What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-09-19 · 364 added, 882 removed, 237 unchanged (84% of the section changed)

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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,

assumes responsibility for the accuracy and completeness of the forward-looking statements.

Moreover, neither we, nor any other person, assumes responsibility for the accuracy and completeness of the forward-looking statements.

Except as required by law, we are under no obligation to update any of the forward-looking statements after the filing of this Annual Report to conform such statements to actual results or to changes in our expectations.

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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);

and developments that may arise related to our prior investment in Freedom VCM Holdings, LLC (“Freedom VCM”) and 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;

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our ability to generate sufficient revenues to achieve and maintain profitability;

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 exposure to credit risk;

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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;

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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;

our dependence on communications, information and other systems and third parties;

the potential loss of financial institution clients;

the diversion of management time on divestiture-related issues;

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the activities of short sellers and their impact on our business and reputation;

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;

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 Annual Report to the “Company,” “B.

Riley Financial,” “we,” “us” or “our” refer to the combined business of B.

Riley Financial, Inc.

Except as otherwise required by the context, references in this Annual Report to the “Company,” “BRCGH,” “BRC,” “BRC Group Holdings,” “we,” “us” or “our” refer to the combined business of BRC Group Holdings, Inc.

and all of its subsidiaries.

Description of the Company

BRC Group Holdings, Inc.

RILY) (the “Company” or “BRCGH”), which changed its name from B.

Riley Financial, Inc.

RILY) (the “Company”) is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners.

We operate through several consolidated subsidiaries (collectively, “B.

Riley”) that provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.

The Company also opportunistically invests in and acquires companies or assets with attractive risk-adjusted return, with a focus on making operational improvements within these companies in an effort to maximize free cash flow.

However, during 2024 and continuing into 2025, our focus has been on reducing indebtedness, including through the net proceeds from a number of strategic asset dispositions or other monetizations as described in additional detail under “—Disposition and Monetization Transactions”.

The Company has reduced its total indebtedness from $2.4 billion at December 31, 2023 to $1.8 billion at December 31, 2024.

effective January 1, 2026, is a diversified holding company offering a platform of businesses, including financial services (with complementary banking and wealth management businesses), telecom, retail, and investments in equity, debt and venture capital.

We refer to BRCGH as having a “platform” because of the unique composition of our financial services businesses and diversification of its operations.

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 complementary banking business offers comprehensive services in capital markets, sales, trading, research, merchant banking, M&A, and restructuring.

Our complementary 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 consumer products and retail companies provide mobile computing accessories and home furnishings.

BRCGH, through its investment business, deploys its capital inside and outside its core financial services business to generate shareholder value through opportunistic investments.

The Company 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.

In addition to efforts to grow the BRC platform, starting in 2024 and continuing through 2025, we have been focused on reducing indebtedness, including through the net proceeds from a number of strategic asset dispositions or other monetizations as described in additional detail under “Disposition and Monetization Transactions.” The Company has reduced its total outstanding indebtedness from $1.8 billion at December 31, 2024 to $1.4 billion at December 31, 2025.

The Company anticipates that reduction of indebtedness, including potentially through additional asset disposition or monetization transactions, will remain a key priority for the foreseeable future.

Our Business Segments

We report our activities in six reportable business segments:

Capital Markets, Wealth Management, Financial Consulting, Communications, Consumer segment and E-Commerce segment.

We maintain a diverse composition of businesses that operate in seven reportable business segments:

Capital Markets, Wealth Management, Lingo, magicJack, Marconi Wireless, UOL, and Consumer Products.

The descriptions below illustrate the businesses that comprise our segments.

We maintain a diverse composition of businesses that operate in six reportable segments.

Management evaluates many different financial and non-financial metrics to assess the individual performance of each of these various businesses.

However, across most businesses, management primarily assesses each business’s financial performance based upon each of the businesses revenues and operating profits generated excluding non-cash charges and the impact of gains and losses related to securities and other investments held.

However, across most businesses, management primarily assesses each business’s financial performance based upon each business’s 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.

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Capital Markets – We provide investment banking, equity research and institutional brokerage services to publicly traded and privately held companies, institutional investors, and financial sponsors;

fund and asset management services to institutional and high-net-worth individual investors;

and direct lending services to middle market companies.

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We act as an advisor to our clients, which at times involves complex transactions consistent with our value-oriented investment philosophy.

We often provide consulting, capital raising, or investment banking services for companies in which B.

Riley may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both.

In our Capital Markets segment we have a portfolio of loans receivable that consisted of the following at December 31, 2024 and December 31, 2023 (dollars in thousands):

Fair Value Adjustments on Loans

Loans Receivable, at Fair Value Year Ended

Industry or Type of Loan December 31,

2024 December 31,

2023 2024 2023 2022

Related Party Loans:

Vintage Capital Management, LLC Retail / consumer $ 2,057 $ 200,506 $ (222,911) $ — $ —

Freedom VCM Receivables, Inc.

Consumer receivable portfolio 3,913 42,183 (13,874) — —

Retail / consumer 38,826 104,760 (71,724) 494 —

Badcock Corporation Consumer receivable portfolio 2,169 20,624 (5,339) (7,940) —

Other related party loans Services, Oil & Gas and Industrial 4,937 10,695 (14,823) (29,342) (1,603)

Total related party 51,902 378,768 (328,671) (36,788) (1,603)

Exela Technologies, Inc.

Technology 32,136 50,296 (701) 21,028 (20,191)

Core Scientific, Inc.

Technology — 45,509 8,473 34,696 (34,791)

Other loans Various 6,065 57,846 (4,599) 1,289 2,251

Total $ 90,103 $ 532,419 $ (325,498) $ 20,225 $ (54,334)

The fair value adjustments on loans receivable for the years ended December 31, 2024, 2023 and 2022, were $(325.5) million, $20.2 million, and $(54.3) million, respectively.

During the years ended December 31, 2024, 2023 and 2022, fair value adjustments for loans receivable from related parties totaled $(328.7) million, $(36.8) million, and $(1.6) million, respectively.

During the years ended December 31, 2024, 2023 and 2022, fair value adjustments for other loans receivable totaled $3.2 million, $57.0 million, and $(52.7) million respectively .

During the year ended December 31, 2024, fair value adjustments for the loan receivable for Vintage Capital Management, LLC were $(222.9) million.

The fair value adjustments are related primarily to the decline in the equity fair value of Freedom VCM which, along with certain guarantees, is the primary collateral for this loan.

The decline in the equity fair value of Freedom VCM is primarily due to Freedom VCM’s filing of voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 as a result of increases in net debt, a decrease in the operational performance of Freedom VCM various business units during 2024, and a decline in the equity value of Freedom VCM’s investment in Conn’s, Inc.

common stock which was impacted by the Chapter 11 Cases under chapter 11 the Bankruptcy Code in the Bankruptcy Court.

During the year ended December 31, 2024, we recorded $(13.9) million of fair value adjustments to the loan receivable for Freedom VCM Receivables, Inc., primarily due to higher projected charge offs of receivables on the consumer receivable portfolio that are serviced by Conn's, Inc.

which was impacted by the Chapter 11 Cases under chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

During the years ended December 31, 2024 and 2023, we recorded $(71.7) million and $0.5 million of fair value adjustments to the loan receivable for Conn’s, Inc., respectively.

The fair value adjustments are primarily related to Conn’s Inc.

July 23, 2024 Chapter 11 Cases.

The filing of the Chapter 11 Cases impacted the operational performance of the stores operated by Conn’s, Inc.

and the additional expenses projected to be incurred in the Chapter 11 Cases resulted in a decline in the projected recovery value of the collateral for the Conn’s Inc.

loan receivable.

During the years ended December 31, 2024 and 2023, fair value adjustments for the loan receivable from W.S.

Badcock Corporation were $(5.3) million and $(7.9) million, respectively.

The fair value adjustment of $(5.3) million during the year ended December 31, 2024, was primarily due to higher projected charge offs of receivables on the consumer receivable portfolio resulting from Conn’s, Inc.

bankruptcy and estimated costs and losses from the projected liquidation of the consumer receivable portfolio.

The fair value adjustment of $(7.9) million during the year ended December 31, 2023, was primarily due to changes in an increase in projected charge-offs due to a slowdown in the economy that impacted customer collections on the individual consumer loans in the portfolio.

During the years ended December 31, 2024, 2023 and 2022, fair value adjustments for the loan receivable from Exela Technologies, Inc.

were $(0.7) million, $21.0 million, and $(20.2) million, respectively.

The fair value adjustment of $21.0 million was primarily due to the payment of promissory note in full during year ended December 31, 2023 The fair value adjustment of $(20.2) million for the year ended December 31, 2022, was primarily due to deterioration in the collateral for the loan.

During the years ended December 31, 2024, 2023 and 2022, fair value adjustments for the loan receivable from Core Scientific, Inc.

were $8.5 million, $34.7 million, and $(34.8) million, respectively.

Core Scientific, Inc.

provides digital infrastructure for bitcoin mining and high-performance computing.

Core Scientific, Inc.

filed Chapter 11 bankruptcy in 2022, leading to a significant mark down of the loan receivable in the fourth quarter of 2022.

Subsequent to the Chapter 11 restructuring, and during the first quarter of 2023, there was a significant rebound in bitcoin prices resulting in significant growth and value assumptions.

The $45.5 million of loans receivable from Core Scientific, Inc.

(“Core Scientific”) at December 31, 2023 included a loan in the amount of $42.1 million that was settled in full upon Core Scientific’s exit from Chapter 11 bankruptcy in January 2024.

We often provide consulting, capital raising, or investment banking services for companies in which BRC may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both.

Wealth Management – We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers.

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Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions.

Wealth management revenues are comprised of the following:

2024 2023 2022

Revenues - Services and fees

Brokerage revenues $ 91,488 $ 88,866 $ 112,837

Advisory revenues 77,307 73,904 85,768

Other 28,673 30,717 32,130

Total services and fees revenue

197,468 193,487 230,735

Trading income 3,278 4,758 3,522

Total revenues

$ 200,746 $ 198,245 $ 234,257

Total assets under management were approximately $20.7 billion, $25.4 billion, and $23.9 billion at December 31, 2024, 2023, and 2022, respectively.

Of these amounts, advisory assets under management totaled approximately $6.9 billion at December 31, 2024, and $8.0 billion at December 31, 2023, and $7.2 billion at December 31, 2022.

Advisory revenues were 0.25%, 0.24%, and 0.32% of average advisory assets under management during the years ended December 31, 2024, 2023, and 2022, respectively.

The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management.

Broker revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets.

Other revenues are primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed.

Financial Consulting Segment - We provide a variety of specialized advisory services spanning bankruptcy, restructuring, turnaround management, forensic accounting, crisis and litigation support, and operations management.

On November 15, 2024, as more fully described in “—Recent Developments”, the Company entered into a transaction whereby approximately 52.6% of the common equity interests of a newly formed subsidiary that included the Company’s appraisal and valuation and real estate advisory services operations along with the Company’s auction and liquidations operations was sold to an investment management firm.

These operations are included in discontinued operations as discussed in Note 4 to the accompanying consolidated financial statements and will be deconsolidated in future periods since B.

Riley no longer has control and owns a non-controlling equity investment ownership interest of 44.2% in the business.

On June 27, 2025, as more fully described in “—Recent Developments”, the Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber.

The aggregate cash consideration paid by the Buyers for the interests of GlassRatner and shares of Farber was $117.8 million, which is based on a target closing working capital amount that is subject to adjustment within 180-days following the sale date.

In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services.

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 Management"), 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.

Lingo Segment - Lingo Management, LLC and its subsidiary Bullseye Telecom (together, “Lingo”) is a global cloud/unified communications (“UC”) and managed service provider to Enterprise and Small to Medium Businesses in the United States.

Lingo primarily re-sells Plain Old Telephone Services (POTS), Broadband data services and Managed Security services in addition to the Cloud Voice, POTS Alternative and business collaboration communication services.

magicJack Segment – magicJack VoIP Services, LLC and related subsidiaries (“magicJack”) is a non-interconnected Voice-over-IP (VoIP) cloud-based communications service provider that offers related devices and subscription services within the United States and Canada.

The magicJack services allow its subscribers to stay connected at low costs.

Marconi Wireless Segment - Marconi Wireless Holdings, LLC (“Marconi Wireless”) is a mobile virtual network operator that provides mobile phone voice, text, and data services and devices using the Credo Mobile brand.

UOL Segment - United Online, Inc.

(“UOL”) is an Internet access provider that offers dial-up and digital subscriber line (“DSL”) services under the NetZero and Juno brands across the United States.

UOL also provides paid and free e-mail subscription services that also generate advertising revenues.

Consumer Products Segment – This segment is comprised of Tiger US Holdings, Inc.

("Targus"), which we acquired on October 18, 2022 and 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.

(“Targus”), which is a multinational company that, together with its subsidiaries, designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries.

The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories.

E-Commerce Segment – This segment is comprised of Nogin, Inc.

("Nogin"), which is a technology platform operating e-commerce stores that delivers CaaS solutions for apparel brands and other retailers.

The Company manages clients’ 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 six 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.

Our operating results are primarily comprised of the operations of these businesses within our seven reportable operating segments.

However, we also generate revenues from investment and lending entities and 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 stores inc.

(“bebe”) which operates rent-to-own stores.

In prior years, we also generated operating revenues from an entity that was then a majority owned subsidiary of ours which licensed the trademarks and intellectual properties from ownership of six brands:

Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore.

We also generated other income from dividends we received from our then equity ownership of investments that ranged from 10% to 50% in companies that license the trademark and intellectual property of the Hurley, Justice, and Scotch & Soda brands as well as from our majority owned subsidiary bebe stores, inc.

which owns the bebe and Brookstone brands.

Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore, and we generated other income from dividends we received from our equity ownership of investments that ranged 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, 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.

As of December 31, 2024, B.

Riley no longer has control over these operations and are included as discontinued operations in the consolidated financial statements as of December 31, 2023, and for the years ended December 31, 2024, 2023, and 2022.

In October 2024, BRC entered into transactions that sold these businesses, and BRC no longer controlled these operations and they are included in discontinued operations in the consolidated financial statements for the year ended December 31, 2024.

Securities and Other Investments Owned Portfolio – We have a portfolio of securities and other investments owned that consists of public equity securities, private securities, partnership interests and other investments, corporate bonds and other fixed income securities as follows at December 31, 2025 and 2024:

2024 December 31,

Public Equity Securities:

Badcock & Wilcox Enterprises, Inc.

Babcock & Wilcox Enterprises, Inc.

- common stock $ 174,011 $ 45,012

Badcock & Wilcox Enterprises, Inc.

Babcock & Wilcox Enterprises, Inc.

- preferred stock — 1,528

Alta Equipment Group, Inc.

- common stock — 44,653

Double Down Interactive Co., Ltd - common stock 30,010 43,706

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Private Equity Securities:

Freedom VCM Holdings, LLC — 287,043

Other private equities 135,605 107,616

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Other fixed income securities 4,373 4,923

Partnership interest and other 15,867 35,196

Partnership interests and other 41,915 15,867

Total securities and other investments owned $ 446,843 $ 282,325

Securities and other investments owned was $282.3 million and $809.0 million as of December 31, 2024 and December 31, 2023, respectively.

Of this amount, the fair value of equity securities totaled $232.5 million and $711.6 million as of December 31, 2024 and December 31, 2023.

Of these amounts, public equity securities totaled $124.9 million and $194.5 million as of December 31, 2024 and December 31, 2023, and private equity securities totaled $107.6 million and $517.0 million as of December 31, 2024 and December 31, 2023.

The fair value of Badcock & Wilcox Enterprises, Inc.

- common stock held as of held as of December 31, 2024 and December 31, 2023 was $45.0 million and $40.1 million, respectively.

The change in fair value for the year ended December 31, 2024 is primarily related to an increase in the public share price during the period.

The fair value of Alta Equipment Group, Inc.

common stock held as of December 31, 2023 was $44.7 million, and the Company sold the entire position in the first quarter of 2024 and recorded a loss of $(3.5) million.

The sale was executed to raise additional capital to fund operating activities.

The fair value of our Double Down Interactive Co., Ltd common stock held as of December 31, 2024 and December 31, 2023 was $43.7 million and $30.4 million, respectively.

The change in fair value for the year ended December 31, 2024 is primarily related to an increase in the public share price during the period.

The fair value of our investment in Freedom VCM Holdings, LLC, held as of December 31, 2024 and December 31, 2023 was zero and $287.0 million, respectively.

During the year ended December 31, 2024, we recorded fair value adjustments of $(221.0) million primarily due to increases in net debt, declines in Freedom VCM Holdings, LLC’s investment in Conn’s, Inc.

common stock and impact of Conn's bankruptcy filing on July 23, 2024, and a decrease in the operational performance of Freedom VCM Holdings, LLC’s various business segments.

The investment in Freedom VCM Holdings, LLC was also impacted due to the filing of Freedom VCM’s voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024.

Realized and Unrealized Gains (Losses)

2024 2023 2022

Other Income (Expense) - Realized & Unrealized Gains (Losses)

Public Equity Securities:

Babcock & Wilcox Enterprises, Inc.

- common stock $ 1,181 $ (84,244) $ (49,583)

Babcock & Wilcox Enterprises, Inc.

- preferred stock 1,830 (2,204) (9,105)

Alta Equipment Group, Inc.

- common stock (3,537) 3,502 13,617

Double Down Interactive Co., Ltd - common stock 11,977 (4,260) (26,662)

Synchronoss Technologies, Inc.

- common stock 6,368 (3,392) —

Franchise Group, Inc.

- common stock — — (775)

Arena Group Holdings, Inc.

- common stock — (31,041) (6,101)

Other public equities (2,163) (15,634) (157,466)

Subtotal 15,656 (137,273) (236,075)

Private Equity Securities:

Freedom VCM Holdings, LLC (221,042) 4,542 —

Other private equities (58,903) (30,334) (9,074)

Subtotal (279,945) (25,792) (9,074)

Corporate bonds 898 1,224 (3,671)

Partnership interest and other (295) (212) 1,280

Total $ (263,686) $ (162,053) $ (247,540)

During the years ended December 31, 2024, 2023, and 2022, realized and unrealized losses of $(263.7) million, $(162.1) million, and $(247.5) million were recorded to other income as realized and unrealized losses on investments, respectively.

These realized and unrealized losses are made up of realized and unrealized gains (losses) recorded to public equity securities, private equity securities, corporate bonds, and partnership interest and other investments.

The majority of realized and unrealized (losses) gains on investments are related to public equity securities (equity securities that trade on major exchanges), and private equity securities.

During the years ended December 31, 2024, 2023, and 2022, $15.7 million, $(137.3) million, and $(236.1) million of realized and unrealized gains (losses) were recorded for public equity securities to other income as realized and unrealized gains (losses) on investments.

During the years ended December 31, 2024, 2023, and 2022, we recorded $1.2 million, $(84.2) million, and $(49.6) million, respectively, to realized and unrealized gains (losses) related to Babcock & Wilcox Enterprises, Inc.

("B&W") - common stock, primarily due to public share price movements during these periods.

During the years ended December 31, 2024, 2023, and 2022, we recorded $12.0 million, $(4.3) million, and $(26.7) million, respectively, to realized and unrealized gains (losses) related to Double Down Interactive Co., Ltd.

primarily related to public share price movements during these periods.

During the years ended December 31, 2024, 2023, and 2022, $(279.9) million, $(25.8) million, and $(9.1) million of realized and unrealized losses were recorded for private equity securities to other income as realized and unrealized losses on investments.

During the year ended December 31, 2024, we recorded $(221.0) million to realized and unrealized losses related to our investment in Freedom VCM Holdings, LLC.

The entirety of the balances were related to fair value adjustments due primarily to increases in net debt as well as significant declines in Freedom VCM Holdings, LLC’s investment in Conn’s, Inc.

common stock and impact of Conn's, Inc.

bankruptcy filing on July 23, 2024, and a decrease in the operational performance of Freedom VCM Holdings, LLC’s various business segments.

The investment in Freedom VCM Holdings, LLC was also impacted due to the filing of Freedom VCM’s voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024.

Recent Developments

Conn’s and FRG

The Company’s results during the year ended December 31, 2024 were negatively impacted by a significant non-cash markdown of $287.0 million related to its investment in Freedom VCM, the indirect parent entity for FRG.

Freedom VCM’s strategy, which included the potential divestiture or monetization of certain assets, was materially negatively impacted by the unexpected announcement in November 2023 concerning FRG’s former CEO and his alleged involvement in fraudulent schemes despite the fact that these allegations are unrelated to FRG and its businesses.

In the meantime, the consumer facing portion of the U.S.

economy has deteriorated.

On November 3, 2024, FRG, its operating businesses, and certain other affiliates, including Freedom VCM, filed the FRG Chapter 11 Cases under chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

As a result, on November 4, 2024, we concluded that we were required to record an impairment (in addition to prior impairments) with respect to the Freedom VCM Investment and the Vintage Loan Receivable.

The additional non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivable are $118.0 million in the aggregate as of November 4, 2024.

As a result of such additional impairments, we have ascribed no value to the Freedom VCM Investment and the Vintage Loan Receivable was valued at $2.1 million at December 31, 2024, which approximates the fair value of the underlying collateral for this loan which is primarily comprised of other securities.

Subsequent to December 31, 2024, the fair value of the underlying collateral for this loan, which is comprised of other public securities, decreased to a fair value of $1.3 million at September 16, 2025.

Additionally, on July 23, 2024, Conn’s and certain of its subsidiaries filed the Chapter 11 Cases under chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

FRG, pursuant to a transaction consummated in January 2024, acquired a substantial equity investment in Conn’s in exchange for the sale of its Badcock Home Furniture & more business to Conn’s.

The commencement of the Chapter 11 Cases constituted an event of default that accelerated the obligations under the Conn’s, among Conn’s, W.S.

Badcock LLC, as borrowers, and an affiliate of the Company, as administrative agent, collateral agent, and lender.

As of the date of the filing of the Chapter 11 Cases, $93.0 million in outstanding borrowings existed under the Conn’s Term Loan.

Any efforts to enforce payment obligations under the Conn’s Term Loan were 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.

The fair value of the Conn's loans receivable was $38.8 million as of December 31, 2024.

The fair value adjustment on the Conn’s loan receivable was $(71.7) million for the year ended December 31, 2024.

Wealth Management

On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s (W-2) Wealth Management business to Stifel for estimated net consideration based on the number of advisors that join Stifel at closing, among other things.

Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $26.0 million, representing 36 financial advisors whose managed accounts represent approximately $4.0 billion, or 19.3%, of AUM as of December 31, 2024.

Debt Financing and Repayment of Nomura Credit Facility

On February 26, 2025, the Company and the Company’s wholly owned subsidiary, BR Financial Holdings, LLC (the “BRFH Borrower”), entered into a new credit agreement with a group of funds indirectly or directly controlled by Oaktree Capital Management, L.P.

with Oaktree Fund Administration, LLC, acting as the administrative agent and collateral agent.

The new credit agreement provided for (i) a three-year $125.0 million secured term loan credit facility (the “Initial Term Loan Facility”) and (ii) a four-month $35.0 million secured delayed draw term loan credit facility (the “Delayed Draw Facility” and, together with the Initial Term Loan Facility, the “Credit Facility”).

The proceeds from the Initial Term Loan Facility were primarily used (a) to repay the existing indebtedness under the Nomura Credit agreement discussed in Note 13, (b) for working capital and general corporate purposes and (c) to pay transaction fees and expenses.

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

and its subsidiaries and (b) for working capital and general corporate purposes.

Borrowings accrue interest at the adjusted term Secured Overnight Financing Rate ("SOFR") rate as defined in the Credit Facility with an applicable margin of 8.00%.

In addition to paying interest on outstanding borrowings under the Credit Facility, the Company was required to pay (i) a closing fee of 3.00% of the aggregate principal amount of the loans under the Initial Term Loan Facility and 2.00% of the aggregate principal amount of the loans under the Delayed Draw Facility, and (ii) an exit fee upon the prepayment or repayment of the Credit Facility of 5.00% of the aggregate principal amount of such loans repaid, provided, that the Initial Term Loan Facility exit fee shall not be payable if the share price for the Company's common stock exceeds a certain threshold.

The Credit Facility also contains a provision where the final $62.5 million of repayment of principal on the Initial Term Loan may be subject to an additional prepayment premium, as defined in the Credit Facility, if the prepayment occurs before the second anniversary date of the Credit Facility.

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

in connection with the Credit Facility to purchase approximately 1,832,290 shares (or 6% on a fully diluted basis) of the Company’s common stock at an exercise price of $5.14 per share.

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.

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.

The sale of an asset in the Borrowing Base requires the BRFH Borrower to make a prepayment in an amount equal to the proceeds of such disposition multiplied by the percentage “credit” that is assigned to such asset in the Borrowing Base.

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 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.

Redemption of Senior Notes

On February 28, 2025 we redeemed all the issued and outstanding 6.375% 2025 Notes.

The redemption price was equal to 100% of the aggregate principal amount, plus any accrued interest and unpaid interest up to, but excluding, the redemption date The total redemption payment included approximately $0.7 million accrued interest.

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.

Sale of Atlantic Coast Recycling

On March 3, 2025, the Company and BR Financial, B.

Riley Environmental Holdings, LLC and other indirect subsidiaries of the Company, which included the Atlantic Companies, entered into the MIPA.

Pursuant to the MIPA, on March 3, 2025, the Interests owned by BR Financial and the minority holders were sold to a third party.

The Interests were sold to the third party on March 3, 2025 for a purchase price of $102.5 million, subject to certain adjustments and a holdback amount pending receipt of a certain third party consent, resulting in cash proceeds of $68.6 million 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 $68.6 million of cash

proceeds received by the Company, approximately $22.6 million was used to pay interest, fees, and principal on the Credit Facility discussed above.

A gain of $52.7 million was recognized in the first quarter of 2025 from this sale.

Riley Securities Holdings, Inc.

Equity Issuance

On March 10, 2025, the Company’s wholly-owned subsidiary B.

Riley Securities Holdings, Inc.

("BRSH") which is comprised of the broker dealer operations within the Capital Markets segment merged with a shell corporation and issued 0.6% of the equity in BRSH to certain investors in the shell corporation and upon completion of the transaction became minority stockholders of BRSH.

Simultaneously with the merger with the shell corporation, BRSH approved the BRSH Stock Plan and issued restricted stock awards to employees and officers of BRSH which represented 10.0% of the equity of BRSH that vest over a period of four to five years.

Assuming the full issuance of the restricted stock awards, the Company continues to own 89.4% of BRSH.

Exchange of Senior Notes

On March 26, 2025, the Company completed a private exchange transaction with an institutional investor pursuant to which the investor exchanged $86.3 million of aggregate principal amount of the Company’s 5.50% Senior Notes due March 2026 and $36.7 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026 owned by it for approximately $87.8 million aggregate principal amount of 8.00% Senior Secured Second Lien Notes due 2028 (the "New Notes"), whereupon the exchanged notes were cancelled.

In addition, on April 7, 2025, the Company completed a private exchange transaction with a certain institutional investor pursuant to which the investor exchanged approximately $22.0 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for approximately $10.0 million aggregate principal amount of the New Notes.

On May 21, 2025, the Company completed a private exchange transaction with a certain institutional investor to exchange principal amounts of approximately $29.5 million, $75.0 million, and $34.5 million of the Company's 5.50% Senior Notes due March 2026, 5.00% Senior Notes due December 2026, and 6.00% Senior Notes due January 2028, respectively, for approximately $93.1 million aggregate principal amount of the New Notes.

On June 30, 2025, the Company entered into a private exchange transaction with a certain institutional investor pursuant to which such investor exchanged approximately $28.0 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for $13.0 million aggregate principal amount of the New Notes.

On July 11, 2025, the Company entered into a private exchange transaction with a certain institutional investor pursuant to which such investor exchanged approximately $42.8 million aggregate principal amount of the Company’s 6.50% Senior Notes due September 2026, 5.00% Senior Notes due December 2026, 6.00% Senior Notes due January 2028 and 5.25% Senior Notes due August 2028 for $24.6 million aggregate principal amount of the New Notes.

The New Notes were issued pursuant to an indenture, dated as of March 26, 2025 (the “Indenture”), 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 (in such capacities, the “Trustee”), 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.

The New Notes are subordinated in right of payment to the payment in full of the obligations under the Company’s Credit Facility.

The New Notes accrue interest at a rate of 8.00% per annum, payable semi-annually in arrears on April 30 and October 31, starting October 31, 2025.

The New Notes mature on January 1, 2028.

The Company may redeem the New Notes (i) at any time, in whole or in part, before March 26, 2026, at a redemption price equal to 100% of the aggregate principal amount being redeemed, plus a customary make-whole premium, plus accrued and unpaid interest, if any, to, but excluding, the redemption date;

and (ii) at any time, in whole or in part, after March 26, 2026, at a redemption price equal to 100% of the aggregate principal amount being redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The New Notes contain change of control provisions, whereby 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.

In addition, if the Company or its restricted subsidiaries engage in certain asset sales and do not invest such proceeds or permanently reduce certain debt within a specified period of time, the Company will be required to use a portion of the proceeds of such asset sales above a specified threshold to make an offer

to purchase the New Notes at a price equal to 100% of the principal amount of the New Notes being purchased, plus accrued and unpaid interest.

The Indenture contains certain covenants that, among other things, limit the Company’s and its 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.

On March 31, 2025, the Company signed a Deed of Assignment for the Benefit of Creditors, (i) pursuant to which all of the assets of Nogin were transferred to an assignee for the benefit of Nogin’s creditors, and (ii) which provides the assignee the right to, among other things, sell or dispose of such assets and settle all claims against Nogin.

The Company no longer controls or owns the assets of Nogin and the results of operations will no longer be reported in the Company’s financial statements after March 31, 2025.

Sale of GlassRatner and Farber

On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests GlassRatner and Farber.

In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services.

Targus/FGI Credit Agreement

On August 20, 2025, Targus (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 $30.0 million revolving loan 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.

The Targus/FGI Credit Agreement is a revolving line of credit facility with a receivables purchase feature under which the purchase of eligible receivables is on a full recourse basis with each borrower retaining the risk of non-payment.

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

The Targus/FGI Credit Agreement is secured by (i) a first priority perfected security interest in and a lien upon all of the assets of the FGI Loan Parties, and (ii) a pledge of all of the equity interests of the Targus Borrower and its direct and indirect subsidiaries.

The Targus/FGI Credit Agreement contains certain covenants, including those limiting the FGI Loan Parties' ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends.

The Targus/FGI Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement.

As required under the Targus/FGI Credit Agreement, B.

Riley Commercial Capital, LLC, a wholly owned subsidiary of the Company ("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 $5.0 million increasing the aggregate principal amount of such loan from $5.0 million to $10.0 million.

The carrying values of Babcock & Wilcox Enterprises, Inc.

common stock held as of December 31, 2025 and December 31, 2024 were $174.0 million (38.9% of total securities and other investments owned) and $45.0 million (15.9% of total securities and other investments owned), respectively.

The change in the carrying value for the year ended December 31, 2025 was due to an increase in the public share price during the period.

The carrying values of our Double Down Interactive Co., Ltd common stock held as of December 31, 2025 and December 31, 2024 were $30.0 million and $43.7 million, respectively.

The change in the carrying value for the year ended December 31, 2025 was primarily driven by sales of the securities and a decrease in the public share price during the period.

The carrying values of our investments in other public equities held as of December 31, 2025 and December 31, 2024 were $25.7 million and $27.4 million, respectively.

The change in the aggregate carrying value for the year ended December 31, 2025 was driven by net sales of certain other public equity securities during the period.

The carrying values of our investments in other private equities held as of December 31, 2025 and December 31, 2024 were $135.6 million and $107.6 million, respectively.

The change in the aggregate carrying value for the year ended December 31, 2025 was driven by purchases of certain private securities, partially offset by decreases in fair values during the period.

The carrying value of our investments in partnership interests and other securities held as of December 31, 2025 and December 31, 2024 were $41.9 million and $15.9 million, respectively.

The change in the aggregate carrying value for the year ended December 31, 2025 was primarily driven by net increase in market value of certain securities during the period.

Nasdaq Compliance

On April 3, 2025, May 21, 2025, August 20, 2025, October 1, 2025 and November 21, 2025, the Company received Staff Determination Letters (the “Prior Determination Letters”) from the Nasdaq Listing Qualifications Staff (the “Staff”) based on the Company’s non-compliance with Nasdaq Listing Rule 5250(c)(1) (the “Filing Rule”).

The basis for the Prior Determination Letters was the Company’s inability to timely file its Form 10-K for the fiscal year ended December 31, 2024 (the “2024 10K”) and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2025 (the “Q1 Report”), June 30, 2025 (the “Q2 Report”) and September 30, 2025 (the “Q3 Report”) with the U.S.

Securities and Exchange Commission (the “SEC”).

The Company filed its 2024 10K on September 19, 2025.

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

The Prior Determination Letters notified the Company that it may request a hearing before a Nasdaq Hearings Panel (“Hearings Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series.

The Company timely submitted a request for a hearing on October 8, 2025, including continued listing of its securities pending the hearing and the Hearings Panel’s decision.

A hearing before the Hearings Panel was held on November 4, 2025.

On November 18, 2025, the Company received written notification (the “Decision Letter”) from the Hearings Panel notifying the Company of its decision to grant the Company’s request to continue its listing on The Nasdaq Stock Market (“Nasdaq” or the “Exchange”), subject to the Company’s meeting certain conditions outlined in the Decision Letter.

In the Decision Letter, the hearings advisors noted that the Hearings Panel reviewed the information presented by the Company, detailing the compliance plan proposed by the Company, as well as all other correspondence previously submitted by the Company and the Staff.

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, the Q2 Report on December 15, 2025 and the Q3 Report on January 14, 2026, thereby satisfying all deadlines requested by the Hearings Panel as outlined in the Decision Letter.

On January 27, 2026, the Company received a letter from Nasdaq confirming that it has regained compliance with Nasdaq’s Periodic Filing Rule 5250(c)(1).

Consistent with the applicable Nasdaq Listing Rules in such circumstances, the notice also indicated that Nasdaq imposed a “Mandatory Panel Monitor” as that term is defined in Nasdaq Listing Rule 5815(d)(4)(B) for a period of one year.

In the event the Company fails to timely satisfy the Periodic Filing Rule during such one-year period, the Company will not be afforded the opportunity to provide a compliance plan for the Nasdaq Listing Qualifications Staff’s review.

The Company would instead receive a Delist Determination Letter in response to which the Company could request a hearing and stay of the delist determination pending a hearing before a Hearings Panel.

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.

Results of Operations

7 unchanged sentences

Services and fees $ 633,836 65.4 % $ 783,304 104.8 % $ (149,468) (19.1) %

Trading (loss) income (57,007) (6.8) % 21,603 1.5 % (78,610) n/m

Fair value adjustments on loans (325,498) (38.8) % 20,225 1.4 % (345,723) n/m

Trading gains (losses), net 125,530 13.0 % (57,007) (7.6) % 182,537 (320.2) %

Fair value adjustments on loans (448) — % (325,498) (43.6) % 325,050 (99.9) %

Interest income - loans 10,574 1.1 % 54,141 7.3 % (43,567) (80.5) %

7 unchanged sentences

Restructuring charge 195 — % 1,522 0.2 % (1,327) (87.2) %

Impairment of goodwill and other intangible assets

105,373 12.6 % 70,333 4.8 % 35,040 49.8 %

Impairment of goodwill and tradenames 1,500 0.2 % 105,373 14.1 % (103,873) (98.6) %

Interest expense - Securities lending and loan participations sold 5,794 0.6 % 66,128 8.9 % (60,334) (91.2) %

Total operating expenses 892,018 92.2 % 1,243,968 166.7 % (351,950) (28.3) %

Operating (loss) income (475,738) (56.8) % 96,051 6.6 % (571,789) n/m

Operating income (loss) 75,581 7.8 % (497,547) (66.7) % 573,128 (115.2) %

Other income (expense):

1 unchanged sentence

Dividend income 1,818 0.2 % 4,462 0.6 % (2,644) (59.3) %

Realized and unrealized losses on investments (263,686) (31.4) % (162,053) (11.1) % (101,633) 62.7 %

Change in fair value of financial instruments and other 4,614 0.6 % (3,998) (0.3) % 8,612 n/m

Gain on bargain purchase — — % 15,903 1.1 % (15,903) (100.0) %

Income (loss) from equity method investments 31 — % (152) — % 183 (120.4) %

Loss on extinguishment of debt (18,725) (2.2) % (5,409) (0.4) % (13,316) n/m

Realized and unrealized gains (losses) on investments 62,718 6.5 % (263,686) (35.3) % 326,404 (123.8) %

Change in fair value of financial instruments and other 11,349 1.2 % 4,471 0.6 % 6,878 153.8 %

Gain on sale and deconsolidation of businesses 86,213 8.9 % 306 — % 85,907 n/m

Gain on senior note exchange 67,208 6.9 % — — % 67,208 n/m

Income from equity investments 34,996 3.6 % 31 — % 34,965 n/m

Loss on extinguishment of debt (21,298) (2.2) % (18,725) (2.5) % (2,573) 13.7 %

Interest expense (92,736) (9.6) % (133,308) (17.9) % 40,572 (30.4) %

Loss from continuing operations before income taxes (878,729) (104.8) % (199,276) (13.6) % (679,453) n/m

(Provision for) benefit from income taxes (22,125) (2.6) % 39,115 2.7 % (61,240) (156.6) %

Loss from continuing operations (900,854) (107.4) % (160,161) (10.9) % (740,693) n/m

Income (loss) from continuing operations before income taxes 229,559 23.7 % (900,396) (120.7) % 1,129,955 (125.5) %

Benefit from (provision for) income taxes 9,885 1.0 % (22,013) (2.9) % 31,898 (144.9) %

Income (loss) from continuing operations 239,444 24.7 % (922,409) (123.6) % 1,161,853 (126.0) %

Income from discontinued operations, net of income taxes 70,841 7.3 % 147,470 19.8 % (76,629) (52.0) %

Net loss (774,939) (92.4) % (105,631) (7.2) % (669,308) n/m

Net loss attributable to noncontrolling interests (10,665) (1.3) % (5,721) (0.4) % (4,944) 86.4 %

Net loss attributable to B.

Riley Financial, Inc.

(764,274) (91.1) % (99,910) (6.8) % (664,364) n/m

Net income (loss) 310,285 32.1 % (774,939) (103.8) % 1,085,224 (140.0) %

Net income (loss) attributable to noncontrolling interests 2,870 0.3 % (10,665) (1.4) % 13,535 (126.9) %

Net income (loss) attributable to BRC Group Holdings, Inc.

307,415 31.8 % (764,274) (102.4) % 1,071,689 (140.2) %

Preferred stock dividends 8,060 0.8 % 8,060 1.1 % — — %

Net loss available to common shareholders $ (772,334) (92.1) % $ (107,967) (7.4) % $ (664,367) n/m

Net income (loss) available to common shareholders $ 299,355 30.9 % $ (772,334) (103.5) % $ 1,071,689 (138.8) %

n/m - Not applicable or not meaningful.

6 unchanged sentences

Wealth Management segment 158,065 16.3 % 197,468 26.5 % (39,403) (20.0) %

Financial Consulting segment 92,176 11.0 % 77,283 5.3 % 14,893 19.3 %

Communications segment 289,435 34.5 % 330,952 22.6 % (41,517) (12.5) %

E-Commerce segment 13,855 1.7 % — — % 13,855 100.0 %

All Other 90,047 10.7 % 47,992 3.3 % 42,055 87.6 %

Lingo segment 164,148 17.0 % 195,886 26.2 % (31,738) (16.2) %

magicJack segment 36,698 3.8 % 41,247 5.5 % (4,549) (11.0) %

Marconi Wireless segment 31,394 3.2 % 37,216 5.0 % (5,822) (15.6) %

UOL segment 13,145 1.4 % 15,133 2.0 % (1,988) (13.1) %

Corporate and All Other 75,965 8.1 % 109,604 14.8 % (33,639) (30.7) %

Subtotal 633,836 65.8 % 783,304 105.0 % (149,468) (19.1) %

Trading (loss) income:

Capital Markets segment (60,285) (7.2) % 16,845 1.1 % (77,130) n/m

Trading gains (losses), net:

Capital Markets segment 106,364 11.0 % (41,710) (5.6) % 148,074 (355.0) %

Wealth Management segment 17,507 1.8 % 3,278 0.4 % 14,229 434.1 %

Subtotal (57,007) (6.8) % 21,603 1.4 % (78,610) n/m

Corporate and All Other 1,659 0.2 % (18,575) (2.5) % 20,234 (108.9) %

Subtotal 125,530 13.0 % (57,007) (7.7) % 182,537 (320.2) %

Fair value adjustments on loans:

Capital Markets segment (3,131) (0.3) % (63) — % (3,068) n/m

Corporate and All Other 2,683 0.3 % (325,435) (43.6) % 328,118 (100.8) %

Subtotal (448) — % (325,498) (43.6) % 325,050 (99.9) %

Interest income - loans:

Capital Markets segment 65 — % 1,829 0.2 % (1,764) (96.4) %

Corporate and All Other 10,509 1.1 % 52,312 7.0 % (41,803) (79.9) %

Subtotal 10,574 1.1 % 54,141 7.2 % (43,567) (80.5) %

Interest income - securities lending:

1 unchanged sentence

Sale of goods:

Communications segment 5,589 0.7 % 6,737 0.5 % (1,148) (17.0) %

magicJack segment 1,236 0.1 % 1,598 0.2 % (362) (22.7) %

Marconi Wireless segment 3,390 0.4 % 3,991 0.5 % (601) (15.1) %

Consumer Products segment 181,540 18.8 % 202,597 27.1 % (21,057) (10.4) %

E-Commerce segment 10,646 1.3 % — — % 10,646 100.0 %

All Other 1,787 0.2 % 364 — % 1,423 n/m

Corporate and All Other 4,948 0.5 % 12,433 1.8 % (7,485) (60.2) %

Subtotal 191,114 19.8 % 220,619 29.6 % (29,505) (13.4) %

1 unchanged sentence

n/m - Not applicable or not meaningful.

Total revenues decreased approximately $627.2 million to $838.6 million during the year ended December 31, 2024 from $1.5 billion during the year ended December 31, 2023.

The decrease in revenues during the year ended December 31, 2024 was primarily due to a decrease in fair value adjustments on loans of $345.7 million, decrease in interest income from securities lending of $90.8 million, higher trading losses of $78.6 million, decrease in interest income from loans of $69.1 million, lower revenue from services and fees of $23.3 million, and lower revenue from sale of goods of $19.7 million.

The $345.7 million decrease in fair value adjustments related to loans was primarily driven by unfavorable changes in fair value adjustments of $222.9 million related to the loan to Vintage Capital Management, LLC, $72.2 million related to the loan to Conn’s, $26.2 million related to Core Scientific, Inc., $13.9 million related to the loan to Freedom VCM, and the remaining

decrease in fair value adjustments of $10.5 million related to other loans.

The decrease in revenue from services and fees of $23.3 million was primarily due to decreases of $56.5 million in the Capital Markets segment and $41.5 million in the Communications segment, partially offset by increases of $42.1 million in All Other, $14.9 million in the Financial Consulting segment, $13.9 million in the E-Commerce segment and $4.0 million in the Wealth Management segment.

Total revenues increased approximately $221.2 million to $967.6 million during the year ended December 31, 2025 from $746.4 million during the year ended December 31, 2024.

The increase in revenues during the year ended December 31, 2025 was primarily due to increases in revenue from fair value adjustments on loans of $325.1 million and trading gains of $182.5 million, partially offset by decreases in revenues from services and fees of $149.5 million, interest income from securities lending of $63.9 million, interest income from loans of $43.6 million, and sale of goods of $29.5 million.

The decrease in revenue of $149.5 million from services and fees in the year ended December 31, 2025 consisted of decreases in revenue of $39.4 million in the Wealth Management segment, $33.6 million in the Corporate and All Other category, $32.3 million in the Capital Markets segment, $31.7 million in the Lingo segment, $5.8 million in the Marconi Wireless segment, $4.5 million in the magicJack segment and $2.0 million in the UOL segment.

Revenues from services and fees in the Capital Markets segment decreased approximately $32.3 million, to $154.4 million during the year ended December 31, 2025 from $186.8 million during the year ended December 31, 2024.

The decrease in revenues was primarily due to decreases in revenue of $36.1 million in corporate finance, consulting, and investment banking fees, $9.5 million in commission fees, $6.7 million in dividends, $3.0 million in interest income and $2.0 million in other income, partially offset by an increase of $0.7 million in asset management fees.

Revenues from services and fees in the Wealth Management segment increased $4.0 million, to $197.5 million during the year ended December 31, 2024 from $193.5 million during the year ended December 31, 2023.

The increase in revenues was primarily due to increases in revenue of $3.2 million from wealth and asset management fees, and $1.3 million in other income, partially offset by a decrease of $0.5 million in commission fees.

Revenues from services and fees in the Financial Consulting segment increased $14.9 million, to $92.2 million during the year ended December 31, 2024 from $77.3 million during the year ended December 31, 2023.

The increase in revenues was primarily due to an increase of $21.0 million from the bankruptcy and restructuring, forensic and litigation, C&W, Interface Consulting and Farber divisions, partially offset by a decrease in revenues of $6.1 million from the automotive restructuring and finance and valuations divisions.

Revenues from services and fees in the Communications segment decreased $41.5 million to $289.4 million during the year ended December 31, 2024 from $331.0 million during the year ended December 31, 2023.

The decrease in revenues was primarily due to a decrease of $40.4 million in subscription services partially due to $18.8 million from the Lingo/Bullseye carrier business which was divested in the third quarter of 2024 and other revenue of $1.1 million.

We expect Communications segment revenue to continue to decline year over year.

Revenues from services and fees in the E-Commerce segment were $13.9 million during the year ended December 31, 2024.

These revenues include commission fees from Nogin, which we acquired in the second quarter of 2024,

Revenues from services and fees in All Other increased by $42.1 million to $90.0 million during the year ended December 31, 2024 from $48.0 million during the year ended December 31, 2023.

These revenues include merchandise rental fees and sales from bebe in which we acquired a controlling interest during the fourth quarter of 2023, and the operations of a regional environmental services business and a landscaping business that we acquired in 2022.

Revenues from services and fees in All Other increased by approximately $39.3 million related to merchandise rental fees from bebe, $10.1 million related to the operations of the regional environmental services business, and $0.6 million in other income, partially offset by a decrease of $8.0 in revenues from the landscaping business, which was sold in the third quarter of 2023.

Trading (loss) income decreased $78.6 million to a loss of $57.0 million during the year ended December 31, 2024 compared to income of $21.6 million during the year ended December 31, 2023.

This was primarily due to decreases of $77.1 million in the Capital Markets segment and $1.5 million in the Wealth Management segment.

The loss of $57.0 million during the year ended December 31, 2024 was primarily due to $64.6 million in realized loss on Freedom VCM.

The decrease in fair value adjustment of $345.7 million on our loans receivable during the year ended December 31, 2024 was primarily driven by unfavorable changes in fair value adjustments of $222.9 million related to the loan to VCM, $72.2 million related to the loan to Conn’s, $26.2 million related to Core Scientific, Inc., $13.9 million related to the loan to Freedom VCM, and the remaining decrease in fair value adjustments of $10.5 million related to other loans.

Interest income from loans decreased $69.1 million to $54.1 million during the year ended December 31, 2024 from $123.2 million during the year ended December 31, 2023.

The decrease was due to a reduction in loan receivable balances from $532.4 million as of December 31, 2023 to $90.1 million as of December 31, 2024.

Interest income from securities lending decreased $90.8 million to $70.9 million during the year ended December 31, 2024 from $161.7 million during the year ended December 31, 2023.

The decrease was due to a decrease in the securities borrowed balance from $2.9 billion as of December 31, 2023 to $43.0 million as of December 31, 2024 and business decline due to counterparties constraining their business activity with the Company.

Lower revenue was comprised of a decline of $22.9 million in corporate finance, consulting, and investment banking fees, $3.7 million in interest income, $3.6 million in commission fees, $1.8 million in dividends, and $0.3 million in other income.

The investment banking and advisory revenue decline is attributable to several factors including late SEC filings leading to a decrease in the number of advisors and a decline in counterparties and the general uneven nature of investment banking revenues.

The decreases in investment banking revenues were $20.3 million in at-the-market fees, $15.0 million in mergers and acquisitions advisory fees, and $0.6 million in investment banking underwriting fees, partially offset by an increase of $13.1 million in private placement fees.

Revenues from the Wealth Management segment are comprised of the following:

Year Ended December 31,

2025 2024 Amount %

Revenues - Services and fees

Brokerage revenues $ 69,290 $ 91,488 $ (22,198) (24.3) %

Advisory revenues 50,518 77,307 (26,789) (34.7) %

Other 38,257 28,673 9,584 33.4 %

Total services and fees revenue

158,065 197,468 (39,403) (20.0) %

Trading gains, net 17,507 3,278 14,229 434.1 %

Total revenues

$ 175,572 $ 200,746 $ (25,174) (12.5) %

Revenues from brokerage and advisory decreased $49.0 million to $119.8 million during the year ended December 31, 2025 from $168.8 million during the year ended December 31, 2024.

Brokerage revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets.

The decrease in revenues was primarily due to decreases in revenue from wealth and asset management fees due to a reduction in assets under management driven by the sale of a portion of the Company’s (W-2) Wealth Management business to Stifel Financial Corp.

(“Stifel”) in April 2025.

Refer to Note 5 - Discontinued Operations and Assets Held For Sale in the accompanying consolidated financial statements for additional information.

Total assets under management were approximately $13.0 billion and $20.7 billion at December 31, 2025 and December 31, 2024, respectively.

Of these amounts, advisory assets under management totaled approximately $4.3 billion and $6.9 billion at December 31, 2025 and December 31, 2024, respectively.

Advisory revenues were 0.26% and 0.25% of average advisory assets under management during the years ended December 31, 2025 and 2024, respectively.

The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management.

Other revenues is primarily comprised of carried interest earned from certain funds, which include investment in private company equity securities for which one of the funds includes an investment in SpaceX, tax service fees and management fees earned from comprehensive client focused services performed.

Revenues from services and fees in the Lingo segment decreased $31.7 million to $164.1 million during the year ended December 31, 2025 from $195.9 million during the year ended December 31, 2024.

The decrease in revenues was primarily due to a decrease in subscription revenue of $24.8 million, which was largely driven by the divestiture of Lingo’s wholesale carrier business in the third quarter of fiscal year 2024, and there were no revenues from this business in 2025.

The remaining decrease of $6.9 million was primarily due to a decrease in Plain Old Telephone services and Broadband customers choosing to renew their existing internet speeds with lower priced circuits.

Revenues from services and fees in the magicJack segment decreased $4.5 million to $36.7 million during the year ended December 31, 2025 from $41.2 million during the year ended December 31, 2024.

The decrease in revenues was primarily driven by decreases in the number of active subscription customers and active APP users and, to a lesser extent, decreases in sales of devices and other ancillary products and services.

Revenues from services and fees in the Marconi Wireless segment decreased $5.8 million to $31.4 million during the year ended December 31, 2025 from $37.2 million during the year ended December 31, 2024.

The decrease in revenues was primarily due to a decrease in subscription revenue due to a decline in active customers.

Revenues from services and fees in the UOL segment decreased $2.0 million to $13.1 million during the year ended December 31, 2025 from $15.1 million during the year ended December 31, 2024.

The decrease in revenues was primarily due to a decrease in subscription revenue from Internet Service Providers (“ISPs”) and digital subscriber line services and, to a lesser extent, advertising revenues.

Revenues from services and fees in the Corporate and All Other category decreased by $33.6 million to $76.0 million during the year ended December 31, 2025 from $109.6 million during the year ended December 31, 2024.

These revenues include merchandise rental fees from bebe, carried interest on certain investments, managed service fees from the Company’s e-commerce platform (Nogin, Inc., or “Nogin”), and the operations of Atlantic Coast Recycling, which was sold in March 2025.

Revenues from services and fees in the Corporate and All Other category decreased $31.2 million due to the sale of Atlantic Coast Recycling and there was a full year of revenues in 2024 and in March 2025, $10.4 million due to Nogin, which we acquired in the second quarter of 2024 and deconsolidated in the first quarter of 2025, and $4.9 million related to merchandise rental fees from bebe due to the closure of multiple stores, partially offset by an increase of $9.3 million in carried interest of certain investments, $2.3 million in asset management fees, and $1.2 million in other revenue.

Trading gains (losses), net increased $182.5 million to a gain of $125.5 million during the year ended December 31, 2025 compared to a loss of $57.0 million during the year ended December 31, 2024.

This was primarily due to increases of $148.1 million in the Capital Markets segment, $20.2 million in the Corporate and All Other category, and $14.2 million in the Wealth Management segment.

The income of $125.5 million during the year ended December 31, 2025 was primarily due to realized and unrealized gains on investments made in our proprietary trading accounts reflecting gains of $73.2 million from our investment in Babcock & Wilcox Enterprises, Inc.

common stock, $37.4 million from trading activities related to equity offerings for clients, and $9.9 million for U.S.

The loss of $57.0 million during the year ended December 31, 2024 was primarily due to realized and unrealized losses on investments made in our proprietary trading accounts reflecting losses of $64.8 million for Freedom VCM and $13.0 million for Core Scientific, partially offset by gains of $16.2 million for U.S.

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:

At Fair Value Fair Value Adjustments on Loans Receivables

December 31, Year Ended December 31,

Industry or Type of Loan 2025 2024 2025 2024

Related Party Loans Receivable:

Vintage Capital Management, LLC Retail / consumer $ 1,835 $ 2,057 $ (223) $ (222,911)

Badcock Corporation Consumer receivable portfolio — 2,169 250 (5,339)

Freedom VCM Receivables, Inc.

Consumer receivable portfolio — 3,913 1,393 (13,874)

Retail / consumer — 38,826 805 (71,724)

Torticity, LLC Application software — — — (16,433)

Great American Holdings, LLC Professional services — 1,698 — —

Other related party loans Services, oil & gas and industrial 1,000 3,239 (164) 1,610

Total related party loans receivable 2,835 51,902 2,061 (328,671)

Exela Technologies, Inc.

Technology 21,415 32,136 945 (701)

Norlin EV Limited Real estate 10 6,065 (375) (737)

Other loans receivable Various 2,043 — (3,079) 4,611

Total loans receivable $ 26,303 $ 90,103 $ (448) $ (325,498)

During the years ended December 31, 2025 and 2024, favorable (unfavorable) fair value adjustments for loans receivable from related parties totaled $2.1 million and $(328.7) million, respectively.

During the years ended December 31, 2025 and 2024, fair value adjustments for non-related party loans receivable totaled $(2.5) million and $3.2 million, respectively .

The $325.1 million favorable variance in fair value adjustments related to our loans receivable during the year ended December 31, 2025 was primarily driven by losses from fair value adjustments recorded in the prior year period of $(222.9) million related to the loan to VCM, $(71.7) million related to the loan to Conn’s, $(16.4) million related to the loan to Torticity, and $(13.9) million related to the loan to Freedom VCM with no fair value adjustments of comparable magnitude recorded in the current year period.

Interest income related to loans receivable decreased $43.6 million to $10.6 million during the year ended December 31, 2025 from $54.1 million during the year ended December 31, 2024.

The decrease was primarily due to non-accrual of interest on the following adjusted loans:

$15.6 million for VCM, $7.6 million for Conn’s, $6.0 million for Freedom VCM, which was sold in February 2025, $5.9 million for Exela Technologies Inc.

and $3.5 million for Nogin, as well as a reduction in loan receivable balances from $90.1 million as of December 31, 2024 to $26.3 million as of December 31, 2025.

Interest income related to securities lending decreased $63.9 million to $7.0 million during the year ended December 31, 2025 from $70.9 million during the year ended December 31, 2024.

The decrease was primarily due to a strategic shift to decrease securities lending activities and allocating more capital to investment banking and advisory services.

With counterparty trading limits reduced due to late SEC Company filings, the Company terminated its Options Clearinghouse Corporation’s Stock Loan/Hedging program and reduced the securities lending team resources.

Average securities lending balances declined to $82.9 million in 2025 from $1.1 billion in 2024.

Interest rate spreads, which is the difference between interest income and interest expense, in 2025 were slightly higher on average when compared to 2024.

Revenues from the sale of goods decreased $29.5 million, to $191.1 million, during the year ended December 31, 2025, from $220.6 million during the year ended December 31, 2024.

The decrease in revenues from sale of goods was primarily due to decreases of $30.6 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide and a decrease of $1.1 million from the Communications segment, partially offset by increases of $10.6 million from the E-Commerce segment, consisting of sale of goods from Nogin, which we acquired in the second quarter of 2024 and $1.4 million from All Other, consisting of sale of goods from bebe, in which we acquired a controlling interest and consolidated during the fourth quarter of 2023.

The decrease in revenues from sale of goods was attributable to decreases of $21.1 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide, $7.5 million from the Corporate and All Other category consisting of sales of goods from bebe

and Nogin, which we acquired in the second quarter of 2024 and deconsolidated in the first quarter of 2025, $0.6 million from the Marconi Wireless segment, and $0.4 million from the magicJack segment.

Operating Expenses

Direct cost of services

Direct costs decreased $0.2 million, to $213.9 million during the year ended December 31, 2024 from $214.1 million during the year ended December 31, 2023.

The decrease in direct costs of services was primarily attributable to a decrease of $18.7 million in the Communications segment, mostly offset by increases of $12.1 million in All Other, primarily from bebe which we acquired a controlling interest and consolidated during the fourth quarter of 2023, and $6.4 million in the E-Commerce segment from Nogin, which we acquired in the second quarter of 2024.

Direct cost of services decreased $74.5 million, to $139.4 million, during the year ended December 31, 2025, from $213.9 million during the year ended December 31, 2024.

The decrease in direct cost of services was primarily attributable to decreases of $37.1 million in the Lingo segment, $26.9 million of which was attributable to divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024, with the remainder mostly driven by lower subscription sales, $5.2 million in the Marconi Wireless segment due to fewer active lines and migrating our customer base to a lower cost third party network, $4.1 million in the magicJack segment due to resulting in decreases in costs attributable to fewer active customers across the business and reducing our internal network costs by migrating to third party service providers, and a decrease of $28.1 million from the Corporate and All Other category reflecting a $21.2 million decrease from the sale of Atlantic Coast Recycling in March 2025, a $4.9 million decrease from the deconsolidation of Nogin in March 2025, and a $2.0 million decrease from bebe.

Cost of goods sold

Cost of goods sold during the year ended December 31, 2025 decreased by $22.3 million to $145.4 million, from $167.6 million during the year ended December 31, 2024.

The decrease of $5.2 million is primarily comprised of a decrease in cost of goods sold of $12.0 million in the Consumer Products segment and $1.8 million in the Communications segment, partially offset by increases of $7.0 million from the E-Commerce segment consisting of Nogin, which we acquired in the second quarter of 2024, and $1.6 million from All Other and consisting of bebe, which we acquired a controlling interest and consolidated during the fourth quarter of 2023.

The decrease of $22.3 million in cost of goods sold was primarily attributable to decreases of $17.0 million in the Consumer Products segment, due to lower sales across all products, $4.3 million from the Corporate and All Other category, which includes bebe and Nogin, which we acquired in the second quarter of 2024 and deconsolidated in the first quarter of 2025, $0.7 million from the Marconi Wireless segment, and $0.3 million from the magicJack segment.

Selling, general and administrative expenses

5 unchanged sentences

Wealth Management segment 160,326 26.7 % 194,316 28.2 % (33,990) (17.5) %

Financial Consulting segment 74,578 9.8 % 64,366 8.4 % 10,212 15.9 %

Communications segment 94,084 12.4 % 109,583 14.3 % (15,499) (14.1) %

Lingo segment 56,428 9.4 % 63,455 9.2 % (7,027) (11.1) %

magicJack segment 10,682 1.8 % 11,348 1.6 % (666) (5.9) %

Marconi Wireless segment 8,898 1.5 % 8,961 1.3 % (63) (0.7) %

UOL segment 2,537 0.4 % 5,172 0.8 % (2,635) (50.9) %

Consumer Products segment 60,863 10.1 % 69,515 10.1 % (8,652) (12.4) %

E-Commerce segment

25,310 3.3 % — — % 25,310 100.0 %

Corporate and Other 120,275 15.8 % 89,752 11.7 % 30,523 34.0 %

Corporate and All Other 129,948 21.7 % 166,131 24.1 % (36,183) (21.8) %

Total selling, general & administrative expenses $ 599,748 100.0 % $ 689,410 100.0 % $ (89,662) (13.0) %

Total selling, general and administrative expenses decreased $89.7 million to $599.7 million during the year ended December 31, 2025 from $689.4 million during the year ended December 31, 2024.

The decrease of $5.1 million in selling, general and administrative expenses was due to decreases of $47.3 million in the Capital Markets segment, $15.5 million in the Communications segment, $7.6 million in the Consumer Products segment, and $0.8 million in the Wealth Management segment, mostly offset by increases of $25.3 million in the E-Commerce segment, $30.5 million in Corporate and Other, and $10.2 million in the Financial Consulting segment.

The decrease of $89.7 million in selling, general and administrative expenses was primarily due to decreases of $36.2 million in the Corporate and All Other category, $34.0 million in the Wealth Management segment, $8.7 million in the Consumer Products segment, $7.0 million in the Lingo segment, $2.6 million in the UOL segment, $0.7 million in the magicJack segment, $0.4 million in the Capital Markets segment, and $0.1 million in the Marconi Wireless segment.

Capital Markets

Selling, general and administrative expenses in the Capital Markets segment decreased by $0.4 million to $170.1 million during the year ended December 31, 2025 from $170.5 million during the year ended December 31, 2024.

The decrease was primarily due to decreases of $31.0 million in employee compensation and benefits, which primarily related to decreases in share based compensation, salaries, commissions and bonuses, $15.0 million in professional services, of which $12.9 million related to an advisory agreement which ended in August of 2023, $3.3 million in clearing and execution charges, $2.8 million in investment banking deal expenses, and $1.1 million in occupancy and related expenses, partially offset by an increase of $4.9 million in change in fair value of contingent consideration and increase of $1.0 million in foreign currency fluctuations.

An advisory agreement was terminated in August 2023 in connection with the FRG take private transaction, as more fully described in Note 2(t) to the consolidated financial statements, and there was no expense during the year ended December 31, 2024 as compared to the prior year when the expense totaled $12.9 million.

For any given reporting period in 2023, the advisory agreement would result in an expense being reported in selling, general and administrative expenses when realized and unrealized gains on certain invested balances in the Company’s broker-dealer subsidiary exceeded a minimum return on the invested balances during such period;

in addition, a decrease in the invested balance in value during such reporting period would result in the reporting of a credit to selling, general and administrative expense.

During the year ended December 31, 2023, the Company recorded an advisory fee of $12.9 million in accordance with the advisory agreement due to the realized and unrealized gains earned.

The decrease was primarily due to decreases of $3.2 million in employee compensation and benefit related expenses, which primarily related to decreases in salaries, benefits and commissions paid, and other payroll expenses related to reductions in headcount from loss of personnel which management believes was impacted by delays in SEC filings during 2025, $0.8 million in occupancy-related costs, and $0.6 million in depreciation and amortization expense, partially offset by increases of $2.2 million in professional services for increased legal fees due to litigation and $2.0 million in other expenses including write-offs and contingent consideration.

Wealth Management

Selling, general and administrative expenses in the Wealth Management segment decreased by $34.0 million to $160.3 million during the year ended December 31, 2025 from $194.3 million during the year ended December 31, 2024.

The decrease was primarily due to decreases of $2.5 million in occupancy and related expenses, $2.1 million in other expenses, and $0.6 million in change in fair value of contingent consideration, partially offset by an increase of $4.4 million in employee compensation and benefits, primarily related to commissions paid.

Financial Consulting

Selling, general and administrative expenses in the Financial Consulting segment increased by $10.2 million to $74.6 million during the year ended December 31, 2024 from $64.4 million during the year ended December 31, 2023.

The increase was due to increases of $6.8 million in employee compensation and benefits, related to a business acquired in the third quarter of 2023, an increase in headcount, and an increase in variable compensation, $1.4 million in change in fair value of contingent consideration, $1.1 million in other expenses, and $0.9 million in legal settlements.

Communications

Selling, general and administrative expenses in the Communications segment decreased by $15.5 million to $94.1 million during the year ended December 31, 2024 from $109.6 million during the year ended December 31, 2023.

The decrease was primarily due to decreases of $9.7 million in employee compensation and benefits, due to lower headcount, $4.4 million in depreciation and amortization expenses due to items being fully amortized, $1.8 million in regulatory taxes due to receiving credits, and $1.7 million in occupancy and related expenses, partially offset by an increase of $1.3 million in professional services and $0.8 million in other expenses.

The decrease in employee compensation and benefits and other expenses was primarily due to cost savings in 2024 resulting from the implementation of cost savings programs in the second half of 2023 that included a reduction in headcount and other operating expenses and sale of the Lingo carrier business in the third quarter of 2024.

The decrease was primarily due to a reduction in headcount from the sale of a portion of the Company’s (W-2) Wealth Management business to Stifel in April 2025 which resulted in decreases of $30.4 million in employee compensation and benefit related expenses, $4.0 million in other expenses primarily due to legal settlement of contingent consideration, $2.0 million in depreciation and amortization due to the sale of assets, and $0.2 million in professional services, partially offset by an increase of $2.6 million in occupancy-related costs driven by multiple office closures and lease impairments.

Selling, general and administrative expenses in the Lingo segment decreased $7.0 million to $56.4 million during the year ended December 31, 2025 from $63.5 million during the year ended December 31, 2024.

The decrease was primarily related to the divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024 including decreases of $2.5 million in employee compensation and benefit related expenses, $1.9 million in occupancy-related costs, $1.7 million in professional services, $0.5 million in other expenses, and $0.3 million in depreciation and amortization expense.

Selling, general and administrative expenses in the magicJack segment decreased $0.7 million to $10.7 million during the year ended December 31, 2025 from $11.3 million during the year ended December 31, 2024.

The decrease was primarily due to decreases of $0.4 million in occupancy-related costs primarily related to software maintenance and license expenses and $0.3 million in other expenses.

Marconi Wireless

Selling, general and administrative expenses in the Marconi Wireless segment decreased $0.1 million to $8.9 million during the year ended December 31, 2025 from $9.0 million during the year ended December 31, 2024.

The decrease was primarily due to a decrease of $0.3 million in employee compensation and benefit related expenses, primarily related to headcount reductions and severances paid in 2025 due to terminations, offset by an increase of $0.3 million in other expenses, primarily related to higher bad debt expense.

Selling, general and administrative expenses in the UOL segment decreased $2.6 million to $2.5 million during the year ended December 31, 2025 from $5.2 million during the year ended December 31, 2024.

The decrease was primarily due to decreases of $2.3 million in depreciation and amortization due to non-recurring items from the acquisition being fully amortized in the prior year, and $0.4 million in employee compensation and benefit related expenses.

Consumer Products

Selling, general and administrative expenses in the Consumer Products segment decreased by $8.7 million to $60.9 million during the year ended December 31, 2025 from $69.5 million during the year ended December 31, 2024.

The decrease was primarily due to decreases of $1.9 million in depreciation and amortization expense due to items being fully amortized, $1.5 million in professional services, $1.4 million in employee compensation and benefits due to reduced headcount and a reversal of performance based shares in the prior year, $0.7 million in travel and entertainment expenses, and $0.7 million in marketing costs, and $1.4 million in other expenses.

Selling, general and administrative expenses for the E-Commerce segment increased by $25.3 million during the year ended December 31, 2024 from Nogin which was acquired in the second quarter of 2024.

Corporate and Other

Selling, general and administrative expenses for the Corporate and Other category increased $30.5 million to $120.3 million during the year ended December 31, 2024 from $89.8 million during the year ended December 31, 2023.

The increase was primarily due to increases of $16.6 million in professional services, of which $2.2 million was attributable to new acquisitions, and $6.7 million in occupancy related expenses, of which $6.6 million was attributable to new acquisitions, partially offset by a decrease of $1.2 million in employee compensation and benefits, of which $16.0 million primarily related to decreases in share based compensation and other variable compensation, mostly offset by an increase of $14.8 million attributable to new acquisitions.

Other selling, general and administrative expenses increased $7.6 million from bebe, which we acquired a controlling interest and consolidated during the fourth quarter of 2023, $2.1 million from the regional environmental services business, $3.9 million in transaction costs, $1.7 million in legal settlements, and $0.6 million in other expenses.

These increases in other selling, general and administrative expenses were partially offset by $2.1 million related to the landscaping business that was sold in 2023, decreases of $4.1 million in foreign currency fluctuations, and a $1.3 million change in the fair value of contingent consideration.

Impairment of goodwill and other intangible assets.

We recognized impairment charges of $105.4 million during the year ended December 31, 2024.

We performed an interim impairment test as of June 30, 2024 and annual impairment tests as of December 31 2024, as further discussed in Note 10 of the consolidated financial statements.

Based on the results of the impairment tests, we recorded non-cash impairment charges of $26.7 million related to goodwill and $5.0 million related to tradenames in the Consumer Products segment and $57.7 million related to goodwill and $16.0 million related to other intangible assets in the E-Commerce segment.

We recognized impairment charges of $70.3 million during the year ended December 31, 2023.

We performed an interim impairment test as of September 30, 2023 and a year-end impairment test as of December 31, 2023, as further discussed in Note 10 of the consolidated financial statements.

Based on the results of the impairment tests, we recorded a non-cash impairment charge of $68.6 million consisting of a goodwill impairment charge of $53.1 million and a tradename impairment charge of $15.5 million in the Consumer Products segment.

We previously recognized $1.7 million in impairment in the second quarter of 2023 for a tradename in the Capital Markets segment that we no longer use.

The decrease was primarily due to decreases of $3.5 million in professional services, primarily due to higher legal fees incurred in 2024 for intellectual property and patents as compared to 2025, $2.5 million in employee compensation and benefits due

to management’s ongoing efforts to streamline operations and optimize resources across all regions, $1.5 million in other expenses, $0.6 million in occupancy-related expenses and $0.5 million in depreciation and amortization.

Corporate and All Other

Selling, general and administrative expenses for the Corporate and All Other category decreased $36.2 million to $129.9 million during the year ended December 31, 2025 from $166.1 million during the year ended December 31, 2024.

The decrease was due to a decrease in selling, general and administrative expenses of $16.9 million due to the deconsolidation of Nogin at the end of the first quarter of 2025 and a decrease of $11.6 million due to the sale of Atlantic Coast Recycling in March 2025.

The decrease in selling, general and administrative expenses from the deconsolidation of Nogin includes decreases of $7.6 million in employee compensation and benefits, $1.8 million in occupancy-related costs, $1.5 million in professional services, $1.4 million in depreciation and amortization, and $4.6 million of other selling, general and administrative expenses.

The decrease in selling, general and administrative expenses resulting from the sale of Atlantic Coast Recycling includes decreases of $4.3 million in employee compensation and benefits, $2.4 million in occupancy-related costs, $3.2 million in depreciation and amortization, $0.5 million in professional services, and $5.6 million of other selling, general and administrative expenses.

In addition, for all other operating segments including corporate functions, bebe, and individual investment and lending entities, salaries and share-based compensation decreased $5.6 million and $4.8 million, respectively, partially offset by increases of $4.0 million in professional services expenses and $3.3 million in variable employee bonuses.

Impairment of Goodwill and Tradenames.

We recognized a non-cash impairment charge of $1.5 million during the year ended December 31, 2025, related to the Targus tradename in the Consumer Products segment, a decrease from $105.4 million during the year ended December 31, 2024.

We performed an interim impairment test as of June 30, 2024 and annual impairment tests as of December 31 2024, as further discussed in Note 14 - Goodwill and Other Intangible Assets in the accompanying consolidated financial statements.

Based on the results of the impairment tests, in 2024 the non-cash impairment charges included $26.7 million related to goodwill and $5.0 million related to tradenames in the Consumer Products segment and $57.7 million related to goodwill and $16.0 million related to other intangible assets in the Corporate and All Other category.

Interest Expense - Securities Lending and Loan Participations Sold.

Interest expense - Securities lending and loan participation sold decreased $79.3 million to $66.1 million during the year ended December 31, 2024 from $145.4 million during the year ended December 31, 2023.

The decrease was due to a decrease in the securities loaned and loan participations sold balances from $2.9 billion as of December 31, 2023 to $33.9 million as of December 31, 2024 as a result of a decline in our securities lending activities due to counterparties constraining their business activity with the Company.

Interest expense related to securities lending and loan participation sold decreased $60.3 million to $5.8 million during the year ended December 31, 2025 from $66.1 million during the year ended December 31, 2024.

Interest expense drivers are directly linked to interest income related to securities lending as discussed further above.

Other Income (Expense).

Other income included interest income of $3.6 million during the year ended December 31, 2024 compared to $3.9 million during the year ended December 31, 2023.

Dividend income was $4.5 million during the year ended December 31, 2024 compared to $12.7 million during the year ended December 31, 2023, due to sales of securities investments, $5.4 million of which was related to Synchronoss Technologies, Inc.

("Synchronoss") as more fully discussed in Note 2(t) to the consolidated financial statements.

Realized and unrealized losses on investments were $263.7 million during the year ended December 31, 2024 compared to $162.1 million during the year ended December 31, 2023.

The change was primarily due to a decrease in overall values of our investments.

Change in fair value of financial instruments and other in the amount of $4.6 million during the year ended December 31, 2024 was primarily due to $2.5 million of gain on the sale of a retail location.

Change in fair value of financial instruments and other in the amount of $4.0 million during the year ended December 31, 2023 was primarily due to losses on remeasurement of the bebe equity method investment of $12.9 million recorded in the third quarter of 2023, partially offset by a $9.3 million gain on the sale of certain assets related to our landscaping business in 2023.

Gain on bargain purchase of $15.9 million during the year ended December 31, 2023 was related to the acquisition of a majority interest in bebe in the fourth quarter of 2023.

Income from equity method investments was zero during the year ended December 31, 2024 compared to a loss of $0.2 million during the year ended December 31, 2023.

Loss on extinguishment of debt was $18.7 million during the year ended December 31, 2024 compared to $5.4 million during the year ended December 31, 2023.

The loss on extinguishment of debt was primarily from accelerated paydowns of the Nomura facility.

Total other income (expense) experienced a favorable variance of $556.8 million from a net other expense of $(402.8) million during the year ended December 31, 2024 to net other income of $154.0 million during the year ended December 31, 2025.

The favorable variance was primarily driven by favorable variances of $326.4 million in realized and unrealized gains and losses on investments, $85.9 million gain on sale and deconsolidation of businesses, $67.2 million in gains on senior notes exchanges, $35.0 million in income from equity investments, and $40.6 million in interest expense.

Realized and unrealized gains (losses) on investments were $62.7 million during the year ended December 31, 2025, compared to $(263.7) million during the year ended December 31, 2024, and is comprised of the following:

Realized and Unrealized Gains (Losses)

Other Income (Expense) - Realized & Unrealized Gains (Losses)

Public Equity Securities:

Babcock & Wilcox Enterprises, Inc.

- common stock $ 55,804 $ 1,181

Babcock & Wilcox Enterprises, Inc.

- preferred stock 1,157 1,830

Alta Equipment Group, Inc.

- common stock — (3,537)

Double Down Interactive Co., Ltd - common stock (7,087) 11,977

Synchronoss Technologies, Inc.

- common stock — 6,368

Applied Digital Corporation - common stock 21,343 —

Other public equities (10,132) (2,163)

Subtotal 61,085 15,656

Private Equity Securities:

Freedom VCM Holdings, LLC — (221,042)

Kanaci Technologies, LLC — (14,466)

BJES Holdings, LLC — (37,440)

Other private equities (2,943) (6,997)

Subtotal (2,943) (279,945)

Corporate bonds 4,548 898

Partnership interests and other 28 (295)

Total $ 62,718 $ (263,686)

The favorable variance of $326.4 million was primarily due to unfavorable fair value adjustments recorded in the prior year period of $(221.0) million for Freedom VCM, $(37.4) million for BJES Holdings, LLC, and $(14.5) million for Kanaci Technologies, LLC with no respective fair value adjustments recorded in the current year, as well as $21.3 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 $12.0 million coupled with aggregate unfavorable fair value adjustments recorded in the current year of $(7.1) million, which were driven in large part by an overall decrease in the public share price during the period, for Double Down Interactive Co., Ltd.

The $85.9 million favorable variance on gain on sale and deconsolidation of businesses was due to gains of $52.4 million and $5.4 million related to the sales of a portion of the Company’s Wealth Management and Atlantic Coast Recycling businesses, respectively, as more fully discussed in Note 5 - Discontinued Operations and Assets Held For Sale, and $28.4 million related to the deconsolidation of Nogin, as more fully discussed in Note 3 - Variable Interest Entities, recorded during the current year with no transactions of comparable magnitude recorded in the prior year period.

The $67.2 million favorable variance related to the gains on senior notes exchanges were due to five private transactions with institutional investors whereby senior notes were exchanged for new notes bearing interest at 8.00% due in 2028 during the year ended December 31, 2025, as more fully discussed in Note 19 - Senior Notes Payable, with no similar transactions in the prior year period.

The $35.0 million favorable variance on income from equity investments was primarily driven by cash disbursements received and equity in net earnings from the Company’s investment in GA Joann Retail Partnership, LLC equity

investment accounted for under the equity method during year ended December 31, 2025, as more fully discussed in Note 11 - Equity Method Investments, with no comparable amounts of similar magnitude in the prior year period.

Interest expense was $92.7 million during the year ended December 31, 2025, compared to $133.3 million during the year ended December 31, 2024.

The decrease in interest expense was due to lower debt balances during the year ended December 31, 2025.

The decreases in interest expense primarily consisted of $14.4 million from the Capital Markets segment, $2.3 million from the Communications segment, $3.7 million from the Consumer Products segment and $3.7 million from Corporate and other, partially offset by an increase of $1.1 million from the E-Commerce segment.

Loss from Continuing Operations Before Income Taxes .

Loss from continuing operations before income taxes increased $679.5 million to a loss of $878.7 million during the year ended December 31, 2024 from a loss of $199.3 million during the year ended December 31, 2023.

The change was primarily due to a decrease in revenues of approximately $627.2 million, a change in realized and unrealized losses on investments and fair value adjustments of $101.6 million, a 2023 gain on bargain purchase of $15.9 million, a decrease in dividend income of $8.3 million, and a decrease in interest income of $0.3 million, partially offset by a decrease in operating expenses of $55.4 million, a decrease in interest expense of $22.9 million, an increase to change in fair value of financial instruments and other of $8.6 million and an increase in income from equity method investments of $0.2 million.

(Provision for) Benefit from Income Taxes.

Provision for income taxes was $22.1 million during the year ended December 31, 2024 compared to a benefit from income taxes of $39.1 million during the year ended December 31, 2023.

The effective income tax rate was expense of 2.5% during the year ended December 31, 2024 as compared to a benefit of 19.6% during the year ended December 31, 2023.The provision for income taxes and the effective income tax rate were unfavorably impacted as a result of an increase in the valuation allowance for deferred tax assets in 2024.

Loss from Continuing Operations.

Loss from continuing operations was $900.9 million during the year ended December 31, 2024 compared to loss of $160.2 million during the year ended December 31, 2023.

The change was due to a change in operating (loss) income of $571.8 million, an increase in realized and unrealized losses on investments of $101.6 million, a change in provision for income taxes of $61.2 million, a 2023 gain on bargain purchase of $15.9 million, a decrease of $8.3 million in dividend income, and a decrease of $0.3 million in interest income, partially offset by a decrease in interest expense of $22.9 million, an increase to change in fair value of financial instruments and other of $8.6 million and an increase in income from equity method investments of $0.2 million.

The decreases in interest expense primarily consisted of $31.5 million from the Corporate and All Other category, $6.0 million from the Lingo segment, $2.5 million from the Consumer Products segment, and $0.5 million from the Capital Markets segment.

The decrease in interest expense primarily consisted of $23.4 million from the issuance of senior notes, $21.1 million from the Nomura term loan, $5.7 million from the Lingo term loan, $2.9 million from the Targus term loan and revolver, $1.4 million from the Nomura revolving credit facility, $1.2 million from our notes payable, partially offset by increases in interest expense of $12.3 million from the Oaktree term loan, $2.4 million from the BRPAC term loan, and $0.4 million from the Targus/FGI revolving credit facility.

Provision for Income Taxes.

Benefit from income taxes was $9.9 million during the year ended December 31, 2025 compared to provision for income taxes of $22.0 million during the year ended December 31, 2024.

The effective income tax benefit rate was (4.3%) during the year ended December 31, 2025 as compared to an effective income tax rate of 2.4% during the year ended December 31, 2024.

The effective income tax benefit rate is less than the federal statutory rate of 21.0%, primarily due to the full valuation allowance for deferred income taxes and the benefit recorded during the year ended December 31, 2025 for the release of uncertain tax positions.

Income 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.

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 year ended December 31, 2024.

Loss from discontinued operations, net of tax for Brands Transaction was $109.6 million during the year ended December 31, 2024 compared to income from discontinued operations of $48.6 million during the year ended December 31, 2023.

The loss from discontinued operations is primarily due to realized and unrealized losses incurred on the brand equity investments during the year ended December 31, 2024 from the planned securitization transaction and sale of equity investments by the Company’s majority owned subsidiary bebe, as more fully discussed in Note 4 to the consolidated financial statements.

Loss from discontinued operations, net of tax for Brands Transaction was $109.6 million during the year ended December 31, 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 year ended December 31, 2024.

Income from discontinued operations, net of tax, for Great American Group was $235.6 million for the year ended December 31, 2024, compared to income from discontinued operations, net of tax, of $6.0 million during the year ended December 31, 2023.

The $229.6 million favorable variance was primarily driven by the $258.3 million gain recognized from the sale of the Great American Group, partially offset by a $31.8 million decrease in operating income driven by lower sales of goods.

Refer to Note 4 to the consolidated financial statements for additional information.

Net Loss Attributable to Noncontrolling Interest and Redeemable Noncontrolling Interests .

Net loss attributable to noncontrolling interests and redeemable noncontrolling interests represents the proportionate share of net income generated by membership interests of partnerships that we do not own.

The net loss attributable to noncontrolling interests and redeemable noncontrolling interests was $10.7 million during the year ended December 31, 2024 compared to loss of $5.7 million during the year ended December 31, 2023.

Net Loss Attributable to the Company .

Net loss attributable to the Company during the year ended December 31, 2024 was $764.3 million compared to net loss attributable to the Company of $99.9 million during the year ended December 31, 2023.

The change was primarily due to a decrease in operating income of $571.8 million, a change in realized and unrealized losses on investments and fair value adjustments of $101.6 million, a change in the provision for income taxes of $61.2 million, a 2023 gain on bargain purchase of $15.9 million, a decrease in dividend income of $8.3 million, a change in net loss attributable to noncontrolling interests and redeemable noncontrolling interests of $4.9 million, and a decrease in interest income of $0.3 million, partially offset by a decrease in interest expense of $22.9 million, an

increase in change in fair value of financial instruments and other of $8.6 million, and an increase in income from equity method investments of $0.2 million.

Income from discontinued operations, net of tax, for Great American Group was $235.6 million during the year ended December 31, 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 years ended December 31, 2025 and 2024.

Income from discontinued operations, net of tax for GlassRatner and Farber was $70.8 million for the year ended December 31, 2025, compared to income from discontinued operations of $21.6 million during the year ended December 31, 2024.

Refer to Note 5 - Discontinued Operations and Assets Held For Sale in the accompanying consolidated financial statements for additional information.

Net Income (Loss) Attributable to Noncontrolling Interests .

Net income (loss) attributable to noncontrolling interests represents the proportionate share of net income generated by membership interests of partnerships that we do not own.

The net income attributable to noncontrolling interests was $2.9 million during the year ended December 31, 2025, compared to a loss of $10.7 million during the year ended December 31, 2024.

Preferred Stock Dividends .

4 unchanged sentences

Unpaid dividends will accrue until paid in full.

Net Loss Available to Common Shareholders .

Net loss available to common shareholders during the year ended December 31, 2024 was $772.3 million compared to net loss available to common shareholders of $108.0 million during the year ended December 31, 2023.

The change was primarily due to a decrease in operating income of $571.8 million, a change in realized and unrealized losses on investments of $101.6 million, a change in the provision for income taxes of $61.2 million, a 2023 gain on bargain purchase of $15.9 million, a decrease in dividend income of $8.3 million, a change in net loss attributable to noncontrolling interests and redeemable noncontrolling interests of $4.9 million, and a decrease in interest income of $0.3 million, partially offset by a decrease in interest expense of $22.9 million, an increase in change in fair value of financial instruments and other of $8.6 million, and an increase in income from equity method investments of $0.2 million.

Results of Operations

The following period to period comparisons of our financial results are not necessarily indicative of future results.

Year Ended December 31, 2023 Compared to Year Ended December 31, 2022

Consolidated Statements of Operations

(Dollars in thousands)

December 31, 2023 Year Ended

December 31, 2022 Change

Amount % Amount % Amount %

Services and fees $ 898,750 61.3 % $ 815,951 86.9 % $ 82,799 10.1 %

Trading income (loss) 21,603 1.5 % (148,294) (15.8) % 169,897 (114.6) %

Fair value adjustments on loans 20,225 1.4 % (54,334) (5.8) % 74,559 (137.2) %

Interest income - loans 123,244 8.4 % 157,669 16.8 % (34,425) (21.8) %

Interest income - securities lending 161,652 11.0 % 83,144 8.8 % 78,508 94.4 %

Sale of goods 240,303 16.4 % 85,347 9.1 % 154,956 181.6 %

Total revenues 1,465,777 100.0 % 939,483 100.0 % 526,294 56.0 %

Operating expenses:

Direct cost of services 214,065 14.6 % 118,535 12.6 % 95,530 80.6 %

Cost of goods sold 172,836 11.8 % 60,754 6.5 % 112,082 184.5 %

Selling, general and administrative expenses 764,926 52.2 % 654,826 69.7 % 110,100 16.8 %

Restructuring charge 2,131 0.1 % 9,011 1.0 % (6,880) (76.4) %

Impairment of goodwill and other intangible assets 70,333 4.8 % — — % 70,333 100.0 %

Interest expense - Securities lending and loan participations sold 145,435 9.9 % 66,495 7.1 % 78,940 118.7 %

Total operating expenses 1,369,726 93.4 % 909,621 96.9 % 460,105 50.6 %

Operating income 96,051 6.6 % 29,862 3.1 % 66,189 n/m

Other income (expense):

Interest income 3,875 0.3 % 2,735 0.3 % 1,140 41.7 %

Dividend income 12,747 0.9 % 7,851 0.8 % 4,896 62.4 %

Realized and unrealized losses on investments (162,053) (11.1) % (247,540) (26.3) % 85,487 (34.5) %

Change in fair value of financial instruments and other (3,998) (0.3) % 10,188 1.1 % (14,186) (139.2) %

Gain on bargain purchase 15,903 1.1 % — — % 15,903 100.0 %

(Loss) income from equity method investments (152) — % 3,570 0.4 % (3,722) (104.3) %

Loss on extinguishment of debt (5,409) (0.4) % — — % (5,409) 100.0 %

Interest expense (156,240) (10.7) % (141,003) (15.0) % (15,237) 10.8 %

Loss from continuing operations before income taxes (199,276) (13.6) % (334,337) (35.6) % 135,061 (40.4) %

Benefit from income taxes 39,115 2.7 % 65,252 6.9 % (26,137) (40.1) %

Loss from continuing operations (160,161) (10.9) % (269,085) (28.6) % 108,924 (40.5) %

Income from discontinued operations, net of income taxes 54,530 3.7 % 112,491 12.0 % (57,961) (51.5) %

Net loss (105,631) (7.2) % (156,594) (16.7) % 50,963 (32.5) %

Net loss (income) attributable to noncontrolling interests and redeemable noncontrolling interests (5,721) (0.4) % 3,235 0.3 % (8,956) n/m

Net loss attributable to B.

Riley Financial, Inc.

(99,910) (6.8) % (159,829) (17.0) % 59,919 (37.5) %

Preferred stock dividends 8,057 0.5 % 8,008 0.9 % 49 0.6 %

Net loss available to common shareholders $ (107,967) (7.4) % $ (167,837) (17.9) % $ 59,870 (35.7) %

n/m - Not applicable or not meaningful.

The table below and the discussion that follows are based on how we analyze our business.

December 31, 2023 Year Ended

December 31, 2022 Change

Amount % Amount % Amount %

Services and fees:

Capital Markets segment $ 249,036 17.0 % $ 292,933 31.1 % $ (43,897) (15.0) %

Wealth Management segment 193,487 13.2 % 230,735 24.6 % (37,248) (16.1) %

Financial Consulting segment 77,283 5.3 % 50,357 5.4 % 26,926 53.5 %

Communications segment 330,952 22.6 % 228,129 24.3 % 102,823 45.1 %

All Other 47,992 3.3 % 13,797 1.5 % 34,195 n/m

Subtotal 898,750 61.4 % 815,951 86.9 % 82,799 10.1 %

Trading income (loss):

Capital Markets segment 16,845 1.1 % (151,816) (16.2) % 168,661 (111.1) %

Wealth Management segment 4,758 0.3 % 3,522 0.4 % 1,236 35.1 %

Subtotal 21,603 1.4 % (148,294) (15.8) % 169,897 (114.6) %

Fair value adjustments on loans:

Capital Markets segment 20,225 1.4 % (54,334) (5.8) % 74,559 (137.2) %

Interest income - loans:

Capital Markets segment 123,244 8.4 % 157,669 16.8 % (34,425) (21.8) %

Interest income - securities lending:

Capital Markets segment 161,652 11.0 % 83,144 8.8 % 78,508 94.4 %

Sale of goods:

Communications segment 6,737 0.5 % 7,526 0.8 % (789) (10.5) %

Consumer segment 233,202 15.9 % 77,821 8.3 % 155,381 199.7 %

All Other 364 — % — — % 364 100.0 %

Subtotal 240,303 16.4 % 85,347 9.1 % 154,956 181.6 %

Total revenues $ 1,465,777 100.0 % $ 939,483 100.0 % $ 526,294 56.0 %

n/m - Not applicable or not meaningful.

Total revenues increased approximately $526.3 million to $1.5 billion during the year ended December 31, 2023 from $939.5 million during the year ended December 31, 2022.

The increase in revenues during the year ended December 31, 2023 was primarily due to improvement in trading income of $169.9 million, favorable fair value adjustments on loans of $74.6 million, an increase in revenue from sale of goods of $155.0 million, an increase in revenue from services and fees of $82.8 million, and an increase in revenue from interest income - securities lending of $78.5 million, offset by a decrease from interest income - loans of $34.4 million.

The increase in the fair value of the portfolio of securities and other investments owned during the year ended December 31, 2023 was primarily due to the increase in overall values in the stock market.

The increase in revenue from services and fees of $82.8 million was primarily due to increases of $102.8 million in the Communications segment, $26.9 million in the Financial Consulting segment, and $34.2 million in All Other, partially offset by decreases in revenue of $43.9 million in the Capital Markets segment and $37.2 million in the Wealth Management segment.

Revenues from services and fees in the Capital Markets segment decreased approximately $43.9 million, to $249.0 million during the year ended December 31, 2023 from $292.9 million during the year ended December 31, 2022.

The decrease in revenues was primarily due to decreases in revenue of $40.5 million in incentive fees and $8.9 million in commission fees, partially offset by an increase of $5.6 million in interest income.

The Capital Markets segment faced a more challenging capital markets merger and acquisitions environment in 2023.

Revenues from services and fees in the Wealth Management segment decreased $37.2 million, to $193.5 million during the year ended December 31, 2023 from $230.7 million during the year ended December 31, 2022.

The decrease in revenues was primarily due to decreases in revenue of $27.5 million from wealth and asset management fees, $9.3 million in commission fees, and $0.4 million in other income.

The restructuring of the Wealth Management segment in Q3 of 2022 resulted in a reduction in financial advisors, and the decrease in revenues of 2023 has the full year impact of these financial advisors no longer being part of our platform.

Revenues from services and fees in the Financial Consulting segment increased $26.9 million, to $77.3 million during the year ended December 31, 2023 from $50.4 million during the year ended December 31, 2022.

The increase in revenues was primarily due to an increase of $32.6 million from the bankruptcy and restructuring, automotive restructuring, Farber and C&W divisions offset by a decrease in revenues of $5.7 million from the risk compliance and forensic and litigation divisions.

Revenues from services and fees in the Communications segment increased $102.8 million to $331.0 million during the year ended December 31, 2023 from $228.1 million during the year ended December 31, 2022.

The increase in revenues was primarily due to an increase of $115.4 million in subscription services from inclusion of a full year of operating results from the acquisition of a controlling interest in Lingo in the second quarter of 2022 and the acquisition of BullsEye in the third quarter of 2022, partially offset by decreases in subscription revenue of $10.0 million and other revenue of $2.6 million for UOL, magicJack and Marconi Wireless.

We expect UOL, magicJack and Marconi Wireless subscription revenue to continue to decline year over year.

Revenues from services and fees in All Other increased by $34.2 million to $48.0 million during the year ended December 31, 2023 from $13.8 million during the year ended December 31, 2022.

Revenues from services and fees in All Other increased by approximately $18.1 million related to the full year operations of a regional environmental services business (which was acquired in September 2022), $12.0 million related to merchandise rental fees from bebe, which was acquired in October 2023, and revenues from the landscaping business.

The landscaping business had $8.0 million of revenues in 2023 and was sold in the third quarter of 2023.

Trading income (loss) increased $169.9 million to a gain of $21.6 million during the year ended December 31, 2023 compared to loss of $148.3 million during the year ended December 31, 2022.

This was primarily due to increases of $168.7 million in the Capital Markets segment and $1.2 million in the Wealth Management segment.

The gain of $21.6 million during the year ended December 31, 2023 was primarily due to realized and unrealized gains on investments made in our proprietary trading accounts.

The increase in fair value adjustment of $74.6 million on our loans receivable during the year ended December 31, 2023 is primarily due to favorable fair value adjustments of $69.5 million for Core Scientific, Inc., $41.2 million for Exela Technologies, Inc., offset by $27.7 million unfavorable adjustments for other related party loans.

Core Scientific, Inc.

provides digital infrastructure for bitcoin mining and high-performance computing.

Core Scientific, Inc.

filed Chapter 11 bankruptcy in 2022, leading to a significant mark down of the loan receivable in the fourth quarter of 2022.

Subsequent to the Chapter 11 restructuring, and during the first quarter of 2023, there was a significant rebound in bitcoin prices resulting in significant growth and value assumptions.

The fair value adjustment for Exela Technologies, Inc.

was primarily due to paydowns on the term loan and revolver, relative to the underlying collateral coverage by the publicly traded XELA 2026 Senior Notes.

Interest income from loans decreased $34.4 million to $123.2 million during the year ended December 31, 2023 from $157.7 million during the year ended December 31, 2022.

The decrease was due to paydowns on our Badcock Receivables I loan receivable portfolio.

Interest income from securities lending increased $78.5 million to $161.7 million during the year ended December 31, 2023 from $83.1 million during the year ended December 31, 2022.

The increase in interest income from securities lending was primarily due to increased interest rates.

Revenues from the sale of goods increased $155.0 million, to $240.3 million during the year ended December 31, 2023 from $85.3 million during the year ended December 31, 2022.

The increase in revenues from sale of goods was primarily due to increases of $155.4 million from the acquisition of Targus in the fourth quarter of 2022.

Operating Expenses

Direct Cost of Services

Direct costs increased $95.5 million, to $214.1 million during the year ended December 31, 2023 from $118.5 million during the year ended December 31, 2022.

The increase in direct costs of services was primarily attributable to increases of $75.3 million in the Communications segment from the acquisitions of a controlling interest in Lingo during the second quarter of 2022 and BullsEye during the third quarter of 2022, and $20.2 million in All Other due to other acquisitions made during 2023 and subsequent to the first quarter of 2022.

Cost of goods sold

Cost of goods sold during the year ended December 31, 2023 increased by $112.1 million to $172.8 million, from $60.8 million during the year ended December 31, 2022.

The increase of $112.1 million is primarily comprised of an increase in cost of goods sold in the Consumer Products segment of $112.5 million, which was primarily due to owning Targus for the full year 2023 as compared to 2022 when we acquired Targus in October 2022.

Selling, General and Administrative Expenses

Selling, general and administrative expenses during the years ended December 31, 2023 and 2022 were comprised of the following:

December 31, 2023 Year Ended

December 31, 2022 Change

Amount % Amount % Amount %

Capital Markets segment $ 228,991 30.0 % $ 179,498 27.4 % $ 49,493 27.6 %

Wealth Management segment 195,087 25.5 % 263,622 40.3 % (68,535) (26.0) %

Financial Consulting segment 64,366 8.4 % 46,791 7.1 % 17,575 37.6 %

Communications segment 109,583 14.3 % 84,001 12.8 % 25,582 30.5 %

Consumer Products segment 77,147 10.1 % 17,471 2.7 % 59,676 n/m

Corporate and Other 89,752 11.7 % 63,443 9.7 % 26,309 41.5 %

Total selling, general & administrative expenses $ 764,926 100.0 % $ 654,826 100.0 % $ 110,100 16.8 %

Total selling, general and administrative expenses increased $110.1 million to $764.9 million during the year ended December 31, 2023 from $654.8 million during the year ended December 31, 2022.

The increase of $110.1 million in selling, general and administrative expenses was due to increases of $59.7 million in the Consumer Products segment, $49.5 million in the Capital Markets segment, $26.3 million in Corporate and Other, $25.6 million in the Communications segment, and $17.6 million in the Financial Consulting segment, partially offset by a decrease of $68.5 million in the Wealth Management segment.

Capital Markets

Selling, general and administrative expenses in the Capital Markets segment increased by $49.5 million to $229.0 million during the year ended December 31, 2023 from $179.5 million during the year ended December 31, 2022.

The increase was primarily due to changes in amounts between years of $78.8 million in professional services, of which $77.3 million related to an advisory agreement which ended in August of 2023, and $1.7 million in change in fair value of contingent consideration, partially offset by decreases of $21.7 million in employee compensation and benefits due to a decrease in fee income in 2023 as compared to 2022 which resulted in lower variable compensation, $4.5 million in depreciation and amortization, and $2.4 million in foreign currency fluctuation and $2.4 million in other expenses.

Wealth Management

Selling, general and administrative expenses in the Wealth Management segment decreased by $68.5 million to $195.1 million during the year ended December 31, 2023 from $263.6 million during the year ended December 31, 2022.

The decrease was primarily due to decreases of $38.9 million in employee compensation and benefits, $13.7 million in legal settlements and penalties, $5.3 million in other expenses, $4.4 million in professional services, $2.9 million in occupancy and related expenses, $2.1 million in clearing charges, and $1.2 million in depreciation and amortization.

Financial Consulting

Selling, general and administrative expenses in the Financial Consulting segment increased by $17.6 million to $64.4 million during the year ended December 31, 2023 from $46.8 million during the year ended December 31, 2022.

The increase was primarily due to increases of $13.4 million in employee compensation and benefits, as a result of an increase in headcount from acquisitions, $3.1 million in other expenses, and $1.1 million in travel and entertainment expenses.

Communications

Selling, general and administrative expenses in the Communications segment increased by $25.6 million to $109.6 million during the year ended December 31, 2023 from $84.0 million during the year ended December 31, 2022.

The increase was primarily due to increases of $11.1 million in employee compensation and benefits $6.8 million in depreciation and amortization expenses, and $2.7 million in occupancy related costs, all of which were in large part driven by the acquisition of Lingo and BullsEye in the second and third quarters of fiscal year 2022, respectively.

Other selling general and administrative expenses increased $11.1 million due to the acquisition Lingo and BullsEye in subsequent to the first quarter of fiscal year 2022.

The increase from these acquisitions was partially offset by decreases of $4.4 million in other expenses, $0.9 million in transaction costs, and $0.8 million in marketing expenses.

Consumer Products

Selling, general and administrative expenses in the Consumer Products segment increased by $59.7 million to $77.1 million during the year ended December 31, 2023 from $17.5 million during the year ended December 31, 2022.

The increase was primarily due to the inclusion of the full year of results in the current year after the acquisition of Targus in the fourth quarter of 2022.

Corporate and Other

Selling, general and administrative expenses for the Corporate and Other category increased $26.3 million to $89.8 million during the year ended December 31, 2023 from $63.4 million during the year ended December 31, 2022.

The increase was primarily due to increases of $10.3 million in professional services, of which $0.7 million was attributable to new acquisitions, $4.7 million in occupancy related costs, of which $3.3 million was attributable to new acquisitions, $4.3 million in employee compensation and benefits driven in large part by acquisitions made subsequent to the first quarter of fiscal year 2022.

Other selling general and administrative expenses increased $1.8 million from the acquisition of bebe in which we acquired a controlling interest during the fourth quarter of 2023, $5.4 million in change in fair value of contingent consideration, and $5.2 million in foreign currency fluctuations, partially offset by decreases of $3.8 million from the acquisition of a regional environmental services business and a decrease of $1.6 million in other expenses.

Impairment of goodwill and other intangible assets.

We recognized impairment charges of $70.3 million during the year ended December 31, 2023.

We performed an interim impairment test as of September 30, 2023 and a year-end impairment test as of December 31, 2023, as further discussed in Note 10 of the consolidated financial statements.

We previously recognized $1.7 million in impairment in the second quarter of 2023 for a tradename in the Capital Markets segment that we no longer use.

There was no impairment recognized during the year ended December 31, 2022.

Interest expense - Securities lending.

Interest expense - Securities lending increased $78.9 million to $145.4 million during the year ended December 31, 2023 from $66.5 million during the year ended December 31, 2022.

The increase was due to an increase in the securities loaned balances from $2.3 billion as of December 31, 2022 to $2.9 billion as of December 31, 2023.

Other Income (Expense).

Other income included interest income of $3.9 million during the year ended December 31, 2023 compared to $2.7 million during the year ended December 31, 2022.

Dividend income was $12.7 million during the year ended December 31, 2023 compared to $7.9 million during the year ended December 31, 2022.

Realized and unrealized losses on investments were $162.1 million during the year ended December 31, 2023 compared to $247.5 million during the year ended December 31, 2022.

The change was primarily due to a decrease in overall values of our investments.

Change in fair value of financial instruments and other in the amount of $4.0 million during the year ended December 31, 2023 was primarily due to losses on remeasurement of the bebe equity method investment of $12.9 million recorded in the third quarter of 2023 and remeasurement of mandatorily redeemable noncontrolling interest in an investment of $0.8 million, partially offset by a $9.3 million gain on the sale of certain assets related to our landscaping business in 2023.

Gain on bargain purchase of $15.9 million during the year ended December 31, 2023 was related to the acquisition of a majority interest in bebe in the fourth quarter of 2023.

Income from equity method investments was a loss of $0.2 million during the year ended December 31, 2023 compared to income of $3.6 million during the year ended December 31, 2022.

Loss on extinguishment of debt was $5.4 million during the year ended December 31, 2023.

Interest expense was $156.2 million during the year ended December 31, 2023 compared to $141.0 million during the year ended December 31, 2022.

The increase in interest expense was due to higher interest rates due to variable rates on certain of our outstanding debt during the year ended December 31, 2023, which also were responsible for higher interest income as discussed above.

The increases in interest expense primarily consisted of $9.1 million from the Capital Markets segment, $6.5 million from the Communications segment, $6.6 million from the Consumer Products segment, partially offset by a $6.9 million increase from Corporate and other.

Loss from Continuing Operations Before Income Taxes .

Loss from continuing operations before income taxes decreased $135.1 million to a loss of $199.3 million during the year ended December 31, 2023 from a loss of $334.3 million during the year ended December 31, 2022.

The change was primarily due to an increase in revenues of approximately $526.3 million, a change in realized and unrealized losses on investments of $85.5 million, a 2023 gain on bargain purchase of $15.9 million, an increase in dividend income of $4.9 million, and an increase in interest income of $1.1 million, partially offset by an increase in operating expenses of $460.1 million, an increase in interest expense of $15.2 million, a decrease to change in fair value of financial instruments and other of $14.2 million and a decrease in income from equity method investments of $3.7 million.

Benefit from Income Taxes.

Benefit from income taxes was $39.1 million during the year ended December 31, 2023 compared to a benefit from income taxes of $65.3 million during the year ended December 31, 2022.

The effective income tax rate was a benefit of 19.6% during the year ended December 31, 2023 as compared to a benefit of 19.5% during the year ended December 31, 2022.

Loss from Continuing Operations.

Loss from continuing operations was $160.2 million during the year ended December 31, 2023 compared to loss of $269.1 million during the year ended December 31, 2022.

The change was due to an increase in operating income of $66.2 million, a change in realized and unrealized losses on investments of $85.5 million, a 2023 gain on bargain purchase of $15.9 million, an increase in dividend income of $4.9 million, and an increase in interest income of $1.1 million, partially offset by an increase in interest expense of $15.2 million, a change in fair value of financial instruments and other of $14.2 million and a decrease in income from equity method investments of $3.7 million.

(Loss) Income 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 year ended December 31, 2023.

Income from discontinued operations, net of tax, for the Brands Transaction was $48.6 million during the year ended December 31, 2023, compared to income from discontinued operations, net of tax, of $88.2 million during the year ended December 31, 2022.

Refer to Note 4 to the consolidated financial statements for additional information.

On November 15, 2024, we completed the sale of our Great American Group and its results have been presented as discontinued operations for the year ended December 31, 2023.

Income from discontinued operations, net of tax, for Great American Group was $6.0 million during the year ended December 31, 2023, compared to income from discontinued operations, net of tax, of $24.3 million during the year ended December 31, 2022.

Refer to Note 4 to the consolidated financial statements for additional information.

Net Loss (Income) Attributable to Noncontrolling Interest and Redeemable Noncontrolling Interests .

Net loss (income) attributable to noncontrolling interests and redeemable noncontrolling interests represents the proportionate share of net income generated by membership interests of partnerships that we do not own.

The net loss attributable to

noncontrolling interests and redeemable noncontrolling interests was $5.7 million during the year ended December 31, 2023 compared to income of $3.2 million during the year ended December 31, 2022.

Net Loss Attributable to the Company .

Net loss attributable to the Company during the year ended December 31, 2023 was $99.9 million compared to net loss attributable to the Company of $159.8 million during the year ended December 31, 2022.

The change was primarily due to an increase in operating income of $66.2 million, a change in realized and unrealized losses on investments of $85.5 million, a 2023 gain on bargain purchase of $15.9 million, an increase in dividend income of $4.9 million, a change in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests of $9.0 million, and an increase in interest income of $1.1 million, partially offset by a decrease in benefit from income taxes of $26.1 million, an increase in interest expense of $15.2 million, a decrease in change in fair value of financial instruments and other of $14.2 million, and a decrease in income from equity method investments of $3.7 million.

Preferred Stock Dividends .

Preferred stock dividends were $8.1 million during the years ended December 31, 2023 and 2022.

Dividends on the Series A preferred paid during the years ended December 31, 2023 and 2022 were $0.4296875 per depository share.

Dividends on the Series B preferred paid during the years ended December 31, 2023 and 2022 were $0.4609375 per depository share.

Net Loss Available to Common Shareholders .

Net loss available to common shareholders during the year ended December 31, 2023 was $108.0 million compared to net loss available to common shareholders of $167.8 million during the year ended December 31, 2022.

The change was primarily due to an increase in operating income of $66.2 million, a change in realized and unrealized losses on investments of $85.5 million, a 2023 gain on bargain purchase of $15.9 million, a change in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests of $9.0 million, an increase in dividend income of $4.9 million, and an increase in interest income of $1.1 million, partially offset by a decrease in benefit from income taxes of $26.1 million, an increase in interest expense of $15.2 million, a decrease in change in fair value of financial instruments and other of $14.2 million, and a decrease in income from equity method investments of $3.7 million.

Liquidity and Capital Resources

Our operations are funded through a combination of existing cash on hand, cash generated from operations, borrowings under our senior notes payable, term loans and credit facilities, and special purposes financing arrangements.

During the years ended December 31, 2024 and 2023, we generated net loss attributable to the Company of $764.3 million and net loss attributable to the Company of $99.9 million, respectively.

The Company operates a number of businesses in its segments that provide steady cash flows and operating income throughout the year.

However, our cash flows and profitability are impacted by capital market engagements.

As of December 31, 2024, we had $154.9 million of unrestricted cash and cash equivalents, $100.5 million of restricted cash, $282.3 million of securities and other investments, at fair value, $90.1 million of loans receivable, at fair value, and $1.8 billion of borrowings outstanding.

The borrowings outstanding of $1.8 billion as of December 31, 2024 included $1.5 billion of borrowings from the issuance of the series of senior notes that are due at various dates ranging from February 28, 2025 to August 31, 2028 with interest rates ranging from 5.00% to 6.50%, $199.4 million in term loans borrowed pursuant to the Targus, Lingo, BRPI Acquisition Co LLC (“BRPAC"), and Nomura credit agreements discussed below, $16.3 million of revolving credit facility under the Targus credit facility discussed below, and $28.0 million of notes payable.

As more fully described in Note 25 – Subsequent Events, we entered into a new term loan facility on February 26, 2025 with Oaktree affiliated companies, with a maturity date of February 26, 2028 and the proceeds were primarily used to repay all amounts outstanding under the Nomura Credit Agreement as more fully described in Note 13 – Term Loans and Revolving Credit Facility.

We completed the Brands Transaction in October 2024 and the Great American Group Transaction in November 2024 as more fully discussed in Note 4.

The proceeds from these transactions were used for general working capital purposes, make principal payments on the term loan with Nomura, and retire all of the $145.2 million of outstanding 6.375% senior notes due February 28, 2025.

We also completed the sale of 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”) and the sale of part of Wealth Management business for $26.0 million (the “Wealth Transaction”) as more fully described in Note 4 and the sale of the Company’s financial consulting business for $117.8 million on June 27, 2025.

From March 26, 2025 to July 11, 2025, we completed five private exchange transactions with an institutional investors pursuant to which approximately $115.8 million of aggregate principal amount of the Company’s 5.50% Senior Notes due March 2026, approximately $2.1 million aggregate principal amount of 6.50% Senior Notes due September 2026, approximately $146.4 million aggregate principal amount of the Company’s 5.00% Senior Notes due December 2026, approximately $51.1 million aggregate principal amount of the Company’s 6.00% Senior Notes due January 2028, and approximately $39.5 million aggregate principal amount of the Company’s 5.25% Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $228.4 million aggregate principal amount of New Notes, whereupon the Exchanged Notes were cancelled.

After the completion of the Exchanged Notes described above, we have approximately $100,818 of 5.50% Senior Notes due March 31, 2026 as more fully described in Note 14 – Senior Notes Payable.

We believe that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, cash expected to be generated from operating activities and proceeds received from the Atlantic Coast Transaction, the Wealth Management Transaction and the sale of the Company’s financial consulting business will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements.

Due to the fact that we are no longer a well-known seasoned issuer and no longer eligible to file a short form registration statement with the SEC, accessing the capital markets could take longer and cost more than would otherwise be the case.

We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan.

Our operations and debt obligations are funded through a combination of existing cash on hand, cash generated from operations, monetization of investments and asset sales, borrowings under our senior notes payable, term loans and credit facilities, other financing arrangements, and obligations under operating leases.

The Company operates multiple business segments that provide sources of cash flow and operating income, which include a mix of businesses with recurring revenue models and transactional businesses with uneven cashflows.

With our primary business in capital markets and investment banking, we have expertise in accessing public and private capital markets and in transacting investments and operating companies.

We use our expertise to buy and sell assets and investments on our balance sheet and to access private and public capital, which are described in the 2025 and 2024 activity summarized below.

During the year ended December 31, 2025, the Company’s sources and uses of cash from investing, financing and operations included the following.

The Company completed the sale of (a) a majority owned subsidiary, Atlantic Coast Recycling, LLC, on March 3, 2025 for proceeds of approximately $68.6 million;

(b) the partial sale of the Wealth Management business for $26.0 million;

and (c) the sale of the Company’s financial consulting business (together, “GlassRatner”) on June 27, 2025 for $117.8 million, as more fully described in Note 5 - Discontinued Operations and Assets Held For Sale in the accompanying consolidated financial statements.

Additionally, from our securities and investments owned we had net proceeds of approximately $27.6 million, which excludes certain trading activity related to broker dealer operations and approximately $57.4 million in net proceeds from loans receivable.

Net cash used in operating activities was $59.7 million inclusive of a balance sheet increase in Securities and other investments owned of $165.4 million in operating assets.

The Company executed a new term loan facility on February 26, 2025 with Oaktree affiliated companies, with a maturity date of February 26, 2028 and the proceeds were primarily used to repay all amounts outstanding under the Nomura Credit Agreement.

The Company has made additional repayments of $97.5 million on its Oaktree loan.

On February 28, 2025, the Company fully redeemed the $145.2 million of outstanding 6.375% Senior Notes on their maturity date.

The Company completed five private exchange transactions with institutional lenders pursuant to which the lenders exchanged $355.0 million in senior notes for $228.4 million in New Notes, whereupon the exchanged notes were cancelled.

Refer to Note 18 - Term Loans and Revolving Credit Facility and Note 19 – Senior Notes Payable for additional information.

During the year ended December 31, 2024, the Company’s sources and uses of cash from investing financing and operations included completion of the Brands Transaction sale for $189.3 million in net proceeds in October 2024 and the Great American Group Transaction for a sale price of approximately $203.0 million in November 2024.

Additionally, from our securities and investments owned we had net proceeds of approximately $249.9 million, which excludes certain trading activity related to broker dealer operations and approximately $26.8 million in net proceeds from loans receivable.

Net cash provided by operating activities was $263.6 million inclusive of a balance sheet reduction in Securities and other investments owned of $699.6 million in operating assets.

The Company made principal payments of $375.6 million on the term loans with Nomura, and repaid the $140.5 million of outstanding 6.750% Senior notes due May 31, 2024.

In the next 12 months, in addition to funding the Company’s operations, several debt obligations will be due including approximately $457.2 million in Senior Note maturities (RILYK in March 2026, RILYN in September 2026, and RILYG in December 2026) and a total of $16.0 million in term loan amortization payments.

The Company also has approximately $15.4 million of obligations due under operating leases, along with operational expenditures and investment opportunities in the ordinary course of business.

For additional information regarding our debt obligations and related agreements, refer to Note 17 - Notes Payable, Note 18 - Term Loans and Revolving Credit Facility, and Note 19 - Senior Notes Payable in the accompanying consolidated financial statements.

The Company expects capital expenditures to be less than $7.0 million for the next twelve months.

To fund the short-term obligations due in the next 12 months, management plans to use a combination of existing cash on hand, cash generated from continuing operations, proceeds from investment and assets sales, and public and private capital market options.

As of December 31, 2025, the Company had $226.6 million of unrestricted cash and cash equivalents, $446.8 million of securities and other investments owned, and $26.3 million of loans receivable, at fair value.

Additionally, the Company will evaluate external sources of liquidity including public and private debt refinancing, bond swaps, buybacks or exchanges, and equity capital raises.

Among many factors, the Company considers the timing of debt obligation payoffs, the cost of capital, and future value of assets when determining the sources used to fund debt obligations.

We believe these liquidity sources provide sufficient cash resources to meet our debt obligation and operating cash flow requirements in the next 12 months.

Our long-term debt obligations beyond 12 months include approximately $844.6 million on Senior Notes and Senior Secured Second Lien Notes due 2028 and $62.5 million in Oaktree term loans maturing February 2028.

Additionally, the Company’s term loan through Banc of California has $16.0 million annually in amortization payments due through maturity in January 2030 with approximately $30.6 million of obligations due under operating leases.

The Company has $6.6 million outstanding through the revolving credit facility through FGI as of December 31, 2025, with final maturity date of August 20, 2028.

The Company expects capital expenditures to be less than $7.0 million annually.

The Company will fund long-term obligations beyond 12 months using the same tactics described in the short-term liquidity.

Additionally, the Company will evaluate operating company sales as a source of long-term liquidity.

As with short term obligations, the Company considers many factors including timing of debt obligation payoffs, the cost of capital, and future value when determining the source used to fund debt obligations.

As long-term capital planning is a continual process, the Company may also choose to address certain long term capital and obligations over the next twelve months.

The Company’s debt structure as of December 31, 2025 included borrowings of $1.4 billion primarily comprised of $1.3 billion of Senior Notes and Senior Secured Second Lien Notes with varying maturity dates from March 31, 2026 through August 31, 2028, with fixed interest rates ranging from 5.00% to 8.00%.

Additionally, we have $128.1 million in outstanding term loans borrowed pursuant to the Oaktree Capital Management, L.P.

and BRPI Acquisition Co LLC (“BRPAC”) credit agreements, and $6.6 million of revolving credit facility under the Targus credit facility, which are all subject to variable rates.

The Company is compliant with its debt obligation requirements and maintains processes to monitor ongoing compliance.

For additional information regarding our debt obligations, covenant compliance, and related agreements, refer to Note 17 - Notes Payable, Note 18 - Term Loans and Revolving Credit Facility, and Note 19 - Senior Notes Payable in the accompanying consolidated financial statements.

The Company completed the sale of GlassRatner in 2025 and the Great American Group and the Brands Transaction in 2024 as described in this liquidity section generating cash proceeds of $117.8 million in 2025 and $392.3 million in 2024.

These dispositions were treated as discontinued operations in our financial reporting.

While these discontinued operations had cash flow from operating activities of $20.2 million in 2025 and $42.9 million in 2024, the sale proceeds were used to enhance the Company’s liquidity through paydown of debt.

Please see Note 5 - Discontinued Operations and Assets Held For Sale for additional details.

The Company believes it has sufficient excess liquidity to meet our short-term obligations within the next twelve months and will pursue capital market options to reduce long-term debt, extend maturities, or remix our capital structure when advantageous.

There is no assurance on favorable refinancing terms, which will be subject to market conditions and our credit profile.

Cash Flow Summary

Following is a summary of our cash flows provided by (used in) operating activities, investing activities and financing activities during the years ended December 31, 2025 and 2024.

A discussion of cash flows during the year ended December 31, 2022 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under the heading “Liquidity and Capital Resources” in our Annual Report on Form 10-K during the year ended December 31, 2023, filed with the SEC on April 24, 2024, which is available free of charge on the SEC’s website at www.sec.gov.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

1 unchanged sentence

(Dollars in thousands)

Net cash provided by (used in):

Net cash (used in) provided by:

Operating activities $ (59,711) $ 263,551

2 unchanged sentences

Effect of foreign currency on cash 202 (9,301)

Net increase (decrease) in cash, cash equivalents and restricted cash $ 22,837 $ (37,087)

Cash provided by operating activities was $263.6 million during the year ended December 31, 2024 compared to cash provided by operating activities of $24.5 million during the year ended December 31, 2023.

Cash provided by operating activities during the year ended December 31, 2024 included a net loss of $774.9 million adjusted for noncash items of $323.7 million and changes in operating assets and liabilities of $714.8 million.

Noncash items of $323.7 million included fair value adjustments of $327.6 million, impairment of goodwill and tradenames of $105.4 million, depreciation and amortization of $45.4 million, deferred income taxes of $25.9 million, share-based compensation of $19.1 million, loss on extinguishment of debt of $19.2 million, depreciation of rental merchandise of $15.1 million, provision for credit losses of $6.0 million, income allocated to and fair value adjustment for mandatorily redeemable noncontrolling interests of $1.2 million, and dividends from equity method investments of $0.2 million, partially offset by gain on disposal of discontinued operations of $217.5 million, non-cash interest and other of $23.3 million, effect of foreign currency on operations of $0.2 million, and gain on sale of business, disposal of fixed assets, and other of $0.2 million.

Cash provided by operating activities during the year ended December 31, 2023 included net loss of $105.6 million adjusted for noncash items of $97.5

million and changes in operating assets and liabilities of $32.7 million.

Noncash items of $97.5 million included impairment of goodwill and tradenames of $70.3 million, depreciation and amortization of $49.6 million, share-based compensation of $45.1 million, provision for credit losses of $7.1 million, loss on extinguishment of debt of $5.3 million, depreciation of rental merchandise of $4.1 million, income allocated to and fair value adjustment for mandatorily redeemable noncontrolling interests of $1.8 million, dividends from equity method investments of $0.4 million, and income from equity method investments of $0.2 million, partially offset by deferred income taxes of $40.9 million, gain on bargain purchase of $15.9 million, fair value adjustments of $10.7 million, non-cash interest and other of $9.7 million, gain on sale of business, disposal of fixed assets, and other of $9.0 million, and effect of foreign currency on operations of $0.3 million.

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

$ (27,399) $ 22,837

Cash used in operating activities was $59.7 million during the year ended December 31, 2025, compared to cash provided by operating activities of $263.6 million, during the year ended December 31, 2024.

The reduction of $323.3 million in net cash provided by operating activities in 2025 was primarily due to $865.0 million less cash generated from securities and other investments owned, as fewer securities positions were sold to provide liquidity to fund operations, partially offset by an increase of $600.7 million in net income, net of non-cash items.

Cash provided by investing activities was $311.5 million during the year ended December 31, 2025, compared to cash provided by investing activities of $440.5 million, during the year ended December 31, 2024.

During the year ended December 31, 2024, cash provided by investing activities consisted of cash received from sale of Brands Interests of $234.1 million, sale of Great American Group of $167.1 million, loans receivable repayment of $149.0 million, sale of loans receivable of $31.0 million, proceeds from loan participations sold of $6.0 million, and proceeds from sale of business and other of $0.3 million, partially offset by cash used for purchases of loans receivable of $118.7 million, acquisition of businesses of $19.1 million, purchases of property and equipment and intangible assets of $8.0 million, and purchases of equity method investments of $1.1 million.

During the year ended December 31, 2023, cash provided by investing activities consisted of cash received from loans receivable repayment of $606.7 million, funds received from trust account of subsidiary of $175.8 million, sale of loans receivable of $85.0 million, and proceeds from sale of business and other of $17.5 million, partially offset by cash used for purchases of loans receivable of $545.0 million, acquisition of businesses of $26.2 million, purchases of property and equipment and intangible assets of $7.7 million, and purchases of equity method investments of $4.9 million.

The decrease of $129.1 million in net cash provided by investing activities in 2025 was primarily due to a reduction of $192.1 million in proceeds received from sales of businesses ($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 and $26.0 million in proceeds from the sale of the Wealth Management business in 2025, compared to $234.1 million in proceeds received from the sale of Brands Interests and $167.1 million in proceeds received from the sale of the Great American Group business in 2024), partially offset by $39.8 million in distributions received from equity investment Joann Retail, a new investment in 2025, 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.

Cash used in financing activities was $279.4 million during the year ended December 31, 2025, compared to cash used in financing activities of $671.9 million, during the year ended December 31, 2024.

During the year ended December 31, 2024, cash used in financing activities primarily consisted of repayment on our term loans of $444.8 million, redemption of senior notes of $140.5 million, repayment of our revolving line of credit of $116.7 million, payment of dividends on our common shares of $33.7 million, payment for contingent consideration of $12.9 million, distributions to noncontrolling interests of $10.7 million, payment of dividends on our preferred shares of $8.1 million, repayment of our notes payable and other of $6.7 million, payment of debt issuance and offering costs of $3.5 million, and ESPP and payment of employment taxes on vesting of restricted stock of $3.2 million, partially offset by proceeds from revolving line of credit of $89.3 million, proceeds from notes payable of $15.0 million, contributions from noncontrolling interests of $3.9 million and proceeds from exercise of warrants of $0.7 million.

During the year ended December 31, 2023, cash used in financing activities primarily consisted of repayment on our term loans of $520.8 million, repayment of our revolving line of credit of $303.0 million, redemption of subsidiary temporary equity and distributions of $175.8 million, payment of dividends on our common shares of $141.1 million, repurchase of our common stock of $69.5 million, redemption of senior notes of $58.9 million, payment of debt issuance costs of $28.0 million, repayment of our notes payable of $13.8 million, payment of dividends on our preferred shares of $8.1 million, payment of employment taxes on vesting of restricted stock of $7.6 million, distribution to noncontrolling interests of $6.5 million, and payment for contingent consideration of $1.9 million, partially offset by proceeds from term loans of $628.2 million, proceeds from revolving line of credit of $219.2 million, proceeds from our offering of common stock of $115.0 million, contributions from noncontrolling interests of $6.1 million, proceeds from our offering of preferred stock of $0.5 million, and proceeds from issuance of senior notes of $0.2 million.

Credit Agreements

Targus Credit Agreement

On October 18, 2022, Targus Borrower, among others, entered into a credit agreement (“Targus Credit Agreement”) with PNC Bank, National Association (“PNC”), as agent and security trustee for a five-year $28.0 million term loan and a five-year $85.0 million revolver loan, which was used to finance part of the acquisition of Targus.

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 $176.6 million including $39.1 million of accounts receivable and $57.5 million of inventory as of December 31, 2024.

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.

The Targus Credit Agreement also contains customary representations and warranties,

affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

If an event of default were to have occurred, the agent would have been entitled to take various actions, including the acceleration of amounts outstanding under the Targus Credit Agreement.

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

1 and Amendment No.

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

Amendment No.

2 also provided, among other things, with a cure right for the Company to provide a capital contribution to Targus in the event of a financial covenant breach (the "Keepwell").

For the period ended September 30, 2023, the FCCR covenant was not fulfilled in accordance with the Targus Credit Agreement, and for the period ended December 31, 2023, the FCCR and minimum EBITDA covenant was not fulfilled in accordance with the Targus Credit Agreement.

However, the amendments to the Targus Credit Agreement and the capital contributions made to the subsidiary cured the covenant breaches.

On June 27, 2024 the Company entered into Amendment No.

3 to the Targus Credit Agreement to replace the terminating Canadian benchmark interest rate with the Term CORRA Reference Rate.

For the period ended June 30, 2024, the minimum EBITDA covenant was also breached.

On August 14, 2024, the Company contributed $1.6 million to Targus to cure a minimum EBITDA financial covenant requirement for the period ended June 30, 2024.

For the period ended September 30, 2024, the minimum EBITDA covenant was also breached.

On November 7, 2024, the Company entered into Amendment No.

4 to the Targus Credit Agreement, which among other things, reduced revolving loan sub-limits, modified the FCCR covenant, removed the minimum EBITDA requirement, imposed a minimum undrawn availability covenant, and modified the terms of the Keepwell.

Amendment No.

4 to the Targus Credit Agreement also waived the September 30, 2024 minimum EBITDA covenant breach.

Concurrently with the effectiveness of Amendment No.

4 to the Targus Credit Agreement, the Company repaid the outstanding balance of the term loan in full with $2.1 million of revolver loan advances and $7.5 million of cash from the Company.

On May 9, 2025, the Targus Borrower entered into Amendment No.

5 to the Targus Credit Agreement, which among other things, (i) required quarterly repayments of revolver loan advances in an amount equal to $2.5 million commencing on September 30, 2025 and continuing until the total outstanding amount thereunder is paid in full, (ii) reduced the maximum revolving commitments from $30.0 million to $25.0 million, (iii) required the repayment of $5.0 million of outstanding revolving advances and (iv) requires that the Targus Borrower pay a deferred amendment fee of $1.0 million in the event the Company is unable to refinance the obligations under the Targus Credit Agreement by July 31, 2025.

On July 25, 2025, the Targus Borrower entered into Amendment No.

6 to the Targus Credit Agreement, which among other things, (i) reduced the deferred amendment fee of $1.0 million to $0.2 million, due and payable on July 25, 2025, and (ii) requires that the Targus Borrower pay an additional deferred amendment fee of $0.9 million in the event the Company is unable to refinance the Targus Credit Agreement by August 15, 2025.

On August 15, 2025, the Targus Borrower entered into Amendment No.

7 to the Targus Credit Agreement, which among other things, (i) required the Targus Borrower to pay an additional deferred amendment fee of $0.1 million in the event the Targus Borrower is unable to refinance the Targus Credit Agreement by August 15, 2025, and (ii) requires the Targus Borrower to pay an additional deferred amendment fee of $0.9 million in the event the Targus Borrower is unable to refinance the Targus Credit Agreement by August 20, 2025.

In connection with the above amendments to the Targus Credit Agreement, the Company entered into Amendment No.

2 to the Keepwell on May 9, 2025, Amendment No.

3 to the Keepwell on July 25, 2025, and Amendment No.

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.

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

The Company is in compliance with all financial covenants with the Targus Credit Agreement, as amended, and no defaults or events of default, as defined in the credit agreement, were noted as of December 31, 2024.

The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus an applicable margin of 5.75%.

The 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%.

As of December 31, 2024 and 2023, the outstanding balance on the term loan was zero and $17.8 million (net of unamortized debt issuance costs of $0.4 million), respectively.

As of December 31, 2024 and 2023, the outstanding balance on the revolver loan was $16.3 million and $43.8 million, respectively.

The average borrowings under the revolver loan was $21.4 million and $56.7 million during the year ended December 31 2024 and 2023, respectively.

available for borrowings under the Targus Credit Agreement was $5.4 million and $1.8 million at December 31, 2024, and 2023, respectively.

Interest expense on these loans during the years ended December 31, 2024, 2023 and 2022 was $4.2 million, $7.3 million, and $1.3 million (including amortization of deferred debt issuance costs and unused commitment fees of $1.0 million, $0.7 million, and $0.2 million), respectively.

In connection with the principal payments made on the term loan during the year ended December 31, 2024, we recorded losses of the extinguishment of this debt in the amount of $0.8 million, which was included in the consolidated statements of operations in 2024.

The interest rate on the term loan was 10.45%, 10.20% and 8.43% and the interest rate on the revolver loan ranged between 8.44% to 11.25%, between 8.45% to 11.25% and between 6.03% to 9.25% as of December 31, 2024, 2023 and 2022, respectively.

The weighted average interest rate on the revolver loan was 10.39%, 8.53% and 6.68% as of December 31, 2024, 2023 and 2022, respectively.

Targus/FGI Credit Agreement

On August 20, 2025, the Targus Borrower and the FGI Loan Parties entered into the Targus/FGI Credit Agreement with FGI, as agent and for a three-year $30.0 million revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the existing Targus Credit Agreement with PNC.

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

The Targus/FGI Credit Agreement is a revolving line of credit facility with a receivable purchase feature under which the purchase of eligible receivables is on a full recourse basis with each borrower retaining the risk of non-payment.

If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement.

As required under the Targus/FGI Credit Agreement, B.

Riley Commercial Capital, LLC, a wholly owned subsidiary of the Company, entered into an amendment to an existing intercompany loan and security agreement to extend an additional subordinated loan to the Targus Borrower at the closing of the Targus/FGI Credit Agreement in the amount of $5.0 million increasing the aggregate principal amount of such loan from $5.0 million to $10.0 million.

Lingo Credit Agreement

On August 16, 2022, Lingo Management, (the “Lingo Borrower”), entered into a credit agreement (the “Lingo Credit Agreement”) by and among the Lingo Borrower, the Company as the secured guarantor, and Banc of California, N.A.

in its capacity as administrative agent and lender, for a five-year $45.0 million term loan.

This loan was used to finance part of the purchase of BullsEye by the Lingo Borrower.

On September 9, 2022, the Lingo Borrower entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the "New Lender") for an incremental term loan of $7.5 million, increasing the principal balance of the term loan to $52.5 million.

On November 10, 2022, the Lingo Borrower entered into the Second Amendment to the Lingo Credit Agreement with KeyBank National Association for an incremental term loan of $20.5 million, increasing the principal balance of the term loan to $73.0 million.

The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment.

As of December 31, 2024, 2023, and 2022, the interest rate on the Lingo Credit Agreement was 7.91%, 8.70%, and 7.89% respectively.

The Lingo Credit Agreement is guaranteed by the Company and the Lingo Borrower's subsidiaries and secured by certain Lingo assets and equity interests as collateral which totals approximately $228.7 million defined in the Lingo Credit Agreement which includes $12.3 million of accounts receivable.

The agreement contains certain covenants, including those limiting the Lingo Borrower's ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the

nature of its businesses, engage in transactions with related parties, make certain investments or pay dividends.

In addition, the Lingo Credit Agreement requires the Lingo Borrower to maintain certain financial ratios.

The Lingo Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

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

We are in compliance with all financial covenants in the Lingo Credit Agreement as of December 31, 2024.

Principal outstanding is due in quarterly installments.

The quarterly installments from March 31, 2025 to June 30, 2027 are in the amount of $3.7 million, and the remaining principal balance is due at final maturity on August 16, 2027.

As of December 31, 2024 and 2023, the outstanding balance on the term loan was $52.4 million (net of unamortized debt issuance costs of $0.6 million) and $63.2 million (net of unamortized debt issuance costs of $0.7 million), respectively.

Interest expense on the term loan during the years ended December 31, 2024 was $5.8 million (including amortization of deferred debt issuance costs of $0.5 million), $6.4 million (including amortization of deferred debt issuance costs of $0.3 million) and $1.6 million (including amortization of deferred debt issuance costs of $0.1 million), respectively.

On January 6, 2025, as discussed below BRPAC entered into an amended and restated credit agreement (the “BRPAC Amended Credit Agreement”) with the Banc of California, in the capacity as 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 Credit Agreement and the Lingo Credit Agreement was effectively terminated upon repayment on January 6, 2025.

bebe Credit Agreement

As a result of the Company obtaining a majority ownership interest in bebe on October 6, 2023, bebe's credit agreement with SLR Credit Solutions (the “bebe Credit Agreement”) for a $25.0 million five-year term loan with a maturity date of August 24, 2026 is included in the Company's long-term debt.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 5.50% to 6.00% per annum, depending on the total fixed charge coverage ratio as defined in the bebe Credit Agreement.

As of December 31, 2023, the interest rate on the bebe Credit Agreement was 11.14%.

The bebe Credit Agreement is collateralized by a first lien on all bebe assets and pledges of capital stock including equity interests.

The agreement contains certain covenants, including those limiting the borrower’s 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.

In addition the agreement requires bebe to maintain certain financial ratios.

The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

As of December 31, 2024 and 2023, the outstanding balance on the term loan was zero (net of unamortized debt issuance costs of zero) and $22.5 million (net of unamortized debt issuance costs of $0.6 million), respectively.

Interest expense on the term loan during the year ended December 31, 2024 and 2023 was $2.7 million (including amortization of deferred debt issuance costs of $0.6 million and allocated to income from discontinued operations, net of income taxes in the consolidated statement of operations) and $0.7 million (including amortization of deferred debt issuance costs of $0.1 million), respectively.

Principal outstanding is due in quarterly installments through June 30, 2026 in the amount of $0.3 million per quarter and the remaining principal balance of $20.0 million is due at final maturity on August 24, 2026.

On October 25, 2024, upon the closing of the Brands Transaction, as described in Note 4 – Discontinued Operation, proceeds of $22.2 million was used to pay off the then outstanding balance of the loan in full and $0.2 million of loan payoff expenses.

Nomura Credit Agreement

The Company and its wholly owned subsidiaries, BR Financial Holdings, LLC, and BR Advisory & Investments, LLC had entered into a credit agreement dated June 23, 2021 (as amended, the “Prior Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent, and Wells Fargo Bank, N.A., as collateral agent, for a four-year $300.0 million secured term loan credit facility (the “Prior Term Loan Facility”) and a four-year $80.0 million secured revolving loan credit facility (the “Prior Revolving Credit Facility”) with a maturity date of June 23, 2025.

On August 21, 2023, the Company and its wholly owned subsidiary, BR Financial Holdings, LLC, and certain direct and indirect subsidiaries of the BRFH Borrower (the “BRFH Guarantors”), entered into a credit agreement (the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent, and Computershare Trust Company, N.A., as collateral agent, for a four-year $500.0 million secured term loan credit facility (the “New Term Loan Facility”) and a four-year $100.0 million secured revolving loan credit facility (the “New Revolving Credit Facility” and together, the “New Credit Facilities”).

The purpose of the Credit Agreement was to (i) fund the Freedom VCM equity investment, (ii) prepay in full the Prior Term Loan Facility and Prior Revolving Credit Facility with an aggregate outstanding balance of $347.9 million, which included $342.0 million in principal and $5.9 million in interest and fees, (iii) fund a dividend reserve in an amount not less than $65.0 million, (iv) pay related fees and expenses, and (v) for general corporate purposes.

We recorded a loss on extinguishment of debt related to the Prior Credit Agreement of $5.4 million, which was included in the consolidated statements of operations for the year ended December 31, 2023.

SOFR rate loans under the New Credit Facilities accrued interest at the adjusted term SOFR rate plus an applicable margin of 6.00%.

In addition to paying interest on outstanding borrowings under the New Revolving Credit Facility, we were 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 Credit Agreement was secured on a first priority basis by a security interest in the equity interests of the BRFH Borrower and each of the BRFH Borrower’s subsidiaries (subject to certain exclusions) and a security interest in substantially all of the assets of the BRFH Borrower and the BRFH Guarantors.

The borrowing base as defined in the Credit Agreement consisted of a collateral pool that included certain of the Company's loans receivables in the amount of $112.5 million (which is included in the total loans receivable, at fair value balance of $90.1 million reported in our consolidated balance sheet at December 31, 2024) and $375.8 million (which is included in the total loans receivable, at fair value balance of $532.4 million reported in our consolidated balance sheet at December 31, 2023) and investments in the amount of $228.3 million (which is included in the total securities and other investments owned, at fair value of $282.3 million reported in our consolidated balance sheet at December 31, 2024) and $786.7 million (which is included in the total securities and other investments owned, at fair value of $809.0 million reported in our consolidated balance sheet at December 31, 2023) as of December 31, 2024 and 2023, respectively.

The Credit Agreement contained certain affirmative and negative covenants customary for financings of this type that, among other things, limited the Company’s and its 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 Credit Agreement contained customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

We were in compliance with all financial covenants in the Credit Agreement as of December 31, 2024.

On September 17, 2024, the Company entered into Amendment No.

4 to its credit agreement, dated August 21, 2023, with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Fourth Amendment”).

On September 17, 2024, the Company made a payment of $85.9 million which consisted of a principal payment of $85.1 million and accrued interest of $0.7 million.

Loan fees incurred in connection with the Fourth Amendment totaled $5.9 million of which $3.5 million was added to the principal balance of the term loan.

After giving effect to these amounts, the outstanding principal balance on the term loan was reduced from $469.8 million to $388.1 million.

In connection with the Fourth Amendment, the revolving credit facility in the amount of $100.0 million which had no balance outstanding at September 17, 2024 was terminated and the Company was required to reduce the principal amount of the term loan to be no greater than $100.0 million on or prior to September 30, 2025.

The scheduled maturity date of the term loan was August 21, 2027.

The Fourth 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.

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.

On December 9, 2024, the Company entered into Amendment No.

5 to its credit agreement, dated August 21, 2023, with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Fifth Amendment”).

The Fifth Amendment extended the springing maturity date of the term loans if more than $25.0 million aggregate principal amount of the 5.50% 2026 Notes were outstanding to February 3, 2026 and permitted under certain conditions an additional $10.0 million of telecommunications financing.

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

6 to its credit agreement, dated August 21, 2023, with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Sixth Amendment”).

The Sixth Amendment 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.

As of December 31, 2024 and 2023, the outstanding balance on the term loan was $117.3 million (net of unamortized debt issuance costs of $5.2 million) and $475.1 million (net of unamortized debt issuance costs of $18.7 million), respectively.

Interest on the term loan during the years ended December 31, 2024, 2023 and 2022 was $23.5 million (including amortization of deferred debt issuance costs of $5.8 million), $11.7 million (including amortization of deferred debt issuance costs of $2.9 million), and $21.3 million (including amortization of deferred debt issuance costs of $2.1 million), respectively.

The interest rate on the term loan as of December 31, 2024, 2023 and 2022 was 11.52%, 11.37% and 9.23%, respectively.

We had an outstanding balance of zero and $74.7 million under the revolving facility as of December 31, 2024 and 2023, respectively.

Interest on the revolving facility during the years ended December 31, 2024 and 2023 was $1.4 million (including unused commitment fees of $0.7 million and amortization of deferred financing costs of $0.7 million) and $5.9 million (including unused commitment fees of $0.3 million and amortization of deferred financing costs of $0.8 million), and $5.4 million (including unused commitment fees of $0.01 million and amortization of deferred financing costs of $0.6 million), respectively.

The interest rate on the revolving credit facility as of December 31, 2024 and 2023 was 11.37%.

In connection with the principal payments made on the term loan and revolving credit facility with Nomura during the year ended December 31, 2024, the Company recorded losses of the extinguishment of this debt in the amount of $18.0 million, which was included in the consolidated statements of operations in 2024.

On February 26, 2025, we entered into a new credit agreement with a group of funds indirectly or directly controlled by Oaktree Capital Management, L.P.

with Oaktree Fund Administration, LLC, acting as the administrative agent and collateral agent, as more fully described in Note 25.

The Nomura Credit Agreement discussed above was paid in full and terminated using proceeds from the Initial Term Loan Facility.

BRPAC Credit Agreement

On December 19, 2018, BRPAC, UOL, and YMAX Corporation, Delaware corporations (collectively, the “BRPAC Borrowers”), indirect wholly owned subsidiaries of ours, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A.

in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”).

Certain of the BRPAC Borrowers’ U.S.

subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”;

and together with the BRPAC Borrowers, the “Credit Parties”).

In addition, we and B.

Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of ours, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral.

The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties which totals approximately $184.6 million (which includes $3.7 million of accounts receivable and $3.3 million of inventory), including a pledge of (a) 100% of the equity interests of the Credit Parties;

(b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India;

and (c) 65% of the equity interests in magicJack VocalTec Ltd., an Israel corporation.

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

The BRPAC 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.

In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios.

The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

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

We are in compliance with all financial covenants in the BRPAC Credit Agreement as of December 31, 2024.

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the BRPAC Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things:

(i) the Closing Date Lenders agreed to make a new $75.0 million term loan to the BRPAC Borrowers, the proceeds of which the BRPAC Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless was added to the BRPAC Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the BRPAC Borrowers were permitted to make certain distributions to the parent company of the BRPAC Borrowers.

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the BRPAC Borrowers’ consolidated total funded debt ratio as defined in the BRPAC Credit Agreement.

As of December 31, 2024, 2023 and 2022, the interest rate on the BRPAC Credit Agreement was 7.42%, 8.46% and 7.65%, respectively.

Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments.

The quarterly installments from March 31, 2025 to December 31, 2026 are in the amount of $3.2 million per quarter, the quarterly installment on March 31, 2027 is in the amount of $2.4 million, and the remaining principal balance is due at final maturity on June 30, 2027.

As of December 31, 2024, and 2023, the outstanding balance on the term loan was $29.8 million (net of unamortized debt issuance costs of $0.3 million) and $46.4 million (net of unamortized debt issuance costs of $0.4 million), respectively.

Interest expense on the term loan during the years ended December 31, 2024, 2023, and 2022, was $3.5 million (including amortization of deferred debt issuance costs of $0.3 million), $5.2 million (including amortization of deferred debt issuance costs of $0.3 million), and $3.5 million (including amortization of deferred debt issuance costs of $0.3 million), respectively.

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.

Our subsidiary Lingo was added as a BRPAC Borrower to the BRPAC Amended Credit Agreement.

Pursuant to the BRPAC Amended Credit Agreement, the lenders made a new five-year $80.0 million term loan to the BRPAC Borrowers, the proceeds of which were used to repay in full the obligations under the original BRPAC Credit Agreement dated December 19, 2018 and the Lingo Credit Agreement.

In connection with the BRPAC Amended Credit Agreement, the BRPAC Borrowers also made certain distributions to the parent company of the BRPAC Borrowers from existing cash on hand.

The BRPAC Amended Credit Agreement also builds in provisions for incremental term loans up to $40.0 million allowing certain distributions to the parent company of the BRPAC Borrowers from the proceeds of such incremental term loans.

The BRPAC Borrowers’ U.S.

subsidiaries are guarantors of all obligations under the BRPAC Amended Credit Agreement.

The obligations under the BRPAC Amended Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the BRPAC Borrowers, including a pledge of (a) 100% of the equity interests of the BRPAC Borrowers;

(b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India;

and (c) 65% of the equity interests in magicJack VocalTec Ltd., an Israel corporation.

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

The borrowings under the BRPAC Amended Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the BRPAC Borrowers consolidated total funded debt ratio as defined in the BRPAC Amended Credit Agreement.

The interest rate is subject to a margin level of 3.25%.

As of the Closing Date, the outstanding principal amount was $80.0 million with quarterly installments of principal due in the amount of $4.0 million, and any remaining principal balance is due at final maturity on January 6, 2030.

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.

In addition, the BRPAC Amended Credit Agreement requires the Credit Parties to maintain certain financial ratios.

The BRPAC Amended Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

If an 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 obtained a waiver from the lender to allow for an extra 15 days to deliver interim financial statements for the quarter ended March 31, 2025.

The Company delivered the interim financial statements within the amended time period.

Senior Note Offerings

During the years ended December 31, 2024 and 2023, we issued zero and $0.2 million, respectively, of senior notes with maturity dates ranging from May 2024 to August 2028 pursuant to At the Market Issuance Sales Agreements with B.

Riley Securities, Inc.

("BRS") which governs the program of at-the-market sales of our senior notes.

We filed a series of prospectus supplements with the SEC in respect of our offerings of these senior notes.

In June 2023, we entered into note purchase agreements in connection with the 6.75% Senior Notes due 2024 (“6.75% 2024 Notes”) that were issued for the Targus acquisition.

The note purchase agreements had a repurchase date of June 30, 2023 on which date we repurchased our 6.75% 2024 Notes with an aggregate principal amount of $58.9 million.

The repurchase price was equal to the aggregate principal amount, plus accrued and unpaid interest up to, but excluding, the repurchase date.

The total repurchase payment included approximately $0.7 million in accrued interest.

On February 29, 2024, we partially redeemed $115.5 million aggregate principal amount of our 6.75% 2024 Notes pursuant to the seventh supplemental indenture dated December 3, 2021.

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

The total redemption payment included approximately $0.6 million in accrued interest.

On May 31, 2024, we redeemed the remaining $25.0 million aggregate principal amount of the 6.75% 2024 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.

The total redemption payment included approximately $0.1 million in accrued interest.

In connection with the full redemption, the 6.75% 2024 Notes, which were listed on NASDAQ under the ticker symbol “RILYO,” were delisted from NASDAQ and ceased trading on the redemption date.

On February 28, 2025, we redeemed all the issued and outstanding 6.375% Senior Notes due February 28, 2025 (the "6.375% 2025 Notes").

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.

As of December 31, 2024 and 2023, the total senior notes outstanding was $1.5 billion (net of unamortized debt issue costs of $0.1 million and $1.7 billion (net of unamortized debt issue costs of $13.1 million) with a weighted average interest rate of 5.62% and 5.71%, respectively.

Interest on the senior notes is payable on a quarterly basis.

Interest expense on the senior notes totaled $92.7 million, $103.2 million and $99.9 million during the years ended December 31, 2024, 2023 and 2022, respectively.

From March 26, 2025 to July 11, 2025, we completed five private exchange transactions with institutional investors pursuant to which approximately $115.8 million of aggregate principal amount of our 5.50% Senior Notes due March 2026, approximately $2.1 million aggregate principal amount of 6.50% Senior Notes due September 2026, approximately $146.4 million aggregate principal amount of our 5.00% Senior Notes due December 2026, approximately $51.1 million aggregate principal amount of our 6.00% Senior Notes due January 2028, and approximately $39.5 million aggregate principal amount of our 5.25% Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $228.4 million aggregate principal amount of New Notes, whereupon the Exchanged Notes were cancelled.

The decrease of $392.6 million in net cash used in financing activities in 2025 was primarily due to a net increase in debt-related proceeds of $334.2 million and the suspension of dividends, compared to $41.8 million paid in common stock and preferred dividends in 2024.

From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations.

During the years ended December 31, 2024, and 2023, we paid cash dividends on our common stock of $33.7 million, and $141.1 million, respectively.

During the years ended December 31, 2025, and 2024, we paid cash dividends on our common stock of zero and $33.7 million, respectively.

In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt.

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February 29, 2024 March 22, 2024 March 11, 2024 0.500

November 8, 2023 November 30, 2023 November 20, 2023 1.000

July 25, 2023 August 21, 2023 August 11, 2023 1.000

May 4, 2023 May 23, 2023 May 16, 2023 1.000

February 22, 2023 March 23, 2023 March 10, 2023 1.000

Holders of Series A Preferred Stock, when and as authorized by our board of directors, 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.

As of December 31, 2024 and 2023, dividends in arrears in respect of the Depositary Shares were $0.8 million.

As of December 31, 2025 and 2024, dividends in arrears in respect of the Depositary Shares were $5.7 million and $0.8 million, respectively.

On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock.

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Dividends are payable quarterly in arrears.

As of December 31, 2024 and 2023, dividends in arrears in respect of the Depositary Shares were $0.5 million.

As of December 31, 2025 and 2024, dividends in arrears in respect of the Depositary Shares were $3.7 million and $0.5 million, respectively.

On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series B Preferred Stock.

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January 9, 2024 January 31, 2024 January 22, 2024 0.4296875 0.4609375

October 10, 2023 October 31, 2023 October 23, 2023 0.4296875 0.4609375

July 11, 2023 July 31, 2023 July 21, 2023 0.4296875 0.4609375

April 10, 2023 May 1, 2023 April 21, 2023 0.4296875 0.4609375

January 9, 2023 January 31, 2023 January 20, 2023 0.4296875 0.4609375

Critical Accounting Estimates

The Company’s accounting estimates are essential to understanding and interpreting the financial results on the consolidated financial statements.

The significant accounting policies used in the preparation of the Company’s consolidated financial statements are summarized in Note 2 to the consolidated financial statements.

The Company’s accounting estimates are essential to understanding and interpreting the financial results in the consolidated financial statements.

The significant accounting policies used in the preparation of the Company’s consolidated financial statements are summarized in Note 2 - Summary of Significant Accounting Policies in the accompanying consolidated financial statements.

Certain of those policies require management to make estimates and assumptions that affect the reported amounts in our consolidated financial statements.

Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

apparent from other sources.

On a continual basis, management reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience, and reasonable assumptions.

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(1) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (2) changes in the estimate that are reasonably likely to occur from period to period, or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.

We believe the following accounting estimates to be critical to our business operations and the understanding of results of operations and affect the more significant judgements and estimates used in the preparation of our consolidated financial statements.

We believe the following accounting estimates to be critical to our business operations and the understanding of results of operations and affect the more significant judgments and estimates used in the preparation of our consolidated financial statements.

Fair Value Measurements

The fair value of loan receivables, investments which are included in securities and other investments owned, and securities sold, not yet purchased, are accounted for in accordance with the accounting guidance Accounting Standards Codification ("ASC") 820 – Fair Value Measurements with gains or losses recognized in our consolidated statement of operations.

The fair value of loan receivables, investments which are included in securities and other investments owned, and securities sold, not yet purchased, are accounted for with gains or losses recognized in our consolidated statements of operations.

The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

In determining fair value, the hierarchy under accounting principles generally accepted in the United States of America (“GAAP”) gives (i) the highest priority to unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities (Level 1 inputs), (ii) the next priority to inputs other than Level 1 inputs that are observable, either directly or indirectly (Level 2 inputs), and (iii) the lowest priority to inputs that cannot be observed in market activity (Level 3 inputs).

A significant amount of our assets consist of loan receivables and equity securities for which market quotes are not readily available and a significant degree of judgement is applied to reflect those judgements that a market participant would use in valuing the asset or liability.

A significant amount of our assets consist of loan receivables and equity securities for which market quotes are not readily available and a significant degree of judgment is applied to reflect those judgments that a market participant would use in valuing the asset or liability.

Absent evidence to the contrary, financial instruments classified in Level 3 of the fair value hierarchy are initially valued at transaction price, which is considered the best initial estimate of fair value.

Subsequent to the transaction date, these financial instruments that are classified in level 3 of the fair value hierarchy are valued using valuation techniques that incorporate one or more significant unobservable inputs, and therefore involve the greatest degree of management judgements.

These judgements include (a) determining the appropriate valuation methodology and/or model for each type of level 3 financial instrument;

(b) determining model inputs based on an assessment of relevant empirical market data, including prices evidenced in market transactions, interest rates, credit spreads, volatilities, and correlations;

and (c) determining the appropriate valuation adjustments to reflect counterparty credit quality, liquidity considerations, and other observations as it pertains to the individual financial instrument.

See Note 2(v), “Fair Value Measurements,” to the consolidated financial statements for further discussion regarding fair value of financial instruments.

Subsequent to the transaction date, these financial instruments that are classified in Level 3 of the fair value hierarchy are valued using valuation techniques that incorporate one or more significant unobservable inputs, and therefore involve the greatest degree of management judgments.

These judgments include (a) determining model inputs based on an assessment of relevant empirical market data, including prices evidenced in market transactions, interest rates, credit spreads, volatilities, and correlations and (b) determining the appropriate valuation adjustments to reflect counterparty credit quality, liquidity considerations, and other observations as it pertains to the individual financial instrument.

See Note 2(f) - Fair Value Measurements in the accompanying consolidated financial statements for further discussion regarding fair value of financial instruments.

Goodwill and Other Intangible Assets

We account for goodwill and intangible assets in accordance with the accounting guidance which requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value.

Goodwill and other intangibles with indefinite lives are tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value.

Goodwill includes the excess of the purchase price over the fair value of net assets acquired in business combinations and the acquisition of noncontrolling interests.

ASC 350 – Intangibles - Goodwill and Other , as amended by Accounting Standards Update (“ASU”) No.

2017-04, Simplifying the Test for Goodwill Impairment, permits management to perform a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its corresponding carrying value.

If management determines the reporting unit's fair value is more likely than not less than its

carrying value, a quantitative analysis will be performed to compare the fair value of the reporting unit with its corresponding carrying value.

Management performs a qualitative analysis to determine whether it is more likely than not that the fair value of a reporting unit is less than its corresponding carrying value.

If management determines the reporting unit’s fair value is more likely than not less than its carrying value, a quantitative analysis will be performed to compare the fair value of the reporting unit with its corresponding carrying value.

If the conclusion of the quantitative analysis is that the fair value is in fact less than the carrying value, management will recognize a goodwill impairment charge for the amount by which the reporting unit’s carrying value exceeds its fair value.

Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value.

We operate six reporting units, which are the same as our reporting segments described in Note 24 – Business Segments:

the Capital Markets segment, Wealth Management segment, Financial Consulting segment, Communications segment, and Consumer Products segment and the All Other category.

We operate eight reporting units, which are the same as our reportable segments described in Note 29 - Business Segments:

Capital Markets, Wealth Management, Lingo, magicJack, Marconi Wireless, UOL, and Consumer Products, plus Corporate and All Other which is not a reportable segment.

Significant judgment is required to estimate the fair value of reporting units which includes estimating future cash flows, determining appropriate discount rates and other assumptions.

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If the undiscounted cash flows of such assets are less than the carrying amount, the impairment to be recognized is measured by the amount by which the carrying amount of the asset or asset group, if any, exceeds its fair market value.

In performing the annual review of goodwill and other intangible assets at December 31, 2024, qualitative factors indicated it could be more likely than not that the carrying value of goodwill and other intangible assets for the Nogin reporting unit could be impaired and the tradename for the Targus reporting unit could be impaired.

For the Targus reporting unit, there were also qualitative factors in performing the interim and annual analysis at June 30, 2024, December 31, 2023 and September 30, 2023 that indicated it could be more likely than not that the carrying value of goodwill and tradename for the Targus reporting unit could be impaired.

As more fully described in Note 10, based on the results of these analyses, we recorded non-cash impairment charges of $105.4 million during the year ended December 31, 2024 which included impairment charges related to (a) indefinite lived assets of $84.3 million related to goodwill and $5.0 million related to tradenames and (b) $16.0 million related to finite-lived intangible assets for customer relationships, internally developed software and other intangible assets, and trademarks.

We recorded non-cash impairment charges of $70.3 million during the year ended December 31, 2023 which included impairment charges related to (a) indefinite lived assets of $53.1 million related to goodwill and $15.5 million related to tradenames and (b) $1.7 million related to finite-lived tradename in the Capital Markets segment that was no longer used by us.

There were no impairments of goodwill or indefinite-lived intangibles identified during the year ended December 31, 2022.

During the year ended December 31, 2022, we recognized $4.2 million impairment of finite-lived intangibles representing the carrying amount of tradenames and software development costs as a result of the reorganization and consolidation activities in the Wealth Management segment and the Communications segment, which was included as a restructuring charge in our consolidated statements of operations.

See Note 2(u), “Goodwill and Other Intangible Assets,” to the consolidated financial statements for further discussion regarding goodwill impairment.

In performing the annual review of goodwill and other intangible assets at December 31, 2025, we elected to bypass the qualitative assessment and proceed directly to performing the quantitative assessment.

Based on these analyses performed, we concluded there was no goodwill impairment during the year December 31, 2025.

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 year ended December 31, 2025.

In performing the annual review of goodwill and other intangible assets at December 31, 2024, qualitative factors indicated it could be more likely than not that the carrying value of goodwill and other intangible assets for the Corporate and All Other reporting unit related to Nogin could be impaired and the Targus tradename for the Consumer Products reporting unit could be impaired.

For the Consumer Products reporting unit, there were also qualitative factors in performing the interim and annual analysis at June 30, 2024 that indicated it could be more likely than not that the carrying value of the Targus goodwill and tradename for the Consumer Products reporting unit could be impaired.

As more fully described in Note 14 - Goodwill and Other Intangible Assets, based on the results of these analyses, we recorded non-cash impairment charges of $105.4 million during the year ended December 31, 2024 which included impairment charges related to (a) indefinite lived assets of $84.3 million related to goodwill and $5.0 million related to tradenames and (b) $16.0 million related to finite-lived intangible assets for customer relationships, internally developed software and other intangible assets, and trademarks.

See Note 2(o) and Note 14 - Goodwill and Other Intangible Assets in the accompanying consolidated financial statements for further discussion regarding goodwill impairment.

The Company is subject to the income tax laws of the various jurisdictions in which it operates, including U.S.

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It is possible that revisions in the Company’s estimate of income taxes may materially affect the Company’s results of operations in any reporting period.

The Pillar Two directive, which was established by the Organization for Economic Co-operation and Development, and which generally provides for a 15% minimum effective tax rate for multinational enterprises, in every jurisdiction in which

they operate.

While the Company does not anticipate that this will have a material impact on its tax provision or effective tax rate, the Company continues to monitor evolving tax legislation in the jurisdictions in which it operates.

Deferred taxes arise from differences between assets and liabilities measured for financial reporting versus income tax return purposes.

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Adjustments based on filed returns are generally recorded in the period when the tax returns are filed and these adjustments could impact the Company’s effective tax rate.

See Note 16, “Income Taxes,” to the consolidated financial statements for further discussion regarding income taxes.

See Note 23 - Income Taxes in the accompanying consolidated financial statements for further discussion regarding income taxes.

Recent Accounting Standards

See Note 2(af) to the accompanying financial statements for recent accounting standards we have not yet adopted and recently adopted.

See Note 2(ad) - Recent Accounting Standards in the accompanying consolidated financial statements for recent accounting standards we have not yet adopted and recently adopted.

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.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item 8 is submitted as a separate section beginning on page 87 of this Annual Report on Form 10-K (the “Financial Statements”).

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 7. Management’s Discussion and Analysis