BRC Group Holdings, Inc. 10-Q

Item 1. Financial Statements. BRC GROUP HOLDINGS, INC. Condensed Consolidated Balance Sheets (Dollars in thousands, except share and par value) June 30, 2026 December 31, 2025 (Unaudited) ASSETS Assets: Cash and cash equivalents (1) $ 154,112 $ 226,601 Restricted cash 1,530 2,676 Due from clearing brokers 31,706 51,000 Securities and other investments owned ($ 660,185 and $ 382,461 at fair value) (1) 723,715 446,843 Securities borrowed 206,717 114,937 Accounts receivable, net of allowance for credit losses of $ 6,209 and $ 6,108 61,382 55,473 Loans receivable, at fair value ($ 1,035 and $ 2,835 from related parties) 38,802 26,303 Equity investments 84,817 90,433 Prepaid expenses and other assets (1) 110,862 128,650 Operating lease right-of-use assets 38,476 32,109 Property and equipment, net 17,850 17,606 Goodwill 392,687 392,687 Other intangible assets, net 101,867 118,290 Deferred income taxes 794 763 Assets of discontinued operations (Note 4) 2,221 2,221 Total assets $ 1,967,538 $ 1,706,592 LIABILITIES AND EQUITY (DEFICIT) Liabilities: Accounts payable $ 35,475 $ 41,463 Accrued expenses and other liabilities ($ 797 and $ 6,400 at fair value) (1) 156,333 154,780 Deferred revenue 46,985 49,907 Deferred income taxes 4,642 4,109 Securities sold not yet purchased, at fair value 9,487 9,809 Securities loaned 189,192 97,321 Operating lease liabilities 46,307 40,902 Revolving credit facilities 31,316 6,638 Term loans, net 115,770 119,297 Senior notes payable, net 1,129,966 1,301,798 Liabilities of discontinued operations (Note 4) 830 830 Total liabilities $ 1,766,303 $ 1,826,854 Commitments and contingencies (Note 26) 1 Table of Contents BRC Group Holdings, Inc. stockholders’ equity (deficit): Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; 4,563 shares issued and outstanding and liquidation preference of $ 126,172 and $ 122,142 — — Common stock, $ 0.0001 par value; 100,000,000 shares authorized; 40,199,755 and 30,597,066 issued and outstanding 4 3 Additional paid-in capital 680,097 598,022 Accumulated deficit ( 529,464 ) ( 763,286 ) Accumulated other comprehensive loss ( 8,468 ) ( 6,272 ) Total BRC Group Holdings, Inc. stockholders’ equity (deficit) 142,169 ( 171,533 ) Noncontrolling interests (1) 59,066 51,271 Total equity (deficit) 201,235 ( 120,262 ) Total liabilities and equity (deficit) $ 1,967,538 $ 1,706,592 (1) At June 30, 2026 and December 31, 2025 the balance sheet includes cash of $ 183 and $ 446 , securities and other investments owned, at fair value of $ 713 and $ 682 , prepaid and other expenses of $ 3,678 and $ 3,737 , accrued expenses and other liabilities of $ 28 and $ 28 , and noncontrolling interest of $ 3,939 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. 2 Table of Contents BRC GROUP HOLDINGS, INC. Condensed Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Services and fees ($ 6,976 and $ 5,121 for the three months and $ 12,899 and $ 7,849 for the six months ended June 30, 2026 and 2025 from related parties, respectively) $ 173,595 $ 145,772 $ 325,717 $ 304,611 Trading gains, net 12,874 27,680 157,935 11,509 Fair value adjustments on loans ($ 82 and $( 992 ) for the three months and $ 56 and $( 3,137 ) for the six months ended June 30, 2026 and 2025 from related parties, respectively) 4,245 800 10,790 ( 7,296 ) Interest income - loans ($ — and $ 475 for the three months and $ — and $ 1,171 for the six months ended June 30, 2026 and 2025 from related parties, respectively) 2,171 3,853 3,885 7,049 Interest income - securities lending 1,632 2,124 2,883 2,964 Sale of goods 44,600 45,073 89,967 92,528 Total revenues 239,117 225,302 591,177 411,365 Operating expenses: Direct cost of services 29,364 33,216 61,066 75,916 Cost of goods sold 31,361 35,113 63,726 71,846 Selling, general and administrative expenses 133,377 142,369 267,725 309,757 Restructuring charge (Note 18) 1,914 321 1,914 321 Impairment of tradename 4,000 1,500 4,000 1,500 Interest expense - Securities lending and loan participations sold 906 1,968 1,623 2,687 Total operating expenses 200,922 214,487 400,054 462,027 Operating income (loss) 38,195 10,815 191,123 ( 50,662 ) Other income (expense): Interest income 339 492 697 1,978 Dividend income 133 122 802 257 Realized and unrealized gains (losses) on investments 12,092 10,216 117,192 ( 4,284 ) Change in fair value of financial instruments and other 1,546 11,884 ( 2,881 ) 12,806 Gain on sale and deconsolidation of businesses — 5,372 — 86,213 Gain on senior note exchange — 44,454 — 54,986 (Loss) income from equity investments ( 5,459 ) 25,603 ( 4,133 ) 25,051 (Loss) gain on extinguishment of debt ( 1,283 ) ( 10,266 ) 1,607 ( 20,693 ) Interest expense ( 18,016 ) ( 23,952 ) ( 37,810 ) ( 53,916 ) Income from continuing operations before income taxes 27,547 74,740 266,597 51,736 Provision for income taxes ( 5,950 ) ( 3,053 ) ( 22,841 ) ( 11 ) Income from continuing operations 21,597 71,687 243,756 51,725 Income from discontinued operations, net of income taxes — 69,312 — 72,707 Net income 21,597 140,999 243,756 124,432 Net income (loss) attributable to noncontrolling interests 1,048 1,528 9,934 ( 5,064 ) Net income attributable to BRC Group Holdings, Inc. 20,549 139,471 233,822 129,496 Preferred stock dividends 2,015 2,015 4,030 4,030 Net income available to common shareholders $ 18,534 $ 137,456 $ 229,792 $ 125,466 3 Table of Contents Basic net income per common share: Continuing operations $ 0.49 $ 2.23 $ 6.59 $ 1.73 Discontinued operations — 2.27 — 2.38 Basic income per common share $ 0.49 $ 4.50 $ 6.59 $ 4.11 Diluted net income per common share: Continuing operations $ 0.45 $ 2.23 $ 6.47 $ 1.73 Discontinued operations — 2.27 — 2.38 Diluted income per common share $ 0.45 $ 4.50 $ 6.47 $ 4.11 Weighted average basic common shares outstanding 37,811,031 30,527,835 34,879,728 30,512,757 Weighted average diluted common shares outstanding 38,422,185 30,527,835 35,311,001 30,512,757 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents BRC GROUP HOLDINGS, INC. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Dollars in thousands) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income $ 21,597 $ 140,999 $ 243,756 $ 124,432 Other comprehensive income (loss): Change in cumulative translation adjustment ( 1,319 ) 1,158 ( 2,196 ) 671 Other comprehensive (loss) income, net of tax ( 1,319 ) 1,158 ( 2,196 ) 671 Total comprehensive income 20,278 142,157 241,560 125,103 Comprehensive income (loss) attributable to noncontrolling interests 1,048 1,528 9,934 ( 5,064 ) Comprehensive income attributable to BRC Group Holdings, Inc. $ 19,230 $ 140,629 $ 231,626 $ 130,167 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Table of Contents BRC GROUP HOLDINGS, INC. Condensed Consolidated Statements of Equity (Deficit) (Unaudited) (Dollars in thousands, except share and per share data) For the Three Months Ended June 30, 2026 and 2025 Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Noncontrolling Interests Total Equity (Deficit) Shares Amount Shares Amount Balance, April 1, 2026 4,563 $ — 35,150,932 $ 4 $ 634,479 $ ( 550,013 ) $ ( 7,149 ) $ 59,011 $ 136,332 Common stock issued, in connection with redemption of Senior Notes — — 3,804,629 — 34,284 — — — 34,284 Common stock issued, in connection with the exercise of warrants — — 915,251 — 9,400 — — — 9,400 Vesting of restricted stock, net of shares withheld for employer taxes — — 328,943 — ( 929 ) — — — ( 929 ) Share-based payments — — — — 2,863 — — — 2,863 Share-based payments in equity of subsidiary — — — — — — — 365 365 Net income — — — — — 20,549 — 1,048 21,597 Distributions to noncontrolling interests and other — — — — — — — ( 1,358 ) ( 1,358 ) Other comprehensive loss — — — — — — ( 1,319 ) — ( 1,319 ) Balance, June 30, 2026 4,563 $ — 40,199,755 $ 4 $ 680,097 $ ( 529,464 ) $ ( 8,468 ) $ 59,066 $ 201,235 Balance, April 1, 2025 4,563 $ — 30,497,066 $ 3 $ 591,207 $ ( 1,080,971 ) $ ( 7,056 ) $ 42,847 $ ( 453,970 ) Common stock issued, in connection with employment agreement — — 100,000 — 295 — — — 295 Warrants issued — — — — 737 — — — 737 Share-based payments — — — — 3,193 — — — 3,193 Share-based payments in equity of subsidiary — — — — — — — 1,277 1,277 Dividend forfeitures on unvested equity awards — — — — — 257 — — 257 Net income — — — — — 139,471 — 1,528 140,999 Distributions to noncontrolling interests — — — — — — — ( 3,249 ) ( 3,249 ) Other comprehensive income — — — — — — 1,158 — 1,158 Balance, June 30, 2025 4,563 $ — 30,597,066 $ 3 $ 595,432 $ ( 941,243 ) $ ( 5,898 ) $ 42,403 $ ( 309,303 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 Table of Contents For the Six Months Ended June 30, 2026 and 2025 Preferred Stock Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Noncontrolling Interests Total Equity (Deficit) Shares Amount Shares Amount 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 — — 8,358,495 1 67,784 — — — 67,785 Common stock issued, in connection with the exercise of warrants — — 915,251 — 9,400 — — — 9,400 RSU equity awards reclassified from liability — — — — 2,589 — — — 2,589 Vesting of restricted stock, net of shares withheld for employer taxes — — 328,943 — ( 929 ) — — — ( 929 ) Share-based payments — — — — 3,231 — — — 3,231 Share-based payments in equity of subsidiary — — — — — — — 1,121 1,121 Vesting of shares in equity of subsidiary — — — — — — — ( 1,902 ) ( 1,902 ) Net income — — — — — 233,822 — 9,934 243,756 Distributions to noncontrolling interests and other — — — — — — — ( 1,358 ) ( 1,358 ) Other comprehensive loss — — — — — — ( 2,196 ) — ( 2,196 ) Balance, June 30, 2026 4,563 $ — 40,199,755 $ 4 $ 680,097 $ ( 529,464 ) $ ( 8,468 ) $ 59,066 $ 201,235 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 ) Common stock forfeited — — ( 2,865 ) — — — — — — Warrants issued — — — — 1,600 — — — 1,600 Share-based payments — — — — 6,336 — — — 6,336 Share-based payments in equity of subsidiary — — — — 23 — — 1,570 1,593 Vesting of shares in equity of subsidiary — — — — ( 71 ) — — — ( 71 ) Dividend forfeitures on unvested equity awards — — — — — 257 — — 257 Net income (loss) — — — — — 129,496 — ( 5,064 ) 124,432 Distributions to noncontrolling interests — — — — — — — ( 3,249 ) ( 3,249 ) Common stock issuance in equity of subsidiary — — — — — — — 1,575 1,575 Disposition from sale and deconsolidation of businesses — — — — — — — 2,918 2,918 Initial consolidation of VIE — — — — — — — 12,494 12,494 Other comprehensive income — — — — — — 671 — 671 Balance, June 30, 2025 4,563 $ — 30,597,066 $ 3 $ 595,432 $ ( 941,243 ) $ ( 5,898 ) $ 42,403 $ ( 309,303 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 7 Table of Contents BRC GROUP HOLDINGS, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) Six Months Ended June 30, 2026 2025 Cash flows from operating activities (1) : Net income $ 243,756 $ 124,432 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 15,137 18,798 Provision for losses on accounts receivable 873 1,614 Share-based compensation 5,666 8,606 Fair value and remeasurement adjustments ($( 56 ) and $ 3,011 from related parties) ( 6,461 ) ( 6,789 ) Non-cash interest and other (includes $ — and $( 268 ) from related parties) 3,516 6,584 Depreciation of rental merchandise 6,094 6,698 Net foreign currency losses (gains) 18 ( 481 ) Loss (income) from equity investments 4,133 ( 25,051 ) Dividends from equity investments 273 122 Deferred income taxes 502 9,100 Impairment of tradename 4,000 1,500 Gain on disposal of discontinued operations — ( 66,795 ) Loss (gain) on sale or disposal of fixed assets and other 143 ( 1,147 ) Gain on sale and deconsolidation of businesses — ( 86,213 ) (Gain) loss on extinguishment of debt ( 1,607 ) 20,693 Gain on senior note exchange — ( 54,986 ) Change in operating assets and liabilities: Amounts due to/from clearing brokers 19,294 ( 14,668 ) Securities and other investments owned ( 278,602 ) 39,126 Securities borrowed ( 91,780 ) ( 29,298 ) Accounts receivable ( 6,784 ) 3,542 Prepaid expenses and other assets ($ — and $ 3,373 from related parties) 11,080 6,728 Accounts payable, accrued expenses and other liabilities 2,005 ( 13,665 ) Amounts due to/from related parties and partners — ( 2,290 ) Securities sold not yet purchased ( 322 ) 6,672 Deferred revenue ( 2,922 ) ( 4,609 ) Securities loaned 91,871 26,402 Net cash provided by (used in) operating activities 19,883 ( 25,375 ) Cash flows from investing activities (1) : Purchases of loans receivable ($ — and $ 50,853 from related parties) ( 44,192 ) ( 66,650 ) Repayments of loans receivable ($ 1,855 and $ 50,883 by related parties) 44,403 105,378 Proceeds from sale of loans receivable ($ — and $ 6,611 from related parties) — 10,415 Proceeds from loan participations sold — 4,475 Proceeds from sale of business, net of cash sold and other — 94,938 Purchases of property, equipment, and intangible assets ( 2,241 ) ( 9,148 ) Proceeds from sale of property, equipment, intangible assets, and other — 7,173 8 Table of Contents Distributions from equity investments 1,210 34,869 Purchases of equity and other investments — ( 6,621 ) Consolidation of VIE — 359 Proceeds from sale of discontinued operations, net of cash sold — 114,032 Net cash (used in) provided by investing activities ( 820 ) 289,220 Cash flows from financing activities (1) : Proceeds from revolving lines of credit 108,077 46,374 Repayment of revolving lines of credit ( 83,399 ) ( 50,627 ) Proceeds from note payable — 850 Repayment of notes payable and other ( 592 ) ( 13,138 ) Repayment of term loans ( 6,250 ) ( 310,253 ) Proceeds from term loans — 235,550 Redemption of senior notes, net ( 90,594 ) ( 145,302 ) Repurchases and payments on senior notes ( 13,122 ) — Payment of debt issuance and offering costs ( 441 ) ( 11,253 ) Payment of contingent consideration — ( 1,376 ) Payment of employment taxes on vesting of restricted stock ( 2,831 ) — Distributions to noncontrolling interests ( 1,358 ) ( 3,249 ) Net cash used in financing activities ( 90,510 ) ( 252,424 ) (Decrease) increase in cash, cash equivalents and restricted cash (1) ( 71,447 ) 11,421 Effect of foreign currency on cash, cash equivalents and restricted cash (1) ( 2,188 ) 546 Net (decrease) increase in cash, cash equivalents and restricted cash (1) ( 73,635 ) 11,967 Cash, cash equivalents and restricted cash from continuing operations, beginning of period 229,277 248,651 Cash, cash equivalents and restricted cash from discontinued operations, beginning of period — 8,025 Cash, cash equivalents and restricted cash, beginning of period 229,277 256,676 Cash, cash equivalents and restricted cash from continuing operations, end of period 155,642 268,643 Cash, cash equivalents and restricted cash from discontinued operations, end of period — — Cash, cash equivalents and restricted cash, end of period $ 155,642 $ 268,643 Reconciliation of cash, cash equivalents and restricted cash to amounts reported in the condensed consolidated balance sheets: Cash and cash equivalents $ 154,112 $ 267,388 Restricted cash 1,530 1,255 Total cash, cash equivalents and restricted cash $ 155,642 $ 268,643 Supplemental disclosure of cash flow information: Interest paid $ 38,418 $ 55,011 Taxes paid 838 2,139 9 Table of Contents Supplemental disclosure of non-cash investing and financing activities: Transfer of loans to held for sale from loans receivable at fair value $ — $ 8,876 Issuance of common stock in equity of subsidiary — 1,575 Issuance of warrants for term loan — 7,860 Recognition of derivative liability for term loan springing maturity 797 — 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 redemption of senior notes 67,785 — Issuance of warrants for senior notes — 1,600 Settlement of warrant liability upon cashless exercise 9,400 — Exchange of preferred stock investment for loan receivable 1,198 — (1) Amounts presented contain results from both continuing and discontinued operations. Refer to Note 4 – Discontinued Operations and Assets Held for Sale for additional information regarding cash flow associated with the results of discontinued operations. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 10 Table of Contents BRC GROUP HOLDINGS, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands, except share and per share data) NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS OPERATIONS BRC Group Holdings, 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’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) 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 For the six months ended June 30, 2026, the Company generated net income of $ 243,756 . During the six months ended June 30, 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 six months ended June 30, 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 $ 69,054 of senior notes which included (i) $ 11,002 of the 5.50 % Senior Notes which were due March 31, 2026, (ii) $ 36,133 of the 6.50 % Senior Notes due September 30, 2026, (iii) $ 8,945 of the 5.00 % Senior Notes due December 31, 2026, (iv) $ 6,383 of the 6.00 % Senior Notes due January 31, 2028, and (v) $ 6,591 of the 5.25 % Senior Notes due August 31, 2028 for an aggregate of 8,358,495 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. 11 NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ( a) Principles of Consolidation and Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of BRC Group Holdings, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. 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(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. The condensed consolidated balance sheet at December 31, 2025 was derived from our audited annual consolidated financial statements. Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. 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/A for the year ended December 31, 2025. 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 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 period. 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. (c) Concentration of Risk 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 Services (“POTS”) copper lines from four major nationwide Incumbent Local Exchange Carriers (“ILECs”) to its customers. As ILECs have been decommissioning POTS lines and halting new POTS, there is a concentration of risk related to Lingo’s ability to attract new POTS customers which adversely affects Lingo’s financial condition, results of operations, and cash flows. To mitigate this, Lingo has made concerted efforts to transition POTS customers to alternative solutions offered by Lingo. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a 12 concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts and mitigates this risk by utilizing financial institutions of high credit quality. At June 30, 2026, the Company had concentrations in loans receivable at fair value that includes two loans to XBP Americas, LLC totaling $ 15,041 , or 38.8 % of total loans receivable, and one loan to Enovum NC-1 Venture, LLC, a subsidiary of a public AI Infrastructure company, totaling $ 19,794 , or 51.0 % of total loans receivable (see Note 9 - Loans Receivable, at Fair Value). Additionally, the Company had a concentration in securities and other investments owned at June 30, 2026 that includes investments in two publicly traded companies individually in the amounts of $ 386,996 or 53.5 % and $ 80,040 or 11.1 % 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. As of June 30, 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. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable, and actively traded in over-the-counter markets. 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 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. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. 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. 13 The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. 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. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds, and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; 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 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 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. 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. 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 14 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. 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 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. 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. 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. 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 15 representation on the board of directors of such 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. 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. 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 Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to the Company. 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 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. The five-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated required return on equity for market participants at the time of the analysis. 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. Refer to Note 16 - Noncontrolling Interests. (o) Recent Accounting Standards Not yet adopted In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles - Goodwill and Other Internal Use Software . This ASU was issued to modernize the accounting for software costs by removing references to prescriptive and sequential software development stages and providing an updated framework for capitalizing internal software costs. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses . This ASU requires additional expense disclosures by public entities in the notes to the financial statements. The ASU outlines the specific costs that are required 16 to be disclosed which include such costs as: purchases of inventory, employee compensation, depreciation, intangible asset amortization, selling costs, and depreciation, depletion, and amortization related to oil and gas production. It also requires qualitative descriptions of the amounts remaining in the relevant expense income statement captions that are not separately disaggregated quantitatively in the notes to the financial statements and the entity’s definition of selling expenses. The disclosures are required for each interim and annual reporting period. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Claiming the Effective Date, which clarified the effective date for entities that do not have an annual reporting period that ends on December 31 st . The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations. Recently adopted In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses - Measurement of Credit Losses for Accounts Receivable and Contract Assets . This ASU provides a practical expedient that simplifies the estimation of credit losses on accounts receivable and contract assets arising from transactions accounted for under ASC 606 - Revenue from Contracts with Customers by assuming that current conditions as of the balance sheet date do not change for the remaining life of these assets when estimating expected credit losses. The Company adopted this ASU effective January 1, 2026, and the adoption did not have a material impact on the Company’s financial position, results of operations, or cash flows. NOTE 3 — VARIABLE INTEREST ENTITIES On August 21, 2023, in connection with the Franchise Group, Inc. (“FRG”) take-private transaction, one of the Company’s subsidiaries (the “Lender”) and an affiliate of Mr. Kahn (the “Borrower”) entered into an amended and restated promissory note as discussed further in Note 9 - Loans Receivable, at Fair Value. The Company was not involved in the design of the Borrower, has no equity financial interest, and has no rights to make decisions or participate in the management of the Borrower that significantly impact the economics of the Borrower. Since the Company does not have the power to direct the activities of the Borrower, the Company is not the primary beneficiary and therefore does not consolidate the Borrower. The promissory note is included in the “Loans receivable, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets and is a variable interest in accordance with the accounting guidance at December 31, 2025, and the maximum amount of loss exposure to the VIE on a fair value basis was $ 1,835 . In February 2026, the Company collected proceeds in the amount of $ 1,855 from the sale of collateral related to the promissory note and does not expect to collect any further amounts. As such, there is no balance remaining for the promissory note that is included in Loans receivable, at fair value in the Company’s accompanying unaudited condensed consolidated balance sheets at June 30, 2026 and the promissory note is no longer a variable interest. On April 14, 2026, the Company invested $ 750 in a Special Purpose Entity (“SPE”) that owns a publicly traded equity security. The SPE is managed by a third party that serves as the investment manager. The Company owns approximately 7 % of the SPE in the form of a Class A membership interest in the limited liability company. The SPE governing documents do not provide any kick-out or participating rights. Since the Company does not have the power to direct the SPE’s activities, the Company is not the primary beneficiary and therefore does not consolidate the SPE. However, 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 its equity investment in the SPE under the fair value option. The Class A membership interest is included as an equity security at fair value in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheet at June 30, 2026 and is a variable interest in accordance with the accounting guidance. As of June 30, 2026, the maximum amount of loss exposure to the VIE was $ 1,294 . On May 26, 2026, a strategic asset company assigned a $ 20,000 advance under an existing facility with Enovum NC-1 Venture, LLC (“Enovum”), to the Company’s wholly owned subsidiary B. Riley Securities, Inc. (“BRS”) for consideration of $ 19,400 , and Enovum issued a promissory note to BRS on the same economic terms as the original lender, as discussed further in Note 9 - Loans Receivable, at Fair Value. The Company determined that Enovum is a variable interest entity because its equity at risk is insufficient to finance its activities without additional subordinated financial support. Since the Company does not have the power to direct the activities of Enovum, the Company is not the primary beneficiary and therefore does not consolidate Enovum. The promissory note is included in the “Loans receivable, at fair value” line item in the accompanying unaudited condensed consolidated balance sheet at June 30, 2026 and is a variable interest in 17 accordance with the accounting guidance. As of June 30, 2026, the maximum amount of loss exposure to the VIE on a fair value basis was $ 20,545 . The carrying amounts included in the Company’s accompanying unaudited condensed consolidated balance sheets related to variable interests in VIEs that were not consolidated are shown below. June 30, 2026 December 31, 2025 Securities and other investments owned, at fair value $ 1,294 $ — Loans receivable, at fair value 19,794 17,294 Other assets 4,046 3,500 Maximum exposure to loss $ 25,134 $ 20,794 Bicoastal Alliance, LLC (“Bicoastal”) On May 3, 2024, as part of the acquisition of Nogin, the Company acquired a 50 % equity interest in Bicoastal through a wholly owned subsidiary of Nogin. Bicoastal is a holding company designed to manage the investments, including strategy and operations, for two brand apparel operating companies. The Company determined Bicoastal is a variable interest entity as it does not have sufficient resources to carry out its management activities without additional financial support. The Company determined that it has the power to direct the activities that most significantly impact Bicoastal’s economic performance, has more equity capital at risk, and is expected to continue to fund operations. Therefore, the Company determined that it is the primary beneficiary of Bicoastal and has reported its investment in the assets and liabilities in the accompanying unaudited condensed consolidated balance sheets and consolidated its results into the Company’s accompanying unaudited condensed consolidated statements of operations. On August 14, 2024, Bicoastal entered into an agreement to acquire the remaining 50 % equity interest upon paydown of a $ 700 note payable to the noncontrolling interest noteholder with a final repayment date and equity ownership interest transfer date of June 30, 2025. On March 31, 2025, the Company signed a Deed of Assignment for the Benefit of Creditors (“ABC”), (i) pursuant to which all of the assets of Nogin were transferred to an assignee for the benefit of Nogin’s creditors, and (ii) which provided the assignee the right to, among other things, sell or dispose of such assets and settle all claims against Nogin. The Company no longer controls or owns the assets of Nogin or has any remaining or future obligations to Nogin’s creditors. The results of operations were deconsolidated on March 31, 2025 and are no longer reported in the Company’s financial statements after March 31, 2025. Management does not expect any recovery of the Company’s investment in Nogin. Subsequent to March 31, 2025, certain of Nogin’s creditors filed an involuntary petition for relief under chapter 7 of title 11 of the United States Code in the United States Bankruptcy Court for the District of New York and an order for relief was entered to move the ABC to a liquidation. A gain of $ 28,411 was recognized during the six months ended June 30, 2025 from deconsolidation of Nogin, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations. BRC Partners Opportunities Trust (“BRC Trust”) BRC Trust was formed on January 6, 2025, for the purpose of transferring the assets and liabilities of BRC Partners Opportunity Fund, L.P., a Delaware limited partnership (“BRCPOF”), and liquidating the transferred net assets. BRCPOF transferred its assets and liabilities upon formation of the BRC Trust. The Company determined that the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights and substantially all of the activities are conducted on behalf of the Company and its related parties which own 13.3 % and 58.2 % (see Note 24 - Related Party Transactions), respectively, of the equity interest in the BRC Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidates the BRC Trust upon formation on January 6, 2025. Additionally, the BRC Trust does not meet the definition of a business and the initial consolidation of the BRC Trust did not result in a gain or loss upon initial consolidation. 18 The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of June 30, 2026 and December 31, 2025, are as follows: June 30, 2026 December 31, 2025 Assets Cash and cash equivalents $ 183 $ 446 Securities and other investments owned, at fair value 713 682 Prepaid expenses and other assets 3,678 3,737 Total assets $ 4,574 $ 4,865 Liabilities Accrued expenses and other liabilities $ 28 $ 28 Total liabilities $ 28 $ 28 Noncontrolling interest $ 3,939 $ 4,192 B. Riley Securities Holdings, Inc. (“BRSH”) On March 10, 2025, a merger subsidiary of the Company’s wholly-owned subsidiary BRSH merged with a shell corporation traded on the OTC exchange. The shell corporation survived the transaction as a wholly-owned subsidiary of BRSH as more fully described in Note 16 – Noncontrolling interests. The shell corporation did not meet the definition of a business, since it did not have any assets, liabilities, or operations. The Company concluded that it has a variable interest in the shell corporation on the basis the Company owns substantially all the outstanding common stock in the shell corporation. The shell corporation is a variable interest entity since its equity at risk is considered insufficient to finance its activities without additional support. As a result, the Company was determined to be the primary beneficiary and consolidates the shell corporation. The shell remains dormant, and the Company does not have any obligations to the shell corporation to provide financial support. 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 on the initial recognition of a variable interest entity, 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. NOTE 4 — DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE Assets Held For Sale Wealth Management On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s (W-2) Wealth Management business to Stifel Financial Corp. (“Stifel”) for estimated net consideration based on the number of advisors that join Stifel at closing, among other things. Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $ 26,037 , representing 36 financial advisors whose managed accounts represent approximately $ 4.0 billion, or 23.6 %, of total assets under management as of the close of the transaction. A gain of $ 5,372 was recognized during the three and six months ended June 30, 2025 from this sale, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations. 19 Atlantic Coast Recycling On March 3, 2025, the Company, BR Financial Holdings, LLC (“BRFH”), B. Riley Environmental Holdings, LLC and other indirect subsidiaries of the Company which included Atlantic Coast Recycling, LLC and Atlantic Coast Recycling of Ocean County, LLC entered into the Membership Interest Purchase Agreement (“MIPA”), whereby the interests owned by BRFH and the minority holders were sold to a third party in accordance with the terms of the MIPA on March 3, 2025. The interests were sold to the third party on March 3, 2025 for a purchase price of $ 102,478 , subject to certain adjustments and a holdback amount pending receipt of a certain third party consent, resulting in cash proceeds of $ 68,638 to the Company after adjustments for amounts allocated to noncontrolling interests, repayment of contingent consideration, transaction costs and other items directly attributable to the closing of the transaction. Of the $ 68,638 of cash proceeds received by the Company, approximately $ 22,610 was used to pay interest, fees, and principal on the Credit Facility entered into with Oaktree Capital Management L.P. (“Oaktree”) on February 26, 2025. A gain of $ 52,430 was recognized during the six months ended June 30, 2025 from this sale, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations. Operating results from the sale of the Wealth Management business and Atlantic Coast Recycling businesses contributed to the operating incomes of the Wealth Management segment and Corporate and All Other category, respectively, for the six months ended June 30, 2025. Discontinued Operations The Company presents a disposition of a component, being an operating or reportable segment, business unit, subsidiary or asset group, that represents a strategic shift that has or will have a major effect on the Company’s operations and financial results as discontinued operations when the components meet the criteria to be classified as held for sale. The following operations have been presented as discontinued operations. GlassRatner and Farber On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber from the Company’s Financial Consulting reportable segment. The aggregate cash consideration paid by the buyers for the interests of GlassRatner and shares of Farber was $ 117,800 , which was based on a target closing working capital amount that was subject to adjustment within 180 days following the sale date. In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services. The major classes of assets and liabilities included in discontinued operations were as follows: June 30, 2026 December 31, 2025 Assets: Prepaid expenses and other assets $ 2,221 $ 2,221 Total assets $ 2,221 $ 2,221 Liabilities: Accrued expenses and other liabilities $ 830 $ 830 Total liabilities $ 830 $ 830 20 Revenues, expenses and income from discontinued operations for the three and six months ended June 30, 2025 were as follows: Three Months Ended Six Months Ended June 30, 2025 June 30, 2025 Revenues: Services and fees $ 19,465 $ 40,575 Operating expenses: Selling, general and administrative expenses 16,592 34,205 Operating income 2,873 6,370 Other income: Interest income 4 7 Gain on disposal of discontinued operations before income taxes 66,795 66,795 Income from discontinued operations before income taxes 69,672 73,172 Provision for income taxes ( 360 ) ( 465 ) Income from discontinued operations, net of income taxes $ 69,312 $ 72,707 Cash flows from discontinued operations were as follows: Six Months Ended June 30, 2025 Net cash from discontinued operations provided by (used in): Operating activities $ 22,022 Investing activities 114,032 Financing activities ( 144,581 ) Effect of foreign currency on cash 502 Net decrease in cash and cash equivalents $ ( 8,025 ) Supplemental disclosures from cash flows were as follows: Six Months Ended June 30, 2025 Interest paid - Continuing Operations $ 55,011 Interest paid - Discontinued Operations — Interest paid - Total $ 55,011 Taxes paid - Continuing Operations $ 2,139 Taxes paid - Discontinued Operations — Taxes paid - Total $ 2,139 21 NOTE 5 — FAIR VALUE MEASUREMENTS The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2026 and December 31, 2025. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of June 30, 2026 Using Fair value as of June 30, 2026 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities and other investments owned: Equity securities $ 541,444 $ 432,120 $ 276 $ 109,048 Partnership interests and other investments 83,026 — — 83,026 Corporate bonds 28,166 — 28,166 — Other fixed income securities 5,175 4,973 202 — Total securities and other investments owned 657,811 437,093 28,644 192,074 Loans receivable, at fair value 38,802 — — 38,802 Total assets measured at fair value $ 696,613 $ 437,093 $ 28,644 $ 230,876 Liabilities: Securities sold not yet purchased: Equity securities $ 8,894 $ 8,593 $ 301 $ — Corporate bonds 593 — 593 — Total securities sold not yet purchased 9,487 8,593 894 — Embedded derivatives, included in accrued expenses and other liabilities 797 — — 797 Total liabilities measured at fair value $ 10,284 $ 8,593 $ 894 $ 797 22 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2025 Using Fair value at December 31, 2025 Quoted prices in active markets for identical assets (Level 1) Other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Securities and other investments owned: Equity securities $ 304,422 $ 233,199 $ — $ 71,223 Partnership interests and other investments 40,082 — — 40,082 Corporate bonds 31,751 — 31,751 — Other fixed income securities 4,373 2,957 1,416 — Total securities and other investments owned 380,628 236,156 33,167 111,305 Loans receivable, at fair value 26,303 — — 26,303 Total assets measured at fair value $ 406,931 $ 236,156 $ 33,167 $ 137,608 Liabilities: Securities sold not yet purchased: Equity securities $ 9,342 $ 9,342 $ — $ — Corporate bonds 467 — 467 — Total securities sold not yet purchased 9,809 9,342 467 — Liability-classified warrants 6,400 — — 6,400 Total liabilities measured at fair value $ 16,209 $ 9,342 $ 467 $ 6,400 As of June 30, 2026 and December 31, 2025, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $ 230,876 and $ 137,608 , respectively, or 11.7 % and 8.1 %, 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, multiple of EBITDA and indexes, the market price of related securities, annualized volatility, carried interest %, 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. 23 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 June 30, 2026 and December 31, 2025: Fair value at June 30, 2026 Valuation Technique Unobservable Input Range Weighted Average (1) Assets: Equity securities $ 28,087 Market approach Multiple of EBITDA and indexes 1.8 x - 7.3 x 4.3 x Multiple of sales 0.7 x - 8.5 x 2.2 x Market price of related security $ 10.32 - $ 12.01 $ 10.70 80,040 Monte Carlo simulation Annualized volatility 120.0 % 120.0 % 921 Option pricing model Annualized volatility 50.0 % - 110.0 % 52.0 % Partnership interests and other investments 83,026 Market approach Carried interest sharing 15.0 % - 46.3 % 33.1 % Loans receivable at fair value 38,802 Discounted cash flow Discount rate 6.8 % - 93.7 % 36.0 % Recovery rate 35.9 % 35.9 % Total level 3 assets measured at fair value $ 230,876 Liabilities: Embedded derivatives, included in accrued expenses and other liabilities $ 797 Discounted cash flow Discount rate 15.9 % 15.9 % Monte Carlo simulation Annualized volatility 95.0 % - 100.0 % 97.5 % Total level 3 liabilities measured at fair value $ 797 (1) Unobservable inputs were weighted by the relative fair value of the financial instruments. 24 Fair value at December 31, 2025 Valuation Technique Unobservable Input Range Weighted Average (1) Assets: Equity securities $ 25,572 Market approach Multiple of sales 0.7 x - 6.0 x 2.3 x Market price of related security $ 2.14 - $ 12.01 $ 10.97 43,101 Monte Carlo simulation Annualized volatility 120.0 % - 148.0 % 121.0 % 2,550 Option pricing model Annualized volatility 46.0 % - 115.0 % 57.0 % Partnership interests and other investments 40,082 Market approach Discount rate — % - 3.5 % 0.5 % Market price of related security $ 421.00 $ 421.00 Loans receivable at fair value 24,468 Discounted cash flow Discount rate 6.8 % - 56.5 % 21.0 % 1,835 Market approach Market price of related security $ 8.56 $ 8.56 Total Level 3 assets measured at fair value $ 137,608 Liabilities: Liability-classified warrants $ 6,400 Monte Carlo simulation and Black-Scholes option pricing model Annualized volatility 85.0 % 85.0 % Discount for lack of marketability 14.7 % 14.7 % Total Level 3 liabilities measured at fair value $ 6,400 (1) Unobservable inputs were weighted by the relative fair value of the financial instruments. 25 The changes in Level 3 fair value hierarchy during the three months ended June 30, 2026 and 2025 were as follows: Equity Securities Partnership Interests And Other Investments Loans Receivable at Fair Value Contingent Consideration Liability-Classified Warrants (4) Embedded Derivatives Three Months Ended June 30, 2026 Level 3 balance at beginning of period $ 30,455 $ 52,650 $ 24,927 $ — $ 11,080 $ — Fair value adjustments (1) 8,018 — 4,245 — 4,730 797 Relating to undistributed earnings — 30,376 233 — — — Purchases/originations 225,749 — 24,097 — — — Settlements/repayments ( 155,174 ) — ( 14,700 ) — ( 15,810 ) — Level 3 balance at end of period $ 109,048 $ 83,026 $ 38,802 $ — $ — $ 797 Change in unrealized gains (losses) (2) $ 8,552 $ — $ 2,315 $ — $ — $ ( 797 ) Three Months Ended June 30, 2025 Level 3 balance at beginning of period $ 27,530 $ — $ 98,596 $ 4,593 $ 5,160 $ 14,593 Fair value adjustments (3) 197 1,029 799 63 ( 1,000 ) ( 11,468 ) Purchases/originations 24,998 — 624 — — — Sales — — ( 3,575 ) — — — Settlements/repayments ( 24,999 ) — ( 47,464 ) ( 48 ) — ( 3,125 ) Level 3 balance at end of period $ 27,726 $ 1,029 $ 48,980 $ 4,608 $ 4,160 $ — Change in unrealized gains (losses) (2) $ 197 $ 1,029 $ 799 $ ( 63 ) $ 1,000 $ 11,468 (1) Fair value adjustments during the three months ended June 30, 2026 include the following: $ 8,018 of realized and unrealized gains (losses) on equity securities is comprised of $ 4,946 included in “Trading gains, net” and $ 3,072 included in “Realized and unrealized gains (losses) on investments”, $ 30,376 of fees from investment income that has not yet been distributed from investment funds, $ 4,245 of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 4,730 of realized losses related to liability-classified warrants included in “Change in fair value of financial instruments and other” line items in the accompanying unaudited condensed consolidated statements of operations. (2) For the three months ended June 30, 2026 and 2025, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period. (3) Fair value adjustments during the three months ended June 30, 2025 include the following: $ 197 of realized and unrealized gains (losses) on equity securities comprised of $( 92 ) included in “Trading gains, net” and $ 289 included in “Realized and unrealized gains (losses) on investments”, $ 799 of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 1,029 of realized and unrealized gains related to other assets which is comprised of $ 902 recorded to “Trading gains, net” and $ 127 recorded to “Realized and unrealized gains (losses) on investments”, $( 63 ) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $ 1,000 of unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $ 11,468 of unrealized gains related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the accompanying unaudited condensed consolidated statements of operations. (4) On May 28, 2026, immediately prior to exercise, the Oaktree Warrants were remeasured to fair value, resulting in a fair value of $ 15,810 . This fair value represents the final measurement of the warrant liability immediately prior to settlement and does not reflect the subsequent gain recognized upon settlement of the Oaktree Warrants (see Note 22 – Stockholders’ Equity). 26 The changes in Level 3 fair value hierarchy during the six months ended June 30, 2026 and 2025 were as follows: Equity Securities Partnership Interests And Other Investments Loans Receivable at Fair Value Contingent Consideration Liability-Classified Warrants Embedded Derivatives Six Months Ended June 30, 2026 Level 3 balance at beginning of period $ 71,223 $ 40,082 $ 26,303 $ — $ 6,400 $ — Fair value adjustments (1) 5,969 — 10,790 — 9,410 797 Relating to undistributed earnings — 42,944 717 — — — Purchases/originations 375,751 — 44,197 — — — Settlements/repayments ( 343,895 ) — ( 43,205 ) — ( 15,810 ) — Level 3 balance at end of period $ 109,048 $ 83,026 $ 38,802 $ — $ — $ 797 Change in unrealized gains (losses) (2) $ 6,552 $ — $ 2,170 $ — $ — $ ( 797 ) Six Months Ended June 30, 2025 Level 3 balance at beginning of period $ 40,516 $ — $ 90,103 $ 4,538 $ — $ — Fair value adjustments (3) ( 3,648 ) 1,029 ( 7,296 ) 166 ( 3,700 ) ( 8,119 ) Purchases/originations 25,867 — 58,632 — 7,860 11,244 Sales ( 10,000 ) — ( 10,415 ) — — — Settlements/repayments ( 25,009 ) — ( 82,044 ) ( 96 ) — ( 3,125 ) Level 3 balance at end of period $ 27,726 $ 1,029 $ 48,980 $ 4,608 $ 4,160 $ — Change in unrealized gains (losses) (2) $ ( 3,648 ) $ 1,029 $ ( 8,834 ) $ ( 166 ) $ 3,700 $ 8,119 (1) Fair value adjustments during the six months ended June 30, 2026 include the following: $ 5,969 of realized and unrealized gains (losses) on equity securities comprised of $ 4,021 included in “Trading gains, net” and $ 1,948 of “Realized and unrealized gains (losses) on investments”, $ 42,944 of fees from investment income that has not yet been distributed from investment funds, $ 2,170 of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 9,410 of realized losses related to liability-classified warrants included in “Change in fair value of financial instruments and other” line items in the accompanying unaudited condensed consolidated statements of operations. (2) For the six months ended June 30, 2026 and 2025, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period. (3) Fair value adjustments during the six months ended June 30, 2025 include the following: $( 3,648 ) of realized and unrealized gains (losses) on equity securities comprised of $( 1,174 ) included in “Trading gains, net” and $( 2,474 ) of “Realized and unrealized gains (losses) on investments”, $( 7,296 ) of fair value adjustments on loans included in “Fair value adjustments on loans”, $ 1,029 of realized and unrealized gains related to other assets which is comprised of $ 902 recorded to “Trading gains (losses), net” and $ 127 recorded to “Realized and unrealized gains (losses) on investments”, $( 166 ) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $ 3,700 of unrealized gains 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 accompanying unaudited condensed consolidated statements of operations. Partnership and investment fund interests valued at NAV were $ 2,374 and $ 1,833 as of June 30, 2026 and December 31, 2025, respectively. Beginning in April 2025, the Company entered into purchase agreements with public companies that allow the counterparties to put their convertible preferred stock to the Company from time to time at its discretion (the “Written 27 Puts”) (see Note 26 – Commitments and Contingencies). The Written Puts are recognized at fair value on a recurring basis within the “Accrued expenses and other liabilities” line item on the accompanying unaudited condensed consolidated balance sheets, with changes in fair value recognized in earnings. As of June 30, 2026 and December 31, 2025, the Company determined that the fair value of the Written Put liability was de minimis due to its discount to market prices being advantageous to the Company, and no liability or changes in earnings were recorded on the accompanying unaudited condensed consolidated balance sheets or accompanying unaudited condensed consolidated statements of operations. The Company holds the Written Puts as investments to advantageously monetize the underlying stock and provide capital raising activities for customers. The Company’s exposure is driven primarily by movements in the Issuer’s common stock price, the put writer’s credit by assumptions regarding the likelihood and timing of exercise and the April 2026 agreement which was amended to allow for the Issuer’s creditor to exercise the Written Put upon the Issuer’s Event of Default under the terms of its credit agreement. The amendment had a de minimis impact on the fair value of the Written Put. Assets and Liabilities Not Measured at Fair Value 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. June 30, 2026 December 31, 2025 Fair Value Hierarchy Level Carrying Amount Fair Value Carrying Amount Fair Value Revolving credit facilities Level 2 $ 31,316 $ 31,104 $ 6,638 $ 6,638 Term loans, net Level 2 $ 115,770 $ 121,906 $ 119,297 $ 120,931 Senior notes payable Level 2 $ 871,036 $ 734,696 $ 1,033,782 $ 681,890 New Notes payable Level 3 $ 258,930 $ 202,511 $ 268,016 $ 166,796 The fair value of the Company's revolving credit facilities and term loans was estimated using a discounted cash flow approach, whereby contractual cash flows were discounted using current market interest rates and applicable credit spreads. The Company used a market approach for estimating the fair value of senior notes payable as they are listed and actively traded on the Nasdaq with sufficient frequency and volume to utilize quoted market prices. The fair value of the Company’s New Notes payable was estimated using a discounted cash flow approach, whereby contractual cash flows were discounted using a credit spread based on significant unobservable inputs, including the Company's estimated cost of borrowing of approximately 15.0 %. Nonrecurring Fair Value Measurement 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 Level 3 As of June 30, 2026 Non-marketable equity securities measured using the measurement alternative $ 17,284 $ 17,284 $ — As of December 31, 2025 Non-marketable equity securities measured using the measurement alternative $ 13,867 $ 13,739 $ 128 28 NOTE 6 — SECURITIES AND OTHER INVESTMENTS OWNED AND SECURITIES SOLD NOT YET PURCHASED The Company’s securities and other investments owned and securities sold not yet purchased consisted of the following as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Securities and other investments owned: Securities and other investments owned at fair value: Equity securities $ 541,444 $ 304,422 Partnership interests and other investments 83,026 40,082 Corporate bonds 28,166 31,751 Other fixed income securities 5,175 4,373 Total securities and other investments owned at fair value 657,811 380,628 Partnership interests and other investments at net asset value 2,374 1,833 Equity securities valued under the measurement alternative 63,530 64,382 Total securities and other investments owned $ 723,715 $ 446,843 Securities sold not yet purchased, at fair value: Equity securities $ 8,894 $ 9,342 Corporate bonds 593 467 Total securities sold not yet purchased, at fair value $ 9,487 $ 9,809 Unrealized gains (losses) on equity securities held at June 30, 2026 include unrealized gains of $ 2,404 and $ 2,855 for the three months ended June 30, 2026 and 2025 respectively, and unrealized gains (losses) of $ 98,394 and $( 13,127 ) for the six months ended June 30, 2026 and 2025, respectively, which is included in the “Realized and unrealized gains (losses) on investments” line item on the accompanying unaudited condensed consolidated statements of operations. The following table presents the related adjustments recorded during the three and six months ended June 30, 2026 and 2025 for equity securities measured under the measurement alternative and for those securities with observable price changes: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Upward carrying value changes (1) $ 1,415 — $ 1,415 1,732 Downward carrying value changes/impairment (2) $ ( 1,400 ) — $ ( 2,268 ) ( 592 ) _________________________ (1) The cumulative upward carrying value changes between September 6, 2019 and June 30, 2026 were $ 12,533 . (2) The cumulative downward carrying value changes/impairment between September 6, 2019 and June 30, 2026 were $( 13,553 ). Certain equity securities investments in public and private companies are accounted for under the fair value option where the Company would otherwise use the equity method of accounting. The Company accounts for these 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. The related summarized financial information included below for purposes of disclosure are presented a quarter in arrears where balance sheet amounts as of March 31, 2026 and September 30, 2025 correspond to amounts as of June 30, 2026 and December 31, 2025, respectively, and income statement amounts for the three and six months ended March 31, 2026 and 2025 correspond to amounts for the three and six months ended June 30, 2026 and 2025 of the Company, respectively. 29 Babcock and Wilcox Enterprises, Inc, Equity Investment The Company owned a 19 % and 25 % voting interest in Babcock & Wilcox Enterprises, Inc. (“B&W”) as of June 30, 2026 and December 31, 2025, respectively, 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: March 31, 2026 September 30, 2025 Current assets $ 491,272 $ 479,733 Noncurrent assets $ 266,573 $ 178,151 Current liabilities $ 494,519 $ 400,985 Noncurrent liabilities $ 435,421 $ 489,106 Deficit attributable to investee $ ( 172,095 ) $ ( 232,207 ) Three Months Ended March 31, Six Months Ended March 31, 2026 2025 2026 2025 Revenues $ 214,414 $ 181,194 $ 327,831 $ 247,470 Cost of revenues $ 170,957 $ 141,133 $ 260,968 $ 183,176 Loss from continuing operations $ ( 79,622 ) $ ( 7,763 ) $ ( 96,313 ) $ ( 79,081 ) Net loss $ ( 76,945 ) $ ( 21,989 ) $ ( 67,715 ) $ ( 85,010 ) Net loss attributable to investees $ ( 76,945 ) $ ( 22,007 ) $ ( 67,715 ) $ ( 85,072 ) As of June 30, 2026 and December 31, 2025, the fair value of the investment in B&W totaled $ 386,996 and $ 174,011 , 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 Equity Investments As of June 30, 2026, 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 four private companies as of June 30, 2026 and December 31, 2025, respectively. The following table contains summarized financial information for these companies: March 31, 2026 September 30, 2025 Current assets $ 25,801 $ 23,491 Noncurrent assets $ 149,585 $ 140,981 Current liabilities $ 15,863 $ 22,988 Noncurrent liabilities $ 81,680 $ 66,509 Equity attributable to investee $ 77,843 $ 74,975 30 For the Three Months Ended March 31, For the Six Months Ended March 31, 2026 2025 2026 2025 Revenues $ 20,039 $ 18,500 $ 35,576 $ 30,223 Cost of revenues $ 2,847 $ 2,003 $ 6,003 $ 4,797 Net income attributable to investees $ 1,391 $ 6,323 $ 3,698 $ 4,009 As of June 30, 2026 and December 31, 2025, the fair value of these investments totaled $ 19,903 and $ 19,835 , respectively, and is included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets. NOTE 7 — SECURITIES LENDING The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of June 30, 2026 and December 31, 2025: Gross amounts recognized Gross amounts offset in the consolidated balance sheets (1) Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2) Net amounts As of June 30, 2026 Securities borrowed $ 206,717 $ — $ 206,717 $ 206,717 $ — Securities loaned $ 189,192 $ — $ 189,192 $ 189,192 $ — As of December 31, 2025 Securities borrowed $ 114,937 $ — $ 114,937 $ 119,872 $ — Securities loaned $ 97,321 $ — $ 97,321 $ 89,142 $ 8,179 _________________________ (1) Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. (2) Represents the fair value of collateral held/posted which is comprised of financial instruments. The following table presents the contract value of securities lending transactions accounted for as secured borrowings by the type of collateral provided to counterparties as of June 30, 2026 and December 31, 2025: Remaining contractual maturity - Overnight and continuous June 30, 2026 December 31, 2025 Securities lending transactions: Corporate securities - fixed income $ 277 $ 305 Equity securities 206,440 114,632 Total securities borrowed $ 206,717 $ 114,937 The Company’s securities lending transactions require us to pledge collateral based on the terms of each contract which is generally denominated in U.S. dollars and marked to market on a daily basis. If the fair value of the collateral pledged for these transactions declines, the Company could be required to provide additional collateral to the counterparty, therefore decreasing the amount of assets available for other liquidity needs that may arise. The Company’s liquidity risk is mitigated by maintaining offsetting securities borrowed transactions in which the Company receives cash from the counterparty which, in general, is equal to or greater than the cash the Company posts on securities lending transactions. 31 Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Such expense is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 906 and $ 1,968 during the three months ended June 30, 2026 and 2025, respectively, and $ 1,623 and $ 2,687 during the six months ended June 30, 2026 and 2025, respectively. NOTE 8 — ACCOUNTS RECEIVABLE The components of accounts receivable, net, from revenue from contracts with customers include the following: June 30, 2026 December 31, 2025 Accounts receivable $ 52,180 $ 52,631 Investment banking fees, commissions and other receivables 15,411 8,950 Total accounts receivable 67,591 61,581 Allowance for credit losses ( 6,209 ) ( 6,108 ) Accounts receivable, net $ 61,382 $ 55,473 Additions and changes to the allowance for credit losses consist of the following: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Balance, beginning of period $ 6,450 $ 5,343 $ 6,108 $ 6,100 Changes to reserve 517 831 873 1,614 Other adjustments and write-offs ( 758 ) ( 152 ) ( 772 ) ( 1,675 ) Recoveries — — — ( 17 ) Balance, end of period $ 6,209 $ 6,022 $ 6,209 $ 6,022 32 NOTE 9 — LOANS RECEIVABLE, AT FAIR VALUE Loans receivable consist of the following: At Fair Value Outstanding Principal Balance, Net of Discounts Outstanding Principal Balance in Excess of Fair Value Maturity June 30, December 31, June 30, December 31, June 30, December 31, Dates 2026 2025 2026 2025 2026 2025 Related Party Loans Receivable: Vintage Capital Management, LLC December 2027 n/a $ 1,835 n/a $ 224,968 n/a $ 223,133 Conn’s, Inc . February 2027 n/a — n/a 70,425 n/a 70,425 Torticity, LLC November 2026 — — 16,333 16,333 16,333 16,333 Other related party loans Various through August 2027 1,035 1,000 1,164 1,164 129 164 Total related party loans receivable 1,035 2,835 17,497 312,890 16,462 310,055 XBP Americas, LLC September 2026 15,041 21,415 15,164 21,731 123 316 Norlin EV Limited December 2025 n/a 10 n/a 1,233 n/a 1,223 Enovum NC-1 Venture, LLC, a subsidiary of a public AI Infrastructure company August 2026 19,794 — 20,000 — 206 — Other loans receivable Various 2,932 2,043 8,844 7,845 5,912 5,802 Total loans receivable $ 38,802 $ 26,303 $ 61,505 $ 343,699 $ 22,703 $ 317,396 The Company has elected to measure loans 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. During the three months ended June 30, 2026 and 2025 the Company recorded realized and unrealized gains of $ 4,245 and $ 800 , respectively, and net realized and unrealized gains and (losses) of $ 10,790 and $( 7,296 ) during the six months ended June 30, 2026 and 2025, respectively, on loans receivable at fair value. Net realized and unrealized gains and losses on loans receivable are reflected in the “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations. Loans receivable at fair value on non-accrual and 90 days or greater past due was zero and $ 1,835 , which represented approximately zero and 7.0 % of total loans receivable at fair value as of June 30, 2026 and December 31, 2025, respectively. The principal balances of loans receivable on non-accrual and 90 days or greater past due was $ 21,276 and $ 320,285 as of June 30, 2026 and December 31, 2025, respectively. Interest income for loans receivable 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 (losses) included in earnings attributable to changes in instrument-specific credit risk was $ 2,155 and $ 800 during the three months ended June 30, 2026 and 2025, respectively, and $ 2,008 and $( 7,296 ) for the six months ended June 30, 2026 and 2025, 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. The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of June 30, 2026, the Company has outstanding limited guarantee arrangements with respect to B&W as further described in Note 26(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. On June 18, 2025, an amendment was made to the Axos Guaranty, as defined in Note 26 - Commitments and Contingencies, whereby the Company’s obligations as guarantor were suspended 33 until January 1, 2027. On February 25, 2026, the Axos Guaranty was terminated and is of no further force and effect as further discussed in Note 26 - Commitments and Contingencies - (b) Babcock & Wilcox Commitments and Guarantees. 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 paid-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 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 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 accompanying 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. 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 (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 Freedom VCM equity interests owned by Mr. Kahn and his spouse that collateralize the VCM loan receivable. 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 pleaded guilty to one count of conspiracy to commit securities fraud. Mr. Kahn is awaiting sentencing. In February 2026, the Company collected proceeds of $ 1,855 on the loan receivable from the sale of all of the collateral that the Company held for the Vintage loan. No additional collections are expected on the loan receivable. Conn’s, Inc. Loan Receivable On December 18, 2023, W.S. Badcock Corporation, a Florida corporation 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 petitions 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 34 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. The loan had a fair value of zero as of December 31, 2025, and was written off effective January 1, 2026. At the time of the write-off, Conn’s was no longer considered a related party of the Company. During the six months ended June 30, 2026, the Company recovered $ 8,600 of proceeds from the collateral for the loan receivable which is included in “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations. Torticity, LLC Loan Receivable On November 2, 2023, B. Riley Principal Investments, LLC (“BRPI”), a wholly owned subsidiary of the Company, along with other lenders, entered into a loan receivable with Torticity, LLC for an aggregate principal amount of $ 25,000 , of which $ 15,000 was BRPI’s total principal commitment. On November 20, 2023, BRPI transferred the promissory note to B. Riley Commercial Capital, LLC (“BRCC”), another wholly owned subsidiary of the Company. The loan receivable bore 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. Subsequent to December 31, 2024, there were amendments to the loan. However, the entire loan remained impaired with no fair value at June 30, 2026, and there has been no interest income on the loan receivable during the six months ended June 30, 2026 and all of 2025. XBP Americas, LLC (formerly Exela Technologies, Inc. (“Exela”)) Loans Receivable As of June 30, 2026, the Company had a loan receivable and an accounts receivable facility with XBP Americas, LLC (“XBP Americas”), with fair value balances of $ 9,430 and $ 5,611 , respectively. As of December 31, 2025, the Company had a loan receivable, accounts receivable facility, and unsecured note with XBP Americas, with fair value balances of $ 15,459 , $ 1,440 , and $ 4,516 , respectively. Exela Loan On February 27, 2023, BRCC loaned Exela Receivables 3 Holdco, LLC (“Holdco”) $ 31,500 , and on August 18, 2023, assigned the loan receivables to BRF Finance Co., LLC, a wholly owned subsidiary of the Company (the “Exela Loan”). The Exela Loan bears interest at a rate equal to Term SOFR plus 7.50 %, with interest payable monthly in arrears. The obligations under the Exela Loan are fully and unconditionally guaranteed, on a joint and several basis, by certain subsidiaries of XBP Americas. The loan is secured by liens on substantially all assets of XBP Americas and certain guarantors, including accounts receivable, inventory, cash and deposit accounts, equipment, equity interests in subsidiaries, general intangibles and related assets. The Company’s liens are subordinated to the liens securing XBP Americas’ senior debt facilities. On July 29, 2025, the Company amended the Exela Loan to, among other things, reassign the loan receivable to XBP Americas, a subsidiary under common control with Holdco, as borrower, provide for an option to extend the maturity date, include additional events of default, and require mandatory principal repayments. The borrower exercised this extension option on March 27, 2026, extending the maturity date to September 30, 2026. Pursuant to the amended terms, the borrower is required to make a one-time prepayment of $ 1,250 on the earlier of (i) sixty days following the fourth and final Monthly Purchase and (ii) the third Business Day following the termination of the Exela AR Facility (as defined below) upon achievement of the applicable collections milestone, which was achieved in January 2026. In addition, commencing February 6, 2026, the borrower is required to make monthly principal payments of $ 1,000 on the fifth Business Day of each month until the loan is repaid in full. During the three and six months ended June 30, 2026, the borrower made $ 3,000 and $ 6,250 of such mandatory principal repayments. As of June 30, 2026 and December 31, 2025, the outstanding principal balance of the Exela Loan was $ 9,525 and $ 15,775 , respectively. Exela AR Facility On February 12, 2024, BR Exar, LLC (“BREL”), an affiliate of BRCC, entered into a receivables purchase agreement with Exela BR SPV, a subsidiary under common control with XBP Americas (as subsequently amended, the “Exela AR Facility”), pursuant to which BREL purchased certain existing receivables and future receivables until the achievement of a 35 specified collection milestone. As of December 31, 2025, the Exela AR Facility had an outstanding balance of $ 1,440 , which was repaid in full on January 12, 2026. On December 31, 2025, the Company entered into an unsecured promissory note with Exela in the principal amount of $ 5,000 . The note bore no interest and included an original issue discount of $ 500 . The unsecured promissory note matured on January 21, 2026, following full collection under the Exela AR Facility. The borrower repaid $ 5,000 to fully extinguish the unsecured promissory note on the maturity date. On January 21, 2026, BREL entered into an amended and restated receivables purchase agreement with certain subsidiaries of XBP Americas (including subsequent amendments, the “Amended Exela AR Facility”). On May 14, 2026, BREL entered into an amendment which increased the aggregate receivables to be purchased by $ 4,625 , for a total amount of up to $ 24,625 of receivables. In connection with the Amended Exela AR Facility, the Company provided total consideration of $ 22,623 . During the three and six months ended June 30, 2026, the Company collected $ 8,696 and $ 18,986 under the Amended Exela AR Facility, respectively, and as of June 30, 2026, $ 5,639 remained outstanding under the Amended Exela AR Facility. Enovum Loan Receivable On May 26, 2026, the Company purchased from a strategic asset company $ 20,000 of a Delayed Draw Term Loan Facility and Security Agreement to Enovum, a subsidiary of a public AI infrastructure company. Enovum received consideration of $ 19,400 and the Company received a Term Loan Note in the amount of $ 20,000 , which included all of the existing rights and obligations of the original lender (the “Enovum Loan”). The Company funded the Enovum Loan on May 27, 2026. This Loan bears interest at a rate of 9.50 % per annum, which the borrower may elect to pay in cash or in kind, and steps down to 8.00 % per annum upon the occurrence of a defined rate step down event with a maturity date of August 24, 2026, subject to a 30-day extension only upon the written agreement of the borrower, the Company, and the guarantor. In addition to principal and interest, the borrower is obligated to pay a minimum multiple on invested capital amount (the “MOIC”) at maturity, such that the aggregate payments to the Company on the advance are no less than 1.1 multiplied by the stated principal amount of the advance (excluding any original issue discount), or $ 22,000 . The MOIC is not reduced by any prepayment of the loan. The obligations under the Enovum Loan are guaranteed by another subsidiary of the public AI infrastructure company (the “Guarantor”) and secured by a first priority lien and security interest in all of the equity interests of an affiliate of the AI infrastructure company. The guaranty and the collateral are released upon the occurrence of a collateral step down event, defined as the date upon which an affiliate of Enovum obtains term loan B or other permanent financing in respect of the development of Enovum’s data center located in Madison, North Carolina. As of June 30, 2026, the Enovum Loan had a fair value of $ 19,794 and an unpaid principal balance in excess of fair value of $ 206 . The economic effects of the MOIC and the original issue discount are captured through the periodic remeasurement of the loan to fair value, with the resulting change reported in “Fair value adjustments on loans” in the accompanying unaudited condensed consolidated statements of operations. 36 NOTE 10 — EQUITY METHOD INVESTMENTS Equity investments accounted for under the equity method of accounting consist of the following: June 30, 2026 December 31, 2025 Percentage Ownership Investment Balance Percentage Ownership Investment Balance Investments accounted for under the equity method: Great American Holdings, LLC 38.4 % $ 77,845 38.4 % $ 83,349 SW-B. Riley Retail Opportunity Fund 22.6 % 6,972 22.6 % 7,084 Total equity method investments $ 84,817 $ 90,433 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 is included in the “(Loss) income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations. The summarized financial information with respect to the equity method investments noted below for purposes of disclosure are presented a quarter in arrears whereas balance sheet and income statement amounts as of and for the quarter ended December 31, 2025 correspond to amounts as of and for the quarter ended June 30, 2026. Great American Holdings, LLC (“GA Holdings”) 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 in 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 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. Based on the terms of the limited liability agreement, we recorded equity in the net (loss) income attributable to GA Holdings using the HLBV method of $( 5,828 ) and $ 3,190 for the three months ended June 30, 2026 and 2025, respectively, and $( 5,505 ) and $ 3,639 for the six months ended June 30, 2026 and 2025, respectively. 37 The following tables contain summarized financial information with respect to GA Holdings: March 31, 2026 September 30, 2025 Current assets $ 42,101 $ 58,177 Noncurrent assets $ 295,890 $ 283,238 Current liabilities $ 22,609 $ 51,024 Noncurrent liabilities $ 5,257 $ 518 Mezzanine equity - preferred units $ 279,097 $ 279,097 Equity attributable to investee $ 31,028 $ 10,776 For the Three Months Ended March 31, For the Six Months Ended March 31, 2026 Period from November 15, 2024 to March 31, 2025 2026 2025 Revenue $ 37,747 $ 37,062 $ 92,588 $ 58,736 Cost of revenue and expenses $ 35,148 $ 33,044 $ 86,549 $ 51,228 Net income attributable to investee $ 2,599 $ 4,018 $ 6,039 $ 7,508 GA Joann Retail Partnership, LLC (“Joann Retail”) On February 27, 2025, the Company contributed capital and certain financial support in the form of cash and subordinated debt in exchange for a 47.4 % minority ownership interest 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. As of June 30, 2026, the Company’s investment in Joann Retail was zero as the Company had fully recovered its initial investment of $ 6,163 in Joann Retail during the second quarter of 2025. Prior to the recovery of the Company’s initial investment, the investment in Joann Retail was adjusted for the Company’s proportionate share of equity method income or losses and of cash distributions received. The Company received $ 1,210 and $ 30,420 in excess of the Company’s investment balance during the six months ended June 30, 2026 and 2025, and the distributions received in excess of the investment balance are recognized as other income and included in the “(Loss) 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 Joann Retail: March 31, 2026 September 30, 2025 Current assets $ 17,754 $ 27,415 Current liabilities $ 17,754 $ 27,415 Three Months Ended Period from February 27, 2025 to March 31, 2025 Six Months Ended Period from February 27, 2025 to March 31, 2025 March 31, 2026 March 31, 2026 Revenue $ 2,671 $ — $ 9,254 $ — Cost of revenue and expenses 710 3,615 2,431 3,615 Net income (loss) attributed to investee $ 1,961 $ ( 3,615 ) $ 6,823 $ ( 3,615 ) SW-B. Riley Retail Opportunity Fund (“SW-B. Retail”) After the consolidation of BRC Trust as discussed in Note 3 - Variable Interest Entities and Note 16 - Noncontrolling Interests, the Company’s ownership percentage in SW-B. Retail is 22.6 %. During the three months ended June 30, 2026 38 and 2025, the Company recorded equity method income of $ 87 and $ 86 respectively, and for the six months ended June 30, 2026 and 2025, the Company recorded equity method income (loss) of $ 161 and $( 17 ) respectively . NOTE 11 — PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following: June 30, 2026 December 31, 2025 Inventory, net $ 47,203 $ 48,020 Rental merchandise, net 12,063 13,372 Prepaid expenses 15,350 23,148 Unbilled receivables 2,180 2,727 Income tax receivable 9,759 18,673 Other receivables, net 14,157 12,394 Other assets 10,150 10,316 Prepaid expenses and other assets $ 110,862 $ 128,650 Unbilled receivables represent amounts not yet billed to customers, consisting of mobile handsets and services provided but not yet billed in the Marconi Wireless segment, and hardware, installation, and usage services for customers in the Lingo segment. Other receivables primarily consist of interest receivables on loans and advances to financial advisors, net. Other assets primarily consist of deposits, contract costs and finance lease assets. NOTE 12 — GOODWILL AND OTHER INTANGIBLE ASSETS The carrying amount of goodwill at June 30, 2026 and December 31, 2025 was $ 392,687 . Goodwill is comprised of $ 158,834 for the Capital Markets Segment, $ 37,334 for the Wealth Management Segment, $ 71,551 for the Lingo Segment, $ 106,461 for the magicJack Segment, $ 128 for the Marconi Wireless Segment, $ 15,727 for the UOL Segment, and $ 2,652 for the Corporate and All Other category. Goodwill is net of accumulated impairment losses of $ 137,445 , of which $ 79,781 and $ 57,664 were recorded in the Consumer Products and Corporate and All Other category, respectively. 39 Intangible assets consisted of the following: As of June 30, 2026 As of December 31, 2025 Estimated Useful Life in Years Gross Carrying Value Accumulated Amortization Intangibles, Net Gross Carrying Value Accumulated Amortization Intangibles, Net Amortizable assets: Customer relationships 1 to 16 $ 240,780 $ ( 158,627 ) $ 82,153 $ 240,780 $ ( 148,015 ) $ 92,765 Domain names 7 170 ( 170 ) — 170 ( 170 ) — Franchise rights and advertising relationships 8 to 10 755 ( 280 ) 475 755 ( 247 ) 508 Internally developed software and other intangibles 0.5 to 10 28,597 ( 26,895 ) 1,702 28,597 ( 26,116 ) 2,481 Trademarks 3 to 10 19,950 ( 13,013 ) 6,937 19,950 ( 12,014 ) 7,936 Total 290,252 ( 198,985 ) 91,267 290,252 ( 186,562 ) 103,690 Non-amortizable assets: Tradenames 10,600 — 10,600 14,600 — 14,600 Total intangible assets $ 300,852 $ ( 198,985 ) $ 101,867 $ 304,852 $ ( 186,562 ) $ 118,290 Intangible assets related to tradenames is net of accumulated impairment losses of $ 26,000 , which were recorded in the Consumer Products segment. Amortization expense was $ 6,172 and $ 6,811 during the three months ended June 30, 2026 and 2025, respectively and $ 12,424 and $ 14,453 during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, estimated future amortization expense was $ 12,134 , $ 23,272 , $ 20,096 , $ 15,470 , and $ 11,167 for the years ended December 31, 2026 (remaining six months), 2027, 2028, 2029 and 2030, respectively. The estimated future amortization expense after December 31, 2030 was $ 9,128 . The Company performs impairment tests for goodwill and intangible assets with an indefinite life as of December 31 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company’s reporting units or intangible assets below their carrying values. As a result of the current financial performance of the Company’s Targus subsidiary which comprises the reporting unit of all operations within the Consumer Products segment as well as current market conditions in the personal computer market for computers and accessories, the Company updated its long-term forecasts for the reporting unit. The Company performed an interim quantitative assessment of intangible assets with an indefinite life as of June 30, 2026. Prior to the impairment charge, the carrying value of the Targus tradename was $ 13,000 . Based on the results of the analysis, the Company recorded a non-cash impairment charge related to the Targus tradename of $ 4,000 , which was recorded in impairment of tradename in the accompanying condensed consolidated statements of operations during the three and six months ended June 30, 2026. The Targus tradename was measured at fair value on a nonrecurring basis as of June 30, 2026 using the relief-from-royalty method. The estimated fair value of the Targus tradename was $ 9,000 as of June 30, 2026, which is a reduction from the carrying value of $ 13,000 at December 31, 2025, resulting in the $ 4,000 impairment charge discussed above. The fair value measurement is classified as Level 3 within the fair value hierarchy as the significant inputs are unobservable and reflect management’s estimates and assumptions. In order to estimate the fair value of the Targus tradename, the key inputs used in the valuation included projected revenues, a royalty rate of 1.0 %, a long-term growth rate of 3.0 %, and a discount rate of 22.0 %. 40 NOTE 13 — ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following: June 30, 2026 December 31, 2025 Accrued payroll and related expenses $ 65,814 $ 58,422 Dividends payable 123 611 Income taxes payable 9,634 697 Other tax liabilities 14,470 14,439 Accrued expenses 36,705 45,154 Other liabilities 29,587 35,457 Accrued expenses and other liabilities $ 156,333 $ 154,780 Other tax liabilities primarily consist of uncertain tax positions, sales and VAT taxes payable, and other non-income tax liabilities. Accrued expenses primarily consist of accrued trade payables, investment banking payables and legal settlements. Other liabilities primarily consist of interest payables, accrued legal fees and finance lease liabilities. NOTE 14 — TERM LOANS AND REVOLVING CREDIT FACILITIES Term loans and revolving credit facilities are comprised of the following: June 30, 2026 December 31, 2025 Interest Rate Principal Interest Rate Principal Term Loans: BRPAC Term Loan 6.51 % $ 57,750 6.83 % $ 64,000 Oaktree Term Loan 11.66 % 65,234 11.82 % 64,117 Subtotal 122,984 128,117 Less: Unamortized debt issuance costs and discount ( 7,214 ) ( 8,820 ) Total Term Loans $ 115,770 $ 119,297 June 30, 2026 December 31, 2025 Weighted Average Weighted Average Interest Rate Principal Interest Rate Principal Revolver Loans: Targus Revolver Loan 6.76 % $ 15,316 7.20 % $ 6,638 BRPAC Revolver Loan 6.57 % 16,000 — % — Total Revolver Loans $ 31,316 $ 6,638 Oaktree Credit Agreement On February 26, 2025, the Company and BRFH (“BRFH Borrower”) entered into a new credit agreement with a group of funds indirectly or directly controlled by Oaktree Capital Management, L.P. with Oaktree Fund Administration, LLC, acting as the administrative agent and collateral agent. The new credit agreement provided for (i) a three-year $ 125,000 secured term loan credit facility (the “Oaktree Term Loan”) and (ii) a four-month $ 35,000 secured delayed draw term loan credit facility (the “Delayed Draw Facility” and, together with the Oaktree Term Loan, the “Oaktree Credit Facility”). The Oaktree Term Loan matures on the earliest of (i) February 26, 2028, and (ii) a springing maturity date 91 days prior to the maturity of any series of bonds, notes or bank indebtedness of the Company or the BRFH Borrower outstanding on such date with an aggregate amount exceeding $ 10,000 . The proceeds from the Oaktree Term Loan were primarily used (a) to 41 repay the existing indebtedness under the Nomura Credit agreement (b) for working capital and general corporate purposes and (c) to pay transaction fees and expenses. The proceeds of the Delayed Draw Facility were used (a) to fund obligations relating to the liquidation of substantially all of the assets of JOANN, Inc. and its subsidiaries and (b) for working capital and general corporate purposes. The Oaktree Credit Facility accrues interest at the adjusted term SOFR rate (as defined in the Oaktree Credit Facility) with an applicable margin of 8.00 % or interest at the base rate as defined in the Oaktree Credit Facility plus an applicable margin of 7.00 %. In addition to paying interest on outstanding borrowings under the Oaktree Credit Facility, the Company was required to pay (i) a closing fee of 3.00 % of the aggregate principal amount of the loans under the Oaktree Term Loan and 2.00 % of the aggregate principal amount of the loans under the Delayed Draw Facility, and (ii) an exit fee upon the prepayment or repayment of the Oaktree Credit Facility of 5.00 % of the aggregate principal amount of such loans repaid, provided, that the Oaktree Term Loan exit fee shall not be payable if the share price for the Company’s common stock exceeds a certain threshold. The Company determined that the Oaktree Credit Facility is an indexed debt obligation under ASC 470, Debt and is accreting the contingent Oaktree Term Loan exit fee to its expected payment amount. The Oaktree Term Loan also contains an additional prepayment premium, as defined in the Oaktree Term Loan, of a minimum of 5.00 %. At June 30, 2026, under the Oaktree Credit Agreement, certain assets with a total carrying value of $ 304,400 collateralize the $ 62,500 outstanding balance of the Oaktree Term Loan, and these assets primarily consist of the common and preferred equity interest in GA Holdings and certain other designated loans receivable and equity investments held by the BRFH Borrower. The collateral for the Oaktree Credit Agreement also includes the equity interests in the BRFH Borrower’s subsidiaries, and the Oaktree Credit Agreement covenants, among other things, limit the Company’s, the BRFH Borrower’s and the BRFH Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness, and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. The Company is in compliance with all financial covenants in the Oaktree Credit Agreement as of June 30, 2026. Subject to certain eligibility requirements, certain assets of the BRFH Borrower are placed into a borrowing base (the “Borrowing Base”), which serves to limit the borrowings under the Oaktree Credit Facility. The sale of an asset in the Borrowing Base requires the BRFH Borrower to make a prepayment in an amount equal to the proceeds of such disposition multiplied by the percentage “credit” that is assigned to such asset in the Borrowing Base. The BRFH Borrower may be obligated to prepay the loans or post cash in a controlled account in the event the Borrowing Base falls below a certain level as defined in the Oaktree Credit Facility. The Company recorded a derivative liability of $ 11,244 related to a mandatory repayment feature in the Oaktree Credit Facility at the inception of the Oaktree Credit Facility (see Note 5 - Fair Value Measurements). The Company sold certain assets in the Borrowing Base that required the Company to repay $ 62,500 of principal on the Oaktree Term Loan and $ 35,000 on the Delayed Draw Facility. These principal repayments reduced the outstanding balance on the Oaktree Term Loan from $ 125,000 to $ 62,500 and paid the Delayed Draw Facility off in full. In accordance with paydowns on the Oaktree Credit Facility, the Company recorded a loss on debt extinguishment of $ 10,266 and $ 15,639 during the three and six months ended June 30, 2025, respectively, which were included in the “(Loss) gain on extinguishment of debt” line item in the unaudited condensed consolidated statements of operations. Interest expense on the Oaktree Credit Facility during the three months ended June 30, 2026 and 2025 was $ 3,320 and $ 4,578 , respectively. Interest expense on the Oaktree Credit Facility during the six months ended June 30, 2026 and 2025 was $ 6,441 and $ 7,759 , respectively. The Company issued warrants (“Oaktree Warrants”) to certain affiliates of Oaktree Capital Management, L.P. (the “Oaktree Holders”) in connection with the Oaktree Term Loan to purchase approximately 1,832,290 shares (or 6 % on a fully diluted basis) of the Company’s common stock at an exercise price of $ 5.14 per share. The Oaktree Warrants contained certain anti-dilution provisions pursuant to which, under certain circumstances, the warrant holders would be entitled to exercise the warrants for up to 19.9 % of the then-outstanding shares of the Company’s common stock. The Company determined the Oaktree Warrants met the criteria for liability classification under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity and recorded an initial warrant liability of $ 7,860 . On May 28, 2026, the Oaktree Holders sent a cashless exercise notice to the Company in accordance with the terms of the Oaktree Warrants. On May 29, 2026, the Company issued an aggregate of 915,251 shares of common stock to the Oaktree Holders in exchange for the surrender by the Oaktree Holders of 917,039 shares of the Company’s common stock. The shares underlying the Oaktree Warrants are registered for resale on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348). As of May 29, 2026, the Oaktree Warrants have been fully exercised and are no longer outstanding. 42 The initial measurement of the embedded derivative and warrant liability creates a discount on the carrying amount of the long-term debt, which together with the original issue discount, debt issuance costs, are amortized via the effective interest method under ASC 835-30, Interest – Imputation of Interest . Subsequent changes in fair value of the embedded derivative and warrant liability are reported in the “Other income (expense)” section in our accompanying unaudited condensed consolidated statements of operations. Refer to Note 22(a) - Common Stock Warrants. During the quarter ended June 30, 2026, the Company determined that the occurrence of the springing maturity, a component of the embedded derivative, was probable which could result in the repayment of the Oaktree Debt on October 4, 2027. As of June 30, 2026, the embedded derivative has a fair value of $ 797 (See Note 5 – Fair Value Measurement). As a result of the change in probability of the springing maturity, the Company revised the estimated amortization period of the Oaktree Term Loan. The amortization of the debt discount and third-party costs was accelerated prospectively. On March 24, 2025, the Company and the BRFH Borrower entered into Amendment No. 1 to the Oaktree Credit Facility which, among other things, removed certain pledged stock from the collateral and adjusted mandatory prepayment provisions in connection with dispositions of borrowing base assets. On July 8, 2025, the Company and the BRFH Borrower entered into Amendment No. 2 to the Oaktree Credit Facility which, among other things, amended the borrowing base to include certain first lien term loans extended to certain subsidiaries of the Company and made certain changes to the negative covenants. On October 8, 2025, the Company and the BRFH Borrower entered into Amendment No. 3 to the Oaktree Credit Facility with Oaktree which provided that the springing maturity date of the Oaktree Term Loan shall in no event occur prior to March 31, 2027, thereby extending the earliest possible maturity date for the Oaktree Term Loan. On January 14, 2026, the Company and the BRFH Borrower entered into Amendment No. 4 to the Oaktree Credit Facility, which added an additional carve-out with respect to limitation on investments and allows the Company to repurchase unsecured notes on or prior to June 30, 2026 in an aggregate outstanding amount not to exceed $ 25,000 . Targus/FGI Credit Agreement On August 20, 2025, Targus (“Targus Borrower”) and certain of the Targus Borrower’s direct and indirect subsidiaries (the “FGI Loan Parties”) entered into a Revolving Credit, Receivables Purchase, Security and Guaranty Agreement (the “Targus/FGI Credit Agreement”) with FGI Worldwide LLC (“FGI”), as agent and for a three-year $ 30,000 revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the Targus Credit Agreement with PNC Bank, National Association, dated October 18, 2022 (the “Prior Targus Credit Agreement”). The final maturity date of the Targus/FGI Credit Agreement is August 20, 2028. The Targus/FGI Credit Agreement is a revolving line of credit facility with a receivables purchase feature under which the purchase of eligible receivables is on a full recourse basis with each borrower retaining the risk of non-payment. The revolving loans bear interest at the greater of (a) 5.25 % per annum or (b) 3.00 % above the term SOFR for a period of one month plus 10 basis points, plus (c) 0.30 % per month collateral management fee. The average borrowings under the revolving loan facility was $ 11,551 during the six months ended June 30, 2026. The amount available for borrowings under the Targus/FGI Credit Agreement was $ 17,635 at June 30, 2026. Interest expense on these loans during the three and six months ended June 30, 2026 was $ 348 and $ 583 , respectively. Under the Prior Targus Credit Agreement, the average borrowings under the revolver loan was $ 14,424 during the six months ended June 30, 2025. Interest expense on the revolver loan during the three and six months ended June 30, 2025 was $ 380 and $ 782 , respectively. The Targus/FGI Credit Agreement includes certain embedded features, such as a receivable purchase arrangement, default interest of 3.00 %, certain cost reimbursements, and optional and mandatory prepayments that could result in an acceleration of the Company’s obligations. The mandatory prepayments are triggered by asset disposition, event of loss, over advances and upon an event of default. Certain cost reimbursements and default interest upon a non-credit risk event of default were determined to be embedded derivatives. The Company determined their value was de minimis for the period. The Targus/FGI Credit Agreement is secured by (i) a first priority perfected security interest in and a lien upon all of the assets of the FGI Loan Parties, and (ii) a pledge of all of the equity interests of the Targus Borrower and its direct and indirect subsidiaries. The Targus/FGI Credit Agreement was secured by substantially all Targus assets as collateral defined in the Targus/FGI Credit Agreement, which assets had an aggregate value of approximately $ 149,409 , including $ 35,846 of accounts receivable and $ 44,355 of inventory as of June 30, 2026. The Targus/FGI Credit Agreement contains certain covenants, including those limiting the FGI Loan Parties’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Targus/FGI Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults 43 and cross defaults. If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement. The Company is in compliance with all financial covenants in the Targus/FGI Credit Agreement as of June 30, 2026. As required upon the closing of the Targus/FGI Credit Agreement, one of the Company’s subsidiaries was required to invest an additional $ 5,000 in Targus in the form of an intercompany subordinated loan. In addition, on March 13, 2026, the Company’s subsidiary agreed to invest an additional $ 2,000 in accordance with provisions of the Targus/FGI Credit Agreement which increased the balance of the intercompany subordinated loan. On June 30, 2026, the FGI Loan Parties entered into a First Amendment to Credit Agreement, Limited Waiver, and Omnibus Joinder Agreement (the “First Amendment”) with FGI. Among other things, the First Amendment (i) joined Targus Australia Pty. Ltd. as an additional guarantor and loan party under the Targus/FGI Credit Agreement, (ii) extended the FCCR Conversion Date (the date on which the financial covenant transitions from a minimum Adjusted Consolidated EBITDA test to a fixed charge coverage ratio test) from December 31, 2026 to October 31, 2027, (iii) restructured the measurement period for the Adjusted Consolidated EBITDA financial covenant, resetting the look-back to a one-month trailing period for the test period ending June 30, 2026 and stepping up to a six-month trailing period by November 30, 2026, and (iv) granted a limited waiver of certain defaults that had occurred and were continuing under the Targus/FGI Credit Agreement as of June 30, 2026. Nomura Credit Agreement On August 21, 2023, the Company, the BRFH Borrower, and certain direct and indirect subsidiaries of the BRFH Borrower, entered into a credit agreement (the “Nomura Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (“Nomura”), and Computershare Trust Company, N.A., as collateral agent, for a four-year $ 500,000 secured term loan credit facility and a four-year $ 100,000 secured revolving loan credit facility. The Nomura Credit Agreement replaced the prior credit agreement with Nomura and Wells Fargo Bank, N.A., as collateral agent, dated June 23, 2021, that had a maturity date of June 23, 2025 (the “Prior Nomura Credit Agreement”). The purpose of the Nomura Credit Agreement was to (i) fund the Freedom VCM equity investment, (ii) prepay in full the Prior Nomura Credit Agreement with an aggregate outstanding balance of $ 347,877 , which included $ 342,000 in principal and $ 5,877 in interest and fees, (iii) fund a dividend reserve in an amount not less than $ 65,000 , (iv) pay related fees and expenses, and (v) for general corporate purposes. On September 17, 2024, the Company entered into Amendment No. 4 to the Nomura Credit Agreement (the “Fourth Nomura Amendment”), and after payment on principal and the addition of loan fees to principal, the outstanding principal balance on the term loan was reduced from $ 469,750 to $ 388,127 . In connection with the Fourth Nomura Amendment, the revolving credit facility in the amount of $ 100,000 , which had no balance outstanding at September 17, 2024, was terminated and the Company was required to reduce the principal amount of the term loan to be no greater than $ 100,000 on or prior to September 30, 2025. The scheduled maturity date of the term loan was August 21, 2027. In connection with the Fourth Nomura Amendment, interest on the term loan increased to SOFR loans accrued interest at the adjusted term SOFR plus an applicable margin of 7.00 % cash interest or, at the election of the Company, at the adjusted term SOFR determined plus an applicable margin of 6.00 % cash interest plus 1.50 % paid-in-kind interest; and base rate loans accrued interest at the base rate plus an applicable margin of 6.00 % cash interest or, at the election of the Company, at the adjusted term SOFR determined for such day plus an applicable margin of 5.00 % cash interest plus 1.50 % PIK Interest. Interest expense on the term loan during the six months ended June 30, 2025 was $ 2,457 . As fully discussed in “Oaktree Credit Agreement” above, on February 26, 2025, the Company used proceeds from the Oaktree Credit Facility to repay the outstanding principal balance under the Nomura Credit Agreement and the Nomura Credit Agreement was terminated. Upon repayment, the Company recorded a loss on extinguishment of debt in the amount of $ 4,666 , which was included in the “(Loss) gain on extinguishment of debt” line item in the unaudited condensed consolidated statements of operations during the six months ended June 30, 2025. BRPAC Credit Agreement On January 6, 2025, BRPAC, Lingo, UOL and YMAX Corporation (collectively, the “BRPAC Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into an amended and restated credit agreement (the “BRPAC Credit Agreement”), with the Banc of California, in its capacity as sole lead arranger, sole book manager, administrative agent and lender (the “Agent”) and the lenders party thereto from time to time to amend and 44 restate the prior BRPAC credit agreement, dated December 19, 2018 (the “Prior BRPAC Credit Agreement”) and replace the prior Lingo credit agreement, dated August 16, 2022 (the “Prior Lingo Credit Agreement”). Certain of the BRPAC Borrowers’ U.S. subsidiaries are parties to and guarantors of all obligations under the BRPAC Credit Agreement (collectively, the “Secured Guarantors”; and together with the BRPAC Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent company of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the outstanding membership interests of BRPAC are pledged as collateral. Pursuant to the BRPAC Credit Agreement, the lenders made a five-year $ 80,000 term loan to the BRPAC Borrowers, the proceeds of which were used to repay in full the obligations under the Prior BRPAC Credit Agreement and the Prior Lingo Credit Agreement. The BRPAC Credit Agreement also builds in provisions for incremental term loans up to $ 40,000 allowing certain distributions to the parent company of the BRPAC Borrowers from the proceeds of such incremental term loans. Upon repayment of the Prior Credit Agreement and the Lingo Credit Agreement, the Company recorded a loss on extinguishment of debt in the amount of $ 389 , which was included in the “(Loss) gain on extinguishment of debt” line item in the accompanying unaudited condensed consolidated statements of operations during the six months ended June 30, 2025. The remaining debt modification was accounted for as a troubled debt restructuring. As the future undiscounted cash payments under the terms of the modified debt exceeded the carrying amount of the old debt on the modification date, the Company accounted for the restructuring on a prospective basis using the revised effective interest rate established under the BRPAC Credit Agreement. On April 8, 2026 (“Amendment Effective Date”), the BRPAC Borrowers entered into the Third Amendment to the BRPAC Credit Agreement (the “Third Amendment”) with the Agent. In connection with the Third Amendment, the lenders made a new term loan to the BRPAC Borrowers in an aggregate original principal amount of $ 60,000 , the proceeds of which were used to repay in full the outstanding principal balance and accrued interest on the previously outstanding term loans under the BRPAC Credit Agreement. The Third Amendment established a new revolving credit facility with aggregate commitments of $ 20,000 (the “Revolving Credit Facility”), which was not available under the prior facility. The Revolving Credit Facility matures on January 6, 2030. On April 8, 2026, the BRPAC Borrowers drew $ 16,000 on the Revolving Credit Facility, which remained outstanding as of June 30, 2026. The new term loan is repayable in quarterly installments of $ 2,250 beginning June 30, 2026, with the remaining outstanding balance due at maturity on January 6, 2030. In connection with the Third Amendment, the BRPAC Borrowers are permitted to make an aggregate cash dividend of up to $ 28,000 to the Company’s parent entities on or within two months of the Amendment Effective Date. The BRPAC Credit Agreement, as amended by the Third Amendment, requires the BRPAC Borrowers to maintain (i) a Consolidated Total Funded Debt Ratio not to exceed 2.00 x through September 30, 2026, with step-downs to 1.50 x, 1.25 x, and 1.00 x in subsequent periods, and (ii) a Consolidated Fixed Charge Coverage Ratio of not less than 1.20 x, tested quarterly beginning March 31, 2026. For accounting purposes, the Third Amendment was considered a troubled debt restructuring. As the future undiscounted cash payments under the terms of the modified debt exceeded the carrying amount of the debt on the modification date, no gain or loss was recognized, and the Company accounted for the restructuring on a prospective basis using the revised effective interest rate established under the Third Amendment. The borrowings under the BRPAC Credit Agreement bear interest at the greater of (i) the one-month Term SOFR rate plus a margin of 2.75 % to 3.50 % per annum, depending on the BRPAC Borrowers’ Consolidated Total Funded Debt Ratio, or (ii) a 3.25 % per annum floor per annum. Interest expense on the term loan during the three months ended June 30, 2026 and 2025 was $ 1,080 and $ 1,561 , respectively. Interest expense on the term loan during the six months ended June 30, 2026 and 2025 was $ 2,261 and $ 3,151 , respectively. The average borrowings under the Revolving Credit Facility was $ 16,000 during the six months ended June 30, 2026. The amount available for borrowings under the Revolving Credit Facility was $ 4,000 at June 30, 2026. Interest expense on the Revolving Credit Facility during the six months ended June 30, 2026 was $ 254 . Interest expense on the term loan under the Prior Lingo Credit Agreement during the six months ended June 30, 2025 was $ 62 . The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first-priority security interests in, substantially all of the assets of the BRPAC Borrowers totaling approximately $ 292,723 as of June 30, 2026 (which includes $ 12,828 of accounts receivable and $ 2,848 of inventory), including a pledge of (a) 100 % of the equity interests of the BRPAC Borrowers; (b) 65 % of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65 % of the equity interests in magicJack 45 VocalTec Ltd., an Israel corporation. Such security interests are evidenced by pledge, security, and other related agreements. The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’, ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of outstanding amounts due under the BRPAC Credit Agreement. The Company is in compliance with all financial covenants in the BRPAC Credit Agreement as of June 30, 2026. NOTE 15 — SENIOR NOTES PAYABLE Senior notes payable, net, are comprised of the following: Effective Interest Rate June 30, 2026 December 31, 2025 Senior Notes Payable, Net of Debt Discount: 5.50 % Senior notes due March 31, 2026 — $ — $ 101,523 6.50 % Senior notes due September 30, 2026 6.82 % 142,130 178,242 5.00 % Senior notes due December 31, 2026 5.57 % 163,836 176,772 8.00 % New Notes due January 1, 2028 0.00 % 258,930 268,016 6.00 % Senior notes due January 31, 2028 6.50 % 207,851 213,989 5.25 % Senior notes due August 31, 2028 5.78 % 357,219 363,256 Total Senior Notes Payable, Net $ 1,129,966 $ 1,301,798 As of June 30, 2026 and December 31, 2025, the senior notes had a weighted average interest rate of 5.59 % and 5.60 %, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $ 12,905 and $ 17,236 during the three months ended June 30, 2026 and 2025, respectively. Interest expense on senior notes totaled $ 27,909 and $ 38,890 during the six months ended June 30, 2026 and 2025, respectively. The senior notes are unsecured obligations and are not secured by any of the Company’s or its subsidiaries’ assets and therefore are effectively subordinated to any existing and future secured indebtedness to the extent of the collateral securing such indebtedness. During the six months ended June 30, 2026, the Company completed a series of Section 3(a)(9) Exchanges with the Investor. During the three and six months ended June 30, 2026, the Company exchanged aggregate principal amounts of $ 32,965 and $ 69,054 , respectively of senior notes, including $ 9,297 and $ 42,490 , respectively related to troubled debt restructurings, for 3,804,629 and 8,358,495 of the Company’s common stock. The shares issued had aggregate fair values of $ 34,284 and $ 67,784 , respectively, based on the closing market price of the Company's common stock on the applicable settlement dates, which ranged from $ 6.60 to $ 9.34 per share. As a result of these exchanges, the carrying amount of the senior notes, together with related accrued interest, was reduced by $ 33,155 and $ 69,366 during the three and six months ended June 30, 2026, respectively. The Company recognized a net loss on extinguishment of debt of $ 1,283 for the three months ended June 30, 2026, and a net gain on extinguishment of debt of $ 1,338 for the six months ended June 30, 2026, which is included in the “(Loss) gain on extinguishment of debt” line item in the accompanying condensed consolidated statements of operations. During the three and six months ended June 30, 2026, the net loss and net gain consisted of troubled debt restructuring gains of $ 805 and $ 3,509 , respectively, offset by losses on extinguishment of $ 2,088 and $ 2,171 , respectively. On March 10, 2026, the Company repurchased $ 4,293 of the 5.00 % Senior Notes due December 31, 2026 from the open market for $ 4,035 . The repurchase was accounted for as a debt extinguishment, and the Company recognized a gain 46 of $ 269 in the “(Loss) gain on extinguishment of debt” line item in the accompanying condensed consolidated statements of operations during six months ended June 30, 2026. On March 30, 2026, the Company redeemed all of the $ 95,991 of issued and outstanding 5.50 % Senior Notes due March 31, 2026 (the “ 5.50 % 2026 Notes”). The redemption price was equal to 100 % of the aggregate principal amount, plus any accrued and unpaid interest up to, but excluding, the redemption date. In connection with the full redemption, the 5.50 % 2026 Notes, which were listed on Nasdaq under the ticker symbol “RILYK,” were delisted from Nasdaq and ceased trading on the redemption date. During the six months ended June 30, 2025, the Company completed four private exchange transactions with institutional investors pursuant to which the investors exchanged senior notes for the New Notes, whereupon the exchanged notes were cancelled. The Company recorded a gain on the debt restructuring of $ 44,784 and $ 55,316 in the “Gain on senior note exchange” line item in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2025, respectively. Each of the exchanges represented a troubled debt restructuring. The New Notes were issued pursuant to an indenture, dated as of March 26, 2025 (the “New Notes Indenture”), governing the issuance of New Notes dated March 26, 2025, April 7, 2025, May 21, 2025, June 30, 2025, and July 11, 2025 for the five private exchange transactions during 2025, between the Company, certain subsidiaries of the Company, as guarantors, and GLAS Trust Company LLC, a New Hampshire limited liability company, as trustee and collateral agent, and the New Notes are unconditionally guaranteed jointly and severally by all direct and indirect wholly-owned restricted subsidiaries of the Company, subject to certain excluded subsidiaries (collectively, the “Guarantors”). The New Notes are secured on a second lien basis, junior to the obligations under the Company’s Credit Facility, by substantially all of the assets of the Company and the Guarantors. The New Notes mature on January 1, 2028 and accrue interest at a rate of 8.00 % per annum, payable semi-annually in arrears on April 30 and October 31, beginning on October 31, 2025. The Company is required to pay default interest of 8.00 % on accrued interest if the Company fails to pay interest when due. The Company has the right to redeem the New Notes at any time, in whole or in part. If the New Notes are redeemed, including by a tender offer, the Company may repay the New Notes at principal plus accrued and unpaid interest if any, but excluding the redemption date. The New Notes include a change of control provision, where the holders of the New Notes have the right to require the Company to repurchase all or a portion of the New Notes at a purchase price, in cash, equal to 101 % of the principal amount thereof, plus accrued and unpaid interest if the Company does not exercise its redemption option. The New Notes also contain certain other events of default that could result in an acceleration of the Company’s obligations under the New Notes. In addition, if the Company or its restricted subsidiaries engage in certain asset sales and do not invest such proceeds or permanently reduce certain debt within a specified period of time, the Company may be required to use a portion of the proceeds of such asset sales above a specified threshold to make an offer to purchase the New Notes at a price equal to 100 % of the principal amount of the New Notes being purchased, plus accrued and unpaid interest. The New Notes Indenture contains certain covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In connection with the issuance of warrants in conjunction with the private exchange transactions during 2025 (further described in Note 22 - Stockholders’ Equity), the Company entered into registration rights agreements with the investors, pursuant to which the Company granted such investors (i) certain shelf registration rights whereby the Company will register resales of the shares of Common Stock issued upon exercise of the warrants and (ii) certain piggyback registration rights, in each case subject to the terms and conditions set forth in the registration rights agreements. The Company registered the shares of Common Stock underlying such warrants pursuant to a Registration Statement on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348) and declared effective by the Securities and Exchange Commission in April 2026. 47 NOTE 16 — NONCONTROLLING INTERESTS BRSH On March 10, 2025, a merger subsidiary of the Company’s wholly-owned subsidiary 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 21(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. As of June 30, 2026 and December 31, 2025, the Company owned 92.9 % and 90.7 %, respectively. 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 and was treated as the initial recognition of a variable interest entity, as more fully described in Note 3 - Variable Interest Entities. BRC Trust BRC Trust was formed on January 6, 2025, and is a variable interest entity as more fully described in Note 3 - 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 24 - Related Party Transactions. 48 NOTE 17 — REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers from the Company’s seven reportable operating segments and the Corporate and All Other category during the three and six months ended June 30, 2026 and 2025 is reported below. Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Corporate & All Other Total Revenues for the three months ended June 30, 2026: Corporate finance, consulting and investment banking fees (1) $ 36,310 $ — $ — $ — $ — $ — $ — $ ( 2,363 ) $ 33,947 Wealth and asset management fees — 28,438 — — — — — 551 28,989 Commissions, fees and reimbursed expenses 8,045 2,494 — — — — — 6 10,545 Subscription services — — 38,788 7,798 6,878 2,347 — — 55,811 Sale of goods — — — 286 490 — 43,537 287 44,600 Advertising and other (2) — — — 483 — 534 — 10,968 11,985 Total revenues from contracts with customers 44,355 30,932 38,788 8,567 7,368 2,881 43,537 9,449 185,877 Trading gains (losses), net 4,363 9,251 — — — — — ( 740 ) 12,874 Fair value adjustments on loans 751 — — — — — — 3,494 4,245 Interest income - loans 1,027 — — — — — — 1,144 2,171 Interest income - securities lending 1,632 — — — — — — — 1,632 Other 1,584 17,770 — — — — — 12,964 32,318 Total revenues $ 53,712 $ 57,953 $ 38,788 $ 8,567 $ 7,368 $ 2,881 $ 43,537 $ 26,311 $ 239,117 (1) Corporate finance, consulting and investment banking fees for the Corporate & All Other category represents intercompany sales. (2) Advertising and other revenues for the Corporate and All Other category primarily consist of bebe’s revenues from merchandise rental fees. 49 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Corporate & All Other Total Revenues for the three months ended June 30, 2025: Corporate finance, consulting and investment banking fees $ 32,346 $ — $ — $ — $ — $ — $ — $ — $ 32,346 Wealth and asset management fees — 29,373 — — — — — 959 30,332 Commissions, fees and reimbursed expenses 4,518 2,576 — — — — — 65 7,159 Subscription services — — 39,907 8,930 8,065 2,787 — — 59,689 Sale of goods — — — 304 1,167 — 43,284 318 45,073 Advertising and other (1) — — — 543 — 500 — 12,524 13,567 Total revenues from contracts with customers 36,864 31,949 39,907 9,777 9,232 3,287 43,284 13,866 188,166 Trading gains, net 21,249 5,200 — — — — — 1,231 27,680 Fair value adjustments on loans — — — — — — — 800 800 Interest income - loans — — — — — — — 3,853 3,853 Interest income - securities lending 2,124 — — — — — — — 2,124 Other 1,055 1,472 — — — — — 152 2,679 Total revenues $ 61,292 $ 38,621 $ 39,907 $ 9,777 $ 9,232 $ 3,287 $ 43,284 $ 19,902 $ 225,302 (1) Advertising and other revenues for the Corporate and All Other category primarily consist of bebe’s revenues from merchandise rental fees. 50 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Corporate & All Other Total Revenues for the six months ended June 30, 2026 Corporate finance, consulting and investment banking fees (1) $ 65,044 $ — $ — $ — $ — $ — $ — $ ( 3,638 ) $ 61,406 Wealth and asset management fees — 56,657 — — — — — 2,140 58,797 Commissions, fees and reimbursed expenses 13,556 5,895 — — — — — 41 19,492 Subscription services — — 79,578 15,754 13,904 4,744 — — 113,980 Sale of goods — — — 596 1,001 — 87,652 718 89,967 Advertising and other (2) — — — 1,000 — 958 — 22,306 24,264 Total revenues from contracts with customers 78,600 62,552 79,578 17,350 14,905 5,702 87,652 21,567 367,906 Trading gains (losses), net 139,666 19,347 — — — — — ( 1,078 ) 157,935 Fair value adjustments on loans 751 — — — — — — 10,039 10,790 Interest income - loans 1,034 — — — — — — 2,851 3,885 Interest income - securities lending 2,883 — — — — — — — 2,883 Other 2,889 28,229 — — — — — 16,660 47,778 Total revenues $ 225,823 $ 110,128 $ 79,578 $ 17,350 $ 14,905 $ 5,702 $ 87,652 $ 50,039 $ 591,177 (1) Corporate finance, consulting and investment banking fees for the Corporate & All Other category represents intercompany sales. (2) Advertising and other revenues for the Corporate and All Other category primarily consist of bebe’s revenues from merchandise rental fees. 51 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Corporate & All Other Total Revenues for the six months ended June 30, 2025 Corporate finance, consulting and investment banking fees (1) $ 49,723 $ — $ — $ — $ — $ — $ — $ 352 $ 50,075 Wealth and asset management fees — 66,602 — — — — — 1,831 68,433 Commissions, fees and reimbursed expenses 7,816 6,195 — — — — — 122 14,133 Subscription services — — 81,460 17,765 16,606 5,975 — — 121,806 Sale of goods — — — 659 2,113 — 85,387 4,369 92,528 Advertising and other (2) — — — 1,154 — 945 — 36,319 38,418 Total revenues from contracts with customers 57,539 72,797 81,460 19,578 18,719 6,920 85,387 42,993 385,393 Trading gains, net 3,983 5,812 — — — — — 1,714 11,509 Fair value adjustments on loans ( 3,131 ) — — — — — — ( 4,165 ) ( 7,296 ) Interest income - loans 65 — — — — — — 6,984 7,049 Interest income - securities lending 2,964 — — — — — — — 2,964 Other 1,972 7,290 — — — — — 2,484 11,746 Total revenues $ 63,392 $ 85,899 $ 81,460 $ 19,578 $ 18,719 $ 6,920 $ 85,387 $ 50,010 $ 411,365 (1) Corporate finance, consulting and investment banking fees for the Corporate and All Other category represents intercompany sales. (2) Advertising and other revenues for the Corporate and All Other category primarily consist of bebe’s revenues from merchandise rental fees. These also include recycling processing fees for a regional environmental services business, which was sold in March 2025, and managed service fees for Nogin, an e-commerce, technology platform provider, through March 31, 2025. 52 Contract Balances The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, financial consulting engagements, and subscription services where the performance obligation has not yet been satisfied. The following table presents changes in deferred revenue during the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Balance, beginning of period $ 49,907 $ 58,148 Additions to deferred revenue during the period 68,757 77,285 Reductions to deferred revenue for revenue recognized during the period ( 71,679 ) ( 81,934 ) Balance, end of period $ 46,985 $ 53,499 During the six months ended June 30, 2026 and 2025 the Company recognized revenue of $ 22,581 and $ 25,033 that was recorded as deferred revenue at the beginning of the period. The Company expects to recognize the deferred revenue of $ 46,985 as of June 30, 2026 as service and fee revenues when the performance obligation is met during the years ended December 31, 2026 (remaining six months), 2027, 2028, 2029 and 2030 in the amount of $ 30,491 , $ 8,008 , $ 4,194 , $ 1,350 , and $ 772 , respectively. The Company expects to recognize the deferred revenue of $ 2,170 after December 31, 2030. The following table contains a rollforward of unbilled receivables, which are included in prepaid expenses and other assets, for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Balance, beginning of period $ 2,727 $ 3,387 Additional unbilled revenue recognized 2,248 3,172 Less: Amounts billed to customers ( 2,795 ) ( 3,415 ) Balance, end of period $ 2,180 $ 3,144 Contract Costs The Company capitalizes: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable and; (2) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period. The capitalized costs to fulfill a contract were $ 4,645 and $ 4,550 as of June 30, 2026 and December 31, 2025, respectively, and are recorded in the “Prepaid expenses and other assets” line item in the accompanying unaudited condensed consolidated balance sheets. For the three months ended June 30, 2026 and 2025, the Company recognized expenses of $ 785 and $ 1,034 related to capitalized costs to fulfill a contract, respectively. During the six months ended June 30, 2026 and 2025, the Company recognized expenses of $ 1,637 and $ 2,094 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three and six months ended June 30, 2026 and 2025. 53 Remaining Performance Obligations and Revenue Recognized from Past Performance The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of June 30, 2026. Corporate finance and investment banking fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of June 30, 2026. During the three and six months ended June 30, 2026, and 2025, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time and over time were: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue recognized at a point in time $ 106,201 $ 100,595 $ 205,509 $ 191,065 Revenue recognized over time 79,676 87,571 162,397 194,328 Total revenue $ 185,877 $ 188,166 $ 367,906 $ 385,393 NOTE 18 — RESTRUCTURING CHARGE The Company recorded restructuring charges of $ 1,914 and $ 321 during the three and six months ended June 30, 2026, and 2025, respectively, which are included in “Restructuring charge” in the accompanying unaudited condensed consolidated statements of operations. The $ 1,914 of restructuring charges recorded during the three and six months ended June 30, 2026 were in connection with organizational realignments and consisted of severance and related costs consistent with the Company's historical severance practices across the following segments: $ 1,757 related to Capital Markets, $ 128 related to Consumer Products, and $ 29 related to Wealth Management. The Company continues to evaluate its organizational structure and may incur additional restructuring charges in future periods. The $ 321 of restructuring charges recorded during the three and six months ended June 30, 2025 consisted of reductions in workforce, of which $ 285 was attributable to the Corporate and All Other category and $ 36 was attributable to the Consumer Products segment. The following table summarizes the changes in accrued restructuring charge during the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Balance, beginning of period $ 295 $ 840 $ 361 $ 1,316 Restructuring charge 1,914 321 1,914 321 Cash paid ( 1,682 ) ( 305 ) ( 1,767 ) ( 726 ) Non-cash items 20 ( 57 ) 39 ( 112 ) Balance, end of period $ 547 $ 799 $ 547 $ 799 54 NOTE 19 — INCOME TAXES The Company’s effective income tax rate was a provision of 21.6 % for the three months ended June 30, 2026, as compared to a provision of 4.1 % for the three months ended June 30, 2025. The Company’s effective income tax rate was a provision of 8.6 % for the six months ended June 30, 2026, as compared to a provision of less than 1.0 % for the six months ended June 30, 2025. During the three months ended June 30, 2026, the Company had a provision for income taxes from continuing operations of $ 5,950 , which is primarily comprised of the estimated federal, state, and foreign taxes based on the expected annual effective income tax rate for 2026 that includes the impact of the utilization of net operating loss carryforwards and disallowed interest expense carried forward from prior years. During the three months ended June 30, 2025, the provision for income taxes from continuing operations of $ 3,053 resulted primarily from the impact of recording uncertain tax positions for state and foreign taxes, interest and penalties. During the six months ended June 30, 2026, the Company had a provision for income taxes from continuing operations of $ 22,841 . During the six months ended June 30, 2025, the Company had a provision for income taxes from continuing operations of $ 11 . The effective income tax rate for the six months ended June 30, 2026 is less than the federal statutory tax rate of 21%, primarily due to the expected utilization of net operating losses, carryforwards, disallowed interest expense carried forward from prior years and the Company continuing to have a full valuation allowance. The effective income tax rate for the six months ended June 30, 2025 was less than the federal statutory tax rate of 21% primarily due to the utilization of capital loss carryforwards to offset the gain on sale and deconsolidation of businesses and the Company having a full valuation allowance. As of December 31, 2025, the Company had federal net operating loss carryforwards of $ 602,913 and state net operating loss carryforwards of $ 688,239 , which are available to offset taxable income. The Company has $ 39,319 of state capital loss carryovers as of December 31, 2025 that is available for carryforwards and will start to expire December 31, 2028. The Company’s federal net operating loss carryforwards generated in 2023 through 2025 of $ 278,310 will be limited to offsetting 80% of taxable income but do not expire. The remaining federal net operating loss carryforwards will expire in the tax years commencing on December 31, 2033, through December 31, 2038. The state net operating loss carryforwards will expire in the tax years commencing on December 31, 2030. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of June 30, 2026 and December 31, 2025, a full valuation allowance has been recorded since it is more likely than not that the Company will not be able to utilize tax benefits before they expire. The Company reassesses the need for a valuation allowance on an ongoing basis. The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain state and local and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2022 to 2025. The Company intends to indefinitely reinvest foreign earnings and cash unless such repatriation results in no or minimal tax costs. It is not practicable to determine the amount of an unrecognized deferred tax liability for temporary differences related to investments in foreign subsidiaries. 55 NOTE 20 — EARNINGS PER SHARE Basic earnings per share is calculated by dividing income from continuing operations, income from discontinued operations, or net income by the weighted-average number of shares outstanding during the period, including contingently issuable shares. Diluted earnings per share is calculated by dividing income from continuing operations, income from discontinued operations, or net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares include shares that may be issued under warrants, including warrants issued in connection with the Oaktree Credit Agreement and private debt exchange transactions, and restricted stock and stock option awards. As of May 29, 2026, the Oaktree Warrants issued in connection with the Oaktree Credit Agreement were exercised and are no longer outstanding. Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share as the effect would be anti-dilutive were 1,350,215 and 3,229,165 during the three and six months ended June 30, 2026 and 2025, respectively. Basic and diluted earnings per share were calculated as follows: Three Months Ended June 30, 2026 2025 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total Numerator: Net income $ 21,597 $ — $ 21,597 $ 71,687 $ 69,312 $ 140,999 Net income attributable to noncontrolling interests 1,048 — 1,048 1,528 — 1,528 Net income attributable to Registrant 20,549 — 20,549 70,159 69,312 139,471 Preferred stock dividends 2,015 — 2,015 2,015 — 2,015 Net income available to common shareholders $ 18,534 $ — $ 18,534 $ 68,144 $ 69,312 $ 137,456 Add back: Change in fair value of warrants and gain on warrant exercise ( 1,331 ) — ( 1,331 ) — — — Diluted net income attributable to common stockholders $ 17,203 $ — $ 17,203 $ 68,144 $ 69,312 $ 137,456 56 Six Months Ended June 30, 2026 2025 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total Numerator: Net income $ 243,756 $ — $ 243,756 $ 51,725 $ 72,707 $ 124,432 Net income (loss) attributable to noncontrolling interests 9,934 — 9,934 ( 5,064 ) — ( 5,064 ) Net income attributable to Registrant 233,822 — 233,822 56,789 72,707 129,496 Preferred stock dividends 4,030 — 4,030 4,030 — 4,030 Net income available to common shareholders $ 229,792 $ — $ 229,792 $ 52,759 $ 72,707 $ 125,466 Add back: Change in fair value of warrants and gain on warrant exercise ( 1,331 ) — ( 1,331 ) — — — Diluted net income attributable to common stockholders $ 228,461 $ — $ 228,461 $ 52,759 $ 72,707 $ 125,466 Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Denominator: Weighted average common shares outstanding: Basic 37,811,031 30,527,835 34,879,728 30,512,757 Effect of dilutive potential common shares: Restricted stock units, stock options and warrants 611,154 — 431,273 — Diluted 38,422,185 30,527,835 35,311,001 30,512,757 Basic net income per common share: Continuing operations $ 0.49 $ 2.23 $ 6.59 $ 1.73 Discontinued operations — 2.27 — 2.38 Basic income per common share $ 0.49 $ 4.50 $ 6.59 $ 4.11 Diluted net income per common share: Continuing operations $ 0.45 $ 2.23 $ 6.47 $ 1.73 Discontinued operations — 2.27 — 2.38 Diluted income per common share $ 0.45 $ 4.50 $ 6.47 $ 4.11 57 NOTE 21 — SHARE-BASED PAYMENTS (a) Employee Stock Incentive Plans Under the Company’s 2021 Stock Incentive Plan, share-based compensation expense for restricted stock units was: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Share-based compensation expense for restricted stock units for continuing operations $ 2,818 $ 2,649 $ 4,458 $ 5,658 Share-based compensation expense for restricted stock units for discontinued operations — 822 — 1,038 Total share-based compensation expense for restricted stock units $ 2,818 $ 3,471 $ 4,458 $ 6,696 On April 3, 2026, the Company granted 308,514 restricted stock units (“RSUs”), with a grant date fair value of $ 2,099 to its six non-employee directors under the Company’s 2021 Stock Incentive Plan. The awards consisted of: (i) 21,960 RSUs that vested immediately on the grant date; (ii) 88,170 RSUs that vested on the earlier of the Company's 2026 Annual Meeting of Stockholders or December 1, 2026 subject to the director's continued service, which vested on May 19, 2026, the date of the 2026 Annual Meeting of Stockholders; and (iii) 198,384 RSUs that vest on the one-year anniversary of the grant date, subject to continued service. For five of the six non-employee directors, the post-grant service period associated with the third award was determined to be non-substantive because those directors were retirement-eligible under the terms of the award following the 2026 Annual Meeting of Stockholders; accordingly, those awards were considered vested and the resulting share-based expense was accelerated for accounting purposes on May 19, 2026. The grant-date fair value of the RSUs was based on the closing market price of the Company's common stock on the trading day prior to the grant date. During the six months ended June 30, 2026, 17,405 RSUs were forfeited. Share-based compensation expense is recorded in the “Selling, general and administrative expenses” line item in the accompanying unaudited condensed consolidated statements of operations. (b) Employee Stock Purchase Plan In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), there was no share-based compensation expense during the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, there were 236,949 shares reserved for issuance under the Purchase Plan. (c) BRSH Stock Incentive Plan On March 10, 2025, the Company’s majority-owned subsidiary approved the BRSH Stock Incentive Plan which allows for issuance of up to 4,000,000 restricted stock awards of BRSH. No restricted stock awards of BRSH were granted during the six months ended June 30, 2026 and there is no intention to issue restricted stock awards of BRSH after the date hereof. The restricted stock awards granted generally vest over a period of four to five years , based on continued service. The restricted stock awards vest for common stock of BRSH and increase the noncontrolling interest in BRSH, when vested. During the three months ended June 30, 2026 and 2025, share-based compensation expense of $ 365 and $ 1,277 , respectively, and during the six months ended June 30, 2026 and 2025, share-based compensation expense of $ 1,121 and $ 1,570 , respectively, related to the BRSH restricted stock awards was recorded in the “Selling, general and administrative expenses” line item in the accompanying unaudited condensed consolidated statements of operations. During the six months ended June 30, 2026, 272,157 restricted stock awards vested, of which 107,071 shares valued at $ 1,902 were withheld to satisfy tax withholding obligations, resulting in the net issuance of 165,086 shares. During the six months ended June 30, 2026, 339,530 awards were forfeited. This activity, including shares withheld to satisfy tax 58 withholding obligations, contributed to changes in noncontrolling interest, as more fully described in Note 16 – Noncontrolling Interest. (d) Common Stock and Stock Options Issued On June 3, 2025, the Company issued 100,000 unregistered shares and options to purchase a total of 300,000 shares of the Company’s common stock in connection with the employment agreement entered into with the Company’s chief financial officer. The 100,000 unregistered shares issued were issued upon execution of the employment agreement as an employment inducement grant that is not subject to vesting conditions and expensed immediately. The fair value of the unregistered shares of $ 295 was expensed upon issuance. The options to purchase a total of 300,000 shares of the Company’s common stock vests in three tranches (in each case, subject to continued employment): (1) 100,000 with an exercise price of $ 7.00 , (2) 100,000 with an exercise price of $ 10.00 and (3) 100,000 with an exercise price of $ 12.50 . The stock options vest in annual installments over a three-year period on each anniversary of the grant date based on continued service and acceleration upon a change in control. The maximum term of the stock options is 10 years. At June 30, 2026, 200,001 of the 300,000 options to purchase shares of the Company’s common stock were unvested. During the three and six months ended June 30, 2026, share-based compensation expense for the options totaled $ 43 and $ 87 respectively. During the three and six months ended June 30, 2025, share-based compensation expense for the options totaled $ 14 . NOTE 22 — STOCKHOLDERS’ EQUITY (a) Common Stock Warrants In connection with the Oaktree Credit Agreement, on February 26, 2025 (refer to Note 14 - Term Loans and Revolving Credit Facilities), the Company issued seven-year warrants to the Oaktree Holders to purchase approximately 1,832,290 shares (or 6 % on a fully diluted basis) of the Company’s common stock at an exercise price of $ 5.14 per share. The Oaktree Warrants contain certain anti-dilution provisions pursuant to which, under certain circumstances, the Oaktree Holders would be entitled to exercise the warrants for up to 19.9 % of the then-outstanding shares of common stock. The Oaktree Warrants were classified as a liability. The shares underlying the Oaktree Warrants are registered for resale on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348). On May 28, 2026, immediately prior to exercise, the Oaktree Warrants were remeasured to fair value, resulting in a fair value of $ 15,810 . The Oaktree Holders exercised the Oaktree Warrants through a cashless exercise in accordance with the terms of the warrants, resulting in the issuance of an aggregate of 915,251 shares of the Company’s common stock to the Oaktree Holders in full settlement of the warrants. Upon settlement, the Company recognized a gain on settlement of the warrants of $ 6,410 , representing the difference between the fair value of the Oaktree Warrants immediately prior to exercise of $ 15,810 and the fair value of the Company's common stock issued in settlement of the warrants of $ 9,400 , based on the Company's closing stock price of $ 10.27 per share on the settlement date. The gain is included in the "Change in fair value of financial instruments and other" line item in the accompanying unaudited condensed consolidated statements of operations. As a result of the exercise, the Oaktree Warrants were settled and no warrant liability remained outstanding as of June 30, 2026. The warrant liability had an estimated fair value of $ 6,400 as of December 31, 2025 which is included in other liabilities in Note 13 - Accrued Expenses and Other Liabilities. During the three and six months ended June 30, 2026, the change in the fair value of the warrant liability, including the final remeasurement immediately prior to exercise, resulted in a loss of $ 4,730 and $ 9,410 , respectively, and a gain of $ 1,000 and $ 3,700 during the three and six months ended June 30, 2025, respectively, and is included in the “Change in fair value of financial instruments and other” line item in the accompanying unaudited condensed consolidated statements of operations. See Note 5 - Fair Value Measurements further details. In conjunction with the debt exchanges (see Note 15 - Senior Notes Payable), the Company issued seven-year warrants to the investors to purchase up to 913,692 shares of common stock at an exercise price of $ 10.00 . The warrants contain certain anti-dilution provisions and upon exercise, the warrant holders are entitled to dividends and distributions as if the warrants had been exercised in full prior to the dividend or distribution date. The warrants meet the definition of a derivative and were classified within stockholders’ equity. 59 (b) Preferred Stock There were 2,834 shares of the Series A Preferred Stock issued and outstanding as of June 30, 2026 and December 31, 2025. The total liquidation preference for the Series A Preferred Stock as of June 30, 2026 and December 31, 2025 was $ 78,161 (inclusive of cumulative unpaid dividends of $ 7,307 ) and $ 75,725 (inclusive of cumulative unpaid dividends of $ 4,871 ), respectively. There were no dividends declared or paid on the Series A Preferred Stock during the three and six months ended June 30, 2026 and 2025. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full. There were 1,729 shares of the Series B Preferred Stock issued and outstanding as of June 30, 2026 and December 31, 2025. The total liquidation preference for the Series B Preferred Stock as of June 30, 2026 and December 31, 2025 was $ 48,011 (inclusive of cumulative unpaid dividends of $ 4,782 ) and $ 46,416 (inclusive of cumulative unpaid dividends of $ 3,188 ), respectively. There were no dividends declared or paid on the Series B Preferred Stock during the three and six months ended June 30, 2026 and 2025. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series B Preferred Stock. Unpaid dividends will accrue until paid in full. On April 30, 2026, the Company did not pay the quarterly dividend that would otherwise have been payable on its Series A Preferred Stock and Series B Preferred Stock for the Dividend Period (as defined in the applicable Certificate of Designation) ended April 30, 2026. This was the sixth quarterly Dividend Period for which dividends on the Series A Preferred Stock and Series B Preferred Stock have not been paid since the Company’s announcement on January 21, 2025 of the temporary suspension of preferred dividends. As a result, a “Preferred Dividend Default” has occurred under each Certificate of Designation. Pursuant to each Certificate of Designation, upon the occurrence of a Preferred Dividend Default, the size of the Company’s Board of Directors is automatically increased by two seats, and the holders of the Series A Preferred Stock and the Series B Preferred Stock (voting together as a single class with the holders of any other parity preferred stock with similar voting rights then exercisable) become entitled to elect two additional directors to the Board of Directors (the “Preferred Directors”) until all dividends accumulated and unpaid on the Series A Preferred Stock and Series B Preferred Stock for all past Dividend Periods shall have been fully paid. The election of Preferred Directors will take place at (i) either (A) a special meeting called in accordance with the Certificate of Designation requirements and the Company’s by-laws if the request is received more than 90 days before the date fixed for the Corporation’s next annual or special meeting of stockholders or (B) the next annual or special meeting of stockholders if the request is received within 90 days of the date fixed for the Corporation’s next annual or special meeting of stockholders, and (ii) at each subsequent annual meeting of stockholders, or special meeting at which Preferred Directors are to be elected, until the right of holders of Series A Preferred Stock and Series B Preferred Stock to elect Preferred Directors shall have terminated. As of the date of this Quarterly Report, the Company has not received a written demand from holders that satisfies the requirements of the Company’s Certificates of Designation and by-laws of the Series A Preferred Stock or Series B Preferred Stock to call a special meeting for the election of Preferred Directors. 60 NOTE 23 — NET CAPITAL REQUIREMENTS BRS and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, to not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. June 30, 2026 December 31, 2025 BRS: Net capital $ 113,349 $ 79,560 Excess capital $ 106,877 $ 74,393 Net capital requirement $ 6,472 $ 5,167 BRWM: Net capital $ 9,018 $ 7,521 Excess capital $ 7,746 $ 6,186 Net capital requirement $ 1,272 $ 1,335 NOTE 24 — RELATED PARTY TRANSACTIONS For bebe’s rent to own stores that are franchised through Freedom VCM, during the three and six months ended June 30, 2025, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,068 and $ 2,285 respectively, and inventory purchases by bebe from Freedom VCM totaled $ 2,478 and $ 5,339 , respectively. In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P. (“Whitehawk”), a limited partnership controlled by Mr. J. Ahn, who is the brother of one of the Company’s executive officers who was the Company’s Chief Financial Officer and Chief Operating Officer until the executive officer’s departure on June 3, 2025. Whitehawk agreed to provide investment advisory services for GACP I, L.P. and GACP II, L.P. There were no management fees paid to Whitehawk during 2025. Whitehawk is no longer a related party upon the departure of the executive officer on June 3, 2025. The Company periodically participates in loans and financing arrangements for which the Company has an equity ownership and representation on the board of directors (or similar governing body). The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions are summarized as follows: Babcock and Wilcox B&W is a related party as a result of the Company’s equity investment as more fully described in Note 6 - Securities and Other Investments Owned and Securities Sold Not Yet Purchased for which the Company is deemed to have significant influence. One of the Company’s wholly owned subsidiaries entered into a services agreement with B&W that provided for the President of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the “Executive Consulting Agreement”), unless terminated by either party with thirty days written notice. The agreement was extended through December 31, 2028. Under this agreement, fees for services provided are $ 750 per annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W’s compensation committee of the board, a bonus or bonuses may also be earned and payable to the Company. On September 20, 2024, Kenny Young resigned from his position as the President of the Company, the Executive Consulting Agreement with B&W was terminated, and concurrently, Kenny Young entered into a one-year consulting agreement to provide services to the Company, pursuant to which he was paid an annual fee of $ 250 paid on a monthly basis, subject to deduction of 61 damages, fees and expenses that he may owe to the Company pursuant to this agreement. The consulting agreement expired on September 20, 2025 in accordance with its original terms. During the three months ended June 30, 2026 and 2025, the Company earned $ 6,576 and $ 2,982 , respectively, and during the six months ended June 30, 2026 and 2025, the Company earned $ 12,499 and $ 3,818 , respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities which are included in services and fees in the accompanying unaudited condensed consolidated statements of operations. The Company is also a party to indemnification agreements for the benefit of B&W and the B. Riley Guaranty, each as disclosed in Note 26 – Commitments and Contingencies. Vintage Capital Management - Brian Kahn In connection with the completion of the FRG take-private transaction, one of the Company’s subsidiaries and VCM, an affiliate of Brian Kahn, entered into the Amended and Restated Note. The Amended and Restated Note in the aggregate principal amount of $ 200,506 bears interest at the rate of 12 % per annum paid-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 in amount equal to the greater of (i) 80 % of the net after-tax proceeds, and (ii) 50 % of gross proceeds. The obligations under the Amended and Restated Note are primarily secured by a first priority perfected security interest in Freedom VCM equity interests owned by Mr. Kahn and his spouse with a value (based on the transaction price in the FRG take-private transaction) of $ 227,296 as of the closing of the FRG Take-private transaction. On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code which impacted the Freedom VCM equity interest, which served as the collateral for this loan receivable. Fair value adjustments on the VCM loan receivable were zero and a decrease of $( 866 ) during the three months ended June 30, 2026 and 2025, respectively. Fair value adjustments on the VCM loan receivable were an increase and (decrease) of $ 20 and $( 589 ) during the six months ended June 30, 2026 and 2025, respectively. In light of the Company’s determination that any repayment of the Amended and Restated Note would have been paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying Freedom VCM equity interest and other collateral provided by Mr. Kahn and his spouse, the Company has determined that both VCM and Mr. Kahn are related parties as of June 30, 2026 and December 31, 2025. There was no interest income during the three and six months ended June 30, 2026 and 2025. During the three months ended March 31, 2026, the Company collected $ 1,855 on the loan receivable from the sale of all of the collateral that the company held for the Vintage loan. No additional collections are expected on the loan receivable. Torticity, LLC Torticity is a related party as a result of the Company’s equity ownership in the limited liability company and BRC’s representation on the board of directors (board representation through January 12, 2025). On November 2, 2023, the Company agreed to lend up to $ 15,369 to Torticity, LLC, of which $ 6,690 was drawn upon with $ 8,679 remaining, with interest payable of 15.0 % per annum and a maturity date of November 2, 2026. There were amendments to the loan during 2025; however, the entire loan receivable remains impaired with no fair value at June 30, 2026. There was no interest income on the loan receivable during three and six months ended June 30, 2026 and all of 2025. GA Holdings GA Holdings is a related party as a result of the Company’s equity investment as fully described in Note 10 - Equity Method Investments and BRC’s representation on the board of directors. The Company provided GA Holdings with a $ 25,000 secured revolving credit facility upon closing the Great American Transaction on November 15, 2024, which had an initial outstanding balance of $ 1,698 . As subsequently amended, the revolving commitment was revised to $ 40,000 for the period from March 10, 2025 to June 30, 2025 and reduced back to $ 25,000 from July 1, 2025 until the maturity date of November 15, 2025. The secured revolving credit facility was secured by all of the assets of GA Holdings and accrued interest at the annual rate of SOFR plus 4.75 %. Interest income recorded on the loan receivable was $ 394 and $ 701 during the three and six months ended June 30, 2025, respectively. On October 16, 2025, all outstanding amounts due and owing under this facility were repaid in full to BRF and the facility was terminated. During the period from November 15, 2024 to October 16, 2025, the Company provided services to GA Holdings in accordance with a transition services agreement for accounting, information technology and other administration services. During the three and six months ended June 30, 2025, the Company recorded fee revenues for these services in the amount 62 of $ 563 and $ 1,694 , respectively. Pursuant to an existing consulting arrangement, as amended on December 31, 2025 to extend the term through December 31, 2026, the Company also paid $ 12 and $ 105 respectively, of consulting fees to the consultant, who was hired in July 2025 as the chief executive officer of GA Holdings, during the three and six months ended June 30, 2026. GA Joann Retail Partnership, LLC GA Joann Retail Partnership, LLC, formed in February 2025, is a related party as a result of the Company’s equity investment as more fully described in Note 10 - Equity Method Investments for which the Company is deemed to have significant influence. On February 27, 2025, BRF, along with other lenders, entered into a credit agreement with GA Joann Retail Partnership, LLC for an aggregate commitment of $ 52,000 , of which BRF is committed to $ 24,653 . The credit agreement bore interest at 10.00 % to be paid monthly as payment-in-kind and capitalized into the outstanding principal balance and had a maturity date of November 26, 2025. This loan receivable was paid in full on April 7, 2025. Interest income recorded on the loan receivable was $ 9 and $ 223 during the three and six months ended June 30, 2025, respectively. Other The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. During the three months ended June 30, 2026 and 2025, the Company earned $ 400 and $ 1,964 of fees related to these services, respectively. During the six months ended June 30, 2026 and 2025, the Company earned $ 400 and $ 2,621 of fees related to these services, respectively. The Company established BRC Trust on January 6, 2025, for the purpose of transferring and liquidating the assets of BRCPOF. After the formation of the BRC Trust, BRCPOF transferred its assets and liabilities to the BRC Trust. The Company determined the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights, and substantially all of the activities are conducted on behalf of the Company which owns 13.3 %, and related parties of the Company which include executive officers and members of the board of directors of the Company owning 58.2 % of the equity interest in the Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidated the BRC Trust upon its formation. 63 NOTE 25 — BUSINESS SEGMENTS The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended June 30, 2026 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Total Reportable Segments Corporate & All Other (1) Total Revenues - Services and fees (2) $ 45,939 $ 48,702 $ 38,788 $ 8,281 $ 6,878 $ 2,881 $ — $ 151,469 $ 22,126 $ 173,595 Trading gains (losses), net 4,363 9,251 — — — — — 13,614 ( 740 ) 12,874 Fair value adjustment on loans 751 — — — — — — 751 3,494 4,245 Interest income - loans 1,027 — — — — — — 1,027 1,144 2,171 Interest income - securities lending 1,632 — — — — — — 1,632 — 1,632 Revenues - Sale of goods — — — 286 490 — 43,537 44,313 287 44,600 Total revenues 53,712 57,953 38,788 8,567 7,368 2,881 43,537 212,806 26,311 239,117 Direct cost of services — — ( 21,306 ) ( 1,698 ) ( 2,211 ) ( 884 ) — ( 26,099 ) ( 3,265 ) ( 29,364 ) Cost of goods sold — — — ( 274 ) ( 497 ) — ( 30,282 ) ( 31,053 ) ( 308 ) ( 31,361 ) Employee compensation and benefits ( 28,182 ) ( 33,266 ) ( 4,016 ) ( 642 ) ( 311 ) ( 201 ) ( 9,604 ) ( 76,222 ) ( 12,365 ) ( 88,587 ) Professional services ( 366 ) ( 255 ) ( 28 ) ( 297 ) ( 74 ) ( 30 ) ( 1,244 ) ( 2,294 ) ( 9,653 ) ( 11,947 ) Occupancy-related costs ( 1,593 ) ( 1,946 ) ( 549 ) ( 345 ) ( 444 ) ( 158 ) ( 1,214 ) ( 6,249 ) ( 3,032 ) ( 9,281 ) Depreciation and amortization ( 197 ) ( 384 ) ( 3,213 ) ( 846 ) ( 469 ) ( 21 ) ( 1,701 ) ( 6,831 ) ( 717 ) ( 7,548 ) Other selling, general and administrative expenses (3) ( 7,593 ) ( 4,555 ) ( 4,357 ) ( 292 ) ( 365 ) ( 98 ) ( 1,056 ) ( 18,316 ) 2,302 ( 16,014 ) Restructuring charge ( 1,757 ) ( 29 ) — — — — ( 128 ) ( 1,914 ) — ( 1,914 ) Impairment of tradename — — — — — — ( 4,000 ) ( 4,000 ) — ( 4,000 ) Interest expense - Securities lending and loan participations sold ( 906 ) — — — — — — ( 906 ) — ( 906 ) Segment income (loss) $ 13,118 $ 17,518 $ 5,319 $ 4,173 $ 2,997 $ 1,489 $ ( 5,692 ) $ 38,922 $ ( 727 ) $ 38,195 (1) Corporate and All Other consists of general corporate administrative functions not allocable to reportable segments and operating segments and entities that individually, or in aggregate, do not meet the criteria of a separate reportable segment including bebe, and individual investment and lending entities. (2) Revenues - Services and fees for the Corporate and All Other category includes intersegment eliminations. (3) Other selling, general and administrative expenses for the Corporate and All Other category includes intersegment eliminations and corporate expense allocations to segments. 64 Three Months Ended June 30, 2025 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Total Reportable Segments Corporate & All Other (1) Total Revenues - Services and fees (2) $ 37,919 $ 33,421 $ 39,907 $ 9,473 $ 8,065 $ 3,287 $ — $ 132,072 $ 13,700 $ 145,772 Trading gains, net 21,249 5,200 — — — — — 26,449 1,231 27,680 Fair value adjustment on loans — — — — — — — — 800 800 Interest income - loans — — — — — — — — 3,853 3,853 Interest income - securities lending 2,124 — — — — — — 2,124 — 2,124 Revenues - Sale of goods — — — 304 1,167 — 43,284 44,755 318 45,073 Total revenues 61,292 38,621 39,907 9,777 9,232 3,287 43,284 205,400 19,902 225,302 Direct cost of services — — ( 22,957 ) ( 1,868 ) ( 3,738 ) ( 1,011 ) — ( 29,574 ) ( 3,642 ) ( 33,216 ) Cost of goods sold — — — ( 316 ) ( 1,401 ) — ( 33,031 ) ( 34,748 ) ( 365 ) ( 35,113 ) Employee compensation and benefits ( 29,259 ) ( 29,499 ) ( 4,884 ) ( 762 ) ( 748 ) ( 358 ) ( 9,158 ) ( 74,668 ) ( 14,474 ) ( 89,142 ) Professional services ( 923 ) ( 582 ) ( 149 ) ( 313 ) ( 93 ) ( 28 ) ( 800 ) ( 2,888 ) ( 8,766 ) ( 11,654 ) Occupancy-related costs ( 1,636 ) ( 4,513 ) ( 757 ) ( 385 ) ( 621 ) ( 182 ) ( 1,483 ) ( 9,577 ) ( 4,701 ) ( 14,278 ) Depreciation and amortization ( 680 ) ( 411 ) ( 3,329 ) ( 878 ) ( 483 ) ( 64 ) ( 1,952 ) ( 7,797 ) ( 848 ) ( 8,645 ) Other selling, general and administrative expenses (3) ( 9,919 ) ( 4,935 ) ( 4,904 ) ( 165 ) ( 343 ) ( 94 ) ( 1,228 ) ( 21,588 ) 2,938 ( 18,650 ) Restructuring charge — — — — — — ( 36 ) ( 36 ) ( 285 ) ( 321 ) Impairment of tradename — — — — — — ( 1,500 ) ( 1,500 ) — ( 1,500 ) Interest expense - Securities lending and loan participations sold ( 1,655 ) — — — — — — ( 1,655 ) ( 313 ) ( 1,968 ) Segment income (loss) $ 17,220 $ ( 1,319 ) $ 2,927 $ 5,090 $ 1,805 $ 1,550 $ ( 5,904 ) $ 21,369 $ ( 10,554 ) $ 10,815 (1) Corporate and All Other consists of general corporate administrative functions not allocable to reportable segments and operating segments and entities that individually, or in aggregate, do not meet the criteria of a separate reportable segment including bebe, and individual investment and lending entities. (2) Revenues - Services and fees for the Corporate and All Other category includes intersegment eliminations. (3) Other selling, general and administrative expenses for the Corporate and All Other category includes intersegment eliminations and corporate expense allocations to segments. 65 Six Months Ended June 30, 2026 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Total Reportable Segments Corporate & All Other (1) Total Revenues - Services and fees (2) $ 81,489 $ 90,781 $ 79,578 $ 16,754 $ 13,904 $ 5,702 $ — $ 288,208 $ 37,509 $ 325,717 Trading gains (losses), net 139,666 19,347 — — — — — 159,013 ( 1,078 ) 157,935 Fair value adjustment on loans 751 — — — — — — 751 10,039 10,790 Interest income - loans 1,034 — — — — — — 1,034 2,851 3,885 Interest income - securities lending 2,883 — — — — — — 2,883 — 2,883 Revenues - Sale of goods — — — 596 1,001 — 87,652 89,249 718 89,967 Total revenues 225,823 110,128 79,578 17,350 14,905 5,702 87,652 541,138 50,039 591,177 Direct cost of services — — ( 44,969 ) ( 3,405 ) ( 4,428 ) ( 1,779 ) — ( 54,581 ) ( 6,485 ) ( 61,066 ) Cost of goods sold — — — ( 556 ) ( 1,026 ) — ( 61,460 ) ( 63,042 ) ( 684 ) ( 63,726 ) Employee compensation and benefits ( 54,373 ) ( 64,453 ) ( 8,591 ) ( 1,367 ) ( 679 ) ( 331 ) ( 18,911 ) ( 148,705 ) ( 27,049 ) ( 175,754 ) Professional services ( 896 ) ( 511 ) ( 55 ) ( 626 ) ( 151 ) ( 72 ) ( 2,895 ) ( 5,206 ) ( 23,217 ) ( 28,423 ) Occupancy-related costs ( 3,231 ) ( 4,117 ) ( 1,243 ) ( 697 ) ( 931 ) ( 309 ) ( 2,761 ) ( 13,289 ) ( 6,475 ) ( 19,764 ) Depreciation and amortization ( 474 ) ( 769 ) ( 6,431 ) ( 1,693 ) ( 939 ) ( 44 ) ( 3,357 ) ( 13,707 ) ( 1,430 ) ( 15,137 ) Other selling, general and administrative expenses (3) ( 13,116 ) ( 6,747 ) ( 9,206 ) ( 582 ) ( 677 ) ( 205 ) ( 2,473 ) ( 33,006 ) 4,359 ( 28,647 ) Restructuring charge ( 1,757 ) ( 29 ) — — — — ( 128 ) ( 1,914 ) — ( 1,914 ) Impairment of tradename — — — — — — ( 4,000 ) ( 4,000 ) — ( 4,000 ) Interest expense - Securities lending and loan participations sold ( 1,623 ) — — — — — — ( 1,623 ) — ( 1,623 ) Segment income (loss) $ 150,353 $ 33,502 $ 9,083 $ 8,424 $ 6,074 $ 2,962 $ ( 8,333 ) $ 202,065 $ ( 10,942 ) $ 191,123 (1) Corporate and All Other consists of general corporate administrative functions not allocable to reportable segments and operating segments and entities that individually, or in aggregate, do not meet the criteria of a separate reportable segment including bebe, and individual investment and lending entities. (2) Revenues - Services and fees for the Corporate and All Other category includes intersegment eliminations. (3) Other selling, general and administrative expenses for the Corporate and All Other category includes intersegment eliminations and corporate expense allocations to segments. 66 Six Months Ended June 30, 2025 Capital Markets Wealth Management Lingo magicJack Marconi Wireless UOL Consumer Products Total Reportable Segments Corporate & All Other (1) Total Revenues - Services and fees (2) $ 59,511 $ 80,087 $ 81,460 $ 18,919 $ 16,606 $ 6,920 $ — $ 263,503 $ 41,108 $ 304,611 Trading gains, net 3,983 5,812 — — — — — 9,795 1,714 11,509 Fair value adjustment on loans ( 3,131 ) — — — — — — ( 3,131 ) ( 4,165 ) ( 7,296 ) Interest income - loans 65 — — — — — — 65 6,984 7,049 Interest income - securities lending 2,964 — — — — — — 2,964 — 2,964 Revenues - Sale of goods — — — 659 2,113 — 85,387 88,159 4,369 92,528 Total revenues 63,392 85,899 81,460 19,578 18,719 6,920 85,387 361,355 50,010 411,365 Direct cost of services — — ( 48,121 ) ( 3,858 ) ( 8,034 ) ( 2,185 ) — ( 62,198 ) ( 13,718 ) ( 75,916 ) Cost of goods sold — — — ( 650 ) ( 2,584 ) — ( 64,660 ) ( 67,894 ) ( 3,952 ) ( 71,846 ) Employee compensation and benefits ( 50,963 ) ( 63,169 ) ( 9,656 ) ( 1,506 ) ( 1,502 ) ( 603 ) ( 19,061 ) ( 146,460 ) ( 34,665 ) ( 181,125 ) Professional services ( 1,491 ) ( 991 ) ( 343 ) ( 794 ) ( 178 ) ( 40 ) ( 1,975 ) ( 5,812 ) ( 24,066 ) ( 29,878 ) Occupancy-related costs ( 3,675 ) ( 7,995 ) ( 1,615 ) ( 756 ) ( 1,246 ) ( 353 ) ( 2,933 ) ( 18,573 ) ( 8,029 ) ( 26,602 ) Depreciation and amortization ( 1,361 ) ( 1,417 ) ( 6,646 ) ( 1,758 ) ( 966 ) ( 136 ) ( 3,864 ) ( 16,148 ) ( 2,498 ) ( 18,646 ) Other selling, general and administrative expenses (3) ( 22,276 ) ( 11,922 ) ( 9,753 ) ( 550 ) ( 660 ) ( 199 ) ( 2,403 ) ( 47,763 ) ( 5,743 ) ( 53,506 ) Restructuring charge — — — — — — ( 36 ) ( 36 ) ( 285 ) ( 321 ) Impairment of tradename — — — — — — ( 1,500 ) ( 1,500 ) — ( 1,500 ) Interest expense - Securities lending and loan participations sold ( 2,149 ) — — — — — — ( 2,149 ) ( 538 ) ( 2,687 ) Segment (loss) income $ ( 18,523 ) $ 405 $ 5,326 $ 9,706 $ 3,549 $ 3,404 $ ( 11,045 ) $ ( 7,178 ) $ ( 43,484 ) $ ( 50,662 ) (1) Corporate and All Other consists of general corporate administrative functions not allocable to reportable segments and operating segments and entities that individually, or in aggregate, do not meet the criteria of a separate reportable segment including bebe, Nogin (deconsolidated in March 2025), Atlantic Coast Recycling (sold in March 2025), and individual investment and lending entities. (2) Revenues - Services and fees for the Corporate and All Other category includes intersegment eliminations. (3) Other selling, general and administrative expenses for the Corporate and All Other category includes intersegment eliminations and corporate expense allocations to segments. 67 Reconciliation of Segment Income (Loss) to Net Income: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Segment income (loss) $ 38,195 10,815 $ 191,123 $ ( 50,662 ) Interest income 339 492 697 1,978 Dividend income 133 122 802 257 Realized and unrealized gains (losses) on investments 12,092 10,216 117,192 ( 4,284 ) Change in fair value of financial instruments and other 1,546 11,884 ( 2,881 ) 12,806 Gain on sale and deconsolidation of businesses — 5,372 — 86,213 Gain on senior note exchange — 44,454 — 54,986 (Loss) income from equity investments ( 5,459 ) 25,603 ( 4,133 ) 25,051 (Loss) gain on extinguishment of debt ( 1,283 ) ( 10,266 ) 1,607 ( 20,693 ) Interest expense: Capital Markets segment — — — ( 30 ) Lingo segment — — — ( 66 ) Consumer Products segment ( 354 ) ( 443 ) ( 733 ) ( 860 ) Corporate and All Other ( 17,662 ) ( 23,509 ) ( 37,077 ) ( 52,960 ) Interest expense ( 18,016 ) ( 23,952 ) ( 37,810 ) ( 53,916 ) Income from continuing operations before income taxes 27,547 74,740 266,597 51,736 Provision for income taxes ( 5,950 ) ( 3,053 ) ( 22,841 ) ( 11 ) Income from continuing operations 21,597 71,687 243,756 51,725 Income from discontinued operations, net of income taxes — 69,312 — 72,707 Net income 21,597 140,999 243,756 124,432 Net income (loss) attributable to noncontrolling interests 1,048 1,528 9,934 ( 5,064 ) Net income attributable to BRC Group Holdings, Inc. 20,549 139,471 233,822 129,496 Preferred stock dividends 2,015 2,015 4,030 4,030 Net income available to common shareholders $ 18,534 $ 137,456 $ 229,792 $ 125,466 68 The following table presents revenues by geographical area: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues Services and fees North America $ 173,595 $ 145,772 $ 325,717 $ 304,611 Trading gains, net North America 12,874 27,680 157,935 11,509 Fair value adjustments on loans North America 4,245 800 10,790 ( 7,296 ) Interest income - loans North America 2,171 3,853 3,885 7,049 Interest income - securities lending North America 1,632 2,124 2,883 2,964 Sale of goods North America 23,609 22,598 46,147 48,819 Australia 1,973 2,563 4,111 4,682 Europe, Middle East, and Africa 11,095 12,743 23,874 24,970 Asia 5,989 5,327 11,688 10,277 Latin America 1,934 1,842 4,147 3,780 Total - Sale of goods 44,600 45,073 $ 89,967 $ 92,528 Total Revenues North America 218,126 202,827 $ 547,357 $ 367,656 Australia 1,973 2,563 4,111 4,682 Europe, Middle East, and Africa 11,095 12,743 23,874 24,970 Asia 5,989 5,327 11,688 10,277 Latin America 1,934 1,842 4,147 3,780 Total Revenues $ 239,117 $ 225,302 $ 591,177 $ 411,365 69 The following table presents long-lived assets, which consists of property and equipment, net, by geographical area: June 30, 2026 December 31, 2025 Long-lived Assets - Property and Equipment, net: North America $ 17,766 $ 17,450 Europe 30 88 Asia Pacific 46 62 Australia 8 6 Total $ 17,850 $ 17,606 Segment assets are not reported to, or used by, the Company’s CODM to allocate resources to, or assess performance of the segments and therefore, total segment assets have not been disclosed. NOTE 26 — COMMITMENTS AND CONTINGENCIES (a) Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In addition to such legal and other claims, reviews, investigations, and proceedings, the Company and its subsidiaries are subject to the risk of unasserted claims, including, among others, as it relates to matters related to Mr. Kahn and our investment in Freedom VCM. If such claims are made, however, the Company believes it has valid defenses from any such claim and any such claim would be without merit. The Company has not accrued for any such contingent liabilities, but such contingent liabilities could be realized which could have a material adverse impact on the Company’s financial condition. On February 2, 2026, a stockholder derivative complaint was filed by Adrian Rubio in the U.S. Federal District Court, Central District of California on behalf of the Company and against the members of the Company’s Board of Directors and certain of the Company’s executive officers. The complaint alleges that certain of the Company’s officers and the board of directors substantially damaged the Company by filing false and misleading statements that omitted material adverse facts regarding Brian Kahn’s involvement in the Prophecy fraud and the regulatory scrutiny that the Company would face because of its entanglements with Kahn and Franchise Group. Claims include breach of fiduciary duties and unjust enrichment. The parties have agreed to stay this action pending decisions in the other derivative matters, and a stipulation to that effect has been accepted by the court. The Company believes that these claims are meritless and intends to defend this action. On January 2, 2026, a stockholder derivative complaint was filed by Joel Friedman in the U.S. Federal District Court, Central District of California on behalf of the Company and against the members of the Company’s Board of Directors and certain of the Company’s executive officers. The complaint alleges that certain of the Company’s officers and the board of directors substantially damaged the Company by filing false and misleading statements that omitted material adverse facts regarding Brian Kahn’s involvement in the Prophecy fraud and the regulatory scrutiny that the Company would face because of its entanglements with Kahn and Franchise Group. Claims include breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The parties have agreed to stay this action pending decisions in the other derivative matters, and a stipulation to that effect has been submitted to the court. The Company believes that these claims are meritless and intends to defend this action. On July 11, 2025, the Company’s subsidiary, BRS, received a demand letter from certain parties that invested in a special purpose entity that in turn invested in the going private transaction (the “Transaction”) in August 2023 of Franchise Group, Inc. An arbitration demand (the “Demand”) was filed by such parties with the American Arbitration Association on October 10, 2025 against BRS and related entities (the “BR Defendants”). The Demand alleges that the BR Defendants (i) failed to disclose certain material facts regarding FRG and the Transaction in violation of certain securities laws, (ii) committed fraud and/or civil conspiracy, and (iii) breached fiduciary duties and aided and abetted the breach of fiduciary 70 duties. Such investors seek rescission of the aggregate investment amount of $ 37,500 plus interest thereon and related fees and expenses. The Company believes such claims are meritless and intends to defend such action. On February 14, 2025, a stockholder derivative complaint was filed by Michael Marchner in the Delaware Chancery Court on behalf of the Company and against the members of the Company’s Board of Directors. The complaint alleges that certain of the Company’s officers and the board of directors (i) breached their fiduciary duties related to the Company’s involvement with Mr. Kahn and subsequent legal issues, (ii) engaged in misconduct, and (iii) wasted corporate assets, including the approval of improper compensation. On March 30, 2026, the Court of Chancery dismissed the complaint in full. On April 29, 2026, Marchner filed an appeal to the Delaware Supreme Court. On January 22, 2025, a stockholder derivative complaint was filed by James Smith in the Superior Court for Los Angeles County against the Company, certain of the Company’s executive officers and the members of the Company’s Board of Directors. The complaint alleges that certain of the Company’s officers and directors (i) breached their fiduciary duties related to the Company’s involvement with Mr. Kahn and subsequent legal issues, (ii) engaged in a waste of corporate assets, and (iii) received unjust enrichment. The Company believes that these claims are meritless and intends to defend this action. On July 19, 2024, the Company received a demand from two stockholders, Renato Rene Amio and Stephen Edwards, to inspect certain of the Company’s books and records pursuant to Section 220 of the Delaware General Corporation Law, focused on the Company’s business dealings with Mr. Kahn and the FRG take-private transaction, and the Company produced documents in response. On January 16, 2026, the same stockholders delivered a pre-suit litigation demand to the Company’s Board of Directors demanding that the Board pursue claims against certain officers and directors for alleged breaches of fiduciary duty, citing Mr. Kahn’s December 2025 guilty plea, alleging that the Board knew or should have known of Mr. Kahn’s history, criticizing the Company’s internal investigations, and seeking disgorgement of compensation, personnel action, and corporate governance reforms. The demand does not specify an amount of alleged damages. The Company believes any resulting claims would be without merit and intends to respond in due course. On July 9, 2024, a putative class action was filed by Brian Gale, Mark Noble, Terry Philippas and Lawrence Bass in the Delaware Chancery Court against Freedom VCM, Mr. Kahn, Andrew Laurence, Matthew Avril, and the Company. This complaint alleges that former shareholders of FRG suffered damages due to alleged breaches of fiduciary duties by officers, directors and other participants in the August 2023 management-led take private transaction of FRG and that the Company aided and abetted those alleged breaches of fiduciary duties. The claim seeks an award of unspecified damages, rescissory damages and/or quasi-appraisal damages, disgorgement of profits, attorneys’ fees and expenses, and interest thereon. The Company believes these claims are meritless and intends to defend this action. On July 3, 2024, each of the Company and Bryant Riley, Chairman and Co-Chief Executive Officer, received a subpoena from the SEC requesting the production of certain documents and other information primarily related to (i) the Company’s business dealings with Mr. Kahn, (ii) certain transactions in an unrelated public company’s securities, and (iii) the communications and related compliance and other policies and procedures of certain of its regulated subsidiaries. On November 22, 2024, each of the Company and Mr. Riley received an additional SEC subpoena requesting the production of certain additional documents and information relating to Franchise Group, Inc. (including its holding company, Freedom VCM Holdings, LLC) as well as Mr. Riley’s personal loan and his pledge of shares of the Company’s common stock as collateral for such loan. In June 2026, the SEC issued subpoenas to certain current and former employees seeking their testimony. As previously disclosed on April 23, 2024, the Audit Committee of the Company’s Board of Directors, with the assistance of Sullivan & Cromwell LLP, the Company’s legal counsel, conducted an internal review, and separately the Audit Committee retained Winston & Strawn LLP, independent legal counsel, to conduct an independent investigation, to review transactions among Mr. Kahn (and his affiliates) and the Company (and its affiliates). The review and the investigation both confirmed that the Company and its executives, including Mr. Riley, had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates. The receipt of subpoenas is not an indication that the SEC or its staff has determined that any violations of law have occurred. Both the Company and Mr. Riley are responding to the subpoenas and are fully cooperating with the SEC. On May 2, 2024, a putative class action was filed by Ted Donaldson in the Superior Court for the State of California, County of Los Angeles on behalf of all persons who acquired the Company’s senior notes pursuant to the shelf registration statement filed with the SEC on Form S-3 dated January 28, 2021, and the prospectuses filed and published on August 4, 2021 and December 2, 2021 (the “Offerings”). The action asserts claims under §§ 11, 12, and 15 of the Securities Act of 1933 against the Company, some of the Company’s current and former officers and directors, and the financial institutions that served as underwriters and book runners for the Offerings. An amended complaint was filed on September 27, 2024. The amended complaint alleges that the offering documents failed to advise investors that Brian Kahn and/or one or more 71 of his controlled entities was engaged in illicit business activities, that the Company, despite the foregoing, continued to finance transactions for Kahn, eventually enabling him and others to take FRG private, and that the foregoing was reasonably likely to draw regulatory scrutiny and reputational harm to the Company. The Company believes these claims are meritless and intends to defend this action. On January 24, 2024, a putative securities class action complaint was filed by Mike Coan in U.S. Federal District Court, Central District of California, against the Company, Mr. Riley, Tom Kelleher and Phillip Ahn. The purported class includes persons and entities that purchased shares of the Company’s common stock between May 10, 2023 and November 9, 2023. A second putative class action lawsuit was filed on March 15, 2024 by the KL Kamholz Joint Revocable Trust (“Kamholz”). On August 8, 2024, this matter was consolidated with the Kamholz matter and an amended complaint was then filed on April 21, 2025. The amended complaint alleges that the Company failed to disclose to investors material financial details concerning a going private transaction involving FRG, and that the Company made false or misleading statements concerning the Company’s lending practices, its high concentration of risk in transactions involving Mr. Kahn and his affiliates, the condition and composition of the Company’s loan portfolio, the Company’s due diligence and risk management procedures, and the Company’s level of concern and internal scrutiny concerning Mr. Kahn after it learned he was potentially implicated in a fraud involving an unrelated third party. The amended complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On December 12, 2025, the District Court granted in part and denied in part the Company’s motion to dismiss the consolidated amended complaint. The matter will now move into discovery and class certification proceedings. The Company cannot estimate the amount of potential liability, if any, that could arise from these matters and believes these claims are meritless and intends to defend these actions. On September 21, 2023, BRCC, a wholly owned subsidiary of the Company, received a demand alleging that certain payments to BRCC in the aggregate amount of approximately $ 32,166 made by Sorrento Therapeutics, Inc. (“Sorrento”), a Chapter 11 debtor in U.S. Bankruptcy Court, Southern District of Texas (the “Court”), pursuant to that certain Bridge Loan Agreement dated September 30, 2022 between Sorrento and BRCC, are avoidable as preferential transfers (the “Alleged Preferences”). On June 16, 2025, the liquidating trustee (the “Trustee”) on behalf of the Sorrento Liquidating Trust filed a complaint with the Court in an adversary proceeding seeking to avoid and recover the Alleged Preferences. On September 12, 2025, the Court denied BRCC’s motion to dismiss. The Company believes that the Trustee’s claims lack merit and intends to continue to assert its statutory defenses to defeat such claims. In light of the significant factual issues to be resolved with respect to the asserted claims and other proceedings described above and uncertainties regarding unasserted claims described above, at the present time reasonably possible losses cannot be estimated with respect to the asserted and unasserted claims described in the preceding paragraphs. (b) Babcock & Wilcox Commitments and Guarantees On January 18, 2024, the Company entered into a guaranty (the “Axos Guaranty”) in favor of (i) Axos Bank, in its capacity as administrative agent (the “Administrative Agent”) for the secured parties under that certain credit agreement, dated as of January 18, 2024, among B&W, the guarantors party thereto, the lenders party thereto and the Administrative Agent (the “B&W Axos Credit Agreement”), and (ii) the secured parties. Subject to the terms and conditions of the Axos Guaranty, the Company has guaranteed certain obligations of B&W (subject to certain limitations) under the B&W Axos Credit Agreement, including the obligation to repay outstanding loans and letters of credit and to pay earned interest, fees costs and expenses of enforcing the Axos Guaranty, provided however, that the Company’s obligations with respect to the principal amount of credit extensions and unreimbursed letter of credit obligations under the B&W Axos Credit Agreement shall not at any time exceed $ 150,000 in the aggregate, which is the maximum potential amount of future payments under the guaranty. In consideration for the agreements and commitments under the Axos Guaranty and pursuant to a separate fee and reimbursement agreement, B&W has agreed to pay the Company a fee equal to 2.00 % of the aggregate revolving commitments (as defined in the B&W Axos Credit Agreement) under the B&W Axos Credit Agreement, payable quarterly and, at B&W’s election, in cash in full or 50 % in cash and 50 % in the form of penny warrants. On June 18, 2025, an amendment was made to the Axos Guaranty whereby the Company’s obligations as guarantor were suspended until January 1, 2027. On February 25, 2026, the Axos Guaranty was terminated and is of no further force and effect. On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties. Pursuant to this indemnity agreement, the Company agreed to indemnify the surety in connection with a default by B&W under a € 30,000 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. Under the agreement, the performance bond amount was reduced upon the satisfaction of specified 72 contractual performance obligations. As of June 30, 2026, the Company’s indemnity obligation under the performance bond was € 5,000 . (c) Other Commitments In the normal course of business, the Company enters into commitments to its clients in connection with capital raising transactions, such as firm commitment underwritings, equity lines of credit, or other commitments to provide financing on specified terms and conditions. Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated. The Company entered into two Written Put agreements in April and September of 2025 and the September 2025 Written Put agreement has been subsequently amended. Under the Written Put agreements, the Issuers may require the Company to purchase up to: (i) $ 15,000 of the Issuer’s convertible preferred stock prior to March 24, 2027 and (ii) $ 2,000,000 of the Issuer’s convertible preferred stock prior to August 27, 2029, subject to limitations. The maximum put notice is (i) $ 500 per week in the aggregate and (ii) $ 150,000 per issuance and no more than one put notice a week, respectively. Conversion of the preferred stock is subject to a 19.99 % conversion limitation pursuant to the applicable Nasdaq Listing Rules. If exercised, the Company would remit cash and receive preferred shares at a discount to their stated value, with the preferred stock convertible at the Company’s option into common shares of the Issuer based on a formula tied to market prices. The preferred stock also includes a contingent redemption feature if the Issuer’s common stock declines below a specified price threshold. During the three and six months ended June 30, 2026, the Company purchased an aggregate of $ 225,000 and $ 375,000 of preferred shares pursuant to the April 2025 agreement. As of June 30, 2026, future commitments for the Written Puts include: (i) $ 12,700 , which does not meet the requirements to be put by one Issuer, due to a decrease in stock price below the required floor as of the balance sheet date and (ii) $ 960,000 , which remained outstanding from another Issuer and had not been exercised, and no amounts were due (see Note 5 - Fair Value Measurements). 73