B. Riley Financial, Inc.
For the period ended Mar 31, 2025. Filed Nov 18, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Nov 18, 2025
RILY$3.65-3.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2025-02-21.
0001628280-25-007082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-11-18.
0001464790-25-000023
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 218 previous paragraphs and 115 current paragraphs.
30 unchanged; 46 reworded; 37 added; 135 removed; 7 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (37)
Current report
E-Commerce Segment –This segment is comprised of Nogin, Inc. ("Nogin"), which is a technology platform operating e-commerce stores that delivers CaaS solutions for apparel brands and other retailers. The Company manages clients’
Current report
front-to-back-end operations of the e-commerce stores and also provides marketing services to their clients. The Company’s business model is based on providing a comprehensive e-commerce solution to its customers on a revenue sharing basis.
Current report
The carrying value of our investments in other public equities held as of March 31, 2025 and December 31, 2024 was $15.0 million and $27.4 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was driven by sales of certain other public equity securities and, to a lesser extent, decreases in the public share prices during the period.
Current report
The carrying value of our investments in other private equities held as of March 31, 2025 and December 31, 2024 was $97.7 million and $107.6 million, respectively. The decrease in the carrying value for the three months ended March 31, 2025 was driven by sales of certain private securities and, to a lesser extent, decreases in fair values during the period.
Current report
Exchange of Senior Notes
Current report
As discussed in more detail in Note 11 - Senior Notes Payable, from April 7, 2025 to July 11, 2025, we completed four private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $29.5 million of the 5.50% Senior Notes due March 2026, $2.1 million of the 6.50% Senior Notes Payable due September 2026, $109.7 million of the 5.00% Senior Notes due December 2026, $51.1 million of the 6.00% Senior Notes due January 2028, and $39.5 million of the 5.25% Senior Notes due August 2028 (collectively, the “Exchanged Notes”) owned by the investors were exchanged for approximately $140.7 million aggregate principal amount of 8.00% Senior Secured Second Lien Notes due 2028 (the "New Notes"), whereupon the Exchanged Notes were cancelled.
Current report
Sale of GlassRatner and Farber
Current report
On June 27, 2025, the Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber. The aggregate cash consideration paid by the Buyers for the interests of GlassRatner and shares of Farber was $117.8 million, which is based on a target closing working capital amount that is subject to adjustment within 180-days following the sale date. In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services.
Current report
Targus/FGI Credit Agreement
Current report
On August 20, 2025, the Targus ("Targus Borrower") and certain of its direct and indirect subsidiaries (the “FGI Loan Parties”) entered into a Revolving Credit, Receivables Purchase, Security and Guaranty Agreement (the “Targus/FGI Credit Agreement”) with FGI Worldwide LLC (“FGI”), as agent and for a three-year $30.0 million revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the existing Targus Credit Agreement (as more fully discussed in Note 10 — Term Loans and Revolving Credit Facility) with PNC Bank, National Association ("PNC"). The final maturity date of the Targus/FGI Credit Agreement is August 20, 2028. The Targus/FGI Credit Agreement is a revolving line of credit facility with a receivables purchase feature under which the purchase of eligible receivables is on a full recourse basis with each borrower retaining the risk of non-payment. The revolving loans bear interest at the greater of (a) 5.25% per annum or (b) 3.00% above the term Secured Overnight Financing Rate for a period of 1 month plus 10 basis points, plus (c) 0.30% per month collateral management fee. The Targus/FGI Credit Agreement is secured by (i) a first priority perfected security interest in and a lien upon all of the assets of the FGI Loan Parties, and (ii) a pledge of all of the equity interests of the Borrower and its direct and indirect subsidiaries. The Targus/FGI Credit Agreement contains certain covenants, including those limiting the FGI Loan Parties' ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Targus/FGI Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement. As required under the Targus/FGI Credit Agreement, B. Riley Commercial Capital, LLC ("BRCC"), a wholly owned subsidiary of the Company, entered into an amendment to an existing intercompany loan and security agreement to extend an additional subordinated loan to the Targus Borrower at the closing of the Targus/FGI Credit Agreement in the amount of $5.0 million increasing the aggregate principal amount of such loan from $5.0 million to $10.0 million.
Current report
On November 11, 2025, the Company announced that it will change its name to BRC Group Holdings, Inc., effective on January 1, 2026.
Current report
Condensed Consolidated Statements of Operations
Current report
Revenues from the Wealth Management segment are comprised of the following:
Current report
Revenues from services and fees in the E-Commerce segment were $3.5 million during the three months ended March 31, 2025. These revenues consisted of commission fees from Nogin which we acquired in the second quarter of 2024.
Current report
The $4.1 million favorable variance in fair value adjustments related to loans was primarily driven by $17.5 million related to the loan to VCM, $3.1 million related to the loan to Freedom VCM, partially offset by unfavorable variances of $8.5 million related to the loan to Core Scientific, $2.9 million related to the loan to Exela, $2.8 million related to the loan to Conn's, and $2.3 million from all other loans receivable.
Current report
Revenues from the sale of goods decreased $6.0 million to $47.5 million during the three months ended March 31, 2025 from $53.4 million during the three months ended March 31, 2024. The decrease in revenues from sale of goods was attributable to decreases of $9.4 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide due to market conditions and $0.1 million in All Other, consisting of sale of goods from bebe, partially offset by an increase of $3.5 million from the E-Commerce segment consisting of sale of goods from Nogin, which we acquired in the second quarter of 2024.
Current report
Cost of goods sold
Current report
Cost of goods sold for the three months ended March 31, 2025 decreased $2.1 million to $36.7 million from $38.8 million during the three months ended March 31, 2024. The decrease in cost of goods sold was primarily attributable to decreases of $5.3 million in the Consumer Products segment, due to lower sales volume, $0.2 million in the Communications segment and $0.1 million from All Other consisting of bebe, partially offset by an increase of $3.1 million from the E-Commerce segment, consisting of Nogin which we acquired in the second quarter of 2024.
Current report
Selling, general and administrative expenses in the Capital Markets segment decreased by $12.2 million to $41.8 million during the three months ended March 31, 2025 from $54.0 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $16.8 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, share based compensation and other payroll expenses largely related to reduced revenue and loss of headcount, and $0.1 million in other expenses, partially offset by increases of $3.4 million in write-offs of receivables and $1.3 million in professional services.
Current report
Selling, general and administrative expenses in the Wealth Management segment decreased by $4.5 million to $45.6 million during the three months ended March 31, 2025 from $50.1 million during the three months ended March 31, 2024. The decrease was primarily due to a decrease of $6.8 million in employee compensation and benefit related expenses, which primarily related to decreases in commissions paid, bonuses and other payroll expenses due to a decrease in headcount, which aligns with the decrease in revenue, partially offset by increases of $1.8 million in arbitration settlements and $0.4 million in other expenses.
Current report
Selling, general and administrative expenses in the Communications segment decreased $3.2 million to $20.7 million for the three months ended March 31, 2025 from $23.9 million for the three months ended March 31, 2024. The decrease was primarily due to decreases of $2.0 million in employee compensation and benefit related expenses due to lower headcount, lower commissions and sale of the Lingo carrier business in the third quarter of 2024, and $1.2 million in depreciation and amortization expenses due to items being fully amortized in 2024.
Current report
E-Commerce
Current report
Selling, general and administrative expenses in the E-Commerce segment consisted of $8.4 million during the three months ended March 31, 2025 from Nogin which was acquired in the second quarter of 2024. Of the $8.4 million, $3.2 million was in employee compensation and benefit related expenses, $2.5 million was in other selling general and administrative expenses, and $2.1 million was in professional services.
Current report
Selling, general and administrative expenses for Corporate and All Other increased $1.9 million to $35.3 million during the three months ended March 31, 2025 from $33.4 million for the three months ended March 31, 2024. The increase was primarily due to increases of $6.0 million in transaction costs, of which $4.4 million were from the regional environmental services business which was sold this quarter, $1.5 million in foreign currency fluctuation, and $0.9 million in legal settlements, partially offset by decreases of $3.6 million in employee compensation and benefit related expenses primarily driven by a decrease in share based compensation, $2.0 million in occupancy-related costs, $0.6 million in professional services and $0.3 million in other expenses.
Current report
Interest Expense - Securities Lending and Loan Participations Sold. Interest expense - securities lending and loan participations sold decreased $34.7 million to $0.7 million during the three months ended March 31, 2025 from $35.4 million for the three months ended March 31, 2024. The decrease was due to a decrease in the securities loaned and loan participations sold balances from $2.0 billion as of March 31, 2024 to $33.0 million as of March 31, 2025.
Current report
Realized and unrealized losses on investments was a loss of $14.5 million during the three months ended March 31, 2025 compared to a loss of $34.9 million during the three months ended March 31, 2024, which is comprised of the following:
Current report
The $20.4 million favorable variance was primarily due to unfavorable fair value adjustments recorded in the prior year quarter and no fair value adjustments recorded in the current quarter of $32.7 million in our investment in Freedom VCM Holdings, LLC, which was written off in the fourth quarter of the prior year, $11.5 million in our investment in CSL Completions Co-Invest-A, LLC, $7.1 million in our investment in Kanaci Technologies, LLC, and $3.5 million in our investment in Alta Equipment Group, Inc., the three of which were sold prior to March 31, 2025. These favorable increases were partially offset by unfavorable variances between the comparative reporting periods of $16.2 million related to our investment in Double Down Interactive Co. Ltd and $7.4 million related to our investment in Babcock & Wilcox Enterprises, Inc., both of which were driven by favorable changes in their respective stock prices in the prior year quarter, other private equities of $7.8 million, and other public equities of $3.9 million.
Current report
Other income (expense) also includes change in fair value of financial instruments and other was a gain of $0.9 million during the three months ended March 31, 2025 and a gain on sale and deconsolidation of businesses of $80.8 million during the three months ended March 31, 2025 primarily related to $52.4 million net gain on the sale of Atlantic Coast Recycling and $28.4 million net gain on the disposition of Nogin. The gain on senior note exchange was $10.5 million during the three months ended March 31, 2025. The loss on extinguishment of debt was $10.4 million during the three months ended March 31, 2025.
Current report
Interest expense was $30.0 million during the three months ended March 31, 2025 compared to $35.7 million during the three months ended March 31, 2024. The decrease in interest expense was due to lower average debt balances during the three months ended March 31, 2025 when compared to the same period in the prior year. The decreases in interest expense primarily consisted of $4.1 million from the Nomura term loan, $2.8 million from the issuance of senior notes,
Current report
Benefit from Income Taxes. Benefit from income taxes was $3.0 million during the three months ended March 31, 2025 compared to a benefit from income taxes of $21.3 million during the three months ended March 31, 2024. The benefit for income taxes in 2025 is primarily limited to the reversal of tax reserves due to the expiration of stature of limitations since the Company has a valuation allowance for deferred taxes. In the prior year period the benefit for income taxes approximated the effective rate for income taxes prior to establishing a valuation allowance at June 30, 2024 due to losses incurred in 2024. The effective income tax rate was 13.2% for the three months ended March 31, 2025 as compared to 25.8% for the three months ended March 31, 2024.
Current report
On June 27, 2025, we signed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber and their results have been presented as discontinued operations for the three months ended March 31, 2025 and 2024. Income from discontinued operations, net of tax for GlassRatner and Farber was $3.4 million for the three months ended March 31, 2025 and 2024. Refer to Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements for additional information.
Current report
As of March 31, 2025, we had $138.3 million of unrestricted cash and cash equivalents, $1.4 million of restricted cash, $231.8 million of securities and other investments owned, $98.6 million of loans receivable, at fair value, $1.6 billion of borrowings outstanding, and approximately $64.0 million of obligations under operating leases. The Company expects to collect approximately $72.5 million of loans at fair value in the next twelve months and has approximately $80.2 million of level 1 securities and other investments owned that are available for sale during the next twelve months.
Current report
The Company expects to utilize existing cash balances, cash generated from investments, cash proceeds from the sale of certain businesses described below, available borrowing capacity under our existing revolving credit facility and cash generated from operations to fund debt service obligations over the next twelve months which includes amounts coming due on the Company’s senior notes payable as discussed in Note 11 - Senior Notes Payable. The Company may also explore various funding options in the future that may include additional debt exchanges, refinancing of existing senior notes and other debt, equity capital raises, the sale of operating companies, or the liquidation of securities and investments owned to provide liquidity to meet future debt obligations as they become due.
Current report
The following summarizes key liquidity events.
Current report
We completed the sale of (a) the Company’s majority owned subsidiary Atlantic Coast Recycling, LLC on March 3, 2025 for proceeds of approximately $68.6 million (the “Atlantic Coast Transaction”); (b) the sale of part of Wealth Management business for $26.0 million (the “Wealth Transaction”) as more fully described in Note 3; and (c) the sale of the Company’s financial consulting business on June 27, 2025 for $117.8 million. In addition to the sale of these businesses, approximately $30.0 million of investments and loans were sold during the three months ended March 31, 2025 and approximately $14.0 million of investments were sold from April 1, 2025 through October 31, 2025. Approximately $34.0 million in repayments of loans receivable, fair value were received during the three months ended March 31, 2025 and approximately $44.0 million in repayments of loans receivable, fair value were received from April 1, 2025 through October 31, 2025. The sale of additional investments in the next twelve months will vary based upon the realization of the investments providing the best economic value or as liquidity needs arise for the Company.
Current report
As discussed in more detail in Note 11 - Senior Notes Payable, from April 7, 2025 to July 11, 2025, we completed four private exchange transactions with institutional investors pursuant to which aggregate principal amounts of approximately $29.5 million of the 5.50% Senior Notes due March 2026, $2.1 million of the 6.50% Senior Notes Payable due September 2026, $109.7 million of the 5.00% Senior Notes due December 2026, $51.1 million of the 6.00% Senior Notes due January 2028, and $39.5 million of the 5.25% Senior Notes due August 2028 of the Company’s Exchanged Notes owned by the investors were exchanged for approximately $140.7 million aggregate principal amount of New Notes, whereupon the Exchanged Notes were cancelled.
Current report
The borrowings outstanding of $1.6 billion as of March 31, 2025 included $1.4 billion from the issuance of series of senior notes that are due at various dates ranging from March 31, 2026 to August 31, 2028 with interest rates ranging from 5.00% to 8.00%, $184.1 million in term loans borrowed pursuant to the Oaktree Capital Management, L.P. ("Oaktree") and BRPI Acquisition Co LLC (“BRPAC”) credit agreements, and $13.8 million of revolving credit facility under the Targus credit facility. Of the senior notes outstanding, after the completion of the four private exchange transactions discussed above, there is $101.6 million of senior notes due in the next twelve months and $1.2 billion thereafter. The $205.5 million of term loans outstanding includes $83.0 million that is expected to be repaid in the next twelve months and $122.5 million thereafter. Of the approximately $64.0 million of obligations due under operating lease, approximately $22.0 million is due in the next twelve months and approximately $42.0 million is due thereafter. For additional information regarding our debt offerings and related agreements, refer to Note 9 - Notes Payable, Note 10 - Term Loans and Revolving Credit Facility, and Note 11 - Senior Notes Payable to the unaudited condensed consolidated financial statements.
Removed paragraphs (135)
Previous report
During the three and nine months ended September 30, 2024, fair value adjustments for the loan receivable for Vintage Capital Management, LLC was $(54.3) million and $(222.7) million, respectively. The fair value adjustments are related primarily to the decline in the equity fair value of Freedom VCM Holdings, LLC (“Freedom VCM”) which, along with certain guarantees, is the primary collateral for this loan. The decline in the equity fair value of Freedom VCM is due to increases in net debt, a decrease in the operational performance of Freedom VCM various business units during 2024, and a decline in the equity value of Freedom VCM’s investment in Conn’s, Inc. common stock which was impacted by Conn’s Inc. 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”). Subsequent to September 30, 2024, the collateral value for the VCM loan receivable was also impacted due to the filing of Freedom VCM’s voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024. These factors resulted in a decrease in the fair value of the Freedom VCM loan receivable to $2.3 million at September 30, 2024.
Previous report
During the three and nine months ended September 30, 2024, we recorded $0.5 million and $(13.2) million of fair value adjustments to the loan receivable for Freedom VCM Receivables, Inc.. The fair value adjustment of $(13.2) million during the nine months ended September 30, 2024 was primarily due to a fair value adjustment of $12.0 million recorded in the second quarter of 2024 resulting from higher projected charge offs of receivables on the consumer receivable portfolio that are serviced by Conn's, Inc. which was 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”).
Previous report
During the three and nine months ended September 30, 2024, we recorded $(18.6) million and $(27.1) million of fair value adjustments to the loan receivable for Conn’s, Inc. The Company collected principal payments $104.8 million loan receivable from Conn’s Inc. which reduced the principal balance of the loan to $93.0 million at June 30, 2024. All accrued interest on this loan receivable was paid through June 30, 2024. The fair value of the Conn’s loan receivable was $63.7 million at September 30, 2024. The fair value adjustments of $(18.6) million during the quarter ended September 30, 2024, is primarily related to Conn’s Inc. July 23, 2024 Chapter 11 Cases. The filing of the Chapter 11 Cases impacted the operational performance of the stores operated by Conn’s, Inc. and the additional expenses projected to be incurred in the
Previous report
Chapter 11 Cases resulted in a decline in the projected recovery value of the collateral for the Conn’s Inc. loan receivable. The $45.5 million of loans receivable from Core Scientific, Inc. (“Core Scientific”) at December 31, 2023 included a loan in the amount of $42.1 million that was settled in full upon Core Scientific’s exit from Chapter 11 bankruptcy in January 2024.
Previous report
During the three and nine months ended September 30, 2024, fair value adjustments for the loan receivable from W.S. Badcock Corporation was $0.9 million and $(6.0) million, respectively. During the three and nine months ended September 30, 2023, fair value adjustments for the loan receivable from W.S. Badcock Corporation was $(5.2) million. The fair value adjustment of $(6.0) million during the nine months ended September 30, 2024, was primarily due to fair value adjustments recorded in the second quarter of 2024 related to higher projected charge offs of receivables on the consumer receivable portfolio resulting from Conn’s, Inc. bankruptcy and estimated costs and losses from the projected liquidation of the consumer receivable portfolio.
Previous report
During the nine months ended September 30, 2024, fair value adjustments for the loan receivable from Core Scientific, Inc. was $8.5 million. In the prior year nine months ended September 30, 2023, fair value adjustments for the loans receivable from Core Scientific, Inc. was $34.8 million. Core Scientific, Inc. provides digital infrastructure for bitcoin mining and high-performance computing. Core Scientific, Inc. filed Chapter 11 bankruptcy in 2022, leading to a significant mark down of the loan receivable in the fourth quarter of 2022. Subsequent to the Chapter 11 restructuring, and during the first quarter of 2023, there was a significant rebound in bitcoin prices resulting in significant growth and value assumptions. As a result, the Core Scientific, Inc. loan receivable had a fair value adjustment of $34.8 million for the nine months ended September 30, 2023.
Previous report
Financial Consulting Segment -We provide a variety of specialized advisory services spanning bankruptcy, restructuring, turnaround management, forensic accounting, crisis and litigation support, and operations management. On November 15, 2024, as more fully described in recent developments, the Company entered into a transaction whereby approximately 52.6% of the common equity interests of a newly formed subsidiary that included the Company’s appraisal and valuation and real estate advisory services operations along with the Company’s auction and liquidations operations was sold to an investment management firm. These operations are included in discontinued operations as discussed in Note 4 to the accompanying condensed consolidated financial statements and are expected to be deconsolidated since B. Riley will no longer have control and will own a non-controlling equity investment ownership interest of 44.2% in the business.
Previous report
The fair value of Alta Equipment Group, Inc. common stock held as of December 31, 2023 was $44.7 million, and the Company sold the entire position in the first quarter of 2024 and recorded a loss of $(3.5) million. The sale was executed to raise additional capital to fund operating activities.
Previous report
The fair value of our investment in Freedom VCM Holdings, LLC held as of September 30, 2024 and December 31, 2023 was zero and $287.0 million, respectively. During the nine months ended September 30, 2024, we recorded fair value adjustments of $(221.0) million primarily due to increases in net debt, declines in Freedom VCM Holdings, LLC’s investment in Conn’s, Inc. common stock and impact of Conn's bankruptcy filing on July 23, 2024, and a decrease in the operational performance of Freedom VCM Holdings, LLC’s various business segments. Subsequent to September 30, 2024, the investment in Freedom VCM Holdings, LLC was also impacted due to the filing of Freedom VCM’s voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on November 3, 2024.
Previous report
During the three and nine months ended September 30, 2024, realized and unrealized losses of $(22.2) million and $(212.4) million were recorded to other income as realized and unrealized losses on investments. These realized and unrealized losses are made up of realized and unrealized gains (losses) recorded to public equity securities, private equity securities, corporate bonds, and partnership interest and other investments. The majority of realized and unrealized (losses) gains on investments during the three and nine months ended September 30, 2024 are related to public equity securities (equity securities that trade on major exchanges), and private equity securities.
Previous report
During the three and nine months ended September 30, 2024, $29.3 million and $47.3 million of realized and unrealized gains were recorded for public equity securities to other income as realized and unrealized gains on investments. Of these amounts, Double Down Interactive Co., Ltd common stock made up the majority of the balances. During the three and nine months ended September 30, 2024, we recorded $13.1 million and $35.0 million, respectively, to realized and unrealized gains related to Double Down Interactive Co., Ltd. primarily related to public share price movements during these periods.
Previous report
During the three and nine months ended September 30, 2024, $(50.8) million and $(262.0) million of realized and unrealized losses were recorded for private equity securities to other income as realized and unrealized losses on investments. Of these amounts, our investment in Freedom VCM Holdings, LLC made up the majority of the balances. During the three and nine months ended September 30, 2024, we recorded $(49.0) million and $(221.0) million to realized and unrealized losses related to our investment in Freedom VCM Holdings, LLC. The entirety of the balances were made related to fair value adjustments due primarily to increases in net debt as well as significant declines in Freedom VCM Holdings, LLC’s investment in Conn’s, Inc., market-related inputs, and overall operational performance.
Previous report
We report our activities in five reportable business segments: Capital Markets, Wealth Management, Financial Consulting, Communications, 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, we reassessed our previously reported Consumer segment due to organizational changes and financial information provided to the Chief
Previous report
Operating Decision Maker (“CODM”). These changes resulted in Targus’ operations being reported on a stand-alone basis in the Consumer Products segment.
Previous report
Great American Group Transaction
Previous report
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. The Investors are affiliates of Oaktree Capital Management, L.P.
Previous report
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 $203.0 million (which have an initial liquidation preference of approximately $203.0 million). 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 $183.0 million) (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).
Previous report
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 $25.0 million for general corporate purposes, subject to the terms and conditions set forth therein., which had an outstanding balance of $1.8 million at closing, and (iv) entered into promissory notes which totaled $15.3 million related to capital requirements for certain retail liquidation engagements that were ongoing as of closing.
Previous report
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. Upon closing the Equity Purchase Agreement on November 15, 2024, B. Riley will record a gain of approximately $235.0 million and the operations of Great American NewCo will be deconsolidated since B. Riley will no longer have control and will own a non-controlling equity investment ownership interest of 44.2% of the common units along with the Preferred B units described above. After the closing of the Equity Purchase Agreement, the Company will account for this equity method investment under the equity method of accounting.
Previous report
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”).
Previous report
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 $189.3 million.
Previous report
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 $46.6 million in net proceeds (such sale, the “Sale”), with certain of such proceeds applied towards indebtedness related to the bebe holdings. Upon closing of the Sale proceeds of $22.2 million was used to pay off the then outstanding balance of the bebe Credit Agreement in full (see note 11 to the accompanying condensed consolidated financial statements) and $0.2 million of loan related pay off expenses.
Previous report
The Sale by bebe resulted in a subsequent fair value adjustment at September 30, 2024 in the amount of approximately $(20.0) million that was recorded during the quarter ended 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 $(133.0) million was recorded in the quarter ending September 30, 2024.
Previous report
Take-Private Proposal
Previous report
On August 16, 2024, the Company’s Board of Directors received an unsolicited preliminary, non-binding letter of proposal from the Company’s Chairman and Co-CEO, Bryant Riley, to acquire the outstanding shares of the Company not currently owned by Mr. Riley, in a transaction to take the Company private, at a proposed purchase price of $7.00 per share. Following receipt of the proposal, the Company’s Board of Directors established a special committee consisting of independent directors, which has engaged its own advisors to evaluate the proposal and determine the appropriate course of action and process. There can be no assurance that any definitive offer will be received, that any definitive agreement will be executed relating to the proposal or that this or any other transaction will be approved or consummated.
Previous report
SEC Subpoena
Previous report
On July 3, 2024, each of the Company and Bryant Riley, Chairman and Co-Chief Executive Officer, received a subpoena from the U.S. Securities and Exchange Commission (the “SEC”) requesting the production of certain documents and other information primarily related to (i) the Company’s business dealings with Brian Kahn, (ii) certain transactions in an unrelated public company’s securities, and (iii) the communications and related compliance and other policies and procedures of certain of its regulated subsidiaries. On November 22, 2024, each of the Company and Mr. Riley received an additional SEC subpoena requesting the production of certain additional documents and information relating to Franchise Group, Inc. (including its holding company, Freedom VCM Holdings, LLC) as well as Mr. Riley’s personal loan and his pledge of shares of the Company’s common stock as collateral for such loan. As previously disclosed on April 23, 2024, the Audit Committee of the Company’s Board of Directors, with the assistance of Sullivan & Cromwell LLP, the Company’s legal counsel, conducted an internal review, and separately the Audit Committee retained Winston & Strawn LLP, independent legal counsel, to conduct an independent investigation, to review transactions among Mr. Kahn (and his affiliates) and the Company (and its affiliates). The review and the investigation both confirmed that the Company and its executives, including Mr. Riley, had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates. The receipt of subpoenas is not an indication that the SEC or its staff has determined that any violations of law have occurred. Both the Company and Mr. Riley are responding to the subpoenas and are fully cooperating with the SEC.
Previous report
Conn’s and FRG
Previous report
The Company’s results during the three and nine months ended September 30, 2024 were negatively impacted by a significant non-cash markdown of $(54.3) million and $(222.7) million related to its investment in Freedom VCM Holdings, LLC (“Freedom VCM”), the indirect parent entity for Franchise Group (“FRG”). Freedom VCM’s strategy, which included the potential divestiture or monetization of certain assets, was materially negatively impacted by the unexpected announcement in November 2023 concerning FRG’s former CEO and his alleged involvement in fraudulent schemes despite the fact that these allegations are unrelated to FRG and its businesses. In the meantime, the consumer-facing portion of the U.S. economy has deteriorated. On July 23, 2024, Conn’s, Inc. (“Conn’s”) and certain of its subsidiaries filed voluntary petitions 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”). FRG, pursuant to a transaction consummated in January 2024, acquired a substantial equity investment in Conn’s in exchange for the sale of its Badcock Home Furniture & more business to Conn’s. The commencement of the Chapter 11 Cases constitute an event of default that accelerated the obligations under the Term Loan and Security Agreement, dated as of December 18, 2023 (the “Conn’s Term Loan”), among Conn’s, W.S. Badcock LLC, as borrowers, and an affiliate of the Company, as administrative agent, collateral agent, and lender. As of the date of the filing of the Chapter 11 Cases, $93.0 million in outstanding borrowings existed under the Conn’s Term Loan. Any efforts to enforce payment obligations under the Conn’s Term Loan are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of the Conn’s Term Loan are subject to the applicable provisions of the Bankruptcy Code. The fair value adjustment on the Conn’s loan receivable was $(18.6) million and $(27.1) million for the three and nine months ended September 30, 2024.
Previous report
On November 3, 2024, FRG, its operating businesses, and certain other affiliates, including Freedom VCM, filed voluntary petitions for relief (the “FRG Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code. As a result, on November 4, 2024, we concluded that we are required to record an additional impairment of with respect to the Freedom VCM Investment and the Vintage Loan Receivable. The additional non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivable are $118.0 million in the aggregate as of November 4, 2024. The fair value adjustment for the Conn’s loan receivable was $(18.6) million for the three months ended September 30, 2024 and $(27.1) million for the nine months ended September 30, 2024. As a result of such additional impairment we have ascribed no value to the Freedom VCM Investment and the Vintage Loan Receivable was valued at $2.3 million at September 30, 2024 which approximates the fair value of the underlying collateral for this loan which is primarily comprised of other securities. Subsequent to September 30, 2024, the fair value of the underlying collateral for this loan, which is comprised of other public securities, decreased to a fair value of $2.2 million at February 7, 2025.
Previous report
Revenues from services and fees in the Wealth Management segment decreased $1.5 million to $49.4 million during the three months ended September 30, 2024 from $50.9 million during the three months ended September 30, 2023. The decrease in revenues was primarily due to decreases in revenue of $1.6 million from wealth and asset management fees and $0.1 million in commission fees, partially offset by an increase of $0.2 million in other income.
Previous report
Revenues from services and fees in the Financial Consulting segment increased $3.7 million to $23.9 million during the three months ended September 30, 2024 from $20.2 million during the three months ended September 30, 2023. The increase in revenues was primarily due to an increase of $7.0 million from the bankruptcy and restructuring, forensic and litigation, C&W, Interface Consulting and Farber divisions offset by a decrease in revenues of $3.3 million from the automotive restructuring division.
Previous report
The decrease in fair value adjustment of $70.6 million on our loans receivable during the three months ended September 30, 2024 was primarily due to $54.3 million related to VCM, and $18.6 million related to Conn’s, partially offset by an increase of $6.0 million related to Badcock Receivables I.
Previous report
Interest income – loans decreased $16.1 million to $11.3 million during the three months ended September 30, 2024 from $27.4 million during the three months ended September 30, 2023 due to a reduction in loan receivable balances from $549.1 million as of September 30, 2023 to $151.7 million as of September 30, 2024.
Previous report
Revenues from the sale of goods decreased $4.8 million to $55.2 million during the three months ended September 30, 2024 from $60.0 million during the three months ended September 30, 2023. The decrease was primarily related to a decrease of $8.6 million from the Consumer Products segment due to a decrease in computer and peripheral sales worldwide and a decrease of $0.3 million from the Communications segment, partially offset by an increase of $4.1 million in All Other consisting of $3.7 million in sales of goods from Nogin which we acquired in the second quarter of 2024 and $0.4 million in sales of goods from bebe in which we acquired a controlling interest and consolidated during the fourth quarter of 2023. Cost of goods sold for the three months ended September 30, 2024 decreased approximately $1.9 million to $40.3 million from $42.2 million during the three months ended September 30, 2023. The decrease in cost of goods sold was primarily attributable to decreases of $4.1 million in the Consumer Products segment and $0.4 million in the Communications segment, partially offset by an increase of $2.6 million from All Other, primarily from Nogin which we acquired in the second quarter of 2024.
Previous report
Selling, general and administrative expenses in the Capital Markets segment decreased by $32.5 million to $31.3 million during the three months ended September 30, 2024 from $63.8 million during the three months ended September 30, 2023. The decrease was primarily due to decreases of $26.8 million in payroll and related expenses, which primarily related to decreases in commissions paid, share based compensation and other payroll expenses, $4.0 million in consulting expenses of which $2.9 million related to an advisory agreement which ended in August of 2023, $0.8 million in clearing and execution costs, $0.7 million in business development activities, $0.7 million in investment banking deal expenses, $0.6 million in foreign currency fluctuation, and $0.2 million in other expenses, partially offset by an increase of $1.3 million in legal expenses. The advisory agreement was terminated in August 2023 in connection with the FRG take private transaction as more fully described in Note 2(h) of the accompanying condensed consolidated financial statements and there was no expense during the three months ended September 30, 2024 as compared to the prior year when the expense totaled $2.9 million. For any given reporting period in 2023, the advisory agreement would result in an expense being reported in selling, general and administrative expenses when realized and unrealized gains on certain invested balances in the Company’s broker-dealer subsidiary exceeded a minimum return on the invested balances during such period; in addition, a decrease in the invested balance in value during such reporting period would result in the reporting of a credit to selling, general and administrative expense. During the three months ended September 30, 2023, the Company recorded an advisory fee of $2.9 million in accordance with the advisory agreement due to the realized and unrealized gains earned.
Previous report
Selling, general and administrative expenses in the Wealth Management segment increased by $0.3 million to $49.3 million during the three months ended September 30, 2024 from $49.0 million during the three months ended September 30, 2023, primarily due to payroll and related expenses.
Previous report
Financial Consulting
Previous report
Selling, general and administrative expenses in the Financial Consulting segment increased by $1.9 million to $19.8 million during the three months ended September 30, 2024 from $17.9 million during the three months ended September 30, 2023. The increase was primarily due to an increase of $1.6 million in payroll and related expenses related to a business acquired in the third quarter of 2023 and an increase in headcount and an increase of $0.3 million in other expenses.
Previous report
Selling, general and administrative expenses in the Communications segment decreased $6.9 million to $21.5 million for the three months ended September 30, 2024 from $28.4 million for the three months ended September 30, 2023. The decrease was primarily due to decreases of $2.7 million in payroll and related expenses, $1.9 million in depreciation and amortization expenses, non-recurring receipt of $1.2 million refund of regulatory taxes that were overpaid in the prior year based on estimated billing, $0.8 million in communications expenses, and $0.3 million in other expenses. The decrease in payroll and related expenses and other expenses was primarily due to cost savings in 2024 resulting from the implementation of cost savings programs in second half of 2023 that included a reduction in headcount and other operating expenses and sale of the Lingo carrier business in the third quarter of 2024.
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Reworded paragraphs (46)
Previous wording
The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption “Risk Factors.”
Current wording
The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption “Risk Factors.”
Previous wording
Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to risks related to: volatility in our revenues and results of operations; changing conditions in the financial markets; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; the accuracy of our estimates and valuations of inventory or assets in “guarantee” based engagements; failure to successfully compete in any of our businesses; potential losses related to our auction or liquidation engagements; our dependence on communications, information and other systems and third parties; potential losses related to purchase transactions in our auction and liquidations business; the potential loss of financial institution clients; potential losses from or illiquidity of our proprietary investments; changing economic and market conditions, including continuing inflation and any further actions by the Federal Reserve to address inflation and the possibility of recession or an economic downturn; the effects of pandemics or severe public health crises, and other related impacts including supply chain disruptions, labor shortages and increased labor costs; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; loss of key personnel; our ability to borrow under our credit facilities or at-the-market offering as necessary; failure to comply with the terms of our credit agreements or senior notes; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on acquisition-related issues; the failure of our brand investment portfolio licensees to pay us royalties; the impact of legal proceedings, including those related to the allegations raised against Brian Kahn; the activities of short sellers and their impact on our business and reputation; and the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine and conflicts in the Middle East. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Current wording
Risk factors that could cause actual results to differ from those contained in the forward-looking statements include, but are not limited to: volatility in our revenues and results of operations; changing conditions in the financial markets; matters related to our investment in Freedom VCM Holdings, LLC (“Freedom VCM”) and developments related to our prior business relationship with Brian Kahn (the former CEO of Freedom VCM); the receipt by the Company and Bryant Riley of subpoenas from the SEC; material weaknesses in internal control over financial reporting; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; failure to successfully compete in any of our businesses; our dependence on communications, information and other systems and third parties; the potential loss of financial institution clients; the illiquidity of, and additional potential losses from, our proprietary investments; changing economic and market conditions, including inflation and any actions by the Federal Reserve to address inflation, and the possibility of recession or an economic downturn; the effects of tariffs and other governmental initiatives, and related impacts including supply chain disruptions, labor shortages and increased labor costs; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; loss of key personnel; our ability to borrow under our credit facilities; failure to comply with the terms of our credit agreements or senior notes; the level of our indebtedness; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on divestiture -related issues; the impact of legal proceedings, including in respect of matters related to Freedom VCM and Brian Kahn; the activities of short sellers and their impact on our business and reputation; and the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine and conflicts in the Middle East. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Previous wording
B. Riley Financial, Inc. (Nasdaq: RILY) (the “Company”) is a diversified financial services “platform” that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. We operate through several consolidated subsidiaries (collectively, “B. Riley”) that provide investment banking, brokerage, wealth management, asset management, direct lending, and business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.
Current wording
B. Riley Financial, Inc. (NASDAQ: RILY) (the “Company”) is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. We operate through several consolidated subsidiaries (collectively, “B. Riley”) that provide investment banking, brokerage, wealth management, asset management, direct lending, business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals.
Previous wording
The Company opportunistically invests in and acquires companies or assets with attractive risk-adjusted return profiles to benefit our shareholders. We own and operate several uncorrelated consumer businesses on a principal basis. Our approach is focused on high quality companies and assets in industries in which we have extensive knowledge and can benefit from our experience to make operational improvements and maximize free cash flow. Our principal investments often leverage the financial, restructuring, and operational expertise of our professionals who work collaboratively across disciplines.
Current wording
The Company also opportunistically invests in and acquires companies or assets with attractive risk-adjusted return, with a focus on making operational improvements within these companies in an effort to maximize free cash flow.
Previous wording
We are headquartered in Los Angeles, California and maintain offices throughout the U.S. including in New York, Chicago, Metro District of Columbia, Atlanta, Boston, Dallas, Metro Detroit, Houston, Memphis, Miami, San Francisco, Boca Raton, and West Palm Beach, as well as additional offices located in Canada, Europe, Asia, and Australia.
Current wording
We are headquartered in Los Angeles, California and maintain offices throughout the U.S. including in New York, Chicago, Metro District of Columbia, Boston, Memphis, Miami, San Francisco, Boca Raton, and Palm Beach, as well as additional offices located in Canada, Europe, Asia, and Australia.
Previous wording
We report our activities in five reportable business segments: Capital Markets, Wealth Management, Financial Consulting, Communications, and Consumer segment. The descriptions below illustrate the businesses that comprise our segments.
Current wording
We report our activities in five reportable business segments: Capital Markets, Wealth Management, Communications, Consumer, and E-Commerce segment. The descriptions below illustrate the businesses that comprise our segments.
Previous wording
We maintain a diverse composition of businesses that operate in five reportable segments. Management evaluates many different financial and non-financial metrics to assess the individual performance of each of these various businesses. However, across most businesses, management primarily assesses each business’s financial performance based upon each of the businesses revenues and operating profits generated excluding non-cash charges and the impact of gains and losses related to securities and other investments held. Management believes that gains and losses on individual investments are generally impacted by individual characteristics specific to each investment and although this has an impact on our overall financial performance the impact of these gains and losses may not be indicative of the overall strength or weakness in each of our business operations. Additionally, in evaluating the financial performance of each of our business, management monitors the increase or decrease in operating results from period to period while factoring in the relative volatility inherent in each industry in which these businesses operate. Management recognizes that some of the Company’s businesses exhibit more volatile results.
Current wording
We maintain a diverse composition of businesses that operate in five reportable segments. Management evaluates many different financial and non-financial metrics to assess the individual performance of each of these various businesses. However, across most businesses, management primarily assesses each business’s financial performance based upon each of the businesses revenues and operating profits generated excluding non-cash charges and the impact of gains and losses related to securities and other investments held. Management believes that gains and losses on individual investments are generally impacted by individual characteristics specific to each investment and although this has an impact on our overall financial performance the impact of these gains and losses may not be indicative of the overall strength or weakness in each of our business operations. Additionally, in evaluating the financial performance of each of our businesses, management monitors the increase or decrease in operating results from period to period while factoring in the relative volatility inherent in each industry in which these businesses operate. Management recognizes that some of the Company’s businesses exhibit more volatile results.
Previous wording
Wealth Management –We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers. Our experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions. Wealth management revenues are comprised of the following:
Current wording
Wealth Management –We provide retail brokerage, investment management, and insurance, and tax preparation services to individuals and families, small businesses, non-profits, trusts, foundations, endowments, and qualified retirement plans through a boutique private wealth and investment management firm to meet the individual financial needs and goals of our customers. Our experienced financial advisors provide investment management, retirement planning, education planning, wealth transfer and trust coordination, and lending and liquidity solutions. Our investment strategists provide strategies and real-time market views and commentary to help our clients make important and informed financial and investment decisions.
Previous wording
Communications Segment –We own a number of businesses that comprises our Communications Segment that we have acquired for attractive risk-adjusted investment return characteristics. We may pursue future acquisitions to expand this portfolio of businesses which currently includes: Lingo Management, LLC (“Lingo Management”), a global cloud/unified communications and managed service provider that includes the operations of BullsEye Telecom that was merged into Lingo Management in July 2023, a single source communications and cloud technology provider (collectively “Lingo”); Marconi Wireless Holdings, LLC, a mobile virtual network operator that provides mobile phone voice, text, and data services and devices; magicJack VoIP Services, LLC, a VoIP cloud-based technology and communications provider that offers related devices and subscription services; and United Online, Inc., an Internet access provider that offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands.
Current wording
Communications Segment –We own a number of businesses that comprises our Communications Segment that we have acquired for attractive risk-adjusted investment return characteristics. We may pursue future acquisitions to expand this portfolio of businesses which currently includes: Lingo Management, LLC ("Lingo"), a global cloud/unified communications and managed service provider that includes the operations of BullsEye Telecom, Inc. ("BullsEye"), a single source communications and cloud technology provider (previously merged into Lingo); Marconi Wireless Holdings, LLC ("Marconi Wireless"), a mobile virtual network operator that provides mobile phone voice, text, and data services and devices; magicJack VoIP Services, LLC ("magicJack"), a VoIP cloud-based technology and communications provider that offers related devices and subscription services; and United Online, Inc. ("UOL"), an Internet access provider that offers dial-up, mobile broadband and digital subscriber line services under the NetZero and Juno brands.
Previous wording
Consumer Products Segment –This segment is comprised of Targus, which is a multinational company that designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries. The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories that we acquired on October 18, 2022.
Current wording
Consumer Products Segment –This segment is comprised of Tiger US Holdings, Inc. ("Targus"), which is a multinational company that, together with its subsidiaries, designs, manufactures, and sells consumer and enterprise productivity products with a large business-to-business (B2B) customer client base and global distribution in over 100 countries. The Targus product line includes laptop and tablet cases, backpacks, universal docking stations, and computer accessories.
Previous wording
Our operating results are primarily comprised of the operations of these businesses within our five reportable operating segments. However, we also generate revenues from other businesses that we may acquire with the goal to expand their operations, drive growth, and create operational efficiencies to improve cash flows to reinvest across other business operations in our platform. These businesses are typically in fragmented markets and include the operations of a regional environmental services business, bebe which operates rent-to-own stores, and a technology company that provides e-commerce platforms, marketing and technology services acting as a merchant for consumer brand companies.
Current wording
Our operating results are primarily comprised of the operations of these businesses within our five reportable operating segments. However, we also generate revenues from other businesses that we may acquire with the goal to expand their operations, drive growth, and create operational efficiencies to improve cash flows to reinvest across other business operations in our platform. These businesses are typically in fragmented markets and include the operations of a regional environmental services business, and bebe which operates rent-to-own stores.
Previous wording
In prior years, we also generated operating revenues from our majority owned subsidiary that licenses the trademarks and intellectual properties from our ownership of six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore and we generated other income from dividends we receive from our equity ownership of investments that range from 10% to 50% in companies that license the trademark and intellectual property of the Hurley, Justice, and Scotch & Soda brands and bebe and Brookstone brands (equity ownership of bebe stores, inc., our majority owned subsidiary). We also reported fair value adjustments from these equity investments since we elected to account for these equity investments using the fair value method of accounting. These operations are included in discontinued operations as discussed in Note 4 to the accompanying condensed consolidated financial statements and are expected to be deconsolidated since B. Riley will no longer have control and will own a non-controlling equity investment ownership interest of 44.2% in the business. These operating results are included in discontinued operations and are expected to be deconsolidated as a result of the Sale by bebe and completion of the Secured Financing of the Brand Interests as discussed in Note 4 to the accompanying condensed consolidated financial statements.
Current wording
In prior years, we also generated operating revenues from our majority owned subsidiary that licenses the trademarks and intellectual properties from our ownership of six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore, and we generated other income from dividends we receive from our equity ownership of investments that range from 10% to 50% in companies that license the trademark and intellectual property of the Hurley, Justice, and Scotch & Soda brands and bebe and Brookstone brands (equity ownership of bebe stores, inc., our majority owned subsidiary). We also reported fair value adjustments from these equity investments since we elected to account for these equity investments using the fair value method of accounting. These operating results are included in discontinued operations and are expected to be deconsolidated as a result of the Sale by bebe and completion of the Secured Financing of the Brand Interests as discussed in Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements.
Previous wording
Securities and Other Investments Owned Portfolio –We have a portfolio of securities and other investments owned that consists of public equity securities, private securities that are primarily comprised of our 31% investment in Freedom VCM Holdings, LLC described above, partnership interests and other investments, corporate bonds and other fixed income securities as follows at September 30, 2024 and December 31, 2023:
Current wording
Securities and Other Investments Owned Portfolio –We have a portfolio of securities and other investments owned that consists of public equity securities, private equity securities, corporate bonds, other fixed income securities, and partnership interests and other investments as follows at March 31, 2025 and December 31, 2024:
Previous wording
Securities and other investments owned was $341.8 million and $809.0 million as of September 30, 2024 and December 31, 2023. Of this amount, the fair value of equity securities totaled $289.3 million and $711.6 million as of September 30, 2024 and December 31, 2023. Of these amounts, public equity securities totaled $161.6 million and $194.5 million as of September 30, 2024 and December 31, 2023, and private equity securities totaled $127.7 million and $517.0 million as of September 30, 2024 and December 31, 2023.
Current wording
Securities and other investments owned was $231.8 million and $282.3 million as of March 31, 2025 and December 31, 2024. Of this amount, the carrying value of equity securities totaled $177.4 million and $232.5 million as of March 31, 2025 and December 31, 2024. Of these amounts, public equity securities totaled $79.7 million and $124.9 million as of March 31, 2025 and December 31, 2024, and private equity securities totaled $97.7 million and $107.6 million as of March 31, 2025 and December 31, 2024.
Previous wording
The fair value of Badcock & Wilcox Enterprises, Inc. - common stock held as of held as of September 30, 2024 and December 31, 2023 was $56.0 million and $40.1 million, respectively. The change in fair value for the nine months ended September 30, 2024 is primarily related to an increase in the public share price during the period.
Current wording
The carrying value of Badcock & Wilcox Enterprises, Inc. - common stock held as of held as of March 31, 2025 and December 31, 2024 was $18.5 million and $45.0 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was due to a decrease in the public share price during the period.
Previous wording
The fair value of our Double Down Interactive Co., Ltd common stock held as of September 30, 2024 and December 31, 2023 was $66.5 million and $30.4 million, respectively. The change in fair value for the nine months ended September 30, 2024 is primarily related to an increase in the public share price during the period.
Current wording
The carrying value of our Double Down Interactive Co., Ltd common stock held as of March 31, 2025 and December 31, 2024 was $41.8 million and $43.7 million, respectively. The change in the carrying value for the three months ended March 31, 2025 was primarily due to a decrease in the public share price during the period.
Previous wording
On October 31, 2024, we 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 $27.0 million to $35.0 million 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 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. It is expected to close early in the second quarter of 2025.
Current wording
On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s (W-2) Wealth Management business to Stifel for estimated net consideration based on the number of advisors that join Stifel at closing, among other things. Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $26.0 million, representing 36 financial advisors whose managed accounts represent approximately $4.0 billion, or 23.6%, of assets under management ("AUM") as of March 31, 2025.
Previous wording
The preparation of our condensed consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities, and reported amounts of revenue and expense during the reporting period. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may differ from those estimates. Critical accounting estimates represent the areas where more significant judgments and estimates are used in the preparation of our condensed consolidated financial statements. A discussion of such critical accounting estimates, which include fair value measurements, goodwill and other intangible assets, and accounting for income tax valuation allowances can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Current wording
The preparation of our unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities, and reported amounts of revenue and expense during the reporting period. The estimates and assumptions are based on historical experience and on other factors that management believes to be reasonable. Actual results may significantly differ from those estimates. Critical accounting estimates represent the areas where more significant judgments and estimates are used in the preparation of our unaudited condensed consolidated financial statements. A discussion of such critical accounting estimates, which include fair value measurements, goodwill and other intangible assets, and accounting for income tax valuation allowances can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Previous wording
Total revenues decreased $164.0 million to $199.3 million during the three months ended September 30, 2024 from $363.3 million during the three months ended September 30, 2023. The decrease in revenues during the three months ended September 30, 2024 was primarily due to decreases in fair value adjustments on loans of $70.6 million, revenues from services and fees of $45.6 million, interest income from securities lending of $35.3 million, interest income from loans of $16.1 million, and sale of goods of $4.8 million, partially offset by increases in fair value of the portfolio of securities and other investments owned of $8.5 million. Of the $70.6 million decrease in fair value adjustments related to loans, $54.3 million related to the loan to Vintage Capital Management, LLC (“VCM”), and $18.6 million related to the loan to Conn’s Inc. (“Conn’s”), partially offset by fair value gains of $6.0 million related to the loan to Badcock Receivables I. The decrease in revenue of $45.6 million from services and fees in the three months ended September 30, 2024 consisted of decreases in revenue of $50.5 million in the Capital Markets segment, $15.9 million in the Communications segment, and $1.5 million in the Wealth Management segment, partially offset by increases in revenues of $18.6 million in All Other, and $3.7 million in the Financial Consulting segment.
Current wording
Total revenues decreased $111.5 million to $186.1 million during the three months ended March 31, 2025 from $297.6 million during the three months ended March 31, 2024. The decrease in revenues during the three months ended March 31, 2025 was primarily due to decreases in revenues from services and fees of $55.2 million, interest income from securities lending of $37.0 million, interest income from loans of $18.9 million, sale of goods of $6.0 million, partially offset by increases in revenue from fair value adjustments on loans of $4.1 million, and in the fair value of the portfolio of securities and other investments owned of $1.5 million. The $4.1 million favorable variance in fair value adjustments related to loans was primarily driven by $17.5 million related to the loan to Vintage Capital Management, LLC ("VCM"), $3.1 million related to the loan to Freedom VCM Receivables, Inc. ("Freedom VCM"), partially offset by unfavorable variances of $8.5 million related to the loan to Core Scientific, Inc. ("Core Scientific"), $2.9 million related to the loan to Exela Technologies, Inc. ("Exela"), $2.8 million related to the loan to Conn’s, Inc. ("Conn's"), and $2.3 million from all other loans receivable. The decrease in revenue from services and fees in the three months ended March 31, 2025 consisted of decreases in revenue of $35.1 million in the Capital Markets segment, and $17.9 million in the Communications segment, $4.5 million in the Wealth Management segment, and $1.2 million in All Other, partially offset by an increase in revenue of $3.5 million in the E-Commerce segment.
Previous wording
Revenues from services and fees in the Capital Markets segment decreased $50.5 million to $30.4 million during the three months ended September 30, 2024 from $80.9 million during the three months ended September 30, 2023 related to a decrease in underwriting engagements. The decrease in revenues was primarily due to decreases of $46.1 million of corporate finance, consulting, and investment banking fees, $1.9 million in commission fees, $1.0 million in dividends, $0.9 million in asset management fees, and $0.8 million of interest income, partially offset by an increase of $0.2 million in other income.
Current wording
Revenues from services and fees in the Capital Markets segment decreased $35.1 million to $25.2 million during the three months ended March 31, 2025 from $60.3 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in revenue of $32.4 million in corporate finance, consulting, and investment banking fees, $2.9 million in commission fees, $1.0 million in dividends, $0.9 million in interest income, $0.3 million in other income and $0.2 million in asset management fees, partially offset by an increase of $2.7 million in contingent accrued management fees. The decrease in investment banking revenues is related to the episodic nature of this business and the decline in business due to the late SEC filings of the parent company. The decreases in investment banking revenues were $11.3 million in mergers and acquisitions advisory fees, $10.6 million in at the market fees, $7.6 million in investment banking underwriting fees, and $3.7 million in private placement fees.
Previous wording
Total assets under management were approximately $25.7 billion, $25.4 billion, and $24.0 billion at September 30, 2024, December 31, 2023, and September 30, 2023, respectively. Of these amounts, advisory assets under management totaled approximately $8.1 billion at September 30, 2024, and $8.0 billion at December 31, 2023, and $7.5 billion at September 30, 2023. Advisory revenues were 0.24% of average advisory assets under management during the three months ended September 30, 2024 and 2023, respectively, and 0.25% and 0.24% of average advisory assets under management during the nine months ended September 30, 2024 and 2023, respectively. The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management. Broker revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets. Other revenues is primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed.
Current wording
Revenues from services and fees in the Wealth Management segment decreased $4.5 million to $46.7 million during the three months ended March 31, 2025 from $51.2 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in revenue of $8.8 million from wealth and asset management fees due to a reduction in AUM in December 2024, driven by a loss of headcount, $0.3 million in other income, and $0.3 million in commission fees, partially offset by an increase of $4.9 million in contingent accrued management fees for companies in the process of going public. Total assets under management were approximately $18.4 billion, $20.7 billion, and $25.8 billion at March 31, 2025, December 31, 2024, and March 31, 2024, respectively. Of these amounts, advisory assets under management totaled approximately $6.5 billion at March 31, 2025, and $6.9 billion at December 31, 2024, and $8.0 billion at March 31, 2024. Advisory revenues were 0.25% and 0.24% of average advisory assets under management during the three months ended March 31, 2025 and 2024, respectively. The average revenues earned on advisory assets under management are not expected to fluctuate significantly from period to period as a percentage of advisory assets under management. Broker revenues are primarily comprised of commissions and fees earned from trading activities from brokerage client assets. Other revenues is primarily comprised of tax service fees and management fees earned from comprehensive client focused services performed.
Previous wording
Revenues from services and fees in the Communications segment decreased $15.9 million to $66.2 million during the three months ended September 30, 2024 from $82.2 million during the three months ended September 30, 2023. The decrease in revenues was primarily due to decreases in subscription revenue of $15.7 million and $0.2 million in advertising and other revenue. We expect UOL, magicJack, and Marconi subscription revenue to continue to decline year-over-year.
Current wording
Revenues from services and fees in the Communications segment decreased $17.9 million to $63.2 million during the three months ended March 31, 2025 from $81.1 million during the three months ended March 31, 2024. The decrease in revenues was primarily due to decreases in subscription revenue of $17.6 million, $12.4 million of which related to divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024. Of the remaining $5.2 million decrease in subscription revenue, $2.9 million was from Lingo, $1.1 million was from magicJack, $1.0 million was from Marconi Wireless, and $0.2 million was from UOL. We expect Lingo, magicJack, Marconi Wireless and UOL subscription revenue to continue to decline year-over-year as landline and VoIP technologies are older and cellular services have a higher customer acquisition cost than profitability.
Previous wording
Revenues from services and fees in All Other increased $18.6 million to $28.5 million during the three months ended September 30, 2024 from $9.9 million during the three months ended September 30, 2023. These revenues include merchandise rental fees and sales from bebe in which we acquired a controlling interest and consolidated during the fourth quarter of 2023, commission fees from Nogin Inc. (“Nogin”) which we acquired in the second quarter of 2024, and the operations of a regional environmental services business and a landscaping business that we acquired in 2022 and sold in the third quarter of 2023. Revenues from services and fees in All Other increased by approximately $12.1 million related to merchandise rental fees from bebe, $5.2 million in commission fees from Nogin, and $4.4 million related to the regional environmental services business, partially offset by a decrease in revenues of $3.1 million due to the sale of the landscaping business in the fourth quarter of 2023.
Current wording
Revenues from services and fees in All Other decreased $1.2 million to $20.3 million during the three months ended March 31, 2025 from $21.5 million during the three months ended March 31, 2024. These revenues include merchandise rental fees and sales from bebe and the operations of a regional environmental services business. Revenues from services and fees in All Other decreased by $1.8 million related to merchandise rental fees from bebe, and $0.5 million due to the operations of a regional environmental services business, partially offset by increases in revenues of $1.1 million in other income.
Previous wording
Trading income (loss) increased approximately $8.5 million to a loss of $1.2 million during the three months ended September 30, 2024 compared to loss of $9.7 million during the three months ended September 30, 2023. The loss of $1.2 million during the three months ended September 30, 2024 was primarily due to realized and unrealized losses on investments made in our proprietary trading accounts.
Current wording
Trading gains (losses), net decreased $1.5 million to a loss of $16.2 million during the three months ended March 31, 2025 compared to loss of $17.7 million during the three months ended March 31, 2024. The loss of $16.2 million during the three months ended March 31, 2025 was primarily due to realized and unrealized losses on investments made in our proprietary trading accounts, primarily $15.1 million on B&W driven by a decrease in share price.
Previous wording
In our Capital Markets segment we have a portfolio of loans receivable that consisted of the following at September 30, 2024 and December 31, 2023:
Current wording
In our Capital Markets segment, we have a portfolio of loans receivable that are measured at fair value with changes in fair value reported in our results of operations. The loan portfolio and fair value adjustments on loans consisted of the following:
Previous wording
The fair value adjustments on loans receivable for the three months ended September 30, 2024 and 2023 were $(71.5) million and $(0.9) million, respectively. The fair value adjustments on loans receivable for the nine months ended September 30, 2024 and 2023 was $(259.3) million and $51.6 million, respectively. During the three and nine months ended September 30, 2024, fair value adjustments for loans receivable from related parties totaled $(68.8) million and $(265.5) million as compared to $(4.7) million and $(6.2) million during the three and nine months ended September 30, 2023. During the three and nine months ended September 30, 2024, fair value adjustments for other loans receivable totaled $(2.7) million and $6.3 million as compared to $3.8 million and $57.8 million during the three and nine months ended September 30, 2023.
Current wording
The fair value adjustments on loans receivable for the three months ended March 31, 2025 and 2024, were $(8.1) million and $(12.2) million, respectively. During the three months ended March 31, 2025 and 2024, fair value adjustments for loans receivable from related parties totaled $(2.1) million and $(19.1) million, respectively. During the three months ended March 31, 2025 and 2024, fair value adjustments for other loans receivable totaled $(6.0) million and $6.9 million, respectively.
Previous wording
Interest income - loans decreased $50.6 million to $51.9 million during the nine months ended September 30, 2024 from $102.5 million during the nine months ended September 30, 2023. The decrease was due to a reduction in loan receivable balances from $549.1 million as of September 30, 2023 to $151.7 million as of September 30, 2024.
Current wording
Interest income from loans decreased $18.9 million to $3.2 million during the three months ended March 31, 2025 from $22.1 million during the three months ended March 31, 2024. The decrease was primarily due to non-accrual of interest on the following adjusted loans: $6.1 million for VCM, $4.1 million for Conn's, $2.2 million for Freedom VCM, which was sold in February 2025, and $1.8 million for Nogin, as well as a reduction in loan receivable balances from $452.5 million as of March 31, 2024 to $98.6 million as of March 31, 2025.
Previous wording
Interest income – securities lending decreased $35.3 million to $7.0 million during the three months ended September 30, 2024 from $42.3 million during the three months ended September 30, 2023. The decrease was due to a reduction in the securities borrowed balance from $2,782.0 million as of September 30, 2023 to $64.0 million as of September 30, 2024.
Current wording
Interest income from securities lending decreased $37.0 million to $0.8 million during the three months ended March 31, 2025 from $37.8 million during the three months ended March 31, 2024. The decrease was due to a decrease in the securities borrowed balance from $2.1 billion as of March 31, 2024 to $40.9 million as of March 31, 2025 and decreases of revenue from business decline due to counterparties constraining their business activity.
Previous wording
Direct cost of services decreased approximately $3.0 million to $49.7 million during the three months ended September 30, 2024 from $52.6 million during the three months ended September 30, 2023. The decrease in direct cost of services was primarily attributable to a decrease of $9.8 million from the Communications segment, partially offset by an increase of $6.8 million from All Other consisting of $3.7 million from bebe in which we acquired a controlling interest and consolidated during the fourth quarter of 2023, $3.0 million from Nogin which we acquired in the second quarter of 2024, and $0.1 million from the regional environmental services business.
Current wording
Direct cost of services decreased $17.0 million to $42.7 million during the three months ended March 31, 2025 from $59.7 million during the three months ended March 31, 2024. The decrease in direct cost of services was primarily attributable to decreases of $16.2 million from the Communications segment, $13.4 million of which was attributable to divestiture of the Lingo wholesale carrier business in the third quarter of fiscal year 2024, and $2.3 million from All Other consisting of $0.7 million from bebe, and $1.6 million from the regional environmental services business, partially offset by an increase of $1.6 million from the E-Commerce segment consisting of Nogin, which we acquired in the second quarter of 2024.
Previous wording
Total selling, general and administrative expenses decreased by $17.7 million to $184.6 million during the three months ended September 30, 2024 from $202.3 million during the three months ended September 30, 2023. The decrease was primarily due to decreases of $32.5 million in the Capital Markets segment, $6.9 million in the Communications segment, and $1.9 million in the Consumer Products segment, partially offset by increases of $21.4 million in Corporate and All Other, $1.9 million in the Financial Consulting segment, and $0.3 million in the Wealth Management segment.
Current wording
Total selling, general and administrative expenses decreased by $11.6 million to $167.4 million during the three months ended March 31, 2025 from $178.9 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $12.2 million in the Capital Markets segment, $4.5 million in the Wealth Management segment, $3.2 million in the Communications segment, and $1.9 million in the Consumer Products segment, partially offset by increases of $8.4 million in the E-Commerce segment and $1.9 million in Corporate and All Other.
Previous wording
Selling, general and administrative expenses in the Consumer Products segment decreased $1.9 million to $16.9 million for the three months ended September 30, 2024 from $18.8 million during the three months ended September 30, 2023. The decrease was primarily due to decreases of $0.7 million in payroll and related expenses due to reduced headcount, $0.7 million in depreciation and amortization expense due to items being fully amortized, $0.7 million in currency fluctuation, and $0.6 million in other expenses due to efforts to reduce costs, partially offset by an increase of $0.8 million in professional fees.
Current wording
Selling, general and administrative expenses in the Consumer Products segment decreased $1.9 million to $15.6 million for the three months ended March 31, 2025 from $17.5 million during the three months ended March 31, 2024. The decrease was primarily due to decreases of $0.6 million in professional fees partially due to nonrecurring legal expenses in the prior year, $0.5 million in employee compensation and benefit related expenses due to reduced headcount, and $0.5 million in marketing costs, and $0.3 million in other expenses due to efforts to reduce costs.
Previous wording
Other Income (Expense). Other income included interest income of $1.4 million and $0.2 million during the three months ended September 30, 2024 and 2023, respectively. Dividend income was $0.7 million during the three months ended September 30, 2024 compared to $3.4 million during the three months ended September 30, 2023. Realized and unrealized (losses) gains on investments was a loss of $22.2 million during the three months ended September 30, 2024 compared to a loss of $77.3 million during the three months ended September 30, 2023. The change was primarily due to increases in the valuation of our investments in Babcock & Wilcox Enterprises, Inc. of $43.2 million, Alta Equipment Group, Inc. of $17.9 million, Double Down Interactive Co., Ltd of $17.3 million, partially offset by a decrease in valuation of Freedom VCM Holdings, LLC of $49.0 million. Change in fair value of financial instruments and other was a gain of $0.5 million during the three months ended September 30, 2024 and a loss of $4.2 million during the three months ended September 30, 2023. Interest expense was $33.0 million during the three months ended September 30, 2024 compared to $37.5 million during the three months ended September 30, 2023. The decrease in interest expense was due to lower debt balances during the three months ended September 30, 2024. The decreases in interest expense primarily consisted of $5.4 million from the Nomura term loan, $2.1 million from the Pathlight term loan, $2.5 million from the issuance of senior notes, $1.5 million from the Nomura revolving credit facility, $0.2 million and $0.6 million from the Targus term loan and revolver, respectively, $0.4 million from the BRPAC term loan, and $0.3 million from the Lingo term loan, partially offset by increases in interest expense of $0.7 million from the bebe term loan, and $0.4 million from the Nogin secured convertible promissory note.
Current wording
Other Income (Expense). Other income included interest income of $1.5 million and $0.7 million during the three months ended March 31, 2025 and 2024, respectively. Dividend income was $0.1 million during the three months ended March 31, 2025 compared to $3.0 million during the three months ended March 31, 2024.
Previous wording
(Loss) Income from Discontinued Operations, Net of Income Taxes. On October 25, 2024, we and our subsidiary bebe stores, inc. (“bebe”) have completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of tax for Brands Transaction was $134.4 million during the three months ended September 30, 2024 compared to income from discontinued operations of $10.3 million during the three months ended September 30, 2023. The loss from discontinued operations is primarily due to realized and unrealized losses incurred on the brand equity investments during the three months ended September 30, 2024 from the planned securitization transaction and Sale of equity investments by the Company’s majority owned subsidiary bebe, as more fully discussed in Note 4 to the accompanying condensed consolidated financial statements.
Current wording
Income from Discontinued Operations, Net of Income Taxes. On October 25, 2024, we and our subsidiary bebe stores, inc. (“bebe”) completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the three months ended March 31, 2024. Income from discontinued operations, net of tax for Brands Transaction was $13.1 million during the three months ended March 31, 2024. The income from discontinued operations is primarily due to realized and unrealized losses incurred on the brand equity investments during the three months ended March 31, 2024 from the planned securitization transaction and Sale of equity investments by the Company’s majority owned subsidiary bebe, as more fully discussed in Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements.
Previous wording
On November 15, 2024, we completed the sale of our Great American Group and its results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of tax for Great American Group was $4.4 million for the three months ended September 30, 2024, compared to income from discontinued operations of $13.4 million during the three months ended September 30, 2023. Refer to Note 4 to the accompanying condensed consolidated financial statements for additional information.
Current wording
On November 15, 2024, we completed the sale of our Great American Group and its results have been presented as discontinued operations for the three months ended March 31, 2024. Loss from discontinued operations, net of tax for Great American Group was $3.2 million during the three months ended March 31, 2024. Refer to Note 3 - Discontinued Operations and Assets Held for Sale to the accompanying unaudited condensed consolidated financial statements for additional information.
Previous wording
Preferred Stock Dividends. Preferred stock dividends were $2.0 million for the three months ended September 30, 2024 and 2023. Dividends on the Series A preferred paid during the three months ended September 30, 2024 and 2023 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the three months ended September 30, 2024 and 2023 were $0.4609375 per depository share.
Current wording
Preferred Stock Dividends. Preferred stock dividends were $2.0 million for the three months ended March 31, 2025 and 2024. Dividends on the Series A preferred paid during the three months ended March 31, 2024 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the three months ended March 31, 2024 were $0.4609375 per depository share. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A and B Preferred Stock. Unpaid dividends will accrue until paid in full.
Previous wording
Our operations are funded through a combination of existing cash on hand, cash generated from operations, borrowings under our senior notes payable, term loans and credit facilities, and special purposes financing arrangements. During the nine months ended September 30, 2024 and 2023, we generated net losses of $645.5 million and $48.5 million, respectively. The Company operates a number of businesses in its segments that provide steady cash flows and operating income throughout the year, however, our cash flows and profitability are impacted by capital market engagements.
Current wording
Our operations are funded through a combination of existing cash on hand, cash generated from operations, investment portfolio liquidity, borrowings under our senior notes payable, term loans and credit facilities, other financing arrangements, and obligations under operating leases. During the three months ended March 31, 2025 and 2024, we generated a net loss attributable to the Company of $10.0 million and $49.2 million, respectively. The Company operates several businesses in its segments that provide cash flows and operating income throughout the year.
Previous wording
We believe that our current cash and cash equivalents, securities and other investments owned, funds available under our asset based credit facility and funds available under the Targus revolving credit facility 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.
Current wording
We believe that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, cash expected to be generated from operating activities and proceeds received from the Wealth Management Transaction and the sale of the Company’s GlassRatner and Farber financial consulting business will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements. We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan.
Previous wording
From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. During the nine months ended September 30, 2024, we paid cash dividends on our common stock of $33.6 million. During the year ended December 31, 2023, we paid cash dividends on our common stock of $141.1 million. In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors.
Current wording
From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. During the three months ended March 31, 2025, we did not pay any cash dividends on our common stock. During the year ended December 31, 2024, we paid cash dividends on our common stock of $33.7 million. In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors.
Previous wording
A summary of common stock dividend activity for the nine months ended September 30, 2024 and the year ended December 31, 2023 was as follows:
Current wording
A summary of common stock dividend activity for the three months ended March 31, 2025 and the year ended December 31, 2024 was as follows:
Previous wording
Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of September 30, 2024, dividends in arrears in respect of the Depositary Shares were $0.8 million. On October 16, 2024, the Company declared a cash dividend of $0.4296875 per Depositary Share, which was paid on October 31, 2024 to holders of record as of the close of business on October 28, 2024. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full.
Current wording
Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $0.03 million liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears, on or about the last day of January, April, July, and October. As of March 31, 2025, dividends in arrears in respect of the Depositary Shares were $2.0 million. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
$1.4 million from the Lingo term loan, $0.5 million from the Nomura revolving credit facility, and $0.5 million and $0.4 million from the Targus term loan and revolver, respectively, partially offset by increases in interest expense of $3.2 million from the Oaktree term loan, $0.5 million from the BRPAC term loan, and $0.4 million from the Nogin secured convertible promissory note.
Current report — wording carried from elsewhere
$0.6 million and dividends from equity investments of $0.1 million. Cash provided by operating activities for the three months ended March 31, 2024 consisted of the impact of net loss of $48.0 million, noncash items of $19.8 million, and changes in operating assets and liabilities of $163.5 million. The positive cash flow impact from noncash items of $19.8 million included fair value and remeasurement adjustments of $13.7 million, depreciation and amortization of $11.1 million, share-based compensation of $8.7 million, depreciation of rental merchandise of $4.2 million, provision for losses on accounts receivable of $0.4 million, income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests of $0.3 million, net foreign currency losses of $0.3 million, partially offset by deferred income taxes of $16.0 million, non-cash interest and other of $2.7 million, and gain on sale of business and other of $0.3 million.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
The following period to period comparisons of our financial results and our interim results are not necessarily indicative of future results.
Previous report — wording carried elsewhere
The table below and the discussion that follows are based on how we analyze our business.
Previous report — wording carried elsewhere
n/m - Not applicable or not meaningful.
Previous report — wording carried elsewhere
Selling, general and administrative expenses during the nine months ended September 30, 2024 and 2023 were comprised of the following:
Previous report — wording carried elsewhere
(Loss) Income from Discontinued Operations, Net of Income Taxes. On October 25, 2024, we and our subsidiary bebe stores, inc. (“bebe”) have completed a transaction for our brand assets yielding approximately $236.0 million in cash proceeds. The results have been presented as discontinued operations for the nine months ended September 30, 2024. Loss from discontinued operations, net of tax for Brands Transaction was $112.6 million during the nine months ended September 30, 2024 compared to income from discontinued operations of $21.7 million during the nine months ended September 30, 2023. The loss from discontinued operations is primarily due to realized and unrealized losses incurred on the brand equity investments during the three months ended September 30, 2024 from the planned securitization transaction and Sale of equity investments by the Company’s majority owned subsidiary bebe, as more fully discussed in Note 4 to the accompanying condensed consolidated financial statements.
Previous report — wording carried elsewhere
On November 15, 2024, we completed the sale of our Great American Group and its results have been presented as discontinued operations for the three months ended September 30, 2024. Loss from discontinued operations, net of tax for Great American Group was $11.2 million for the nine months ended September 30, 2023, compared to income from discontinued operations of $10.8 million during the nine months ended September 30, 2023. Refer to Note 4 to the accompanying condensed consolidated financial statements for additional information.
Previous report — wording carried elsewhere
Preferred Stock Dividends. Preferred stock dividends were $6.0 million for the nine months ended September 30, 2024 and 2023. Dividends on the Series A preferred paid during the nine months ended September 30, 2024 and 2023 were $0.4296875 per depository share. Dividends on the Series B preferred paid during the nine months ended September 30, 2024 and 2023 were $0.4609375 per depository share.