 ( 11,468 ) — — — ( 3,125 ) — — 11,468

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Equity securities $ 114,982 $ ( 66,349 ) $ — $ 49 $ — $ 13,266 $ — $ 61,948 $ ( 66,346 )

1 unchanged sentence

Contingent consideration 25,216 373 — — — ( 5,048 ) — 20,541 ( 373 )

(1) Fair value adjustments during the three months ended June 30, 2025 includes the following:

$ 197 of realized and unrealized gains (losses) on equity securities is comprised of $( 92 ) included in “Trading gains (losses), net” and $ 289 included in “Realized and unrealized gains (losses) on investments”, $ 799 of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 1,029 of realized and unrealized gains related to other assets which is comprised of $ 902 recorded to “Trading gains (losses), net” and $ 127 recorded to “Realized and unrealized gains (losses) on investments”, $( 63 ) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $ 1,000 of realized and unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $ 11,468 of realized and unrealized losses related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations.

Fair value adjustments during the three months ended June 30, 2024 includes the

$( 202,573 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 39,114 ) of realized and unrealized gains (losses) included in fair value adjustments on loans and $( 163,458 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 175,582 ) of fair value adjustments on loans included in fair value adjustments on loans, and $( 288 ) related to contingent consideration included in “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.

(2) For the three months ended June 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The changes in Level 3 fair value hierarchy during the six months ended June 30, 2025 and 2024 were as follows:

(1) Fair value adjustments during the three months ended September 30, 2025 includes the following:

$ 645 of realized and unrealized gains (losses) on equity securities is comprised of $( 37 ) included in “Trading gains (losses), net” and $ 682 included in “Realized and unrealized gains (losses) on investments”, $ 1,299 of fair value adjustments on loans included in “Fair value adjustments on loans”, $( 1,029 ) of realized and unrealized losses related to other assets which is comprised of $( 127 ) recorded to “Trading gains (losses), net” and $( 902 ) recorded to “Realized and unrealized gains (losses) on investments”, $ 4,560 of realized and unrealized gains related to contingent consideration included in “Selling, general and administrative expenses”, and $( 4,340 ) of unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations.

Fair value adjustments during the three months ended September 30, 2024 includes the following:

$( 66,349 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 15,127 ) of realized and unrealized gains

(losses) included in “Trading gains (losses), net” and $( 51,222 ) of realized and unrealized gains (losses) included in “Realized and unrealized gains (losses) on investments”, $( 71,477 ) of fair value adjustments on loans included in “Fair value adjustments on loans”, and $( 373 ) related to contingent consideration included in “Selling, general and administrative expenses” line items in the unaudited condensed consolidated statements of operations.

(2) For the three months ended September 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2025 and 2024 were as follows:

Year Level 3 Changes During the Period Level 3

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Earnings Purchases/ Originations Sales Settlements/ Repayments Transfer in

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Equity securities $ 40,516 $ ( 3,003 ) $ — $ 201,466 $ ( 10,000 ) $ ( 200,002 ) $ — $ 28,977 $ ( 3,655 )

Loans receivable at fair value 90,103 ( 5,997 ) — 106,212 ( 10,415 ) ( 124,885 ) — 55,018 ( 8,834 )

Other assets — 1,029 — — — — — 1,029 1,029

Contingent consideration 4,538 ( 4,394 ) — — — ( 144 ) — — 4,394

1 unchanged sentence

Embedded derivative — ( 8,119 ) — 11,244 — ( 3,125 ) — — 8,119

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Equity securities $ 452,581 $ ( 325,310 ) $ 20 $ 665 $ ( 78,197 ) $ 13,266 $ ( 1,077 ) $ 61,948 $ ( 327,675 )

1 unchanged sentence

Contingent consideration 25,194 513 — — — ( 5,166 ) — 20,541 ( 513 )

(1) Fair value adjustments during the six months ended June 30, 2025 includes the following:

$( 3,648 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 1,174 ) included in “Trading gains (losses), net” and $( 2,474 ) of realized and unrealized gains (losses) included in “Realized and unrealized gains (losses) on investments”, $( 7,296 ) of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 1,029 of realized and unrealized gains related to other assets which is comprised of $ 902 recorded to “Trading gains (losses), net” and $ 127 recorded to “Realized and unrealized gains (losses) on investments”, $( 166 ) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $ 3,700 of realized and unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $ 8,119 of realized and unrealized losses related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations.

Fair value adjustments during the six months ended June 30, 2024 includes the following:

$( 258,961 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 49,505 ) of realized and unrealized gains (losses) included in fair value adjustments on loans and $( 209,456 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 187,783 ) of fair value adjustments on loans included in fair value adjustments on loans, and $( 140 ) related to contingent consideration included in “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.

(2) For the six months ended June 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

(1) Fair value adjustments during the nine months ended September 30, 2025 includes the following:

$( 3,003 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 1,212 ) included in “Trading gains (losses), net” and $( 1,791 ) of realized and unrealized gains (losses) included in “Realized and unrealized gains (losses) on investments”, $( 5,997 ) of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 4,394 of realized and unrealized gains related to contingent consideration included in “Selling, general and administrative expenses”, $( 640 ) of realized and unrealized losses related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $ 8,119 of unrealized gains related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations.

Fair value adjustments during the nine months ended September 30, 2024 includes the following:

$( 325,310 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 64,632 ) of realized and unrealized gains (losses) included in fair value adjustments on loans and $( 260,678 ) of realized and unrealized gains (losses) included in “Realized and unrealized gains (losses) on investments”, $( 259,260 ) of fair value adjustments on loans included in “Fair value adjustments on loans”, and $( 513 ) related to contingent consideration included in “Selling, general and administrative expenses” line items in the unaudited condensed consolidated statements of operations.

(2) For the nine months ended September 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The carrying amounts reported in the unaudited condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments.

As of June 30, 2025 and December 31, 2024, the senior notes payable had a carrying amount of $ 1,323,727 and $ 1,530,561 , respectively, and fair value of $ 391,198 and $ 769,476 , respectively.

The aggregate carrying amount of the Company’s notes payable, revolving credit facility, and term loans of $ 136,659 and $ 243,779 as of June 30, 2025 and December 31, 2024, respectively, approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk.

As of September 30, 2025 and December 31, 2024, the senior notes payable had a carrying amount of $ 1,311,311 and $ 1,530,561 , respectively, and fair value of $ 648,218 and $ 769,476 , respectively.

The aggregate carrying amount of the Company’s notes payable, revolving credit facility, and term loans of $ 132,091 and $ 243,779 as of September 30, 2025 and December 31, 2024, respectively, approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk.

(m) Equity Method Investment

As of June 30, 2025 and December 31, 2024, equity investments that are accounted for under the equity method of accounting had an aggregate carrying value of $ 86,042 and $ 85,487 , respectively, which is included in “Prepaid expenses and other assets” in the accompanying unaudited condensed consolidated balance sheets (refer to Note 8 - Prepaid

Expenses and Other Assets).

The Company’s share of earnings or losses from equity method investees included in the “Income from equity investments” line item was $ 25,603 and $ 10 during the three months ended June 30, 2025 and 2024, respectively, and $ 25,051 and $ 6 during the six months ended June 30, 2025 and 2024, respectively, in the accompanying unaudited condensed consolidated statements of operations.

As of September 30, 2025 and December 31, 2024, equity investments that are accounted for under the equity method of accounting had an aggregate carrying value of $ 92,427 and $ 85,487 , respectively, which is included in “Prepaid expenses and other assets” in the accompanying unaudited condensed consolidated balance sheets (refer to Note 8 - Prepaid Expenses and Other Assets).

The Company’s share of earnings or losses from equity method investees included in the “Income from equity investments” line item was $ 9,193 and $ 6 during the three months ended September 30, 2025 and

2024, respectively, and $ 34,244 and $ 12 during the nine months ended September 30, 2025 and 2024, respectively, in the accompanying unaudited condensed consolidated statements of operations.

On November 15, 2024, the Company completed the sale of a majority interest in GA Holdings to Oaktree (the “Great American Transaction”).

7 unchanged sentences

Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

As of June 30, 2025 and December 31, 2024, our investment in GA Holdings was $ 78,823 and $ 82,462 , respectively, and is included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.

Based on the terms of the limited liability agreement, we recorded equity in net losses attributable to GA Holdings using the HLBV method of $ 3,190 and $ 3,639 for the three and six months ended June 30, 2025, respectively, which is included in the “Income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to GA Holdings, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2025 correspond to amounts as of June 30, 2025 and income statement amounts during the three months ended March 31, 2025 and period from November 15, 2024 to March 31, 2025 correspond to three months and six months ended June 30, 2025, respectively):

March 31, 2025

As of September 30, 2025 and December 31, 2024, our net investment in GA Holdings was $ 85,233 and $ 82,462 , respectively, and is included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.

Based on the terms of the limited liability agreement, we recorded equity in net income attributable to GA Holdings using the HLBV method of $ 6,410 and $ 2,771 for the three and nine months ended September 30, 2025, respectively, which is included in the “Income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to GA Holdings, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2025 correspond to amounts as of September 30, 2025 and income statement amounts during the quarter ended June 30, 2025 and period from November 15, 2024 to June 30, 2025 correspond to quarter ended and year to date amounts for the period ended September 30, 2025, respectively):

June 30, 2025

Current assets $ 50,040

1 unchanged sentence

Current liabilities $ 35,151

Noncurrent liabilities $ 538

Mezzanine equity - preferred units $ 279,097

Equity attributable to investee $ 11,261

Three Months Ended March 31, 2025 November 15, 2024 to

March 31, 2025

Three Months Ended June 30, 2025 November 15, 2024 to

June 30, 2025

Revenue $ 55,947 $ 114,683

5 unchanged sentences

The Company accounts for its investment in Joann Retail under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures , under which the Company accounts for its investment on a three-month lag to determine the allocation of profits and losses.

For the three months ended June 30, 2025, the Company recorded equity method losses in the amount of $ 1,714 in its unaudited condensed consolidated statements of operations, which corresponds to the equity method investment’s operating results for the three months ended March 31, 2025.

As of June 30, 2025, the Company’s investment in Joann Retail was zero as the Company had fully recovered its initial investment of $ 6,163 in Joann Retail.

The Company’s investment in Joann Retail is adjusted for the Company’s proportionate share of equity method losses and cash distributions received during the three months ended June 30, 2025.

The Company received $ 30,420 in excess of the Company’s investment balance and the distributions received in excess of the investment balance are recognized as other income and included in the “Income from equity investments” line item in the unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to Joann Retail included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2025 correspond to amounts as of June 30, 2025 and income statement amounts for the period from February 27, 2025 (inception) to March 31, 2025 correspond to the three months and six months ended June 30, 2025):

March 31, 2025

For the three and nine months ended September 30, 2025, the Company recorded equity method losses in the amount of zero and $ 1,714 , respectively, in its unaudited condensed consolidated statements of operations, which correspond to the equity method investment’s operating results for the three and nine months ended June 30, 2025, respectively.

As of September 30, 2025, the Company’s investment in Joann Retail was zero as the Company had fully recovered its initial investment of $ 6,163 in Joann Retail.

The Company’s investment in Joann Retail is adjusted for the Company’s proportionate share of equity method income or losses and of cash distributions received during the nine months ended September 30, 2025.

The Company received $ 33,086 in excess of the Company’s investment balance during the nine months ended September 30, 2025, and the distributions received in excess of the investment balance are recognized as other income and included in the “Income from equity investments” line item in the unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to Joann Retail, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2025 correspond to amounts as of September 30, 2025 and income statement amounts for the three months ended June 30, 2025 and period from February 27, 2025 (inception) to June 30, 2025 correspond to the three and nine months ended September 30, 2025, respectively):

June 30, 2025

Current assets $ 47,944

2 unchanged sentences

Equity attributable to investee $ —

February 27, 2025 to March 31, 2025

Expenses $ 3,615

Net loss attributable to investee $ ( 3,615 )

Three Months Ended June 30, 2025 February 27, 2025 to June 30, 2025

Revenue $ 158,990 $ 158,990

Cost of revenue and expenses $ 94,825 $ 98,440

Net income attributable to investee $ 64,165 $ 60,550

Riley Retail Opportunity Fund (“SW-B.

2 unchanged sentences

Retail’s earnings or losses on the basis of the percentage of the equity interest the Company owns.

At December 31, 2024, the Company’s ownership percentage was approximately 10.7 % and increased to 22.6 % with the consolidation of BRC Partners Opportunity Trust (the “BRC Trust”) as discussed below in Note 2(n) - Noncontrolling Interests.

At December 31, 2024, the Company’s ownership percentage was approximately 10.7 % and increased to 22.6 % with the consolidation of BRC Partners Opportunities Trust (the “BRC Trust”) as discussed below in Note 2(n) - Noncontrolling Interests.

The carrying value of the Company’s equity method investments in SW-B.

Retail included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets was $ 7,219 and $ 3,025 as of June 30, 2025 and December 31, 2024, respectively.

Retail included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets was $ 7,194 and $ 3,025 as of September 30, 2025 and December 31, 2024, respectively.

(n) Noncontrolling Interests

3 unchanged sentences

The discounted cash flow method utilized five-year discrete projections of the operating results, working capital and depreciation and capital expenditures, along with a residual value subsequent to the discrete period.

The five-year projections were based upon historical and anticipated future results,

general economic and market conditions, and considered the impact of planned business and operational strategies.

The five-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies.

The discount rates for the calculations represented the estimated required return on equity for market participants at the time of the analysis.

5 unchanged sentences

Upon completion of the transaction, the investors in the shell corporation became minority stockholders of BRSH.

The Company also issued restricted stock awards as more fully described in Note 18(c) - BRSH Stock Incentive Plan and assuming the full issuance of the restricted stock awards are vested, the Company continues to own 89.4 % majority-interest in BRSH.

The shell corporation that merged with BRSH on March 10, 2025 did not meet the definition of a business, since it did not have any assets, liabilities, or operations.

9 unchanged sentences

(1) Unobservable inputs were weighted by the relative equity value of BRSH.

BRC Partners Opportunity Trust (the “BRC Trust”)

BRC Partners Opportunities Trust (the “BRC Trust”)

BRC Trust was formed on January 6, 2025, and is a variable interest entity as more fully described in Note 2(o) - Variable Interest Entities.

8 unchanged sentences

The Company determines whether it is the primary beneficiary of a VIE by performing an analysis that principally considers:

(a) which variable interest holder has the power to direct the activities of the VIE that most significantly impact

the VIE’s economic performance;

(a) which variable interest holder has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance;

(b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE;

8 unchanged sentences

The promissory note is included in the “Loans receivable, at fair value” line item in the Company’s unaudited condensed consolidated financial statements and is a variable interest in accordance with the accounting guidance.

As of June 30, 2025 and December 31, 2024, the maximum amount of loss exposure to the VIE on a fair value basis was $ 1,468 and $ 2,057 , respectively.

As of September 30, 2025 and December 31, 2024, the maximum amount of loss exposure to the VIE on a fair value basis was $ 1,303 and $ 2,057 , respectively.

The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered variable interest entities under the accounting guidance.

3 unchanged sentences

As the fee arrangements under such agreements are arm’s length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs.

Placement agent fees attributable to such arrangements were zero and $ 494 during the three months ended June 30, 2025 and 2024, respectively, and zero and $ 866 during the six months ended June 30, 2025 and 2024, respectively, and were included in the “Services and fees” line item in the unaudited condensed consolidated statements of operations.

The carrying amounts included in the Company’s unaudited condensed consolidated balance sheets related to variable interests in VIEs that were not consolidated is shown below.

Placement agent fees attributable to such arrangements were zero during the three months ended September 30, 2025 and 2024, respectively, and zero and $ 866 during the nine months ended September 30, 2025 and 2024, respectively, and were included in the “Services and fees” line item in the unaudited condensed consolidated statements of operations.

The carrying amounts included in the Company’s unaudited condensed consolidated balance sheets related to variable interests in VIEs that were not consolidated are shown below.

September 30,

2025 December 31,

13 unchanged sentences

Subsequent to March 31, 2025, certain of Nogin’s creditors filed an involuntary petition for relief under chapter 7 of title 11 of the United States Code in the United States Bankruptcy Court for the District of New York and an order for relief was entered to move the ABC to a liquidation.

A gain of $ 28,411 was recognized during the six months ended June 30, 2025 from deconsolidation of Nogin, which is included in “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations.

A gain of $ 28,411 was recognized during the nine months ended September 30, 2025 from deconsolidation of Nogin, which is included in “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations.

BRC Trust was formed on January 6, 2025, for the purpose of transferring the assets and liabilities of BRC Partners Opportunity Fund, L.P., a Delaware limited partnership (“BRCPOF”), and liquidating the transferred net assets.

3 unchanged sentences

Additionally, the BRC Trust does not meet the definition of a business and the initial consolidation of the BRC Trust did not result in a gain or loss upon initial consolidation.

The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of June 30, 2025 and formation on January 6, 2025, are as follows:

June 30, 2025 January 6, 2025

The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of September 30, 2025 and formation on January 6, 2025, are as follows:

September 30, 2025 January 6, 2025

Cash and cash equivalents $ 194 $ 359

18 unchanged sentences

Certain prior period amounts have been reclassified to conform with the current period presentation.

In the prior year periods, loss on extinguishment of debt of $( 5,900 ) and $( 5,780 ) for the three and nine months ended September 30, 2024 was previously included in “Selling, general and administrative expenses” line item and is now included in “Other income (expense)” section in our unaudited condensed consolidated statements of operations to conform to the current period presentation.

In the prior year periods, gain on sale of businesses of $ 476 and $ 790 for the three and nine months ended September 30, 2024 was previously included in “Change in fair value of financial instruments and other” and is now included in “Gain on sale and deconsolidation of businesses” line items in our unaudited condensed consolidated statements of operations to conform to the current period presentation.

Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations and held for sale;

3 unchanged sentences

Not yet adopted

In September 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-06, Intangibles - Goodwill and Other Internal Use Software .

In December 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

This ASU is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This standard update will be effective for the interim reporting periods within annual reporting periods beginning after December 15, 2027, with the option to early adopt at any time prior to the effective date and should be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements.

The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position, results of operations, and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other Internal Use Software .

This ASU was issued to modernize the accounting for software costs by removing references to prescriptive and sequential software development stages and providing an updated framework for capitalizing internal software costs.

74 unchanged sentences

Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $ 26,037 , representing 36 financial advisors whose managed accounts represent approximately $ 4.0 billion, or 23.6 %, of total assets under management (“AUM”) as of the close of the transaction.

A gain of $ 5,372 was recognized on April 4, 2025 in connection with the completion of the sale and is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025

Atlantic Coast Recycling

1 unchanged sentence

Riley Environmental Holdings, LLC and other indirect subsidiaries of the Company which included the Atlantic Companies, entered into the MIPA, whereby the Interests owned by BRFH and the minority holders were sold to a third party in accordance with the terms of the MIPA on March 3, 2025.

The Interests were

sold to the third party on March 3, 2025 for a purchase price of $ 102,478 , subject to certain adjustments and a holdback amount pending receipt of a certain third party consent, resulting in cash proceeds of $ 68,638 to the Company after adjustments for amounts allocated to non-controlling interests, repayment of contingent consideration, transaction costs and other items directly attributable to the closing of the transaction.

The Interests were sold to the third party on March 3, 2025 for a purchase price of $ 102,478 , subject to certain adjustments and a holdback amount pending receipt of a certain third party consent, resulting in cash proceeds of $ 68,638 to the Company after adjustments for amounts allocated to non-controlling interests, repayment of contingent consideration, transaction costs and other items directly attributable to the closing of the transaction.

Of the $ 68,638 of cash proceeds received by the Company, approximately $ 22,610 was used to pay interest, fees, and principal on the Credit Facility entered into with Oaktree on February 26, 2025 as further discussed in Note 11 - Term Loans and Revolving Credit Facility.

A gain of $ 52,430 was recognized during the six months ended June 30, 2025 from this sale, which is included in “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations.

A gain of $ 52,430 was recognized during the nine months ended September 30, 2025 from this sale, which is included in “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations.

The Company determined that the assets and liabilities associated with the Wealth Management Transaction and Atlantic Coast Recycling transactions met the criteria under ASC 360, Impairment and Disposal of Long-Lived Assets to be classified as held for sale as of December 31, 2024.

The assets and liabilities for both transactions were properly presented in the unaudited condensed consolidated balance sheets.

Operating results from the disposal groups comprising the Wealth Management business and Atlantic Coast Recycling contributed to the operating incomes of the Wealth Management and All Other segment categories, respectively, for the six months ended June 30, 2025.

Assets and liabilities held for sale consist of the following:

18 unchanged sentences

Discontinued Operations

The Company presents a disposition of a component, being an operating or reportable segment, business unit, subsidiary or asset group, that represents a strategic shift that has or will have a major effect on the Company’s operations and financial results as discontinued operations when the components meet the criteria to be classified as held for sale.

and financial results as discontinued operations when the components meet the criteria to be classified as held for sale.

The following operations have been presented as discontinued operations.

Brands Transaction

the Company’s financial statements, and the noncontrolling equity interests the Company owned in the assets and intellectual properties of Hurley, Justice, and Scotch & Soda (collectively with Six Brands, the “Brands Interests”), which the Company had elected to account for the equity investments under the fair value option, into a securitization financing vehicle in exchange for $ 189,300 in net proceeds.

On October 25, 2024, the Company completed a transaction whereby the Company contributed and transferred its controlling equity interest in the assets and intellectual properties related to the licenses of Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore (“Six Brands”), which were previously consolidated in the Company’s financial statements, and the noncontrolling equity interests the Company owned in the assets and intellectual properties of Hurley, Justice, and Scotch & Soda (collectively with Six Brands, the “Brands Interests”), which the Company had elected to account for the equity investments under the fair value option, into a securitization financing vehicle in exchange for $ 189,300 in net proceeds.

The Company accounted for this transfer of financial assets as a sale.

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At the closing on November 15, 2024, (i) Oaktree received (a) all of the outstanding class A preferred limited liability units of Great American NewCo (which will have a 7.5 % cash coupon and a 7.5 % payment-in-kind coupon) (the “Class A Preferred Units”) and (b) common limited liability units of Great American NewCo (the “Common Units”) representing 52.6 % of the issued and outstanding common limited liability units in Great American NewCo for a purchase price of approximately $ 203,000 (with an initial liquidation preference of approximately $ 203,000 ).

The Company retains (a) 93.2 % of the issued and outstanding class B preferred limited liability company units of Great American NewCo (which will have a 2.3 % payment-in-kind coupon and an initial aggregate liquidation preference of approximately $ 183,000 ) (the “Class B Preferred Units”) and (b) 44.2 % of the issued and outstanding Common Units.

“Class B Preferred Units”) and (b) 44.2 % of the issued and outstanding Common Units.

The remaining 6.8 % of issued and outstanding Class B Preferred Units and 3.2 % of issued and outstanding Common Units will be held by certain minority investors.

The Company accounts for its non-controlling equity interest in Great American NewCo using the equity method of accounting (refer to Note 2(m) - Equity Method Investment) with its carrying value included in the “Prepaid expenses and other assets” line item in the consolidated balance sheets (refer to Note 8 - Prepaid Expenses and Other Assets).

inventory, trade fixtures, machinery and equipment, intellectual property, and real property—and within the Financial Consulting segment—offering bankruptcy, financial advisory, forensic accounting, real estate consulting, and valuation and appraisal services—were divested.

The Great American Group, which was historically reported within the Auction and Liquidation segment—providing auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property, and real property—and within the Financial Consulting segment—offering bankruptcy, financial advisory, forensic accounting, real estate consulting, and valuation and appraisal services—were divested.

The Company recorded a net gain of $ 258,286 to the “Income from discontinued operations, net of taxes” line item in the consolidated statements of operations during the fourth quarter of fiscal year 2024.

1 unchanged sentence

The Company analyzed the quantitative and qualitative factors relevant to the sale of the Great American Group, including the significance of the operating income generated from the appraisal, real estate consulting and auction and liquidation operations to the overall net income (loss), net (loss) income per share, and net assets, and determined that those conditions for discontinued operations presentation had been met.

As such, results of operations and cash flows of that business are reported as discontinued operations in the accompanying unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024.

Continuing Involvement

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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.

On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber from the Company’s Financial Consulting reportable segment.

2 unchanged sentences

GlassRatner & Farber

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and cash equivalents $ — $ 8,025

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Total liabilities $ 830 $ 21,321

Revenues and income (loss) from discontinued operations for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2025

GlassRatner & Farber

Loss from discontinued operations during the three months ended September 30, 2025 is comprised of interest expense allocated to discontinued operations of $ 1,866 related to debt that was required to be paid as a result of the sale of GlassRatner.

This interest expense during the three months ended September 30, 2025 is due to an immaterial correction for an out of period adjustment between the three months ended June 30, 2025 and September 30, 2025.

Revenues, expenses and income from discontinued operations for the nine months ended September 30, 2025 were as follows (in thousands):

GlassRatner & Farber

Nine Months Ended

September 30, 2025

Services and fees $ 40,575

5 unchanged sentences

Gain on disposal of discontinued operations

66,795 66,795

Interest expense

Income from discontinued operations before income taxes 71,306

1 unchanged sentence

Income from discontinued operations, net of income taxes $ 70,841

Three Months Ended June 30, 2024

Revenues, expenses and income (loss) from discontinued operations for the three and nine months ended September 30, 2024 were as follows (in thousands):

Three Months Ended September 30, 2024

Brands Transaction Great American Group GlassRatner & Farber Total

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( 113,234 ) — — ( 113,234 )

Loss on extinguishment of debt

— — ( 163 ) ( 163 )

Loss on sale and deconsolidation of businesses ( 39,500 ) — — ( 39,500 )

Interest expense ( 690 ) ( 8,841 ) — ( 9,531 )

Income (loss) from discontinued operations before income taxes 11,535 ( 5,007 ) 4,667 11,195

(Loss) income from discontinued operations before income taxes ( 141,339 ) ( 1,919 ) 6,317 ( 136,941 )

Benefit from (provision for) income taxes 65 1 ( 112 ) ( 46 )

Income (loss) from discontinued operations, net of income taxes $ 15,547 $ ( 6,150 ) $ 5,973 $ 15,370

Six Months Ended June 30, 2024

(Loss) income from discontinued operations, net of income taxes $ ( 141,274 ) $ ( 1,918 ) $ 6,205 $ ( 136,987 )

Nine Months Ended September 30, 2024

Brands Transaction Great American Group GlassRatner & Farber Total

11 unchanged sentences

Dividend income 26,459 — — 26,459

Realized and unrealized gains on investments

Realized and unrealized losses on investments

( 108,304 ) — — ( 108,304 )

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— — ( 163 ) ( 163 )

Loss on sale and deconsolidation of businesses ( 39,500 ) — — ( 39,500 )

Interest expense ( 2,102 ) ( 25,781 ) — ( 27,883 )

Income (loss) from discontinued operations before income taxes 28,735 ( 9,305 ) 9,352 28,782

Provision for income taxes ( 65 ) — — ( 65 )

Income (loss) from discontinued operations, net of income taxes $ 28,670 $ ( 9,305 ) $ 9,352 $ 28,717

amount to $ 699 , $ 8,454 , and zero for the three months ended June 30, 2024, respectively, and $ 1,412 , $ 16,940 , and zero for the six months ended June 30, 2024, respectively.

(Loss) income from discontinued operations before income taxes ( 112,604 ) ( 11,224 ) 15,669 ( 108,159 )

(Provision for) benefit from income taxes — 1 ( 112 ) ( 111 )

(Loss) income from discontinued operations, net of income taxes $ ( 112,604 ) $ ( 11,223 ) $ 15,557 $ ( 108,270 )

Interest expense for discontinued operations is based upon the amount of debt that was required to be repaid as a result of the Brands Transaction, Great American Group transaction, and GlassRatner and Farber transaction described above and amount to $ 690 , $ 8,841 , and zero for the three months ended September 30, 2024, respectively, and $ 2,102 , $ 25,781 , and zero for the nine months ended September 30, 2024, respectively.

Cash flows from discontinued operations were as follows:

Six Months Ended

Nine Months Ended September 30,

Net cash from discontinued operations provided by (used in):

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Effect of foreign currency on cash 502 602

Net decrease in cash and cash equivalents $ ( 8,025 ) $ ( 3,778 )

Net (decrease) increase in cash and cash equivalents $ ( 8,025 ) $ 1,286

Supplemental disclosures from cash flows were as follows:

Six Months Ended

Nine Months Ended September 30,

Interest paid - Continuing Operations $ 74,095 $ 179,695

5 unchanged sentences

NOTE 5 — RESTRUCTURING CHARGE

During the three and six months ended June 30, 2025, the Company recognized restructuring charges of $ 321 (which was included in the “Restructuring charge” line item in the unaudited condensed consolidated statement of operations) related to Corporate and the Consumer Products segment, which consisted of reductions in workforce.

During the three and six months ended June 30, 2025, of the $ 321 total restructuring charges, $ 285 was related to Corporate and $ 36 was related to the Consumer Products segment.

During the three and six months ended June 30, 2024, the Company recognized restructuring charges of $ 20 and $ 809 (which was included in the “Restructuring charge” line item in the unaudited condensed consolidated statement of operations), respectively, primarily related to reorganization and consolidation activities in the Communications segment and Consumer Products segment, which consisted of reductions in workforce.

During the three months ended June 30, 2024, the $ 20 of total restructuring charges was related to the Consumer Products segment.

During the six months ended June 30, 2024, of the $ 809 total restructuring charges, $ 546 was related to the Consumer Products segment and $ 263 was related to the Communications segment.

The following tables summarize the changes in accrued restructuring charge during the three and six months ended June 30, 2025 and 2024:

During the three and nine months ended September 30, 2025, the Company recognized restructuring charges of $ 184 and $ 505 (which were included in the “Restructuring charge” line item in the unaudited condensed consolidated statement of operations), respectively, related to Corporate and the Consumer Products segment, which consisted of reductions in workforce.

During the three months ended September 30, 2025, of the $ 184 total restructuring charges, $ 184 was related to the Consumer Products segment.

During the nine months ended September 30, 2025, of the $ 505 total restructuring charges, $ 285 was related to Corporate and $ 220 was related to the Consumer Products segment.

During the three and nine months ended September 30, 2024, the Company recognized restructuring charges of $ 116 and $ 925 (which were included in the “Restructuring charge” line item in the unaudited condensed consolidated statement of operations), respectively, primarily related to reorganization and consolidation activities in the Communications segment and Consumer Products segment, which consisted of reductions in workforce.

During the three months ended September 30, 2024, the $ 116 of total restructuring charges was related to the Communications segment.

During the nine months ended September 30, 2024, of the $ 925 total restructuring charges, $ 546 was related to the Consumer Products segment and $ 379 was related to the Communications segment.

The following tables summarize the changes in accrued restructuring charge during the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

5 unchanged sentences

NOTE 6 — SECURITIES LENDING

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of June 30, 2025 and December 31, 2024:

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2025 and December 31, 2024:

Gross amounts recognized Gross amounts offset in the consolidated balance

Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2)

As of June 30, 2025

As of September 30, 2025

Securities borrowed $ 106,777 $ — $ 106,777 $ 106,777 $ —

6 unchanged sentences

(2) Includes the amount of cash collateral held/posted.

The following table presents the contract value of securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Remaining contractual maturity Remaining contractual maturity

9 unchanged sentences

Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 1,968 and $ 23,313 during the three months ended June 30, 2025 and 2024, respectively.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 2,687 and $ 58,696 during the six months ended June 30, 2025 and 2024, respectively.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 2,094 and $ 6,359 during the three months ended September 30, 2025 and 2024, respectively.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 4,781 and $ 65,055 during the nine months ended September 30, 2025 and 2024, respectively.

NOTE 7 — ACCOUNTS RECEIVABLE

The components of accounts receivable, net, from revenue from contracts with customers include the following:

September 30,

2025 December 31,

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

6 unchanged sentences

Prepaid expenses and other assets consist of the following:

September 30,

2025 December 31,

11 unchanged sentences

NOTE 9 — GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amount of goodwill at June 30, 2025 and December 31, 2024 was $ 392,687 .

The carrying amount of goodwill at September 30, 2025 and December 31, 2024 was $ 392,687 .

Goodwill is comprised of $ 161,486 for the Capital Markets Segment, $ 37,334 for the Wealth Management Segment and $ 193,867 for the Communications Segment.

1 unchanged sentence

Intangible assets consisted of the following:

As of June 30, 2025

As of September 30, 2025

As of December 31, 2024

13 unchanged sentences

Total intangible assets $ 304,852 $ ( 180,207 ) $ 124,645 $ 306,142 $ ( 159,696 ) $ 146,446

Intangible assets related to tradenames is net of accumulated impairment losses of $ 22,000 , which were recorded in the Consumer Products segment.

Amortization expense was $ 6,811 and $ 9,226 during the three months ended June 30, 2025 and 2024, respectively, and $ 14,453 and $ 18,150 during the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, estimated future amortization expense was $ 13,029 , $ 24,554 , $ 23,272 , $ 20,096 , and $ 15,470 for the years ended December 31, 2025 (remaining six months), 2026, 2027, 2028 and 2029, respectively.

Intangible assets related to tradenames is net of accumulated impairment losses of $ 22,000 , which were recorded prior to December 31, 2024 in the Consumer Products segment.

Amortization expense was $ 6,674 and $ 8,389 during the three months ended September 30, 2025 and 2024, respectively, and $ 21,127 and $ 26,539 during the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, estimated future amortization expense was $ 6,356 , $ 24,554 , $ 23,272 , $ 20,096 , and $ 15,470 for the years ended December 31, 2025 (remaining three months), 2026, 2027, 2028 and 2029, respectively.

The estimated future amortization expense after December 31, 2029 was $ 20,297 .

1 unchanged sentence

As a result of the current financial performance of the Company’s Targus subsidiary, which comprises the reporting unit of all the operations within the Consumer Products segment as well as current market conditions in the personal computer market for computers and accessories, the Company updated its long-term forecasts for the reporting unit.

The Company performed an interim quantitative assessment of intangible assets with an indefinite live as of June 30, 2025, and based on the results of the analysis, the Company recorded a non-cash impairment charge related to the Targus tradename of $ 1,500 , which was recorded in impairment of tradenames in the accompanying condensed consolidated statements of operations during the three and six months ended June 30, 2025.

The Targus tradename was measured at fair value on a nonrecurring basis as of June 30, 2025.

6 unchanged sentences

On March 31, 2025, the Company signed a Deed of ABC, and the $ 15,000 convertible note was no longer an obligation of the Company.

Interest expense on the secured convertible promissory note was $ 386 during the six months ended June 30, 2025.

Interest expense on the secured convertible promissory note was $ 360 during the three months ended September 30, 2024, and $ 386 and $ 602 during the nine months ended September 30, 2025 and 2024, respectively.

Notes payable as of December 31, 2024 also included $ 12,408 related to deferred cash consideration owed to the sellers of FocalPoint.

The deferred cash consideration was paid in full in January 2025.

Interest expense was $ 144 during the three months ended June 30, 2024, and $ 30 and $ 288 during the six months ended June 30, 2025 and 2024, respectively.

Interest expense was $ 145 during the three months ended September 30, 2024, and $ 30 and $ 433 during the nine months ended September 30, 2025 and 2024, respectively.

NOTE 11 — TERM LOANS AND REVOLVING CREDIT FACILITY

Term loans and revolving credit facilities are comprised of the following:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Interest Rate

15 unchanged sentences

Interest Rate

June 30, 2025 June 30, 2025 December 31, 2024

September 30, 2025 September 30, 2025 December 31, 2024

Revolver Loan:

6 unchanged sentences

The Oaktree Term Loan matures on the earliest of (i) February 26, 2028, and (ii) a springing maturity date 91 days prior to the maturity of any series of bonds, notes or bank indebtedness of the Company or the BRFH Borrower (other than the Company’s 6.375 % Senior Notes due February 28, 2025 and the Company’s 5.50 % Senior Notes due March 31, 2026) outstanding on such date with an aggregate amount exceeding $ 10,000 (the “Initial Term Loan Maturity Date”).

The proceeds from the Oaktree Term Loan were primarily used (a) to repay the existing indebtedness under the Nomura Credit agreement (b) for

working capital and general corporate purposes and (c) to pay transaction fees and expenses.

The proceeds from the Oaktree Term Loan were primarily used (a) to repay the existing indebtedness under the Nomura Credit agreement (b) for working capital and general corporate purposes and (c) to pay transaction fees and expenses.

The proceeds of the Delayed Draw Facility was used (a) to fund obligations relating to the liquidation of substantially all of the assets of JOANN, Inc.

4 unchanged sentences

The Oaktree Term Loan also contains an additional prepayment premium, as defined in the Oaktree Term Loan, of a minimum of 5.00 %.

The Credit Facility contains covenants that, among other things, limit the Company’s, the BRFH Borrower’s and the BRFH Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests.

The Company is in compliance with all financial covenants in the Oaktree Credit Agreement as of June 30, 2025.

The Credit Facility contains covenants that, among other things, limit the Company’s, the BRFH Borrower’s and the

BRFH Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases

in respect of their respective equity interests.

The Company is in compliance with all financial covenants in the Oaktree Credit Agreement as of September 30, 2025.

Subject to certain eligibility requirements, certain assets of the BRFH Borrower are placed into a borrowing base (the “Borrowing Base”), which serves to limit the borrowings under the Credit Facility.

1 unchanged sentence

The BRFH Borrower may be obligated to prepay the loans or post cash in a controlled account in the event the Borrowing Base falls below a certain level as defined in the Credit Facility.

The Company recorded a derivative liability of $ 11,244 related to this a mandatory repayment feature in the Credit Facility at the inception of the Credit Facility.

(See Note 2(l) - Fair Value Measurements.) During the first and second quarters of 2025, the Company sold certain assets in the Borrowing Base and in accordance with the Credit Facility, the Company was required to prepay $ 30,521 and $ 4,479 of the Delayed Draw Facility, respectively.

During the three and six months ended June 30, 2025, the Company made principal payments of $ 4,479 and $ 35,000 , respectively, on the Delayed Draw Facility which paid the facility off in full.

Through a series of principal payments in the amount of $ 62,500 during the three months ended June 30, 2025, the outstanding balance on the Oaktree Term Loan was reduced from $ 125,000 to $ 62,500 at June 30, 2025.

Interest expense on the Credit Facility to Oaktree during the three and six months ended June 30, 2025 was $ 4,578 and $ 7,759 , respectively.

The Company recorded a derivative liability of $ 11,244 related to a mandatory repayment feature in the Credit Facility at the inception of the Credit Facility.

(See Note 2(l) - Fair Value Measurements.) The Company sold certain assets in the Borrowing Base that required the Company to repay $ 62,500 of principal on the Oaktree Term Loan and $ 35,000 on the Delayed Draw Facility during the nine months ended September 30, 2025.

During the nine months ended September 30, 2025, the Company made principal payments of $ 35,000 on the Delayed Draw Facility, which paid the facility off in full.

Through a series of principal payments in the amount of $ 62,500 during the nine months ended September 30, 2025, the outstanding balance on the Oaktree Term Loan was reduced from $ 125,000 to $ 62,500 as of September 30, 2025.

Interest expense on the Credit Facility to Oaktree during the three and nine months ended September 30, 2025 was $ 1,330 and $ 9,089 , respectively.

The Company issued warrants to certain affiliates of Oaktree Capital Management, L.P.

1 unchanged sentence

The warrants contain certain anti-dilution provisions pursuant to which, under certain circumstances, the warrant holders would be entitled to exercise the warrants for up to 19.9 % of the then-outstanding shares of the Company’s common stock.

The Company evaluated the warrants under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity , and determined the warrants met the criteria for liability classification, and recorded a warrant liability of $ 7,860 .

The Company evaluated the warrants under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity , determined the warrants met the criteria for liability classification, and recorded a warrant liability of $ 7,860 .

The initial measurement of the embedded derivative and warrant liability creates a discount on the carrying amount of the long-term debt, which together with the original issue discount, debt issuance costs, are amortized via the effective interest method under ASC 835-30, Interest – Imputation of Interest .

6 unchanged sentences

On October 8, 2025, the Company and the BRFH Borrower entered into Amendment No.

Credit Facility with Oaktree which provided that the springing maturity date of the Oaktree Term Loan shall in no event occur prior to March 31, 2027, thereby extending the earliest possible maturity date for the Oaktree Term Loan.

3 to the Credit Facility with Oaktree which provided that the springing maturity date of the Oaktree Term Loan shall in no event occur prior to March 31, 2027, thereby extending the earliest possible maturity date for the Oaktree Term Loan.

Targus Credit Agreement

1 unchanged sentence

The final maturity date is October 18, 2027.

The Targus Credit Agreement was secured by substantially all Targus assets as collateral defined in the Targus Credit Agreement which assets had an aggregate value of approximately $ 153,285 , including $ 34,588 of accounts receivable and $ 48,482 of inventory as of June 30, 2025.

The Targus Credit Agreement contained certain covenants, including those limiting the Targus Borrower’s ability to incur certain 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.

2 unchanged sentences

On October 31, 2023 and February 20, 2024, the Company entered into Amendment No.

2 to the Targus Credit Agreement, which, among other things, modified the fixed charge coverage ratio (“FCCR”) and the minimum EBITDA requirements which waived the financial covenant breaches for the periods ended September 30, 2023 and December 31, 2023.

2 to the Targus Credit Agreement, which, among other things, modified the fixed charge coverage ratio (“FCCR”) and the

minimum EBITDA requirements which waived the financial covenant breaches for the periods ended September 30, 2023 and December 31, 2023.

Amendment No.

18 unchanged sentences

4 to the Keepwell on August 15, 2025, which among other things, modified the conditions under which, if satisfied, the Company would be required to make certain capital contributions to the Targus Borrower.

The Targus Revolver Loan consists of base rate loans that bear interest on the outstanding principal amount equal to the base rate plus an applicable margin of 3.00 % and term rate loans that bear interest on the outstanding principal amount equal to the revolver SOFR rate plus an applicable margin of 4.00 %.

The average borrowings under the revolver loan was

$ 14,424 and $ 23,612 for the six months ended June 30, 2025 and 2024, respectively.

The amount available for borrowings under the Targus Credit Agreement was $ 2,754 and $ 5,361 at June 30, 2025 and December 31, 2024, respectively.

Interest expense on these loans during the three and six months ended June 30, 2025 was $ 380 and $ 792 , respectively.

Interest expense on these loans during the three and six months ended June 30, 2024 was $ 1,086 and $ 2,446 , respectively.

On August 20, 2025, the Company entered into a new Targus/FGI Credit Agreement to refinance and repay all outstanding obligations under the existing Targus Credit Agreement as more fully described below.

The Targus Revolver Loan consisted of base rate loans that bear interest on the outstanding principal amount equal to the base rate plus an applicable margin of 3.00 % and term rate loans that bear interest on the outstanding principal amount equal to the revolver SOFR rate plus an applicable margin of 4.00 %.

The average borrowings under the revolver loan was $ 14,179 for the period from January 1, 2025 through August 19, 2025 (see “Targus/FGI Credit Agreement” section below) and $ 21,023 for the nine months ended September 30, 2024.

The amount available for borrowings under the Targus Credit Agreement was zero and $ 5,361 at September 30, 2025 and December 31, 2024, respectively.

Interest expense on these loans during the three and nine months ended September 30, 2025 was $ 545 and $ 1,337 , respectively.

Interest expense on these loans during the three and nine months ended September 30, 2024 was $ 987 and $ 3,432 , respectively.

On August 20, 2025, the Company entered into a new Targus/FGI Credit Agreement to refinance and repay all outstanding obligations under the existing Targus Credit Agreement, as more fully described below, and recorded a loss on extinguishment of debt of $ 950 , which is included in the “Loss on extinguishment of debt” line item in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2025.

Targus/FGI Credit Agreement

On August 20, 2025, the Targus Borrower and certain of the Targus Borrowers’ 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 $ 30,000 revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the existing Targus Credit Agreement with PNC.

facility, the proceeds of which were used to refinance and repay all obligations under the existing Targus Credit Agreement with PNC.

The final maturity date of the Targus/FGI Credit Agreement is August 20, 2028.

1 unchanged sentence

The revolving loans bear interest at the greater of (a) 5.25 % per annum or (b) 3.00 % above the term SOFR for a period of 1 month plus 10 basis points, plus (c) 0.30 % per month collateral management fee.

The average borrowings under the revolving loan facility was $ 11,090 for the three months ended September 30, 2025.

The amount available for borrowings under the Targus/FGI Credit Agreement was $ 11,406 at September 30, 2025.

Interest expense on these loans during the three months ended September 30, 2025 was $ 129 .

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 pledge of all of the equity interests of the Targus Borrower and its direct and indirect subsidiaries.

The Targus/FGI Credit Agreement was secured by substantially all Targus assets as collateral defined in the Targus/FGI Credit Agreement which assets had an aggregate value of approximately $ 157,006 , including $ 36,409 of accounts receivable and $ 48,034 of inventory as of September 30, 2025.

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.

1 unchanged sentence

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, the Company’s wholly owned subsidiary BRCC 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 $ 5,000 , increasing the aggregate principal amount of such loan from $ 5,000 to $ 10,000 .

As required under the Targus/FGI Credit Agreement, BRCC 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 $ 5,000 , increasing the aggregate principal amount of such loan from $ 5,000 to $ 10,000 .

Lingo Credit Agreement

4 unchanged sentences

in its capacity as the administrative agent and lender and with other lenders party thereto from time to time.

A portion of the proceeds from the BRPAC Amended Credit Agreement were used to pay all outstanding principal

amounts and accrued interest under the Lingo Term Loan, and the Lingo Credit Agreement was effectively terminated upon repayment on January 6, 2025.

Interest expense on the term loan during the three months ended June 30, 2024 was $ 1,413 .

Interest expense on the term loan during the six months ended June 30, 2025 and 2024 was $ 62 , and $ 2,885 , respectively.

A portion of the proceeds from the BRPAC Amended Credit Agreement were used to pay all outstanding principal amounts and accrued interest under the Lingo Term Loan, and the Lingo Credit Agreement was effectively terminated upon repayment on January 6, 2025.

Interest expense on the term loan during the three months ended September 30, 2024 was $ 1,370 .

Interest expense on the term loan during the nine months ended September 30, 2025 and 2024 was $ 62 , and $ 4,254 , respectively.

bebe Credit Agreement

1 unchanged sentence

Proceeds of $ 22,188 from closing the Brands Transaction was used to pay off the then outstanding balance of the term loan in full and $ 224 of loan payoff expenses.

Interest expense on the term loan during the three and six months ended June 30, 2024 was $ 699 and $ 1,412 , respectively.

Interest expense on the term loan during the three and nine months ended September 30, 2024 was $ 691 and $ 2,102 , respectively.

Nomura Credit Agreement

13 unchanged sentences

In addition to paying interest on outstanding borrowings under the New Revolving Credit Facility, the Company was required to pay a quarterly commitment fee based on the unused portion, which was determined by the average utilization of the facility for the immediately preceding fiscal quarter.

the adjusted term SOFR determined plus an applicable margin of 6.00 % cash interest plus 1.50 % paid-in-kind interest;

In connection with the Fourth Nomura Amendment, interest on the term loan increased to SOFR loans accrued interest at the adjusted term SOFR plus an applicable margin of 7.00 % cash interest or, at the election of the Company, at the adjusted term SOFR determined plus an applicable margin of 6.00 % cash interest plus 1.50 % paid-in-kind interest;

and base rate loans accrued interest at the base rate plus an applicable margin of 6.00 % cash interest or, at the election of the Company, at the adjusted term SOFR determined for such day plus an applicable margin of 5.00 % cash interest plus 1.50 % PIK Interest.

Interest expense on the term loan during the three months ended June 30, 2024 was $ 6,173 .

Interest expense on the term loan during the six months ended June 30, 2025 and 2024 was $ 2,457 and $ 12,689 , respectively.

Interest on the revolving facility, which was terminated in connection with the Fourth Nomura Amendment on September 17, 2024, was $ 495 and $ 992 during the three and six months ended June 30, 2024, respectively.

Interest expense on the term loan during the three months ended September 30, 2024 was $ 6,087 .

Interest expense on the term loan during the nine months ended September 30, 2025 and 2024 was $ 2,457 and $ 18,776 , respectively.

Interest on the revolving facility, which was terminated in connection with the Fourth Nomura Amendment on September 17, 2024, was $ 428 and $ 1,420 during the three and nine months ended September 30, 2024, respectively.

The Fourth Nomura Amendment contained certain provisions related to borrowing base, including specific treatment for certain assets in the calculation of borrowing base and also included mandatory prepayment provisions regarding asset sales.

2 unchanged sentences

On January 3, 2025, the Company entered into Amendment No.

6 to the Credit Agreement (the “Sixth Amendment”) which agreed to permit under certain conditions the contribution by BRPI of 100 % of the equity interests in Lingo to BRPAC in connection with the entry into the BRPAC Amended Credit Agreement.

6 to the Credit Agreement (the “Sixth Amendment”) which agreed to permit under certain conditions the contribution by BRPI of 100 % of

the equity interests in Lingo to BRPAC in connection with the entry into the BRPAC Amended Credit Agreement.

There was no fee charged in connection with the Sixth Amendment.

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As of December 31, 2024, the outstanding balance on the term loan was $ 29,774 (net of unamortized debt issuance costs of $ 332 ).

On January 6, 2025 (the “Closing Date”), BRPAC entered into the BRPAC Amended Credit Agreement with certain subsidiaries of the Company, the Banc of California, in the capacity as agent and lender and with other lenders party

thereto from time to time.

The Company’s subsidiary Lingo was added as a BRPAC Borrower to the BRPAC Amended Credit Agreement.

9 unchanged sentences

Such security interests are evidenced by pledge, security, and other related agreements.

The purpose of the refinancing was to consolidate the prior Lingo and BRPAC Credit Agreements held by subsidiaries of the Communications segment into a single debt facility.

The purpose of the refinancing was to consolidate the prior Lingo and BRPAC Credit Agreements held by subsidiaries of the

Communications segment into a single debt facility.

For accounting purposes, the modification of terms was considered a troubled debt restructuring.

4 unchanged sentences

As of the Closing Date, the outstanding principal amount was $ 80,000 with quarterly installments of principal due in the amount of $ 4,000 , and any remaining principal balance is due at final maturity on January 6, 2030.

Interest expense on the term loan during the three months ended June 30, 2025 and 2024 was $ 1,561 and $ 914 , respectively, and during the six months ended June 30, 2025 and 2024 was $ 3,151 and $ 1,974 , respectively.

Interest expense on the term loan during the three months ended September 30, 2025 and 2024 was $ 1,475 and $ 825 , respectively, and during the nine months ended September 30, 2025 and 2024 was $ 4,626 and $ 2,800 , respectively.

The BRPAC Amended Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’, 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.

2 unchanged sentences

If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of outstanding amounts due under the BRPAC Amended Credit Agreement.

The Company is in compliance with all financial covenants in the BRPAC Amended Credit Agreement as of June 30, 2025.

The Company is in compliance with all financial covenants in the BRPAC Amended Credit Agreement as of September 30, 2025.

NOTE 12 — SENIOR NOTES PAYABLE

Senior notes payable, net, are comprised of the following:

September 30,

2025 December 31,

15 unchanged sentences

Unamortized debt issuance costs ( 18 ) ( 95 )

Total Senior Note Payable

Total Senior Notes Payable

$ 1,311,311 $ 1,530,561

As of June 30, 2025 and December 31, 2024, total senior notes outstanding were $ 1,323,727 (net of unamortized debt issue costs of $ 45 ) and $ 1,530,561 (net of unamortized debt issue costs of $ 95 ), respectively, with a weighted average interest rate of 5.59 % and 5.62 %, respectively.

As of September 30, 2025 and December 31, 2024, total senior notes outstanding were $ 1,311,311 (net of unamortized debt issue costs of $ 18 ) and $ 1,530,561 (net of unamortized debt issue costs of $ 95 ), respectively, with a weighted average interest rate of 5.60 % and 5.62 %, respectively.

Interest on senior notes is payable on a quarterly basis.

Interest expense on senior notes during the three and six months ended June 30, 2025 and 2024 totaled $ 17,236 and $ 38,890 , and $ 22,977 and $ 47,415 , respectively.

Interest expense on senior notes totaled $ 15,184 and $ 22,617 during the three months ended September 30, 2025 and 2024, respectively and $ 54,074 and $ 70,032 during the nine months ended September 30, 2025 and 2024, respectively.

On February 28, 2025 (“the Redemption Date”), the Company redeemed all of the $ 145,211 of issued and outstanding 6.375 % Senior Notes due February 28, 2025 (the “ 6.375 % 2025 Notes”).

The redemption price was equal to 100 % of the aggregate principal amount, plus any accrued and unpaid interest up to, but excluding, the Redemption Date.

In connection with the full redemption, the 6.375 % 2025 Notes, which were listed on Nasdaq under the ticker symbol “RILYM,” were delisted from Nasdaq and ceased trading on the Redemption Date.

During the six months ended June 30, 2025, the Company completed four private exchange transactions with institutional investor lenders pursuant to which the lenders exchanged senior notes for the New Notes, whereupon the exchanged notes were cancelled.

The exchange date, senior notes exchanged, New Notes issued and the issuance of warrants in conjunction with each of the four private exchange transactions (see Note 19 — Stockholder’s Equity for discussion of the warrants) during the six months ended June 30, 2025, is summarized in the following table:

In connection

with the full redemption, the 6.375 % 2025 Notes, which were listed on Nasdaq under the ticker symbol “RILYM,” were delisted from Nasdaq and ceased trading on the Redemption Date.

During the nine months ended September 30, 2025, the Company completed five private exchange transactions with institutional investor lenders pursuant to which the lenders exchanged senior notes for the New Notes, whereupon the exchanged notes were cancelled.

The exchange dates, senior notes exchanged, New Notes issued and the issuance of warrants in conjunction with each of the five private exchange transactions (see Note 19 — Stockholder’s Equity for discussion of the warrants) during the nine months ended September 30, 2025 are summarized in the following table:

Exchange Date Total

March 26, 2025 April 7, 2025 May 21, 2025 June 30, 2025

March 26, 2025 April 7, 2025 May 21, 2025 June 30, 2025 July 11, 2025

5.50 % Senior Notes due 2026

6 unchanged sentences

— 10,000 34,537 1,892 4,706 51,135

5.25 % Senior Notes due 2028

— 5,000 — 18,096 16,389 39,485

Total exchanged Senior Notes principal $ 123,054 $ 22,000 $ 139,072 $ 28,009 $ 42,838 $ 354,973

2 unchanged sentences

Warrants issued with the exchange (Note 19) 351,012 39,968 372,268 52,000 98,444 913,692

The total principal amount of New Notes issued for the four exchanges above totaled $ 203,812 .

The carrying amount of the New Notes in the amount of $ 247,468 at June 30, 2025 also includes the future undiscounted cash payments representing interest in the amount of $ 43,656 .

The total principal amount of New Notes issued for the five exchanges above totaled $ 228,423 .

The carrying amount of the New Notes in the amount of $ 277,007 at September 30, 2025 also includes the future undiscounted cash payments representing interest in the amount of $ 48,584 .

Each of the exchanges above represented a troubled debt restructuring.

As the carrying amount of the debt for each exchange exceeded the future undiscounted cash payments under the terms of the New Notes on the date of each exchange, the Company recorded a gain on the debt restructuring of $ 44,784 and $ 55,316 during the three and six months ended June 30, 2025.

The New Notes were recognized at a carrying value of $ 107,156 for the exchange dated March 26, 2025 and $ 140,312 for the three exchanges dated April 7, 2025, May 21, 2025, and June 30, 2025 that is equal to the future undiscounted cash payments of the New Notes and no future interest expense is recognized since the effective interest rate was set to zero upon the restructuring.

The New Notes were issued pursuant to an indenture, dated as of March 26, 2025 (the “New Notes Indenture”), governing the issuance of New Notes dated March 26, 2025, April 7, 2025, May 21, 2025, and June 30, 2025 for the four exchanges noted above, between the Company, certain subsidiaries of the Company, as guarantors, and GLAS Trust Company LLC, a New Hampshire limited liability company, as trustee and collateral agent, 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”).

As the carrying amount of the debt for each exchange exceeded the future undiscounted cash payments under the terms of the New Notes on the date of each exchange, the Company recorded a gain on the debt restructuring of $ 12,222 and $ 67,208 during the three and nine months ended September 30, 2025.

The New Notes were recognized at a carrying value of $ 107,156 for the exchange dated March 26, 2025, $ 140,312 for the three exchanges dated April 7, 2025, May 21, 2025, and June 30, 2025, and $ 29,539 for the exchange dated July 11, 2025 that is equal to the future undiscounted cash payments of the New Notes, and no future interest expense is recognized since the effective interest rate was set to zero upon the restructuring.

The New Notes were issued pursuant to an indenture, dated as of March 26, 2025 (the “New Notes Indenture”), governing the issuance of New Notes dated March 26, 2025, April 7, 2025, May 21, 2025, June 30, 2025, and July 11, 2025 for the five exchanges noted above, between the Company, certain subsidiaries of the Company, as guarantors, and GLAS Trust Company LLC, a New Hampshire limited liability company, as trustee and collateral agent, 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”).

The New Notes are secured on a second lien basis, junior to the obligations under the Company’s Credit Facility, by substantially all of the assets of the Company and the Guarantors.

3 unchanged sentences

If the New Notes are redeemed prior to March 26, 2026 (including bankruptcy – see events of default below), the redemption price is equal to (1) 100 % of the aggregate principal plus (2) a premium, if any, that is the excess for interest payments from the redemption date through March 26, 2026 discounted by the Treasury rate plus 50 basis points over the principal of the Notes being redeemed (the “Applicable Premium”) plus (3) any unpaid and accrued interest that excludes the redemption date.

If the New Notes are redeemed after March 26, 2026, including a tender offer, the Company may repay the New Notes at principal plus accrued and unpaid interest if any, but excluding the redemption date.

If the New Notes are

redeemed after March 26, 2026, including a tender offer, the Company may repay the New Notes at principal plus accrued and unpaid interest if any, but excluding the redemption date.

The New Notes include a change of control provision, where the holders of the New Notes have the right to require the Company to repurchase all or a portion of the New Notes at a purchase price, in cash, equal to 101 % of the principal amount thereof, plus accrued and unpaid interest if the Company does not exercise its redemption option.

4 unchanged sentences

Accrued expenses and other liabilities consist of the following:

September 30,

2025 December 31,

11 unchanged sentences

NOTE 14 — REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers by the Company’s five reportable operating segments and the All Other category during the three and six months ended June 30, 2025 and 2024 was as follows:

Revenue from contracts with customers by the Company’s five reportable operating segments and the All Other category during the three and nine months ended September 30, 2025 and 2024 was as follows:

Markets Wealth

Management Communications Consumer Products All Other Total

Revenues for the three months ended June 30, 2025

Revenues for the three months ended September 30, 2025

Corporate finance, consulting and investment banking fees $ 53,894 $ — $ — $ — $ — $ 53,894

14 unchanged sentences

Management Communications Consumer Products E-Commerce All Other Total

Revenues for the three months ended June 30, 2024

Revenues for the three months ended September 30, 2024

Corporate finance, consulting and investment banking fees $ 21,316 $ — $ — $ — $ — $ — $ 21,316

14 unchanged sentences

Management Communications Consumer Products E-Commerce All Other Total

Revenues for the six months ended June 30, 2025

Revenues for the nine months ended September 30, 2025

Corporate finance, consulting and investment banking fees $ 103,969 $ — $ — $ — $ — $ — $ 103,969

2 unchanged sentences

Subscription services — — 180,098 — — — 180,098

Service contract revenues — — — — — — —

Sale of goods — — 3,775 132,354 3,528 1,146 140,803

10 unchanged sentences

Management Communications Consumer Products E-Commerce All Other Total

Revenues for the six months ended June 30, 2024

Revenues for the nine months ended September 30, 2024

Corporate finance, consulting and investment banking fees $ 111,560 $ — $ — $ — $ — $ — $ 111,560

16 unchanged sentences

Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied.

Receivables related to revenues from contracts with customers totaled $ 61,233 and $ 68,653 as of June 30, 2025 and December 31, 2024, respectively.

The Company had no significant impairments related to these receivables during the three and six months ended June 30, 2025 and 2024.

The Company also has $ 3,144 and $ 3,387 of unbilled receivables included in prepaid expenses and other assets as of June 30, 2025 and December 31, 2024, respectively.

Receivables related to revenues from contracts with customers totaled $ 63,457 and $ 68,653 as of September 30, 2025 and December 31, 2024, respectively.

The Company had no significant impairments related to these receivables during the three and nine months ended September 30, 2025 and 2024.

The Company also has $ 2,921 and $ 3,387 of unbilled receivables included in prepaid expenses and other assets as of September 30, 2025 and December 31, 2024, respectively.

The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, and subscription services where the performance obligation has not yet been satisfied.

Deferred revenue as of June 30, 2025 and December 31, 2024 was $ 53,499 and $ 58,148 , respectively.

The Company expects to recognize the deferred revenue of $ 53,499 as of June 30, 2025 as service and fee revenues when the performance obligation is met during the years ended December 31, 2025 (remaining six months), 2026, 2027, 2028 and 2029 in the amount of $ 35,160 , $ 8,597 , $ 4,357 , $ 1,879 , and $ 1,103 , respectively.

Deferred revenue as of September 30, 2025 and December 31, 2024 was $ 51,982 and $ 58,148 , respectively.

The Company expects to recognize the deferred revenue of $ 51,982 as of September 30, 2025 as service and fee revenues when the performance obligation is met during the years ended December 31, 2025 (remaining three months), 2026, 2027, 2028 and 2029 in the amount of $ 34,280 , $ 8,358 , $ 4,314 , $ 1,721 , and $ 997 , respectively.

The Company expects to recognize the deferred revenue of $ 2,312 after December 31, 2029.

During the three months ended June 30, 2025 and 2024, the Company recognized revenue of $ 7,792 and $ 9,183 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the six months ended June 30, 2025 and 2024, the Company recognized revenue of $ 25,033 and $ 29,725 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the three months ended September 30, 2025 and 2024, the Company recognized revenue of $ 5,572 and $ 6,846 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the nine months ended September 30, 2025 and 2024, the Company recognized revenue of $ 30,605 and $ 36,571 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

Contract Costs

2 unchanged sentences

(2) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period.

The capitalized costs to fulfill a contract were $ 5,170 and $ 5,694 as of June 30, 2025 and December 31, 2024, respectively, and are recorded in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.

For the three months ended June 30, 2025 and 2024, the Company recognized expenses of $ 1,034 and $ 1,142 related to capitalized costs to fulfill a contract, respectively.

For the six months ended June 30, 2025 and 2024, the Company recognized expenses of $ 2,094 and $ 2,679 related to capitalized costs to fulfill a contract, respectively.

There were no significant impairment charges recognized in relation to these capitalized costs during the three and six months ended June 30, 2025 and 2024.

The capitalized costs to fulfill a contract were $ 4,886 and $ 5,694 as of September 30, 2025 and December 31, 2024, respectively, and are recorded in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.

For the three months ended September 30, 2025 and 2024, the Company recognized expenses of $ 1,214 and $ 1,140 related to capitalized costs to fulfill a contract, respectively.

For the nine months ended September 30, 2025 and 2024, the Company recognized expenses of $ 3,307 and $ 3,820 related to capitalized costs to fulfill a contract, respectively.

There were no significant impairment charges recognized in relation to these capitalized costs during the three and nine months ended September 30, 2025 and 2024.

Remaining Performance Obligations and Revenue Recognized from Past Performance

The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of June 30, 2025.

Corporate finance and investment banking fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of June 30, 2025.

During the three months ended June 30, 2025 and 2024, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time was $ 100,595 and $ 128,077 and over time was $ 87,572 and $ 127,963 , respectively.

During the six months ended June 30, 2025 and 2024, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time was $ 191,065 and $ 266,153 and over time was $ 194,329 and $ 253,293 , respectively.

The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of September 30, 2025.

During the three months ended September 30, 2025 and 2024, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time were $ 131,405 and $ 105,740 and over time were $ 83,848 and $ 119,766 , respectively.

During the nine months ended September 30, 2025 and 2024, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time were $ 322,470 and $ 371,891 and over time were $ 278,176 and $ 373,058 , respectively.

NOTE 15 — INCOME TAXES

The Company’s effective income tax rate was a provision of 4.1 % for the three months ended June 30, 2025 as compared to a provision of 6.9 % for the three months ended June 30, 2024.

The Company’s effective income tax rate was a provision of less than 1 % for the six months ended June 30, 2025, as compared to a provision of 1.6 % for the six months ended June 30, 2024.

During the three months ended June 30, 2025, the Company had a provision for income taxes from continuing operations of $ 3,053 resulting primarily from the impact of recording uncertain tax positions for state and foreign taxes, interest and penalties.

During the three months ended June 30, 2024, the Company had a provision for income taxes from continuing operations of $ 29,183 resulting primarily from the impact of recording a valuation allowance on deferred tax assets as of June 30, 2024.

During the six months ended June 30, 2025, the Company had a provision for income taxes from continuing operations of $ 11 .

During the six months ended June 30, 2024, the Company had a provision for income taxes from continuing operations of $ 7,853 .

The effective income tax rates for the three and six months ended June 30, 2025 are less than the federal statutory tax rate of 21% due to being in a tax loss with a full valuation allowance.

The effective income tax rates for the three and six months ended June 30, 2024 are impacted by the valuation allowance recorded on deferred tax assets as of June 30, 2024.

As of June 30, 2025, the Company had federal net operating loss carryforwards of $ 344,508 and state net operating loss carryforwards of $ 71,248 , respectively.

The Company’s effective income tax rate was a provision of 1.2 % for the three months ended September 30, 2025, as compared to a provision of 7.1 % for the three months ended September 30, 2024.

The Company’s effective income tax rate was a provision of less than 1% for the nine months ended September 30, 2025, as compared to a provision of 2.8 % for the nine months ended September 30, 2024.

During the three months ended September 30, 2025, the Company had a provision for income taxes from continuing operations of $ 1,183 resulting primarily from the impact of recording uncertain tax positions for state and foreign taxes, interest and penalties.

During the three months ended September 30, 2024, the Company had a provision for income taxes from continuing operations of $ 9,950 resulting primarily from the impact of recording a valuation allowance on deferred tax assets as of September 30, 2024.

During the nine months ended September 30, 2025, the Company had a provision for income taxes from continuing operations of $ 1,194 .

During the nine months ended September 30, 2024, the Company had a provision for income taxes from continuing operations of $ 17,803 .

The effective income tax rates for the three and nine months ended September 30, 2025 are less than the federal statutory tax rate of 21% due to being in a tax loss with a full valuation allowance.

The effective income tax rates for the three and nine months ended September 30, 2024 are impacted by the valuation allowance recorded on deferred tax assets as of September 30, 2024.

As of September 30, 2025, the Company had federal net operating loss carryforwards of $ 344,508 and state net operating loss carryforwards of $ 71,248 , respectively.

The Company’s federal net operating loss carryforwards will expire in the tax years commencing on December 31, 2033, through December 31, 2038.

3 unchanged sentences

The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382.

Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income.

As of June 30, 2025, a full valuation allowance has been recorded since it is more likely than not that the Company

will not be able to utilize tax benefits before they expire.

Accordingly, the Company is limited to the

amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income.

As of September 30, 2025, a full valuation allowance has been recorded since it is more likely than not that the Company will not be able to utilize tax benefits before they expire.

The Company reassess the need for a valuation allowance on an ongoing basis.

10 unchanged sentences

The Act includes changes to U.S.

tax law that will be applicable to the Company beginning in fiscal year 2026.

tax law that will be applicable to the Company beginning in the year ended 2025.

These changes include provisions allowing accelerated tax deductions for qualified property and research expenditures.

The Company is in the process of evaluating the impact of the Act to our financial statements.

The Company is in the process of evaluating the impact of the Act on our financial statements.

Given our history of domestic tax losses and the establishment of a full valuation allowance against our domestic deferred tax assets, the Company does not anticipate that the provisions of the Act will have a material impact on our consolidated income tax provision.

NOTE 16 — EARNINGS PER SHARE

1 unchanged sentence

Diluted earnings per share is calculated by dividing (loss) income from continuing operations, (loss) income from discontinued operations, or net income (loss) by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period.

Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share as the effect would be anti-dilutive were 3,229,165 during the three and six months ended June 30, 2025 and 2,781,112 during the three and six months ended June 30, 2024, respectively.

Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share as the effect would be anti-dilutive were 3,320,660 during the three and nine months ended September 30, 2025 and 2,637,588 during the three and nine months ended September 30, 2024.

Basic and diluted earnings per share were calculated as follows:

Three Months Ended June 30,

Three Months Ended September 30,

Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total

1 unchanged sentence

Net income (loss) attributable to noncontrolling interests 4,470 — 4,470 624 ( 3,825 ) ( 3,201 )

Net income (loss) attributable to B.

Riley Financial, Inc.

70,159 69,312 139,471 ( 448,133 ) 14,529 ( 433,604 )

Net income (loss) attributable to Registrant 92,949 ( 1,866 ) 91,083 ( 151,235 ) ( 133,162 ) ( 284,397 )

Preferred stock dividends 2,015 — 2,015 2,015 — 2,015

Net income (loss) available to common shareholders $ 90,934 $ ( 1,866 ) $ 89,068 $ ( 153,250 ) $ ( 133,162 ) $ ( 286,412 )

Six Months Ended June 30,

Nine Months Ended September 30,

Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total

Net income (loss) $ 149,144 $ 70,841 $ 219,985 $ ( 661,063 ) $ ( 108,270 ) $ ( 769,333 )

Net (loss) income attributable to noncontrolling interests ( 5,064 ) — ( 5,064 ) ( 1,021 ) 2,055 1,034

Net income (loss) attributable to B.

Riley Financial, Inc.

56,789 72,707 129,496 ( 509,431 ) 26,662 ( 482,769 )

Net loss attributable to noncontrolling interests ( 594 ) — ( 594 ) ( 397 ) ( 1,770 ) ( 2,167 )

Net income (loss) attributable to Registrant 149,738 70,841 220,579 ( 660,666 ) ( 106,500 ) ( 767,166 )

Preferred stock dividends 6,045 — 6,045 6,045 — 6,045

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

22 unchanged sentences

The Company has not accrued for any such contingent liabilities, but such contingent liabilities could be realized which could have a material adverse impact on the Company’s financial condition.

On January 2, 2026, a stockholder derivative complaint was filed by Joel Friedman in the U.S.

Federal District Court, Central District of California on behalf of the Company and against the members of the Company’s Board of Directors and certain of the Company’s executive officers.

The complaint alleges that certain of the Company’s officers and the board of directors substantially damaged the Company by filing false and misleading statements that omitted material adverse facts regarding Brian Kahn's involvement in the Prophecy fraud and the regulatory scrutiny that the Company would face because of its entanglements with Kahn and Franchise Group.

Claims include breach of fiduciary duties, waste of corporate assets, and unjust enrichment.

The Company believes that these claims are meritless and intends to defend this action.

On July 11, 2025, the Company’s subsidiary, BRS, received a demand letter from certain parties that invested in a special purpose entity (the “SPV”) that in turn invested in the going private transaction (the “Transaction”) in August 2023 of Franchise Group, Inc.

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Riley received an additional SEC subpoena requesting the production of certain additional documents and information relating to Franchise Group, Inc.

(including its holding company, Freedom VCM Holdings, LLC) as well as Mr.

(including its holding company, Freedom

VCM Holdings, LLC) as well as Mr.

Riley’s personal loan and his pledge of shares of the Company’s common stock as collateral for such loan.

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Kahn or any of his affiliates.

The receipt of

subpoenas is not an indication that the SEC or its staff has determined that any violations of law have occurred.

The receipt of subpoenas is not an indication that the SEC or its staff has determined that any violations of law have occurred.

Both the Company and Mr.

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The amended complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

On December 12, 2025, the District Court granted in part and denied in part the Company’s motion to dismiss the consolidated amended complaint.

The matter will now move into discovery and class certification proceedings.

The Company cannot estimate the amount of potential liability, if any, that could arise from these matters and believes these claims are meritless and intends to defend these actions.

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On January 18, 2024, the Company entered into a guaranty (the “Axos Guaranty”) in favor of (i) Axos Bank, in its capacity as administrative agent (the “Administrative Agent”) for the secured parties under that certain credit agreement, dated as of January 18, 2024, among B&W, the guarantors party thereto, the lenders party thereto and the Administrative Agent (the “B&W Axos Credit Agreement”), and (ii) the secured parties.

Subject to the terms and conditions of the Axos Guaranty, the Company has guaranteed certain obligations of B&W (subject to certain limitations) under the B&W Axos Credit Agreement, including the obligation to repay outstanding loans and letters of credit and to pay earned interest, fees costs and expenses of enforcing the Axos Guaranty, provided however, that the Company’s obligations with respect to the principal amount of credit extensions and unreimbursed letter of credit obligations under the B&W Axos Credit Agreement shall not at any time exceed $ 150,000 in the aggregate, which is the maximum potential amount of future payments under the guaranty.

principal amount of credit extensions and unreimbursed letter of credit obligations under the B&W Axos Credit Agreement shall not at any time exceed $ 150,000 in the aggregate, which is the maximum potential amount of future payments under the guaranty.

In consideration for the agreements and commitments under the Axos Guaranty and pursuant to a separate fee and reimbursement agreement, B&W has agreed to pay the Company a fee equal to 2.00 % of the aggregate revolving commitments (as defined in the B&W Axos Credit Agreement) under the B&W Axos Credit Agreement, payable quarterly and, at B&W’s election, in cash in full or 50 % in cash and 50 % in the form of penny warrants.

On June 18, 2025, an

amendment was made to the Axos Guaranty whereby the Company’s obligations as guarantor were suspended until January 1, 2027.

On June 18, 2025, an amendment was made to the Axos Guaranty whereby the Company’s obligations as guarantor were suspended until January 1, 2027.

On June 30, 2021, the Company agreed to guaranty (the “Cash Collateral Provider Guaranty”) up to $ 110,000 of obligations that B&W may owe to providers of cash collateral pledged in connection with a debt financing for B&W.

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In consideration for providing the indemnity rider, B&W paid the Company fees in the amount of $ 600 on August 26, 2020.

During the period ended December 31, 2024, the indemnity rider was reduced to $ 2,997 , which remained outstanding at June 30, 2025.

During the period ended December 31, 2024, the indemnity rider was reduced to $ 2,997 , which expired during the third quarter of 2025.

No amounts remained outstanding at September 30, 2025.

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Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated.

The Company is party to a purchase agreement with a public company (the “Issuer”) under which the Issuer may require the Company to purchase the Issuer’s convertible preferred stock prior to April 30, 2028.

If exercised, the Company would remit $ 25,000 in cash and receive preferred shares at a discount to their stated value, with the preferred stock convertible at the Company’s option into common shares of the Issuer based on a formula tied to market prices.

At September 30, 2025, the Company is a party to a purchase agreement with a public company (the “Issuer”) under which the Issuer may require the Company to purchase up to $ 15,000 of the Issuer’s convertible preferred stock prior to March 24, 2027.

If exercised, the Company would remit cash and receive preferred shares at a discount to their stated value, with the preferred stock convertible at the Company’s option into common shares of the Issuer based on a formula tied to market prices.

The preferred stock also includes a contingent redemption feature if the Issuer’s common stock declines below a specified price threshold.

As of June 30, 2025, the $ 25,000 commitment remained outstanding and had not been exercised by the Issuer, and no amounts were due.

The Company purchased the $ 25,000 of preferred shares from the Issuer on July 15, 2025.

As of September 30, 2025, the $ 15,000 commitment remained outstanding and had not been exercised by the Issuer, and no amounts were due.

The Company purchased the $ 2,300 of preferred shares from the Issuer on November 14, 2025 and $ 12,700 of the commitment remains outstanding.

NOTE 18 — SHARE-BASED PAYMENTS

(a) Employee Stock Incentive Plans

Under the 2021 B.

Riley Stock Incentive Plan (the “2021 Plan”), share-based compensation expense for restricted stock units under the Company’s 2021 Plan was:

Under the Company’s 2021 Stock Incentive Plan (the “2021 Plan”), share-based compensation expense for restricted stock units under the 2021 Plan was:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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Total share-based compensation expense for restricted stock units $ 1,506 $ 2,588 $ 8,202 $ 17,002

During the six months ended June 30, 2025, in connection with employee stock incentive plans, the Company did not grant any restricted stock units.

During the nine months ended September 30, 2025, in connection with employee stock incentive plans, the Company did not grant any restricted stock units.

Share based compensation expense is recorded in the “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statement of operations.

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The fair value of the liability at each balance sheet date is determined based on the Company’s stock price.

As of the six months ended June 30, 2025, the Company settled $ 2,287 of restricted stock units in cash and as of June 30, 2025, the liability was $ 396 , which is recorded in the “Accrued expenses and other liabilities” line item in the unaudited condensed consolidated balance sheet.

During the six months ended June 30, 2024, in connection with employee stock incentive plans, the Company granted 1,223,263 restricted stock units with a grant date fair value of $ 16,181 .

For the nine months ended September 30, 2025, the Company settled $ 2,296 of restricted stock units in cash and as of September 30, 2025, the liability was $ 1,296 , which is recorded in the “Accrued expenses and other liabilities” line item in the unaudited condensed consolidated balance sheet.

During the nine months ended September 30, 2024, in connection with employee stock incentive plans, the Company granted 1,223,263 restricted stock units with a grant date fair value of $ 16,181 .

The restricted stock units generally vest over a period of one to five years based on continued service.

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(b) Employee Stock Purchase Plan

In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), there was no share based compensation expense during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024, share based compensation expense totaled $ 70 and $ 307 , respectively, of which $ 57 and $ 247 , respectively, was recorded in continuing operations and $ 13 and $ 60 , respectively, was recorded in discontinued operations.

In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), there was no share based compensation expense during the three and nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, share based compensation expense totaled $ 72 and $ 379 , respectively, of which $ 56 and $ 304 , respectively, was recorded in continuing operations and $ 16 and $ 75 , respectively, was recorded in discontinued operations.

Share based compensation expense is recorded in the “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.

As of June 30, 2025 and December 31, 2024, there were 236,949 shares reserved for issuance under the Purchase Plan.

As of September 30, 2025 and December 31, 2024, there were 236,949 shares reserved for issuance under the Purchase Plan.

On March 10, 2025, the Company’s majority-owned subsidiary approved the BRSH Stock Incentive Plan which allows for issuance of up to 4,000,000 restricted stock awards of BRSH.

On March 10, 2025, BRSH issued 1,873,600 restricted stock awards, representing approximately 10.0 % of the equity of BRSH, to employees and officers with a grant date fair value of $ 21,657 in conjunction with the acquisition of the shell corporation as more fully described in see Note

2(n) - Noncontrolling Interests.

Noncontrolling Interests.

On August 18, 2025, BRSH issued an additional 22,951 restricted stock awards with a grant date fair value of $ 265 to employees and directors of BRSH.

The grant date fair value of the BRSH restricted stock awards was determined using the same discounted cash flows method and market value approach that was utilized to value the BRSH share issued to owners of the shell corporation as more fully described in Note 2(n) - Noncontrolling Interests with an additional discount of 17.5 % for the lack of marketability due to the service condition of the restricted stock awards vesting over a period of up to five years.

The restricted stock awards vest over a period of four to five years based on continued service.

The restricted stock awards generally vest over a period of four to five years based on continued service.

The restricted stock awards vest for common stock of BRSH and increase the noncontrolling interest in BRSH, when vested.

During the three and six months ended June 30, 2025, share-based compensation expense of $ 1,277 and $ 1,570 , respectively, related to the BRSH restricted stock awards was recorded in the “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.

During the three and nine months ended September 30, 2025, share-based compensation expense of $ 850 and $ 2,420 , respectively, related to the BRSH restricted stock awards and was recorded in the “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.

(d) Common Stock and Stock Options Issued

On June 3, 2025, the Company issued 100,000 unregistered shares and options to purchase 300,000 shares of the Company’s common stock in connection with the employment agreement entered into with the Company’s chief financial officer.

On June 3, 2025, the Company issued 100,000 unregistered shares and 300,000 shares of the Company’s common stock in connection with the employment agreement entered into with the Company’s chief financial officer.

The 100,000 unregistered shares issued were issued upon execution of the employment agreement as an employment inducement grant that is not subject to vesting conditions and expensed immediately.

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The estimated fair value of $ 523 for the options was determined using the Black-Scholes Option Pricing Model, which included a risk free rate of 4.5 %, volatility of 66.5 % and expected dividend rate of zero .

During the three and six months ended June 30, 2025, share based compensation expense for the options totaled $ 14 .

During the three and nine months ended September 30, 2025, share based compensation expense for the options totaled $ 43 and $ 57 , respectively.

NOTE 19 — STOCKHOLDERS’ EQUITY

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The shares repurchased under the program are retired.

During the three and six months ended June 30, 2025 and 2024, the Company did not repurchase any shares of its common stock.

During the three and nine months ended September 30, 2025 and 2024, the Company did not repurchase any shares of its common stock.

(b) Common Stock Warrants

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The warrants were classified as a liability.

At inception on February 26, 2025, the fair value of the warrants were $ 7,860 and the fair value of the warrants were $ 4,160 at June 30, 2025 (see Note 2(l) - Fair Value Measurements).

The warrant liability of $ 4,160 at June 30, 2025 is included in other liabilities in Note 13 - Accrued Expenses and Other Liabilities and the change in value of the warrant liability of $ 1,000 and $ 3,700 for the three and six months ended June 30, 2025, respectively, is included in the “Change in fair value of financial instruments and other” line item in the unaudited condensed consolidated statements of operations.

In conjunction with the debt exchanges (see Note 12 - Senior Notes Payable), the Company issued seven -year warrants to the investors to purchase up to 464,236 and 815,248 shares of common stock at an exercise price of $ 10.00 as of the three and six months ended June 30, 2025, respectively.

The warrants contain certain anti-dilution provisions and upon

exercise, the warrant holders are entitled to dividends and distributions as if the warrants had been exercised in full prior to the dividend or distribution date.

At inception on February 26, 2025, the fair value of the warrants was $ 7,860 , and the fair value of the warrants was $ 8,500 at September 30, 2025 (see Note 2(l) - Fair Value Measurements).

The warrant liability of $ 8,500 at September 30, 2025 is included in other liabilities in Note 13 - Accrued Expenses and Other Liabilities and the change in value of the warrant liability of $( 4,340 ) and $( 640 ), respectively for the three and nine months ended September 30, 2025, is included in the “Change in fair value of financial instruments and other” line item in the unaudited condensed consolidated statements of operations.

In conjunction with the debt exchanges (see Note 12 - Senior Notes Payable), the Company issued seven -year warrants to the investors to purchase up to 98,444 and 913,692 shares of common stock at an exercise price of $ 10.00 as of the three and nine months ended September 30, 2025, respectively.

The warrants contain certain anti-dilution provisions and upon exercise, the warrant holders are entitled to dividends and distributions as if the warrants had been exercised in full prior to the dividend or distribution date.

The warrants meet the definition of a derivative and were classified within stockholder’s equity.

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Exchange Date

March 26, 2025 April 7, 2025 May 21, 2025 June 30, 2025

March 26, 2025 April 7, 2025 May 21, 2025 June 30, 2025 July 11, 2025

Fair value at issuance $ 863 $ 67 $ 590 $ 80 $ 248

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There were 2,834 shares of the Series A Preferred Stock issued and outstanding as of June 30, 2025 and December 31, 2024.

The total liquidation preference for the Series A Preferred Stock as of June 30, 2025 and December 31, 2024 was $ 73,289 (inclusive of cumulative unpaid dividends of $ 2,436 ) and $ 70,854 , respectively.

There were no dividends declared or paid on the Series A Preferred Stock during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024 dividends paid on the Series A Preferred Stock were $ 0.4296875 per depository share.

There were 2,834 shares of the Series A Preferred Stock issued and outstanding as of September 30, 2025 and December 31, 2024.

The total liquidation preference for the Series A Preferred Stock as of September 30, 2025 and December 31, 2024 was $ 74,507 (inclusive of cumulative unpaid dividends of $ 3,654 ) and $ 70,854 , respectively.

There were no dividends declared or paid on the of the Series A Preferred Stock during the three and nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, dividends paid on the Series A Preferred Stock were $ 0.4296875 per depository share.

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.

There were 1,729 shares of the Series B Preferred Stock issued and outstanding as of June 30, 2025 and December 31, 2024.

The total liquidation preference for the Series B Preferred Stock as of June 30, 2025 and December 31, 2024 was $ 44,822 (inclusive of cumulative unpaid dividends of $ 1,594 ) and $ 43,228 , respectively.

There were no dividends declared or paid on the Series B Preferred Stock during the three and six months ended June 30, 2025.

During the three and six months ended June 30, 2024 dividends paid on the Series B Preferred Stock were $ 0.4609375 per depository share.

There were 1,729 shares of the Series B Preferred Stock issued and outstanding as of September 30, 2025 and December 31, 2024.

The total liquidation preference for the Series B Preferred Stock as of September 30, 2025 and December 31, 2024 was $ 45,619 (inclusive of cumulative unpaid dividends of $ 2,391 ) and $ 43,228 , respectively.

There were no dividends declared or paid on the of the Series B Preferred Stock during the three and nine months ended September 30, 2025.

During the three and nine months ended September 30, 2024, dividends paid on the Series B Preferred Stock were $ 0.4609375 per depository share.

On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series B Preferred Stock.

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As such, they are subject to the minimum net capital requirements promulgated by the SEC.

As of June 30, 2025, BRS had net capital of $ 55,529 , which was $ 52,028 in excess of required minimum net capital of $ 3,501 ;

As of September 30, 2025, BRS had net capital of $ 69,463 , which was $ 64,043 in excess of required minimum net capital of $ 5,420 ;

and BRWM had net capital of $ 8,997 , which was $ 7,723 in excess of required minimum net capital of $ 1,274 .

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In connection with these services, the Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Funds.

Management fees from the Funds during the three and six months ended June 30, 2024 totaled $ 28 and $ 143 , respectively.

Management fees from the Funds during the three and nine months ended September 30, 2024 totaled $ 6 and $ 149 , respectively.

There were no management fees from the Funds during 2025.

As of June 30, 2025 and December 31, 2024, amounts due from related parties were $ 185 and $ 189 , respectively, of which $ 41 , was due from the Funds for management fees and other operating expenses at December 31, 2024.

As of June 30, 2025 and December 31, 2024, amounts due to related parties were $ 1,198 and $ 3,404 , respectively, of which $ 1,198 and $ 2,764 , respectively, related to bebe’s rent to own stores which are franchised through Freedom VCM and consist of royalty fees, inventory purchases, marketing, and IT services.

During the three and six months ended June 30, 2025, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,068 and $ 2,285 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 2,478 and $ 5,339 , respectively.

During the three and six months ended June 30, 2024, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,235 and $ 2,525 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 3,220 and $ 6,759 , respectively.

As of September 30, 2025 and December 31, 2024, amounts due from related parties were $ 202 and $ 189 , respectively, of which $ 41 was due from the Funds for management fees and other operating expenses at December 31, 2024.

As of September 30, 2025 and December 31, 2024, amounts due to related parties were $ 2,595 and $ 3,404 , respectively, of which $ 2,595 and $ 2,764 , respectively, related to bebe’s rent to own stores which are franchised through Freedom VCM and consist of royalty fees, inventory purchases, marketing, and IT services.

During the three and nine months ended September 30, 2025, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,001 and $ 3,286 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 3,612 and $ 8,951 , respectively.

During the three and nine months ended September 30, 2024, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,176 and $ 3,701 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 3,877 and $ 10,636 , respectively.

In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P.

(“Whitehawk”), a limited partnership controlled by Mr.

Ahn, who is the brother of one of the Company’s executive officer’s who was the Company’s Chief Financial Officer and Chief Operating Officer until the executive officer’s departure on June 3, 2025.

Ahn, who is the brother of one of the Company’s executive officers who was the Company’s Chief Financial Officer and Chief Operating Officer until the executive officer’s departure on June 3, 2025.

Whitehawk has agreed to provide investment advisory services for GACP I, L.P.

and GACP II, L.P.

During the six months ended June 30, 2024, management fees paid for investment advisory services by Whitehawk were $ 1,237 .

There were no management fees paid to Whitehawk during the 2025.

During the three and nine months ended September 30, 2024, management fees paid for investment advisory services by Whitehawk were zero and $ 1,237 , respectively.

There were no management fees paid to Whitehawk during 2025.

Whitehawk is no longer a related party upon the departure of the executive officer on June 3, 2025.

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The Agreement expired on September 20, 2025 in accordance with its original terms.

During the three months ended June 30, 2025 and 2024, the Company earned $ 2,982 and $ 968 , respectively, and during the six months ended June 30, 2025 and 2024, the Company earned $ 3,818 and $ 1,716 , respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities which are included in services and fees in the unaudited condensed consolidated statements of operations.

During the three months ended September 30, 2025 and 2024, the Company earned $ 1,121 and $ 1,061 , respectively, and during the nine months ended September 30, 2025 and 2024, the Company earned $ 4,939 and $ 2,778 , respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities which are included in services and fees in the unaudited condensed consolidated statements of operations.

The Company is also a party to indemnification agreements for the benefit of B&W and the B.

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Riley Receivables, LLC, a wholly owned subsidiary of the Company, all in accordance with the terms of that certain amended and restated funding agreement, dated December 18, 2023, by and among Freedom VCM Interco Holdings, Inc., Freedom VCM Receivables, Inc., BRRII, the Company and certain other parties thereto.

This loan was sold on February 7, 2025, and as such, we no longer owned the loan as of June 30, 2025.

This loan was sold on February 7, 2025, and as such, we no longer owned the loan as of September 30, 2025.

This loan receivable was measured at fair value in the amount of $ 3,913 as of December 31, 2024.

Interest income on this loan receivable was $ 2,238 and $ 4,392 during the three and six months ended June 30, 2024, respectively.

There was no interest income on this loan receivable during the three and six months ended June 30, 2025.

Interest income on this loan receivable was $ 1,538 and $ 5,930 during the three and nine months ended September 30, 2024, respectively.

There was no interest income on this loan receivable during the three and nine months ended September 30, 2025.

The Company also had a related party loan receivable with a fair value of approximately $ 2,169 at December 31, 2024, from home-furnishing retailer W.S.

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As of the date of the filing of the Chapter 11 Cases, $ 93,000 in outstanding borrowings existed under the Conn’s Term Loan.

Any efforts to enforce payment obligations under the Conn’s Term Loan are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of the Conn’s Term Loan are subject to the applicable provisions of the

Bankruptcy Code.

Any efforts to enforce payment obligations under the Conn’s Term Loan are automatically stayed as a result of the Chapter 11 Cases and the

Company’s rights of enforcement in respect of the Conn’s Term Loan are subject to the applicable provisions of the Bankruptcy Code.

These loan receivables are reported as related party loan receivables 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.

During the three and six months ended June 30, 2024, interest income on these loans totaled $ 3,388 and $ 7,538 , respectively.

During the three and nine months ended September 30, 2024, interest income on these loans totaled zero and $ 7,538 , respectively.

There was no interest income on these loans during 2025.

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After the impairment of the collateral related to the Freedom equity interest, the fair value of the loan was $ 2,057 at December 31, 2024 which was determined based on the remaining collateral for this loan which is primarily comprised of other securities.

Fair value adjustments on the VCM loan receivable were decreases of $( 866 ) and $( 151,147 ) during the three months ended June 30, 2025 and 2024, respectively, and decreases of $( 589 ) and $( 168,385 ) during the six months ended June 30, 2025 and 2024, respectively.

Fair value adjustments on the VCM loan receivable were decreases of $( 165 ) and $( 54,333 ) during the three months ended September 30, 2025 and 2024, respectively, and decreases of $( 754 ) and $( 222,718 ) during the nine months ended September 30, 2025 and 2024, respectively.

In light of the Company’s determination that any repayment of the Amended and Restated Note would have been paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying Freedom VCM equity interest collateral provided by Mr.

Kahn and his spouse, the Company has determined that both VCM and Mr.

Kahn are related parties as of June 30, 2025 and December 31, 2024.

Interest income was $ 6,082 and $ 12,164 , respectively during the three and six months ended June 30, 2024.

There was no interest income during the three and six months ended June 30, 2025.

Kahn are related parties as of September 30, 2025 and December 31, 2024.

Interest income was $ 3,409 and $ 15,573 during the three and nine months ended September 30, 2024, respectively.

There was no interest income during the three and nine months ended September 30, 2025.

Torticity, LLC

Torticity is a related party as a result of the Company’s equity ownership in the limited liability company and B.

Riley’s representation on the Board of Directors (board representation through January 12, 2025).

Torticity is a related party as a result of the Company’s equity ownership in the limited liability company and BRC’s representation on the Board of Directors (board representation through January 12, 2025).

On November 2, 2023, the Company agreed to lend up to $ 15,369 to Torticity, LLC, of which $ 6,690 was drawn upon with $ 8,679 remaining, with interest payable of 15.0 % per annum and a maturity date of November 2, 2026.

Interest income was $ 1,256 and $ 2,465 during the three and six months ended June 30, 2024.

Interest income was $ 1,281 and $ 3,746 during the three and nine months ended September 30, 2024, respectively.

The fair value of the entire loan receivable was impaired with no fair value at December 31, 2024.

Subsequent to December 31, 2024, there were amendments to the loan;

however, the entire loan remained impaired with no fair value at June 30, 2025 and there has been no interest income on the loan receivable during 2025.

however, the entire loan remained impaired with no fair value at September 30, 2025, and there has been no interest income on the loan receivable during 2025.

Kanaci Technologies, LLC

On November 21, 2023, the Company agreed to lend up to $ 10,000 to Kanaci Technologies, LLC (“Kanaci”), of which $ 4,000 was drawn upon with $ 6,000 remaining, with interest payable of 15.0 % per annum and a maturity date of June 30, 2026.

Interest income was $ 476 and $ 844 during the three and six months ended June 30, 2024.

Interest income was $ 1,244 and $ 2,088 during the three and nine months ended September 30, 2024, respectively.

In June 2023, one of the Company’s members of senior management was appointed to the board of directors of Kanaci.

The loan receivable in the amount of $ 11,453 was converted to equity on September 30, 2024.

GA Holdings is a related party as a result of the Company’s equity investment as fully described in Note 2(m) - Equity Method Investment and B.

Riley’s representation on the Board of Directors.

GA Holdings is a related party as a result of the Company’s equity investment as fully described in Note 2(m) - Equity Method Investment and BRC’s representation on the Board of Directors.

Upon closing the Great American Transaction on November 15, 2024, the Company had loans receivable outstanding for three retail liquidation engagements from GA Holdings in the amount of $ 15,000 .

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As subsequently amended, the revolving commitment was revised to $ 40,000 for the period March 10, 2025 to June 30, 2025 and reduced back to $ 25,000 from July 1, 2025 until the maturity date.

The secured revolving credit facility is secured by all of the assets of GA Holdings and accrues interest at the annual rate of SOFR plus 4.75 % (weighted average rates of 9.05 % and 9.27 % as of June 30, 2025 and December 31, 2024, respectively).

Interest income recorded on the loan receivable was $ 394 and $ 701 during the three and six months ended June 30, 2025, respectively.

The secured revolving credit facility is secured by all of the assets of GA Holdings and accrues interest at the annual rate of SOFR plus 4.75 % (weighted average rates of 8.83 % and 9.27 % as of September 30, 2025 and December 31, 2024, respectively).

Interest income recorded on the loan receivable was $ 126 and $ 828 during the three and nine months ended September 30, 2025, respectively.

The loan matures on November 15, 2025.

The outstanding balance on the secured revolving credit facility was $ 4,700 and $ 1,698 at June 30, 2025 and December 31, 2024, respectively.

The outstanding balance on the secured revolving credit facility was $ 25,000 and $ 1,698 at September 30, 2025 and December 31, 2024, respectively.

On October 16, 2025, all outstanding amounts due and owing under this facility were repaid in full to BRF and the facility was terminated.

During the three and six months ended June 30, 2025, the Company provided services to GA Holdings in accordance with a transition services agreement for accounting, information technology and other administration services and recorded fee revenues for these services in the amount of $ 563 and $ 1,694 , respectively.

At June 30, 2025 and December 31, 2024, amounts due from GA Holdings for these services totaled $ 185 and $ 121 , respectively.

During the three and nine months ended September 30, 2025, the Company provided services to GA Holdings in accordance with a transition services agreement for accounting, information technology and other administration services and recorded fee revenues for these services in the amount of $ 239 and $ 1,933 , respectively.

At September 30, 2025 and December 31, 2024, amounts due from GA Holdings for these services totaled $ 202 and $ 121 , respectively.

Pursuant to an existing consulting arrangement, the Company also paid $ 200 of consulting fees to the consultant, who was hired in July 2025 as the chief executive officer of GA Holdings, during the three months ended September 30, 2025.

GA Joann Retail Partnership, LLC

2 unchanged sentences

The credit agreement bears interest at 10.00 % to be paid monthly as payment-in-kind and capitalized into the outstanding principal balance and has a maturity date of November 26, 2025.

Interest income recorded on the loan receivable was $ 9 and $ 223 during the three and six months ended June 30, 2025, respectively .

Interest income recorded on the loan receivable was zero and $ 223 during the three and nine months ended September 30, 2025, respectively.

This loan receivable was paid in full on April 7, 2025.

The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both.

During the three and six months ended June 30, 2025, the Company earned $ 1,964 and $ 2,621 of fees related to these services, respectively.

During the three and six months ended June 30, 2024, the Company earned $ 369 and $ 548 of fees related to these services, respectively.

During the three and nine months ended September 30, 2025, the Company earned $ 198 and $ 2,819 of fees related to these services, respectively.

During the three and nine months ended September 30, 2024, the Company earned $ 601 and $ 1,325 of fees related to these services, respectively.

The Company’s executive officers and members of the Company’s board of directors had a 15.3 % financial interest in the 272LP for the period January 1, 2024 through February 5, 2024.

3 unchanged sentences

After the formation of the BRC Trust, BRCPOF transferred its assets and liabilities to the BRC Trust.

The Company determined the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights and substantially all of the activities are conducted on behalf of the Company which owns 13.4 % and related parties of the Company which includes executive officer’s and members of the board of directors of the Company owning 58.2 % of the equity interest in the Trust.

equity interest in the Trust.

As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidated the BRC Trust upon its formation.

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

22 unchanged sentences

Depreciation and amortization ( 397 ) ( 1,045 ) ( 1,814 ) ( 3,148 )

Segment (loss) income ( 1,319 ) 1,668 405 3,347

Segment income 7,190 780 7,595 4,127

Communications segment:

55 unchanged sentences

Dividend income 564 675 821 4,139

Realized and unrealized (losses) gains on investments 10,216 ( 155,241 ) ( 4,284 ) ( 190,165 )

Realized and unrealized gains (losses) on investments

32,756 ( 22,197 ) 28,472 ( 212,362 )

Change in fair value of financial instruments and other ( 3,314 ) — 9,492 —

2 unchanged sentences

Income from equity investments 9,193 6 34,244 12

(Loss) gain on extinguishment of debt ( 10,266 ) 120 ( 20,693 ) 120

Loss on extinguishment of debt ( 950 ) ( 5,900 ) ( 21,643 ) ( 5,780 )

Interest expense:

8 unchanged sentences

Income (loss) from continuing operations 97,419 ( 150,611 ) 149,144 ( 661,063 )

Income from discontinued operations, net of income taxes 69,312 15,370 72,707 28,717

(Loss) income from discontinued operations, net of income taxes ( 1,866 ) ( 136,987 ) 70,841 ( 108,270 )

Net income (loss) 95,553 ( 287,598 ) 219,985 ( 769,333 )

Net income (loss) attributable to noncontrolling interests 4,470 ( 3,201 ) ( 594 ) ( 2,167 )

Net income (loss) attributable to B.

Riley Financial, Inc.

139,471 ( 433,604 ) 129,496 ( 482,769 )

Net income (loss) attributable to Registrant 91,083 ( 284,397 ) 220,579 ( 767,166 )

Preferred stock dividends 2,015 2,015 6,045 6,045

2 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2025 2024 2025 2024

24 unchanged sentences

The following table presents long-lived assets, which consists of property and equipment, net, by geographical area:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Long-lived Assets - Property and Equipment, net:

6 unchanged sentences

NOTE 23 — SUBSEQUENT EVENTS

Exchange of Senior Notes

As discussed in more detail in Note 12 - Senior Notes Payable with respect to prior private exchange transactions, on July 11, 2025, the Company completed private exchange transactions with institutional investors pursuant to which aggregate principal amounts of Exchanged Notes of approximately $ 2,061 of the 6.50 % Senior Notes Payable due September 30, 2026, $ 19,682 of the 5.00 % Senior Notes due December 2026, $ 4,706 of the 6.00 % Senior Notes due January 2028, and $ 16,389 of the 5.25 % Senior Notes due August 2028 owned by the investors were exchanged for approximately $ 24,611 aggregate principal amount of newly-issued New Notes, whereupon the Exchanged Notes were cancelled.

On November 11, 2025, the Company announced that our corporate name will be changed from B.

Riley Financial, Inc.

to BRC Group Holdings, Inc.

(the “Name Change”), effective on January 1, 2026.

Our trading symbol (“RILY”) and our CUSIP (05580M 108) will not change.

On January 1, 2026, the Company’s previously announced name change became effective.

The name of the Company is now BRC Group Holdings, Inc.

Our trading symbol (“RILY”) and our CUSIP (05580M108) remain the same.

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.

What changed 10-Q

Item 1. Financial Statements