BRC Group Holdings, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “seek,” “likely,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report to conform such statements to actual results or to changes in our expectations. The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption “Risk Factors.” Risk factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: volatility in our revenues and results of operations; changing conditions in the financial markets; matters related to our investment in Freedom VCM Holdings, LLC (“Freedom VCM”) and developments related to our prior business relationship with Brian Kahn (the former CEO of Freedom VCM); the receipt by the Company and Bryant Riley of subpoenas from the SEC; material weaknesses in internal control over financial reporting; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; failure to successfully compete in any of our businesses; our dependence on communications, information and other systems and third parties; the potential loss of financial institution clients; the illiquidity of, and additional potential losses from, our proprietary investments; changing economic and market conditions, including inflation and any actions by the Federal Reserve to address inflation, and the possibility of recession or an economic downturn; the effects of tariffs and other governmental initiatives, and related impacts including supply chain disruptions, labor shortages and increased labor costs; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; loss of key personnel; our ability to borrow under our credit facilities; failure to comply with the terms of our credit agreements or senior notes; the level of our indebtedness; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on divestiture -related issues; the impact of legal proceedings, including in respect of matters related to Freedom VCM and Brian Kahn; the activities of short sellers and their impact on our business and reputation; and the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine and conflicts in the Middle East. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Except as otherwise required by the context, references in this Quarterly Report to the “Company,” “BRC,” “BRC Group Holdings,” “we,” “us” or “our” refer to the combined business of BRC Group Holdings (f/k/a B. Riley Financial, Inc.) and all of its subsidiaries. Overview Description of the Company BRC Group Holdings, Inc. (f/k/a B. Riley Financial Inc.) (NASDAQ: RILY) (the “Company”) is a diversified holding company, including financial services, telecom, and retail, and investments in equity, debt and venture capital. Our core financial services platform provides small cap and middle market companies customized end-to-end solutions at every stage of the enterprise life cycle. Our banking business offers comprehensive services in capital markets, sales, trading, research, merchant banking, M&A, and restructuring. Our wealth management business offers wealth management and financial planning services including brokerage, investment management, insurance, and tax preparation. Our telecom businesses provide consumer and business services including traditional, mobile and cloud phone, internet and data, security, and email. Our retail companies provide home furnishings and mobile computing accessories. BRC deploys its 80 capital inside and outside its core financial services platform to generate shareholder value through opportunistic investments. The Company also opportunistically invests in and acquires companies or assets with attractive risk-adjusted return, with a focus on making operational improvements within these companies in an effort to maximize free cash flow. We are headquartered in Los Angeles, California and maintain offices throughout the U.S. including in New York, Chicago, Metro District of Columbia, Boston, Memphis, Miami, San Francisco, Boca Raton, and Palm Beach, as well as additional offices located in Canada, Europe, Asia, and Australia. Our Business Segments We maintain a diverse composition of businesses that operate in five reportable segments: Capital Markets, Wealth Management, Communications, Consumer Products, and E-Commerce segment. The descriptions below illustrate the businesses that comprise our segments. Management evaluates many different financial and non-financial metrics to assess the individual performance of each of these various business segments. However, across most businesses, management primarily assesses each business’s financial performance based upon each of the businesses revenues and operating profits generated excluding non-cash charges and the impact of gains and losses related to securities and other investments held. Management believes that gains and losses on individual investments are generally impacted by individual characteristics specific to each investment and although this has an impact on our overall financial performance the impact of these gains and losses may not be indicative of the overall strength or weakness in each of our business operations. Additionally, in evaluating the financial performance of each of our businesses, management monitors the increase or decrease in operating results from period to period while factoring in the relative volatility inherent in each industry in which these businesses operate. Management recognizes that some of the Company’s businesses exhibit more volatile results. Capital Markets Segment – We provide investment banking, equity research and institutional brokerage services to publicly traded and privately held companies, institutional investors, and financial sponsors; fund and asset management services to institutional and high-net-worth individual investors; and direct lending services to middle market companies. We also trade equity securities as a principal for our account, including investments in funds managed by our subsidiaries. We maintain an investment portfolio comprised of public and private equities and debt securities. We also opportunistically provide loans to our clients, and we engage in securities-based lending which involves the borrowing and lending of equity and fixed income securities. Our investment approach is value-oriented and represents a core competency of our capital markets strategy. We act as an advisor to our clients, which at times involves complex transactions consistent with our value-oriented investment philosophy. We often provide consulting, capital raising, or investment banking services for companies in which we may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. Wealth Management Segment – We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers. Our experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions. Communications Segment – We own a number of businesses that comprises our Communications Segment that we have acquired for attractive risk-adjusted investment return characteristics. We may pursue future acquisitions to expand this portfolio of businesses which currently includes: Lingo Management, LLC (“Lingo”), a global cloud/unified communications and managed service provider that includes the operations of BullsEye Telecom, Inc. (“BullsEye”), a single source communications and cloud technology provider (previously merged into Lingo); Marconi Wireless Holdings, LLC (“Marconi Wireless”), a mobile virtual network operator that provides mobile phone voice, text, and data services and devices; magicJack VoIP Services, LLC (“magicJack”), a VoIP cloud-based technology and communications provider that offers related devices and subscription services; and United Online, Inc. (“UOL”), an Internet access provider that offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands. 81 Consumer Products Segment – This segment is comprised of Tiger US Holdings, Inc. (“Targus”), which is a multinational company that, together with its subsidiaries, designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries. The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories. E-Commerce Segment – This segment is comprised of Nogin, Inc. (“Nogin”), which is a technology platform operating e-commerce stores that delivers Commerce-as-a-Service (“CaaS”) solutions for apparel brands and other retailers. The Company manages clients’ front-to-back-end operations of the e-commerce stores and also provides marketing services to their clients. The Company’s business model is based on providing a comprehensive e-commerce solution to its customers on a revenue sharing basis. Our operating results are primarily comprised of the operations of these businesses within our five reportable operating segments. However, we also generate revenues from other businesses that we may acquire with the goal to expand their operations, drive growth, and create operational efficiencies to improve cash flows to reinvest across other business operations in our platform. These businesses are typically in fragmented markets and include the operations of a regional environmental services business, and bebe which operates rent-to-own stores. In prior years, we also generated operating revenues from our majority owned subsidiary that licenses the trademarks and intellectual properties from our ownership of six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore, and we generated other income from dividends we receive from our equity ownership of investments that range from 10% to 50% in companies that license the trademark and intellectual property of the Hurley, Justice, and Scotch & Soda brands and bebe and Brookstone brands (equity ownership of bebe stores, inc. (“bebe”), our majority owned subsidiary). We also reported fair value adjustments from these equity investments since we elected to account for these equity investments using the fair value method of accounting. These operating results are included in discontinued operations and are expected to be deconsolidated as a result of the Sale by bebe and completion of the secured financing of the Brand Interests as discussed in Note 4 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements. Securities and Other Investments Owned Portfolio – We have a portfolio of securities and other investments owned that consists of public equity securities, private equity securities, corporate bonds, other fixed income securities, and partnership interests and other investments as follows at September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Public Equity Securities: Babcock & Wilcox Enterprises, Inc. - common stock $ 79,595 $ 45,012 Babcock & Wilcox Enterprises, Inc. - preferred stock 1,959 1,528 Double Down Interactive Co., Ltd - common stock 32,227 43,706 Synchronoss Technologies, Inc. - common stock 2,488 7,200 Other public equities 33,465 27,446 Total public equity securities 149,734 124,892 Private Equity Securities: Other private equities 98,968 107,616 Total private equity securities 98,968 107,616 Total equity securities 248,702 232,508 Corporate bonds 33,048 29,027 Other fixed income securities 10,141 4,923 Partnership interest and other 23,575 15,867 Total securities and other investments owned $ 315,466 $ 282,325 82 Securities and other investments owned was $315.5 million and $282.3 million as of September 30, 2025 and December 31, 2024, respectively. Of this amount, the carrying value of equity securities totaled $248.7 million and $232.5 million as of September 30, 2025 and December 31, 2024, respectively. Of these amounts, public equity securities totaled $149.7 million and $124.9 million as of September 30, 2025 and December 31, 2024, and private equity securities totaled $99.0 million and $107.6 million as of September 30, 2025 and December 31, 2024, respectively. The carrying value of Babcock & Wilcox Enterprises, Inc.’s (“B&W”) - common stock held as of held as of September 30, 2025 and December 31, 2024 was $79.6 million and $45.0 million, respectively. The change in the carrying value for the nine months ended September 30, 2025 was due to a increase in the public share price during the period. The carrying value of our Double Down Interactive Co., Ltd common stock held as of September 30, 2025 and December 31, 2024 was $32.2 million and $43.7 million, respectively. The change in the carrying value for the nine months ended September 30, 2025 was primarily driven by sales of the securities and, to a lesser extent, a decrease in the public share price during the period. The carrying value of our investments in other public equities held as of September 30, 2025 and December 31, 2024 was $33.5 million and $27.4 million, respectively. The change in the carrying value for the nine months ended September 30, 2025 was driven by purchases of certain other public equity securities and, to a lesser extent, increases in the public share prices during the period. The carrying value of our investments in other private equities held as of September 30, 2025 and December 31, 2024 was $99.0 million and $107.6 million, respectively. The decrease in the carrying value for the nine months ended September 30, 2025 was driven by sales of certain private securities and, to a lesser extent, decreases in fair values during the period. Recent Developments Name 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. Critical Accounting Estimates The preparation of our unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities, and reported amounts of revenue and expense during the reporting period. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may significantly differ from those estimates. Critical accounting estimates represent the areas where more significant judgments and estimates are used in the preparation of our unaudited condensed consolidated financial statements. A discussion of such critical accounting estimates, which include fair value measurements, goodwill and other intangible assets, and accounting for income tax valuation allowances can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. At June 30, 2025, qualitative factors indicated it could be more likely than not that the carrying value of the Targus tradename in the Consumer Products segment could be impaired. In order to estimate the fair value of the Targus tradename management must make certain estimates and assumptions which, among other things, included an assessment of market conditions, projected cash flows, discount rates, and revenue growth rates. The inputs for the fair value calculations included a 3.5% growth rate to calculate the terminal value, a discount rate of 22.2%, and a royalty rate of 1.5%. This resulted in an impairment charge for the Targus tradename in the amount of $1.5 million at June 30, 2025. Changes in these estimates and assumptions could materially affect the determination of fair value and any impairment charge for the tradename. Any changes from our current estimates and assumptions that result in materially different estimates and assumptions in the future in response to changing economic conditions, changes in our business or for other reasons could result in the recognition of additional impairment charges in future periods. There were no impairments of goodwill or indefinite-lived intangibles of other reporting units identified in an interim basis during the nine months ended September 30, 2025. 83 Results of Operations The following period to period comparisons of our financial results and our interim results are not necessarily indicative of future results. Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Condensed Consolidated Statements of Operations (Dollars in thousands) 84 Three Months Ended September 30, Change 2025 2024 Amount % Revenues: Services and fees $ 170,668 $ 174,573 $ (3,905) (2.2) % % Trading gains (losses), net 53,012 (1,238) 54,250 n/m Fair value adjustments on loans 1,299 (71,477) 72,776 (101.8) % % Interest income - loans 2,094 11,251 (9,157) (81.4) % % Interest income - securities lending 2,523 7,007 (4,484) (64.0) % % Sale of goods 48,275 55,248 (6,973) (12.6) % % Total revenues 277,871 175,364 102,507 58.5 % % Operating expenses: Direct cost of services 31,291 49,659 (18,368) (37.0) % % Cost of goods sold 35,001 40,312 (5,311) (13.2) % % Selling, general and administrative expenses 143,892 161,075 (17,183) (10.7) % % Restructuring charge 184 116 68 58.6 % % Interest expense - Securities lending and loan participations sold 2,094 6,359 (4,265) (67.1) % % Total operating expenses 212,462 257,521 (45,059) (17.5) % % Operating income (loss) 65,409 (82,157) 147,566 (179.6) % % Other income (expense): Interest income 1,491 1,432 59 4.1 % % Dividend income 564 675 (111) (16.4) % % Realized and unrealized gains (losses) on investments 32,756 (22,197) 54,953 n/m Change in fair value of financial instruments and other (3,314) — (3,314) n/m Gain on sale and deconsolidation of businesses — 476 (476) (100.0) % % Gain on senior note exchange 12,222 — 12,222 n/m Income from equity investments 9,193 6 9,187 n/m Loss on extinguishment of debt (950) (5,900) 4,950 (83.9) % % Interest expense (18,769) (32,996) 14,227 (43.1) % % Income (loss) from continuing operations before income taxes 98,602 (140,661) 239,263 (170.1) % % Provision for income taxes (1,183) (9,950) 8,767 (88.1) % % Income (loss) from continuing operations 97,419 (150,611) 248,030 (164.7) % % Loss from discontinued operations, net of income taxes (1,866) (136,987) 135,121 (98.6) % % Net income (loss) 95,553 (287,598) 383,151 (133.2) % % Net income (loss) attributable to noncontrolling interests 4,470 (3,201) 7,671 n/m Net income (loss) attributable to Registrant 91,083 (284,397) 375,480 (132.0) % % Preferred stock dividends 2,015 2,015 — — % % Net income (loss) available to common shareholders $ 89,068 $ (286,412) $ 375,480 (131.1) % % n/m - Not applicable or not meaningful. 85 Revenues The table below and the discussion that follows are based on how we analyze our business. Three Months Ended September 30, Change 2025 2024 Amount % Services and fees: Capital Markets segment $ 65,352 $ 30,437 $ 34,915 114.7 % % Wealth Management segment 34,342 49,389 (15,047) (30.5) % % Communications segment 59,363 66,241 (6,878) (10.4) % % E-Commerce segment — 5,233 (5,233) (100.0) % % All Other 11,611 23,273 (11,662) (50.1) % % Subtotal 170,668 174,573 (3,905) (2.2) % % Trading gains (losses), net: Capital Markets segment 44,951 (1,908) 46,859 n/m Wealth Management segment 8,061 670 7,391 n/m Subtotal 53,012 (1,238) 54,250 n/m Fair value adjustments on loans: Capital Markets segment 1,299 (71,477) 72,776 (101.8) % % Interest income - loans: Capital Markets segment 2,094 11,251 (9,157) (81.4) % % Interest income - securities lending: Capital Markets segment 2,523 7,007 (4,484) (64.0) % % Sale of goods: Communications segment 1,003 1,318 (315) (23.9) % % Consumer Products segment 46,967 49,793 (2,826) (5.7) % % E-Commerce segment — 3,749 (3,749) (100.0) % % All Other 305 388 (83) (21.4) % % Subtotal 48,275 55,248 (6,973) (12.6) % % Total revenues $ 277,871 $ 175,364 $ 102,507 58.5 % % __________________________________________ n/m - Not applicable or not meaningful. Total revenues increased $102.5 million to $277.9 million during the three months ended September 30, 2025 from $175.4 million during the three months ended September 30, 2024. The increase in revenues during the three months ended September 30, 2025 was primarily due to increases in fair value adjustments on loans of $72.8 million, and increases in fair value of the portfolio of securities and other investments owned of $54.3 million, partially offset by decreases in revenues from interest income from loans of $9.2 million, sale of goods of $7.0 million, interest income from securities lending of $4.5 million, and services and fees of $3.9 million. Of the $72.8 million increase in fair value adjustments related to loans, $54.2 million related to the loan to Vintage Capital Management, LLC (“VCM”) and $18.6 million related to the loan to 86 Conn’s Inc. (“Conn’s”). The decrease in revenue of $3.9 million from services and fees in the three months ended September 30, 2025 consisted of decreases in revenue of $15.0 million in the Wealth Management segment, $11.7 million in All Other, $6.9 million in the Communications segment, and $5.2 million in the E-Commerce segment, partially offset by an increase of revenue of $34.9 million in the Capital Markets segment. Revenues from services and fees in the Capital Markets segment increased $34.9 million to $65.4 million during the three months ended September 30, 2025 from $30.4 million during the three months ended September 30, 2024. The increase in revenues was primarily due to increases of $32.6 million of corporate finance, consulting, and investment banking fees, $2.2 million in asset management fees, $0.7 million in commission fees, and $0.3 million in dividends, partially offset by increases of $0.7 million of interest income, and $0.2 million in other income. The increase in investment banking revenues is related to the episodic nature of this business, an increase in the number of transactions when compared to the prior period, and the public press release of the B. Riley Securities Holdings, Inc. (“BRSH”) carve out. The increases in investment banking revenues were $13.6 million in investment banking underwriting fees, $11.5 million in private placement fees, and $9.4 million in at the market fees, partially offset by a decrease of $1.7 million in mergers and acquisitions advisory fees. Revenues from the Wealth Management segment are comprised of the following: Three Months Ended September 30, 2025 2024 Revenues - Services and fees Brokerage revenues $ 18,582 $ 23,120 Advisory revenues 10,800 19,935 Other 4,960 6,334 Total services and fees revenue 34,342 49,389 Trading gains (losses), net 8,061 670 Total revenues $ 42,403 $ 50,059 Revenues from brokerage and advisory decreased $13.7 million to $29.4 million during the three months ended September 30, 2025 from $43.1 million during the three months ended September 30, 2024. The decrease in revenues was primarily due to decreases in revenue from wealth and asset management fees due to a reduction in AUM which was driven by a loss of headcount of wealth management advisors and the Stifel transaction in April 2025. Refer to Note 4 to the accompanying unaudited condensed consolidated financial statements for additional information. Total assets under management were approximately $13.3 billion and $25.7 billion at September 30, 2025 and September 30, 2024, respectively. Of these amounts, advisory assets under management totaled approximately $4.2 billion at September 30, 2025 and $8.1 billion at September 30, 2024. Advisory revenues were 0.25% and 0.24% of average advisory assets under management during the three months ended September 30, 2025 and 2024, respectively. The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management. Brokerage revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets. Other revenues is primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed. Revenues from services and fees in the Communications segment decreased $6.9 million to $59.4 million during the three months ended September 30, 2025 from $66.2 million during the three months ended September 30, 2024. The decrease in revenues was primarily due to decreases in subscription revenue of $6.7 million, $1.7 million of which related to divestiture of the Lingo wholesale carrier business in third quarter of fiscal year 2024. Of the remaining $5.1 million decrease in subscription revenue, $1.8 million was from Marconi Wireless, $1.7 million was from Lingo, $1.1 million was from magicJack, and $0.4 million was from UOL. We expect Lingo, magicJack, Marconi Wireless and UOL subscription revenue to continue to decline year-over-year as landline and VoIP technologies are older and cellular services are offered in a highly competitive marketplace. There were no revenues from services and fees in the E-Commerce segment during the three months ended September 30, 2025. This segment consisted of Nogin which we deconsolidated in the first quarter of 2025. Refer to Note 3 to the accompanying unaudited condensed consolidated financial statements for additional information. 87 Revenues from services and fees in All Other decreased $11.7 million to $11.6 million during the three months ended September 30, 2025 from $23.3 million during the three months ended September 30, 2024. These revenues include merchandise rental fees and sales from bebe, and the operations of a regional environmental services business, which was sold in the first quarter of 2025. Revenues from services and fees in All Other decreased by $11.2 million related to the regional environmental services business, and $0.9 million related to merchandise rental fees from bebe, partially offset by an increase in revenues of $0.4 million in other revenue. Trading gains (losses), net increased $54.3 million to income of $53.0 million during the three months ended September 30, 2025 compared to loss of $1.2 million during the three months ended September 30, 2024. The income of $53.0 million during the three months ended September 30, 2025 was primarily due to realized and unrealized income on investments made in our proprietary trading accounts, primarily gains of $30.2 million on Babcock & Wilcox Enterprises, Inc. (“B&W”) and $28.4 million on Applied Digital Corporation (“Applied Digital”), offset by trading losses. In our Capital Markets segment we have a portfolio of loans receivable that are measured at fair value with changes in fair value reported in our results of operations. The loan portfolio and fair value adjustments on loans consisted of the following: Fair Value Adjustments on Loans Loans Receivable, at Fair Value Three Months Ended September 30, Industry or Type of Loan September 30, 2025 December 31, 2024 2025 2024 Related Party Loans: Vintage Capital Management, LLC Retail / consumer $ 1,303 $ 2,057 $ (165) $ (54,333) Freedom VCM Receivables, Inc. Consumer receivable portfolio — 3,913 — 534 Conn’s, Inc. Retail / consumer — 38,826 — (18,600) W.S. Badcock Corporation Consumer receivable portfolio — 2,169 — 852 Great American Holdings, LLC Professional Services 25,000 — — — Other related party loans Professional Services, Industrials 1,542 4,937 116 2,779 Total related party 27,845 51,902 (49) (68,768) Exela Technologies, Inc. Technology 25,173 32,136 1,323 (221) Norlin EV Limited Real Estate — 6,065 25 12 Other loans Various 2,000 — — (2,500) Total $ 55,018 $ 90,103 $ 1,299 $ (71,477) The fair value adjustments on loans receivable for the three months ended September 30, 2025 and 2024, were $1.3 million and $(71.5) million, respectively. During the three months ended September 30, 2025 and 2024, fair value adjustments for other loans receivable totaled $1.3 million and $(2.7) million, respectively. The $72.8 million favorable variance in fair value adjustment related to our loans receivable during the three months ended September 30, 2025 was primarily driven by $54.2 million related to the VCM and $18.6 million related to Conn’s. Interest income from loans decreased $9.2 million to $2.1 million during the three months ended September 30, 2025 from $11.3 million during the three months ended September 30, 2024. The decrease was primarily due to non-accrual of interest on the following adjusted loans: $3.4 million for VCM, and $1.5 million for Nogin, as well as a reduction in loan receivable balances from $151.7 million as of September 30, 2024 to $55.0 million as of September 30, 2025. 88 Interest income from securities lending decreased $4.5 million to $2.5 million during the three months ended September 30, 2025 from $7.0 million during the three months ended September 30, 2024. The decrease was due to counterparties constraining their business activity and a reduced strategic focus and deployment of capital in securities lending, which led to lower securities lending balances. Revenues from the sale of goods decreased $7.0 million to $48.3 million during the three months ended September 30, 2025 from $55.2 million during the three months ended September 30, 2024. The decrease was primarily related to decreases of $3.7 million from Nogin in the E-Commerce segment, which was deconsolidated in the first quarter of 2025,$2.8 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide, $0.3 million from the Communications segment, and $0.1 million in All Other consisting of sales of goods from bebe. Operating Expenses Direct cost of services Direct cost of services decreased $18.4 million to $31.3 million during the three months ended September 30, 2025 from $49.7 million during the three months ended September 30, 2024. The decrease in direct cost of services was primarily attributable to a decrease of $8.3 million from the Communications segment, $2.0 million of which was attributable to divestiture of the Lingo wholesale carrier business in third quarter of fiscal year 2024, $7.1 million from All Other, consisting of $6.7 million from the regional environmental services business that was sold in the first quarter of 2025, and $0.4 million from bebe, and $3.0 million from the E-Commerce segment, consisting of Nogin which was deconsolidated in the first quarter of 2025. Cost of goods sold Cost of goods sold for the three months ended September 30, 2025 decreased $5.3 million to $35.0 million from $40.3 million during the three months ended September 30, 2024. The decrease in cost of goods sold was primarily attributable to decreases of $2.8 million in the Consumer Products segment, due to lower sales volume, $2.1 million from the E-Commerce segment, consisting of Nogin which was deconsolidated in the first quarter of 2025, $0.3 million from the Communications segment due to decreased sales, and $0.1 million from All Other consisting of cost of goods from bebe. Selling, general and administrative expenses Selling, general and administrative expenses during the three months ended September 30, 2025 and 2024 were comprised of the following: Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Change Amount % Amount % Amount % Capital Markets segment $ 53,427 37.1 % % $ 31,270 19.4 % % $ 22,157 70.9 % % Wealth Management segment 35,213 24.5 % % 49,279 30.6 % % (14,066) (28.5) % % Communications segment 19,386 13.5 % % 21,533 13.4 % % (2,147) (10.0) % % Consumer Products segment 14,506 10.1 % % 16,893 10.5 % % (2,387) (14.1) % % E-Commerce segment — — % % 9,089 5.6 % % (9,089) (100.0) % % Corporate and All Other 21,360 14.8 % % 33,011 20.5 % % (11,651) (35.3) % % Total selling, general & administrative expenses $ 143,892 100.0 % % $ 161,075 100.0 % % $ (17,183) (10.7) % % Total selling, general and administrative expenses decreased by $17.2 million to $143.9 million during the three months ended September 30, 2025 from $161.1 million during the three months ended September 30, 2024. The decrease was primarily due to decreases of $14.1 million in the Wealth Management segment, $11.7 million in Corporate and All Other, $9.1 million in the E-Commerce segment, $2.4 million in the Consumer Products segment, and $2.1 million in the Communications segment, partially offset by an increase of $22.2 million in the Capital Markets segment. 89 Capital Markets Selling, general and administrative expenses in the Capital Markets segment increased by $22.2 million to $53.4 million during the three months ended September 30, 2025 from $31.3 million during the three months ended September 30, 2024. The increase was primarily due to increases of $21.2 million in employee compensation and benefit related expenses, which primarily related to increases in commissions paid, largely related to increased revenue, and $2.1 million in investment banking deal expenses, partially offset by decreases of $0.6 million in other expenses, and $0.5 million in occupancy-related costs. Wealth Management Selling, general and administrative expenses in the Wealth Management segment decreased by $14.1 million to $35.2 million during the three months ended September 30, 2025 from $49.3 million during the three months ended September 30, 2024, primarily due to decreases of $9.6 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, bonuses and other payroll expenses due to a decrease in headcount, which aligns with the decrease in revenue, $3.8 million change in the fair value of contingent consideration, $0.6 million in depreciation and amortization expense, and $0.6 million in other expenses, partially offset by an increase of $0.5 million in occupancy-related costs, due to multiple office closures and lease impairments as a result of the Stifel transaction. Communications Selling, general and administrative expenses in the Communications segment decreased $2.1 million to $19.4 million for the three months ended September 30, 2025 from $21.5 million for the three months ended September 30, 2024. The decrease was primarily due to decreases of $0.9 million in employee compensation and benefit related expenses due to lower headcount, lower commissions and sale of the Lingo carrier business in the third quarter of 2024, $0.6 million in professional services, $0.5 million in occupancy-related costs, and $0.1 million in depreciation and amortization expenses due to items being fully amortized in 2024. Consumer Products Selling, general and administrative expenses in the Consumer Products segment decreased $2.4 million to $14.5 million for the three months ended September 30, 2025 from $16.9 million during the three months ended September 30, 2024. The decrease was primarily due to decreases of $1.6 million in professional services and $0.8 million in employee compensation and benefit related expenses due to reduced headcount. E-Commerce There were no selling, general and administrative expenses in the E-Commerce segment during the three months ended September 30, 2025. This segment consisted of Nogin which we deconsolidated in the first quarter of 2025. Refer to Note 3 to the accompanying unaudited condensed consolidated financial statements for additional information. Corporate and All Other Selling, general and administrative expenses for Corporate and All Other decreased $11.7 million to $21.4 million during the three months ended September 30, 2025 from $33.0 million during the three months ended September 30, 2024. The decrease was primarily due to $5.6 million in employee compensation and benefit related expenses primarily driven by a decrease in corporate compensation, $2.6 million in other expenses, $2.4 million in foreign currency translation, and $1.1 million in depreciation and amortization. Interest Expense - Securities Lending and Loan Participations Sold. Interest Expense - Securities Lending and Loan Participations Sold decreased $4.3 million to $2.1 million during the three months ended September 30, 2025 from $6.4 million for the three months ended September 30, 2024. The decrease was due to a reduced strategic focus and deployment of capital in securities lending, which led to lower securities lending balances. Other Income (Expense). Other income included interest income of $1.5 million and $1.4 million during the three months ended September 30, 2025 and 2024, respectively. Dividend income was $0.6 million during the three months ended September 30, 2025 compared to $0.7 million during the three months ended September 30, 2024. Realized and unrealized (losses) gains on investments was a gain of $32.8 million during the three months ended September 30, 2025 90 compared to a loss of $22.2 million during the three months ended September 30, 2024, which is comprised of the following: Realized and Unrealized Gains (Losses) Three Months Ended September 30, 2025 2024 Other Income (Expense) - Realized & Unrealized Gains (Losses) Public Equity Securities: Babcock & Wilcox Enterprises, Inc. - common stock $ 23,009 $ 7,005 Babcock & Wilcox Enterprises, Inc. - preferred stock 840 2,495 Double Down Interactive Co., Ltd - common stock (751) 13,113 Synchronoss Technologies, Inc. - common stock — 6,445 Applied Digital Corporation - common stock 13,189 — Other public equities (3,559) 209 Subtotal 32,728 29,267 Private Equity Securities: Freedom VCM Holdings, LLC — (49,033) Kanaci Technologies, LLC — 32,364 BJES Holdings, LLC — (35,891) Other private equities 328 1,309 Subtotal 328 (51,251) Corporate bonds (300) (246) Partnership interest and other — 33 Total $ 32,756 $ (22,197) The favorable variance of $55.0 million was primarily due to unfavorable fair value adjustments recorded in the prior year quarter of $49.0 million for Freedom VCM and $35.9 million for BJES Holdings, LLC, and a $16.0 million increase in the fair value of our common stock investment in Babcock & Wilcox Enterprises, Inc, partially offset by favorable fair value adjustments recorded in the prior year quarter of $32.4 million for Kanaci Technologies, LLC and $13.1 million for Double Down Interactive Co., Ltd. Other income (expense) also includes change in fair value of financial instruments and other was a loss of $3.3 million during the three months ended September 30, 2025. Gain on senior note exchange was $12.2 million during the three months ended September 30, 2025. Income from equity investments was $9.2 million during the three months ended September 30, 2025. Loss on extinguishment of debt during the three months ended September 30, 2025 was $1.0 million compared to a loss of $5.9 million during the three months ended September 30, 2024. Interest expense was $18.8 million during the three months ended September 30, 2025 compared to $33.0 million during the three months ended September 30, 2024. The decrease in interest expense was due to lower debt balances during the three months ended September 30, 2025. The decreases in interest expense primarily consisted of $7.4 million from the issuance of senior notes, $5.9 million from the Nomura term loan, $1.4 million from the Lingo term loan, $0.4 million from the Nomura revolving credit facility, $0.4 million from the Targus term loan, $0.4 million from the Nogin secured convertible promissory note, and partially offset by increases in interest expense of $1.3 million from the Oaktree term loan, $0.6 million from the BRPAC term loan, and $0.1 million from the Targus FGI loan. Provision for Income Taxes. Provision for income taxes was $1.2 million during the three months ended September 30, 2025 compared to $10.0 million during the three months ended September 30, 2024. The effective income tax rate was 1.2% for the three months ended September 30, 2025 as compared to 7.1% for the three months ended September 30, 2024. 91 Loss From Discontinued Operations, Net Of Income Taxes. On October 25, 2024, we and our subsidiary bebe completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of tax, for Brands Transaction, as described in Note 4 to the accompanying unaudited condensed consolidated financial statements, was $(141.3) million during the three months ended September 30, 2024. On November 15, 2024, we completed the sale of our Appraisal and Valuation Services, Real Estate, and Retail, Wholesale & Industrial Solutions businesses (collectively, the “Great American Group”), and its results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of income taxes was $(1.9) million during the three months ended September 30, 2024. On June 27, 2025, we signed an equity purchase agreement to sell all of the membership interests of GlassRatner Advisory & Capital Group, LLC (“GlassRatner”) and B. Riley Farber Advisory Inc. (“Farber”), and their results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of tax for GlassRatner and Farber was $(1.9) million for the three months ended September 30, 2025, compared to income from discontinued operations of $6.2 million during the three months ended September 30, 2024. Refer to Note 4 to the accompanying unaudited condensed consolidated financial statements for additional information. Preferred Stock Dividends . Preferred stock dividends were $2.0 million for the three months ended September 30, 2025 and 2024. Dividends on the Series A preferred paid during the three months ended September 30, 2024 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the three months ended September 30, 2024 were $0.4609375 per depository share. On January 21, 2025, the Company announced that we had temporarily suspended dividends on our Series A and B Preferred Stock. Unpaid dividends will accrue until paid in full. Results of Operations The following period to period comparisons of our financial results and our interim results are not necessarily indicative of future results. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Condensed Consolidated Statements of Operations (Dollars in thousands) 92 Nine Months Ended September 30, Change 2025 2024 Amount % Revenues: Services and fees $ 475,279 $ 591,563 $ (116,284) (19.7) % % Trading gains (losses), net 64,521 (50,226) 114,747 n/m Fair value adjustments on loans (5,997) (259,260) 253,263 (97.7) % % Interest income - loans 9,143 51,894 (42,751) (82.4) % % Interest income - securities lending 5,487 69,614 (64,127) (92.1) % % Sale of goods 140,803 164,254 (23,451) (14.3) % % Total revenues 689,236 567,839 121,397 21.4 % % Operating expenses: Direct cost of services 107,207 168,008 (60,801) (36.2) % % Cost of goods sold 106,847 118,897 (12,050) (10.1) % % Selling, general and administrative expenses 453,649 518,029 (64,380) (12.4) % % Restructuring charge 505 925 (420) (45.4) % % Impairment of goodwill and tradenames 1,500 27,681 (26,181) (94.6) % % Interest expense - Securities lending and loan participations sold 4,781 65,055 (60,274) (92.7) % % Total operating expenses 674,489 898,595 (224,106) (24.9) % % Operating income (loss) 14,747 (330,756) 345,503 (104.5) % % Other income (expense): Interest income 3,469 2,892 577 20.0 % % Dividend income 821 4,139 (3,318) (80.2) % % Realized and unrealized gains (losses) on investments 28,472 (212,362) 240,834 (113.4) % % Change in fair value of financial instruments and other 9,492 — 9,492 n/m Gain on sale and deconsolidation of businesses 86,213 790 85,423 n/m Gain on senior note exchange 67,208 — 67,208 n/m Income from equity investments 34,244 12 34,232 n/m Loss on extinguishment of debt (21,643) (5,780) (15,863) n/m Interest expense (72,685) (102,195) 29,510 (28.9) % % Income (loss) from continuing operations before income taxes 150,338 (643,260) 793,598 (123.4) % % Provision for income taxes (1,194) (17,803) 16,609 (93.3) % % Income (loss) from continuing operations 149,144 (661,063) 810,207 (122.6) % % Income (loss) from discontinued operations, net of income taxes 70,841 (108,270) 179,111 (165.4) % % Net income (loss) 219,985 (769,333) 989,318 (128.6) % % Net loss attributable to noncontrolling interests (594) (2,167) 1,573 (72.6) % % Net income (loss) attributable to Registrant 220,579 (767,166) 987,745 (128.8) % % Preferred stock dividends 6,045 6,045 — — % % Net income (loss) available to common shareholders $ 214,534 $ (773,211) $ 987,745 (127.7) % % n/m - Not applicable or not meaningful. 93 Revenues The table below and the discussion that follows are based on how we analyze our business. Nine Months Ended September 30, Change 2025 2024 Amount % Services and fees: Capital Markets segment $ 129,652 $ 141,026 $ (11,374) (8.1) % % Wealth Management segment 114,429 150,153 (35,724) (23.8) % % Communications segment 183,268 225,055 (41,787) (18.6) % % E-Commerce segment 3,469 7,964 (4,495) (56.4) % % All Other 44,461 67,365 (22,904) (34.0) % % Subtotal 475,279 591,563 (116,284) (19.7) % % Trading gains (losses), net: Capital Markets segment 50,648 (52,787) 103,435 (195.9) % % Wealth Management segment 13,873 2,561 11,312 n/m Subtotal 64,521 (50,226) 114,747 n/m Fair value adjustments on loans: Capital Markets segment (5,997) (259,260) 253,263 (97.7) % % Interest income - loans: Capital Markets segment 9,143 51,894 (42,751) (82.4) % % Interest income - securities lending: Capital Markets segment 5,487 69,614 (64,127) (92.1) % % Sale of goods: Communications segment 3,775 4,079 (304) (7.5) % % Consumer Products segment 132,354 152,739 (20,385) (13.3) % % E-Commerce segment 3,528 6,014 (2,486) (41.3) % % All Other 1,146 1,422 (276) (19.4) % % Subtotal 140,803 164,254 (23,451) (14.3) % % Total revenues $ 689,236 $ 567,839 $ 121,397 21.4 % % _____________________________________________ n/m - Not applicable or not meaningful. Total revenues increased $121.4 million to $689.2 million during the nine months ended September 30, 2025 from $567.8 million during the nine months ended September 30, 2024. The increase in revenues during the nine months ended September 30, 2025 was primarily due to increases in revenue from fair value adjustments on loans of $253.3 million, and in the fair value of the portfolio of securities and other investments owned of $114.7 million, partially offset by decreases in revenues from services and fees of $116.3 million, interest income from securities lending of $64.1 million, interest income from loans of $42.8 million, and sale of goods of $23.5 million. Of the $253.3 million increase in fair value adjustments related to loans, $222.0 million related to VCM, $23.0 million related to the loan to Conn’s, $14.6 million related to the loan to Freedom VCM, and $6.2 million related to Badcock, partially offset by a decrease of $8.5 million related to Core Scientific, Inc. (“Core Scientific”). The decrease in revenue of $116.3 million from services and fees in the 94 nine months ended September 30, 2025 consisted of decreases in revenue of $41.8 million in the Communications segment, $35.7 million in the Wealth Management segment, $22.9 million in All Other, $11.4 million in the Capital Markets segment, and $4.5 million in the E-Commerce segment. Revenues from services and fees in the Capital Markets segment decreased $11.4 million to $129.7 million during the nine months ended September 30, 2025 from $141.0 million during the nine months ended September 30, 2024. The decrease in revenues was primarily due to decreases of $7.6 million of corporate finance, consulting, and investment banking fees, $4.7 million in commission fees, $3.3 million in interest income and $1.1 million in dividends, $1.0 million in other income, partially offset by an increase of $4.1 million in advisory fees related to the Innovation X and GACP II funds and $1.6 million in asset management fees. The decrease in investment banking revenues is related to the episodic nature of this business and the decline in business due to the late SEC filings of the parent company, partially offset by an increase in the number of transactions when compared to the prior period driven in part by the public announcement of the BRSH carve out. The decreases in investment banking revenues were $13.5 million in at the market fees, $9.2 million in mergers and acquisitions advisory fees, partially offset by increases of $8.6 million in private placement fees, and $6.5 million in investment banking underwriting fees. Revenues from the Wealth Management segment are comprised of the following: Nine Months Ended September 30, 2025 2024 Revenues - Services and fees Brokerage revenues $ 52,297 $ 69,613 Advisory revenues 39,396 59,501 Other 22,736 21,039 Total services and fees revenue 114,429 150,153 Trading gains (losses), net 13,873 2,561 Total revenues $ 128,302 $ 152,714 Revenues from brokerage and advisory decreased $37.4 million to $91.7 million during the nine months ended September 30, 2025 from $129.1 million during the nine months ended September 30, 2024. The decrease in revenues was primarily due to decreases in revenue from wealth and asset management fees due to a reduction in AUM which was driven by a loss of headcount of wealth management advisors and the Stifel transaction in April 2025. Refer to Note 4 to the accompanying unaudited condensed consolidated financial statements for additional information. Total assets under management were approximately $13.3 billion and $25.7 billion at September 30, 2025 and September 30, 2024, respectively. Of these amounts, advisory assets under management totaled approximately $4.2 billion at September 30, 2025 and $8.1 billion at September 30, 2024. Advisory revenues were 0.26% and 0.25% of average advisory assets under management during the nine months ended September 30, 2025 and 2024, respectively. The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management. Brokerage revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets. Other revenues is primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed. Revenues from services and fees in the Communications segment decreased $41.8 million to $183.3 million during the nine months ended September 30, 2025 from $225.1 million during the nine months ended September 30, 2024. The decrease in revenues was primarily due to decreases in subscription revenue of $41.1 million, $24.8 million of which related to divestiture of the Lingo wholesale carrier business in third quarter of fiscal year 2024. Of the remaining $16.3 million decrease in subscription revenue, $8.0 million was from Lingo, $4.3 million was from Marconi Wireless, $3.0 million was from magicJack, and $1.0 million was from UOL. We expect Lingo, UOL, magicJack, and Marconi Wireless subscription revenue to continue to decline year-over-year as landline and VoIP technologies are older and cellular services are offered in a highly competitive marketplace. 95 Revenues from services and fees in the E-Commerce segment were $3.5 million during the nine months ended September 30, 2025. This segment consisted of Nogin which we deconsolidated in the first quarter of 2025. Refer to Note 3 to the accompanying unaudited condensed consolidated financial statements for additional information. Revenues from services and fees in All Other decreased $22.9 million to $44.5 million during the nine months ended September 30, 2025 from $67.4 million during the nine months ended September 30, 2024. These revenues include merchandise rental fees and sales from bebe, and the operations of a regional environmental services business, which was sold in the first quarter of 2025. Revenues from services and fees in All Other decreased by $21.3 million due to the operations of a regional environmental services business, and $3.8 million related to merchandise rental fees from bebe, partially offset by an increase of $2.2 million in other revenue. Trading gains (losses), net increased $114.7 million to income of $64.5 million during the nine months ended September 30, 2025 compared to a loss of $50.2 million during the nine months ended September 30, 2024. The income of $64.5 million during the nine months ended September 30, 2025 was primarily due to realized and unrealized income on investments made in our proprietary trading accounts, primarily gains of $42.2 million for Applied Digital and $19.6 million for B&W. In our Capital Markets segment we have a portfolio of loans receivable that are measured at fair value with changes in fair value reported in our results of operations. The loan portfolio and fair value adjustments on loans consisted of the following: Fair Value Adjustments on Loans Loans Receivable, at Fair Value Nine Months Ended September 30, Industry or Type of Loan September 30, 2025 December 31, 2024 2025 2024 Related Party Loans: Vintage Capital Management, LLC Retail / consumer $ 1,303 $ 2,057 $ (754) $ (222,718) Freedom VCM Receivables, Inc. Consumer receivable portfolio — 3,913 1,393 (13,187) Conn’s, Inc. Retail / consumer — 38,826 (4,065) (27,084) W.S. Badcock Corporation Consumer receivable portfolio — 2,169 250 (5,993) Great American Holdings, LLC Professional Services 25,000 — — — Other related party loans Professional Services, Industrials 1,542 4,937 (9) 3,470 Total related party 27,845 51,902 (3,185) (265,512) Exela Technologies, Inc. Technology 25,173 32,136 693 47 Core Scientific, Inc. Technology — — — 8,473 Norlin EV Limited Real Estate — 6,065 (460) 61 Other loans Various 2,000 — (3,045) (2,329) Total $ 55,018 $ 90,103 $ (5,997) $ (259,260) During the nine months ended September 30, 2025 and 2024, fair value adjustments for loans receivable from related parties totaled $(3.2) million and $(265.5) million, respectively. During the nine months ended September 30, 2025 and 2024, fair value adjustments for other loans receivable totaled $(2.8) million and $6.3 million, respectively. The $253.3 million favorable variance in fair value adjustment related to our loans receivable during the nine months ended September 30, 2025 was primarily driven by losses from fair value adjustments recorded in the prior year period of $222.7 million related to VCM loan, $27.1 million related to the loan to Conn’s, $13.2 million related to the loan to 96 Freedom VCM, and $6.0 million related to Badcock loan with no fair value adjustments of comparable magnitude recorded in the current year period, partially offset by a favorable variance of $8.5 million from a realized loss recorded in the prior year period related to the equity conversion of the Core Scientific loan. Interest income - loans decreased $42.8 million to $9.1 million during the nine months ended September 30, 2025 from $51.9 million during the nine months ended September 30, 2024. The decrease was primarily due to non-accrual of interest on the following adjusted loans: $15.6 million for VCM, $7.4 million for Conn’s, $5.9 million for Freedom VCM, which was sold in February 2025, and $3.5 million for Nogin, as well as a reduction in loan receivable balances from $151.7 million as of September 30, 2024 to $55.0 million as of September 30, 2025. Interest income – securities lending decreased $64.1 million to $5.5 million during the nine months ended September 30, 2025 from $69.6 million during the nine months ended September 30, 2024. The decrease was due to counterparties constraining their business activity and a reduced strategic focus and deployment of capital in securities lending, which led to lower average securities lending balances. Revenues from the sale of goods decreased $23.5 million to $140.8 million during the nine months ended September 30, 2025 from $164.3 million during the nine months ended September 30, 2024. The decrease in revenues from sale of goods was attributable to decreases of $20.4 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide, $2.5 million from Nogin in the E-Commerce segment, $0.3 million from the Communications segment, and $0.3 million from All Other consisting of sale of goods from bebe. Operating Expenses Direct Cost of Services Direct cost of services decreased $60.8 million to $107.2 million during the nine months ended September 30, 2025 from $168.0 million during the nine months ended September 30, 2024. The decrease in direct cost of services was primarily attributable to decreases of $41.2 million from the Communications segment, $26.9 million of which was attributable to divestiture of the Lingo wholesale carrier business in third quarter of fiscal year 2024, and $16.6 million from All Other consisting of $14.8 million from the regional environmental services business, which was sold in the first quarter of 2025, and $1.8 million from bebe. Cost of goods sold Cost of goods sold for the nine months ended September 30, 2025 decreased $12.1 million to $106.8 million from $118.9 million during the nine months ended September 30, 2024. The decrease in cost of goods sold was primarily attributable to decreases of $11.0 million in the Consumer Products segment, due to lower sales volume, and $0.6 million from the E-Commerce segment, consisting of Nogin which we acquired in the second quarter of 2024 and deconsolidated in the first quarter of 2025, $0.4 million from All Other consisting of bebe, and $0.1 million in the Communications segment. Selling, General and Administrative Expenses Selling, general and administrative expenses during the nine months ended September 30, 2025 and 2024 were comprised of the following: 97 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Change Amount % Amount % Amount % Capital Markets segment $ 139,890 30.8 % % $ 135,816 26.2 % % $ 4,074 3.0 % % Wealth Management segment 120,707 26.6 % % 148,587 28.7 % % (27,880) (18.8) % % Communications segment 59,972 13.2 % % 70,886 13.7 % % (10,914) (15.4) % % Consumer Products segment 44,742 9.9 % % 51,464 9.9 % % (6,722) (13.1) % % E-Commerce segment 8,428 1.9 % % 15,126 2.9 % % (6,698) (44.3) % % Corporate and All Other 79,910 17.6 % % 96,150 18.6 % % (16,240) (16.9) % % Total selling, general & administrative expenses $ 453,649 100.0 % % $ 518,029 100.0 % % $ (64,380) (12.4) % % Total selling, general and administrative expenses decreased by $64.4 million to $453.6 million during the nine months ended September 30, 2025 from $518.0 million during the nine months ended September 30, 2024. The decrease was primarily due to decreases of $27.9 million in the Wealth Management segment, $16.2 million in Corporate and All Other, $10.9 million in the Communications segment, $6.7 million in the E-Commerce segment, and $6.7 million in the Consumer Products segment, partially offset by an increase of $4.1 million in the Capital Markets segment. Capital Markets Selling, general and administrative expenses in the Capital Markets segment increased by $4.1 million to $139.9 million during the nine months ended September 30, 2025 from $135.8 million during the nine months ended September 30, 2024. The increase was primarily due to increases of $1.8 million in professional services, an increase of $3.5 million in other expenses, partially offset by decreases of $0.7 million in occupancy-related costs, and $0.5 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, share based compensation and other payroll expenses related to reduced revenue and loss of headcount. Wealth Management Selling, general and administrative expenses in the Wealth Management segment decreased by $27.9 million to $120.7 million during the nine months ended September 30, 2025 from $148.6 million during the nine months ended September 30, 2024. The decrease was primarily due to a decrease of $26.1 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, bonuses and other payroll expenses due to a decrease in headcount, which aligns with the decrease in revenue, $3.8 million in change in fair value of contingent consideration, and $1.3 million in depreciation and amortization, partially offset by increases of $2.4 million in occupancy-related costs, due to multiple office closures and lease impairments as a result of the Stifel transaction, and $0.9 million in other expenses. Communications Selling, general and administrative expenses in the Communications segment decreased $10.9 million to $60.0 million for the nine months ended September 30, 2025 from $70.9 million for the nine months ended September 30, 2024. The decrease was primarily due to decreases of $4.7 million in employee compensation and benefit related expenses due to lower headcount, lower commissions and sale of the Lingo carrier business in the third quarter of 2024, $2.4 million in depreciation and amortization expenses due to items being fully amortized in 2024, $1.8 million in occupancy-related costs, $1.7 million in professional services, and $0.3 million in other expenses. Consumer Products Selling, general and administrative expenses in the Consumer Products segment decreased $6.7 million to $44.7 million for the nine months ended September 30, 2025 from $51.5 million during the nine months ended September 30, 2024. The decrease was primarily due to decreases of $3.7 million in professional services, $2.1 million in employee compensation and benefit related expenses due to reduced headcount, and $0.9 million in other expenses. 98 E-Commerce Selling, general and administrative expenses in the E-Commerce segment decreased $6.7 million to $8.4 million during the nine months ended September 30, 2025 from $15.1 million for the nine months ended September 30, 2024. The E-Commerce segment was composed of Nogin which was acquired in the second quarter of 2024 and deconsolidated in the first quarter of 2025. Refer to Note 3 to the accompanying unaudited condensed consolidated financial statements for additional information. Corporate and All Other Selling, general and administrative expenses for Corporate and All Other decreased $16.2 million to $79.9 million during the nine months ended September 30, 2025 from $96.2 million for the nine months ended September 30, 2024. The decrease was primarily due to decreases of $12.1 million in employee compensation and benefit related expenses primarily driven by decreases in corporate compensation and from the regional environmental services business which was sold in the first quarter of 2025, $3.9 million in other expenses, $3.2 million in occupancy-related costs, $1.6 million in depreciation and amortization expense and $1.2 million in insurance expense, partially offset by increases of $4.4 million in transaction costs from the regional environmental services business which was sold in the first quarter of 2025, and $1.4 million in professional services. Impairment of Goodwill and Tradenames. We recognized non-cash impairment charges of $1.5 million during the nine months ended September 30, 2025 related to tradenames in the Consumer Products segment. We recognized non-cash impairment charges of $27.7 million during the nine months ended September 30, 2024 consisting of $26.7 million of goodwill and $1.0 million of tradenames in the Consumer Products segment. Interest Expense - Securities Lending and Loan Participations Sold. Interest Expense - Securities Lending and Loan Participations Sold decreased $60.3 million to $4.8 million during the nine months ended September 30, 2025 from $65.1 million for the nine months ended September 30, 2024. The decrease was due to a reduced strategic focus and deployment of capital in securities lending, which led to lower average securities lending balances. Other Income (Expense). Other income included interest income of $3.5 million and $2.9 million during the nine months ended September 30, 2025 and 2024, respectively. Dividend income was $0.8 million during the nine months ended September 30, 2025 compared to $4.1 million during the nine months ended September 30, 2024. Realized and unrealized losses on investments was a gain of $28.5 million during the nine months ended September 30, 2025 compared to a loss of $212.4 million during the nine months ended September 30, 2024, which is comprised of the following: 99 Realized and Unrealized Gains (Losses) Nine Months Ended September 30, 2025 2024 Other Income (Expense) - Realized & Unrealized Gains (Losses) Public Equity Securities: Babcock & Wilcox Enterprises, Inc. - common stock $ 14,960 $ 5,930 Babcock & Wilcox Enterprises, Inc. - preferred stock 667 2,342 Alta Equipment Group, Inc. - common stock — (3,537) Double Down Interactive Co., Ltd - common stock (4,675) 34,952 Synchronoss Technologies, Inc. - common stock — 9,940 Applied Digital Corporation - common stock 18,572 — Other public equities (4,571) (2,035) Subtotal 24,953 47,592 Private Equity Securities: Freedom VCM Holdings, LLC — (221,042) Kanaci Technologies, LLC — (12,001) BJES Holdings, LLC — (35,892) Other private equities (877) 9,204 Subtotal (877) (259,731) Corporate bonds 4,396 779 Partnership interest and other — (1,002) Total $ 28,472 $ (212,362) The favorable variance of $240.8 million was primarily due to unfavorable fair value adjustments recorded in the prior year period of $221.0 million for Freedom VCM, $35.9 million for BJES Holdings, LLC, and $12.0 million for Kanaci Technologies, LLC, and $18.6 million in the addition of our investment in Applied Digital Corporation in the current year. These increases were partially offset by a favorable fair value adjustment recorded in the prior year period of $35.0 million for Double Down Interactive Co., Ltd. Other income (expense) also includes change in fair value of financial instruments and other was a gain of $9.5 million during the nine months ended September 30, 2025. Gain on senior note exchange was $67.2 million during the nine months ended September 30, 2025. Income from equity investments was $34.2 million during the nine months ended September 30, 2025. Loss on extinguishment of debt was $21.6 million during the nine months ended September 30, 2025 compared to a loss of $5.8 million during the nine months ended September 30, 2024. Interest expense was $72.7 million during the nine months ended September 30, 2025 compared to $102.2 million during the nine months ended September 30, 2024. The decrease in interest expense was due to lower debt balances during the nine months ended September 30, 2025. The decreases in interest expense primarily consisted of $16.1 million from the Nomura term loan, $16.0 million from the issuance of senior notes, $4.2 million from the Lingo term loan, $1.4 million from the Nomura revolving credit facility, $1.5 million and $0.6 million from the Targus term loan and revolver, respectively, and $0.2 million from the Nogin secured convertible promissory note, partially offset by increases in interest expense of $9.1 million from the Oaktree term loan, $1.8 million from the BRPAC term loan and $0.1 million from the Targus FGI loan. Provision for Income Taxes. Provision for income taxes was $1.2 million during the nine months ended September 30, 2025 compared to $17.8 million during the nine months ended September 30, 2024. The effective income tax rate was 0.8% for the nine months ended September 30, 2025 as compared to 2.8% for the nine months ended September 30, 2024. 100 Income (Loss) From Discontinued Operations, Net Of Income Taxes. On October 25, 2024, we and our subsidiary bebe have completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the six months ended June 30, 2024. Loss from discontinued operations, net of tax for Brands Transaction was $(112.6) million during the nine months ended September 30, 2024. On November 15, 2024, we completed the sale of our Great American Group, and its results have been presented as discontinued operations for the nine months ended September 30, 2024. Loss from discontinued operations, net of tax for Great American Group was $(11.2) million during the nine months ended September 30, 2024. On June 27, 2025, we signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber, and their results have been presented as discontinued operations for the nine months ended September 30, 2025 and 2024. Income from discontinued operations, net of tax for GlassRatner and Farber was $70.8 million for the nine months ended September 30, 2025, compared to income from discontinued operations of $15.6 million during the nine months ended September 30, 2024. Refer to Note 4 to the accompanying unaudited condensed consolidated financial statements for additional information. Preferred Stock Dividends . Preferred stock dividends were $6.0 million for the nine months ended September 30, 2025 and 2024. Dividends on the Series A preferred paid during the nine months ended September 30, 2024 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the nine months ended September 30, 2024 were $0.4609375 per depository share. On January 21, 2025, the Company announced that we had temporarily suspended dividends on our Series A and B Preferred Stock. Unpaid dividends will accrue until paid in full. Liquidity and Capital Resources Our operations are funded through a combination of existing cash on hand, cash generated from operations, investment portfolio liquidity, borrowings under our senior notes payable, term loans and credit facilities, other financing arrangements, and obligations under operating leases. During the nine months ended September 30, 2025 and 2024, we generated net income (loss) attributable to the Company of $220.6 million and $(767.2) million, respectively. The Company operates several businesses in its segments that provide cash flows and operating income throughout the year. As of September 30, 2025, we had $184.2 million of unrestricted cash and cash equivalents, $1.3 million of restricted cash, $315.5 million of securities and other investments owned, $55.0 million of loans receivable, at fair value, $1.4 billion of borrowings outstanding, and approximately $48.8 million of obligations under operating leases. The Company expects to collect approximately $58.7 million of loans at fair value in the next twelve months and has approximately $149.8 million of level 1 securities and other investments owned that are available for sale during the next twelve months. The Company expects to utilize existing cash balances, cash generated from investments, cash proceeds from the sale of certain businesses described below, available borrowing capacity under our existing revolving credit facility and cash generated from operations to fund debt service obligations over the next twelve months which includes amounts coming due on the Company’s senior notes payable as discussed in Note 12 - Senior Notes Payable. The Company may also explore various funding options in the future that may include additional debt exchanges, refinancing of existing senior notes and other debt, equity capital raises, the sale of operating companies, or the liquidation of securities and investments owned to provide liquidity to meet future debt obligations as they become due. The following summarizes key liquidity events. We completed the sale of (a) the Company’s majority owned subsidiary, Atlantic Coast Recycling, LLC on March 3, 2025 for proceeds of approximately $68.6 million (the “Atlantic Coast Transaction”); (b) the sale of part of the Wealth Management business for $26.0 million (the “Wealth Management Transaction”) as more fully described in Note 4 to the accompanying unaudited condensed consolidated financial statements; and (c) the sale of the Company’s financial consulting business on June 27, 2025 for $117.8 million. In addition to the sale of these businesses, approximately $61.2 million of investments were sold during the nine months ended September 30, 2025 and approximately $4.7 million of investments and loans were sold from October 1, 2025 through December 31, 2025. Approximately $50.4 million in repayments of loans receivable, fair value were received during the nine months ended September 30, 2025 and approximately $31.4 million in repayments of loans receivable, fair value were received from October 1, 2025 through December 31, 2025. The sale of additional investments in the next twelve months will vary based upon the realization of the investments providing the best economic value or as liquidity needs arise for the Company. 101 As discussed in more detail in Note 12 - Senior Notes Payable, on July 11, 2025, the Company completed private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $2.1 million of the 6.50% Senior Notes Payable due September 2026, $19.7 million of the 5.00% Senior Notes due December 2026, $4.7 million of the 6.00% Senior Notes due January 2028, and $16.4 million of the 5.25% Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $24.6 million aggregate principal amount of newly-issued 8.00% Senior Secured Second Lien Notes due 2028 (the “New Notes”), whereupon the Exchanged Notes were cancelled. The borrowings outstanding of $1.4 billion as of September 30, 2025 included $1.3 billion from the issuance of series of senior notes that are due at various dates ranging from March 31, 2026 to August 31, 2028 with interest rates ranging from 5.00% to 8.00%, $121.9 million in term loans borrowed pursuant to the Oaktree Capital Management, L.P. (“Oaktree”) and BRPI Acquisition Co LLC (“BRPAC”) credit agreements, and $10.2 million of revolving credit facility under the Targus credit facility. Of the senior notes outstanding, after the completion of the Exchanged Notes described above, there is $280.1 million due in the next twelve months and $1.0 billion thereafter. The $131.6 million of term loans outstanding includes $16.0 million that is expected to be repaid in the next twelve months and $115.6 million thereafter. Of the approximately $48.8 million of obligations due under operating leases, approximately $16.9 million is due in the next twelve months and approximately $32.0 million is due thereafter. For additional information regarding our debt offerings and related agreements, refer to Note 10 - Notes Payable, Note 11 - Term Loans and Revolving Credit Facility, and Note 12 - Senior Notes Payable to the unaudited condensed consolidated financial statements. We believe that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, and cash expected to be generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements. We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan. Dividends From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. During the three months ended September 30, 2025, we did not pay any cash dividends on our common stock. During the year ended December 31, 2024, we paid cash dividends on our common stock of $33.7 million. In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors. A summary of common stock dividend activity for the nine months ended September 30, 2025 and the year ended December 31, 2024 was as follows: Date Declared Date Paid Stockholder Record Date Amount May 15, 2024 June 11, 2024 May 27, 2024 $ 0.50 February 29, 2024 March 22, 2024 March 11, 2024 0.50 Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of September 30, 2025, dividends in arrears in respect of the Series A Preferred Stock and underlying Depositary Shares were $4.5 million. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full. Holders of Series B Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of September 30, 2025, dividends in arrears in respect of the Series B Preferred Stock and underlying Depositary Shares were $2.9 million. On January 21, 2025, the 102 Company announced that it had temporarily suspended dividends on its Series B Preferred Stock. Unpaid dividends will accrue until paid in full. A summary of preferred stock dividend activity for the nine months ended September 30, 2025 and the year ended December 31, 2024 was as follows: Stockholder Preferred Dividend per Depositary Share Date Declared Date Paid Record Date Series A Series B October 16, 2024 October 31, 2024 October 28, 2024 $ 0.4296875 $ 0.4609375 July 9, 2024 July 31, 2024 July 22, 2024 0.4296875 0.4609375 April 9, 2024 April 30, 2024 April 22, 2024 0.4296875 0.4609375 January 9, 2024 January 31, 2024 January 22, 2024 0.4296875 0.4609375 Our principal sources of liquidity to finance our business are our existing cash on hand, cash flows generated from operating activities, funds available under revolving credit facilities and special purpose financing arrangements. Cash Flow Summary Nine Months Ended September 30, 2025 2024 (Dollars in thousands) Net cash (used in) provided by: Operating activities $ (85,932) $ 266,294 Investing activities 275,927 25,529 Financing activities (260,989) (354,722) Effect of foreign currency on cash (183) (1,092) Net decrease in cash, cash equivalents and restricted cash $ (71,177) $ (63,991) Cash used in operating activities was $85.9 million during the nine months ended September 30, 2025 compared to cash provided by operating activities of $266.3 million during the nine months ended September 30, 2024. The reduction of $352.2 million in net cash provided by operating activities in 2025 was primarily due to $673.3 million less cash generated from securities and other investments owned, as fewer securities positions were sold to provide liquidity to fund operations and redemption of the 6.375% Senior Notes due February 28, 2025, partially offset by an increase of $422.0 million in net income, net of non-cash items. Cash used in operating activities for the nine months ended September 30, 2025 consisted of the impact of net income of $220.0 million, non-cash items of $172.4 million, and changes in operating assets and liabilities of $133.5 million. The negative cash flow impact from non-cash items of $172.4 million included gain on sale and deconsolidation of businesses of $86.2 million, gain on senior note exchange of $67.2 million, gain on disposal of discontinued operations of $66.8 million, income from equity investments of $34.2 million, fair value and remeasurement adjustments of $8.6 million, gain on sale or disposal of fixed assets and other of $1.3 million, and net foreign currency gains of $0.5 million, partially offset by depreciation and amortization of $27.2 million, loss on extinguishment of debt of $21.6 million, share-based compensation of $11.0 million, depreciation of rental merchandise of $9.9 million, deferred income taxes of $9.2 million, non-cash interest and other of $9.2 million, provision for losses on accounts receivable of $2.6 million, impairment of goodwill and tradenames of $1.5 million, and dividends from equity investment of $0.2 million. Cash provided by operating activities for the nine months ended September 30, 2024 consisted of the impact of net loss of $769.3 million, non-cash items of $394.9 million, and changes in operating assets and liabilities of $640.7 million. The positive cash flow impact from non-cash items of $394.9 million included fair value adjustments of $261.4 million, loss on disposal of discontinued operations of $39.5 million, depreciation and amortization of $34.1 million, impairment of goodwill and tradenames of $27.7 million, deferred income taxes of $20.5 million, share-based compensation of $17.6 million, depreciation of rental merchandise of $11.7 million, provision for losses on accounts receivable of $2.5 million, income allocated for mandatorily redeemable noncontrolling interests of $1.4 million, net foreign currency gains of $0.3 million, partially offset by non-cash interest and other of $26.3 million, and gain on sale of business of $0.8 million. 103 Cash provided by investing activities was $275.9 million during the nine months ended September 30, 2025 compared to cash provided by investing activities of $25.5 million for the nine months ended September 30, 2024. The increase of $250.4 million in net cash provided by investing activities in 2025 was primarily due to $114.0 million in proceeds received from the sale of the GlassRatner and Farber business, $68.9 million in proceeds received from the sale of the Atlantic Coast Recycling business, $37.5 million in distributions received from equity investment Joann Retail, a new investment in 2025, $26.0 million in proceeds from the sale of the Wealth Management business, and a decrease of $19.1 million in cash paid for acquisitions, as Nogin was acquired in 2024 and there were no acquisitions in 2025. During the nine months ended September 30, 2025, cash provided by investing activities consisted of cash provided by proceeds from loans receivable repayment of $137.7 million, sale of discontinued operation of $114.0 million, proceeds from sale of business, net of cash sold and other of $94.9 million, distributions from equity investments of $37.5 million, proceeds from sale of loans receivable of $10.4 million, proceeds from sale of property, equipment, intangible assets and other of $7.6 million, proceeds from sale of loan participations of $4.5 million, and proceeds from consolidation of VIE, partially offset by cash used in purchases of loans receivable of $114.3 million, purchases of property, equipment and intangible assets of $10.3 million, and purchases of equity and other investments of $6.6 million. During the nine months ended September 30, 2024, cash provided by investing activities consisted of cash received from loans receivable repayment of $105.3 million, proceeds from sale of loans receivable of $22.8 million, and proceeds from sale of loan participations of $4.0 million, partially offset by cash used for purchases of loans receivable of $79.9 million, acquisition of businesses and minority interest of $19.1 million, purchases of property and equipment of $6.7 million, purchases of equity and other investments of $1.1 million, and proceeds from sale of business, net of cash sold and other of $0.3 million. Cash used in financing activities was $261.0 million during the nine months ended September 30, 2025 compared to cash used in financing activities of $354.7 million during the nine months ended September 30, 2024. The decrease of $93.7 million in net cash used in financing activities in 2025 was primarily due to a net increase in debt-related proceeds of $47.9 million and the suspension of dividends, compared to $39.7 million paid in common stock and preferred dividends in 2024. During the nine months ended September 30, 2025, cash used in financing activities primarily consisted of $314.3 million used in the repayment of term loan, $145.3 million used to redeem senior notes, $92.2 million used in payment of revolving line of credit, $13.4 million used to repay our notes payable and other, $13.2 million used to pay debt issuance and offering costs, $3.6 million in distributions to noncontrolling interests, and $1.4 million used to pay contingent consideration, partially offset by cash provided by $235.6 million in proceeds from term loan, $86.1 million in proceeds from revolving line of credit, and $0.9 million in proceeds from notes payable. During the nine months ended September 30, 2024, cash used in financing activities primarily consisted of $140.5 million used to redeem senior notes, $94.2 million used in repayment of revolving line of credit, $138.6 million used in the repayment of term loan, $33.6 million used to pay dividends on our common shares, $6.2 million used to repay our notes payable and other, $6.0 million used to pay dividends on our preferred shares, $7.4 million used in the payment of contingent consideration, $4.6 million in distributions to noncontrolling interests, $3.5 million used in the payment of debt issuance and offering costs, $3.1 million used in payment of ESPP and employment taxes on vesting of restricted stock, partially offset by cash provided by $64.1 million in proceeds from revolving line of credit, $15.0 million in proceeds from notes payable, $3.2 million in contributions from noncontrolling interests, and $0.7 million in proceeds from exercise of warrants. Recent Accounting Standards See Note 2(s) - Recent Accounting Standards to the accompanying unaudited condensed consolidated financial statements for recent accounting standards. Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, the Company is not required to provide the information called for by this Item.