BRC Group Holdings, Inc. 10-K

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “seek,” “likely,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we, nor any other person, 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. The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes and other financial information appearing elsewhere in this Annual Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Annual Report under the caption “Risk Factors.” Factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: volatility in our revenues and results of operations; changing conditions in the financial markets; 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; material weaknesses in internal control over financial reporting; 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; the short term nature of our engagements; failure to successfully compete in any of our businesses; the illiquidity of, and additional potential losses from, our proprietary investments; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; loss of key personnel; our ability to borrow under our credit facilities; 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; the impact of legal proceedings, including in respect of matters related to Freedom VCM and Brian Kahn; the activities of short sellers and their impact on our business and reputation; 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,” “BRCGH,” “BRC,” “BRC Group Holdings,” “we,” “us” or “our” refer to the combined business of BRC Group Holdings, Inc. and all of its subsidiaries. 50 Table of Contents Overview Description of the Company BRC Group Holdings, Inc. (Nasdaq: RILY) (the “Company” or “BRCGH”), which changed its name from B. Riley Financial, Inc. 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 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. 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 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. Additionally, in evaluating the financial performance of each of our businesses, management monitors the increase or decrease in operating results from period to period while factoring in the relative volatility inherent in each industry in which these businesses operate. Management recognizes that some of the Company’s businesses exhibit more volatile results. Capital Markets – We provide investment banking, equity research and institutional brokerage services to publicly traded and privately held companies, institutional investors, and financial sponsors; and direct lending services to middle market companies. We also trade equity securities as a principal for our account, including investments in funds managed by our subsidiaries. We maintain an investment portfolio comprised of public and private equities and debt securities. We also opportunistically provide loans to our clients and we engage in securities-based lending which involves the borrowing and lending of equity and fixed income securities. Our investment approach is value-oriented and represents a core competency of our capital markets strategy. We act as an advisor to our clients, which at times involves complex transactions consistent with our value-oriented investment philosophy. We often provide consulting, capital raising, or investment banking services for companies in which BRC may have significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. 51 Table of Contents Wealth Management – We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers. Our experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions. 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 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. 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, 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. 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: 52 Table of Contents December 31, 2025 2024 Public Equity Securities: Babcock & Wilcox Enterprises, Inc. - common stock $ 174,011 $ 45,012 Babcock & Wilcox Enterprises, Inc. - preferred stock — 1,528 Double Down Interactive Co., Ltd - common stock 30,010 43,706 Synchronoss Technologies, Inc. - common stock 3,503 7,200 Other public equities 25,675 27,446 Total public equity securities 233,199 124,892 Private Equity Securities: Other private equities 135,605 107,616 Total private equity securities 135,605 107,616 Total equity securities 368,804 232,508 Corporate bonds 31,751 29,027 Other fixed income securities 4,373 4,923 Partnership interests and other 41,915 15,867 Total securities and other investments owned $ 446,843 $ 282,325 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. 53 Table of Contents 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 The following period to period comparisons of our financial results are not necessarily indicative of future results. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 54 Table of Contents Consolidated Statements of Operations (Dollars in thousands) Year Ended December 31, 2025 Year Ended December 31, 2024 Change Amount % Amount % Amount % Revenues: Services and fees $ 633,836 65.4 % $ 783,304 104.8 % $ (149,468) (19.1) % 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) % Interest income - securities lending 6,993 0.7 % 70,862 9.5 % (63,869) (90.1) % Sale of goods 191,114 19.8 % 220,619 29.6 % (29,505) (13.4) % Total revenues 967,599 100.0 % 746,421 100.0 % 221,178 29.6 % Operating expenses: Direct cost of services 139,417 14.4 % 213,901 28.7 % (74,484) (34.8) % Cost of goods sold 145,364 15.0 % 167,634 22.4 % (22,270) (13.3) % Selling, general and administrative expenses 599,748 62.0 % 689,410 92.4 % (89,662) (13.0) % Restructuring charge 195 — % 1,522 0.2 % (1,327) (87.2) % 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 income (loss) 75,581 7.8 % (497,547) (66.7) % 573,128 (115.2) % Other income (expense): Interest income 3,710 0.4 % 3,600 0.5 % 110 3.1 % Dividend income 1,818 0.2 % 4,462 0.6 % (2,644) (59.3) % 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) % 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 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 income (loss) available to common shareholders $ 299,355 30.9 % $ (772,334) (103.5) % $ 1,071,689 (138.8) % 55 Table of Contents n/m - Not applicable or not meaningful. Revenues The table below and the discussion that follows are based on how we analyze our business. Year Ended December 31, 2025 Year Ended December 31, 2024 Change Amount % Amount % Amount % Services and fees: Capital Markets segment $ 154,421 16.0 % $ 186,750 25.0 % $ (32,329) (17.3) % Wealth Management segment 158,065 16.3 % 197,468 26.5 % (39,403) (20.0) % 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 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 % 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: Capital Markets segment 6,993 0.7 % 70,862 9.5 % (63,869) (90.1) % Sale of goods: 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) % 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) % Total revenues $ 967,599 100.4 % $ 746,421 100.0 % $ 221,178 29.6 % 56 Table of Contents n/m - Not applicable or not meaningful. 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. 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, Change 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. 57 Table of Contents 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. Treasuries. 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. Treasuries. 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: 58 Table of Contents 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) W.S. Badcock Corporation Consumer receivable portfolio — 2,169 250 (5,339) Freedom VCM Receivables, Inc. Consumer receivable portfolio — 3,913 1,393 (13,874) Conn’s, Inc. 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 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 59 Table of Contents 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 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 $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 Selling, general and administrative expenses during the years ended December 31, 2025 and 2024 were comprised of the following: Year Ended December 31, 2025 Year Ended December 31, 2024 Change Amount % Amount % Amount % Capital Markets segment $ 170,066 28.4 % $ 170,512 24.7 % $ (446) (0.3) % Wealth Management segment 160,326 26.7 % 194,316 28.2 % (33,990) (17.5) % 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) % 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 $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. 60 Table of Contents 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 $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 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. Lingo 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. magicJack 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. UOL 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 $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 61 Table of Contents 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 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). 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. 62 Table of Contents 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) Year Ended December 31, 2025 2024 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 63 Table of Contents 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 $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 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. 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 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 . Preferred stock dividends were $8.1 million during the years ended December 31, 2025 and 2024. Dividends on the Series A preferred paid during the years ended December 31, 2025 and 2024 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the years ended December 31, 2025 and 2024 were $0.4609375 per depository share. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A and B Preferred Stock. Unpaid dividends will accrue until paid in full. Liquidity and Capital Resources Our operations 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. 64 Table of Contents 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. 65 Table of Contents 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. Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Year Ended December 31, 2025 2024 (Dollars in thousands) Net cash (used in) provided by: Operating activities $ (59,711) $ 263,551 Investing activities 311,482 440,534 Financing activities (279,372) (671,947) Effect of foreign currency on cash 202 (9,301) 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. 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. 66 Table of Contents 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. 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. Dividends From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. During the 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. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors. A summary of our common stock dividend activity during the years ended December 31, 2025 and 2024 was as follows: Date Declared Date Paid Stockholder Record Date Amount May 15, 2024 June 11, 2024 May 27, 2024 $ 0.500 February 29, 2024 March 22, 2024 March 11, 2024 0.500 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, 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. Unpaid dividends will accrue until paid in full. Holders of Series B Preferred Stock, when and as authorized by our board of directors, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $0.03 million liquidation preference $25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends are payable quarterly in arrears. 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. Unpaid dividends will accrue until paid in full. A summary of our preferred stock dividend activity during the years ended December 31, 2025 and 2024 was as follows: Preferred Dividend per Depositary Share Date Declared Date Paid Stockholder Record Date Series A Series B October 16, 2024 October 31, 2024 October 28, 2024 $ 0.4296875 $ 0.4609375 July 9, 2024 July 31, 2024 July 22, 2024 0.4296875 0.4609375 April 9, 2024 April 30, 2024 April 22, 2024 0.4296875 0.4609375 January 9, 2024 January 31, 2024 January 22, 2024 0.4296875 0.4609375 Critical Accounting Estimates 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 67 Table of Contents 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. After such reviews, and if deemed appropriate, management’s estimates are adjusted accordingly. Actual results may vary from these estimates and assumptions under different and/or future circumstances. We consider an accounting estimate to be critical if: (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 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 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 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 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 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. 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 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. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment. 68 Table of Contents We review the carrying value of our finite-lived amortizable intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparing the carrying amount of the asset or asset group to the undiscounted cash flows that the asset or asset group is expected to generate. 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, 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. Income Taxes The Company is subject to the income tax laws of the various jurisdictions in which it operates, including U.S. federal, state and local, and non-U.S. jurisdictions. These laws are often complex and may be subject to different interpretations. To determine the financial statement impact of accounting for income taxes, including the provision for income tax expense and unrecognized tax benefits, management must make assumptions and judgments about how to interpret and apply these complex tax laws to numerous transactions and business events, as well as make judgments regarding the timing of when certain items may affect taxable income in the U.S. and non-U.S. tax jurisdictions. The Company’s interpretations of tax laws in the U.S. and non-U.S. jurisdictions are subject to review and examination by the various taxing authorities in the jurisdictions where the Company operates, and disputes may occur regarding its view on a tax position. Generally, disputes over interpretations with the various taxing authorities may be settled by audit or administrative appeals in the tax jurisdictions in which the Company operates. The Company regularly reviews whether it may be assessed additional income taxes as a result of the resolution of these matters, and the Company records additional unrecognized tax benefits, as appropriate. In addition, the Company may revise its estimate of income taxes due to changes in income tax laws, legal interpretations, and business strategies. 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 69 Table of Contents 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. Deferred tax assets are recognized if, in management’s judgment, their realizability is determined to be more likely than not. Deferred taxes are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred taxes of a change in tax rates is recognized within the provision for income taxes in the period enacted. The Company has also recognized deferred tax assets in connection with certain tax attributes, including net operating loss (“NOL”), interest expense limitations and capital loss carryforwards. The Company performs regular reviews to ascertain whether its deferred tax assets are realizable. These reviews include management’s estimates and assumptions regarding future taxable income and may incorporate various tax planning strategies, including strategies that may be available to utilize tax attributes before they expire. In connection with these reviews, if it is determined that a deferred tax asset is not realizable, a valuation allowance is established. The valuation allowance may be reversed in a subsequent reporting period if the Company determines that, based on revised estimates of future taxable income or changes in tax planning strategies, it is more likely than not that all or part of the deferred tax asset will become realizable. As of December 31, 2025, management has recorded a valuation allowance for deferred tax assets that the Company has determined it is more likely than not that the deferred tax assets will not be realized. The Company adjusts its unrecognized tax benefits as necessary when new information becomes available, including changes in tax law and regulations and interactions with taxing authorities. Uncertain tax positions that meet the more-likely-than-not recognition threshold are measured to determine the amount of benefit to recognize. An uncertain tax position is measured at an amount of benefit that management believes is more likely than not to be realized upon settlement. It is possible that the reassessment of unrecognized tax benefits may have a material impact on the Company’s effective income tax rate in the period in which the reassessment occurs. Although the Company believes that its estimates are reasonable, the final tax amount could be different from the amounts reflected in the Company’s income tax provisions and accruals. To the extent that the final outcome of these amounts is different than the amounts recorded, such differences will generally impact the Company’s provision for income taxes in the period in which such a determination is made. The Company’s provision for income taxes is composed of current and deferred taxes. The current and deferred tax provisions are calculated based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed during the subsequent year. 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 23 - Income Taxes in the accompanying consolidated financial statements for further discussion regarding income taxes. Recent Accounting Standards 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. Item 7A. 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. Item 8. 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”). Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 70 Table of Contents