What changed in this filing

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Item 1. Financial Statements

2025-02-21 compared with 2025-01-14 · 694 added, 509 removed, 1408 unchanged (46% of the section changed)

4 unchanged sentences

(Dollars in thousands, except par value)

September 30,

2024 December 31,

4 unchanged sentences

Securities borrowed 64,004 2,870,939

Accounts receivable, net of allowance for credit losses of $ 7,253 and $ 7,339 as of June 30, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 7,941 and $ 7,175 as of September 30, 2024 and December 31, 2023, respectively

91,506 101,036

Due from related parties 189 172

Loans receivable, at fair value (includes $ 171,748 and $ 378,768 from related parties as of June 30, 2024 and December 31, 2023, respectively)

Loans receivable, at fair value (includes $ 98,292 and $ 378,768 from related parties as of September 30, 2024 and December 31, 2023, respectively)

151,704 532,419

Prepaid expenses and other assets (includes $ 24,579 and $ 11,802 from related parties as of June 30, 2024 and December 31, 2023, respectively)

Prepaid expenses and other assets (includes $ 3,237 and $ 11,802 from related parties as of September 30, 2024 and December 31, 2023, respectively)

201,688 241,862

4 unchanged sentences

Deferred income taxes 13,402 33,631

Assets of discontinued operations (Note 4) 291,701 438,341

Total assets $ 2,157,276 $ 6,080,604

8 unchanged sentences

Notes payable 29,915 19,391

Loan participations sold 3,963 —

Revolving credit facility 13,681 43,801

1 unchanged sentence

Senior notes payable, net 1,529,560 1,668,021

Liabilities of discontinued operations (Note 4) 19,210 28,756

Total liabilities 2,583,498 5,721,038

4 unchanged sentences

1,000,000 shares authorized;

4,563 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively;

and liquidation preference of $ 114,082 as of June 30, 2024 and December 31, 2023

4,563 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively;

and liquidation preference of $ 114,082 as of September 30, 2024 and December 31, 2023

Common stock, $ 0.0001 par value;

100,000,000 shares authorized;

30,499,931 and 29,937,067 issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

30,499,931 and 29,937,067 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 588,048 572,170

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Services and fees (includes $ 3,357 and $ 547 for the three months ended June 30, 2024 and 2023 and $ 5,870 and $ 2,777 for the six months ended June 30, 2024 and 2023 from related parties, respectively)

Services and fees (includes $ 2,227 and $ 3,831 for the three months ended September 30, 2024 and 2023 and $ 7,802 and $ 6,481 for the nine months ended September 30, 2024 and 2023 from related parties, respectively)

$ 198,514 $ 244,096 $ 660,946 $ 662,181

Trading (loss) income ( 1,238 ) ( 9,727 ) ( 50,226 ) 31,723

Fair value adjustments on loans (includes $( 177,618 ) and $ 226 for the three months ended June 30, 2024 and 2023 and $( 196,743 ) and $( 1,546 ) for the six months ended June 30, 2024 and 2023 from related parties, respectively)

Fair value adjustments on loans (includes $( 68,768 ) and $( 4,659 ) for the three months ended September 30, 2024 and 2023 and $( 265,512 ) and $( 6,205 ) for the nine months ended September 30, 2024 and 2023 from related parties, respectively)

( 71,477 ) ( 860 ) ( 259,260 ) 51,623

Interest income - loans (includes $ 13,439 and $ 3,042 for the three months ended June 30, 2024 and 2023 and $ 27,403 and $ 5,871 for the six months ended June 30, 2024 and 2023 from related parties, respectively)

Interest income - loans (includes $ 7,472 and $ 7,013 for the three months ended September 30, 2024 and 2023 and $ 34,875 and $ 12,884 for the nine months ended September 30, 2024 and 2023 from related parties, respectively)

11,251 27,397 51,894 102,535

Interest income - securities lending 7,007 42,333 69,614 119,580

24,798 40,073 62,607 77,247

Sale of goods 55,248 60,029 164,254 184,301

12 unchanged sentences

Dividend income 675 3,373 4,139 9,541

Realized and unrealized (losses) gains on investments ( 155,690 ) 18,843 ( 185,235 ) ( 9,599 )

Realized and unrealized losses on investments ( 22,197 ) ( 77,287 ) ( 212,362 ) ( 77,020 )

Change in fair value of financial instruments and other 476 ( 4,170 ) 627 ( 3,998 )

Income from equity investments 10 143 6 133

Income (loss) from equity investments 6 ( 308 ) 12 ( 175 )

Interest expense ( 32,996 ) ( 37,493 ) ( 102,195 ) ( 118,630 )

(Loss) income before income taxes ( 408,773 ) 65,285 ( 473,817 ) 89,764

Provision for income taxes ( 25,008 ) ( 21,504 ) ( 7,918 ) ( 29,423 )

Net (loss) income ( 433,781 ) 43,781 ( 481,735 ) 60,341

Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests ( 177 ) ( 2,600 ) 1,034 ( 3,195 )

Net (loss) income attributable to B.

Loss from continuing operations before income taxes ( 134,344 ) ( 123,687 ) ( 627,591 ) ( 45,465 )

(Provision for) benefit from income taxes ( 14,508 ) 23,638 ( 17,915 ) ( 3,045 )

Loss from continuing operations ( 148,852 ) ( 100,049 ) ( 645,506 ) ( 48,510 )

(Loss) income from discontinued operations, net of income taxes ( 138,746 ) 23,741 ( 123,827 ) 32,543

Net loss ( 287,598 ) ( 76,308 ) ( 769,333 ) ( 15,967 )

Net loss attributable to noncontrolling interests and redeemable noncontrolling interests ( 3,201 ) ( 2,485 ) ( 2,167 ) ( 5,680 )

Net loss attributable to B.

Riley Financial, Inc.

1 unchanged sentence

Preferred stock dividends 2,015 2,015 6,045 6,042

Net (loss) income available to common shareholders $ ( 435,619 ) $ 44,366 $ ( 486,799 ) $ 59,509

Net loss available to common shareholders $ ( 286,412 ) $ ( 75,838 ) $ ( 773,211 ) $ ( 16,329 )

Basic net (loss) income per common share:

Continuing operations $ ( 4.97 ) $ ( 3.30 ) $ ( 21.50 ) $ ( 1.61 )

Discontinued operations ( 4.42 ) 0.77 ( 4.03 ) 1.05

Basic (loss) income per common share $ ( 9.39 ) $ ( 2.53 ) $ ( 25.53 ) $ ( 0.56 )

Diluted net (loss) income per common share:

Continuing operations $ ( 4.97 ) $ ( 3.30 ) $ ( 21.50 ) $ ( 1.61 )

Discontinued operations ( 4.42 ) 0.77 ( 4.03 ) 1.05

Diluted (loss) income per common share $ ( 9.39 ) $ ( 2.53 ) $ ( 25.53 ) $ ( 0.56 )

4 unchanged sentences

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive (Loss) Income

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Dollars in thousands)

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Net (loss) income $ ( 433,781 ) $ 43,781 $ ( 481,735 ) $ 60,341

Other comprehensive (loss) income:

Net loss $ ( 287,598 ) $ ( 76,308 ) $ ( 769,333 ) $ ( 15,967 )

Other comprehensive income (loss):

Change in cumulative translation adjustment 3,981 ( 4,879 ) ( 1,135 ) ( 3,006 )

Other comprehensive (loss) income, net of tax ( 1,244 ) 1,007 ( 5,116 ) 1,873

Total comprehensive (loss) income ( 435,025 ) 44,788 ( 486,851 ) 62,214

Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests ( 177 ) ( 2,600 ) 1,034 ( 3,049 )

Comprehensive (loss) income attributable to B.

Other comprehensive income (loss), net of tax 3,981 ( 4,879 ) ( 1,135 ) ( 3,006 )

Total comprehensive loss ( 283,617 ) ( 81,187 ) ( 770,468 ) ( 18,973 )

Comprehensive loss attributable to noncontrolling interests and redeemable noncontrolling interests ( 3,201 ) ( 2,485 ) ( 2,167 ) ( 5,534 )

Comprehensive loss attributable to B.

Riley Financial, Inc.

5 unchanged sentences

(Dollars in thousands, except share data)

For the Three Months Ended June 30, 2024 and 2023

For the Three Months Ended September 30, 2024 and 2023

Preferred Stock Common Stock Additional

1 unchanged sentence

Comprehensive

Loss Noncontrolling

Income (Loss) Noncontrolling

Interests Total Equity

Shares Amount Shares Amount

Balance, April 1, 2024 4,563 $ — 30,095,303 $ 3 $ 579,647 $ ( 347,558 ) $ ( 3,643 ) $ 71,208 $ 299,657

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

Vesting of restricted stock and other, net of shares withheld for employer taxes — — — — — — — — —

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

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

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

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

Dividends on common stock ($ 0.50 per share)

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

Dividends on common stock, net of forfeitures

— — — — — 629 — — 629

3 unchanged sentences

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

Acquisition of noncontrolling interests — — — — — — — 4,651 4,651

Other comprehensive loss — — — — — — ( 1,244 ) — ( 1,244 )

Balance, June 30, 2024

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

Balance, September 30, 2024

4,563 $ — 30,499,931 $ 3 $ 588,048 $ ( 1,084,728 ) $ ( 906 ) $ 71,361 $ ( 426,222 )

Balance, April 1, 2023 4,563 $ — 28,135,636 $ 3 $ 445,352 $ ( 62,566 ) $ ( 1,604 ) $ 59,179 $ 440,364

ESPP shares issued and vesting of restricted stock and other, net of shares withheld for employer taxes — — 345,234 — ( 3,523 ) — — — ( 3,523 )

Balance, July 1, 2023 4,563 $ — 28,480,870 $ 3 $ 452,254 $ ( 49,140 ) $ ( 597 ) $ 59,418 $ 461,938

Common stock issued, net of offering costs — — 2,090,909 — 114,507 — — — 114,507

Vesting of restricted stock and other, net of shares withheld for employer taxes — — 10,950 — ( 277 ) — — — ( 277 )

Excise taxes — — — — 115 — — — 115

Share based payments — — — — 10,561 — — — 10,561

Share based payments in equity of subsidiary — — — — 32 — — — 32

Vesting of shares in equity of subsidiary — — — — ( 245 ) — — 245 —

Dividends on common stock ($ 1.00 per share)

1 unchanged sentence

Dividends on preferred stock — — — — — ( 2,015 ) — — ( 2,015 )

Net income (loss) — — — — — 46,381 — ( 2,600 ) 43,781

Net loss — — — — — ( 73,823 ) — ( 2,485 ) ( 76,308 )

Distributions to noncontrolling interests — — — — — — — ( 4,527 ) ( 4,527 )

Contributions from noncontrolling interests — — — — — — — 699 699

Remeasurement of B.

Riley Principal 250 Merger Corporations subsidiary temporary equity — — — — — ( 796 ) — — ( 796 )

Other comprehensive income — — — — — — 1,007 — 1,007

Balance, June 30, 2023

Acquisition of noncontrolling interests — — — — — — — 600 600

Other comprehensive loss — — — — — — ( 4,879 ) — ( 4,879 )

Balance, September 30, 2023

4,563 $ — 30,582,729 $ 3 $ 576,947 $ ( 157,693 ) $ ( 5,476 ) $ 53,950 $ 467,731

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

For the Six Months Ended June 30, 2024 and 2023

For the Nine Months Ended September 30, 2024 and 2023

Preferred Stock Common Stock Additional

11 unchanged sentences

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

Dividends on common stock ($ 1.00 per share)

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

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

— — — — — ( 30,232 ) — — ( 30,232 )

Dividends on preferred stock — — — — — ( 6,045 ) — — ( 6,045 )

Net (loss) income — — — — — ( 482,769 ) — 1,034 ( 481,735 )

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

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

2 unchanged sentences

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

Balance, June 30, 2024

Balance, September 30, 2024

4,563 $ — 30,499,931 $ 3 $ 588,048 $ ( 1,084,728 ) $ ( 906 ) $ 71,361 $ ( 426,222 )

Balance, January 1, 2023 4,545 $ — 28,523,764 $ 3 $ 494,201 $ ( 45,220 ) $ ( 2,470 ) $ 59,379 $ 505,893

Common stock issued, net of offering costs — — 2,090,909 — 114,507 — — — 114,507

Preferred stock issued 18 — — — 467 — — — 467

4 unchanged sentences

Share based payments — — — — 34,528 — — — 34,528

Share based payments in equity of subsidiary — — — — 168 — — — 168

Vesting of shares in equity of subsidiary — — — — ( 245 ) — — 245 —

Dividends on common stock ($ 3.00 per share)

1 unchanged sentence

Dividends on preferred stock — — — — — ( 6,042 ) — — ( 6,042 )

Net income (loss) — — — — — 63,536 — ( 3,049 ) 60,487

Net loss — — — — — ( 10,287 ) — ( 5,534 ) ( 15,821 )

Remeasurement of B.

3 unchanged sentences

Acquisition of noncontrolling interests — — — — — — — 1,138 1,138

Other comprehensive income — — — — — — 1,873 — 1,873

Balance, June 30, 2023

Other comprehensive loss — — — — — — ( 3,006 ) — ( 3,006 )

Balance, September 30, 2023

4,563 $ — 30,582,729 $ 3 $ 576,947 $ ( 157,693 ) $ ( 5,476 ) $ 53,950 $ 467,731

4 unchanged sentences

(Dollars in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

Net (loss) income $ ( 481,735 ) $ 60,341

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

Net loss $ ( 769,333 ) $ ( 15,967 )

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

Depreciation and amortization 34,127 38,102

7 unchanged sentences

Effect of foreign currency on operations ( 297 ) 686

Income from equity investments ( 6 ) ( 133 )

Loss (income) from equity investments ( 12 ) 175

Dividends from equity investments 111 198

1 unchanged sentence

Impairment of goodwill and tradenames 27,681 37,233

Loss on disposal of discontinued operations 39,500 —

Gain on sale of business, disposal of fixed assets, and other ( 723 ) ( 9,581 )

Gain on extinguishment of debt ( 120 ) —

Loss on extinguishment of debt 5,780 5,294

Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests 1,416 1,335

5 unchanged sentences

Prepaid expenses and other assets (includes $ 8,565 and $( 2,001 ) from related parties for 2024 and 2023, respectively)

3,789 ( 13,834 )

Accounts payable, accrued payroll and related expenses, accrued expenses and other liabilities ( 34,577 ) ( 30,024 )

3 unchanged sentences

Securities loaned ( 2,804,492 ) 438,759

Net cash provided by operating activities 246,839 77,105

Net cash provided by (used in) operating activities 266,294 ( 40,957 )

Cash flows from investing activities:

4 unchanged sentences

Sale of loans receivable 22,785 7,500

Proceeds from loan participations sold 4,000 —

Acquisition of businesses and minority interest, net of $ 604 and $ 772 cash acquired for 2024 and 2023, respectively

23 unchanged sentences

Redemption of subsidiary temporary equity and distributions — ( 175,763 )

Proceeds from exercise of warrants 653 —

Proceeds from issuance of common stock — 115,000

Proceeds from issuance of preferred stock — 467

Proceeds from exercise of warrants 653 —

Net cash used in financing activities ( 354,722 ) ( 285,459 )

Increase (decrease) in cash, cash equivalents and restricted cash 10,017 ( 163,371 )

Decrease in cash, cash equivalents and restricted cash ( 62,899 ) ( 13,462 )

Effect of foreign currency on cash, cash equivalents and restricted cash ( 1,092 ) ( 3,116 )

Net increase (decrease) in cash, cash equivalents and restricted cash 4,784 ( 161,024 )

Cash, cash equivalents and restricted cash, beginning of period 233,839 270,926

Cash, cash equivalents and restricted cash, end of period $ 238,623 $ 109,902

Net decrease in cash, cash equivalents and restricted cash ( 63,991 ) ( 16,578 )

Cash, cash equivalents and restricted cash from continuing operations, beginning of period 224,565 225,981

Cash, cash equivalents and restricted cash from discontinued operations, beginning of period 9,274 44,945

Cash, cash equivalents and restricted cash, beginning of year 233,839 270,926

Cash, cash equivalents and restricted cash from continuing operations, end of period 160,613 226,431

Cash, cash equivalents and restricted cash from discontinued operations, end of period 9,235 27,917

Cash, cash equivalents and restricted cash, end of year $ 169,848 $ 254,348

Supplemental disclosures:

11 unchanged sentences

(“Targus”), which designs and sells laptop and computer accessories.

During the fourth quarter of 2023, management reassessed the Company's previously reported Consumer segment due to organizational changes and financial information provided to the Chief Operating Decision Maker (“CODM”).

These changes resulted in Targus's operations being reported on a stand-alone basis in the Consumer Products segment and the operations related to brand licensing that were previously reported in the Consumer segment being reported in the All Other Category that is reported with Corporate and Other.

As a result of the changes, the Company has recast the financial data for the Consumer Products segment and reporting of the All Other Category for all periods presented.

The Company operates in six reportable operating segments:

The Company operates in five reportable operating segments:

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

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

(iii) Auction and Liquidation, through which the Company provides 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;

(iv) Financial Consulting, through which the Company provides bankruptcy, financial advisory, forensic accounting, real estate consulting and valuation and appraisal services;

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

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

(iii) Financial Consulting, through which the Company provides bankruptcy, financial advisory, and forensic accounting services;

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

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

During the quarter ended September 30, 2024, management concluded that certain businesses met the requirements to be classified as held for sale and discontinued operations.

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

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

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

For more information, see Note 16.

Net (loss) income per share amounts are computed independently for net (loss) income from continuing operations, net (loss) income from discontinued operations and net loss.

As a result, the sum of per-share amounts may not equal the total.

Unless otherwise indicated, information in these notes to consolidated financial statements relates to continuing operations.

On February 29, 2024, the Company announced that an independent financial advisor was engaged to assist in the review of strategic alternatives for the Appraisal and Valuation Services, and Retail, Wholesale & Industrial Solutions businesses (collectively formerly known as “Great American Group”), which could include a potential sale or other transaction.

1 unchanged sentence

A solicitation process for the strategic review began in April 2024.

For the six months ended June 30, 2024, the Company incurred a net loss of $( 482,769 ) which is primarily related to fair value adjustments totaling $ 391,754 related to the Company’s equity investment in Freedom VCM Holdings, LLC and the loan to Vintage Capital Management, LLC which are included in the asset collateral pool securing the Company’s credit facility with Nomura Corporate Funding Americas, LLC (“Nomura”).

For the nine months ended September 30, 2024, the Company incurred a net loss of $( 769,333 ) which includes fair value adjustments totaling $( 509,761 ) related to the Company’s equity investment in Freedom VCM Holdings, LLC (“Freedom”) and the loan to Vintage Capital Management, LLC which are included in the asset collateral pool securing the Company’s credit facility with Nomura Corporate Funding Americas, LLC (“Nomura”).

As more fully described in Note 11 – Terms Loans and Revolving Credit Facility, the Company entered into a loan amendment in September 2024 to the credit facility with Nomura Corporate Funding Americas, LLC, which requires the Company to reduce the principal amount of the term loan to be no greater than $ 100,000 on or prior to September 30, 2025.

In conjunction with the amendment, the Company made a principal payment of $ 85,146 thereby reducing the outstanding principal balance on the credit facility from $ 469,750 to $ 388,127 .

In conjunction with the amendment, the Company made a principal payment of $ 85,146 thereby reducing the outstanding principal balance on the credit facility from $ 469,750 to $ 388,127 at September 30, 2024.

After amending the credit facility, the strategic review process continued and in October 2024, the Company entered into a secured financing transaction for it’s brand operations and brand’s equity investments receiving proceeds of $ 189,331 , see Note 22 Subsequent Events.

From these proceeds, the Company repaid $ 171,480 on the Nomura credit facility reducing the outstanding principal balance from $ 388,127 to $ 216,647 .

In November 2024, the Company also entered into a transaction whereby all of its interests in the Great American Group businesses was contributed to a newly formed subsidiary and issued preferred and common units to an investor for a purchase price of approximately $ 203,000 (the “Great American Group Transaction”), see Note 21 – Subsequent Events.

connection with such transaction, the Company used proceeds to further reduce the outstanding balance on the Nomura credit facility from $ 216,647 to $ 125,000 .

purchase price of approximately $ 203,000 (the “Great American Group Transaction”), see Note 22 – Subsequent Events.

In connection with such transaction, the Company used proceeds to further reduce the outstanding balance on the Nomura credit facility from $ 216,647 to $ 125,000 .

The Company has $ 145,302 of 6.375 % Senior Notes due on February 28, 2025 that mature and will use cash on hand to repay these senior notes.

The Company believes that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, and cash expected to be generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements.

The Company has $ 217,440 of Senior Notes that are due to mature on March 31, 2026, as more fully discussed in Note 12.

The Company is considering a number of additional strategic alternatives to satisfy this obligation;

which among other things, includes:

existing cash on hand;

the sale of a portion of the Company’s traditional (W-2) Wealth Management business (as more further discussed in Note 22);

the sale of non-core businesses;

and the sale or refinancing of other assets and investments.

There can be no assurance that these contemplated transactions will occur and in the event these transactions are not completed it could have a material impact on the Company’s financial condition.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4 unchanged sentences

All intercompany accounts and transactions have been eliminated upon consolidation.

Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations, see Notes 1 and 4.

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

5 unchanged sentences

These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on April 24, 2024.

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

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

(b) Use of Estimates

5 unchanged sentences

Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 23,313 and $ 35,780 during the three months ended June 30, 2024 and 2023, respectively, and $ 58,696 and $ 68,204 during the six months ended June 30, 2024 and 2023, respectively.

Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $ 6,359 and $ 38,368 during the three months ended September 30, 2024 and 2023, respectively, and $ 65,055 and $ 106,572 during the nine months ended September 30, 2024 and 2023, respectively.

(d) Concentration of Risk

Revenues in the Capital Markets, Financial Consulting, Wealth Management, and Communications segments are primarily generated in the United States.

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

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

The Company maintains cash in various federally insured banking institutions.

1 unchanged sentence

The Company has not experienced any losses in such accounts.

The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements.

The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors.

Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors.

The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry.

To mitigate the exposure to losses on any one specific liquidations services contract, the Company sometimes conducts operations with third parties through collaborative arrangements.

On December 18, 2023, the Company loaned $ 108,000 to Conn’s Inc.

2 unchanged sentences

On February 14, 2024, the Company collected $ 15,000 of principal payments which reduced the loan balance to $ 93,000 .

This loan combined with two other existing loans receivable with a fair value of $ 30,389 and $ 62,808 as of June 30, 2024 and December 31, 2023, respectively, is collateralized by consumer loan receivables of customers of the furniture and electronics retailer.

These loans have an aggregate fair value of $ 112,694 and $ 167,568 or 49.2 % and 31.5 % of the loan portfolio as of June 30, 2024 and December 31, 2023, respectively, and are concentrated in the retail industry.

The fair value of these loans at June 30, 2024 has been impacted by a deterioration in Conn’s operating results in the second quarter of 2024, which culminated in the Conn's Chapter 11 bankruptcy filing on July 23, 2024 as more fully discussed in Note 2(h) below.

The Company also has a loan receivable with a principal amount of $ 200,506 as of June 30, 2024 and December 31, 2023.

The loan receivable allows for interest to be paid-in-kind, which is capitalized to the loan receivable balance annually on the loan's anniversary date.

The interest receivable on the loan was $ 21,053 and $ 8,889 as of June 30, 2024 and December 31, 2023, respectively, and is included in prepaid expenses and other assets in the condensed consolidated balance sheets.

The fair value of the Conn’s loan receivable was $ 63,705 at September 30, 2024.

This loan combined with two other existing loans receivable with a fair value of $ 12,451 and $ 62,808 as of September 30, 2024 and December 31, 2023, respectively, is collateralized by consumer loan receivables of customers of the furniture and electronics retailer.

These loans have an aggregate fair value of $ 76,156 and $ 167,568 or 50.2 % and 31.5 % of the loan portfolio as of September 30, 2024 and December 31, 2023, respectively, and are concentrated in the retail industry.

The fair value of these loans at September 30, 2024 has been impacted by a deterioration in Conn’s operating results in the second quarter of 2024, which culminated in the Conn's Chapter 11 bankruptcy filing on July 23, 2024 as more fully discussed in Note 2(h) below.

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

The Company collected the $ 27,738 and interest earned on the first-lien loan receivable of $ 238 for the period from December 17, 2024 through January 24, 2025 when the first-lien loan receivable was paid in full.

The Company also has a loan receivable with a principal amount of $ 224,968 and $ 200,506 as of September 30, 2024 and December 31, 2023, respectively.

The increase in the loan receivable principal amount at September 30, 2024 in the amount of $ 24,462 includes interest in-kind interest that was capitalized to the loan receivable balance annually on the loan's anniversary date.

The loan receivable is secured by a first priority security interest in Freedom equity interests owned by Brian Kahn as more fully described in Note 2(h) below.

The fair value of the loan receivable was $ 32,121 and $ 200,506 or 14.0 % and 37.7 % of the total loan portfolio as of June 30, 2024 and December 31, 2023, respectively.

Continued deterioration in the collateral, including in the performance of Freedom VCM or delays in the execution of its strategies, including the possible disposition of additional businesses and further de-leveraging of its balance sheet, for the loan receivable may impact the ultimate collection of principal and interest.

At June 30, 2024, the maximum amount of loss that the Company is exposed to loss from loans receivable concentration is an amount equivalent to the fair value of these loans which totaled $ 144,815 .

The Company is also exposed to a concentration of risk related to Freedom VCM which totaled $ 121,622 as of June 30, 2024.

The exposure includes the amounts directly related to Freedom VCM from the investment in Freedom VCM that had a fair value of $ 63,674 and the Freedom VCM Receivables, Inc.

loan receivable of $ 25,827 at June 30, 2024 and additional exposure from the loan receivable in the amount of $ 32,121 as described above where the primary security includes Freedom VCM equity interests owned by Brian Kahn.

The fair value of the loan receivable and collateral from the security interest in Freedom at September 30, 2024 is impacted by the Freedom VCM filing of voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024.

The fair value of the loan receivable was $ 2,250 and $ 200,506 or 1.5 % and 37.7 % of the total loan portfolio as of September 30, 2024 and December 31, 2023, respectively.

As a result of the bankruptcy filing on November 3, 2024, the loan receivable at September 30, 2024 is on non-accrual and there is no accrued interest receivable on the loan receivable at September 30, 2024.

Interest receivable on the loan in the amount of $ 8,889 as of December 31, 2023 is included in prepaid expenses and other assets in the condensed consolidated balance sheets.

The fair value of the underlying collateral for this loan is primarily comprised of other securities which amounted to $ 2,250 at September 30, 2024 and has decreased to a fair value of $ 2,154 at February 7, 2025.

At September 30, 2024, the maximum amount of loss that the Company is exposed to loss from loans receivable concentration is an amount equivalent to the fair value of these loans which totaled $ 78,406 .

The Company is also exposed to a concentration of risk related to Freedom VCM which totaled $ 9,310 as of September 30, 2024 from the Freedom VCM Receivables, Inc.

loan receivable and additional exposure from the loan receivable with a fair value of $ 2,250 as described above where the primary security includes other public equity securities owned by Brian Kahn.

(e) Advertising Expenses

The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred.

Advertising costs totaled $ 2,736 and $ 2,969 during the three months ended June 30, 2024 and 2023, respectively, and $ 5,146 and $ 5,906 during the six months ended June 30, 2024 and 2023.

Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Advertising costs totaled $ 1,477 and $ 5,911 during the three months ended September 30, 2024 and 2023, respectively, and $ 6,155 and $ 16,462 during the nine months ended September 30, 2024 and 2023.

Advertising expense was included as

a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

(f) Cash and Cash Equivalents

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(g) Restricted Cash

As of June 30, 2024 and December 31, 2023, restricted cash included $ 1,728 and $ 1,875 , respectively, primarily consisting of cash collateral for leases.

As of September 30, 2024 and December 31, 2023, restricted cash included $ 1,366 and $ 1,875 , respectively, primarily consisting of cash collateral for leases.

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

September 30,

2024 December 31,

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Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the condensed consolidated statements of operations.

Loans receivable, at fair value totaled $ 229,199 and $ 532,419 as of June 30, 2024 and December 31, 2023, respectively.

Loans receivable, at fair value totaled $ 151,704 and $ 532,419 as of September 30, 2024 and December 31, 2023, respectively.

The loans have various maturities through August 2033.

As of June 30, 2024 and December 31, 2023, the historical cost of loans receivable accounted for under the fair value option was $ 447,013 and $ 555,882 , respectively, which included principal balances of $ 451,138 and $ 563,637 respectively, and unamortized costs, origination fees, premiums and discounts, totaling $ 4,125 and $ 7,755 , respectively.

The principal balance of loans receivable exceeded the fair value of loans by $ 217,814 and $ 23,463 as of June 30, 2024 and December 31, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the historical cost of loans receivable accounted for under the fair value option was $ 442,880 and $ 555,882 , respectively, which included principal balances of $ 446,089 and $ 563,637 respectively, and unamortized costs, origination fees, premiums and discounts, totaling $ 3,210 and $ 7,755 , respectively.

The principal balance of loans receivable exceeded the fair value of loans by $ 291,176 and $ 23,463 as of September 30, 2024 and December 31, 2023, respectively.

At the time of origination, the Company's loans 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.

During the three months ended June 30, 2024 and 2023, the Company recorded net unrealized losses of $ 175,582 and net unrealized gains of $ 9,207 , respectively, and net unrealized losses of $ 194,352 and net unrealized gains of $ 52,666 during the six months ended June 30, 2024 and 2023, respectively, on loans receivable, at fair value, which is included in fair value adjustments on loans on the condensed consolidated statements of operations.

Loans receivable, at fair value on non-accrual and 90 days or greater past due was approximately zero as of June 30, 2024.

Loans receivable, at fair value on non-accrual and 90 days or greater past due was $ 41,236 , which represents approximately 7.7 % of total loans receivable, at fair value as of December 31, 2023.

The principal balance of loans receivable on non-accrual and 90 days or greater past due was $ 43,326 as of December 31, 2023.

During the three months ended September 30, 2024 and 2023, the Company recorded net unrealized losses of $ 73,360 and $ 859 , respectively, and net unrealized losses of $ 267,713 and net unrealized gains of $ 51,807 during the nine months ended September 30, 2024 and 2023, respectively, on loans receivable, at fair value, which is included in fair value adjustments on loans on the condensed consolidated statements of operations.

Loans receivable, at fair value on non-accrual and 90 days or greater past due was $ 67,274 and $ 41,236 as of September 30, 2024 and December 31, 2023, respectively, which represented approximately 44.3 % and 7.7 % of total loans receivable, at fair value as of September 30, 2024 and December 31, 2023, respectively.

The principal balance of loans receivable on non-accrual and 90 days or greater past due was $ 322,792 and $ 43,326 as of September 30, 2024 and December 31, 2023.

Interest income for loans on non-accrual and/or 90 days or greater past due is recognized separately from changes in fair value adjustments on loans on the condensed consolidated statements of operations.

The amount of gains or (losses) included in earnings attributable to changes in instrument – specific credit risk was $( 176,078 ) and $ 8,621 during the three months ended June 30, 2024 and 2023, respectively, and $( 187,417 ) and $ 46,109 during the six months ended June 30, 2024 and 2023, respectively.

The amount of gains or (losses) included in earnings attributable to changes in instrument – specific credit risk was $( 71,746 ) and $( 759 ) during the three months ended September 30, 2024 and 2023, respectively, and $( 259,163 ) and $ 45,350 during the nine months ended September 30, 2024 and 2023, respectively.

The gains or losses attributable to changes in instrument – specific risk was 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, 2024, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc.

As of September 30, 2024, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc.

(“B&W”) as further described in Note 17(b).

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

As of June 30, 2024, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

As of September 30, 2024, the Company has not recorded any provision for credit

losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans on the condensed consolidated statements of operations.

Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans.

Unearned income, discounts and premiums are amortized to interest income using a level yield methodology.

On August 21, 2023, one of the Company’s subsidiaries and Vintage Capital Management, LLC (“VCM”), an affiliate of Brian 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 and bears interest at the rate of 12 % per annum payable-in-kind with a maturity date of December 31, 2027.

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The fair value of the Freedom VCM equity interest owned by Mr.

Kahn and his spouse was $ 51,478 and $ 232,065 as of June 30, 2024 and December 31, 2023, respectively.

Kahn and his spouse was zero and $ 232,065 as of September 30, 2024 and December 31, 2023, respectively.

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

6 unchanged sentences

Other factors leading to continued deterioration in the collateral, including in the performance of Freedom VCM or delays in the execution of its strategies, including the possible disposition of additional businesses and further de-leveraging of its balance sheet, for the loan receivable may further impact the ultimate collection of principal and interest.

To the extent the loan balance and accrued interest exceed the underlying collateral value of the loan, as was the case as of June 30, 2024, the fair value of the loan has been and will be impacted and has resulted and will result in an unrealized loss being recorded in the condensed consolidated statements of operations.

Subsequent to June 30, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 which impacts the collateral for this loan receivable.

The fair value of the underlying collateral for this loan decreased to a fair value of $ 2,006 at December 20, 2024.

To the extent the loan balance and accrued interest exceed the underlying collateral value of the loan, as was the case as of September 30, 2024, the fair value of the loan has been and will be impacted and has resulted and will result in an unrealized loss being recorded in the condensed consolidated statements of operations.

Subsequent to September 30, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 which impacts the collateral for this loan receivable.

The fair value adjustment on the VCM loan receivable was $( 54,333 ) and $( 222,718 ) for the three and nine months ended September 30, 2024.

The fair value of the underlying collateral for this loan decreased to a fair value of $ 2,154 at February 7, 2025.

The $ 2,154 is comprised of other public securities.

Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans.

Unearned income, discounts, and premiums are amortized to interest income using a level yield methodology.

As of June 30, 2024, loans receivable had an aggregate remaining contractual principal balance of $ 451,138 , an aggregate fair value of $ 229,199 , and the contractual principal balance exceeded the fair value by $ 221,939 .

As of September 30, 2024, loans receivable had an aggregate remaining contractual principal balance of $ 446,089 , an aggregate fair value of $ 151,704 , and the contractual principal balance exceeded the fair value by $ 294,385 .

As of December 31, 2023, loans receivable had an aggregate remaining contractual principal balance of $ 563,637 , an aggregate fair value of $ 532,419 , and the contractual principal balance exceeded the fair value by $ 31,218 .

The Company’s has a loan receivable with a principal amount of $ 93,000 outstanding from Conn’s and two loans with a fair value of $ 12,451 outstanding which are discussed below, (the Badcock Receivables I and Freedom VCM Receivables loans receivable, each as defined below), which are serviced by Conn’s.

These loans were all current in the payment of principal and interest as of June 30, 2024.

Of the $ 30,389 balance at fair value at June 30, 2024, the Company has continued to receive payments of $ 27,414 subsequent to June 30, 2024 and through December 30, 2024 on the Badcock Receivables I and Freedom VCM Receivables loans receivable.

The Company also collected the June 30, 2024 interest payment that was due on the Conn’s $ 93,000 loan receivable in July 2024.

Accrued interest on the $ 93,000 Conn’s loan receivable was current as of June 30, 2024.

As a result of Conn's voluntary petition filing on July 23, 2024 for relief (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) this loan receivable with a fair value of $ 63,705 at September 30, 2024 is included in loans receivable on non-accrual as discussed above.

Future collection of the $ 93,000 Conn’s loan receivable is expected to be paid from the sale of assets and servicing of a pool consumer receivables that serve as collateral for the loan where we have a second lien on these assets.

These proceeds are expected to be collected over the next year and will be impacted by Conn’s voluntary petition filing on July 23, 2024 for relief (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).

These proceeds which are expected to be collected over the next year has been impacted by Conn’s voluntary petition filing on July 23, 2024 for relief (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).

The commencement of the Chapter 11 Cases constitutes an event of default that accelerates the repayment obligations under the $ 93,000 loan receivable to Conn’s.

Any efforts to enforce repayment obligations under the Conn’s $ 93,000 loan receivable are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of this loan are subject to the applicable provisions of the Bankruptcy Code.

Any efforts to

enforce repayment obligations under the Conn’s $ 93,000 loan receivable are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of this loan are subject to the applicable provisions of the Bankruptcy Code.

The fair value adjustment on the Conn's loan receivable was $( 18,600 ) and $( 27,084 ) for the three and nine months ended September 30, 2024.

The Company collected the principal of $ 27,738 and interest on the first-lien loan receivable of $ 238 for the period from December 17, 2024 through January 24, 2025 when the first-lien loan receivable was paid in full.

The Company has continued to receive payments for the other two loans with a fair value of $ 12,451 at September 30, 2024 and has received payments of $ 7,717 subsequent to September 30, 2024 and through February 5, 2025 on the Badcock Receivables I and Freedom VCM Receivable loans receivable.

Badcock Loan Receivable

15 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, the Badcock Receivables I loan receivable in the Company's condensed consolidated balance sheets included loans measured at fair value in the amount of $ 4,562 and $ 20,624 , respectively.

As of June 30, 2024 and December 31, 2023, the Freedom Receivables Note was included in the Company's condensed consolidated balance sheets in loans receivable, at fair value in the amount of $ 25,827 and $ 42,183 , respectively.

As of September 30, 2024 and December 31, 2023, the Badcock Receivables I loan receivable in the Company's condensed consolidated balance sheets included loans measured at fair value in the amount of $ 3,141 and $ 20,624 , respectively.

As of September 30, 2024 and December 31, 2023, the Freedom Receivables Note was included in the Company's condensed consolidated balance sheets in loans receivable, at fair value in the amount of $ 9,310 and $ 42,183 , respectively.

Nogin Loan and Loan Commitment

4 unchanged sentences

This loan receivable had a fair value of $ 17,980 as of December 31, 2023.

An additional $ 3,000 of DIP financing was funded in the second quarter of 2024, for total DIP financing (inclusive of $ 1,700 in fees payable in kind) of $ 37,700 , which was extinguished upon the Company's acquisition of Nogin on May 3, 2024.

An additional $ 3,000 of DIP financing was funded in the second quarter of 2024, for total DIP

financing (inclusive of $ 1,700 in fees payable in kind) of $ 37,700 , which was extinguished upon the Company's acquisition of Nogin on May 3, 2024.

On May 3, 2024, the Company funded an additional $ 18,670 in cash to complete the acquisition of Nogin of which $ 15,500 was a payment to the Consenting Noteholders.

8 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

As of September 30, 2024 and December 31, 2023, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

September 30,

2024 December 31,

14 unchanged sentences

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

In accordance with ASC - 321 Equity Securities unrealized gains (losses) on equity securities held at June 30, 2024, includes unrealized gains (losses) of $( 153,027 ) and $ 4,318 for the three months ended June 30, 2024 and 2023, respectively, and $( 185,519 ) and $( 13,530 ) for the six months ended June 30, 2024 and 2023, respectively, reported in other income (loss) - realized and unrealized gains (losses) on investments in the condensed consolidated statement of operations.

The Brand Investments

The following tables contain summarized financial information with respect to five of the Company's investments in limited liability companies that primarily license brand names and trademarks through licensing agreements.

The Company has an ownership interest in each investee between 10 % and 50 %.

For the 10 % ownership interest, 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 significant influence in the other four investments due to the ownership interest being greater than 20 %.

The financial information of these five investments has been aggregated and included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2024 and September 30, 2023 correspond to amounts as of June 30, 2024 and December 31, 2023, respectively, of the Company;

income statement amounts during the three and six months ended March 31, 2024 and 2023 correspond to amounts during the three and six months ended June 30, 2024 and 2023, respectively, of the Company), which is the period in which the most recent financial information is available:

March 31, September 30,

Current assets $ 51,858 $ 51,588

Noncurrent assets $ 264,167 $ 269,809

Current liabilities $ 9,080 $ 8,594

Noncurrent liabilities $ 780 $ 760

Equity attributable to investee $ 303,396 $ 309,167

Noncontrolling interest $ 2,769 $ 2,876

For the three months ended March 31, For the six months ended

2023 2024 (1)

Revenues $ 40,478 $ 16,457 $ 74,444 $ 44,428

Cost of revenues $ 16,533 $ 13,960 $ 35,602 $ 30,347

Net income attributable to investees $ 24,223 $ 10,878 $ 39,375 $ 22,686

(1) - Financial information for 2024 includes two additional investments as a result of the acquisition of a majority ownership interest in bebe stores, inc (“bebe”) in 2023 and an other investment made in 2023.

As of June 30, 2024 and December 31, 2023, the fair value of these five investments totaled $ 287,987 and $ 283,057 , respectively, and are included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

As described in Note 21 – Subsequent Events, on October 25, 2024 the Company entered into a series of transactions which transferred and contributed three of the five Brand Investments (HRLY Brand Management LLC, Justice Brand Management LLC, and S&S Brand Management LLC) and the majority 80 % ownership of ownership of BR Brand Holdings LLC into a newly formed subsidiary for the purpose of being a securitization financing vehicle.

The Company's majority owned subsidiary bebe also sold the remaining two Brand Investments on October 25, 2024 as fully described in Note 21- Subsequent Events.

In accordance with ASC - 321 Equity Securities unrealized gains

(losses) on equity securities held at September 30, 2024, includes unrealized gains (losses) of $( 25,748 ) and $( 72,583 ) for the three months ended September 30, 2024 and 2023, respectively, and $( 217,370 ) and $( 77,710 ) for the nine months ended September 30, 2024 and 2023, respectively, reported in other income (loss) - realized and unrealized gains (losses) on investments in the condensed consolidated statement of operations.

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

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

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

transaction, and (iii) Mr.

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

6 unchanged sentences

On July 23, 2024, Conn’s filed a Chapter 11 Case under the Bankruptcy Code in the Bankruptcy Court as more fully discussed in Note 2(h).

The $ 69,900 of consideration that Freedom VCM received from the WS Badcock is still held by Freedom VCM at June 30, 2024 and is expected to be impaired as a result of Conn’s bankruptcy filing.

The original $ 69,900 of consideration that Freedom VCM received from the sale of WS Badcock to Conn's that is still held by Freedom VCM at September 30, 2024 is impaired and there is expected to be no recovery of any value by Freedom VCM as a result of Conn’s bankruptcy filing.

Subsequent to September 30, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 which reduced the fair value of this equity investment by $( 63,674 ) to zero .

The Company has elected to account for this 31 % equity investment under the fair value option.

The following tables contain summarized financial information with respect to Freedom VCM, included below for purposes of the disclosure a

quarter in arrears (balance sheet amounts as of March 31, 2024 and September 30, 2023 correspond to amounts as of June 30, 2024 and December 31, 2023, respectively, of the Company;

income statement amounts during the three and six months ended March 31, 2024 correspond to amounts during the three and six months ended June 30, 2024 of the Company), which is the period in which the most recent financial information is available:

March 31, 2024 September 30, 2023

The following tables contain summarized financial information with respect to Freedom VCM, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2024 and September 30, 2023 correspond to amounts as of September 30, 2024 and December 31, 2023, respectively, of the Company;

income statement amounts during the three and nine months ended June 30, 2024 correspond to amounts during the three and nine months ended September 30, 2024 and 2023, respectively of the Company), which is the period in which the most recent financial information is available:

June 30, 2024 December 31, 2023

Current assets $ 877,471 $ 961,787

3 unchanged sentences

Equity attributable to investee $ 601,642 $ 731,978

For the three months ended March 31, For the six months ended March 31,

For the three months ended June 30, For the nine months ended June 30,

2024 2023 2024 2023

Revenues $ 767,404 $ 1,038,686 $ 2,383,350 $ 3,259,396

2 unchanged sentences

Net loss attributable to investees $ ( 111,881 ) $ ( 50,796 ) $ ( 300,720 ) $ ( 159,824 )

As of June 30, 2024 and December 31, 2023, the fair value of the investment in Freedom VCM totaled $ 63,674 and $ 287,043 , respectively, and is included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

The change in fair value recorded in the income statement was an unrealized loss of $ 180,964 and $ 223,369 for the three and six months ended June 30, 2024, respectively.

Subsequent to June 30, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 which impacts the future fair value of the investment in Freedom VCM.

The fair value of the investment in Freedom VCM was reduced to zero at September 30, 2024 and a fair value adjustment of $( 63,674 ) was recorded in the quarter ended September 30, 2024.

As of September 30, 2024 and December 31, 2023, the fair value of the investment in Freedom VCM totaled zero and $ 287,043 , respectively, and is included in securities and other investments owned, at fair value in the condensed

consolidated balance sheets.

The change in fair value recorded in the income statement was an unrealized loss of $ 63,674 and $ 287,043 for the three and nine months ended September 30, 2024, respectively.

Babcock and Wilcox Enterprises, Inc, Equity Investment

The Company owns a 30 % voting interest in B&W whereby the Company has elected to account for this investment under the fair value option.

The following tables contain summarized financial information with respect to B&W included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2024 and September 30, 2023 correspond to amounts as of June 30, 2024 and December 31, 2023, respectively, of the Company;

March 31, 2024 September 30, 2023

The following tables contain summarized financial information with respect to B&W included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2024 and September 30, 2023 correspond to amounts as of September 30, 2024 and December 31, 2023, respectively, of the Company;

income statement amounts during the three and nine months ended June 30, 2024 and 2023 correspond to amounts during the three and nine months ended September 30, 2024 and 2023, respectively, of the Company), which is the period in which the most recent financial information is available:

June 30, 2024 December 31, 2023

Current assets $ 574,562 $ 497,593

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Noncontrolling interest $ 585 $ 611

For the three months ended March 31, For the six months ended March 31,

For the three months ended June 30, For the nine months ended June 30,

2024 2023 2024 2023

1 unchanged sentence

Cost of revenues $ 179,152 $ 228,352 $ 509,779 $ 600,441

Loss from continuing operations $ ( 15,799 ) $ ( 12,686 ) $ ( 70,065 ) $ ( 14,975 )

Net loss $ ( 16,791 ) $ ( 12,475 ) $ ( 79,515 ) $ ( 6,815 )

Net loss attributable to investees $ ( 16,833 ) $ ( 12,496 ) $ ( 83,287 ) $ ( 10,475 )

As of June 30, 2024 and December 31, 2023, the fair value of the investment in B&W totaled $ 39,797 and $ 40,072 , respectively, and is included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

Income (loss) from continuing operations $ 25,222 $ 594 $ ( 44,843 ) $ ( 14,381 )

Net income (loss) $ 25,364 $ ( 5,012 ) $ ( 54,151 ) $ ( 11,827 )

Net income (loss) attributable to investees $ 25,315 $ ( 5,088 ) $ ( 57,972 ) $ ( 15,563 )

As of September 30, 2024 and December 31, 2023, the fair value of the investment in B&W totaled $ 55,991 and $ 40,072 , respectively, and is included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

Other Public Company Equity Investments

As of June 30, 2024, the Company had a voting interest of 13 % in Synchronoss Technologies, Inc.

As of September 30, 2024, the Company had a voting interest of 7 % in Synchronoss Technologies, Inc.

The Company has significant influence due to the equity ownership interest and board representation for this company.

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

The following tables contain summarized financial information with respect to Synchronoss Technologies, Inc., included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of March 31, 2024 and September 30, 2023 correspond to amounts as of June 30, 2024 and December 31, 2023, respectively, of the Company;

The following tables contain summarized financial information with respect to Synchronoss Technologies, Inc., included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2024 and September 30, 2023 correspond to amounts as of September 30, 2024 and December 31, 2023, respectively, of the Company;

income statement amounts during the three and nine months

ended June 30, 2024 and 2023 correspond to amounts during the three and nine months ended September 30, 2024 and 2023, respectively, of the Company), which is the period in which the most recent financial information is available:

Synchronoss Technologies, Inc.

March 31, 2024 September 30, 2023

June 30, 2024 December 31, 2023

Current assets $ 75,520 $ 82,002

4 unchanged sentences

Synchronoss Technologies, Inc.

For the three months ended March 31, For the six months ended March 31,

For the three months ended June 30, For the nine months ended June 30,

2024 2023 2024 2023

2 unchanged sentences

Net income (loss) attributable to investees $ 78 $ ( 10,979 ) $ ( 32,582 ) $ ( 40,297 )

As of June 30, 2024 and December 31, 2023, the fair value of the equity investment in Synchronoss Technologies, Inc.

As of September 30, 2024 and December 31, 2023, the fair value of the equity investment in Synchronoss Technologies, Inc.

was $ 11,212 and $ 8,780 , respectively.

1 unchanged sentence

Other Equity Investments

As of June 30, 2024, 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.

As of September 30, 2024, 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 five private companies at June 30, 2024 and six private companies at December 31, 2023.

The following table contains summarized financial information for these companies, included below for purposes of the disclosure a quarter in arrears (balance sheet

amounts as of March 31, 2024 and September 30, 2023 correspond to amounts as of June 30, 2024 and December 31, 2023, respectively, of the Company;

2024 September 30,

These equity investments are comprised of equity investments in five private companies at September 30, 2024 and six private companies at December 31, 2023.

The following table contains summarized financial information for these companies, included below for purposes of the disclosure a quarter in arrears (balance sheet amounts as of June 30, 2024 and September 30, 2023 correspond to amounts as of September 30, 2024 and December 31, 2023, respectively, of the Company;

June 30, 2024 December 31, 2023

Current assets $ 239,004 $ 279,810

4 unchanged sentences

Equity attributable to investee $ 434,524 $ 475,188

For the three months ended March 31, For the six months ended March 31,

For the three months ended June 30, For the nine months ended June 30,

2024 2023 2024 2023

1 unchanged sentence

Cost of revenues $ 76,286 $ 20,492 $ 279,426 $ 73,244

Net (loss) income attributable to investees $ ( 5,469 ) $ 10,728 $ ( 15,974 ) $ ( 2,886 )

As of June 30, 2024 and December 31, 2023, the fair value of these five investments totaled $ 38,416 and six investments totaled $ 87,713 , respectively, and is included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

Net income (loss) attributable to investees $ ( 4,273 ) $ 6,586 $ ( 14,229 ) $ 3,701

As of September 30, 2024 and December 31, 2023, the fair value of these five investments totaled $ 50,595 and six investments totaled $ 87,713 , respectively, and is included in securities and other investments owned, at fair value in the condensed consolidated balance sheets.

(j) Fair Value Measurements

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

As of June 30, 2024 and December 31, 2023, partnership and investment fund interests valued at NAV of $ 15,609 and $ 35,196 , respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

As of September 30, 2024 and December 31, 2023, partnership and investment fund interests valued at NAV of $ 16,238 and $ 35,196 , respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share.

2 unchanged sentences

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

The following table presents, as of June 30, 2024 and December 31, 2023, the carrying value of equity securities measured under the measurement alternative investments and the related adjustments recorded during the periods presented for those securities with observable price changes:

The following table presents, as of September 30, 2024 and December 31, 2023, the carrying value of equity

securities measured under the measurement alternative investments and the related adjustments recorded during the periods presented for those securities with observable price changes:

September 30,

2024 December 31,

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These assets include equity method investments when they are deemed to be other-than-temporarily impaired, investments adjusted to their fair value by applying the measurement alternative, 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 did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition as of June 30, 2024 and December 31, 2023.

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, 2024 and December 31, 2023.

The Company did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis in periods subsequent to initial recognition as of September 30, 2024 and December 31, 2023.

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2024 and December 31, 2023.

Financial Assets and Liabilities Measured at Fair Value on a

Recurring Basis as of June 30, 2024 Using

Fair value as of June 30, 2024

Recurring Basis as of September 30, 2024 Using

Fair value as of September 30, 2024

Quoted prices in active markets

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Total securities sold not yet purchased 2,450 634 1,816 —

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 5,304 — — 5,304

Contingent consideration 23,702 — — 23,702

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Total securities sold not yet purchased 8,601 1,037 7,564 —

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 5,835 — — 5,835

Contingent consideration 27,985 — — 27,985

Total liabilities measured at fair value $ 36,586 $ 1,037 $ 7,564 $ 27,985

As of June 30, 2024 and December 31, 2023, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $ 632,168 and $ 1,268,057 , respectively, or 19.5 % and 20.9 %, respectively, of the Company’s total assets.

As of September 30, 2024 and December 31, 2023, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $ 213,652 and $ 985,000 , respectively, or 9.9 % and 16.2 %, 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 following table summarizes 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, 2024 and December 31, 2023:

Fair value at June 30,

Fair value at September 30,

2024 Valuation

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Total level 3 assets measured at fair value $ 213,652

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 5,304 Market approach Operating income multiple 6.0 x

Contingent consideration $ 23,702 Discounted cash flow Asset volatility 69.0 % 69.0 %

13 unchanged sentences

Total level 3 assets measured at fair value $ 985,000

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 5,835 Market approach Operating income multiple 6.0 x

Contingent consideration $ 27,985 Discounted cash flow EBITDA volatility 70.0 % 70.0 %

4 unchanged sentences

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

The changes in Level 3 fair value hierarchy during the three months ended June 30, 2024 and 2023 were as follows:

The changes in Level 3 fair value hierarchy during the three months ended September 30, 2024 and 2023 were as follows:

Period Level 3 Changes During the Period Level 3

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Undistributed

Earnings Purchases/ Originations Sales Settlements/ Repayments Transfer in

Three Months Ended June 30, 2024

Earnings Purchases/ Originations

Sales Settlements/ Repayments Transfer in

Three Months Ended September 30, 2024

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

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

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 5,601 — 492 — — ( 789 ) — 5,304 —

Contingent consideration 29,303 386 — — — ( 5,987 ) — 23,702 —

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Equity securities $ 170,503 $ ( 13,120 ) $ ( 47 ) $ 301,730 $ ( 467 ) $ — $ ( 535 ) $ 458,064 $ ( 13,109 )

Loans receivable at fair value 683,827 ( 859 ) 2,873 34,337 — ( 171,036 ) — 549,142 ( 1,646 )

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,654 — 470 — — ( 772 ) — 4,352 —

Contingent consideration 27,724 14 — 793 — ( 544 ) — 27,987 —

(1) - Fair value adjustments during the three months ended June 30, 2024 includes the following:

$( 203,022 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 39,115 ) of realized and unrealized gains (losses) included in fair value adjustments on loans and $( 163,907 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 175,582 ) of fair value adjustments on loans included in fair value adjustments on loans, and $ 264 related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

Fair value adjustments during the three months ended June 30, 2023 includes the following:

$ 17,287 of realized and unrealized gains (losses) on equity securities is comprised of $ 13,932 relating to equity securities included in fair value adjustments on loans and $ 3,355 of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $ 9,207 of fair value adjustments on loans included in fair value adjustments on loans, and $( 1,123 ) related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

(2) - For the three months ended June 30, 2024 and 2023, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The changes in Level 3 fair value hierarchy during the six months ended June 30, 2024 and 2023 were as follows:

(1) - Fair value adjustments during the three months ended September 30, 2024 includes the following:

$( 66,349 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 15,127 ) of realized and unrealized gains (losses) included in trading (loss) income and $( 51,222 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 71,477 ) of fair value adjustments on loans included in fair value adjustments on loans, and $ 386 related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

Fair value adjustments during the three months ended September 30, 2023 includes the following:

$( 13,120 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 2,348 ) relating to equity securities included in trading (loss) income and $( 10,772 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 859 ) of fair value adjustments on loans included in fair value adjustments on loans, and $ 14 related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

(2) - For the three months ended September 30, 2024 and 2023, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2024 and 2023 were as follows:

Year Level 3 Changes During the Period Level 3

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Earnings Purchases/ Originations Sales Settlements/ Repayments Transfer in

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

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

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 5,835 — 785 — — ( 1,316 ) — 5,304 —

Contingent consideration 27,985 2,057 — 1,055 — ( 7,395 ) — 23,702 —

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Equity securities $ 153,972 $ 5,017 $ ( 35 ) $ 341,177 $ ( 34,509 ) $ — $ ( 7,558 ) $ 458,064 $ ( 13,749 )

Loans receivable at fair value 701,652 51,624 1,824 389,883 ( 7,500 ) ( 588,091 ) ( 250 ) 549,142 24,030

Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,648 — 778 — — ( 1,074 ) — 4,352 —

Contingent consideration 31,046 ( 4,556 ) — 3,380 — ( 1,883 ) — 27,987 —

(1) - Fair value adjustments during the six months ended June 30, 2024 includes the following:

$( 254,031 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 49,505 ) of realized and unrealized gains (losses) included in fair value adjustments on loans and $( 204,526 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 187,783 ) of fair value adjustments on loans included in fair value adjustments on loans, and $ 1,671 related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

Fair value adjustments during the six months ended June 30, 2023 includes the following:

$ 8,271 of realized and unrealized gains (losses) on equity securities is comprised of $ 13,920 relating to equity securities included in fair value adjustments on loans and $( 5,649 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $ 52,483 of fair value adjustments on loans included in fair value adjustments on loans, and $( 4,570 ) related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

(2) - For the six months ended June 30, 2024 and 2023, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

The amount reported in the table above during the three and six months ended June 30, 2024 and 2023 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis.

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

As of June 30, 2024 and December 31, 2023, the senior notes payable had a carrying amount of $ 1,528,565 and $ 1,668,021 , respectively, and fair value of $ 1,124,630 and $ 1,127,503 , respectively.

The aggregate carrying amount of the Company's notes payable, revolving credit facility, and term loans of $ 631,243 and $ 688,343 as of June 30, 2024 and December 31, 2023, respectively, approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk.

(1) - Fair value adjustments during the nine months ended September 30, 2024 includes the following:

$( 325,310 ) of realized and unrealized gains (losses) on equity securities is comprised of $( 64,632 ) of realized and unrealized gains (losses) included in trading (loss) income and $( 260,678 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $( 259,260 ) of fair value adjustments on loans included in fair value adjustments on loans, and $ 2,057 related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

Fair value adjustments during the nine months ended September 30, 2023 includes the following:

$ 5,017 of realized and unrealized gains (losses) on equity securities is comprised of $ 11,573 relating to equity securities included in trading (loss) income and $( 6,556 ) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $ 51,624 of

fair value adjustments on loans included in fair value adjustments on loans, and $( 4,556 ) related to contingent consideration included in selling, general and administrative expenses in the condensed consolidated statement of operations.

(2) - For the nine months ended September 30, 2024 and 2023, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.

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

As of September 30, 2024 and December 31, 2023, the senior notes payable had a carrying amount of $ 1,529,560 and $ 1,668,021 , respectively, and fair value of $ 727,965 and $ 1,127,503 , respectively.

The aggregate carrying amount of the Company's notes payable, revolving credit facility, and term loans of $ 534,246 and $ 688,343 as of September 30, 2024 and December 31, 2023, respectively, approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk.

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 on the condensed consolidated statements of operations.

4 unchanged sentences

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 following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of June 30, 2024 and December 31, 2023.

The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2024 and December 31, 2023.

These investments were measured due to an observable price change or impairment during the periods below.

4 unchanged sentences

(Level 2) Significant unobservable inputs

As of June 30, 2024

As of September 30, 2024

Investments in nonpublic entities that do not report NAV $ 3,424 $ — $ 3,424 $ —

5 unchanged sentences

The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets.

Transaction gains were $ 694 and losses were $ 353 during the three months ended June 30, 2024 and 2023, respectively, and $ 2,962 gains and losses were $ 587 during the six months ended June 30, 2024 and 2023, respectively.

Transaction losses were $ 1,836 and gains were $ 322 during the three months ended September 30, 2024 and 2023, respectively, and gains were $ 231 and losses were $ 170 during the nine months ended September 30, 2024 and 2023, respectively.

These amounts were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

(l) Equity Method Investment

As of June 30, 2024 and December 31, 2023, an equity investment that is accounted for under the equity method of accounting had a carrying value of $ 2,551 and $ 2,087 , respectively, which is included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

The Company’s share of earnings or losses from equity method investees included in income (loss) from equity investments was $ 10 and $ 143 during the three months ended June

30, 2024 and 2023, respectively, and $ 6 and $ 133 during the six months ended June 30, 2024 and 2023, respectively, in the accompanying condensed consolidated statements of operations.

As of September 30, 2024 and December 31, 2023, an equity investment that is accounted for under the equity method of accounting had a carrying value of $ 3,053 and $ 2,087 , respectively, which is included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

The Company’s share of earnings or losses from equity method investees included in income (loss) from equity investments was $ 6 and $( 308 ) during the three months ended September 30, 2024 and 2023, respectively, and $ 12 and $( 175 ) during the nine months ended September 30, 2024 and 2023, respectively, in the accompanying condensed consolidated statements of operations.

bebe stores, inc.

As of June 30, 2023, the Company owned a 47.5 % ownership interest in bebe.

This was accounted for under the equity method of accounting and the Company had no income from this equity investment during the three months ended June 30, 2023.

As of September 30, 2023, the Company owned a 47.5 % ownership interest in bebe.

This was accounted for under the equity method of accounting and the Company had no income from this equity investment during the three and nine months ended September 30, 2023.

On October 6, 2023, the Company purchased an additional 3,700,000 shares of bebe for an aggregate purchase price of $ 18,500 , resulting in an increase in the Company's ownership interest to 76.2 %.

1 unchanged sentence

(m) Supplemental Non-cash Disclosures

During the six months ended June 30, 2024, there was non-cash investing activity related to the receipt of a note receivable in the amount of $ 2,000 related to the sale of certain assets, $ 42,077 related to a loan receivable, at fair value that converted into equity securities, and DIP loan conversion to purchase consideration equity for the purchase of Nogin in the amount of $ 37,700 .

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

During the six months ended June 30, 2023, non-cash investing activities included $ 15,000 of notes receivable that converted into equity securities;

During the nine months ended September 30, 2024, there was non-cash investing activity related to the receipt of a note receivable in the amount of $ 2,000 related to the sale of certain assets, $ 42,077 related to a loan receivable, at fair value that converted into equity securities, DIP loan conversion to purchase consideration equity for the purchase of Nogin in the amount of $ 37,700 , and $ 11,453 related to a loan receivable, at fair value that converted into equity securities.

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

During the nine months ended September 30, 2023, non-cash activities related to the sale of BRRII and other businesses consisted of:

(1) non-cash investing activity for a decrease in loans receivable of $ 124,397 and receipt of a loan receivable in the amount of $ 58,872 , and (2) non-cash financing activity for a decrease in term loan in the amount of $ 65,790 and decrease in non-controlling interest related to the distribution of equity of subsidiary of $ 3,374 .

Other non-cash investing activities during the nine months ended September 30, 2023 included $ 24,780 of notes receivable that converted into equity securities;$ 23,668 of other receivables financed with a loan receivable;

$ 1,190 of loans receivable, at fair value, that was included in consideration paid for the purchase of the Lingo noncontrolling interest;

and $ 2,111 of common stock issued as part of the purchase price consideration for a business acquisition.

During the six months ended June 30, 2023, non-cash financing activities also included $ 7,000 in seller financing related to the purchase of the Lingo noncontrolling interest.

During the nine months ended September 30, 2023, non-cash financing activities also included $ 7,000 in seller financing related to the purchase of the Lingo noncontrolling interest.

(n) Variable Interest Entities

15 unchanged sentences

The promissory note is included in loans receivable, at fair value in the Company’s consolidated financial statements and is a variable interest in accordance with the accounting guidance.

As of June 30, 2024 and December 31, 2023, the maximum amount of loss exposure to the VIE on a fair value basis was $ 53,174 and $ 209,395 , respectively.

Subsequent to June 30, 2024, a loss for substantially all of the exposure of $ 53,174 was recorded in the third quarter ended September 30, 2024 as a result of Freedom VCM's voluntary petition for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 as discussed in Note 2(h).

As of September 30, 2024 and December 31, 2023, the maximum amount of loss exposure to the VIE on a fair value basis was $ 2,250 and $ 209,395 , respectively.

The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered variable interest entities under the accounting guidance.

3 unchanged sentences

As the fee arrangements under such agreements are arm’s length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs.

Placement agent fees attributable to such arrangements were $ 494 and $ 399 during the three months ended June 30, 2024 and 2023, respectively, and $ 866 and $ 399 during the six months ended June 30, 2024 and 2023, respectively, and were included in services and fees in the condensed consolidated statements of operations.

Placement agent fees attributable to such arrangements were zero and $ 2,551 during the three months ended September 30, 2024 and 2023, respectively, and $ 866 and $ 2,950 during the nine months ended September 30, 2024 and 2023, respectively, and were included in services and fees in the condensed consolidated statements of operations.

The carrying amounts included in the Company’s condensed consolidated balance sheets related to variable interests in VIEs that were not consolidated is shown below.

September 30,

2024 December 31,

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In 2021, the Company along with BRPM 250, a newly formed special purpose acquisition company incorporated as a Delaware corporation, consummated the initial public offering of 17,250,000 units of BRPM 250.

Each Unit of BRPM 250 consisted of one share of class A common stock and one-third of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of BRPM 250 class A common stock at an exercise price of $ 11.50 per share.

Each Unit of BRPM 250 consisted of one share of class A common stock and one-third of one redeemable warrant, each whole warrant entitling the

holder thereof to purchase one share of BRPM 250 class A common stock at an exercise price of $ 11.50 per share.

The BRPM 250 Units were each sold at a price of $ 10.00 per unit, generating gross proceeds to BRPM 250 of $ 172,500 .

4 unchanged sentences

In connection with the completion of the initial public offering of BRPM 250, the Company invested in the private placement units of BRPM 250.

BRPM 250 was determined to be a VIE because it did not have enough equity at risk to

finance its activities without additional subordinated financial support.

BRPM 250 was determined to be a VIE because it did not have enough equity at risk to finance its activities without additional subordinated financial support.

The Company had determined that the class A shareholders of BRPM 250 do not have substantive rights as shareholders of BRPM 250 since these equity interests are determined to be temporary equity.

8 unchanged sentences

Not yet adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures .

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures .

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 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 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.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures .

The amendments in this update improve income tax disclosure requirements related to the transparency of rate reconciliation and income taxes paid disclosures and the effectiveness and comparability of disclosures of pretax income (or loss) and income tax expense (or benefit).

5 unchanged sentences

The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expense categories included in each reported measure of a segment's profit or loss on an interim and annual basis.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The amendments in this update are effective for fiscal years beginning after December 15, 2023, and

interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

1 unchanged sentence

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.

(q) Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation.

Certain amounts reported in Inventory during the year ended December 31, 2023 have been reclassified as rental merchandise, net in the prepaid expenses and other assets note during the year ended September 30, 2024.

NOTE 3 — ACQUISITIONS

6 unchanged sentences

The assets and liabilities of Nogin, both tangible and intangible, were recorded at their estimated fair values as of the May 3, 2024 acquisition date.

Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Nogin, were charged against earnings in the amount of $ 2,276 and included in selling, general and administrative expenses in the condensed consolidated statements of operations for the three and six months ended June 30, 2024.

Acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Nogin, were charged against earnings in the amount of $ 2,388 and included in selling, general and administrative expenses in the condensed consolidated statements of operations for the nine months ended September 30, 2024.

Nogin goodwill recognized subsequent to the acquisition will be non-deductible for tax purposes.

21 unchanged sentences

Total $ 56,370

During the nine months ended September 30, 2024, goodwill for Nogin increased by $ 1,636 related to certain purchase price accounting adjustments.

The following is a summary of identifiable intangible assets acquired and the related expected lives for the finite-lived intangible assets:

5 unchanged sentences

As described in Note 2(h), the Company had entered into a Chapter 11 RSA with Nogin prior to the acquisition date.

As part of Nogin's Chapter 11 restructuring activities, it ceased the sale of brand apparel merchandise and eliminated warehousing and other costs associated with the inventory, among other things.

As part of Nogin's Chapter 11 restructuring activities, it ceased the sale of brand apparel merchandise and elimination of warehousing and other costs associated with the inventory, among other things.

The Company has determined that the preparation of pro forma financial information would be impracticable due to the significant estimates of amounts needed to reflect Nogin's historical financial information with its operations emerging from bankruptcy.

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The equity interest was acquired in connection with Freedom VCM's acquisition of FRG by a buyer group that included members of senior management of FRG, led by Brian Kahn, FRG’s then Chief Executive Officer as part of the FRG take-private transaction.

The unaudited pro-forma financial information for the three and six months ended June 30, 2023 in the table below summarizes the results of operations of the Company and the equity investment in Freedom VCM as though the acquisition of the approximately 31 % equity investment on August 21, 2023 had occurred as of the beginning of the year on January 1, 2023.

The pro-forma financial information presented includes the effects of the common stock offering in July 2023 and adjustments related to additional interest expense from borrowings that the Company used to finance the acquisition of the

equity interest.

The unaudited pro-forma financial information for the three and nine months ended September 30, 2023 in the table below summarizes the results of operations of the Company and the equity investment in Freedom VCM as though the acquisition of the approximately 31 % equity investment on August 21, 2023 had occurred as of the beginning of the year on January 1, 2023.

The Company has elected to account for the acquisition of the equity investment under the fair value option and any changes in fair value of the equity investment during future periods will be recorded in the condensed consolidated statements of operations.

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Pro Forma (unaudited)

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Revenues $ 462,312 $ 1,300,680

Net income attributable to B.

Net loss attributable to B.

Riley Financial, Inc.

$ ( 75,093 ) $ ( 16,127 )

Net income attributable to common shareholders $ 42,081 $ 54,938

Net loss attributable to common shareholders $ ( 77,108 ) $ ( 22,169 )

Basic income per share $ ( 2.54 ) $ ( 0.73 )

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Both methods require forward looking estimates that are discounted to determine the fair value of the intangible asset using a risk-adjusted discount rate that is reflective of the level of risk associated with future estimates associated with the asset group that could be affected by future economic and market conditions.

NOTE 4 — 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.

Brands Transaction

On October 25, 2024, the Company and its subsidiary bebe stores, inc.

(“bebe”) have completed a transaction for their brand assets yielding approximately $ 235,955 in cash proceeds.

At the closing of the transaction, the Company transferred and contributed its interests in the assets and intellectual property related to the licenses of several brands, including Hurley, Justice, Scotch & Soda, Catherine Malandrino, English Laundry, Joan Vass, Kensie, Limited Too and Nanette Lepore to a securitization vehicle, receiving approximately $ 189,300 in net proceeds in connection with the financing transaction.

bebe sold its interests in the assets and intellectual property related to the licenses of the bebe and Brookstone brands (the “Sale”) for approximately $ 46,624 in net cash proceeds.

Upon closing the transaction proceeds of $ 22,188 was used to pay off the then outstanding balance of the bebe Credit Agreement in full (see Note 11) and $ 224 of loan related pay off expenses.

The pending brands transaction by bebe at September 30, 2024, which closed on October 25, 2024 resulted in a write down of the fair value in the amount of approximately $( 20,043 ) being recorded at September 30, 2024 for the Sale of the bebe Brands.

In addition, upon completion of the Secured Financing of the Brand Interests, the Company will deconsolidate the ownership of the Brand Interests and the Company’s ownership in the Brand Interest will be reported as a non-controlling equity method investment that is estimated to have nominal value as a result of the liquidation preferences and notes that were issued as part of the Secured Financing and upon deconsolidation a loss at September 30, 2024 in the amount of approximately $( 133,000 ) was recorded in the quarter ending September 30, 2024.

The brand assets, which was historically reported within All Other category - generating operating revenues from the Company's majority owned subsidiary that licenses the trademarks and intellectual properties from the six brands:

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

The brand assets also generated other income from dividends the Company received from the equity ownership of investments that range from 10 % to 50 % in companies that license the trademark and intellectual property of bebe and Brookstone brands (equity ownership of bebe stores, inc., our majority owned subsidiary).

The Company concluded that the brand assets met the criteria to be classified as held-for-sale in September 2024.

The Company analyzed the quantitative and qualitative factors relevant to the divestiture of the brand assets, including the fair value adjustments and dividends received from the brand assets significance to the overall net income and earnings per share, and determined that those conditions for discontinued operations presentation had been met.

As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying

condensed consolidated financial statements.

Prior period amounts have been adjusted to reflect discontinued operations presentation.

Great American Group

On November 15, 2024, the Company entered into an equity purchase agreement, dated October 13, 2024 (the “Equity Purchase Agreement”), to sell 53 % ownership stake in the Appraisal and Valuation Services, Real Estate, and Retail, Wholesale & Industrial Solutions businesses (collectively, the "Great American Group") to Oaktree and/or its affiliates (collectively, “Oaktree”), a global asset manager.

Subject to the terms and conditions set forth in, the Equity Purchase Agreement, the Company conducted an internal reorganization and contributed all of the interests in the “Great American Group”), to Great American NewCo.

At the Closing, (i) Oaktree received (a) all of the outstanding class A preferred limited liability units of Great American NewCo (which will have a 7.5 % cash coupon and a 7.5 % payment-in-kind coupon) (the “Class A Preferred Units”) and (b) common limited liability units of Great American NewCo (the “Common Units”) representing 52.6 % of the issued and outstanding common limited liability units in Great American NewCo for a purchase price of approximately $ 203,000 (with an initial liquidation preference of approximately $ 203,000 ).

The Company retains (a) 93.2 % of the issued and outstanding class B preferred limited liability company units of Great American NewCo (which will have a 2.3 % payment-in-kind coupon and an initial aggregate liquidation preference of approximately $ 183,000 ) (the “Class B Preferred Units”) and (b) 44.2 % of the issued and outstanding Common Units.

The remaining 6.8 % of issued and outstanding Class B Preferred Units and 3.2 % of issued and outstanding Common Units will be held by certain minority investors.

Following the completion of the transactions, the Company launched a partnership with Oaktree and contributed all of the interests in the Appraisal and Valuation Services, Retail, Wholesale & Industrial Solutions and Real Estate businesses into Great American Holdings, LLC, a newly formed holding company ("Great American NewCo").

At the closing, the Company received total consideration consisting of approximately $ 203,000 in cash, subject to certain purchase price adjustments, Class B Preferred Units of Great American NewCo with an initial aggregate liquidation preference of approximately $ 183,000 , and Class A Common Units of Great American NewCo representing approximately 47 % of the total outstanding common units.

Upon closing the transaction, the Company recognized a gain on the sale of approximately $ 235,000 in the fourth quarter of 2024.

The Great American Group, which was historically reported within the Auction and Liquidation segment—providing 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—and within the Financial Consulting segment—offering bankruptcy, financial advisory, forensic accounting, real estate consulting, and valuation and appraisal services—will be divested.

The Company intends to use the net after-tax proceeds from this transaction to repay certain debt obligations and focus on the core operating subsidiaries.

The Company concluded that the Great American Group met the criteria to be classified as held-for-sale in September 2024.

The Company analyzed the quantitative and qualitative factors relevant to the sale of the Great American Group, including the significance of the operating income generated from the appraisal, real estate consulting and auction and liquidation operations to the overall net income (loss), net (loss) income per share, and net assets, and determined that those conditions for discontinued operations presentation had been met.

As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying condensed consolidated financial statements.

Prior period amounts have been adjusted to reflect discontinued operations presentation.

At the closing of the transaction, the Company entered into a Transition Services Agreement, pursuant to which the Company will provide certain transition services to Great American NewCo relating for the Great American Group for a period of up to one year from the Closing.

Additionally, the Company entered into a credit agreement, pursuant to which an affiliate of the Company, as lender, will provide to Great American NewCo, as borrower, a first lien secured revolving credit facility of up to $ 25,000 for general corporate purposes, subject to the terms and conditions set forth therein, which had an outstanding balance of $ 1,751 at closing, and (iv)entered into promissory notes which totaled $ 15,332 related to capital requirements for certain retail liquidation engagements that were ongoing as of closing.

On November 15, 2024, in connection with the GA Group Transaction as described above, the asset based credit facility with Wells Fargo Bank, National Association (the “Credit Agreement”) with a maximum borrowing limit of $ 200,000 and a maturity date of April 20, 2027, which provided for cash advances and the issuance of letters of credit on retail liquidation engagements under the credit facility was terminated.

There were no outstanding balances on this credit facility as of September 30, 2024 and December 31, 2023 or at the time of termination.

The major classes of assets and liabilities included in discontinued operations were as follows (in thousands):

Brands Transaction Great American Group Total

September 30,

ASSETS (Unaudited)

Cash and cash equivalents $ 585 $ 8,650 $ 9,235

Securities and other investments owned, at fair value 174,753 — 174,753

Accounts receivable, net 2,924 12,038 14,962

Prepaid expenses and other assets 2 2,645 2,647

Operating lease right-of-use assets — 235 235

Property and equipment, net — 5 5

Goodwill — 5,688 5,688

Other intangible assets, net 84,176 — 84,176

Total assets $ 262,440 $ 29,261 $ 291,701

Accounts payable $ — $ 1,471 $ 1,471

Accrued expenses and other liabilities 1,308 15,556 16,864

Deferred revenue 546 72 618

Operating lease liabilities — 257 257

Total liabilities $ 1,854 $ 17,356 $ 19,210

Brands Transaction Great American Group Total

ASSETS (Unaudited)

Cash and cash equivalents $ 845 $ 8,429 $ 9,274

Securities and other investments owned, at fair value 283,057 — 283,057

Accounts receivable, net 3,232 11,228 14,460

Prepaid expenses and other assets — 1,655 1,655

Operating lease right-of-use assets — 438 438

Goodwill — 5,688 5,688

Other intangible assets, net 123,769 — 123,769

Total assets $ 410,903 $ 27,438 $ 438,341

Accounts payable $ — $ 558 $ 558

Accrued expenses and other liabilities 1,193 25,350 26,543

Due to related parties and partners — 251 251

Deferred revenue 724 205 929

Operating lease liabilities — 475 475

Total liabilities $ 1,917 $ 26,839 $ 28,756

Revenues and income (loss) from discontinued operations were as follows (in thousands):

Brands Transaction Great American Group Total

Three Months Ended

September 30, Three Months Ended

September 30,

2024 2023 2024 2023 2024 2023

Services and fees $ 4,136 $ 4,304 $ 33,605 $ 29,623 $ 37,741 $ 33,927

Sale of goods — — 6,893 65,117 6,893 65,117

Total revenues 4,136 4,304 40,498 94,740 44,634 99,044

Operating expenses:

Direct cost of services — — 13,732 15,234 13,732 15,234

Cost of goods sold — — 6,558 35,836 6,558 35,836

Selling, general and administrative expenses 950 791 13,288 18,576 14,238 19,367

Total operating expenses 950 791 33,578 69,646 34,528 70,437

Operating income 3,186 3,513 6,920 25,094 10,106 28,607

Other income (expense):

Interest income — — 2 — 2 —

Dividend income 8,899 9,503 — — 8,899 9,503

Realized and unrealized gains (losses) on investments ( 113,234 ) 1,926 — — ( 113,234 ) 1,926

Loss on disposal ( 39,500 ) — — — ( 39,500 ) —

Interest expense ( 690 ) — ( 8,841 ) ( 7,736 ) ( 9,531 ) ( 7,736 )

(Loss) income from discontinued operations before income taxes ( 141,339 ) 14,942 ( 1,919 ) 17,358 ( 143,258 ) 32,300

(Provision for) benefit from income taxes 6,983 ( 4,648 ) ( 2,471 ) ( 3,911 ) 4,512 ( 8,559 )

(Loss) income from discontinued operations, net of income taxes $ ( 134,356 ) $ 10,294 $ ( 4,390 ) $ 13,447 $ ( 138,746 ) $ 23,741

Brands Transaction Great American Group Total

Nine Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023 2024 2023

Services and fees $ 13,675 $ 13,654 $ 66,962 $ 68,074 $ 80,637 $ 81,728

Sale of goods — — 17,477 67,009 17,477 67,009

Total revenues 13,675 13,654 84,439 135,083 98,114 148,737

Operating expenses:

Direct cost of services — — 18,060 21,815 18,060 21,815

Cost of goods sold — — 14,306 36,506 14,306 36,506

Selling, general and administrative expenses 2,832 2,721 37,520 40,515 40,352 43,236

Total operating expenses 2,832 2,721 69,886 98,836 72,718 101,557

Operating income 10,843 10,933 14,553 36,247 25,396 47,180

Other income (expense):

Interest income — — 4 — 4 —

Dividend income 26,459 26,094 — — 26,459 26,094

Realized and unrealized gains (losses) on investments ( 108,304 ) ( 7,940 ) — — ( 108,304 ) ( 7,940 )

Loss on disposal ( 39,500 ) — — — ( 39,500 ) —

Interest expense ( 2,102 ) — ( 25,781 ) ( 21,492 ) ( 27,883 ) ( 21,492 )

(Loss) income from discontinued operations before income taxes ( 112,604 ) 29,087 ( 11,224 ) 14,755 ( 123,828 ) 43,842

(Provision for) benefit from income taxes — ( 7,388 ) 1 ( 3,911 ) 1 ( 11,299 )

(Loss) income from discontinued operations, net of income taxes $ ( 112,604 ) $ 21,699 $ ( 11,223 ) $ 10,844 $ ( 123,827 ) $ 32,543

Interest expense for discontinued operations is based upon the amount of debt that was required to be repaid as a result of the Brands Transaction and Great American Group transaction described above and amount to $ 9,531 and $ 7,736 for the three months ended September 30, 2024 and 2023, respectively, and $ 27,883 and $ 21,492 for the nine months ended September 30, 2024 and 2023, respectively.

Cash flows from discontinued operations were as follows (in thousands):

Nine Months Ended

September 30,

Net cash from discontinued operations provided by (used in):

Operating activities $ 32,707 $ 9,793

Investing activities ( 5 ) —

Financing activities ( 33,490 ) ( 25,353 )

Effect of foreign currency on cash 749 ( 1,383 )

Net decrease in cash and cash equivalents $ ( 39 ) $ ( 16,943 )

Supplemental disclosures from cash flows were as follows (in thousands):

Nine Months Ended

September 30,

Interest paid - Continuing Operations

$ 179,695 $ 219,797

Interest paid - Discontinued Operations

25,726 12,076

Interest paid - Total $ 205,421 $ 231,874

Taxes paid - Continuing Operations

$ 3,645 7,796

Taxes paid - Discontinued Operations

Taxes paid - Total $ 5,818 $ 7,798

NOTE 5 — RESTRUCTURING CHARGE

During the three and six months ended June 30, 2024, the Company recognized restructuring charges of $ 20 and $ 809 , respectively, primarily related to reorganization and consolidation activities in the Communications segment and Consumer Products segment, which consisted of reductions in workforce.

During the three and six months ended June 30, 2023, the Company recognized restructuring charges of $ 628 and $ 721 , respectively, primarily related to reorganization and consolidation activities in the Wealth Management segment, Communications segment, and Consumer Products segment, which consisted of reductions in workforce and facility closures.

The following tables summarize the changes in accrued restructuring charge during the three and six months ended months ended June 30, 2024 and 2023:

During the three and nine months ended September 30, 2024, the Company recognized restructuring charges of $ 116 and $ 925 , respectively, primarily related to reorganization and consolidation activities in the Communications segment and Consumer Products segment, which consisted of reductions in workforce.

During the three and nine months ended September 30, 2023, the Company recognized restructuring charges of $ 228 and $ 949 , respectively, primarily related to reorganization and consolidation activities in the Wealth Management segment, Communications segment, and Consumer Products segment, which consisted of reductions in workforce and facility closures.

The following tables summarize the changes in accrued restructuring charge during the three and nine months ended September 30, 2024 and 2023:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Balance, end of period $ 784 $ 1,628 $ 784 $ 1,628

The following table summarizes the restructuring activities by reportable segment during the three months ended June 30, 2024 and 2023.

The following table summarizes the restructuring activities by reportable segment during the three months ended September 30, 2024 and 2023.

Wealth Management Communications Consumer Products Total

Restructuring charges for the three months ended June 30, 2024:

Restructuring charges for the three months ended September 30, 2024:

Employee termination $ — $ 116 $ — $ 116

Total restructuring charge $ — $ 116 $ — $ 116

Restructuring charges for the three months ended June 30, 2023:

Restructuring charges for the three months ended September 30, 2023:

Employee termination $ — $ 145 $ 83 $ 228

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Total restructuring charge $ — $ 145 $ 83 $ 228

The following table summarizes the restructuring activities by reportable segment during the six months ended June 30, 2024 and 2023.

The following table summarizes the restructuring activities by reportable segment during the nine months ended September 30, 2024 and 2023.

Wealth Management Communications Consumer Products Total

Restructuring charges for the six months ended June 30, 2024:

Restructuring charges for the nine months ended September 30, 2024:

Employee termination $ — $ 379 $ 546 $ 925

Total restructuring charge $ — $ 379 $ 546 $ 925

Restructuring charges for the six months ended June 30, 2023:

Restructuring charges for the nine months ended September 30, 2023:

Employee termination $ — $ 402 $ 486 $ 888

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NOTE 6 — 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, 2024 and December 31, 2023:

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2024 and December 31, 2023:

Gross amounts recognized Gross amounts offset in the consolidated balance

Net amounts included in the consolidated balance sheets Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default (2)

As of June 30, 2024

As of September 30, 2024

Securities borrowed $ 64,004 $ — $ 64,004 $ 64,004 $ —

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(2) Includes the amount of cash collateral held/posted.

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, 2024 and December 31, 2023:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Remaining contractual maturity Remaining contractual maturity

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The components of accounts receivable, net, include the following:

September 30,

2024 December 31,

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Prepaid expenses and other assets consist of the following:

September 30,

2024 December 31,

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Prepaid expenses and other assets $ 201,688 $ 241,862

Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based contracts in the Auction and Liquidation segment, mobile handsets in the Communications segment, and consulting related engagements in the Financial Consulting segment.

Unbilled receivables represent the amount of mobile handsets in the Communications segment, and consulting related engagements in the Financial Consulting segment.

Other receivables primarily consist of interest receivables on loans and loans receivables that are held at cost.

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NOTE 9 — GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $ 502,341 and $ 472,326 as of June 30, 2024 and December 31, 2023, respectively.

The increase in goodwill during the six months ended June 30, 2024 was primarily due to $ 56,028 from the acquisition of Nogin in the All Other category and $ 1,431 from an immaterial acquisition in the Financial Consulting segment, partially offset by $ 26,681 from goodwill impairment in the Consumer Products segment.

The changes in the carrying amount of goodwill for the six months ended June 30, 2024 were as follows:

Goodwill was $ 498,377 and $ 466,638 as of September 30, 2024 and December 31, 2023, respectively.

The increase in goodwill during the nine months ended September 30, 2024 was primarily due to $ 56,028 from the acquisition of Nogin in the All Other category and $ 1,431 from an immaterial acquisition in the Financial Consulting segment, partially offset by $ 26,681 from goodwill impairment in the Consumer Products segment.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2024 were as follows:

Segment Wealth

Segment Auction and

Segment Financial

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Other ( 532 ) — ( 143 ) — — 1,636 961

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 161,486 $ 51,195 $ 30,885 $ 193,867 $ — $ 60,944 $ 498,377

During the six months ended June 30, 2024, the changes in goodwill included $( 231 ) of foreign currency translation amounts and $( 532 ) related to the sale of certain assets.

During the nine months ended September 30, 2024, the changes in goodwill included $ 1,636 of Nogin purchase price accounting adjustments, $( 532 ) related to the sale of certain assets and $( 143 ) of foreign currency translation amounts.

Intangible assets consisted of the following:

As of June 30, 2024

As of September 30, 2024

As of December 31, 2023

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Total intangible assets $ 349,668 $ ( 162,483 ) $ 187,185 $ 334,912 $ ( 136,667 ) $ 198,245

Amortization expense was $ 9,298 and $ 10,103 during the three months ended June 30, 2024 and 2023, respectively, and $ 18,294 and $ 20,576 during the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024, estimated future amortization expense was $ 16,728 , $ 32,066 , $ 28,939 , $ 26,694 , and $ 23,188 for the years ended December 31, 2024 (remaining six months), 2025, 2026, 2027 and 2028, respectively.

Amortization expense was $ 8,446 and $ 10,191 during the three months ended September 30, 2024 and 2023, respectively, and $ 26,665 and $ 30,478 during the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, estimated future amortization expense was $ 8,677 , $ 31,672 , $ 28,922 , $ 26,694 , and $ 23,188 for the years ended December 31, 2024 (remaining three months), 2025, 2026, 2027 and 2028, respectively.

The estimated future amortization expense after December 31, 2028 was $ 47,932 .

The Company performs impairment tests for goodwill 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 below their carrying values.

As a result of the current financial performance of the Company’s Targus subsidiary which is included in the Consumer Products segment as well as current market conditions that continued to exist in the personal computer market for computers and accessories, the Company updated its long-term forecasts.

The Company performed an interim goodwill impairment quantitative assessment as of June 30, 2024, and based on the results of the analysis, the Company recorded a non-cash impairment charge of $ 27,681 consisting of a goodwill impairment charge of $ 26,681 and a tradename impairment charge of $ 1,000 , which was recorded in impairment of goodwill and tradenames in the accompanying condensed consolidated statements of operations during the three and six months ended June 30, 2024.

Goodwill and tradename of the Company’s Targus subsidiary was measured at fair value on a nonrecurring basis as of June 30, 2024.

The estimated fair value of goodwill was reduced to zero and the estimated fair value of tradename was $ 18,500 as of June 30, 2024.

Goodwill and tradename of the Company’s Targus subsidiary was remeasured at fair value on a nonrecurring basis as of June 30, 2024 which resulted in the fair value of goodwill being reduced to zero and the estimated fair value of tradename was $ 18,500 as of June 30, 2024.

The estimated fair value of the Company’s Targus reporting unit was calculated using a weighted-average of values determined from an income approach and a market approach.

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NOTE 10 — NOTES PAYABLE

Asset Based Credit Facility

The Company is party to a credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $ 200,000 and a maturity date of April 20, 2027.

Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion.

The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts.

All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding.

The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract.

The interest rate for each revolving credit advance under the Credit Agreement is subject to certain terms and conditions, equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25 % to 3.25 % depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided.

The credit facility provides for success fees in the amount of 1.0 % to 10.0 % of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein.

The credit facility also provides for funding fees in the amount of 0.05 % to 0.20 % of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale.

Interest expense totaled $ 18 during the three months ended June 30, 2024 and 2023, and $ 36 during the six months ended June 30, 2024 and 2023.

There was no outstanding balance on this credit facility as of June 30, 2024 and December 31, 2023.

As of June 30, 2024, there were no open letters of credit outstanding.

The Company is in compliance with all covenants in the asset based credit facility as of June 30, 2024.

The Company received a series of extensions under its Wells Fargo Bank credit agreement with the most recent being dated September 27, 2024 to extend the required time to deliver its second quarter unaudited condensed financial statements to November 19, 2024.

On November 15, 2024, in connection with the GA Group Transaction as described in Note 21 – Subsequent Events the credit agreement which had no borrowings outstanding with Wells Fargo Bank was terminated.

Other Notes Payable

As of June 30, 2024 and December 31, 2023, the outstanding balance for the other notes payable was $ 30,039 and $ 19,391 , respectively.

As of September 30, 2024 and December 31, 2023, the outstanding balance for the other notes payable was $ 29,915 and $ 19,391 , respectively.

On May 3, 2024, upon closing of the acquisition of Nogin, Nogin entered into a secured convertible promissory note agreement with a principal amount of $ 15,000 with an annual interest rate of 10.0 % and a maturity date of May 3, 2027.

The remaining notes payable primarily consisted of additional deferred cash consideration owed to the sellers

of FocalPoint and a promissory note related to the Lingo minority interest purchase, which was paid in full on January 2, 2024.

Interest expense was $ 401 and $ 144 during the three months ended June 30, 2024 and 2023, respectively, and $ 545 and $ 318 during the six months ended June 30, 2024 and 2023, respectively.

The remaining notes payable primarily consisted of additional deferred cash consideration owed to the sellers of FocalPoint and a promissory note related to the Lingo minority interest purchase, which was paid in full on January 2, 2024.

Interest expense was $ 536 and $ 145 during the three months ended September 30, 2024 and 2023, respectively, and $ 1,081 and $ 463 during the nine months ended September 30, 2024 and 2023, respectively.

NOTE 11 — TERM LOANS AND REVOLVING CREDIT FACILITY

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

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

4 to the Targus Credit Agreement, which among other things, reduced

revolving loan sublimits, modified the FCCR covenant, removed the minimum EBITDA requirement, imposed a minimum undrawn availability covenant, and modified the terms of the Keepwell.

Amendment No.

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4 to the Targus Credit Agreement, the Company repaid the outstanding balance of the term loan in full with $ 2,100 of revolver loan advances and $ 7,500 of cash from the Company.

After Amendment No.4 to the Targus Credit Agreement that included a waiver, the Company is in compliance with the Targus Credit Agreement.

The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus an applicable margin of 5.75 %.

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Principal outstanding for the term loan under the amended Targus Credit Agreement is due in quarterly installments.

Quarterly installments from September 30, 2024 to December 31, 2025 are in the amount of $ 2,100 per quarter and the remaining principal balance is due on March 31, 2026.

As of June 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 13,035 (net of unamortized debt issuance costs of $ 265 ) and $ 17,834 (net of unamortized debt issuance costs of $ 366 ), respectively, and the outstanding balance on the revolver loan was $ 19,809 and $ 43,801 , respectively.

Interest expense on these loans during the three and six months ended June 30, 2024 was $ 1,086 (including amortization of deferred debt issuance costs of $ 187 and unused commitment fees of $ 26 ) and $ 2,446 (including amortization of deferred debt issuance costs of $ 371 and unused commitment fees of $ 53 ), respectively.

Interest expense on these loans during the three and six months ended June 30, 2023 was $ 2,068 (including amortization of deferred debt issuance costs of $ 151 and unused commitment fees of

$ 20 ) and $ 3,757 (including amortization of deferred debt issuance costs of $ 305 and unused commitment fees of $ 39 ), respectively.

The interest rate on the term loan was 11.18 % and 10.20 % and the interest rate on the revolver loan ranged between 9.19 % and 11.50 % and between 8.45 % to 11.25 % as of June 30, 2024 and December 31, 2023, respectively.

The weighted average interest rate on the revolver loan was 10.21 % and 8.53 % as of June 30, 2024 and December 31, 2023, respectively.

Quarterly installments from December 31, 2024 to December 31, 2025 are in the amount of $ 2,100 per quarter and the remaining principal balance is due on March 31, 2026.

As of September 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 11,521 (net of unamortized debt issuance costs of $ 177 ) and $ 17,834 (net of unamortized debt issuance costs of $ 366 ), respectively, and the outstanding balance on the revolver loan was $ 13,681 and $ 43,801 , respectively.

Interest expense on these loans during the three and nine months ended September 30, 2024 was $ 987 (including amortization of deferred debt issuance costs of $ 195 and unused commitment fees of $ 20 ) and $ 3,432 (including amortization of deferred debt issuance costs of $ 566 and unused commitment fees of $ 73 ), respectively.

Interest expense on these loans during the three and nine months ended September 30, 2023 was $ 1,790 (including amortization of deferred debt issuance costs of $ 111 and unused commitment fees of $ 18 ) and $ 5,547 (including amortization of deferred debt issuance costs of $ 416 and unused commitment fees of $ 57 ), respectively.

The interest rate on the term loan was 11.18 % and 10.20 % and the interest rate on the revolver loan ranged between 8.96 % and 11.25 % and between 8.45 % to 11.25 % as of September 30, 2024 and December 31, 2023, respectively.

The weighted average interest rate on the revolver loan was 9.04 % and 8.53 % as of September 30, 2024 and December 31, 2023, respectively.

Pathlight Credit Agreement

7 unchanged sentences

The term loan bore interest on the outstanding principal amount equal to the Term SOFR rate plus an applicable margin of 6.50 %.

Interest expense on the term loan during the three and six months ended June 30, 2023 was $ 5,877 (including amortization of deferred debt issuance costs of $ 1,796 ) and $ 12,307 (including amortization of deferred debt issuance costs of $ 3,540 ), respectively.

Interest expense on the term loan during the three and nine months ended September 30, 2023 was $ 2,052 (including amortization of deferred debt issuance costs of $ 722 ) and $ 14,359 (including amortization of deferred debt issuance costs of $ 4,262 ), respectively.

Lingo Credit Agreement

4 unchanged sentences

On November 10, 2022, Lingo entered into the Second Amendment to the Lingo Credit Agreement with KeyBank National Association for an incremental term loan of $ 20,500 , increasing the principal balance of the term loan to $ 73,000 .

The term loan bears interest on the outstanding principal amount equal to the term SOFR rate plus a margin of 3.00 % to 3.75 % per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment.

As of June 30, 2024 and December 31, 2023, the interest rate on the Lingo Credit Agreement was 8.70 %.

applicable spread adjustment.

As of September 30, 2024 and December 31, 2023, the interest rate on the Lingo Credit Agreement was 8.59 % and 8.70 %, respectively.

The Lingo Credit Agreement is guaranteed by the Company and Lingo's subsidiaries and secured by certain Lingo assets and equity interests as collateral which totals approximately $ 230,101 defined in the Lingo Credit Agreement.

3 unchanged sentences

If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the Lingo Credit Agreement.

The Company is in compliance with all financial covenants in the Lingo Credit Agreement as of June 30, 2024.

The Company received a series of extensions under its credit agreement with Banc of California, N.A.

with the most recent being dated December 18, 2024 to extend the required time to deliver its second quarter unaudited condensed consolidated financial statements to January 21, 2025.

The Company is in compliance with all financial covenants in the Lingo Credit Agreement as of September 30, 2024.

Principal outstanding is due in quarterly installments.

The quarterly installments from September 30, 2024 to December 31, 2024 are in the amount of $ 2,738 per quarter, quarterly installments from March 31, 2025 to June 30, 2027 are in the amount of $ 3,650 , and the remaining principal balance is due at final maturity on August 16, 2027.

As of June 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 57,776 (net of unamortized debt issuance costs of $ 623 ) and $ 63,153 (net of unamortized debt issuance costs of $ 722 ), respectively.

Interest expense on the term loan during the three and six months ended June 30, 2024 was $ 1,413 (including amortization of deferred debt issuance costs of $ 72 ) and $ 2,885 (including amortization of deferred debt issuance costs of $ 142 ), respectively.

Interest expense on the term loan during the three and six months ended June 30, 2023 was $ 1,626 (including amortization of deferred debt issuance costs of $ 74 ) and $ 3,187 (including amortization of deferred debt issuance costs of $ 149 ), respectively.

As of September 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 55,021 (net of unamortized debt issuance costs of $ 641 ) and $ 63,153 (net of unamortized debt issuance costs of $ 722 ), respectively.

Interest expense on the term loan during the three and nine months ended September 30, 2024 was $ 1,370 (including amortization of deferred debt issuance costs of $ 70 ) and $ 4,254 (including amortization of deferred debt issuance costs of $ 213 ), respectively.

Interest expense on the term loan during the three and nine months ended September 30, 2023 was $ 1,624 (including amortization of deferred debt issuance costs of $ 73 ) and $ 4,811 (including amortization of deferred debt issuance costs of $ 222 ), respectively.

On January 6, 2025, as discussed below BRPAC entered into an amended and restated credit agreement (the “BRPAC Amended Credit Agreement”) with the Banc of California, in the capacity as agent and lender and with other lenders party thereto from time to time.

3 unchanged sentences

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 5.50 % to 6.00 % per annum, depending on the total fixed charge coverage ratio as defined in the bebe Credit Agreement.

As of June 30, 2024 and December 31, 2023, the interest rate on the bebe Credit Agreement was 11.11 % and 11.14 %, respectively.

As of September 30, 2024 and December 31, 2023, the interest rate on the bebe Credit Agreement was 10.78 % and 11.14 %, respectively.

The bebe Credit Agreement is collateralized by a first lien on all bebe assets and pledges of capital stock including equity interests which totals approximately $ 110,916 .

2 unchanged sentences

The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults.

The Company is in compliance with all financial covenants in the bebe Credit Agreement as of June 30, 2024.

As of September 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 21,735 (net of unamortized debt issuance costs of $ 452 ) and $ 22,487 (net of unamortized debt issuance costs of $ 638 ), respectively.

Interest expense on the term loan during the three and nine months ended September 30, 2024 was $ 691 (including amortization of deferred debt issuance costs of $ 60 ) and $ 2,102 (including amortization of deferred debt issuance costs of $ 185 ), respectively.

Principal outstanding is due in quarterly installments through June 30, 2026 in the amount of $ 313 per quarter and the remaining principal balance of $ 20,000 is due at final maturity on August 24, 2026.

As of June 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 21,987 (net of unamortized debt issuance costs of $ 513 ) and $ 22,487 (net of unamortized debt issuance costs of $ 638 ), respectively.

Interest expense on the term loan during the three and six months ended June 30, 2024 was $ 699 (including amortization of deferred debt issuance costs of $ 60 ) and $ 1,412 (including amortization of deferred debt issuance costs of $ 125 ), respectively.

On October 25, 2024, upon the closing of the Brands Transaction as described in Note 21 – Subsequent Events proceeds of $ 22,188 was used to pay off the then outstanding balance of the loan in full and $ 224 of loan payoff expenses.

On October 25, 2024, upon the closing of the Brands Transaction as described in Note 4 – Discontinued Operation proceeds of $ 22,188 was used to pay off the then outstanding balance of the loan in full and $ 224 of loan payoff expenses.

Nomura Credit Agreement

2 unchanged sentences

The purpose of the Credit Agreement was to (i) fund the Freedom VCM equity investment, (ii) prepay in full the Prior Term Loan Facility and Prior Revolving Credit Facility with an aggregate outstanding balance of $ 347,877 , 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.

Company recorded a loss on extinguishment of debt related to the Prior Credit Agreement of $ 5,408 , which was included in selling, general and administrative expenses on the condensed consolidated statements of operations.

The Company recorded a loss on extinguishment of debt related to the Prior Credit Agreement of $ 5,408 , which was included in selling, general and administrative expenses on the condensed consolidated statements of operations.

SOFR rate loans under the New Credit Facilities accrue interest at the adjusted Term SOFR rate plus an applicable margin of 6.00 %.

1 unchanged sentence

The Credit Agreement is secured on a first priority basis by a security interest in the equity interests of the Borrower and each of the Borrower’s subsidiaries (subject to certain exclusions) and a security interest in substantially all of the assets of the Borrower and the Guarantors.

The borrowing base as defined in the Credit Agreement consists of a collateral pool that includes certain of the Company's loans receivables in the amount of $ 190,688 (which is included in the total loans receivable, at fair value balance of $ 229,199 reported in our condensed consolidated balance sheet at June 30, 2024) and $ 375,814 (which is included in the total loans receivable, at fair value balance of $ 532,419 reported in our condensed consolidated balance sheet at December 31, 2023) and investments in the amount of $ 680,105 (which is included in the total securities and other investments owned, at fair value of $ 664,070 reported in our condensed consolidated balance sheet at June 30, 2024) and $ 786,714 (which is included in the total securities and other investments owned, at fair value of $ 1,092,106 reported in our condensed consolidated balance sheet at December 31, 2023) as of June 30, 2024 and December 31, 2023, respectively.

The borrowing base as defined in the Credit Agreement consists of a collateral pool that includes certain of the Company's loans receivables in the amount of $ 209,891 (which is included in the total loans receivable, at fair value balance of $ 151,704 reported in our condensed consolidated balance sheet at September 30, 2024) and $ 375,814 (which is included in the total loans receivable, at fair value balance of $ 532,419 reported in our condensed consolidated balance sheet at December 31, 2023) and investments in the amount of $ 706,711 (which is included in the total securities and other investments owned, at fair value of $ 341,770 reported in our condensed consolidated balance sheet at September 30, 2024) and $ 786,714 (which is included in the total securities and other investments owned, at fair value of $ 809,049 reported in our condensed consolidated balance sheet at December 31, 2023) as of September 30, 2024 and December 31, 2023, respectively.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type 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.

The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

The Company is in compliance with all financial covenants in the Credit Agreement as of June 30, 2024.

The Company is in compliance with all financial covenants in the Credit Agreement as of September 30, 2024.

On September 17, 2024, the Company entered into Amendment No.

7 unchanged sentences

Interest on the term loan increased to SOFR loans will accrue 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 will accrue 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.

applicable margin of 5.00 % cash interest plus 1.50 % PIK Interest.

On December 9, 2024, the Company entered into Amendment No.

1 unchanged sentence

The Fifth Amendment extended the springing maturity date of the term loans if more than $ 25,000 aggregate principal amount of the 5.50 % 2026 Notes is outstanding to February 3, 2026 and permits under certain conditions an additional $ 10,000 of telecommunications financing.

As of June 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 452,548 (net of unamortized debt issuance costs of $ 17,202 ) and $ 475,056 (net of unamortized debt issuance costs of $ 18,694 ), respectively.

Interest expense on the term loan during the three months ended June 30, 2024 and 2023 was $ 14,609 (including amortization of deferred debt issuance costs of $ 1,087 ) and $ 7,557 (including amortization of deferred debt issuance costs of $ 536 ), respectively, and during the six months ended June 30, 2024 and 2023 was $ 29,593 (including amortization of deferred debt issuance costs of $ 2,152 ) and $ 14,857 (including amortization of deferred debt issuance costs of $ 1,062 ), respectively.

The interest rate on the term loan as of June 30, 2024 and December 31, 2023 was 11.33 % and 11.37 %, respectively.

The Company had an outstanding balance of zero under the revolving facility as of June 30, 2024 and December 31, 2023.

Interest on the revolving facility during the three months ended June 30, 2024 and 2023 was $ 495 (including unused

commitment fees of $ 239 and amortization of deferred financing costs of $ 256 ) and $ 1,527 (including unused commitment fees of $ 28 and amortization of deferred financing costs of $ 151 ), respectively, and during the six months ended June 30, 2024 and 2023 was $ 992 (including unused commitment fees of $ 484 and amortization of deferred financing costs of $ 508 ) and $ 3,483 (including unused commitment fees of $ 28 and amortization of deferred financing costs of $ 301 ), respectively.

The interest rate on the revolving facility as of June 30, 2024 and December 31, 2023 was 11.37 %.

On January 3, 2025, the Company entered into Amendment No.

6 to its credit agreement, dated August 21, 2023, with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Sixth Amendment”).

The Sixth Amendment agreed to permit under certain conditions the contribution by BRPI of 100 % of the equity interests in Lingo to BRPAC in connection with the entry into the BRPAC Credit Agreement.

There was no fee charged in connection with the Sixth Amendment.

As of September 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 369,497 (net of unamortized debt issuance costs of $ 18,838 ) and $ 475,056 (net of unamortized debt issuance costs of $ 18,694 ), respectively.

Interest expense on the term loan during the three months ended September 30, 2024 and 2023 was $ 6,087 (including amortization of deferred debt issuance costs of $ 1,415 ) and $ 11,261 (including amortization of deferred debt issuance costs of $ 758 ), respectively, and during the nine months ended September 30, 2024 and 2023 was $ 18,776 (including amortization of deferred debt issuance costs of $ 3,567 ) and $ 26,105 (including amortization of deferred debt issuance costs of $ 1,820 ), respectively.

The interest rate on the term loan as of September 30, 2024 and December 31, 2023 was 12.13 % and 11.37 %, respectively.

The Company had an outstanding balance of zero under the revolving facility as of September 30, 2024 and December 31, 2023.

Interest on the revolving facility during the three months ended September 30, 2024 and 2023 was $ 428 (including unused commitment fees of $ 204 and amortization of deferred financing costs of $ 224 ) and $ 1,913 (including unused commitment fees of $ 52 and amortization of deferred financing costs of $ 195 ), respectively, and during the nine months ended September 30, 2024 and 2023 was $ 1,420 (including unused commitment fees of $ 688 and amortization of deferred financing costs of $ 732 ) and $ 5,396 (including unused commitment fees of $ 80 and amortization of deferred financing costs of $ 496 ), respectively.

The interest rate on the Revolving Credit Facility as of September 30, 2024 and December 31, 2023 was 11.37 %.

BRPAC Credit Agreement

14 unchanged sentences

If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement.

The Company is in compliance with all financial covenants in the BRPAC Credit Agreement as of June 30, 2024.

The Company received a series of extensions under its credit agreement with Banc of California, N.A.

with the most recent being dated December 18, 2024 to extend the required time to deliver its second quarter unaudited condensed consolidated financial statements to January 21, 2025.

The Company is in compliance with all financial covenants in the BRPAC Credit Agreement as of September 30, 2024.

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things:

1 unchanged sentence

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75 % to 3.50 % per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the BRPAC Credit Agreement.

As of June 30, 2024 and December 31, 2023, the interest rate on the BRPAC Credit Agreement was 8.20 % and 8.46 %, respectively.

As of September 30, 2024 and December 31, 2023, the interest rate on the BRPAC Credit Agreement was 8.10 % and 8.46 %, respectively.

Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments.

The quarterly installments from September 30, 2024 to December 31, 2026 are in the amount of $ 3,169 per quarter, the quarterly installment on March 31, 2027 is in the amount of $ 2,377 , and the remaining principal balance is due at final maturity on June 30, 2027.

As of June 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 36,049 (net of unamortized debt issuance costs of $ 395 ) and $ 46,621 (net of unamortized debt issuance costs of $ 429 ), respectively.

Interest expense on the term loan during the three months ended June 30, 2024 and 2023 was $ 914 (including amortization of deferred debt issuance costs of $ 67 ) and $ 1,348 (including amortization of deferred debt issuance costs of $ 70 ), respectively, and during the six months ended June 30, 2024 and 2023 was $ 1,974 (including amortization of deferred debt issuance costs of $ 124 ) and $ 2,791 (including amortization of deferred debt issuance costs of $ 144 ), respectively.

The quarterly installments from December 31, 2024 to December 31, 2026 are in the amount of $ 3,169 per quarter, the quarterly installment on March 31, 2027 is in the amount of $ 2,377 , and the remaining principal balance is due at final maturity on June 30, 2027.

As of September 30, 2024 and December 31, 2023, the outstanding balance on the term loan was $ 32,876 (net of unamortized debt issuance costs of $ 399 ) and $ 46,621 (net of unamortized debt issuance costs of $ 429 ), respectively.

Interest expense on the term loan during the three months ended September 30, 2024 and 2023 was $ 825 (including amortization of deferred debt issuance costs of $ 61 ) and $ 1,243 (including amortization of deferred debt issuance costs of $ 66 ), respectively, and during the nine months ended September 30, 2024 and 2023 was $ 2,800 (including amortization of deferred debt issuance costs of $ 185 ) and $ 4,034 (including amortization of deferred debt issuance costs of $ 210 ), respectively.

On January 6, 2025 (the “Closing Date”), BRPAC entered into the BRPAC Amended Credit Agreement with certain subsidiaries of the Company, the Banc of California, in the capacity as agent and lender and with other lenders party thereto from time to time.

18 unchanged sentences

Senior notes payable, net, are comprised of the following:

September 30,

2024 December 31,

16 unchanged sentences

$ 1,529,560 $ 1,668,021

The Company issued zero and $ 185 during the three months ended June 30, 2024 and 2023, respectively, and zero and $ 185 during the six months ended June 30, 2024 and 2023, respectively, of senior notes.

The Company issued zero during the three months ended September 30, 2024 and 2023, respectively, and zero and $ 185 during the nine months ended September 30, 2024 and 2023, respectively, of senior notes.

The maturity dates of senior notes ranged from February 2025 to August 2028 pursuant to At the Market Issuance Sales Agreements with B.

Riley Securities, Inc., which governs the program of at-the-market sales of the Company’s senior notes.

Riley Securities, Inc.

which governs the program of at-the-market sales of the Company’s senior notes.

A series of prospectus supplements were filed by the Company with the SEC in respect of the Company’s offerings of these senior notes.

10 unchanged sentences

In connection with the full redemption, the 6.75 % 2024 Notes, which were listed on NASDAQ under the ticker symbol “RILYO,” were delisted from NASDAQ and ceased trading on the redemption date.

As of June 30, 2024 and December 31, 2023, total senior notes outstanding was $ 1,528,565 (net of unamortized debt issue costs of $ 10,964 ) and $ 1,668,021 (net of unamortized debt issue costs of $ 13,130 ), respectively, with a weighted average interest rate of 5.62 % and 5.71 %, respectively.

On January 21, 2025, the Company announced that it has called for the full redemption on February 28, 2025 (the "Redemption Date") of all the issued and outstanding 6.375 % Senior Notes due February 28, 2025 (the " 6.375 % 2025 Notes").

The redemption price is 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 6.375 % 2025 Notes, which are listed on NASDAQ under the ticker symbol “RILYM,” will be delisted from NASDAQ and cease trading on the redemption date.

As of September 30, 2024 and December 31, 2023, total senior notes outstanding was $ 1,529,681 (net of unamortized debt issue costs of $ 9,969 ) and $ 1,668,021 (net of unamortized debt issue costs of $ 13,130 ), respectively, with a weighted average interest rate of 5.62 % and 5.71 %, respectively.

Interest on senior notes is payable on a quarterly basis.

Interest expense on senior notes totaled $ 22,977 and $ 26,776 during the three months ended June 30, 2024 and 2023, respectively and $ 47,415 and $ 53,003 during the six months ended June 30, 2024 and 2023, respectively.

Interest expense on senior notes totaled $ 22,617 and $ 25,088 during the three months ended September 30, 2024 and 2023, respectively and $ 70,032 and $ 78,091 during the nine months ended September 30, 2024 and 2023, respectively.

NOTE 13 — ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

September 30,

2024 December 31,

11 unchanged sentences

NOTE 14 — REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers by the Company's six reportable operating segments and the All Other category during the three and six months ended months ended June 30, 2024 and 2023 was as follows:

Revenue from contracts with customers by the Company's five reportable operating segments and the All Other category during the three and nine months ended September 30, 2024 and 2023 was as follows:

Segment Wealth

Segment Auction and

Segment Financial

2 unchanged sentences

Segment All Other Total

Revenues for the three months ended June 30, 2024

Revenues for the three months ended September 30, 2024

Corporate finance, consulting and investment banking fees $ 21,316 $ — $ 23,941 $ — $ — $ — $ 45,257

3 unchanged sentences

Sale of goods — — — 1,318 49,793 4,137 55,248

Advertising, licensing and other — — — — 1,355 — 30,303 31,658

Advertising and other

— — — 1,200 — 28,506 29,706

Total revenues from contracts with customers 28,136 47,375 23,941 67,559 49,793 32,643 249,447

Trading (loss) income ( 1,908 ) 670 — — — — ( 1,238 )

( 32,612 ) 1,291 — — — — — ( 31,321 )

Fair value adjustments on loans ( 71,477 ) — — — — — ( 71,477 )

( 175,582 ) — — — — — — ( 175,582 )

Interest income - loans 11,251 — — — — — 11,251

3 unchanged sentences

Segment Wealth

Segment Auction and

Segment Financial

2 unchanged sentences

Segment All Other Total

Revenues for the three months ended June 30, 2023

Revenues for the three months ended September 30, 2023

Corporate finance, consulting and investment banking fees $ 67,429 $ — $ 20,225 $ — $ — $ — $ 87,654

3 unchanged sentences

Sale of goods — — — 1,638 58,391 — 60,029

Advertising, licensing and other

Advertising and other

— — — 1,442 — 9,928 11,370

1 unchanged sentence

Trading (loss) income ( 10,217 ) 490 — — — — ( 9,727 )

32,685 473 — — — — — 33,158

Fair value adjustments on loans ( 860 ) — — — — — ( 860 )

9,207 — — — — — — 9,207

Interest income - loans 27,397 — — — — — 27,397

3 unchanged sentences

Segment Wealth

Segment Auction and

Segment Financial

2 unchanged sentences

Segment All Other Total

Revenues for the six months ended June 30, 2024

Revenues for the nine months ended September 30, 2024

Corporate finance, consulting and investment banking fees $ 111,560 $ — $ 69,383 $ — $ — $ — $ 180,943

4 unchanged sentences

Sale of goods — — — 4,079 152,739 7,436 164,254

Advertising, licensing and other

Advertising and other

— — — 3,887 — 75,329 79,216

7 unchanged sentences

Segment Wealth

Segment Auction and

Segment Financial

2 unchanged sentences

Segment All Other Total

Revenues for the six months ended June 30, 2023

Revenues for the nine months ended September 30, 2023

Corporate finance, consulting and investment banking fees $ 137,305 $ — $ 52,325 $ — $ — $ — $ 189,630

3 unchanged sentences

Sale of goods — — — 5,145 179,156 — 184,301

Advertising, licensing and other

Advertising and other

— — — 4,620 — 28,870 33,490

10 unchanged sentences

Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied.

Receivables related to revenues from contracts with customers totaled $ 115,681 and $ 115,496 as of June 30, 2024 and December 31, 2023, respectively.

The Company had no significant impairments related to these receivables during the three and six months ended months ended June 30, 2024 and 2023.

The Company also has $ 13,414 and $ 13,402 of unbilled receivables included in prepaid expenses and other assets as of June 30, 2024 and December 31, 2023, respectively.

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, subscription services where the performance obligation has not yet been satisfied and license agreements with guaranteed minimum royalty payments and advertising/marketing fees with additional royalty revenue based on a percentage of defined sales.

Deferred revenue as of June 30, 2024 and December 31,

2023 was $ 65,421 and $ 71,504 , respectively.

The Company expects to recognize the deferred revenue of $ 65,421 as of June 30, 2024 as service and fee revenues when the performance obligation is met during the years ended December 31, 2024 (remaining six months), 2025, 2026, 2027 and 2028 in the amount of $ 42,613 , $ 11,279 , $ 5,316 , $ 2,220 , and $ 1,270 , respectively.

Receivables related to revenues from contracts with customers totaled $ 91,506 and $ 101,036 as of September 30, 2024 and December 31, 2023, respectively.

The Company had no significant impairments related to these receivables during the three and nine months ended September 30, 2024 and 2023.

The Company also has $ 10,195 and $ 12,997 of unbilled receivables included in prepaid expenses and other assets as of September 30, 2024 and December 31, 2023, respectively.

Deferred revenue as of September 30, 2024 and December 31, 2023 was $ 61,354 and $ 70,575 , respectively.

The Company expects to recognize the deferred revenue of $ 61,354 as of September 30, 2024 as service and fee revenues when the performance obligation is met during the years ended December 31, 2024 (remaining three months), 2025, 2026, 2027 and 2028 in the amount of $ 40,172 , $ 10,104 , $ 4,604 , $ 2,254 , and $ 1,357 , respectively.

The Company expects to recognize the deferred revenue of $ 2,863 after December 31, 2028.

During the three months ended June 30, 2024 and 2023, the Company recognized revenue of $ 9,281 and $ 11,665 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the six months ended June 30, 2024 and 2023, the Company recognized revenue of $ 30,578 and $ 34,167 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the three months ended September 30, 2024 and 2023, the Company recognized revenue of $ 6,846 and $ 9,273 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

During the nine months ended September 30, 2024 and 2023, the Company recognized revenue of $ 36,633 and $ 42,739 , respectively, that was recorded as deferred revenue at the beginning of the respective year.

Contract Costs

Contract costs include:

(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;

(2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied;

and (3) 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 $ 7,020 and $ 8,131 as of June 30, 2024 and December 31, 2023, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets.

For the three months ended June 30, 2024 and 2023, the Company recognized expenses of $ 1,142 and $ 1,258 related to capitalized costs to fulfill a contract, respectively.

For the six months ended June 30, 2024 and 2023, the Company recognized expenses of $ 2,679 and $ 2,273 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 months ended June 30, 2024 and 2023.

(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 $ 6,568 and $ 7,769 as of September 30, 2024 and December 31, 2023, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets.

For the three months ended September 30, 2024 and 2023, the Company recognized expenses of $ 1,140 and $ 1,180 related to capitalized costs to fulfill a contract, respectively.

For the nine months ended September 30, 2024 and 2023, the Company recognized expenses of $ 3,820 and $ 3,453 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 nine months ended September 30, 2024 and 2023.

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, 2024.

Corporate finance and investment banking fees and retail liquidation engagement 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, 2024.

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 September 30, 2024.

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 September 30, 2024.

NOTE 15 — INCOME TAXES

The Company’s effective income tax rate was a provision of 6.1 % for the three months ended June 30, 2024 as compared to a provision of 32.9 % for the three months ended June 30, 2023.

The Company’s effective income tax rate was a provision of 1.7 % for the six months ended June 30, 2024, as compared to a provision of 32.8 % for the six months ended June 30, 2023.

During the three months ended June 30, 2024, the Company had a provision for income taxes of $ 25,008 resulting primarily from the impact of recording a valuation allowance on deferred tax assets as of June 30, 2024.

The change in the effective tax rate compared to the prior year is primarily due to the impact of the valuation allowance recorded on deferred tax assets as of June 30, 2024.

During the six months ended June 30, 2024, the Company had a provision for income taxes of $ 7,918 resulting primarily from the impact of a valuation allowance on deferred tax assets.

As of June 30, 2024, the Company had federal net operating loss carryforwards of $ 46,384 and state net operating loss carryforwards of $ 64,247 , respectively.

In addition, one of the Company’s majority-owned subsidiaries that is not included in the Company’s consolidated federal income tax return has federal net operating loss carryforwards of $ 298,416 and state net operating loss carryforwards of $ 222,585 available to utilize against future taxable income of the majority-owner subsidiary.

The Company’s effective income tax rate was a provision of 10.8 % for the three months ended September 30, 2024 as compared to a benefit of 19.1 % for the three months ended September 30, 2023.

The Company’s effective income tax rate was a provision of 2.9 % for the nine months ended September 30, 2024, as compared to a provision of 6.7 % for the nine months ended September 30, 2023.

During the three months ended September 30, 2024, the Company had a provision for income taxes of $ 14,508 resulting primarily from the impact of recording a valuation allowance on deferred tax assets as of September 30, 2024.

The change in the effective tax rate compared to the prior year is primarily due to the impact of the valuation allowance recorded on deferred tax assets as of September 30, 2024.

During the nine months ended September 30, 2024, the Company had a provision for income taxes of $ 17,915 resulting primarily from the impact of a valuation allowance on deferred tax assets.

As of September 30, 2024, the Company had federal net operating loss carryforwards of $ 46,384 and state net operating loss carryforwards of $ 64,247 , respectively.

In addition one of the Company’s majority-owned subsidiaries that is not included in the Company’s consolidated federal income tax return has federal net operating loss carryforwards of $ 298,416 and state net operating loss carryforwards of $ 222,585 which have a full valuation allowance as of September 30, 2024.

The Company’s federal net operating loss carryforwards will expire in the tax years commencing on December 31, 2033, through December 31, 2038.

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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.

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, 2024, the Company believes that the existing federal and state net operating loss carryforwards will not be fully utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will not be sufficient to realize its deferred tax assets and has provided a valuation allowance in the amount of $ 16,012 against these deferred tax assets.

As of September 30, 2024, the Company believes that the existing federal and state net operating loss carryforwards will not be fully utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will not be sufficient to realize its deferred tax assets and has provided a valuation allowance in the amount of $ 16,012 against these deferred tax assets.

In addition, the Company does not believe that it is more likely than not that the Company will be able to utilize the benefits related to foreign capital loss carryforwards and has provided a valuation allowance in the amount of $ 41,751 against these deferred tax assets.

During the three months ended June 30, 2024, the Company also performed additional analysis of deferred tax assets that relate to tax benefits in future periods from unrealized losses on investments and loans receivable and other debt instruments.

During the three months ended September 30, 2024, the Company also performed additional analysis of deferred tax assets that relate to tax benefits

in future periods from unrealized losses on investments and loans receivable and other debt instruments.

The Company believes that it is more-likely-than-not that the Company will not be able to utilize the tax benefits from unrealized losses from these investments and loans receivable and other debt instruments and has provided valuation allowances in the amounts of $ 70,373 and $ 87,846 , respectively, against these deferred tax assets.

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NOTE 16 — EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period.

Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period.

Basic earnings per share is calculated by dividing (loss) income from continuing operations, (loss) income from discontinued operations, or net income (loss) by the weighted-average number of shares outstanding during the period.

Diluted earnings per share is calculated by dividing (loss) income from continuing operations, (loss) income from discontinued operations, or net income (loss) by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period.

Remeasurements to the carrying value of the redeemable noncontrolling interests in equity of subsidiaries are not deemed to be a dividend.

According to ASC 480 - Distinguishing Liabilities from Equity , there is no impact on earnings per share in the computation of basic and diluted earnings per share to common shareholders for changes in the carrying value of the redeemable noncontrolling interests in equity, when such changes in carrying value which in substance approximates fair value.

Potential common shares that were not included in the computation of diluted loss per share because the effect was antidilutive was 2,781,112 as of June 30, 2024.

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 1,985,442 and 1,992,357 during the three and six months ended June 30, 2023, respectively, because to do so would have been anti-dilutive.

Potential common shares that were not included in the computation of diluted loss per share because the effect was antidilutive was 2,637,588 as of September 30, 2024.

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 1,169,913 and 1,718,209 during the three and nine months ended September 30, 2023, respectively, because to do so would have been anti-dilutive.

Basic and diluted earnings per share were calculated as follows:

Three Months Ended

June 30, Six Months Ended

Three Months Ended September 30,

Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total

Net (loss) income $ ( 148,852 ) $ ( 138,746 ) $ ( 287,598 ) $ ( 100,049 ) $ 23,741 $ ( 76,308 )

Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests 624 ( 3,825 ) ( 3,201 ) ( 3,192 ) 707 ( 2,485 )

Net (loss) income attributable to B.

Riley Financial, Inc.

( 149,476 ) ( 134,921 ) ( 284,397 ) ( 96,857 ) 23,034 ( 73,823 )

Preferred stock dividends 2,015 — 2,015 2,015 — 2,015

Net (loss) income available to common shareholders $ ( 151,491 ) $ ( 134,921 ) $ ( 286,412 ) $ ( 98,872 ) $ 23,034 $ ( 75,838 )

Nine Months Ended September 30,

Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total

Net (loss) income $ ( 645,506 ) $ ( 123,827 ) $ ( 769,333 ) $ ( 48,510 ) $ 32,543 $ ( 15,967 )

Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests ( 397 ) ( 1,770 ) ( 2,167 ) ( 8,049 ) 2,369 ( 5,680 )

Net (loss) income attributable to B.

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Net (loss) income available to common shareholders $ ( 651,154 ) $ ( 122,057 ) $ ( 773,211 ) $ ( 46,503 ) $ 30,174 $ ( 16,329 )

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Weighted average common shares outstanding:

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Diluted 30,499,931 29,961,068 30,281,324 28,933,546

Basic net (loss) income per common share:

Continuing operations $ ( 4.97 ) $ ( 3.30 ) $ ( 21.50 ) $ ( 1.61 )

Discontinued operations ( 4.42 ) 0.77 ( 4.03 ) 1.05

Basic (loss) income per common share $ ( 9.39 ) $ ( 2.53 ) $ ( 25.53 ) $ ( 0.56 )

Diluted net (loss) income per common share:

Continuing operations $ ( 4.97 ) $ ( 3.30 ) $ ( 21.50 ) $ ( 1.61 )

Discontinued operations ( 4.42 ) 0.77 ( 4.03 ) 1.05

Diluted (loss) income per common share $ ( 9.39 ) $ ( 2.53 ) $ ( 25.53 ) $ ( 0.56 )

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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.

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 Brian Kahn and subsequent legal issues, (ii) engaged in misconduct, and (iii) wasted corporate assets, including the approval of improper compensation.

The Company believes that these claims are meritless and intends to defend this action.

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 Brian 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 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.

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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.

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.

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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 “Note Offerings”).

The action asserts claims under §§ 11, 12, and 15 of the Securities Act of 1933, as amended, against the Company, certain of the Company's officers and directors, and the underwriters of the Note Offerings.

The action asserts claims under §§ 11, 12, and 15 of the Securities Act

of 1933, as amended, against the Company, certain of the Company's officers and directors, and the underwriters of the Note Offerings.

The complaint alleged that defendants knew or should have known that Mr.

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Riley Commercial Capital, LLC (“BRCC”), pursuant to that certain Bridge Loan Agreement dated September 30, 2022 between Sorrento and BRCC, are avoidable as preferential transfers.

The parties have entered into a tolling agreement.

The Company believes the Sorrento Unsecured Creditors Committee’s preference claims lack merit, and the Company intends to assert its statutory defenses to defeat the claim.

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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.

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.

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 30, 2021, the Company agreed to guaranty (the “Cash Collateral Provider Guaranty”) up to $ 110,000 of obligations that B&W may owe to providers of cash collateral pledged in connection with a debt financing for B&W.

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B&W has agreed to reimburse the Company to the extent the Cash Collateral Provider Guaranty is called upon.

As of December 31, 2023, the Cash Collateral Provider Guaranty was in respect of up to $ 90,000 of B&W obligations after B&W made paydowns of $ 10,000 during the year ended December 31, 2023.

As of June 30, 2024, the Cash Collateral Provider Guaranty was up to $ 1,650 of B&W obligations after B&W made paydowns of $ 88,350 during the six months ended June 30, 2024.

As of December 31, 2023, the Cash Collateral Provider Guaranty was in respect of up to $ 90,000 of B&W obligations after B&W made paydowns of

$ 10,000 during the year ended December 31, 2023.

As of September 30, 2024, the Cash Collateral Provider Guaranty was up to zero of B&W obligations after B&W made paydowns of $ 88,350 during the nine months ended September 30, 2024.

On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties.

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In consideration for providing the indemnity rider, B&W paid the Company fees in the amount of $ 600 on August 26, 2020.

During the year ended December 31, 2023, the indemnity rider was reduced to $ 5,994 .

During the period ended September 30, 2024 and December 31, 2023, the indemnity rider was reduced to $ 2,997 and $ 5,994 .

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The Company and FRG also entered into a Limited Guarantee in favor of FRG, pursuant to which the Company agreed to guarantee to FRG the due and punctual payment, performance and discharge when required by Parent or its subsidiary to FRG of certain liabilities and obligations of the Parent or such subsidiary.

On August 21, 2023, in connection with the completion of the Acquisition and the Company's portion of the equity financing, the Company's obligations pursuant to the Equity Commitment Letter and Limited Guarantee were satisfied and the Company was paid the $ 16,500 fee pursuant to the Equity Commitment Letter and Limited Guarantee and the Company has no current commitments or guarantees related to FRG.

(d) Other Commitments

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(a) Employee Stock Incentive Plans

Under the 2021 Stock Incentive Plan (the “2021 Plan”), share-based compensation expense for restricted stock units under the Company’s 2021 Plan was $ 6,042 and $ 10,231 during the three months ended June 30, 2024 and 2023, respectively, and $ 14,416 and $ 23,543 during the six months ended June 30, 2024 and 2023, respectively.

During the six months ended June 30, 2024, in connection with employee stock incentive plans, the Company granted 1,223,263 restricted stock units with a grant date fair value of $ 16,181 .

During the six months ended June 30, 2023, in connection with employee stock incentive plans, the Company granted 537,168 restricted stock units with a grant date fair value of $ 20,496 .

Under the 2021 Stock Incentive Plan (the “2021 Plan”), share-based compensation expense for restricted stock units under the Company’s 2021 Plan was:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Share-based compensation expense for restricted stock units for continuing operations $ 2,216 $ 9,849 $ 15,650 $ 32,046

Share-based compensation expense for restricted stock units for discontinued operations 372 580 1,352 1,926

Total share-based compensation expense for restricted stock units $ 2,588 $ 10,429 $ 17,002 $ 33,972

During the nine months ended September 30, 2024, in connection with employee stock incentive plans, the Company granted 1,223,263 restricted stock units with a grant date fair value of $ 16,181 .

During the nine months ended September 30, 2023, in connection with employee stock incentive plans, the Company granted 537,168 restricted stock units with a grant date fair value of $ 20,496 .

The restricted stock units generally vest over a period of one to five years based on continued service.

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(b) Employee Stock Purchase Plan

In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), share based compensation was $ 70 and $ 126 for the three months ended June 30, 2024 and 2023, respectively, and $ 307 and $ 424 for the six months ended June 30, 2024 and 2023, respectively.

As of June 30, 2024 and December 31, 2023, there were 236,949 shares reserved for issuance under the Purchase Plan.

In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), share based compensation was:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Share-based compensation expense for Employee Stock Purchase Plan for continuing operations $ 64 $ 114 $ 340 $ 485

Share-based compensation expense for Employee Stock Purchase Plan for discontinued operations 8 18 39 71

Total share-based compensation expense for Employee Stock Purchase Plan $ 72 $ 132 $ 379 $ 556

As of September 30, 2024 and December 31, 2023, there were 236,949 , shares reserved for issuance under the Purchase Plan.

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All share repurchases were effected on the open market at prevailing market prices or in privately negotiated transactions.

During the six months ended June 30, 2024, the Company repurchased zero shares of its common stock.

During the six months ended June 30, 2023, the Company repurchased 1,452,831 shares of its common stock for $ 53,688 , which represents an average price of $ 36.95 per common share, respectively.

During the nine months ended September 30, 2024, the Company repurchased zero shares of its common stock.

During the nine months ended September 30, 2023, the Company repurchased 1,452,831 shares of its common stock for $ 53,688 , which represents an average price of $ 36.95 per common share.

The shares repurchased under the program are retired.

In November 2023, the share repurchase program was reauthorized by the Board of Directors for share repurchases up to $ 50,000 of the Company's outstanding common shares and the reauthorized program expires in October 2024.

Amounts purchased prior to November 2023 relate to the previously authorized share repurchase program.

As of June 30, 2024 and December 31, 2023, $ 34,206 remain available for common share repurchases under the share repurchase program.

As of September 30, 2024 and December 31, 2023, $ 34,206 remain available for common share repurchases under the share repurchase program.

On July 28, 2023, the Company issued 2,090,909 shares of common stock through a public offering at a price of $ 55.00 per share for net proceeds of $ 114,507 after underwriting fees and costs.

On October 28, 2019, the Company issued 200,000 warrants to purchase common stock of the Company (the “BR Brands Warrants”) in connection with the acquisition of a majority ownership interest in BR Brand Holdings LLC.

The BR Brands Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $ 26.24 per share.

Brands Warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at an exercise price of $ 26.24 per share.

One-third of the BR Brands Warrants immediately vested and became exercisable upon issuance, and the remaining two-thirds of warrants vested and became exercisable on the second anniversary of the closing, upon the BR Brands’ satisfaction of specified financial performance targets.

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In April 2024, 200,000 shares of the Company's common stock were issued in connection with the exercise of warrants for cash in the amount of $ 653 .

As of June 30, 2024 and December 31, 2023, zero and 200,000 BR Brands warrants were outstanding, respectively.

As of September 30, 2024 and December 31, 2023, zero and 200,000 BR Brands warrants were outstanding, respectively.

(d) Preferred Stock

During the six months ended June 30, 2024 and 2023, the Company issued zero depository shares of the Series A Preferred Stock.

There were 2,834 shares issued and outstanding as of June 30, 2024 and December 31, 2023.

Total liquidation preference for the Series A Preferred Stock as of June 30, 2024 and December 31, 2023 was $ 70,854 .

Dividends on the Series A preferred paid during the six months ended June 30, 2024 and 2023 were $ 0.4296875 per depository share.

During the six months ended June 30, 2024 and 2023, the Company issued zero and 18 depository shares of the Series B Preferred Stock, respectively.

There were 1,729 shares issued and outstanding as of June 30, 2024 and December 31, 2023.

Total liquidation preference for the Series B Preferred Stock as of June 30, 2024 and December 31, 2023 was $ 43,228 .

Dividends on the Series B preferred paid during the six months ended June 30, 2024 and 2023 were $ 0.4609375 per depository share.

During the nine months ended September 30, 2024 and 2023, the Company issued zero depository shares of the Series A Preferred Stock.

There were 2,834 shares issued and outstanding as of September 30, 2024 and December 31, 2023.

Total liquidation preference for the Series A Preferred Stock as of September 30, 2024 and December 31, 2023 was $ 70,854 .

Dividends on the Series A preferred paid during the nine months ended September 30, 2024 and 2023 were $ 0.4296875 per depository share.

During the nine months ended September 30, 2024 and 2023, the Company issued zero and 18 depository shares of the Series B Preferred Stock, respectively.

There were 1,729 shares issued and outstanding as of September 30, 2024 and December 31, 2023.

Total liquidation preference for the Series B Preferred Stock as of September 30, 2024 and December 31, 2023 was $ 43,228 .

Dividends on the Series B preferred paid during the nine months ended September 30, 2024 and 2023 were $ 0.4609375 per depository share.

NOTE 19 — NET CAPITAL REQUIREMENTS

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As such, they are subject to the minimum net capital requirements promulgated by the SEC.

As of June 30, 2024, BRS had net capital of $ 68,910 , which was $ 65,363 in excess of required minimum net capital of $ 3,547 ;

As of September 30, 2024, BRS had net capital of $ 72,379 , which was $ 69,538 in excess of required minimum net capital of $ 2,841 ;

and BRWM had net capital of $ 15,479 , which was $ 13,982 in excess of required minimum net capital of $ 1,497 .

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In connection with these services, the Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Funds.

Management fees from the Funds during the three months ended June 30, 2024 and 2023 totaled $ 28 and $ 484 , respectively, and during the six months ended June 30, 2024 and 2023 totaled $ 143 and $ 694 , respectively.

As of June 30, 2024 and December 31, 2023, amounts due from related parties were $ 905 and $ 172 , respectively, of which $ 161 and $ 172 , respectively, were due from the Funds for management fees and other operating expenses.

As of June 30, 2024, $ 744 were due from certain of the Company's brand investments to Nogin for e-commerce related services.

As of June 30, 2024 and December 31, 2023, amounts due to related parties were $ 2,067 and $ 2,731 , respectively, of which $ 1,249 and $ 2,480 , respectively, related to bebe’s rent to own stores which are franchised through Freedom VCM and consist of royalty fees, inventory purchases, marketing, and IT services.

As of June 30, 2024, $ 818 were due to certain of the Company's brand investments from Nogin for sales transactions settled by Nogin as part of its e-commerce related services to the Company’s brand investments.

During the three and six months ended June 30, 2024, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,235 and $ 2,525 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 3,220 and $ 6,759 , respectively.

During the three and six months ended June 30, 2024, Nogin recognized revenues of $ 1,754 from clients that are part of the Company’s brand investments.

Management fees from the Funds during the three months ended September 30, 2024 and 2023 totaled $ 6 and $ 1,392 , respectively, and during the nine months ended September 30, 2024 and 2023 totaled $ 149 and $ 2,086 , respectively.

As of September 30, 2024 and December 31, 2023, amounts due from related parties were $ 189 and $ 172 , respectively, of which $ 189 and $ 172 , respectively, were due from the Funds for management fees and other operating expenses.

As of September 30, 2024 and December 31, 2023, amounts due to related parties were $ 4,112 and $ 2,480 , respectively, of which $ 3,553 and $ 2,480 , respectively, related to bebe’s rent to own stores which are franchised through Freedom VCM and consist of royalty fees, inventory purchases, marketing, and IT services.

As of September 30, 2024, $ 559 were due to certain of the Company's brand investments from Nogin for sales transactions settled by Nogin as part of its e-commerce related services to the Company’s brand investments.

During the three and nine months ended September 30, 2024, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $ 1,176 and $ 3,701 , respectively, and inventory purchases by bebe from Freedom VCM totaled $ 3,877 and $ 10,636 , respectively.

During the three and nine months ended September 30, 2024, Nogin recognized revenues of $ 559 and $ 2,314 from clients that are part of the Company’s brand investments.

In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P.

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and GACP II, L.P.

During the three months ended June 30, 2024 and 2023, management fees paid for investment advisory services by Whitehawk were zero .

During the six months ended June 30, 2024 and 2023, management fees paid for investment advisory services by Whitehawk were $ 1,237 and $ 1,142 , respectively.

During the three months ended September 30, 2024 and 2023, management fees paid for investment advisory services by Whitehawk were zero .

During the nine months ended September 30, 2024 and 2023, management fees paid for investment advisory services by Whitehawk were $ 1,237 and $ 1,142 , respectively.

On February 1, 2024, one of the Company's loans receivable with a principal amount of $ 4,521 was sold to a fund managed by Whitehawk for $ 4,584 .

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Young entered into a one-year consulting agreement concurrently to provide services to the Company, pursuant to which he will be paid an annual fee of $ 250 paid monthly.

During the three months ended June 30, 2024 and 2023, the Company earned $ 968 and zero , respectively, and during the six months ended June 30, 2024 and 2023, the Company earned $ 1,716 and zero , respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities.

During the three months ended September 30, 2024 and 2023, the Company earned $ 1,061 and zero , respectively, and during the nine months ended September 30, 2024 and 2023, the Company earned $ 2,778 and zero , respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities.

The Company is also a party to indemnification agreements for the benefit of B&W and the B.

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Following the completion of the sale, two of the Company's members of senior management resigned from the board of directors of Arena and Arena is no longer a related party.

Interest income on the loan receivable was $ 3,042 and $ 5,871 during the three and six months ended June 30, 2023, respectively.

There were no fees earned from Arena by the Company during the three and six months ended June 30, 2023.

Interest income on the loan receivable was $ 3,100 and $ 8,971 during the three and nine months ended September 30, 2023, respectively.

There were no fees earned from Arena by the Company during the three and nine months ended September 30, 2023.

Applied Digital

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On August 21, 2023, the Company purchased an equity interest in Freedom VCM for $ 216,500 , which resulted in a total equity interest of $ 281,144 and a 31 % voting interest and representation on the board of directors of Freedom VCM as part of the FRG take-private transaction as previously discussed in Note 2(i).

As part of the FRG take-private transaction,

certain members of management of Freedom VCM, which are related parties to Freedom VCM, exchanged their equity interest in FRG for a combined 35 % voting interest in Freedom VCM, of which Mr.

As part of the FRG take-private transaction, certain members of management of Freedom VCM, which are related parties to Freedom VCM, exchanged their equity interest in FRG for a combined 35 % voting interest in Freedom VCM, of which Mr.

Kahn and his wife and one of Mr.

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Kahn as more fully described in Note 2(h).

Subsequent to September 30, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024 which impacts the fair value of this equity investment.

The change in fair value of the Freedom VCM equity investment was an unrealized loss of $ 63,674 and $ 287,043 for the three and nine months ended September 30, 2024.

In connection with the FRG take-private transaction, all of the equity interests of BRRII, a majority-owned subsidiary of the Company, were sold to Freedom VCM Receivables (a subsidiary of Freedom VCM), for a purchase price of $ 58,872 which resulted in a loss of $ 78 on August 21, 2023.

In connection with the sale, Freedom VCM Receivables assumed the obligations with respect to the Pathlight Credit Agreement as more fully discussed in Note 11 and as consideration for the purchase price, the Company entered into a non-recourse promissory note with another Freedom VCM affiliate in the amount of $ 58,872 , with a stated interest rate of 19.74 % and a maturity date of August 21, 2033.

Payments of principal and interest on the note were limited solely to the performance of certain receivables held by BRRII.

Principal and interest was payable based on the collateral without recourse to Freedom VCM Receivables, which includes the performance of certain consumer credit receivables.

This loan receivable was measured at fair value in the amount of $ 25,827 and $ 42,183 as of June 30, 2024 and December 31, 2023.

Interest income on the loan receivable was $ 2,238 and $ 4,392 during the three and six months ended June 30, 2024, respectively.

Payments of principal and interest on the note are limited solely to the performance of certain receivables held by BRRII.

Principal and interest is payable based on the collateral without recourse to Freedom VCM Receivables, which includes the performance of certain consumer credit receivables.

This loan receivable was measured at fair value in the amount of $ 9,310 and $ 42,183 as of September 30, 2024 and December 31, 2023.

Interest income on the loan receivable was $ 1,538 and $ 5,930 during the three and nine months ended September 30, 2024, respectively.

Interest income on the loan receivable was $ 1,173 during the three and nine months ended September 30, 2023.

On October 9, 2024, the Promissory Note was cancelled and certain of the receivables owned by BRRII were transferred to BRRI, all in accordance with the terms of that certain amended and restated funding agreement, dated December 18, 2023, by and among Freedom VCM Interco Holdings, Inc., Freedom VCM Receivables, Inc., BRRII, the Company and certain other parties thereto.

As more fully described in Note 2(h), the Company also has a related party loan receivable with a fair value of approximately $ 4,562 and $ 20,624 at June 30, 2024 and December 31, 2023 from home-furnishing retailer W.S.

As more fully described in Note 2(h), the Company also has a related party loan receivable with a fair value of approximately $ 3,141 and $ 20,624 at September 30, 2024 and December 31, 2023 from home-furnishing retailer W.S.

Badcock Corporation (“Badcock”) that is collateralized by consumer finance receivables of Badcock.

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Badcock now operates as a wholly owned subsidiary of Conn’s.

During the three and six months ended June 30, 2024, interest income on these loans totaled $ 3,387 and $ 7,538 , respectively.

During the three and nine months ended September 30, 2024, interest income on these loans totaled zero and $ 7,538 , respectively.

The commencement of the Chapter 11 Cases constitute an event of default that accelerated the obligations under the Conn’s Term Loan.

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Pursuant to the Consulting Agreement, Conn’s engaged the Company to sell merchandise and furniture, fixtures, & equipment (“FF&E”) as well as additional goods at Conn’s and Badcock stores, headquarters, distribution centers, and cross-dock locations.

The Company will receive a fee of 1.75 % of the gross proceeds of merchandise sold where the gross recovery on cost thresholds is below 105 % of cost, 2.0 % of the gross proceeds of merchandise sold where the gross recovery on cost thresholds is between 105.1 % of cost and 109.9 % of cost, and 2.25 % of the gross proceeds of merchandise sold where the gross recovery on cost thresholds is 110 % of cost or more.

The Company will receive a fee of 1.75 % of

the gross proceeds of merchandise sold where the gross recovery on cost thresholds is below 105 % of cost, 2.0 % of the gross proceeds of merchandise sold where the gross recovery on cost thresholds is between 105.1 % of cost and 109.9 % of cost, and 2.25 % of the gross proceeds of merchandise sold where the gross recovery on cost thresholds is 110 % of cost or more.

The Company will also receive a fee equal to 15 % of the gross proceeds of FF&E sales and 92.5 % of the gross proceeds from the sale of additional goods.

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Kahn and his spouse with a value (based on the transaction price in the FRG take-private transaction) of $ 227,296 as of August 21, 2023.

Interest income

was $ 6,082 and $ 12,164 during the three and six months ended June 30, 2024, respectively.

Interest income was $ 3,409 and $ 15,573 during the three and nine months ended September 30, 2024, respectively.

Interest income was $ 2,740 during the three and nine months ended September 30, 2023.

The fair value of the Freedom VCM equity interest owned by Mr.

Kahn and his spouse was $ 51,478 and $ 232,065 as of June 30, 2024 and December 31, 2023, respectively.

Kahn and his spouse was zero and $ 232,065 as of September 30, 2024 and December 31, 2023, respectively.

On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code which impacts the collateral for this loan receivable.

The fair value of the underlying collateral for this loan decreased to a fair value of $ 2,006 at December 20, 2024.

The fair value of the loan $ 2,250 at September 30, 2024 has been determined based on the underlying collateral for this loan which is primarily comprised of other securities.

The fair value adjustment on the VCM loan receivable was $( 54,333 ) and $( 222,718 ) for the three and nine months ended September 30, 2024.

The fair value of the underlying collateral for this loan decreased to a fair value of $ 2,154 at February 7, 2025.

The $ 2,154 is comprised of other public securities.

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Kahn and his spouse being in Freedom VCM equity interests, the Company has determined that both VCM and Mr.

Kahn are related parties as of June 30, 2024 and December 31, 2023.

Kahn are related parties as of September 30, 2024 and December 31, 2023.

Torticity, LLC

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.

Interest income was $ 1,256 and $ 2,465 during the three and six months ended June 30, 2024, respectively.

Interest income was $ 1,281 and $ 3,746 during the three and nine months ended September 30, 2024, respectively.

One of the Company's members of senior management is on the board of directors of Torticity.

The loan receivable had a fair value of $ 17,170 and $ 6,791 as of June 30, 2024 and December 31, 2023, respectively, and is included in the Company's loans receivable, at fair value in the condensed consolidated balance sheets.

The loan receivable had a fair value of $ 17,986 and $ 6,791 as of September 30, 2024 and December 31, 2023, respectively, and is included in the Company's loans receivable, at fair value in the condensed consolidated balance sheets.

Kanaci Technologies, LLC

On November 21, 2023, the Company agreed to lend up to $ 10,000 to Kanaci Technologies, LLC (“Kanaci”), of which $ 4,000 was drawn upon with $ 6,000 remaining, with interest payable of 15.0 % per annum and a maturity date of June 30, 2026.

Interest income was $ 476 and $ 844 during the three and six months ended June 30, 2024.

Interest income was $ 1,244 and $ 2,088 during the three and nine months ended September 30, 2024.

In June 2023, one of the Company's members of senior management was appointed to the board of directors of Kanaci.

The loan receivable had a fair value of $ 9,762 and $ 3,904 as of June 30, 2024 and December 31, 2023, respectively, and is included in the Company's loans receivable, at fair value in the condensed consolidated balance sheets.

On March 2, 2021, the Company purchased a $ 2,400 minority equity interest in Dash Medical Holdings, LLC ("Dash") and one of the board of directors of the Company is a member of the board of directors of Dash.

The loan receivable in the amount of $ 11,453 was converted to equity on September 30, 2024.

At December 31, 2023, the loan receivable with a fair value of $ 3,904 is included in loans receivable, at fair value in the condensed consolidated balance sheets.

On March 2, 2021, the Company purchased a $ 2,400 minority equity interest in Dash Medical Holdings, LLC ("Dash") and one of the Company's members of senior management was appointed to the board of directors of Dash.

On June 13, 2024, the Company sold its equity interest in Dash for $ 2,760 , resulting in a realized gain of $ 360 .

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(“272LP”) purchased $ 4,081 of the loan receivable including accrued interest;

both of the partnerships are private equity funds managed at the time of the transaction by one of the Company’s subsidiaries.

Our executive officers and members of our board of directors have a 58.2 % financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 24.9 % in the BRCPOF as of June 30, 2024 and December 31, 2023.

the partnerships are private equity funds managed at the time of the transaction by one of the Company’s subsidiaries.

Our executive officers and members of our board of directors had a 15.3 % financial interest in the 272LP as of December 31, 2023.

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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, 2024 and 2023, the Company earned $ 369 and $ 30 of fees related to these services, respectively.

During the six months ended June 30, 2024 and 2023, the Company earned $ 548 and $ 814 of fees related to these services, respectively.

During the three months ended September 30, 2024 and 2023, the Company earned $ 601 and $ 2,439 of fees related to these services, respectively.

During the nine months ended September 30, 2024 and 2023, the Company earned $ 1,325 and $ 3,253 of fees related to these services, respectively.

NOTE 21 — BUSINESS SEGMENTS

The Company’s business is classified into six reportable operating segments:

the Capital Markets segment, Wealth Management segment, Auction and Liquidation segment, Financial Consulting segment, Communications segment, and Consumer Products segment.

The Company’s business is classified into five reportable operating segments:

the Capital Markets segment, Wealth Management segment, Financial Consulting segment, Communications segment, and Consumer Products segment.

These reportable segments are all distinct businesses, each with a different marketing strategy and management structure.

During the fourth quarter of 2023, management reassessed the Company's previously reported Consumer segment due to organizational changes and financial information provided to the CODM.

These changes resulted in Targus’ operations being reported on a stand alone basis in the Consumer Products segment and the operations

related to brand licensing that was previously reported in the Consumer segment being reported in the All Other Category that is reported with Corporate and Other.

As a result of the changes discussed above in the Consumer segment, the Company has recast the financial data for the Consumer Products segment and reporting of the All Other Category for all periods presented.

These changes resulted in Targus’ operations being reported on a stand alone basis in the Consumer Products segment and the operations related to brand licensing that was previously reported in the Consumer segment being reported in the All Other Category that is reported with Corporate and Other.

The Great American Group discontinued operations, as discussed in Note 4, resulted in changes to the Financial Consulting segment and the elimination of the Auction and Liquidation segment as of September 30, 2024.

As a result of the changes discussed above, the Company has recast the financial data for the segments and reporting of the All Other Category for all periods presented.

The following is a summary of certain financial data for each of the Company’s reportable segments:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Trading (loss) income ( 1,908 ) ( 10,217 ) ( 52,787 ) 29,488

Fair value adjustments on loans ( 175,582 ) 9,207 ( 187,783 ) 52,483

Fair value adjustment on loans ( 71,477 ) ( 860 ) ( 259,260 ) 51,623

Interest income - loans 11,251 27,397 51,894 102,535

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Segment income (loss) 780 2,399 4,127 2,414

Auction and Liquidation segment:

Revenues - Services and fees 3,621 8,885 7,181 14,329

Revenues - Sale of goods 8,364 1,676 10,584 1,892

Total revenues 11,985 10,561 17,765 16,221

Direct cost of services ( 2,872 ) ( 3,453 ) ( 4,328 ) ( 6,581 )

Cost of goods sold ( 6,960 ) ( 618 ) ( 7,748 ) ( 670 )

Selling, general and administrative expenses ( 1,861 ) ( 2,302 ) ( 3,369 ) ( 4,582 )

Segment income 292 4,188 2,320 4,388

Financial Consulting segment:

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Interest expense ( 32,996 ) ( 37,493 ) ( 102,195 ) ( 118,630 )

(Loss) income before income taxes ( 408,773 ) 65,285 ( 473,817 ) 89,764

Loss from continuing operations before income taxes ( 134,344 ) ( 123,687 ) ( 627,591 ) ( 45,465 )

Provision for income taxes ( 14,508 ) 23,638 ( 17,915 ) ( 3,045 )

Net (loss) income ( 433,781 ) 43,781 ( 481,735 ) 60,341

Loss from continuing operations ( 148,852 ) ( 100,049 ) ( 645,506 ) ( 48,510 )

(Loss) income from discontinued operations, net of income taxes ( 138,746 ) 23,741 ( 123,827 ) 32,543

Net loss ( 287,598 ) ( 76,308 ) ( 769,333 ) ( 15,967 )

Net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests ( 3,201 ) ( 2,485 ) ( 2,167 ) ( 5,680 )

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

2024 2023 2024 2023

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North America $ 198,514 $ 244,096 $ 660,946 $ 662,181

Europe 769 416 1,342 1,045

Total Revenues - Services and fees 248,025 230,327 505,328 465,886

Trading (loss) income

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Latin America 2,199 2,181 6,892 7,195

Total Revenues - Sale of goods 63,937 58,387 119,590 126,164

Total - Sale of goods 55,248 60,029 164,254 184,301

Total Revenues

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The following table presents long-lived assets, which consists of property and equipment, net, by geographical area:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Long-lived Assets - Property and Equipment, net:

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On October 25, 2024, our wholly-owned subsidiary, B.

Riley Brand Management LLC (“B.

Riley Brand Management”), entered into a transfer and contribution agreement, dated October 25, 2024 (the “Transfer and Contribution Agreement”), by and between B.

Riley Brand Management and BR Funding Holdings 2024-1, LLC, a Delaware limited liability company and, prior to the consummation of the transactions described herein, wholly-owned subsidiary of B.

Riley Brand Management (“Holdings”), pursuant to which, among other things, B.

Riley Brand Management transferred and contributed its limited liability company interests in (i) BR Brand Holdings LLC, a New York limited liability company, (ii) HRLY Brand Management LLC, a Delaware limited liability company, (iii) Justice Brand Management LLC, a New York limited liability company, and (iv) S&S Brand Management LLC, a New York limited liability company (such limited liability interests collectively, the “Brands Interests,” and such transfer, the “Transfer”).

In connection with the transactions contemplated by the Transfer and Contribution Agreement, Holdings transferred and contributed the Brand Interests to its subsidiary, BR Funding 2024-1, LLC, a Delaware limited liability company and securitization financing vehicle (“Issuer”) and Issuer issued notes and preferred stock secured by the Brands Interests (the “Secured Financing”) to a third party purchaser, HBN 101, LLC, a Delaware limited liability company (the "Purchaser"), the proceeds of which were used to fund an upfront payment to the Company of approximately $ 189,300 .

Additionally, in connection with the Transfer and Contribution Agreement, bebe stores, inc., a California corporation and majority owned subsidiary of the Company (“bebe”), entered into a membership interest purchase agreement, dated October 25, 2024 (the “bebe Purchase Agreement”), by and among bebe, HBN 120, LLC, a Delaware limited liability company (“Buyer”), BB Brand Holdings LLC, a Delaware limited liability company (“BB Brand Holdings”), and BKST Brand Management LLC, a New York limited liability company (“BKST Brand Management” and together with BB Brand Holdings, the “bebe Brands”), pursuant to which, among other things, bebe sold its limited liability company interests in the bebe Brands to Buyer, an affiliate of the Purchaser for approximately $ 46,624 in net proceeds (such sale, the “Sale”).

Upon closing of the Sale proceeds of $ 22,188 was used to pay off the then outstanding balance of the bebe Credit Agreement in full (see Note 10) and $ 224 of loan related pay off expenses.

The Sale by bebe resulted in a fair value adjustment at September 30, 2024 in the amount of approximately $( 20,043 ) that was recorded in the quarter ended September 30, 2024.

The Brands Interests transaction resulted in a fair value adjustment at September 30, 2024 in the amount of approximately $( 133,000 ) was recorded in the quarter ending September 30, 2024.

Riley Brand Management, entered into a Transfer and Contribution Agreement and Secured Financing, dated October 25, 2024, by and between B.

Riley Brand Management (“Holdings”) and BR Funding Holdings 2024-1, LLC, a Delaware limited liability company and, prior to the consummation of the transactions described herein, a wholly-owned subsidiary of Holdings, pursuant to which, among other things, B.

Additionally, in connection with the Transfer and Contribution Agreement, bebe entered into a membership interest purchase agreement, dated October 25, 2024, by and among bebe, HBN 120, LLC, a Delaware limited liability company (“Buyer”), BB Brand Holdings, and BKST Brand Management, pursuant to which, among other things, bebe sold its limited liability company interests in the bebe Brands to Buyer.

The assets and liabilities related to the brand assets that are a party to the Secured Financing transaction and sale transaction by bebe are included in assets held for sale and liabilities held for sale and the operations of these businesses are included in income (loss) from discontinued operations as more fully described in Note 4.

Great American Group Transaction

On November 15, 2024 the Company and BR Financial Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“BR Financial”), consummated the transactions contemplated by an equity purchase agreement, dated October 13, 2024 (the “Equity Purchase Agreement”), by and among OCM SSF III Great American PT, L.P., a Delaware limited partnership (“Investor 1”), Opps XII Great American Holdings, LLC, a Delaware limited liability company (“Investor 2”), and VOF Great American Holdings, L.P., a Delaware limited partnership

(“Investor 3,” and, together with Investor 1 and Investor 2, the “Investors”), Great American Holdings, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Company (“Great American NewCo”), and certain other parties identified therein, with respect to the ownership of Great American NewCo by the Investors and the Company.

On November 15, 2024 the Company and BR Financial, consummated the transactions contemplated by an equity purchase agreement involving the Company’s Appraisal and Valuation Services, Retail, Wholesale & Industrial Solutions and Real Estate businesses, dated October 13, 2024, by and among Investor 1, Investor 2, and Investor 3, Great American NewCo, and certain other parties identified therein, with respect to the ownership of Great American NewCo by the Investors and the Company.

The Investors are affiliates of Oaktree Capital Management, L.P.

Pursuant to, and subject to the terms and conditions set forth in, the Equity Purchase Agreement, the Company conducted an internal reorganization and contributed all of the interests in the Company’s Appraisal and Valuation Services, Retail, Wholesale & Industrial Solutions and Real Estate businesses (collectively, the “Great American Group”), to Great American NewCo.

At the Closing, (i) the Investors received (a) all of the outstanding class A preferred limited liability units of Great American NewCo (which will have a 7.5 % cash coupon and a 7.5 % payment-in-kind coupon) (the “Class A Preferred Units”) and (b) common limited liability units of Great American NewCo (the “Common Units”) representing 52.6 % of the issued and outstanding common limited liability units in Great American NewCo for a purchase price of approximately $ 203,000 (with an initial liquidation preference of approximately $ 203,000 ).

BR Financial retains (a) 93.2 % of the issued and outstanding class B preferred limited liability company units of Great American NewCo (which will have a 2.3 % payment-in-kind coupon and an initial aggregate liquidation preference of approximately $ 183,000 ) (the “Class B Preferred Units”) and (b) 44.2 % of the issued and outstanding Common Units.

The remaining 6.8 % of issued and outstanding Class B Preferred Units and 3.2 % of issued and outstanding Common Units will be held by certain minority investors.

The investors in Great American NewCo will also be entitled to certain quarterly tax distributions pursuant to the Great American NewCo LLCA (defined below).

At the closing, (i) BR Financial, the Investors and the other minority investors entered into an Amended and Restated Limited Liability Company Agreement of Great American NewCo (the “Great American NewCo LLCA”), (ii) BR Financial and Great American NewCo entered into a Transition Services Agreement, pursuant to which BR Financial will provide certain transition services to Great American NewCo relating for the Great American Group for a period of up to one year from the Closing, subject to certain exceptions, and (iii) an affiliate of the Company, Great American NewCo and certain subsidiary guarantors of Great American NewCo entered into a credit agreement, pursuant to which an affiliate of the Company, as lender, will provide to Great American NewCo, as borrower, a first lien secured revolving credit facility of up to $ 25,000 for general corporate purposes, subject to the terms and conditions set forth therein, which had an outstanding balance of $ 1,751 at closing, and (iv) entered into promissory notes which totaled $ 15,332 related to capital requirements for certain retail liquidation engagements that were ongoing as of closing.

Under the Great American NewCo LLCA, Great American NewCo will initially have a five -member board of directors that will oversee the day-to-day management of Great American NewCo, subject to certain approval rights reserved for the Investors and/or BR Financial, as applicable.

The Investors will be entitled to appoint a majority of the directors of the board for so long as they collectively hold at least 25% of their combined amount of Common Units owned immediately following the Closing.

The Great American NewCo LLCA will also contain certain protections for BR Financial, including, but not limited to, requiring BR Financial approval for certain fundamental actions.

The Investors will have certain drag-along rights following the second-year anniversary of the Closing Date and certain call rights exercisable starting on the fifth-year anniversary of the Closing Date.

The Great American NewCo LLCA sets forth distribution mechanics pursuant to which Great American NewCo will make distributions in cash and payment-in-kind at any time the board of directors may authorize, with the Class A Preferred Units having priority in any such distribution over Class B Preferred Units.

In addition, the Great American NewCo LLCA will contain certain transfer restrictions and other transfer rights and obligations that apply to BR Financial, the Investors and other unitholders, as applicable, in certain circumstances.

At the Closing, (i) the Investors received (a) all of the outstanding Class A Preferred Units A and (b) Common Units of Great American NewCo representing 52.6 % of the issued and outstanding common limited liability units in Great American NewCo.

Upon closing the Equity Purchase Agreement on November 15, 2024, B.

Riley will record a gain of approximately $ 235,000 and the operations of Great American NewCo will be deconsolidated since B.

Riley will no longer have control and will a non-controlling equity investment ownership interest of 44.2 % of the common units along with the Preferred B units described above.

Riley will no longer have control and will a non-controlling equity investment ownership interest of 44.2 % of the common units along with the Preferred B units described in Note 4.

The assets and liabilities of the Company’s Appraisal and Valuation Services, Retail, Wholesale & Industrial Solutions and Real Estate businesses are included in assets held for sale and liabilities held for sale and the operations of these businesses are included in income (loss) from discontinued operations as more fully described in Note 4.

Wealth Management

On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s traditional (W-2) Wealth Management business to Stifel for estimated net consideration of $ 27,000 to $ 35,000 in cash.

On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s traditional (W-2) Wealth Management business to Stifel Financial Corp.

("Stifel") for estimated net consideration of $ 27,000 to $ 35,000 in cash.

Subject to the terms of the agreement, the final consideration will be based on the number of advisors that join Stifel at closing, among other things.

The transaction is expected to include up to 15 % of the wealth management advisors, along with the associated customer accounts.

The accounts managed by these advisors represents up to $ 4.5 billion total assets under management (AUM) as of September 30, 2024.

The accounts managed by these advisors represents up to $ 4.5 billion total assets

under management (AUM) as of September 30, 2024.

The transaction has been approved by the Board of Directors of the Company and is subject to the receipt of required regulatory approvals and other customary closing conditions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements