BRC Group Holdings, Inc.

Current report

Risks Related to Pending Acquisition of Sangoma.

Current report

On September 28, 2026 we entered into a definitive agreement to acquire all issued and outstanding common shares of Sangoma Technologies Corporation (“Sangoma”). The success of the acquisition of Sangoma will depend, in part, on the Company’s ability to realize the anticipated benefits and cost savings from successfully combining the businesses of the Company and Sangoma within the Company’s projected timeframe. If the Company is not able to achieve these objectives, the anticipated benefits and cost savings of the acquisition may not be realized fully or at all, or may take longer to realize than expected. The Company and Sangoma have operated and, until the completion of the acquisition, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect the Company’s ability to maintain relationships with clients, customers, and employees or to achieve the anticipated benefits of the acquisition. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on the Company during the transition period.

Current report

The Company expects to incur substantial expenses in connection with the acquisition, including conversion costs, severance, professional fees and other expenses. The Company cannot identify the timing, nature and amount of all such charges as of the date of this filing. The completion of the acquisition depends on the satisfaction of specified conditions, many of which are outside of the Company’s control, including the receipt of regulatory approvals and approval of the transaction by Sangoma shareholders. If the acquisition is not completed, these expenses would have been expended or would be recognized currently and not capitalized, and the Company would not have realized the expected benefits of the acquisition. Additionally, the Company’s business may be adversely impacted by the failure to pursue other beneficial opportunities due to the focus of management on the acquisition, without realizing any of the anticipated benefits of completing the acquisition.

Current report

Sangoma may have liabilities that are not known to us.

Current report

The acquisition of Sangoma may have liabilities that we failed, or were unable, to discover in the course of performing our due diligence investigations of Sangoma. We cannot assure you that the indemnification available to us under the Plan of Arrangement in respect of the Sangoma acquisition in connection with such agreement will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business of Sangoma. We may learn additional information about Sangoma that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.

Previous report

There has been recent dilution and there may continue to be additional future dilution of our Common Stock, including as a result of the Company’s recent Section 3(a)(9) exchanges and potential future exchanges, which could adversely affect the market price of shares of our Common Stock.

Previous report

As of June 30, 2026, the Company executed nine Section 3(a)(9) exchanges whereby they exchanged outstanding units of various series of senior notes for shares of the Company’s Common Stock in an effort to decrease the Company’s outstanding indebtedness. As a result of these Section 3(a)(9) exchanges, the outstanding shares of our Common Stock increased by 8,358,495 shares. We may issue additional shares of Common Stock in similar Section 3(a)(9) exchanges or other capital raising transactions to further pay down the Company’s outstanding indebtedness. Additional issuances will dilute the ownership interest of our common stockholders. Investors who purchase our shares will likely pay different prices, and so may experience different outcomes in their investment results. Investors may experience declines in the value of their shares as a result of share sales made at prices lower than the prices they paid. In addition, future issuances of Common Stock could depress the market price of our common stock and impair our ability to raise capital. We cannot predict the effect that future issuances of our common stock would have on the market price of our common stock.

Previous report

As a result of the Section 3(a)(9) exchanges and other issuances of Common Stock during the quarter, the aggregate beneficial ownership of our executive officers, directors and their affiliates declined from approximately 25.4% as reported in our Annual Report on Form 10-K/A to approximately 21.4% of our outstanding Common Stock as of August 3, 2026.

Previous report

We may not pay dividends regularly or at all in the future.

Previous report

During 2024 we suspended paying dividends on our common stock, and in early 2025, we also suspended paying dividends on our Existing Preferred Stock. We may not pay dividends in the near future on our common or preferred stock. Even if we were to reinitiate dividends, our Board of Directors may reduce or discontinue dividends at any time for any reason it deems relevant and there can be no assurances that we will continue to generate sufficient cash to pay dividends, or that we will continue to pay dividends with the cash that we do generate. The determination regarding the payment of dividends is subject to the discretion of our Board of Directors and compliance with applicable laws, and there can be no assurances that we will generate sufficient cash to pay dividends, or that we will pay dividends in future periods. Voting rights for holders of Depositary Shares exist primarily with respect to the ability to elect (together with the holders of other outstanding series of the Company’s preferred stock, or Depositary Shares representing interests in the Company’s preferred stock, or additional series of preferred stock the Company may issue in the future and upon which similar voting rights have been or are in the future conferred and are exercisable) two additional directors to the Company’s Board of Directors in the event that six quarterly dividends (whether or not declared or consecutive) payable on the Existing Preferred Stock are in arrears. On April 30, 2026, the Company did not pay the quarterly dividend that would otherwise have been payable on its Series A Preferred Stock and Series B Preferred Stock for the Dividend Period (as defined in the applicable Certificate of Designation) ended April 30, 2026. This was the sixth quarterly Dividend Period for which dividends on the Series A Preferred Stock and Series B Preferred Stock have not been paid since the Company’s temporary suspension of preferred dividends. As a result, a “Preferred Dividend Default” has occurred under each Certificate of Designation. See “Risk Factors - Holders of Depositary Shares have extremely limited voting rights.”

Previous report

Holders of Depositary Shares have extremely limited voting rights.

Previous report

The voting rights of holders of Depositary Shares are limited. The Company’s common stock is the only class of the Company’s securities that carries full voting rights. Voting rights for holders of Depositary Shares exist primarily with respect to the ability to elect (together with the holders of other outstanding series of the Company’s preferred stock, or Depositary Shares representing interests in the Company’s preferred stock, or additional series of preferred stock the Company may issue in the future and upon which similar voting rights have been or are in the future conferred and are exercisable) two additional directors to the Company’s Board of Directors in the event that six quarterly dividends (whether or not declared or consecutive) payable on the Existing Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s certificate of incorporation or certificate of designation (in some cases voting together with the holders of other outstanding series of the Company’s preferred stock as a single class) that materially and adversely affect the rights of the holders of Depositary Shares (and other series of preferred stock, as applicable) or create additional classes or series of the Company’s stock that are senior to the Existing Preferred Stock, provided that in any event adequate provision for redemption has not been made. Other than the limited circumstances described herein, holders of Depositary Shares will not have any voting rights. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Existing Preferred Stock. On April 30, 2026, the Company did not pay the quarterly dividend that would otherwise have been payable on its Series A Preferred Stock and Series B Preferred Stock for the Dividend Period (as defined in the applicable Certificate of Designation) ended April 30, 2026. This was the sixth quarterly Dividend Period for which dividends on the Series A Preferred Stock and Series B Preferred Stock have not been paid since the Company’s announcement on January 21, 2025 of the temporary suspension of preferred dividends. As a result, a “Preferred Dividend Default” has occurred under each Certificate of Designation and the voting rights to elect two directors to the Company’s Board of Directors subject to compliance with the procedures and process outlined in the each Certificate of Designation and the Company’s by-laws will continue until all dividends accumulated and unpaid on the Series A Preferred Stock and Series B Preferred Stock for all past Dividend Periods shall have been fully paid.

Previous report

Our use of artificial intelligence (“AI”) technology and the incorporation of AI technology carry risks and challenges that could adversely affect our business, financial condition, results of operations, and prospects.

Previous report

We have and are increasingly incorporating AI capabilities into our business operations and internal processes to enable our employees to improve efficiency, scalability, and productivity. The integration of AI presents risks and challenges, including that we may be unable to integrate AI technologies when or as we expect, that our clients do not welcome or realize the anticipated benefits of such technologies, that new AI technologies may disrupt our industry adding market pressure, that our AI-based solutions or output could produce inaccurate results or have other unintended consequences. Additionally, artificial intelligence algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, damage our reputation, and materially harm our business.

Previous report

While AI technologies may offer significant benefits, they also create risks and challenges. Use of AI tools that introduce bias, errors, hallucinations (false, misleading, or fabricated text purporting to be factual), as well as any failure by our employees, contractors, or partners to adhere to AI policies we develop, or inappropriate use of AI, could result in violations of confidentiality obligations, ethical considerations, laws, or regulations, jeopardize our intellectual property rights, or expose our solutions or business systems to defects and malware, any of which could adversely affect our business, financial condition, results of operations, and prospects.