What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2026-01-14 · 1034 added, 1640 removed, 669 unchanged (80% of the section changed)

1 unchanged sentence

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

Condensed Consolidated Balance Sheets

(Dollars in thousands, except par value)

September 30,

(Dollars in thousands, except share and par value)

2026 December 31,

3 unchanged sentences

Due from clearing brokers 43,437 51,000

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

Securities and other investments owned ($ 576,153 and $ 382,461 at fair value) (1)

639,668 446,843

Securities borrowed 133,438 114,937

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

Accounts receivable, net of allowance for credit losses of $ 6,450 and $ 6,108

67,329 55,473

Due from related parties 202 189

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

Loans receivable, at fair value ($ 953 and $ 2,835 from related parties)

24,927 26,303

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

Equity investments 90,692 90,433

Prepaid expenses and other assets (1)

117,851 128,650

4 unchanged sentences

Deferred income taxes 763 763

Assets held for sale (Note 4)

Assets of discontinued operations (Note 4)

2 unchanged sentences

Accounts payable $ 37,721 $ 41,463

Accrued expenses and other liabilities (1)

Accrued expenses and other liabilities ($ 11,080 and $ 6,400 at fair value) (1)

153,413 154,780

1 unchanged sentence

Deferred income taxes 4,089 4,109

Due to related parties and partners 2,595 3,404

Securities sold not yet purchased 22,375 5,675

Securities sold not yet purchased, at fair value 16,833 9,809

Securities loaned 115,642 97,321

Operating lease liabilities 41,752 40,902

Notes payable — 28,021

Loan participations sold — 6,000

Revolving credit facility 10,708 6,638

1 unchanged sentence

Senior notes payable, net 1,171,490 1,301,798

Liabilities held for sale (Note 4)

Liabilities of discontinued operations (Note 4)

2 unchanged sentences

BRC Group Holdings, Inc.

Riley Financial, Inc.) equity (deficit):

stockholders’ equity (deficit):

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

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

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

4,563 shares issued and outstanding and liquidation preference of $ 124,157 and $ 122,142

Common stock, $ 0.0001 par value;

100,000,000 shares authorized;

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

35,150,932 and 30,597,066 issued and outstanding

Additional paid-in capital 634,479 598,022

1 unchanged sentence

Accumulated other comprehensive loss ( 7,149 ) ( 6,272 )

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

Total BRC Group Holdings, Inc.

stockholders’ equity (deficit) 77,321 ( 171,533 )

Noncontrolling interests (1)

59,011 51,271

Total deficit ( 213,091 ) ( 456,016 )

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

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

Total equity (deficit) 136,332 ( 120,262 )

Total liabilities and equity (deficit) $ 1,854,213 $ 1,706,592

(1) At March 31, 2026 and December 31, 2025 the balance sheet includes cash of $ 519 and $ 446 , securities and other investments owned, at fair value of $ 723 and $ 682 , prepaid and other expenses of $ 3,704 and $ 3,737 , accrued expenses and other liabilities of $ 28 and $ 28 , and noncontrolling interest of $ 4,261 and $ 4,192 , respectively, of consolidated variable interest entities (see Note 3 - Variable Interest Entities).

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

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

Condensed Consolidated Statements of Operations (Loss)

Condensed Consolidated Statements of Operations

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

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

Services and fees ($ 5,923 and $ 3,945 from related parties)

$ 152,122 $ 158,839

Trading gains (losses), net 145,061 ( 16,171 )

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

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

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

Fair value adjustments on loans ($( 26 ) and $( 2,146 ) from related parties)

6,545 ( 8,096 )

Interest income - loans ($ — and $ 696 from related parties)

Interest income - securities lending 1,251 840

5 unchanged sentences

Selling, general and administrative expenses 134,348 167,388

Restructuring charge (Note 5) 184 116 505 925

Impairment of goodwill and tradenames — — 1,500 27,681

Interest expense - Securities lending and loan participations sold 717 719

8 unchanged sentences

Gain on senior note exchange — 10,532

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

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

Income (loss) from equity investments 1,326 ( 552 )

Gain (loss) on extinguishment of debt 2,890 ( 10,427 )

Interest expense ( 19,794 ) ( 29,964 )

Income (loss) from continuing operations before income taxes 239,050 ( 23,004 )

Provision for income taxes ( 1,183 ) ( 9,950 ) ( 1,194 ) ( 17,803 )

(Provision for) benefit from income taxes ( 16,891 ) 3,042

Income (loss) from continuing operations 222,159 ( 19,962 )

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

Income from discontinued operations, net of income taxes — 3,395

Net income (loss) 222,159 ( 16,567 )

Net income (loss) attributable to noncontrolling interests 8,886 ( 6,592 )

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

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

213,273 ( 9,975 )

Preferred stock dividends 2,015 2,015

12 unchanged sentences

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

Condensed Consolidated Statements of Comprehensive Income (Loss)

1 unchanged sentence

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net income (loss) $ 222,159 $ ( 16,567 )

1 unchanged sentence

Change in cumulative translation adjustment ( 877 ) ( 487 )

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

Other comprehensive loss, net of tax ( 877 ) ( 487 )

Total comprehensive income (loss) 221,282 ( 17,054 )

Comprehensive income (loss) attributable to noncontrolling interests 8,886 ( 6,592 )

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

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

$ 212,396 $ ( 10,462 )

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

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

Condensed Consolidated Statements of Equity (Deficit)

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

For the Three Months Ended September 30, 2025 and 2024

For the Three Months Ended March 31, 2026 and 2025

Preferred Stock Common Stock Additional

1 unchanged sentence

Comprehensive

Income (Loss) Noncontrolling

Loss Noncontrolling

Interests Total Equity

Shares Amount Shares Amount

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

Warrants issued — — — — 248 — — — 248

Balance, January 1, 2026 4,563 $ — 30,597,066 $ 3 $ 598,022 $ ( 763,286 ) $ ( 6,272 ) $ 51,271 $ ( 120,262 )

Common stock issued in connection with redemption of Senior Notes — — 4,553,866 1 33,500 — — — 33,501

RSU equity awards reclassified from liability — — — — 2,589 — — — 2,589

Share-based payments — — — — 368 — — — 368

Share-based payments in equity of subsidiary — — — — — — — 756 756

Dividend forfeitures on unvested equity awards — — — — — 31 — — 31

Vesting of shares in equity of subsidiary — — — — — — — ( 1,902 ) ( 1,902 )

Net income — — — — — 213,273 — 8,886 222,159

Distributions to noncontrolling interests — — — — — — — ( 355 ) ( 355 )

Other comprehensive loss — — — — — — ( 877 ) — ( 877 )

Balance, September 30, 2025

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

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

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

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

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

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

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

— — — — — ( 1,218 ) — — ( 1,218 )

Dividends on Series B preferred stock ($ 0.4609375 per depository share)

— — — — — ( 797 ) — — ( 797 )

Net loss — — — — — ( 284,397 ) — ( 3,201 ) ( 287,598 )

Distributions to noncontrolling interests — — — — — — — ( 1,064 ) ( 1,064 )

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

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

Balance, September 30, 2024

Balance, March 31, 2026

4,563 $ — 35,150,932 $ 4 $ 634,479 $ ( 550,013 ) $ ( 7,149 ) $ 59,011 $ 136,332

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

For the Nine Months Ended September 30, 2025 and 2024

Preferred Stock Common Stock Additional

Capital Accumulated Deficit Accumulated

Comprehensive

Income (Loss) Noncontrolling

Interests Total

Equity (Deficit)

Shares Amount Shares Amount

Balance, January 1, 2025 4,563 $ — 30,499,931 $ 3 $ 589,387 $ ( 1,070,996 ) $ ( 6,569 ) $ 32,159 $ ( 456,016 )

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

RSU equity awards reclassified to liability — — — — ( 2,138 ) — — — ( 2,138 )

4 unchanged sentences

Vesting of shares in equity of subsidiary — — — — ( 71 ) — — — ( 71 )

Dividend forfeitures on unvested equity awards — — — — — 288 — — 288

Net income (loss) — — — — — 220,579 — ( 594 ) 219,985

Distributions to noncontrolling interests — — — — — — — ( 3,604 ) ( 3,604 )

Net loss — — — — — ( 9,975 ) — ( 6,592 ) ( 16,567 )

Common stock issuance in equity of subsidiary — — — — — — — 1,575 1,575

Disposition from sale and deconsolidation of businesses — — — — — — — 2,918 2,918

Disposition from sale and deconsolidation of

businesses — — — — — — — 2,918 2,918

Initial consolidation of VIE — — — — — — — 12,494 12,494

Other comprehensive loss — — — — — — ( 487 ) — ( 487 )

Balance, September 30, 2025

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

Balance, January 1, 2024 4,563 $ — 29,937,067 $ 3 $ 572,170 $ ( 281,285 ) $ 229 $ 68,449 $ 359,566

Vesting of restricted stock and other, net of shares withheld for employer taxes — — 325,961 — ( 3,136 ) — — — ( 3,136 )

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

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

Share based payments — — — — 17,381 — — — 17,381

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

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

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

— — — — — ( 30,232 ) — — ( 30,232 )

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

— — — — — ( 3,654 ) — — ( 3,654 )

Dividends on Series B preferred stock ($ 0.4609375 per depository share)

— — — — — ( 2,391 ) — — ( 2,391 )

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

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

Contributions from noncontrolling interests — — — — — — — 3,213 3,213

Acquisition of noncontrolling interests — — — — — — — 4,650 4,650

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

Balance, September 30, 2024

Balance, March 31, 2025

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

1 unchanged sentence

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities (1) :

Net income (loss) $ 222,159 $ ( 16,567 )

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 7,589 10,090

1 unchanged sentence

Share-based compensation 2,440 3,563

Fair value and remeasurement adjustments, non-cash (includes $ 3,186 and $ 265,512 from related parties for 2025 and 2024, respectively)

( 8,621 ) 261,357

Non-cash interest and other (includes $( 268 ) and $( 31,949 ) from related parties for 2025 and 2024, respectively)

Fair value and remeasurement adjustments ($ 26 and $ 2,146 from related parties)

( 1,865 ) 8,405

Non-cash interest and other

Depreciation of rental merchandise 3,123 3,387

Net foreign currency gains ( 470 ) ( 297 )

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

Net foreign currency losses (gains) 22 ( 224 )

(Income) loss from equity investments ( 1,326 ) 552

Dividends from equity investments 137 59

Deferred income taxes ( 20 ) 8,957

Impairment of goodwill and tradenames 1,500 27,681

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

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

Loss (gain) on sale or disposal of fixed assets and other 11 ( 1,350 )

Gain on sale and deconsolidation of businesses — ( 80,841 )

Loss on extinguishment of debt 21,643 5,780

(Gain) loss on extinguishment of debt ( 2,890 ) 10,427

Gain on senior note exchange — ( 10,532 )

Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests — 1,416

Change in operating assets and liabilities:

3 unchanged sentences

Accounts receivable ( 12,211 ) 3,551

Prepaid expenses and other assets (includes $ 3,331 and $ 8,565 from related parties for 2025 and 2024, respectively)

Prepaid expenses and other assets ($ — and $ 2,653 from related parties)

Accounts payable, accrued expenses and other liabilities ( 8,668 ) ( 8,961 )

3 unchanged sentences

Securities loaned 18,321 ( 5,199 )

Net cash (used in) provided by operating activities ( 85,932 ) 266,294

Net cash provided by operating activities 38,073 184

Cash flows from investing activities (1) :

Purchases of loans receivable (includes $( 75,853 ) and $( 16,259 ) from related parties for 2025 and 2024, respectively)

( 114,255 ) ( 79,913 )

Repayments of loans receivable (includes $ 90,556 and $ 49,876 from related parties for 2025 and 2024, respectively)

Purchases of loans receivable ($ — and $ 50,853 from related parties)

( 20,115 ) ( 61,528 )

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

Repayments of loans receivable ($ 1,855 and $ 32,683 by related parties)

28,505 46,757

Proceeds from sale of loans receivable ($ — and $ 6,611 from related parties)

Proceeds from loan participations sold — 3,986

Acquisition of businesses and minority interest, net of $ — and $ 604 cash acquired for 2025 and 2024, respectively

Proceeds from sale of business, net of cash sold and other — 68,901

4 unchanged sentences

Consolidation of VIE — 359

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

Net cash provided by investing activities 8,333 59,181

4 unchanged sentences

Repayment of notes payable and other ( 297 ) ( 12,834 )

Repayment of term loan ( 314,253 ) ( 138,574 )

Proceeds from term loan 235,550 —

Repayment of term loans ( 4,000 ) ( 239,274 )

Proceeds from term loans — 235,550

Redemption of senior notes ( 95,991 ) ( 145,302 )

Proceeds from senior notes held at redemption 5,397 —

Repurchases and payments on senior notes ( 4,035 ) —

Payment of debt issuance and offering costs ( 32 ) ( 8,942 )

Payment of contingent consideration — ( 48 )

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

Common dividends paid — ( 33,627 )

Preferred dividends paid — ( 6,045 )

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

Contributions from noncontrolling interests — 3,213

Proceeds from exercise of warrants — 653

Payment of employment taxes on vesting of shares in equity of subsidiary ( 1,902 ) —

Net cash used in financing activities ( 96,790 ) ( 172,529 )

11 unchanged sentences

Cash, cash equivalents and restricted cash, end of period $ 178,022 $ 143,047

Supplemental disclosures (Note 2(f)):

Supplemental disclosure of cash flow information:

Interest paid $ 20,191 $ 28,982

Taxes paid 575 932

Supplemental disclosure of non-cash investing and financing activities:

Transfer of loans to held for sale from loans receivable at fair value $ — $ 5,302

Issuance of common stock in equity of subsidiary — 1,575

Issuance of warrants for term loan — 7,860

Remaining accrued exit fee for term loan — 224

Recognition of derivative liability for term loan exit fee — 11,244

Disposition of noncontrolling interests through sale and deconsolidation of businesses — 2,918

Capital from noncontrolling interest upon initial consolidation of VIE — 12,494

Reclassification of restricted stock units from liability to equity 2,589 —

Reclassification of restricted stock units from equity to liability — 2,138

Issuance of common stock in connection with retirement of senior notes 33,501 —

Issuance of warrants for senior notes — 863

(1) Amounts presented contain results from both continuing and discontinued operations.

2 unchanged sentences

BRC GROUP HOLDINGS, INC.

RILEY FINANCIAL, INC.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2 unchanged sentences

BRC Group Holdings, Inc.

Riley Financial, Inc.) and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, and business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.

The Company also has a portfolio of communication related businesses that provide consumer internet access and cloud communication services, Tiger US Holdings, Inc.

(“Targus”), which designs and sells laptop and computer accessories, and E-Commerce, a technology platform provider that delivers Commerce-as-a-Service (“CaaS”) solutions for apparel brands and other retailers.

The Company operates in five reportable operating segments:

(i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, research, sales and trading services to corporate and institutional clients;

and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, and business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.

The Company’s telecom businesses provide consumer and business services including traditional, mobile and cloud phone, internet and data, security, and email, and its retail companies provide mobile computing accessories and home furnishings.

The Company operates in seven reportable operating segments:

(i) Capital Markets, through which the Company provides an array of investment banking, equity research, institutional sales and trading, securities lending, proprietary trading, and investing services to publicly traded and privately held companies, institutional investors, and financial sponsors, and direct lending services to middle market companies;

(ii) Wealth Management, through which the Company provides wealth management and tax services to corporate and high-net-worth clients;

(iii) Communications, through which the Company provides consumer Internet access and related subscription services, cloud communication services, and mobile phone voice, text, and data services and devices;

(iv) Consumer Products, which generates revenue through sales of laptop and computer accessories;

and (v) E-Commerce, which is a technology platform provider that delivers CaaS solutions for apparel brands and other retailers.

As discussed below, the Company’s previously reported Financial Consulting segment met the requirements to be classified as discontinued operations.

The financial results of this business whose disposal represents a strategic shift that has, or will have, a major effect on our operations and the financial results are reported as discontinued operations in the accompanying condensed statements of operations, and the assets and liabilities are reflected as amounts held for sale in the accompanying condensed balance sheets.

Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations.

The Company’s reporting segments have also been changed for the effects of the discontinued operations.

For more information, see Note 4 - Discontinued Operations and Assets Held for Sale.

Recent Developments

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 Financial Corp.

The sale (the “Wealth Management Transaction”) was completed on April 4, 2025 for net cash consideration based on the 36 financial advisors that joined Stifel at closing.

The Company determined that the assets and liabilities associated with the Wealth Management Transaction met the criteria to be classified as held for sale, as discussed in Note 4 - Discontinued Operations and Assets Held for Sale, and was included in Assets Held for Sale in the consolidated balance sheets as of December 31, 2024.

On March 3, 2025, the Company and BR Financial Holdings, LLC (“BRFH”), a wholly owned subsidiary of the Company, B.

Riley Environmental Holdings, LLC and other indirect subsidiaries of the Company which included Atlantic Coast Recycling, LLC (“Atlantic Coast Recycling”), Atlantic Coast Recycling of Ocean County, LLC, (“Atlantic Coast Recycling of Ocean County” and, together with Atlantic Coast Recycling, the “Atlantic Companies”), entered into a Membership Interest Purchase Agreement, dated as of March 1, 2025 (the “MIPA”), whereby all of the issued and outstanding membership interests in each of the Atlantic Companies (the “Interests”) owned by BRFH and the minority holders were sold to a third party for an agreed upon purchase price subject to certain adjustments and holdback amount pending receipt of a certain third party consent.

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

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

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

On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests of its wholly owned subsidiary, GlassRatner Advisory & Capital Group, LLC, a Delaware limited liability company (“GlassRatner”), and B.

Riley Farber Advisory Inc., an Ontario corporation (“Farber”).

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

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

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

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

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

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

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

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

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

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

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

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

The Company believes that the current cash and cash equivalents, securities and other investments owned, and funds available under our credit facilities will be sufficient to meet our working capital, capital expenditure requirements, and debt service obligations due the next 12 months from issuance date of the accompanying financial statements.

Nasdaq Compliance

On November 21, 2025, the Company received a Staff Determination Letter (“November Determination Letter”) 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”), as previously notified by the Staff on April 3, 2025, May 21, 2025, August 20, 2025 and October 1, 2025 (together, the “Prior Determination Letters”).

The basis for the Prior Determination Letters was that the Company had not yet filed its Form 10-K for the fiscal year ended December 31, 2024 and its Quarterly Reports on Form 10-Q for the periods ended March 31, 2025 (the “Q1 Report”) and June 30, 2025 (the “Q2 Report”) with the U.S.

Securities and Exchange Commission (the “SEC”).

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

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

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

was previously granted to regain compliance with the Filing Rule.

The November Determination Letter and 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 this Q3 Report on the filing date hereof.

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

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

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.

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

(iv) magicJack VoIP Services, LLC and related subsidiaries (together, “magicJack”), 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;

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

(vi) United Online, Inc.

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

and (vii) Consumer Products, which generates revenue through sales of laptop and computer accessories.

Liquidity and Capital Resources

During the three months ended March 31, 2026, the Company generated net income of $ 222,159 .

During the three months ended March 31, 2026, the Company fully redeemed the $ 95,991 of outstanding 5.50 % Senior Notes due 2026 on March 30, 2026.

As discussed in more detail in Note 15 - Senior Notes Payable, during the three months ended March 31, 2026, the Company completed a series of exchanges in accordance with Section 3(a)(9) of the Securities Act of 1933 (“Section 3(a)(9) Exchanges”) with DBA Trading, LLC (the “Investor”) whereby the Company exchanged an aggregate principal amount of $ 36,089 of senior notes which included (i) $ 11,002 of the 5.50 % Senior Notes due March 31, 2026, (ii) $ 11,354 of the 6.50 % Senior Notes due September 30, 2026, (iii) $ 2,683 of the 5.00 % Senior Notes due December 31, 2026, (iv) $ 5,625 of the 6.00 % Senior Notes due January 31, 2028, and (v) $ 5,425 of the 5.25 % Senior Notes due August 31, 2028 for an aggregate of 4,553,866 shares of the Company’s common stock.

The Investor owns more than five percent of the Company’s common stock.

Such senior notes were then cancelled or redeemed following each such Section 3(a)(9) Exchange.

The Company believes that its current cash and cash equivalents, securities and other investments owned, and funds available under our credit facilities will be sufficient to meet our expected working capital, capital expenditure requirements, and debt service obligations due during the next 12 months following the issuance date of the accompanying unaudited condensed consolidated financial statements.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally

accepted in the United States of America (“GAAP”).

All intercompany accounts and transactions have been eliminated upon consolidation.

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

see Note 1 - Organization and Nature of Business Operations and Note 4 - Discontinued Operations and Assets Held for Sale.

The Company consolidates all entities that it controls through a majority voting interest.

In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE.

See Note 2(o) - Variable Interest Entities.

See Note 2(e) - Variable Interest Entities.

The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to interim financial reporting guidelines and the rules and regulations of the SEC.

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

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

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

(b) Risks and Uncertainties

In 2025, the United States introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, with certain exemptions.

To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost, or gross margin of our products that are sold in our Consumer Products segment may be adversely affected and the demand from our customers for products may be diminished.

Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending and may impact the Company’s results of operations.

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements and reported amounts of revenue and expense during the reporting periods.

Estimates are used when accounting for certain items such as valuation of securities, allowance for credit losses, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, embedded derivatives, warrant liabilities, accounting for income tax valuation allowances, and sales returns and allowances.

The unaudited results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

The Company has provided a discussion of significant accounting policies, estimates, and judgments in the Company’s audited annual consolidated financial statements.

There have been no changes to the Company’s significant accounting policies since December 31, 2025 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

(b) Use of Estimates

Estimates are used when accounting for certain items such as valuation of securities, allowance for credit losses, the fair value of loans receivables, intangible assets and goodwill, share-based arrangements, embedded derivatives, warrant and warrant liabilities, accounting for income tax valuation allowances, and sales returns and allowances.

Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances.

Due to the inherent uncertainty involved with estimates, actual results may significantly differ.

(d) Concentration of Risk

Revenues in the Capital Markets, Wealth Management, Communications, and E-Commerce segments are primarily generated in the United States.

Revenues in the Capital Markets, Wealth Management, Lingo, magicJack, Marconi Wireless, and UOL segments are primarily generated in the United States.

Revenues in the Consumer Products segment are primarily generated in the United States, Canada, and Europe.

A significant portion of Lingo’s revenues consists of reselling legacy Plain Old Telephone (“POT”) services copper lines from four major nationwide Incumbent Local Exchange Carriers (“ILECs”) to its customers.

As ILECs have been decommissioning POT lines and halting new POT services, there is a concentration of risk related to Lingo’s ability to attract new POT service customers which adversely affects Lingo’s financial condition, results of operations, and cash flows.

To mitigate this, Lingo has made concerted efforts to transition POT services customers to alternative solutions offered by Lingo.

The Company maintains cash in various federally insured banking institutions.

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The Company has not experienced any losses in such accounts and mitigates this risk by utilizing financial institutions of high credit quality.

(e) Cash and Cash Equivalents and Restricted Cash

At March 31, 2026, the Company also has a concentration in loans receivable at fair value that includes two loans in the amount of $ 21,825 or 87.6 % of total loans receivable to one company (see Note 9 - Loans Receivable, at Fair Value) and securities and other investments owned that includes one investment in the amount of $ 403,189 or 63.0 % of total

securities and other investments owned (see Note 6 - Securities And Other Investments Owned And Securities Sold Not Yet Purchased).

(d) Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company also has restricted cash primarily consisting of cash collateral for leases and at December 31, 2024, restricted cash was used for the full redemption of the 6.375 % Senior Notes due on February 28, 2025.

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

September 30,

2025 December 31,

Cash and cash equivalents $ 184,225 $ 146,852

Restricted cash 1,274 100,475

Total cash, cash equivalents and restricted cash $ 185,499 $ 247,327

(f) Supplemental Non-cash Disclosures

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

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

exchange of senior notes of $ 67,208 .

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

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

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

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

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

(g) Accounts Receivable

Accounts receivable represents amounts due from the Company’s Capital Markets, Wealth Management, Communications, and Consumer Products customers.

The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio.

In establishing the required allowance, management utilizes the expected loss model, which includes the pooling of receivables using the aging method, historical losses, current market conditions, and reasonable supportable forecasts of expected losses.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company does not have any off-balance sheet credit exposure related to its customers.

The Company’s bad debt expense and changes in the allowance for credit losses are included in Note 7 - Accounts Receivable.

(h) Inventories

Inventories are substantially all finished goods from the Consumer Products and Communications segments and are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or net realizable value.

The Company maintains an allowance for excess and obsolete inventories to reflect its estimate of realizable value of the inventory based on historical sales and recoveries.

Inventories are included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.

(i) Rental Merchandise

Rental merchandise is carried at cost, net of accumulated depreciation.

When initially purchased, merchandise is not depreciated until it is leased to its rent-to-own customers.

Leased merchandise is depreciated over the lease term of the rental agreement and recorded as cost of sales.

Rental merchandise that is returned is depreciated from the net book value on the day of the return on a straight-line basis for 24 months until the item is leased again or reaches a zero-dollar salvage value.

Damaged or lost merchandise is written off monthly.

(j) Loans Receivable

Under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments , the Company elected the fair value option for all outstanding loans receivable.

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

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

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

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

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

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

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

The loans have various maturities through February

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

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

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

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

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

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

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

The principal balance of loans receivable on non-accrual was $ 321,544 as of December 31, 2024.

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

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

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

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance and is included in the “Interest income - loans” line item in the unaudited condensed consolidated statements of operations.

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

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

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

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

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

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

Vintage Capital Management, LLC Loan Receivable

On August 21, 2023, one of the Company’s subsidiaries and Vintage Capital Management, LLC (“VCM”), an affiliate of Brian Kahn (“Mr.

Kahn”), amended and restated a promissory note (the “Amended and Restated Note”), pursuant to which VCM owes the Company’s subsidiary the aggregate principal amount of $ 200,506 , which bears interest at the rate of 12.00 % per annum payable-in-kind with a maturity date of December 31, 2027.

The Amended and Restated Note requires repayments prior to the maturity date from certain proceeds received by VCM, Mr.

Kahn or his affiliates from, among other proceeds, distributions or dividends paid by Freedom VCM, Inc.

(“Freedom VCM”) in an amount equal to the greater of (i) 80 % of the net after-tax proceeds, and (ii) 50 % of gross proceeds.

Amounts owing under the Amended and Restated Note may be repaid at any time without penalty.

The obligations under the Amended and Restated Note are primarily secured by a first priority perfected security interest in Freedom VCM’s equity interests owned by Mr.

Kahn, the chief executive officer (“CEO”) and a member of the board of directors of Freedom VCM as of December 31, 2023, and his spouse with a value, based on the transaction price of the take private transaction that included the acquisition of the Franchise Group, Inc.

(“FRG”) by a buyer group that included members of senior management of FRG, led by Mr.

Kahn, FRG’s then CEO (the “FRG take-private transaction”), of $ 227,296 as of August 21, 2023.

On January 22, 2024, Mr.

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

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

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

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

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

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

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

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

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

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

On November 10, 2025, news reports and a court filing by the U.S.

Attorney’s Office for the District of New Jersey indicated that the U.S.

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

On December 10, 2025, Mr.

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

Badcock Corporation and Freedom VCM Receivables, Inc.

Loans Receivable

On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement (“Badcock Receivables I”) with W.S.

Badcock Corporation, a Florida corporation (“WSBC”), which at the time was an indirect wholly owned subsidiary of FRG, which became a subsidiary of Freedom VCM as a result of the transaction on August 21, 2023.

The Company paid $ 400,000 in cash to WSBC for the purchase of certain consumer credit receivables which are small consumer loans issued by WSBC to consumers for the purchase of merchandise sold at WSBC’s stores.

On September 23, 2022, the Company’s then majority-owned subsidiary, B Riley Receivables II, LLC (“BRRII”), a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“Badcock Receivables II”) with WSBC.

This purchase of $ 168,363 consumer credit receivables of WSBC was partially financed by a $ 148,200 term loan.

During the three months ended March 31, 2023, BRRII entered into Amendment No.

3 to Badcock Receivables II with WSBC for a total of $ 145,278 in additional consumer credit receivables.

The accounting for these transactions resulted in the Company recording a loan receivable from WSBC with the recognition of interest income at an imputed rate based on the cash flows expected to be received from the collection of the consumer receivables that serve as collateral for the loan.

The collateral for these loans receivable are the individual consumer credit receivables that were originally issued to WSBC consumers for merchandise sold in WSBC stores and the total amount of collections on these loans receivable is dependent upon their credit performance.

These loans receivable are measured at fair value.

On August 21, 2023, all of the equity interests of BRRII were sold to Freedom VCM Receivables, Inc.

(“Freedom VCM Receivables”), a subsidiary of Freedom VCM, which resulted in a loss of $ 78 .

In connection with the sale, Freedom VCM Receivables entered into the Freedom Receivables Note in the amount of $ 58,872 , with a stated interest rate of 19.74 % per annum and a maturity date of August 21, 2033 with payments of principal and interest on the note limited solely to the performance of certain consumer receivables held by BRRII.

This loan receivable is measured at fair value.

In connection with these loans, the Company entered into a Servicing Agreement with WSBC pursuant to which WSBC provided to the Company certain customary servicing and account management services in respect of the receivables purchased by the Company under the Receivables Purchase Agreement.

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

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

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

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

The principal balances of the two loans exceeded their fair value by $ 39,744 in aggregate as of December 31, 2024.

Loan Receivable

On December 18, 2023, WSBC was sold by Freedom VCM to Conn’s, Inc.

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

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

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

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

The commencement of the Chapter 11 Cases constitutes an event of default that accelerates the repayment obligations of the loan receivable issued to Conn’s.

Any efforts to enforce repayment obligations under the Conn’s loan are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of this loan are subject to the applicable provisions of the Bankruptcy Code.

As a result of the Chapter 11 Cases, the Conn’s loan receivable was placed on non-accrual status.

On December 17, 2024, the Company entered into an agreement with the first-lien holder banks of the Conn’s loan receivable to assign the first-lien loan receivable to the Company for consideration of $ 27,738 .

The fair value and principal balance of the loan receivable was $ 19,761 as of December 31, 2024.

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

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

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

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

Torticity, LLC Loan Receivable

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

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

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

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

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

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

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

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

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

Great American Holdings, LLC Loan Receivable

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

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

BRF’s initial revolving commitment was $ 25,000 with a maturity date of November 15, 2025.

As subsequently amended, the revolving commitment was revised to $ 40,000 for the period March 10, 2025 to June 30, 2025 and reduced back to $ 25,000 from July 1, 2025 until the maturity date.

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

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

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

GA Joann Retail Partnership, LLC Loan Receivable

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

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

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

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

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

September 30,

2025 December 31,

Securities and other investments owned:

Securities and other investments owned at fair value:

Equity securities $ 178,711 $ 165,408

Corporate bonds 33,048 29,027

Other fixed income securities 10,141 4,923

Partnership interests and other 23,575 15,867

Total securities and other investments owned at fair value:

245,475 215,225

Equity securities valued under the measurement alternative 69,991 67,100

Total securities and other investments owned $ 315,466 $ 282,325

Securities sold not yet purchased:

Equity securities $ 18,132 $ —

Corporate bonds 1,954 1,891

Other fixed income securities 2,289 3,784

Total securities sold not yet purchased $ 22,375 $ 5,675

Securities and other investments owned consist of equity securities including, common and preferred stocks, warrants, and options;

corporate bonds;

other fixed income securities including, government and agency bonds, and investments in partnerships that are accounted for at fair value in accordance with ASC 820, Fair Value Measurements (see Note 2(l)).

Equity securities also include investments in public and private companies that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting.

Investments become subject to the equity method of accounting when the Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee.

The ability to exercise significant influence is presumed when the Company possesses more than 20% of the voting interests of the investee.

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

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

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

For these investments the Company has elected to apply the measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments.

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

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

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

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

September 30,

2025 December 31,

Measurement alternative:

Carrying value $ 69,991 $ 67,100

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

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

2025 2024 2025 2024

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

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

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

Fair Value Level 2

As of September 30, 2025

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

As of December 31, 2024

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

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

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

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

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

On August 21, 2023, the Company acquired an equity interest in Freedom VCM for $ 216,500 in cash in connection with the FRG take-private transaction.

In connection with the closing of the FRG take-private transaction, the Company terminated an investment advisory agreement (the “Advisory Agreement”) with Mr.

Pursuant to the Advisory Agreement, Mr.

Kahn, as financial advisor, had the sole power to vote or dispose of $ 64,644 of shares of FRG common stock (based on the value of FRG shares as of the closing date of the FRG take-private transaction) held of record by B.

Riley Securities, Inc.

Upon the termination of the Advisory Agreement, (i) Mr.

Kahn’s right to vote or dispose of such FRG shares terminated, (ii) such FRG shares owned by BRS were rolled over into additional equity interests in Freedom VCM in connection with the FRG take-private transaction, and (iii) Mr.

Kahn owed a total of $ 20,911 to the Company under the Advisory Agreement which amount was added to, and included in, the Amended and Restated Note.

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

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

resulted in a loss of $ 78 .

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

On December 18, 2023, a wholly owned subsidiary of Freedom VCM entered into a transaction that resulted in the sale of all of the operations of WS Badcock to Conn’s in exchange for the issuance by Conn’s of 1,000,000 shares of Conn’s preferred stock (the “Preferred Shares”).

The Preferred Shares issued by Conn’s to Freedom VCM, subject to the terms set forth in the Certificate of Designation, are nonvoting and are convertible into an aggregate of approximately 24,540,295 shares of non-voting common stock of Conn’s, which represented 49.99 % of the issued and outstanding shares of common stock of Conn’s which resulted in consideration received by Freedom VCM of approximately $ 69,900 .

As a result of the convertible preferred stock having a conversion feature into 49.99 % of the common stock of Conn’s, Freedom VCM is considered to have significant influence over Conn’s in accordance with ASC 323 – Investments – Equity Method and Joint Ventures .

On July 23, 2024, Conn’s filed a Chapter 11 Case under the Bankruptcy Code in the Bankruptcy Court.

The original $ 69,900 of consideration that Freedom VCM received from the sale of WS Badcock to Conn’s that was held by Freedom VCM was written off by Freedom VCM after Conn’s bankruptcy filing on July 23, 2024, and there is expected to be no recovery of any value by Freedom VCM.

On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code.

As a result of the bankruptcy filing, the Company no longer had significant influence over Freedom VCM, and the equity investment was written off with a zero balance as of December 31, 2024.

On June 1, 2025, the United States Bankruptcy Court for the District of Delaware entered an Order Confirming the Ninth Amended Joint Chapter 11 Plan of Franchise Group, Inc.

and its affiliated debtors pursuant to the FRG Plan.

Under the FRG Plan, all equity interests and claims related thereto were cancelled and such equity interest holders, including Freedom VCM as an equity holder of Franchise Group, Inc.

will not receive any property or distributions under the FRG Plan.

As a result of the FRG Plan, the Company does not expect to receive any proceeds or distributions from the equity investment in Freedom VCM.

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

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

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

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

September 30, 2024

Current assets $ 871,102

Noncurrent assets $ 2,889,334

Current liabilities $ 569,281

Noncurrent liabilities $ 2,680,178

Equity attributable to investee $ 510,977

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

Revenues $ 767,404 $ 2,383,350

Cost of revenues $ 491,702 $ 1,503,104

Loss from continuing operations $ — $ ( 1,175 )

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

Babcock and Wilcox Enterprises, Inc, Equity Investment

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

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

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

June 30, 2025 September 30, 2024

Current assets $ 526,901 $ 530,223

Noncurrent assets $ 176,589 $ 274,410

Current liabilities $ 529,293 $ 297,928

Noncurrent liabilities $ 482,883 $ 709,823

Deficit attributable to investee $ ( 309,226 ) $ ( 203,694 )

Noncontrolling interest $ 540 $ 576

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

2025 2024 2025 2024

Revenues $ 144,054 $ 233,642 $ 391,524 $ 668,365

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

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

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

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

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

Other Public Company Equity Investments

In March 2024, the Company no longer had board representation in Synchronoss Technologies, Inc.

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

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

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

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

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

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

Revenues $ 43,458 $ 127,825

Cost of revenues $ 10,401 $ 30,916

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

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

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

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

Other Equity Investments

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

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

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

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

June 30, 2025 September 30, 2024

Current assets $ 20,941 $ 215,927

Noncurrent assets $ 136,668 $ 572,628

Current liabilities $ 17,765 $ 86,672

Noncurrent liabilities $ 84,251 $ 105,711

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

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

2025 2024 2025 2024

Revenues $ 16,709 $ 111,909 $ 46,932 $ 372,418

Cost of revenues $ 2,928 $ 76,286 $ 7,725 $ 279,426

Net income (loss) attributable to investees $ 872 $ ( 4,273 ) $ 4,881 $ ( 14,229 )

(l) Fair Value Measurements

As of March 31, 2026 and December 31, 2025, restricted cash primarily consisted of cash held in escrow and cash collateral for leases and loans, which included amounts subject to Deposit Account Control Agreements with lenders in which the Company assigned the rights to the collateral accounts to the lenders.

(e) Variable Interest Entities

The Company holds interests in various entities that meet the characteristics of a VIE.

Interests in these entities are generally in the form of equity interests, loans receivable, or fee arrangements.

The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date.

In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties.

The party with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE.

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

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

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

(c) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders;

(d) the terms between the VIE and its variable interest holders and other parties involved with the VIE;

and (e) related-party relationships with other parties that may also have a variable interest in the VIE.

See Note 3 - Variable Interest Entities and 16 - Noncontrolling Interests for a variable interest entity consolidated during the period.

(f) Fair Value Measurements

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

3 unchanged sentences

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

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

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

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

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

5 unchanged sentences

The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis.

For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks.

These investments are included in Level 3 of the fair value hierarchy.

3 unchanged sentences

the value for these investments is derived from the most recent statements received from the general partner or fund administrator.

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

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

These partnership and investment fund interests are valued at net asset value (“NAV”) and are excluded from the fair value hierarchy in the table in Note 5 - Fair Value Measurements.

The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in realized and unrealized gains (losses) on investments in the accompanying unaudited condensed consolidated statements of operations.

These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer.

Further adjustments are not made until another observable transaction occurs.

Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments.

Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment.

If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

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

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

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

Financial Assets and Liabilities Measured at Fair Value on a

Recurring Basis as of September 30, 2025 Using

Fair value as of September 30, 2025

Quoted prices in active markets

for identical assets

(Level 1) Other observable inputs

(Level 2) Significant unobservable inputs

Securities and other investments owned:

Equity securities $ 178,711 $ 149,734 $ — $ 28,977

Corporate bonds 33,048 86 32,962 —

Other fixed income securities 10,141 — 10,141 —

Total securities and other investments owned 221,900 149,820 43,103 28,977

Loans receivable, at fair value 55,018 — — 55,018

Other assets — — — —

Total assets measured at fair value $ 276,918 $ 149,820 $ 43,103 $ 83,995

Securities sold not yet purchased:

Equity securities $ 18,132 $ 18,132 $ — $ —

Corporate bonds 1,954 — 1,954 —

Other fixed income securities 2,289 — 2,289 —

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

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

Total liabilities measured at fair value $ 30,875 $ 18,132 $ 4,243 $ 8,500

Financial Assets and Liabilities Measured at Fair Value on a

Recurring Basis at December 31, 2024 Using

Fair value at December 31, 2024

Quoted prices in active markets

for identical assets

(Level 1) Other observable inputs

(Level 2) Significant unobservable inputs

Securities and other investments owned:

Equity securities $ 165,408 $ 124,892 $ — $ 40,516

Corporate bonds 29,027 25,461 3,566 —

Other fixed income securities 4,923 — 4,923 —

Total securities and other investments owned 199,358 150,353 8,489 40,516

Loans receivable, at fair value 90,103 — — 90,103

Total assets measured at fair value $ 289,461 $ 150,353 $ 8,489 $ 130,619

Securities sold not yet purchased:

Corporate bonds $ 1,891 $ — $ 1,891 $ —

Other fixed income securities 3,784 — 3,784 —

Total securities sold not yet purchased 5,675 — 5,675 —

Contingent consideration 4,538 — — 4,538

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

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

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

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

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

Fair value at September 30,

2025 Valuation

Technique Unobservable

Input Range Weighted

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

Multiple of sales 0.5 x - 6.0 x

Market price of related security $ 10.07 - $ 11.91

4,860 Option pricing model Annualized volatility 48.0 % - 192.0 %

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

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

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

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

Discount for lack of marketability 12.0 % 12.0 %

Total level 3 liabilities measured at fair value $ 8,500

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

(2) Multiple of earnings before interest, taxes, depreciation, and amortization (“EBITDA”).

Fair value at December 31,

2024 Valuation Technique Unobservable Input Range Weighted

Equity securities $ 34,654 Market approach Multiple of EBITDA 6.3 x

Multiple of Sales 2.1 x - 8.0 x

Market price of related security $ 9.97 - $ 11.10

5,862 Option pricing model Annualized volatility 47.0 % - 171.0 %

Loans receivable at fair value 86,150 Discounted cash flow Discount rate 7.3 % - 69.1 %

3,953 Market approach Market price of related security $ 9.60 - $ 16.48

Total level 3 assets measured at fair value $ 130,619

Contingent consideration $ 4,538 Discounted cash flow Discount rate 5.0 % - 7.5 %

Total level 3 liabilities measured at fair value $ 4,538

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

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

Period Level 3 Changes During the Period Level 3

Period Change in unrealized gains (losses) (2)

Adjustments (1) Relating to

Undistributed

Earnings Purchases/ Originations

Sales Settlements/ Repayments Transfer in

Three Months Ended September 30, 2025

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

Loans receivable at fair value 48,980 1,299 — 47,580 — ( 42,841 ) — 55,018 1,183

Other assets 1,029 ( 1,029 ) — — — — — — ( 1,029 )

Contingent consideration 4,608 ( 4,560 ) — — — ( 48 ) — — 4,560

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

Three Months Ended September 30, 2024

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

Loans receivable at fair value 229,199 ( 71,477 ) 874 27,727 — ( 34,619 ) — 151,704 ( 71,478 )

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

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

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

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

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

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

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

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

Year Level 3 Changes During the Period Level 3

Period Change in unrealized gains (losses) (2)

Adjustments (1) Relating to

Undistributed

Earnings Purchases/ Originations Sales Settlements/ Repayments Transfer in

Nine Months Ended September 30, 2025

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

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

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

Liability-classified warrants — 640 — 7,860 — — — 8,500 ( 640 )

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

Nine Months Ended September 30, 2024

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

Loans receivable at fair value 532,419 ( 259,260 ) 5,136 65,832 ( 22,785 ) ( 169,638 ) — 151,704 ( 267,549 )

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

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

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

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

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

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

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

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

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

(m) Equity Method Investment

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

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

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

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

Upon completion of the sale, the Company retained a minority ownership interest of approximately 44.2 % of the Class A common units of GA Holdings.

GA Holdings operations include appraisal and valuation services, real estate, and retail, wholesale & industrial auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property.

GA Holdings has three classes of equity interests which include common interests, Class A preferred interests and Class B preferred interests.

The Company accounts for its investment in GA Holdings under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures , with a three-month lag.

Under the equity method of accounting, the Company records its proportionate share of earnings or losses;

however, given the capital structure of GA Holdings the Company applies the Hypothetical Liquidation at Book Value (“HLBV”) method on a three-month lag to determine the allocation of profits and losses since the liquidation rights and priorities, as defined by the limited liability agreement of GA Holdings, differ from the Company’s underlying ownership interest.

The HLBV method calculates the proceeds that would be attributable to each partner based on the liquidation provisions of the limited liability agreement as if GA Holdings was to be liquidated at book value as of the balance sheet date.

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

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

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

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

June 30, 2025

Current assets $ 50,040

Noncurrent assets $ 276,007

Current liabilities $ 35,151

Noncurrent liabilities $ 538

Mezzanine equity - preferred units $ 279,097

Equity attributable to investee $ 11,261

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

June 30, 2025

Revenue $ 55,947 $ 114,683

Cost of revenue and expenses $ 54,203 $ 105,431

Net income attributable to investee $ 1,744 $ 9,252

On February 27, 2025, the Company contributed capital and certain financial support in the form of cash and subordinated debt in exchange for minority ownership interest of approximately 47.4 % in Joann Retail.

Joann Retail’s operations include the acquisition and liquidation of Joann Inc’s (and its subsidiaries) retail assets.

Joann Retail has two classes of equity interest which include voting Class A and nonvoting Class B interests.

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

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

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

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

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

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

June 30, 2025

Current assets $ 47,944

Noncurrent assets $ —

Current liabilities $ 47,944

Equity attributable to investee $ —

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

Revenue $ 158,990 $ 158,990

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

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

Riley Retail Opportunity Fund (“SW-B.

The Company accounts for its investments in SW-B.

Retail under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures , under which the Company accounts for its share of SW-B.

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

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

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

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

The Company has elected to measure certain loans and equity investments at fair value to provide management with a more relevant representation for evaluating risk, performance reporting, market conditions, and economic events in earnings on a more timely basis and to provide reporting of the current value of those assets in the accompanying unaudited condensed consolidated balance sheets.

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

Securities and other investments owned consist of equity securities including common and preferred stocks, warrants, and options, corporate bonds, and other fixed income securities including government and agency bonds, loans receivable valued at fair value, and investments in partnerships that are accounted for at fair value (see Note 2(f) - Fair Value Measurements).

Equity securities also include investments in public and private companies that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting.

Refer to Note 2(k) - Equity Method Investments for more information regarding equity method investments.

Dividend income received from equity investments accounted for under the fair value option are recorded to other income in the accompanying unaudited condensed consolidated statements of operations.

Securities sold, but not yet purchased are securities the Company has sold that it does not own (i.e., securities sold short) and, therefore, the Company is obligated to purchase such securities at a future date.

The Company has recorded this obligation on its unaudited condensed consolidated balance sheets at the fair value of the securities borrowed.

There is an element of off-balance sheet risk in that, if the securities sold short increase in value, it will be necessary to purchase the securities sold short at a cost in excess of the obligation reflected on the accompanying unaudited condensed consolidated balance sheets.

Changes in the fair value of securities sold short are recognized in the results of operations in the period in which they occur.

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

For these investments the Company has elected to apply the measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments.

Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including

subsequent equity offerings or other reported equity transactions related to the same issuer.

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

Refer to Note 6 - Securities And Other Investments Owned And Securities Sold Not Yet Purchased.

(h) Accounts Receivable

Accounts receivable represents amounts due from the Company’s Capital Markets, Wealth Management, Lingo, magicJack, Marconi Wireless, UOL and Consumer Products customers.

The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio.

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

The Company does not have any off-balance sheet credit exposure related to its customers.

The Company’s bad debt expense and changes in the allowance for credit losses are included in Note 8 - Accounts Receivable.

(i) Securities Borrowed and Securities Loaned

Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received.

Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender.

With respect to securities loaned, the Company receives collateral in the form of cash.

The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned.

The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.

The Company accounts for securities lending transactions as secured borrowings.

The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 7 - Securities Lending.

(j) Loans Receivable

The Company elected the fair value option for all outstanding loans receivable.

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

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

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance and is included in the “Interest income - loans” line item in the accompanying unaudited condensed consolidated statements of operations.

(k) Equity Method Investments

Equity investments are accounted for under the equity method if the Company is able to exercise significant influence, but not control, over an investee.

The ability to exercise significant influence is presumed when the Company possesses more than 20% of the voting interests of the investee.

Equity investments that are accounted for under the equity method of accounting are included in the “Equity investments” line item in the accompanying unaudited condensed consolidated balance sheets.

The Company’s share of earnings or losses from equity method investees are included in the “Income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The investments are evaluated for impairment annually and when facts and circumstances indicate that the carrying value may not be recoverable.

If a decline in fair value below the carrying value is determined to be not

recoverable, an impairment charge is recorded in “Change in fair value of financial instruments and other” line item in the accompanying unaudited condensed consolidated statements of operations.

(l) Inventories

Inventories are substantially all finished goods from the Consumer Products, magicJack, Marconi Wireless and UOL segments and are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value.

The Company maintains an allowance for excess and obsolete inventories to reflect its estimate of realizable value of the inventory based on historical sales and recoveries.

Inventories are included in prepaid and other assets in the accompanying unaudited condensed consolidated balance sheets.

Refer to Note 11 - Prepaid Expenses and Other Assets.

(m) Rental Merchandise

Rental merchandise is only related to bebe from the Corporate and All Other category and is carried at cost, net of accumulated depreciation.

When initially purchased, merchandise is not depreciated until it is leased to its rent-to-own customers.

Leased merchandise is depreciated over the lease term of the rental agreement and recorded as cost of sales.

Damaged or lost merchandise is written off monthly.

Rental merchandise is included in prepaid and other assets in the unaudited condensed consolidated balance sheets.

Refer to Note 11 - Prepaid Expenses and Other Assets.

(n) Noncontrolling Interests

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The Company’s non-redeemable noncontrolling interest relates to the equity ownership interest of consolidated subsidiaries that it does not own.

The initial fair value of the noncontrolling interest is a nonrecurring Level 3 measurement determined by a weighing of the discounted cash flow method and market approach.

The initial fair value of the noncontrolling interest is determined by a weighing of the discounted cash flow method and market approach.

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

2 unchanged sentences

The market approach included significant estimates using guideline public company data to identify an appropriate market multiple of earnings before income taxes in estimating the fair value of the noncontrolling interest.

Riley Securities Holdings, Inc.

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

Riley Securities Holdings, Inc.

(“BRSH”), which is primarily 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.

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

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

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

The consideration paid in connection with the merger consisted of $ 1,575 of common stock of BRSH, which represented the fair value of the 0.6 % of outstanding common stock of BRSH.

The Company recognized a loss of $ 1,575 , which represented the fair value of the noncontrolling interest in BRSH that was issued to the investors in the shell corporation on March 10, 2025.

The table below summarizes the significant unobservable inputs in determining the fair value measurement on a nonrecurring basis of the noncontrolling interest issued on March 10, 2025 as described above.

In determining the fair value below, the valuation utilized a weighting of 75 % for the discounted cash flow method and 25 % for the market approach.

Fair Value at Measurement Date

Valuation Technique Unobservable Input Range Weighted Average

Noncontrolling interest

$ 1,575 Discounted cash flow and market approach Market interest rate and multiple of EBIT Discount rate 21 % and multiple of EBIT 5.75 x- 10.00 x

Discount rate 21 % and multiple of EBIT 7.3 x (1)

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

BRC Partners Opportunities Trust (the “BRC Trust”)

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

The noncontrolling interest of BRC Trust that is not owned by the Company includes 86.6 % of the equity interests in the BRC Trust.

Of the 86.6 % equity interests not owned by the Company, 58.2 % is owned by related parties as more fully described in Note 21 - Related Party Transactions.

(o) Variable Interest Entities