BRC Group Holdings, Inc.

NOTE 1 —ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

BRC Group Holdings, Inc. and its subsidiaries (collectively, the “Company”) provide investment banking, brokerage, wealth management, asset management, direct lending, and business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals. The Company’s telecom businesses provide consumer and business services including traditional, mobile and cloud phone, internet and data, security, and email, and its retail companies provide mobile computing accessories and home furnishings.

The Company operates inseven reportable operating segments: (i) Capital Markets, through which the Company provides an array of investment banking, equity research, institutional sales and trading, securities lending, proprietary trading, and investing services to publicly traded and privately held companies, institutional investors, and financial sponsors, and direct lending services to middle market companies; (ii) Wealth Management, through which the Company provides wealth management and tax services to corporate and high-net-worth clients; (iii) Lingo Management, LLC and its carrier subsidiaries operating under the Lingo and Bullseye brands (together, “Lingo”), a global cloud/unified communications (“UC”) and managed service provider to Enterprise and Small to Medium Businesses in the United States; (iv) magicJack VoIP Services, LLC and related subsidiaries (together, “magicJack”), a non-interconnected Voice-over-IP (“VoIP”) cloud-based communications service provider that offers related devices and subscription services within the United States and Canada; (v) Marconi Wireless Holdings, LLC (“Marconi Wireless”), a mobile virtual network operator that provides mobile phone voice, text, and data services and devices using the Credo Mobile brand; (vi) United Online, Inc. (“UOL”), an Internet access provider that offers dial-up and digital subscriber line (“DSL”) services under the NetZero and Juno brands across the United States; and (vii) Consumer Products, which generates revenue through sales of laptop and computer accessories.

Liquidity and Capital Resources

For the nine months ended September 30, 2026, the Company incurred a net loss of $3,936, which includes net income of $3,245 attributable to noncontrolling interests, resulting in a net loss attributable to BRC Group Holdings, Inc. of $7,181. The Company generated cash flows from operations during the nine months ended September 30, 2026 of $123,888. During the nine months ended September 30, 2026, the Company fully redeemed the $95,991 of outstanding 5.50% Senior Notes due 2026 on March 30, 2026 and the $142,137 of 6.50% Senior Notes due 2026 on September 30, 2026, respectively.

As discussed in more detail in Note 16 - Senior Notes Payable, during the nine months ended September 30, 2026, the Company completed a series of exchanges in accordance with Section 3(a)(9) of the Securities Act of 1933 (“Section 3(a)(9) Exchanges”) with DBA Trading, LLC (the “Investor”) whereby the Company exchanged an aggregate principal amount of $69,054 of senior notes which included (i) $11,002 of the 5.50% Senior Notes which were due March 31, 2026, (ii) $36,133 of the 6.50% Senior Notes which were due September 30, 2026, (iii) $8,945 of the 5.00% Senior Notes due December 31, 2026, (iv) $6,383 of the 6.00% Senior Notes due January 31, 2028, and (v) $6,591 of the 5.25% Senior Notes due August 31, 2028 for an aggregate of 8,358,495 shares of the Company’s common stock. The Investor owns more than five percent of the Company’s common stock. Such senior notes were then cancelled or redeemed following each such Section 3(a)(9) Exchange.

During the next 12 months, the Company has approximately $163,966 of senior note maturities, $9,000 of term loan principal payments, and approximately $11,626 of operating lease obligations that is expected to be funded from operating cash flows and cash on hand. For additional information, see Note 15 - Term Loans and Revolving Credit Facilities and Note 16 - Senior Notes Payable.

On September 28, 2026, the Company entered into a definitive agreement to acquire Sangoma Technologies Corporation (see Note 4 - Pending Acquisition of Sangoma Technologies Corporation). The cash consideration for the acquisition of approximately $169,602 is expected to be primarily funded through an amended and restated $212,255 senior secured term loan facility that will be collateralized by the Company’s various communications businesses and partially funded with cash on hand. The acquisition is expected to close no later than early 2027.

On November 3, 2026, the Company sold its interest in Great American Holdings, LLC (“GA Holdings”) for $62,250, including $10,570 in cash, and entered into Amendment No. 7 to the Oaktree Credit Facility (as defined below) (“Amendment No. 7”), which provided for the prepayment of $51,680 of the Oaktree Term Loan (as defined below), provided additional term loans of $26,500, and eliminated the prepayment premium on the remaining balance. See Note 11 - Equity Method Investments and Note 15 - Term Loans and Revolving Credit Facilities.

The Company believes that its current cash and cash equivalents of $144,072 as of September 30, 2026, securities and other investments owned of $369,818, cash generated from operations and funds available under our credit facilities will be sufficient to meet our expected working capital, capital expenditure requirements, debt service obligations due during the next 12 months following the issuance date of the accompanying unaudited condensed consolidated financial statements.

NOTE 2 —SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Principles of Consolidation and Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of BRC Group Holdings, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation.

The Company consolidates all entities that it controls through a majority voting interest. In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE. See Note 2(e) - Variable Interest Entities.

The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to interim financial reporting guidelines and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet at December 31, 2025 was derived from our audited annual consolidated financial statements. Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the financial position and the results of operations for the periods presented have been included. The disclosures presented in our notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis. These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2025. The unaudited results of operations for the interim periods presented are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

The Company has provided a discussion of significant accounting policies, estimates, and judgments in the Company’s audited annual consolidated financial statements. There have been no changes to the Company’s significant accounting policies since December 31, 2025 which are expected to have a material impact on the Company’s financial position, results of operations, or cash flows.

(b)Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for credit losses, the fair value of loans receivables, intangible assets and goodwill, share-based arrangements, embedded derivatives, warrant and warrant liabilities, accounting for income tax valuation allowances, and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may significantly differ.

(c)Concentration of Risk

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

A significant portion of Lingo’s revenues consists of reselling legacy Plain Old Telephone Services (“POTS”) copper lines from four major nationwide Incumbent Local Exchange Carriers (“ILECs”) to its customers. As ILECs have been decommissioning POTS lines and halting new POTS, there is a concentration of risk related to Lingo’s ability to retain existing POTS customers which adversely affects Lingo’s financial condition, results of operations, and cash flows. To mitigate this, Lingo has made concerted efforts to transition POTS customers to alternative solutions offered by Lingo.

The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts and mitigates this risk by utilizing financial institutions of high credit quality.

At September 30, 2026, the Company had concentrations in loans receivable at fair value that includestwo loans to XBP Americas, LLC totaling $7,021, or 65.0% of total loans receivable. Additionally, the Company had a concentration in securities and other investments owned at September 30, 2026 that includes an investment inone publicly traded company in the amount of $160,288 or 43.3% of total securities and other investments owned (see Note 7 - Securities And Other Investments Owned And Securities Sold Not Yet Purchased).

(d)Cash and Cash Equivalents and Restricted Cash

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

As of September 30, 2026 and December 31, 2025, restricted cash primarily consisted of cash held in escrow and cash collateral for leases and loans, which included amounts subject to Deposit Account Control Agreements with lenders in which the Company assigned the rights to the collateral accounts to the lenders.

(e)Variable Interest Entities

The Company holds interests in various entities that meet the characteristics of a VIE. Interests in these entities are generally in the form of equity interests, loans receivable, or fee arrangements.

The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties.

The party with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE. The Company determines whether it is the primary beneficiary of a VIE by performing an analysis that principally considers: (a) which variable interest holder has the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; (b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE; (c) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (d) the terms between the VIE and its variable interest holders and other parties involved with the VIE; and (e) related-party relationships with other parties that may also have a variable interest in the VIE. See Note 3 - Variable Interest Entities and 17 - Noncontrolling Interests for a variable interest entity consolidated during the period.

(f)Fair Value Measurements

The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable, and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds, and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments is derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) and are excluded from the fair value hierarchy in the table in Note 6 - Fair Value Measurements.

The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in “Realized and unrealized (losses) gains on investments” in the accompanying unaudited condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

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

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

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

Securities and other investments owned consist of equity securities including common and preferred stocks, warrants, and options, corporate bonds, and other fixed income securities including government and agency bonds, loans receivable valued at fair value, and investments in partnerships that are accounted for at fair value (see Note 2(f) - Fair Value Measurements). Equity securities also include investments in public and private companies that are accounted for under the fair value option where the Company would otherwise use the equity method of accounting. Investments become subject to the equity method of accounting when the Company possesses the ability to exercise significant influence, but not control, over the operating and financial policies of the investee. Refer to Note 2(k) - Equity Method Investments for more information regarding equity method investments. Dividend income received from equity investments accounted for under the fair value option are recorded to other income in the accompanying unaudited condensed consolidated statements of operations.

Securities sold, but not yet purchased are securities the Company has sold that it does not own (i.e., securities sold short) and, therefore, the Company is obligated to purchase such securities at a future date. The Company has recorded this obligation on its unaudited condensed consolidated balance sheets at the fair value of the securities borrowed. There is an element of off-balance sheet risk in that, if the securities sold short increase in value, it will be necessary to purchase the securities sold short at a cost in excess of the obligation reflected on the accompanying unaudited condensed consolidated balance sheets. Changes in the fair value of securities sold short are recognized in the results of operations in the period in which they occur.

Securities and other investments owned also includes equity investments in nonpublic entities that do not have a readily determinable fair value. For these investments the Company has elected to apply the measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, the Company evaluates whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments the Company holds. Refer to Note 7 - Securities And Other Investments Owned And Securities Sold Not Yet Purchased.

(h)Accounts Receivable

Accounts receivable represents amounts due from the Company’s Capital Markets, Wealth Management, Lingo, magicJack, Marconi Wireless, UOL and Consumer Products customers. The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes the expected loss model, which includes the pooling of receivables using the aging method, historical losses, current market conditions, and reasonable supportable forecasts of expected losses. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The Company’s bad debt expense and changes in the allowance for credit losses are included in Note 9 - Accounts Receivable.

(i)Securities Borrowed and Securities Loaned

Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.

The Company accounts for securities lending transactions as secured borrowings. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the accompanying unaudited condensed consolidated balance sheets. Refer to Note 8 - Securities Lending.

(j)Loans Receivable

The Company elected the fair value option for all outstanding loans receivable. Management evaluates the performance of the loan portfolio on a fair value basis. Under the fair value option, loans receivable are measured at each reporting period based upon their exit value in an orderly transaction, and unrealized gains or losses are included in the “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations. At the time of origination, the Company’s loans receivable are collateralized by the assets of borrowers and other pledged collateral and may have guarantees to provide for protection of the payments due on loans receivable.

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

(k)Equity Method Investments

Equity investments are accounted for under the equity method if the Company is able to exercise significant influence, but not control, over an investee. The ability to exercise significant influence is presumed when the Company possesses more than 20% of the voting interests of the investee. However, the Company may have the ability to exercise significant influence over the investee when the Company owns less than 20% of the voting interests of the investee depending on the facts and circumstances that demonstrate that the ability to exercise influence is present, such as when the Company has representation on the board of directors of such investee. Equity investments that are accounted for under the equity method of accounting are included in the “Equity investments” line item in the accompanying unaudited condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees are included in the “(Loss) income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations. The investments are evaluated for impairment when events or changes in circumstances indicate that a decline in fair value below carrying value may be other than temporary. If a decline in fair value below the carrying value is determined to be other than temporary, an impairment charge is recorded in “(Loss) income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

(l)Inventories

Inventories are substantially all finished goods from the Consumer Products, magicJack, Marconi Wireless and UOL segments and are stated at the lower of cost, determined on the first-in, first-out basis, or net realizable value. The Company maintains an allowance for excess and obsolete inventories to reflect its estimate of realizable value of the inventory based on historical sales and recoveries. Inventories are included in prepaid and other assets in the accompanying unaudited condensed consolidated balance sheets. Refer to Note 12 - Prepaid Expenses and Other Assets.

(m)Rental Merchandise

Rental merchandise is related to bebe’s operations which is included in the Corporate and All Other category and is carried at cost, net of accumulated depreciation. When initially purchased, merchandise is not depreciated until it is leased to its rent-to-own customers. Leased merchandise is depreciated over the lease term of the rental agreement and recorded as cost of sales. Rental merchandise that is returned is depreciated from the net book value on the day of the return on a straight-line basis for 24 months until the item is leased again or reaches a zero-dollar salvage value. Damaged or lost merchandise is written off monthly. Rental merchandise is included in “Prepaid expenses and other assets” in the unaudited condensed consolidated balance sheets. Refer to Note 12 - Prepaid Expenses and Other Assets.

(n)Noncontrolling Interests

Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to the Company. The Company’s non-redeemable noncontrolling interest relates to the equity ownership interest of consolidated subsidiaries that it does not own.

The initial fair value of the noncontrolling interest is determined by a weighing of the discounted cash flow method and market approach. The discounted cash flow method utilized five-year discrete projections of the operating results, working capital and depreciation and capital expenditures, along with a residual value subsequent to the discrete period. The five-year projections were based upon historical and anticipated future results, general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated required return on equity for market participants at the time of the analysis. The market approach included significant estimates using guideline public company data to identify an appropriate market multiple of earnings before income taxes in estimating the fair value of the noncontrolling interest. Refer to Note 17 - Noncontrolling Interests.

(o)Recent Accounting Standards

Not yet adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles - Goodwill and Other Internal Use Software. This ASU was issued to modernize the accounting for software costs by removing references to prescriptive and sequential software development stages and providing an updated framework for capitalizing internal software costs. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This ASU requires additional expense disclosures by public entities in the notes to the financial statements. The ASU outlines the specific costs that are required to be disclosed which include such costs as: purchases of inventory, employee compensation, depreciation, intangible asset amortization, selling costs, and depreciation, depletion, and amortization related to oil and gas production. It also requires qualitative descriptions of the amounts remaining in the relevant expense income statement captions that are not separately disaggregated quantitatively in the notes to the financial statements and the entity’s definition of selling expenses. The disclosures are required for each interim and annual reporting period. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Claiming the Effective Date, which clarified the effective date for entities that do not have an annual reporting period that ends on December 31 st. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations.

Recently adopted

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses - Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU provides a practical expedient that simplifies the estimation of credit losses on accounts receivable and contract assets arising from transactions accounted for under ASC 606 -Revenue from Contracts with Customers by assuming that current conditions as of the balance sheet date do not change for the remaining life of these assets when estimating expected credit losses. The Company adopted this ASU effective January 1, 2026, and the adoption did not have a material impact on the Company’s financial position, results of operations, or cash flows.

NOTE 3 —VARIABLE INTEREST ENTITIES

On August 21, 2023, in connection with the Franchise Group, Inc. (“FRG”) take-private transaction, one of the Company’s subsidiaries (the “Lender”) and an affiliate of Mr. Kahn (the “Borrower”) entered into an amended and restated promissory note as discussed further in Note 10 - Loans Receivable, at Fair Value. The Company was not involved in the design of the Borrower, has no equity financial interest, and has no rights to make decisions or participate in the management of the Borrower that significantly impact the economics of the Borrower. Since the Company does not have the power to direct the activities of the Borrower, the Company is not the primary beneficiary and therefore does not consolidate the Borrower. The promissory note is included in the “Loans receivable, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets and is a variable interest in accordance with the accounting guidance at December 31, 2025, and the maximum amount of loss exposure to the VIE on a fair value basis was $1,835. In February 2026, the Company collected proceeds in the amount of $1,855 from the sale of collateral related to the promissory note and does not expect to collect any further amounts. As such, there is no balance remaining for the promissory note that is included in Loans receivable, at fair value in the Company’s accompanying unaudited condensed consolidated balance sheet at September 30, 2026 and the promissory note is no longer a variable interest.

On April 14, 2026, the Company invested $750 in a Special Purpose Entity (“SPE”) that owns a publicly traded equity security. The SPE is managed by a third party that serves as the investment manager. The Company owns approximately 7% of the SPE in the form of a Class A membership interest in the limited liability company. The SPE governing documents do not provide any kick-out or participating rights. Since the Company does not have the power to direct the SPE’s activities, the Company is not the primary beneficiary and therefore does not consolidate the SPE. However, the Company is presumed to have the ability to exercise significant influence since the investment is more than minor and the limited liability company is required to maintain specific ownership accounts for each member. The Company has elected to account for its equity investment in the SPE under the fair value option. The Class A membership interest is included as an equity security at fair value in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheet at September 30, 2026 and is a variable interest in accordance with the accounting guidance. As of September 30, 2026, the maximum amount of loss exposure to the VIE on a fair value basis was $686.

On May 26, 2026, a strategic asset company assigned a $20,000 advance under an existing facility with Enovum NC-1 Venture, LLC (“Enovum”), to the Company’s wholly owned subsidiary B. Riley Securities, Inc. (“BRS”) for consideration of $19,400, and Enovum issued a promissory note to BRS on the same economic terms as the original lender, as discussed further in Note 10 - Loans Receivable, at Fair Value. The Company determined that Enovum was a variable interest entity because its equity at risk is insufficient to finance its activities without additional subordinated financial support. Since the Company did not have the power to direct the activities of Enovum, the Company was not the primary beneficiary and therefore did not consolidate Enovum. In August 2026, the Company received proceeds of $21,652 in full repayment of the promissory note. As such, there is no balance remaining for the promissory note that is included in “Loans receivable, at fair value” in the Company’s accompanying unaudited condensed consolidated balance sheet at September 30, 2026 and the promissory note is no longer a variable interest.

During the nine months ended September 30, 2026, the Company invested in the preferred stock and limited partnership interests of certain entities, as well as issued a promissory note to an entity, none of which are individually significant and each of which was determined to be a variable interest entity. The Company determined that the entity in which it invested in preferred stock and the entity to which it issued the loan receivable were variable interest entities because their equity at risk was insufficient to finance their activities without additional subordinated financial support. The Company determined that the entities in which it invested in limited partnership interests were variable interest entities because their governing documents do not provide any substantive kick-out or participating rights. Since the Company does not have the power to direct the activities of any of these entities, the Company is not the primary beneficiary and it does not consolidate the entities. The investment in preferred stock is accounted for as an equity investment at fair value, the limited partnership interests are valued at NAV, and the loan receivable is accounted for at fair value. As of September 30, 2026, the aggregate maximum amount of loss exposure to these VIEs was $972.

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

Bicoastal Alliance, LLC (“Bicoastal”)

On May 3, 2024, as part of the acquisition of Nogin, the Company acquired a 50% equity interest in Bicoastal through a wholly owned subsidiary of Nogin. Bicoastal is a holding company designed to manage the investments, including strategy and operations, fortwo brand apparel operating companies. The Company determined Bicoastal is a variable interest entity as it does not have sufficient resources to carry out its management activities without additional financial support. The Company determined that it has the power to direct the activities that most significantly impact Bicoastal’s economic performance, has more equity capital at risk, and is expected to continue to fund operations. Therefore, the

Company determined that it is the primary beneficiary of Bicoastal and has reported its investment in the assets and liabilities in the accompanying unaudited condensed consolidated balance sheets and consolidated its results into the Company’s accompanying unaudited condensed consolidated statements of operations.

On August 14, 2024, Bicoastal entered into an agreement to acquire the remaining 50% equity interest upon paydown of a $700 note payable to the noncontrolling interest noteholder with a final repayment date and equity ownership interest transfer date of June 30, 2025.

On March 31, 2025, the Company signed a Deed of Assignment for the Benefit of Creditors (“ABC”), (i) pursuant to which all of the assets of Nogin were transferred to an assignee for the benefit of Nogin’s creditors, and (ii) which provided the assignee the right to, among other things, sell or dispose of such assets and settle all claims against Nogin. The Company no longer controls or owns the assets of Nogin or has any remaining or future obligations to Nogin’s creditors. The results of operations were deconsolidated on March 31, 2025 and are no longer reported in the Company’s financial statements after March 31, 2025. Management does not expect any recovery of the Company’s investment in Nogin. Subsequent to March 31, 2025, certain of Nogin’s creditors filed an involuntary petition for relief under chapter 7 of title 11 of the United States Code in the United States Bankruptcy Court for the District of New York and an order for relief was entered to move the ABC to a liquidation. A gain of $28,411 was recognized during the nine months ended September 30, 2025 from deconsolidation of Nogin, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations.

BRC Partners Opportunities Trust (“BRC Trust”)

BRC Trust was formed on January 6, 2025, for the purpose of transferring the assets and liabilities of BRC Partners Opportunity Fund, L.P., a Delaware limited partnership (“BRCPOF”), and liquidating the transferred net assets. BRCPOF transferred its assets and liabilities upon formation of the BRC Trust. The Company determined that the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights and substantially all of the activities are conducted on behalf of the Company and its related parties which own 13.3% and 58.2% (see Note 25 - Related Party Transactions), respectively, of the equity interest in the BRC Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidates the BRC Trust upon formation on January 6, 2025. Additionally, the BRC Trust does not meet the definition of a business and the initial consolidation of the BRC Trust did not result in a gain or loss upon initial consolidation.

The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of September 30, 2026 and December 31, 2025, are as follows:

B. Riley Securities Holdings, Inc. (“BRSH”)

On March 10, 2025, a merger subsidiary of the Company’s wholly owned subsidiary BRSH merged with a shell corporation traded on the OTC exchange. The shell corporation survived the transaction as a wholly owned subsidiary of BRSH as more fully described in Note 17 - Noncontrolling interests.

The shell corporation did not meet the definition of a business, since it did not have any assets, liabilities, or operations. The Company concluded that it has a variable interest in the shell corporation on the basis the Company owns substantially all the outstanding common stock in the shell corporation. The shell corporation is a variable interest entity since its equity at risk is considered insufficient to finance its activities without additional support. As a result, the Company was determined to be the primary beneficiary and consolidates the shell corporation. The shell remains dormant, and the Company does not have any obligations to the shell corporation to provide financial support. The consideration paid in connection with the merger consisted of $1,575 of common stock of BRSH, which represented the fair value of the 0.6% of outstanding common stock of BRSH. The Company recognized a loss of $1,575 on the initial recognition of a variable interest entity, which represented the fair value of the noncontrolling interest in BRSH that was issued to the investors in the shell corporation on March 10, 2025.

NOTE 4 —PENDING ACQUISITION OF SANGOMA TECHNOLOGIES CORPORATION

On September 28, 2026, the Company and 1001755979 Ontario Inc., a wholly owned subsidiary of BRC (the “Sangoma Purchaser”), entered into a definitive agreement (the “Plan of Arrangement”) under which the Sangoma Purchaser agreed to acquire all issued and outstanding common shares of Sangoma Technologies Corporation (“Sangoma”) (TSX: STC; NASDAQ: SANG), a business communications solutions provider headquartered in Markham, Ontario, Canada, by way of a court-approved plan of arrangement under the Business Corporations Act (Ontario) (the “Acquisition”).

Under the terms of the Plan of Arrangement, Sangoma shareholders will receive $4.925 in cash and 0.04767 of a share of the Company’s common stock for each Sangoma share held, representing aggregate consideration of approximately $169,602 in cash and approximately $10,331 in Company common stock, for a total enterprise value of approximately $203,680 (C$289,226). Upon completion, current Sangoma shareholders will hold approximately 4.0% of the Company’s pro forma outstanding shares.

The Acquisition is expected to be partially funded through an amended and restated $212,255 senior secured term loan facility that will be collateralized by the Company’s various communications businesses and partially funded with cash on hand. The transaction is not subject to any financing condition. Upon the closing of the Acquisition, the shares of Sangoma will be delisted from the Toronto Stock Exchange and Nasdaq Stock Market. Additionally, a termination fee of $5,397 is payable to the Sangoma Purchaser by Sangoma in certain circumstances if the Acquisition is not completed.

The Acquisition is subject to customary closing conditions, including approval by Sangoma shareholders at a special meeting, applicable court and regulatory approvals, and other customary conditions, and is expected to close no later than early 2027. There can be no assurance that the Acquisition will be completed on the terms described, within the expected timeframe, or at all.

The Acquisition will be accounted for as a business combination in accordance with ASC Topic 805, Business Combinations, in the period in which the transaction closes. As the Acquisition had not closed as of September 30, 2026, no assets or liabilities of Sangoma have been included in the Company’s condensed consolidated balance sheet as of that date. Additional disclosures required under ASC 805, including the preliminary purchase price allocation, will be provided in the period in which the Acquisition closes.

NOTE 5 —DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

Assets Held For Sale

On October 31, 2024, the Company signed a definitive agreement to sell a portion of the Company’s (W-2) Wealth Management business to Stifel Financial Corp. (“Stifel”) for estimated net consideration based on the number of advisors that join Stifel at closing, among other things. Upon closing the transaction on April 4, 2025, the sale was completed for net cash consideration of $26,037, representing 36 financial advisors whose managed accounts represent approximately $4.0 billion, or 23.6%, of total assets under management as of the close of the transaction. A gain of $5,372 was recognized during the nine months ended September 30, 2025 from this sale, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations.

Atlantic Coast Recycling

On March 3, 2025, the Company, BR Financial Holdings, LLC (“BRFH”), B. Riley Environmental Holdings, LLC and other indirect subsidiaries of the Company which included Atlantic Coast Recycling, LLC and Atlantic Coast Recycling of Ocean County, LLC entered into the Membership Interest Purchase Agreement (“MIPA”), whereby the interests owned by BRFH and the minority holders were sold to a third party in accordance with the terms of the MIPA on March 3, 2025. The interests were sold to the third party on March 3, 2025 for a purchase price of $102,478, subject to certain adjustments and a holdback amount pending receipt of a certain third party consent, resulting in cash proceeds of $68,638 to the Company after adjustments for amounts allocated to noncontrolling interests, repayment of contingent consideration, transaction costs and other items directly attributable to the closing of the transaction. Of the $68,638 of cash proceeds received by the Company, approximately $22,610 was used to pay interest, fees, and principal on the Credit Facility entered into with Oaktree Capital Management L.P. (“Oaktree”) on February 26, 2025. A gain of $52,430 was recognized during the nine months ended September 30, 2025 from this sale, which is included in the “Gain on sale and deconsolidation of businesses” line item in the accompanying unaudited condensed consolidated statements of operations.

Operating results from the sale of the Wealth Management business and Atlantic Coast Recycling businesses contributed to the operating incomes of the Wealth Management segment and Corporate and All Other category, respectively, for the nine months ended September 30, 2025.

Discontinued Operations

The Company presents a disposition of a component, being an operating or reportable segment, business unit, subsidiary or asset group, that represents a strategic shift that has or will have a major effect on the Company’s operations and financial results as discontinued operations when the components meet the criteria to be classified as held for sale. The following operations have been presented as discontinued operations.

GlassRatner and Farber

On June 27, 2025, the Company entered into and closed an equity purchase agreement to sell all of the membership interests of GlassRatner and Farber from the Company’s Financial Consulting reportable segment. Aggregate cash consideration paid by the buyers for the interests of GlassRatner and shares of Farber was $117,800, which was based on a target closing working capital amount that was subject to adjustment within 180 days following the sale date. In connection with the sale, the Company entered into a transition services agreement with the buyer to provide certain services.

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

Revenues, expenses and income from discontinued operations for the three and nine months ended September 30, 2026 and 2025 were as follows:

Cash flows from discontinued operations were as follows:

There wereno operating or investing cash flows attributable to discontinued operations during the nine months ended September 30, 2026. The $2,401 loss recognized during that period was a non-cash write-off of a purchase-price holdback.

Supplemental disclosures from cash flows were as follows:

NOTE 6 — FAIR VALUE MEASUREMENTS

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2026 and December 31, 2025.

As of September 30, 2026 and December 31, 2025, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $122,535 and $137,608, respectively, or 7.8% and 8.1%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The fair values for individual Level 3 financial assets and liabilities have various financial inputs which include multiple of sales, multiple of EBITDA and indexes, the market price of related securities, discount for lack of marketability, annualized volatility, transaction price (% of par), carried interest sharing, discount rates, recovery rates, and probability of scenario inputs that may change at each reporting period and result in an increase or decrease in the valuation of Level 3 financial assets and liabilities.

The following tables summarize the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of September 30, 2026 and December 31, 2025:

The changes in Level 3 fair value hierarchy during the three months ended September 30, 2026 and 2025 were as follows:

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2026 and 2025 were as follows:

Partnership and investment fund interests valued at NAV were $2,342 and $1,833 as of September 30, 2026 and December 31, 2025, respectively.

Beginning in April 2025, the Company entered into purchase agreements with public companies that allow the counterparties to put their convertible preferred stock to the Company from time to time at its discretion (the “Written Puts”) (see Note 27 - Commitments and Contingencies). The Written Puts are recognized at fair value on a recurring basis within the “Accrued expenses and other liabilities” line item on the accompanying unaudited condensed consolidated balance sheets, with changes in fair value recognized in earnings.

As of September 30, 2026 and December 31, 2025, the Company determined that the fair value of the Written Put liability was de minimis due to its discount to market prices being advantageous to the Company, and no liability or changes in earnings were recorded on the accompanying unaudited condensed consolidated balance sheets or the accompanying unaudited condensed consolidated statements of operations. The Company holds the Written Puts as investments to advantageously monetize the underlying stock and provide capital raising activities for customers. The Company’s exposure is driven primarily by movements in the Issuer’s common stock price, the put writer’s timing of exercise and the April 2026 agreement, which was amended to allow for the Issuer’s creditor to exercise the Written Put upon the Issuer’s Event of Default under the terms of its credit agreement. The amendment had a de minimis impact on the fair value of the Written Put.

Assets and Liabilities Not Measured at Fair Value

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

The fair value of the Company’s revolving credit facilities and term loans was estimated using a discounted cash flow approach, whereby contractual cash flows were discounted using current market interest rates and applicable credit spreads. The Company used a market approach for estimating the fair value of senior notes payable as they are listed and actively traded on Nasdaq with sufficient frequency and volume to utilize quoted market prices. The fair value of the Company’s New Notes payable was estimated using a discounted cash flow approach, whereby contractual cash flows were discounted using a credit spread based on significant unobservable inputs, including the Company’s estimated cost of borrowing of approximately 15.2%.

Nonrecurring Fair Value Measurement

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

The Company’s equity method investment in GA Holdings was measured at fair value on a nonrecurring basis as of September 30, 2026, in connection with the impairment described in Note 11 - Equity Method Investments, reducing the carrying value from $76,802 to its estimated fair value of $62,250. The fair value was determined using a market approach based on the negotiated price in the Company’s agreement to sell the GA Holdings investment. This is a nonrecurring fair value measurement classified within Level 3 of the fair value hierarchy because the price was negotiated with a single counterparty and is not corroborated by observable market data. In accordance with ASC 820, quantitative information about significant unobservable inputs is not presented because the Company did not develop those inputs; the fair value reflects the transaction price without adjustment.

NOTE 7 —SECURITIES AND OTHER INVESTMENTS OWNED AND SECURITIES SOLD NOT YET PURCHASED

The Company’s securities and other investments owned and securities sold not yet purchased consisted of the following as of September 30, 2026 and December 31, 2025:

Unrealized (losses) gains on equity securities held at September 30, 2026 include unrealized (losses) gains of $(100,337) and $25,942 for the three months ended September 30, 2026 and 2025 respectively, and unrealized (losses) gains of $(8,708) and $13,454 for the nine months ended September 30, 2026 and 2025, respectively, which is included in the “Realized and unrealized (losses) gains on investments” line item on the accompanying unaudited condensed consolidated statements of operations.

The following table presents the related adjustments recorded during the three and nine months ended September 30, 2026 and 2025 for equity securities measured under the measurement alternative and for those securities with observable price changes:

Certain equity securities investments in public and private companies are accounted for under the fair value option where the Company would otherwise use the equity method of accounting. The Company accounts for these equity investments at fair value to provide management with a more relevant representation for evaluating risk, performance reporting, market conditions and economic events in earnings on a more timely basis and to provide reporting of the current value of those assets in the accompanying unaudited condensed consolidated balance sheets. The related summarized financial information included below for purposes of disclosure are mostly presented a quarter in arrears where balance sheet amounts as of June 30, 2026 and September 30, 2025 correspond to amounts as of September 30, 2026 and December 31, 2025, respectively, and income statement amounts for the three and nine months ended June 30, 2026 and 2025 correspond to amounts for the three and nine months ended September 30, 2026 and 2025 of the Company, respectively.

Babcock and Wilcox Enterprises, Inc., Equity Investment

The Company owned an 18% and 25% voting interest in Babcock and Wilcox Enterprises, Inc. (“B&W”) as of September 30, 2026 and December 31, 2025, respectively, whereby the Company has elected to account for this investment under the fair value option. The following tables contain summarized financial information with respect to B&W:

As of September 30, 2026 and December 31, 2025, the fair value of the investment in B&W totaled $160,288 and $174,011, respectively, and is included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

Other Equity Investments

As of September 30, 2026, the Company had other equity investments where the Company is considered to have the ability to exercise influence since the Company has representation on the board of directors or the Company is presumed to have the ability to exercise significant influence since the investment is more than minor, and the limited liability company is required to maintain specific ownership accounts for each member. The Company has elected to account for these equity investments under the fair value option. These equity investments are comprised of equity investments infive companies as of September 30, 2026 and December 31, 2025.

The following table contains summarized financial information for these companies:

As of September 30, 2026 and December 31, 2025, the fair value of these investments totaled $19,672 and $19,835, respectively, and is included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.

NOTE 8 —SECURITIES LENDING

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2026 and December 31, 2025:

The following table presents the gross obligation of securities lending transactions accounted for as secured borrowings by the class of collateral pledged as of September 30, 2026 and December 31, 2025:

The Company’s securities lending transactions require us to pledge collateral based on the terms of each contract which is generally denominated in U.S. dollars and marked to market on a daily basis. If the fair value of the collateral pledged for these transactions declines, the Company could be required to provide additional collateral to the counterparty, therefore decreasing the amount of assets available for other liquidity needs that may arise. The Company’s liquidity risk is mitigated by maintaining offsetting securities borrowed transactions in which the Company receives cash from the counterparty which, in general, is equal to or greater than the cash the Company posts on securities lending transactions.

Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Such expense is incurred from equity and fixed income securities that are loaned to the Company and totaled $1,100 and $2,094 during the three months ended September 30, 2026 and 2025, respectively, and $2,723 and $4,781 during the nine months ended September 30, 2026 and 2025, respectively.

NOTE 9 —ACCOUNTS RECEIVABLE

The components of accounts receivable, net, from revenue from contracts with customers include the following:

Additions and changes to the allowance for credit losses consist of the following:

NOTE 10 — LOANS RECEIVABLE, AT FAIR VALUE

Loans receivable consist of the following:

The Company has elected to measure loans at fair value to provide management with a more relevant representation for evaluating risk, performance reporting, market conditions and economic events in earnings on a more timely basis and to provide reporting of the current value of those assets in the accompanying unaudited condensed consolidated balance sheets. During the three months ended September 30, 2026 and 2025, the Company recorded realized and unrealized gains of $1,215 and $1,299, respectively, and net realized and unrealized gains and (losses) of $12,005 and $(5,997) during the nine months ended September 30, 2026 and 2025, respectively, on loans receivable at fair value. Net realized and unrealized gains and losses on loans receivable are reflected in the “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations.

Loans receivable at fair value on non-accrual and 90 days or greater past due waszero and $1,835, which represented approximately zero and 7.0% of total loans receivable at fair value as of September 30, 2026 and December 31, 2025, respectively. The principal balances of loans receivable on non-accrual and 90 days or greater past due was $21,276 and $320,285 as of September 30, 2026 and December 31, 2025, respectively.

Interest income for loans receivable on non-accrual and/or 90 days or greater past due is recognized separately from the “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations. The amount of gains (losses) included in earnings attributable to changes in instrument-specific credit risk was $1,215 and $1,316 during the three months ended September 30, 2026 and 2025, respectively, and $3,223 and $(5,980) for the nine months ended September 30, 2026 and 2025, respectively. The gains or losses attributable to changes in instrument-specific risk were determined by management based on an estimate of the fair value change during the period specific to each loan receivable.

The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of September 30, 2026, the Company has outstanding limited guarantee arrangements with respect to B&W as further described in Note 27(b) - Babcock and Wilcox Commitments and Guarantees. In accordance with the credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. On June 18, 2025, an amendment was made to the Axos Guaranty, as defined in Note 27 - Commitments and Contingencies, whereby the Company’s obligations as guarantor were suspended until January 1, 2027. On February 25, 2026, the Axos Guaranty was terminated and is of no further force and effect as further discussed in Note 27 - Commitments and Contingencies - (b) Babcock and Wilcox Commitments and Guarantees.

Vintage Capital Management, LLC Loan Receivable

On August 21, 2023, one of the Company’s subsidiaries and Vintage Capital Management, LLC (“VCM”), an affiliate of Brian Kahn (“Mr. Kahn”), amended and restated a promissory note (the “Amended and Restated Note”), pursuant to which VCM owes the Company’s subsidiary the aggregate principal amount of $200,506, which bears interest at the rate of 12.00% per annum paid-in-kind with a maturity date of December 31, 2027. The Amended and Restated Note requires repayments prior to the maturity date from certain proceeds received by VCM, Mr. Kahn or his affiliates from, among other proceeds, distributions or dividends paid by Freedom VCM, Inc. (“Freedom VCM”) in an amount equal to the greater of (i)80% of the net after-tax proceeds, and (ii)50% of gross proceeds. Amounts owing under the Amended and Restated Note may be repaid at any time without penalty. The obligations under the Amended and Restated Note are primarily secured by a first priority perfected security interest in Freedom VCM equity interests owned by Mr. Kahn, the chief executive officer (“CEO”) and a member of the board of directors of Freedom VCM as of December 31, 2023, and his spouse with a value, based on the transaction price of the take private transaction that included the acquisition of FRG by a buyer group that included members of senior management of FRG, led by Mr. Kahn, FRG’s then CEO (the “FRG take-private transaction”), of $227,296 as of August 21, 2023.

On January 22, 2024, Mr. Kahn resigned as CEO and a member of the board of directors of Freedom VCM. On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 (“Chapter 11 Cases”) of Title 11 of the United States Bankruptcy Code (“Bankruptcy Code”), which impacted the collateral for this loan receivable. To the extent the loan balance and accrued interest exceed the underlying collateral value of the loan, an unrealized loss will be recorded in the accompanying unaudited condensed consolidated statements of operations. On a quarterly basis, the Company will continue to obtain third party appraisals to evaluate the value of the collateral of the loan since the repayment of the loan and accrued interest will be paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying collateral.

On June 1, 2025, the United States Bankruptcy Court for the District of Delaware entered an Order Confirming the Ninth Amended Joint Chapter 11 Plan of Franchise Group, Inc. and its affiliated debtors (the “FRG Plan”). Under the FRG Plan, all equity interests and claims related thereto were cancelled and such equity interest holders, including Freedom VCM as an equity holder of Franchise Group, Inc., will not receive any property or distributions under the FRG Plan. As a result of the FRG Plan, the Company does not expect to receive any proceeds or distributions from the Freedom VCM equity interests owned by Mr. Kahn and his spouse that collateralize the VCM loan receivable.

On September 29, 2025, the SEC filed a complaint in the U.S. District Court for the District of New Jersey against Prophecy Asset Management LP (“Prophecy”), Prophecy’s CEO, and Mr. Kahn alleging violations of certain of the antifraud provisions of federal securities laws. On November 10, 2025, news reports and a court filing by the U.S. Attorney’s Office for the District of New Jersey indicated that the U.S. Attorney’s Office has charged Kahn with securities fraud in connection with his activities as a Prophecy sub-adviser. On December 10, 2025, Mr. Kahn pleaded guilty to one count of conspiracy to commit securities fraud. Mr. Kahn is awaiting sentencing.

In February 2026, the Company collected proceeds of $1,855 on the loan receivable from the sale of all of the collateral that the Company held for the Vintage loan. No additional collections are expected on the loan receivable.

Conn’s, Inc. Loan Receivable

On December 18, 2023, W.S. Badcock Corporation, a Florida corporation was sold by Freedom VCM to Conn’s, Inc. (“Conn’s”) whereby the Company loaned Conn’s $108,000 pursuant to the “Conn’s Term Loan” which bears interest at an aggregate rate per annum equal to the Term Secured Overnight Financing Rate (“SOFR”) Rate (as defined in the Conn’s Term Loan), subject to a 4.80% floor, plus a margin of 8.00% and matures on February 20, 2027. Future collection of the Conn’s loan receivable is expected to be paid from the sale of assets and servicing of a pool of consumer receivables that serve as collateral for the loan where the Company has a second lien on these assets.

On July 23, 2024, Conn’s and certain of its subsidiaries filed voluntary petitions for relief under Chapter 11 Cases of Title 11 of the Bankruptcy Code in the Southern District of Texas. The commencement of the Chapter 11 Cases constitutes an event of default that accelerates the repayment obligations of the loan receivable issued to Conn’s. Any efforts to enforce repayment obligations under the Conn’s loan are automatically stayed as a result of the Chapter 11 Cases and the Company’s rights of enforcement in respect of this loan are subject to the applicable provisions of the Bankruptcy Code. As a result of the Chapter 11 Cases, the Conn’s loan receivable was placed on non-accrual status.

The loan had a fair value ofzero as of December 31, 2025, and was written off effective January 1, 2026. At the time of the write-off, Conn’s was no longer considered a related party of the Company. During the nine months ended September 30, 2026, the Company recovered $8,600 of proceeds from the collateral for the loan receivable which is included in “Fair value adjustments on loans” line item in the accompanying unaudited condensed consolidated statements of operations.

Torticity, LLC Loan Receivable

On November 2, 2023, B. Riley Principal Investments, LLC (“BRPI”), a wholly owned subsidiary of the Company, along with other lenders, entered into a loan receivable with Torticity, LLC for an aggregate principal amount of $25,000, of which $15,000 was BRPI’s total principal commitment. On November 20, 2023, BRPI transferred the promissory note to B. Riley Commercial Capital, LLC (“BRCC”), another wholly owned subsidiary of the Company. The loan receivable bore interest at 15.00% per annum paid quarterly at 7.50% per annum in cash and 7.50% per annum payment-in-kind to be capitalized and added to the outstanding principal balance. Subsequent to December 31, 2024, there were amendments to the loan. However, the entire loan remained impaired withno fair value at September 30, 2026, and there has beenno interest income on the loan receivable during the nine months ended September 30, 2026 and all of 2025.

XBP Americas, LLC (formerly Exela Technologies, Inc. (“Exela”)) Loans Receivable

As of September 30, 2026, the Company had a loan receivable and an accounts receivable facility with XBP Americas, LLC (“XBP Americas”), with fair value balances of $6,525 and $496, respectively. As of December 31, 2025, the Company had a loan receivable, accounts receivable facility, and unsecured note with XBP Americas, with fair value balances of $15,459, $1,440, and $4,516, respectively.

Exela Loan

On February 27, 2023, BRCC loaned Exela Receivables 3 Holdco, LLC (“Holdco”) $31,500, and on August 18, 2023, assigned the loan receivables to BRF Finance Co., LLC (or “BRF”), a wholly owned subsidiary of the Company (the “Exela Loan”). The Exela Loan bears interest at a rate equal to Term SOFR plus 7.50%, with interest payable monthly in arrears.

The obligations under the Exela Loan are fully and unconditionally guaranteed, on a joint and several basis, by certain subsidiaries of XBP Americas. The loan is secured by liens on substantially all assets of XBP Americas and certain guarantors, including accounts receivable, inventory, cash and deposit accounts, equipment, equity interests in subsidiaries, general intangibles and related assets. The Company’s liens are subordinated to the liens securing XBP Americas’ senior debt facilities.

On July 29, 2025, the Company amended the Exela Loan to, among other things, reassign the loan receivable to XBP Americas, a subsidiary under common control with Holdco, as borrower, provide for an option to extend the maturity date, include additional events of default, and require mandatory principal repayments. The borrower exercised this extension option on March 27, 2026, extending the maturity date to September 30, 2026.

Pursuant to the amended terms, the borrower is required to make a one-time prepayment of $1,250 on the earlier of (i)sixty days following the fourth and final Monthly Purchase and (ii) the third Business Day following the termination of the Exela AR Facility (as defined below) upon achievement of the applicable collections milestone, which was achieved in January 2026. In addition, commencing February 6, 2026, the borrower is required to make monthly principal payments of $1,000 on the fifth Business Day of each month until the loan is repaid in full. During the three and nine months ended September 30, 2026, the borrower made $3,000 and $9,250 of such mandatory principal repayments.

On September 30, 2026, the Company amended the Exela Loan to extend the maturity date from September 30, 2026 to October 1, 2026. As of September 30, 2026 and December 31, 2025, the outstanding principal balance of the Exela Loan was $6,525 and $15,775, respectively. The borrower repaid the remaining balance of $6,525 on October 1, 2026.

Exela AR Facility

On February 12, 2024, BR Exar, LLC (“BREL”), an affiliate of BRCC, entered into a receivables purchase agreement with Exela BR SPV, a subsidiary under common control with XBP Americas (as subsequently amended, the “Exela AR Facility”), pursuant to which BREL purchased certain existing receivables and future receivables until the achievement of a specified collection milestone. As of December 31, 2025, the Exela AR Facility had an outstanding balance of $1,440, which was repaid in full as of January 12, 2026.

On December 31, 2025, the Company entered into an unsecured promissory note with Exela in the principal amount of $5,000. The note bore no interest and included an original issue discount of $500. The unsecured promissory note matured on January 21, 2026, following full collection under the Exela AR Facility. The borrower repaid $5,000 to fully extinguish the unsecured promissory note on the maturity date.

On January 21, 2026, BREL entered into an amended and restated receivables purchase agreement with certain subsidiaries of XBP Americas (including subsequent amendments, the “Amended Exela AR Facility”). On May 14, 2026, BREL entered into an amendment which increased the aggregate receivables to be purchased by $4,625, for a total amount of up to $24,625 of receivables.

In connection with the Amended Exela AR Facility, the Company provided total consideration of $22,623.

During the three and nine months ended September 30, 2026, the Company collected $11,643 and $30,629 under the Amended Exela AR Facility, respectively, and as of September 30, 2026, $496 remained outstanding under the Amended Exela AR Facility.

NOTE 11 —EQUITY METHOD INVESTMENTS

Equity investments accounted for under the equity method of accounting consist of the following:

Equity investments that are accounted for under the equity method of accounting are included in the “Equity investments” line item in the accompanying unaudited condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees is included in the “(Loss) income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The summarized financial information with respect to the equity method investments noted below for purposes of disclosure are presented a quarter in arrears whereas balance sheet amounts as of June 30, 2026 and September 30, 2025 correspond to amounts as of September 30, 2026 and December 31, 2025, respectively, and income statement amounts during the three and nine months ended June 30, 2026 and 2025 (or partial periods as noted below) correspond to amounts during the three and nine months ended September 30, 2026 and 2025, respectively.

Great American Holdings, LLC

On November 15, 2024, the Company completed the sale of a majority interest in GA Holdings to Oaktree (the “Great American Transaction”). Upon completion of the sale, the Company retained a minority ownership interest in the Class A common units of GA Holdings. GA Holdings operations include appraisal and valuation services, real estate, and retail, wholesale & industrial auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property. GA Holdings has three classes of equity interests which include common interests, Class A preferred interests and Class B preferred interests. The Company accounts for its investment in GA Holdings under the equity method of accounting with a three-month lag.

Under the equity method of accounting, the Company records its proportionate share of earnings or losses; however, given the capital structure of GA Holdings the Company applies the Hypothetical Liquidation at Book Value (“HLBV”) method on a three-month lag to determine the allocation of profits and losses since the liquidation rights and priorities, as defined by the limited liability agreement of GA Holdings, differ from the Company’s underlying ownership interest. The HLBV method calculates the proceeds that would be attributable to each partner based on the liquidation provisions of the limited liability agreement as if GA Holdings was to be liquidated at book value as of the balance sheet date. Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

Based on the terms of the limited liability company agreement, the Company recorded equity in the net (loss) income attributable to GA Holdings using the HLBV method of $(1,042) and $6,410 for the three months ended September 30, 2026 and 2025, respectively, and $(6,547) and $2,771 for the nine months ended September 30, 2026 and 2025, respectively.

The following tables contain summarized financial information with respect to GA Holdings:

The Company sold its equity interest in GA Holdings to Oaktree for $62,250 on November 3, 2026, and Oaktree agreed to lend the Company $26,500. The $62,250 of consideration the Company is receiving from Oaktree consists of $10,570 of cash and $51,680 of reduction of indebtedness owed under the Oaktree Term Loan as more fully described in Note 15 - Term Loans and Revolving Credit Facilities. This resulted in the Company recording an other than temporary impairment charge of $14,552 at September 30, 2026, which is included in the “(Loss) income from equity investments” line item in the accompanying unaudited condensed statement of operations. This resulted in a reduction in the carrying value of the GA Holdings equity investment from $76,802 to its estimated fair value of $62,250 (see Note 6 - Fair Value Measurements).

GA Joann Retail Partnership, LLC (“Joann Retail”)

On February 27, 2025, the Company contributed capital and certain financial support in the form of cash and subordinated debt in exchange for a 47.4% minority ownership interest in Joann Retail. Joann Retail’s operations include the acquisition and liquidation of Joann Inc’s (and its subsidiaries) retail assets. Joann Retail has two classes of equity interest which include voting Class A and nonvoting Class B interests.

As of September 30, 2026, the Company’s investment in Joann Retail waszero as the Company had fully recovered its initial investment of $6,163 in Joann Retail during the second quarter of 2025. Prior to the recovery of the Company’s initial investment, the investment in Joann Retail was adjusted for the Company’s proportionate share of equity method income or losses and of cash distributions received. The cash received distributions of $631 and $2,666 in excess of the Company’s investment balance and share of equity earnings during the nine months ended September 30, 2026 and 2025, which is recognized as other income and included in the “(Loss) income from equity investments” line item in the accompanying unaudited condensed consolidated statements of operations.

The following tables contain summarized financial information with respect to Joann Retail:

SW-B. Riley Retail Opportunity Fund (“SW-B. Retail”)

After the consolidation of BRC Trust as discussed in Note 3 - Variable Interest Entities and Note 17 - Noncontrolling Interests, the Company’s ownership percentage in SW-B. Retail is 22.6%. During the three months ended September 30, 2026 and 2025, the Company recorded equity method income of $472 and $118 respectively, and for the nine months ended September 30, 2026 and 2025, the Company recorded equity method income of $633 and $101 respectively.

NOTE 12 —PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consist of the following:

Unbilled receivables represent amounts not yet billed to customers, consisting of mobile handsets and services provided but not yet billed in the Marconi Wireless segment, and hardware, installation, and usage services for customers in the Lingo segment. Other receivables primarily consist of interest receivables on loans and advances to financial advisors, net. Other assets primarily consist of deposits, contract costs and finance lease assets.

NOTE 13 —GOODWILL AND OTHER INTANGIBLE ASSETS

The carrying amount of goodwill at September 30, 2026 and December 31, 2025 was $392,687. Goodwill is comprised of $158,834 for the Capital Markets Segment, $37,334 for the Wealth Management Segment, $71,551 for the

Lingo Segment, $106,461 for the magicJack Segment, $128 for the Marconi Wireless Segment, $15,727 for the UOL Segment, and $2,652 for the Corporate and All Other category. Goodwill is net of accumulated impairment losses of $137,445, of which $79,781 and $57,664 were recorded in the Consumer Products Segment and Corporate and All Other category, respectively.

Intangible assets consisted of the following:

Intangible assets related to tradenames are net of accumulated impairment losses of $27,200, which were recorded in the Consumer Products segment.

Amortization expense was $6,066 and $6,674 during the three months ended September 30, 2026 and 2025, respectively and $18,490 and $21,127 during the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, estimated future amortization expense was $6,284, $24,139, $20,963, $16,337, and $12,034 for the years ended December 31, 2026 (remaining three months), 2027, 2028, 2029 and 2030, respectively. The estimated future amortization expense after December 31, 2030 was $13,242.

The Company performs impairment tests for goodwill and indefinite-lived intangible assets as of December 31 of each year and between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair values of the Company’s reporting units or intangible assets below their carrying values. As a result of the current financial performance of the Company’s Tiger US Holdings, Inc. (“Targus”) subsidiary, which comprises the reporting unit of all operations within the Consumer Products segment, as well as current market conditions in the personal computer market for computers and accessories, the Company updated its long-term forecasts for the reporting unit and performed interim quantitative assessments of the Targus tradename as of June 30, 2026 and September 30, 2026. These assessments resulted in non-cash impairment charges of $4,000 and $1,200, respectively ($5,200 for the nine months ended September 30, 2026), recorded in impairment of tradename in the accompanying condensed consolidated statements of operations, reducing the carrying value of the Targus tradename from $13,000 to $7,800.

The Targus tradename was measured at fair value on a nonrecurring basis as of June 30, 2026 and September 30, 2026 using the relief-from-royalty method. The estimated fair value of the Targus tradename was $9,000 as of June 30, 2026 and $7,800 as of September 30, 2026. The fair value measurement is classified as Level 3 within the fair value hierarchy as the significant inputs are unobservable and reflect management’s estimates and assumptions. The key inputs used in the valuations included projected revenues, royalty rates of 1.0%, long-term growth rates of 3.0%, and discount rates of 22.0% and 23.0% at June 30, 2026 and September 30, 2026, respectively.

In connection with the September 30, 2026 impairment assessment, the Company reassessed the useful life of the Targus tradename, which had been classified as an indefinite-lived intangible asset since the acquisition of Targus in October 2022. Based on the recent financial performance of the Targus business and the competitive environment in which it operates, the Company determined that the Targus tradename no longer met the criteria to be classified as an indefinite-lived intangible asset and that a finite useful life was more appropriate. Accordingly, as of September 30, 2026, following recognition of the impairment charge described above, the Company reclassified the Targus tradename, with a carrying value of $7,800, which was accounted for as a non-amortizable intangible asset with an indefinite life to an amortizable intangible asset with an estimated remaining useful life ofnine years. The tradename is presented within amortizable tradenames in the table above and will be amortized on a straight-line basis beginning October 1, 2026. The change in the estimated useful life is accounted for prospectively as a change in accounting estimate with amortization expense beginning October 1, 2026. The Company expects the change to increase amortization expense by approximately $217 for the three months ended December 31, 2026, approximately $867 in each of the years ending December 31, 2027 through 2034, and approximately $650 for the year ending December 31, 2035.

NOTE 14 —ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

Other tax liabilities primarily consist of uncertain tax positions, sales and VAT taxes payable, and other non-income tax liabilities. Accrued expenses primarily consist of accrued trade payables, investment banking payables and legal settlements. Other liabilities primarily consist of interest payables, accrued legal fees and finance lease liabilities.

NOTE 15 —TERM LOANS AND REVOLVING CREDIT FACILITIES

Term loans and revolving credit facilities are comprised of the following:

Oaktree Credit Agreement

On February 26, 2025, the Company and BRFH (“BRFH Borrower”) entered into a new credit agreement with a group of funds indirectly or directly controlled by Oaktree Capital Management, L.P. with Oaktree Fund Administration, LLC, acting as the administrative agent and collateral agent. The credit agreement provided for (i) athree-year $125,000 secured term loan credit facility (the “Oaktree Term Loan”) and (ii) afour-month $35,000 secured delayed draw term loan credit facility (the “Delayed Draw Facility” and, together with the Oaktree Term Loan, the “Oaktree Credit Facility”). The Oaktree Term Loan matures on the earliest of (i) February 26, 2028, and (ii) a springing maturity date 91 days prior to the maturity of any series of bonds, notes or bank indebtedness of the Company or the BRFH Borrower outstanding on such date with an aggregate amount exceeding $10,000.

At September 30, 2026, under the Oaktree Credit Agreement, certain assets with a total carrying value of $134,496 collateralize the $65,625 outstanding balance of the Oaktree Term Loan, and these assets primarily consist of (a) the common and preferred equity interest in GA Holdings, (b) certain other designated loans receivable and equity investments held by the BRFH Borrower, and (c) the equity interests in the BRFH Borrower’s subsidiaries. These assets of the BRFH Borrower are placed into a borrowing base (the “Borrowing Base”), which serves to limit the borrowings under the Oaktree Credit Facility. The sale of an asset in the Borrowing Base requires the BRFH Borrower to make a prepayment in an amount equal to the proceeds of such disposition multiplied by the percentage “credit” that is assigned to such asset in the Borrowing Base. The BRFH Borrower may be obligated to prepay the loans or post cash in a controlled account in the event the Borrowing Base falls below a certain level as defined in the Oaktree Credit Facility. In 2025, the Company repaid the Delayed Draw Facility in full and sold certain assets in the Borrowing Base that required the Company to repay $62,500 of principal on the Oaktree Term Loan reducing its outstanding balance from $125,000 to $62,500. In accordance with paydowns on the Oaktree Credit Facility, the Company recorded losses on debt extinguishment in the amount of $15,639 during the nine months ended September 30, 2025, included in the “(Loss) gain on extinguishment of debt” line item in the unaudited condensed consolidated statement of operations.

The Oaktree Credit Agreement includes covenants which, among other things, limit the Company’s, the BRFH Borrower’s and the BRFH Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness, and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. The Company is in compliance with all financial covenants in the Oaktree Credit Agreement as of September 30, 2026.

Interest expense on the Oaktree Credit Facility during the three months ended September 30, 2026 and 2025 was $3,287 and $1,330, respectively. Interest expense on the Oaktree Credit Facility during the nine months ended September 30, 2026 and 2025 was $9,728 and $9,089, respectively.

The Company issued warrants (“Oaktree Warrants”) to certain affiliates of Oaktree Capital Management, L.P. (the “Oaktree Holders”) in connection with the Oaktree Term Loan to purchase approximately 1,832,290 shares. The Company determined the Oaktree Warrants met the criteria for liability classification under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, and recorded an initial warrant liability of $7,860. On May 28, 2026, the Oaktree Holders sent a cashless exercise notice to the Company in accordance with the terms of the Oaktree Warrants. On May 29, 2026, the Company issued an aggregate of 915,251 shares of common stock to the Oaktree Holders in full settlement of the warrants. The shares underlying the Oaktree Warrants are registered for resale on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348). As of May 29, 2026, the Oaktree Warrants have been fully exercised and are no longer outstanding. Changes in the fair value of the warrant liability prior to the exercise are reported in the “Other income (expense)” section in our accompanying unaudited condensed consolidated statements of operations. Refer to Note 23(a) - Common Stock Warrants.

On August 7, 2026, the Company and the BRFH Borrower entered into Amendment No. 5 to the Oaktree Credit Facility (“Amendment No. 5”), which eliminated the Oaktree Term Loan exit fee in exchange for a $3,125 payment-in-kind amendment fee, increasing the outstanding principal from $62,500 to $65,625.

On September 28, 2026, the Company and the BRFH Borrower entered into Amendment No. 6 (“Amendment No. 6”), requiring prepayment of the Oaktree Term Loan, subject to the applicable premium, equal to 50% of cash distributions received from BRPAC (as defined below) and its subsidiaries. Amendment No. 6 also provided lender consent and limited covenant waivers for the proposed Sangoma Technologies Corporation transaction and related financing. The amendment did not modify the loan’s interest rate, principal, maturity, or prepayment premium, and no fees were paid to lenders.

Both amendments were accounted for as troubled debt restructurings. As the future undiscounted cash payments under the terms of the modified debt exceeded the carrying amount of the debt on each modification date, the Company accounted for each restructuring prospectively using the revised effective interest rate established at that date. Following Amendment No. 5, the springing maturity and voluntary prepayment features were no longer bifurcated and were recombined with the host instrument, the remaining embedded derivatives had de minimis fair value, and the Oaktree Credit Facility ceased to be accounted for as indexed debt. Amendment No. 6 includes a mandatory prepayment feature requiring bifurcation, resulting in a $190 increase to the compound embedded derivative and a corresponding debt discount. As of September 30, 2026, the embedded derivative has a fair value of $190 (See Note 6 - Fair Value Measurements). Subsequent changes in fair value of the embedded derivative are reported in the “Other income (expense)” section in our accompanying unaudited condensed consolidated statements of operations.

On November 3, 2026, in connection with the sale of the Company’s interest in GA Holdings (see Note 11 - Equity Method Investments), the Company and the BRFH Borrower entered into Amendment No. 7 to the Oaktree Credit Facility and Amendment No. 2 to the Guarantee and Collateral Agreement, which (i) provided for $51,680 of reduction of indebtedness owed under the Oaktree Term Loan, (ii) provided additional term loan proceeds of $26,500, (iii) required a transaction fee of $3,281 paid in kind and added to the principal of the Oaktree Term Loan in exchange for removal of the prepayment premium on any balance outstanding following Amendment No. 7, (iv) required a closing fee of 2.0% of the term loan proceeds, and (v) released the Company’s interests in GA Holdings from the borrowing base and the collateral securing the Oaktree Term Loan. Following Amendment No. 7, the outstanding balance on the Oaktree Credit Facility is $43,727.

Targus/FGI Credit Agreement

On August 20, 2025, Targus (“Targus Borrower”) and certain of the Targus Borrower’s direct and indirect subsidiaries (the “FGI Loan Parties”) entered into a Revolving Credit, Receivables Purchase, Security and Guaranty Agreement (the “Targus/FGI Credit Agreement”) with FGI Worldwide LLC (“FGI”), as agent and for athree-year $30,000 revolving loan facility, the proceeds of which were used to refinance and repay all obligations under the Targus Credit Agreement with PNC Bank, National Association, dated October 18, 2022 (the “Prior Targus Credit Agreement”). Accordingly, the Company recorded a loss on extinguishment of debt of $950, which is included in the “(Loss) gain on extinguishment of debt” line item in the unaudited condensed consolidated statements of operations during the three and nine months ended September 30, 2025.

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 bore interest at the greater of (a)5.25% per annum or (b)3.00% above the term SOFR for a period ofone month plus 10 basis points, plus (c)0.30% per month collateral management fee. Effective September 30, 2026, the FGI Loan Parties entered into a Second Amendment to the Targus/FGI Credit Agreement (the “Second Amendment”), as further discussed below, whereby the revolving loans bear interest at the greater of (a)5.25% per annum or (b)2.75% above the term SOFR for a period ofone month plus 10 basis points, plus (c)0.225% per month collateral management fee. The average borrowings under the revolving loan facility were $12,851 and $11,090 during the nine months ended September 30, 2026 and 2025, respectively. The amount available for borrowings under the Targus/FGI Credit Agreement was $20,203 at September 30, 2026. Interest expense on these loans during the three and nine months ended September 30, 2026 was $412 and $995, respectively. Interest expense on these loans during the three and nine months ended September 30, 2025 was $129. Under the Prior Targus Credit Agreement, the average borrowings under the revolver loan was $14,179 during the nine months ended September 30, 2025. Interest expense on these loans during the three and nine months ended September 30, 2025 was $545 and $1,337, respectively.

The Targus/FGI Credit Agreement provides for an early termination fee, calculated on the $30,000 maximum facility amount, payable if the facility is terminated before its maturity date for any reason. Prior to the Second Amendment, the early termination fee was equal to (a)2.5% if such termination occurred during the year following August 20, 2025, (b)1.5% if such termination occurred during the second year following August 20, 2025, or (c)0.5% if such termination occurred after the second year following August 20, 2025. Effective September 30, 2026, the early termination fee is equal to 1.5%,1.0% or 0.5% if such termination occurs during the first year, during the second year, or after the second year, respectively, following September 30, 2026.

The Targus/FGI Credit Agreement includes certain embedded features, such as a receivable purchase arrangement, default interest of 3.00%, certain cost reimbursements, and optional and mandatory prepayments that could result in an acceleration of the Company’s obligations. The mandatory prepayments are triggered by asset disposition, event of loss, over advances and upon an event of default. Certain cost reimbursements and default interest upon a non-credit risk event of default were determined to be embedded derivatives. As a result of the Second Amendment, the mandatory prepayment provision upon an event of default was determined to meet the criteria for bifurcation as an embedded derivative. The Company determined the value of all embedded derivatives was de minimis as of September 30, 2026.

The Targus/FGI Credit Agreement is secured by (i) a first priority perfected security interest in and a lien upon all of the assets of the FGI Loan Parties, and (ii) a pledge of all of the equity interests of the Targus Borrower and its direct and indirect subsidiaries. The Targus/FGI Credit Agreement was secured by substantially all Targus assets as collateral defined in the Targus/FGI Credit Agreement, which assets had an aggregate value of approximately $143,648, including $36,389 of accounts receivable and $41,553 of inventory as of September 30, 2026. The Targus/FGI Credit Agreement contains certain covenants, including those limiting the FGI Loan Parties’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Targus/FGI Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an uncured event of default occurs, FGI would be entitled to take various actions, including the acceleration of amounts outstanding under the Targus/FGI Credit Agreement. The Company is in compliance with all financial covenants in the Targus/FGI Credit Agreement as of September 30, 2026.

As required upon the closing of the Targus/FGI Credit Agreement, one of the Company’s subsidiaries was required to invest an additional $5,000 in Targus in the form of an intercompany subordinated loan. In addition, on March 13, 2026, the Company’s subsidiary agreed to invest an additional $2,000 in accordance with provisions of the Targus/FGI Credit Agreement which increased the balance of the intercompany subordinated loan.

On June 30, 2026, the FGI Loan Parties entered into a First Amendment to Credit Agreement, Limited Waiver, and Omnibus Joinder Agreement (the “First Amendment”) with FGI. Among other things, the First Amendment (i) joined Targus Australia Pty. Ltd. as an additional guarantor and loan party under the Targus/FGI Credit Agreement, (ii) extended the FCCR Conversion Date (the date on which the financial covenant transitions from a minimum Adjusted Consolidated EBITDA test to a fixed charge coverage ratio test) from December 31, 2026 to October 31, 2027, (iii) restructured the measurement period for the Adjusted Consolidated EBITDA financial covenant, resetting the look-back to a one-month trailing period for the test period ending June 30, 2026 and stepping up to a six-month trailing period by November 30, 2026, and (iv) granted a limited waiver of certain defaults that had occurred and were continuing under the Targus/FGI Credit Agreement as of June 30, 2026.

On September 30, 2026, the Second Amendment, among other things, (i) extended the maturity date from August 20, 2028 to August 20, 2029, (ii) reduced the interest rate and the collateral management fee as described above, (iii) amended the early termination fee provisions as described above, and (iv) eliminated the Adjusted Consolidated EBITDA financial covenant for test periods ending after July 31, 2026.

The Second Amendment was accounted for as a troubled debt restructuring. As the future undiscounted cash payments under the amended terms exceeded the carrying amount of the debt on September 30, 2026, no gain was recognized and the carrying amount of the debt was not adjusted. The Second Amendment also resulted in the identification of an additional embedded derivative, as discussed above.

Nomura Credit Agreement

On August 21, 2023, the Company, the BRFH Borrower, and certain direct and indirect subsidiaries of the BRFH Borrower, entered into a credit agreement (the “Nomura Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (“Nomura”), and Computershare Trust Company, N.A., as collateral agent, for afour-year $500,000 secured term loan credit facility and afour-year $100,000 secured revolving loan credit facility. The Nomura Credit Agreement replaced the prior credit agreement with Nomura and Wells Fargo Bank, N.A., as collateral agent, dated June 23, 2021, that had a maturity date of June 23, 2025 (the “Prior Nomura Credit Agreement”). The purpose of the Nomura Credit Agreement was to (i) fund the Freedom VCM equity investment, (ii) prepay in full the Prior Nomura Credit Agreement with an aggregate outstanding balance of $347,877, which included $342,000 in principal and $5,877 in interest and fees, (iii) fund a dividend reserve in an amount not less than $65,000, (iv) pay related fees and expenses, and (v) for general corporate purposes.

On September 17, 2024, the Company entered into Amendment No. 4 to the Nomura Credit Agreement (the “Fourth Nomura Amendment”), and after payment on principal and the addition of loan fees to principal, the outstanding principal balance on the term loan was reduced from $469,750 to $388,127. In connection with the Fourth Nomura Amendment, the revolving credit facility in the amount of $100,000, which had no balance outstanding at September 17, 2024, was terminated and the Company was required to reduce the principal amount of the term loan to be no greater than $100,000 on or prior to September 30, 2025. The scheduled maturity date of the term loan was August 21, 2027.

In connection with the Fourth Nomura Amendment, interest on the term loan increased to SOFR loans accrued interest at the adjusted term SOFR plus an applicable margin of 7.00% cash interest or, at the election of the Company, at the adjusted term SOFR determined plus an applicable margin of 6.00% cash interest plus 1.50% paid-in-kind interest; and base rate loans accrued interest at the base rate plus an applicable margin of 6.00% cash interest or, at the election of the Company, at the adjusted term SOFR determined for such day plus an applicable margin of 5.00% cash interest plus 1.50% PIK Interest. Interest expense on the term loan during the nine months ended September 30, 2025 was $2,457.

As fully discussed in “Oaktree Credit Agreement” above, on February 26, 2025, the Company used proceeds from the Oaktree Credit Facility to repay the outstanding principal balance under the Nomura Credit Agreement and the Nomura Credit Agreement was terminated. Upon repayment, the Company recorded a loss on extinguishment of debt in the amount of $4,666, which was included in the “(Loss) gain on extinguishment of debt” line item in the unaudited condensed consolidated statements of operations during the nine months ended September 30, 2025.

BRPAC Credit Agreement

On January 6, 2025, BRPI Acquisition Co., LLC (“BRPAC”), Lingo, UOL and YMAX Corporation (collectively, the “BRPAC Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into an amended and restated credit agreement (the “BRPAC Credit Agreement”), with the Banc of California, in its capacity as sole lead arranger, sole book manager, administrative agent and lender (the “Agent”) and the lenders party thereto from time to time to amend and restate the prior BRPAC credit agreement, dated December 19, 2018 (the “Prior BRPAC Credit Agreement”) and replace the prior Lingo credit agreement, dated August 16, 2022 (the “Prior Lingo Credit Agreement”). Certain of the BRPAC Borrowers’ U.S. subsidiaries are parties to and guarantors of all obligations under the BRPAC Credit Agreement (collectively, the “Secured Guarantors”; and together with the BRPAC Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent company of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the outstanding membership interests of BRPAC are pledged as collateral.

Pursuant to the BRPAC Credit Agreement, the lenders made afive-year $80,000 term loan to the BRPAC Borrowers, the proceeds of which were used to repay in full the obligations under the Prior BRPAC Credit Agreement and the Prior Lingo Credit Agreement. The BRPAC Credit Agreement also builds in provisions for incremental term loans up to $40,000 allowing certain distributions to the parent company of the BRPAC Borrowers from the proceeds of such incremental term loans. Upon repayment of the Prior Credit Agreement and the Lingo Credit Agreement, the Company recorded a loss on extinguishment of debt in the amount of $389, which was included in the “(Loss) gain on extinguishment of debt” line item in the accompanying unaudited condensed consolidated statements of operations during the nine months ended September 30, 2025. The remaining debt modification was accounted for as a troubled debt restructuring. As the future undiscounted cash payments under the terms of the modified debt exceeded the carrying amount of the old debt on the modification date, the Company accounted for the restructuring on a prospective basis using the revised effective interest rate established under the BRPAC Credit Agreement.

On April 8, 2026 (“Amendment Effective Date”), the BRPAC Borrowers entered into the Third Amendment to the BRPAC Credit Agreement (the “Third Amendment”) with the Agent. In connection with the Third Amendment, the lenders made a new term loan to the BRPAC Borrowers in an aggregate original principal amount of $60,000, the proceeds of which were used to repay in full the outstanding principal balance and accrued interest on the previously outstanding term loans under the BRPAC Credit Agreement. The Third Amendment established a new revolving credit facility with aggregate commitments of $20,000 (the “Revolving Credit Facility”), which was not available under the prior facility. The Revolving Credit Facility matures on January 6, 2030. On April 8, 2026, the BRPAC Borrowers drew $16,000 on the Revolving Credit Facility, which remained outstanding as of September 30, 2026. The new term loan is repayable in quarterly installments of $2,250 beginning June 30, 2026, with the remaining outstanding balance due at maturity on January 6, 2030. In connection with the Third Amendment, the BRPAC Borrowers are permitted to make an aggregate cash dividend of up to $28,000 to the Company’s parent entities on or within two months of the Amendment Effective Date. The BRPAC Credit Agreement, as amended by the Third Amendment, requires the BRPAC Borrowers to maintain (i) a Consolidated Total Funded Debt Ratio not to exceed 2.00 x through September 30, 2026, with step-downs to 1.50 x,1.25 x, and 1.00 x in subsequent periods, and (ii) a Consolidated Fixed Charge Coverage Ratio of not less than 1.20 x, tested quarterly beginning March 31, 2026. For accounting purposes, the Third Amendment was considered a troubled debt restructuring. As the future undiscounted cash payments under the terms of the modified debt exceeded the carrying amount of the debt on the modification date, no gain or loss was recognized, and the Company accounted for the restructuring on a prospective basis using the revised effective interest rate established under the Third Amendment.

The borrowings under the BRPAC Credit Agreement bear interest at the greater of (i) the one-month Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the BRPAC Borrowers’ Consolidated Total Funded Debt Ratio, or (ii) a 3.25% per annum floor per annum.

Interest expense on the term loan during the three months ended September 30, 2026 and 2025 was $1,066 and $1,475, respectively. Interest expense on the term loan during the nine months ended September 30, 2026 and 2025 was $3,327 and $4,626, respectively.

The average borrowings under the Revolving Credit Facility was $16,000 during the nine months ended September 30, 2026. The amount available for borrowings under the Revolving Credit Facility was $4,000 at September 30, 2026. Interest expense on the Revolving Credit Facility during the three and nine months ended September 30, 2026 was $284 and $538, respectively. Interest expense on the term loan under the Prior Lingo Credit Agreement during the nine months ended September 30, 2025 was $62.

The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first-priority security interests in, substantially all of the assets of the BRPAC Borrowers totaling approximately $287,623 as of September 30, 2026 (which includes $11,792 of accounts receivable and $2,866 of inventory), including a pledge of (a)100% of the equity interests of the BRPAC Borrowers; (b)65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c)65% of the equity interests in magicJack VocalTec Ltd., an Israel corporation. Such security interests are evidenced by pledge, security, and other related agreements.

The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’, ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of outstanding amounts due under the BRPAC Credit Agreement. The Company is in compliance with all financial covenants in the BRPAC Credit Agreement as of September 30, 2026.

NOTE 16 —SENIOR NOTES PAYABLE

Senior notes payable, net, are comprised of the following:

As of September 30, 2026 and December 31, 2025, the senior notes had a weighted average interest rate of 5.41% and 5.60%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $12,679 and $15,184 during the three months ended September 30, 2026 and 2025, respectively. Interest expense on senior notes totaled $40,588 and $54,074 during the nine months ended September 30, 2026 and 2025, respectively.

The senior notes are unsecured obligations and are not secured by any of the Company’s or its subsidiaries’ assets and therefore are effectively subordinated to any existing and future secured indebtedness to the extent of the collateral securing such indebtedness.

During the nine months ended September 30, 2026, the Company completed a series of Section 3(a)(9) Exchanges with the Investor. There was no activity during the three months ended September 30, 2026. During the nine months ended September 30, 2026, the Company exchanged aggregate principal amounts of $69,054, including $42,490 related to troubled debt restructurings, for 8,358,495 of the Company’s common stock. The shares issued had an aggregate fair value of $67,784, based on the closing market price of the Company’s common stock on the applicable settlement dates, which ranged from $6.60 to $9.34 per share. As a result of these exchanges, the carrying amount of the senior notes, together with related accrued interest, was reduced by $69,366 during the nine months ended September 30, 2026. The Company recognized a net gain on extinguishment of debt of $1,338 for the nine months ended September 30, 2026, which is included in the “(Loss) gain on extinguishment of debt” line item in the accompanying condensed consolidated statements of operations. During the nine months ended September 30, 2026, the net gain consisted of troubled debt restructuring gains of $3,509, offset by losses on extinguishment of $2,171.

On March 10, 2026, the Company repurchased $4,293 of the 5.00% Senior Notes due December 31, 2026 from the open market for $4,035. The repurchase was accounted for as a debt extinguishment, and the Company recognized a gain of $269 in the “(Loss) gain on extinguishment of debt” line item in the accompanying condensed consolidated statements of operations during the nine months ended September 30, 2026.

On March 30, 2026, the Company redeemed all of the $95,991 of issued and outstanding 5.50% Senior Notes due March 31, 2026 (the “5.50% 2026 Notes”). The redemption price was equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest up to, but excluding, the redemption date. In connection with the full redemption, the 5.50% 2026 Notes, which were listed on Nasdaq under the ticker symbol “RILYK,” were delisted from Nasdaq and ceased trading on the redemption date.

On September 29, 2026, the Company redeemed all of the $142,137 of issued and outstanding 6.50% Senior Notes due September 30, 2026 (the “6.50% 2026 Notes”). The redemption price was equal to 100% of the aggregate principal amount, plus any accrued and unpaid interest up to, but excluding, the redemption date. In connection with the full redemption, the 6.50% 2026 Notes, which were listed on Nasdaq under the ticker symbol “RILYN,” were delisted from Nasdaq and ceased trading on the redemption date.

During the nine months ended September 30, 2025, the Company completed five private exchange transactions with institutional investors pursuant to which the investors exchanged senior notes for the New Notes, whereupon the exchanged notes were cancelled. The Company recorded a gain on the debt restructuring of $12,222 and $67,208 in the “Gain on senior note exchange” line item in the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2025, respectively. The carrying value of the New Notes includes future interest payments at the 8.00% coupon rate through maturity since each of the exchanges represented a troubled debt restructuring.

The New Notes were issued pursuant to an indenture, dated as of March 26, 2025 (the “New Notes Indenture”), governing the issuance of New Notes dated March 26, 2025, April 7, 2025, May 21, 2025, June 30, 2025, and July 11, 2025 for thefive private exchange transactions during 2025, between the Company, certain subsidiaries of the Company, as guarantors, and GLAS Trust Company LLC, a New Hampshire limited liability company, as trustee and collateral agent, and the New Notes are unconditionally guaranteed jointly and severally by all direct and indirect wholly owned restricted subsidiaries of the Company, subject to certain excluded subsidiaries (collectively, the “Guarantors”). The New Notes are secured on a second lien basis, junior to the obligations under the Company’s Oaktree Credit Facility, by substantially all of the assets of the Company and the Guarantors.

The New Notes mature on January 1, 2028 and accrue interest at a rate of 8.00% per annum, payable semi-annually in arrears on April 30 and October 31, beginning on October 31, 2025. The Company is required to pay default interest of 8.00% on accrued interest if the Company fails to pay interest when due.

The Company has the right to redeem the New Notes at any time, in whole or in part. If the New Notes are redeemed, including by a tender offer, the Company may repay the New Notes at principal plus accrued and unpaid interest if any, but excluding the redemption date.

The New Notes include a change of control provision, where the holders of the New Notes have the right to require the Company to repurchase all or a portion of the New Notes at a purchase price, in cash, equal to 101% of the principal amount thereof, plus accrued and unpaid interest if the Company does not exercise its redemption option.

The New Notes also contain certain other events of default that could result in an acceleration of the Company’s obligations under the New Notes.

In addition, if the Company or its restricted subsidiaries engage in certain asset sales and do not invest such proceeds or permanently reduce certain debt within a specified period of time, the Company may be required to use a portion of the proceeds of such asset sales above a specified threshold to make an offer to purchase the New Notes at a price equal to 100% of the principal amount of the New Notes being purchased, plus accrued and unpaid interest.

The New Notes Indenture contains certain covenants that, among other things, limit the Company’s and its subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests.

In connection with the issuance of warrants in conjunction with the private exchange transactions during 2025 (further described in Note 23 - Stockholders’ Equity), the Company entered into registration rights agreements with the investors, pursuant to which the Company granted such investors (i) certain shelf registration rights whereby the Company will register resales of the shares of Common Stock issued upon exercise of the warrants and (ii) certain piggyback registration rights, in each case subject to the terms and conditions set forth in the registration rights agreements. The Company registered the shares of Common Stock underlying such warrants pursuant to a Registration Statement on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348) and declared effective by the Securities and Exchange Commission in April 2026.

NOTE 17 —NONCONTROLLING INTERESTS

BRSH

On March 10, 2025, a merger subsidiary of the Company’s wholly owned subsidiary BRSH, which is primarily comprised of the broker dealer operations within the Capital Markets segment, merged with a shell corporation and issued 0.6% of the equity in BRSH to certain investors in the shell corporation. Upon completion of the transaction, the investors in the shell corporation became minority stockholders of BRSH. The Company also issued restricted stock awards as more fully described in Note 22(c) - BRSH Stock Incentive Plan and assuming the full issuance of the restricted stock awards are vested, the Company owned 89.4% majority-interest in BRSH as of the date of the merger. As of September 30, 2026 and December 31, 2025, the Company owned 93.3% and 90.7%, respectively.

The shell corporation that merged with BRSH on March 10, 2025 did not meet the definition of a business, since it did not have any assets, liabilities, or operations and was treated as the initial recognition of a variable interest entity, as more fully described in Note 3 - Variable Interest Entities.

On October 22, 2026, in compliance with Section 267 of the Delaware General Corporation Law (the “DGCL”) and Section 18-209(i) of the Delaware Limited Liability Company Act, BRSH Merger Sub LLC, a Delaware limited liability company (“BRSH Merger Sub”), and an indirect, wholly owned subsidiary of BRC, merged with and into BRSH, with BRSH surviving (the “Short-Form Merger”). The Short-Form Merger became effective upon the filing of the Certificate of Ownership and Merger with the Secretary of State of the State of Delaware on October 22, 2026 (the “Effective Time”). Immediately prior to the Effective Time, Merger Sub owned greater than 90% of the outstanding shares of common stock, par value $0.0001 per share, of BRSH (the “BRSH Common Stock”), the sole class of capital stock of BRSH with shares outstanding.

At the Effective Time, in connection with the Short-Form Merger, the outstanding shares of BRSH Common Stock not held by Merger Sub (other than shares subject to BRSH Restricted Stock Awards (as defined below) and shares held by holders who properly demand and perfect appraisal rights under Section 262 of the DGCL) were converted into the right to receive total cash in the amount of approximately $2,422 ($8.88 in cash per BRSH common share, without interest), and the holders of BRSH restricted stock awards (each, a “BRSH Restricted Stock Award”) that were outstanding immediately prior to the Effective Time were cancelled and substituted with a total amount of approximately 1,866,000 restricted stock awards of common stock, par value $0.0001 per share, of BRC (each, a “Substitute Restricted Stock Award”) under the B. Riley Financial Inc. 2021 Stock Incentive Plan (the “BRC Equity Plan”), representing a ratio of approximatelytwo Substitute Restricted Stock Awards for each BRSH Restricted Stock Award. The Substitute Restricted Stock Awards have the same vesting terms and schedule (including with respect to any acceleration) as applied to the corresponding BRSH Restricted Stock Award immediately prior to the Effective Time and are otherwise subject to the terms and conditions of the BRC Equity Plan and the applicable award agreement. As of the Effective Time, the Company owned 100% of BRSH.

BRC Trust

BRC Trust was formed on January 6, 2025, and is a variable interest entity as more fully described in Note 3 - Variable Interest Entities. The noncontrolling interest of BRC Trust that is not owned by the Company includes 86.6% of the equity interests in the BRC Trust. Of the 86.6% equity interests not owned by the Company,58.2% is owned by related parties as more fully described in Note 25 - Related Party Transactions.

NOTE 18 —REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers from the Company’sseven reportable operating segments and the Corporate and All Other category during the three and nine months ended September 30, 2026 and 2025 is reported below.

Contract Balances

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, financial consulting engagements, and subscription services where the performance obligation has not yet been satisfied.

The following table presents changes in deferred revenue during the nine months ended September 30, 2026 and 2025:

During the nine months ended September 30, 2026 and 2025 the Company recognized revenue of $27,970 and $30,605 that was recorded as deferred revenue at the beginning of the period.

The Company expects to recognize the deferred revenue of $45,030 as of September 30, 2026 as service and fee revenues when the performance obligation is met during the years ended December 31, 2026 (remaining three months), 2027, 2028, 2029 and 2030 in the amount of $17,174, $14,944, $6,342, $2,829, and $1,108, respectively. The Company expects to recognize the deferred revenue of $2,633 after December 31, 2030.

The following table contains a rollforward of unbilled receivables, which are included in prepaid expenses and other assets, for the nine months ended September 30, 2026 and 2025:

Contract Costs

The Company capitalizes: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable and; (2) commissions paid to obtain magicJack contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period.

The capitalized costs to fulfill a contract were $4,939 and $4,550 as of September 30, 2026 and December 31, 2025, respectively, and are recorded in the “Prepaid expenses and other assets” line item in the accompanying unaudited condensed consolidated balance sheets. For the three months ended September 30, 2026 and 2025, the Company recognized expenses of $808 and $1,214 related to capitalized costs to fulfill a contract, respectively. During the nine months ended September 30, 2026 and 2025, the Company recognized expenses of $2,445 and $3,307 related to capitalized costs to fulfill a contract, respectively. There wereno significant impairment charges recognized in relation to these capitalized costs during the three and nine months ended September 30, 2026 and 2025.

Remaining Performance Obligations and Revenue Recognized from Past Performance

The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of September 30, 2026. Corporate finance and investment banking fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of September 30, 2026.

During the three and nine months ended September 30, 2026, and 2025, revenues recognized for customer contracts for performance obligations that are satisfied at a point in time and over time were:

NOTE 19 —RESTRUCTURING CHARGE

The Company recorded restructuring charges of $20 and $184 during the three months ended September 30, 2026 and 2025, respectively. The Company recorded restructuring charges of $1,934 and $505 during the nine months ended September 30, 2026, and 2025, respectively. They are included in “Restructuring charge” in the accompanying unaudited condensed consolidated statements of operations.

The $1,934 of restructuring charges recorded during the nine months ended September 30, 2026 were in connection with organizational realignments and consisted of severance and related costs consistent with the Company’s historical severance practices across the following segments: $1,777 related to Capital Markets, $128 related to Consumer Products, and $29 related to Wealth Management. The Company continues to evaluate its organizational structure and may incur additional restructuring charges in future periods.

The $505 of restructuring charges recorded during the nine months ended September 30, 2025 consisted of reductions in workforce, of which $285 was attributable to the Corporate and All Other category and $220 was attributable to the Consumer Products segment.

The following table summarizes the changes in accrued restructuring charge during the three and nine months ended September 30, 2026 and 2025:

NOTE 20 —INCOME TAXES

The Company’s effective income tax rate was a benefit of 8.9% for the three months ended September 30, 2026, as compared to a provision of 1.2% for the three months ended September 30, 2025. The Company’s effective income tax rate was a benefit of 44.0% for the nine months ended September 30, 2026, as compared to a provision of less than 1.0% for the nine months ended September 30, 2025. During the three months ended September 30, 2026, the Company had a benefit for income taxes from continuing operations of $24,048, which is primarily comprised of the estimated federal and state tax benefits from the loss before income taxes reported during the three months ended September 30, 2026 that has decreased the expected annual projected income taxes for the year ended December 31, 2026. The expected annual effective income tax rate for the benefit during the nine months ended September 30, 2026 is greater than the federal statutory rate of 21% primarily due to the benefit recorded for the expiration of statues of limitations for unrecognized tax benefits, offset by the estimated foreign taxes. The effective income tax rate for the nine months ended September 30, 2025 was less than the federal statutory tax rate of 21% primarily due to being in a tax loss with a full valuation allowance.

As of December 31, 2025, the Company had federal net operating loss carryforwards of $602,913 and state net operating loss carryforwards of $688,239, which are available to offset taxable income. The Company has $39,319 of state capital loss carryovers as of December 31, 2025 that is available for carryforwards and will start to expire December 31, 2028. The Company’s federal net operating loss carryforwards generated in 2023 through 2025 of $278,310 will be limited to offsetting 80% of taxable income but do not expire. The remaining federal net operating loss carryforwards will expire in the tax years commencing on December 31, 2033, through December 31, 2038. The state net operating loss carryforwards will expire in the tax years commencing on December 31, 2030.

The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of September 30, 2026 and December 31, 2025, a full valuation allowance has been recorded since it is more likely than not that the Company will not be able to utilize tax benefits before they expire. The Company reassesses the need for a valuation allowance on an ongoing basis.

The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain state, local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2022 to 2025.

The Company intends to indefinitely reinvest foreign earnings and cash unless such repatriation results in no or minimal tax costs. It is not practicable to determine the amount of an unrecognized deferred tax liability for temporary differences related to investments in foreign subsidiaries.

NOTE 21 —EARNINGS PER SHARE

Basic earnings per share is calculated by dividing income from continuing operations, income from discontinued operations, or net income by the weighted-average number of shares outstanding during the period, including contingently issuable shares. Diluted earnings per share is calculated by dividing income from continuing operations, income from discontinued operations, or net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares include shares that may be issued under warrants, including warrants issued in connection with the Oaktree Credit Agreement and private debt exchange transactions, and restricted stock and stock option awards. As of May 29, 2026, the Oaktree Warrants issued in connection with the Oaktree Credit Agreement were exercised and are no longer outstanding.

Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share as the effect would be anti-dilutive were 1,602,885 during the three and nine months ended September 30, 2026 and 3,320,660 during the three and nine months ended September 30, 2025.

Basic and diluted earnings per share were calculated as follows:

NOTE 22 —SHARE-BASED PAYMENTS

(a) Employee Stock Incentive Plans

Under the Company’s 2021 Stock Incentive Plan, share-based compensation expense for restricted stock units was:

On April 3, 2026, the Company granted 308,514 restricted stock units (“RSUs”), with a grant date fair value of $2,099 to itssix non-employee directors under the Company’s 2021 Stock Incentive Plan. The awards consisted of: (i)21,960 RSUs that vested immediately on the grant date; (ii)88,170 RSUs that vested on the earlier of the Company’s 2026 Annual Meeting of Stockholders or December 1, 2026 subject to the director’s continued service, which vested on May 19, 2026, the date of the 2026 Annual Meeting of Stockholders; and (iii)198,384 RSUs that vest on theone-year anniversary of the grant date, subject to continued service. Forfive of thesix non-employee directors, the post-grant service period associated with the third award was determined to be non-substantive because those directors were retirement-eligible under the terms of the award following the 2026 Annual Meeting of Stockholders; accordingly, those awards were considered vested and the resulting share-based expense was accelerated for accounting purposes on May 19, 2026. The grant-date fair value of the RSUs was based on the closing market price of the Company’s common stock on the trading day prior to the grant date. During the nine months ended September 30, 2026,30,629 RSUs were forfeited. Share-based compensation expense is recorded in the “Selling, general and administrative expenses” line item in the accompanying unaudited condensed consolidated statements of operations.

(b) Employee Stock Purchase Plan

In connection with the Company’s Employee Stock Purchase Plan (the “Purchase Plan”), there wasno share-based compensation expense during the three and nine months ended September 30, 2026 and 2025. As of September 30, 2026, there were 236,949 shares reserved for issuance under the Purchase Plan.

(c) BRSH Stock Incentive Plan

On March 10, 2025, the Company’s majority-owned subsidiary approved the BRSH Stock Incentive Plan which allows for issuance of up to 4,000,000 restricted stock awards of BRSH. No restricted stock awards of BRSH were granted during the nine months ended September 30, 2026 and there is no intention to issue restricted stock awards of BRSH after the date hereof.

The restricted stock awards granted generally vest over a period offour tofive years, based on continued service. The restricted stock awards vest for common stock of BRSH and increase the noncontrolling interest in BRSH, when vested. During the three months ended September 30, 2026 and 2025, share-based compensation expense of $768 and $850, respectively, and during the nine months ended September 30, 2026 and 2025, share-based compensation expense of $1,889 and $2,420, respectively, related to the BRSH restricted stock awards was recorded in the “Selling, general and administrative expenses” line item in the accompanying unaudited condensed consolidated statements of operations.

During the nine months ended September 30, 2026,272,157 restricted stock awards vested, of which 107,071 shares valued at $1,902 were withheld to satisfy tax withholding obligations, resulting in the net issuance of 165,086 shares. During the nine months ended September 30, 2026,402,764 awards were forfeited. This activity, including shares withheld to satisfy tax withholding obligations, contributed to changes in noncontrolling interest, as more fully described in Note 17 - Noncontrolling Interests.

(d) Common Stock and Stock Options Issued

On June 3, 2025, the Company issued 100,000 unregistered shares and options to purchase a total of 300,000 shares of the Company’s common stock in connection with the employment agreement entered into with the Company’s chief financial officer. The 100,000 unregistered shares issued were issued upon execution of the employment agreement as an employment inducement grant that is not subject to vesting conditions and expensed immediately. The fair value of the unregistered shares of $295 was expensed upon issuance. The options to purchase a total of 300,000 shares of the Company’s common stock vests in three tranches (in each case, subject to continued employment): (1)100,000 with an exercise price of $7.00, (2)100,000 with an exercise price of $10.00 and (3)100,000 with an exercise price of $12.50. The stock options vest in annual installments over athree-year period on each anniversary of the grant date based on continued service and acceleration upon a change in control. The maximum term of the stock options is 10 years. At September 30, 2026,200,001 of the 300,000 options to purchase shares of the Company’s common stock were unvested. During the three and nine months ended September 30, 2026, share-based compensation expense for the options totaled $44 and $131 respectively. During the three and nine months ended September 30, 2025, share-based compensation expense for the options totaled $43 and $57, respectively.

NOTE 23 —STOCKHOLDERS’ EQUITY

(a) Common Stock Warrants

In connection with the Oaktree Credit Agreement, on February 26, 2025 (refer to Note 15 - Term Loans and Revolving Credit Facilities), the Company issued seven-year warrants to the Oaktree Holders to purchase approximately 1,832,290 shares (or 6% on a fully diluted basis) of the Company’s common stock at an exercise price of $5.14 per share. The Oaktree Warrants contain certain anti-dilution provisions pursuant to which, under certain circumstances, the Oaktree Holders would be entitled to exercise the warrants for up to 19.9% of the then-outstanding shares of common stock. The Oaktree Warrants were classified as a liability. The shares underlying the Oaktree Warrants are registered for resale on Form S-1 (which was subsequently amended by a Post-Effective Amendment) (Reg. No. 333-293348).

On May 28, 2026, immediately prior to exercise, the Oaktree Warrants were remeasured to fair value, resulting in a fair value of $15,810. The Oaktree Holders exercised the Oaktree Warrants through a cashless exercise in accordance with the terms of the warrants, resulting in the issuance of an aggregate of 915,251 shares of the Company’s common stock to the Oaktree Holders in full settlement of the warrants. Upon settlement, the Company recognized a gain on settlement of the warrants of $6,410, representing the difference between the fair value of the Oaktree Warrants immediately prior to exercise of $15,810 and the fair value of the Company’s common stock issued in settlement of the warrants of $9,400, based on the Company’s closing stock price of $10.27 per share on the settlement date. The gain is included in the “Change in fair value of financial instruments and other” line item in the accompanying unaudited condensed consolidated statements of operations. As a result of the exercise, the Oaktree Warrants were settled and no warrant liability remained outstanding as of September 30, 2026.

The warrant liability had an estimated fair value of $6,400 as of December 31, 2025 which is included in other liabilities in Note 14 - Accrued Expenses and Other Liabilities. During the nine months ended September 30, 2026, the change in the fair value of the warrant liability, including the final remeasurement immediately prior to exercise, resulted in a loss of $9,410, and a loss of $4,340 and $640 during the three and nine months ended September 30, 2025, respectively, and is included in the “Change in fair value of financial instruments and other” line item in the accompanying unaudited condensed consolidated statements of operations. See Note 6 - Fair Value Measurements further details.

In conjunction with the debt exchanges (see Note 16 - Senior Notes Payable), the Company issued seven-year warrants to the investors to purchase up to 913,692 shares of common stock at an exercise price of $10.00. The warrants contain certain anti-dilution provisions and upon exercise, the warrant holders are entitled to dividends and distributions as if the warrants had been exercised in full prior to the dividend or distribution date. The warrants meet the definition of a derivative and were classified within stockholders’ equity.

(b) Preferred Stock

There were 2,834 shares of the Series A Preferred Stock issued and outstanding as of September 30, 2026 and December 31, 2025. The total liquidation preference for the Series A Preferred Stock as of September 30, 2026 and December 31, 2025 was $79,378 (inclusive of cumulative unpaid dividends of $8,524) and $75,725 (inclusive of cumulative unpaid dividends of $4,871), respectively. There wereno dividends declared or paid on the Series A Preferred Stock during the three and nine months ended September 30, 2026 and 2025. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series A Preferred Stock. Unpaid dividends will accrue until paid in full.

There were 1,729 shares of the Series B Preferred Stock issued and outstanding as of September 30, 2026 and December 31, 2025. The total liquidation preference for the Series B Preferred Stock as of September 30, 2026 and December 31, 2025 was $48,809 (inclusive of cumulative unpaid dividends of $5,581) and $46,416 (inclusive of cumulative unpaid dividends of $3,188), respectively. There wereno dividends declared or paid on the Series B Preferred Stock during the three and nine months ended September 30, 2026 and 2025. On January 21, 2025, the Company announced that it had temporarily suspended dividends on its Series B Preferred Stock. Unpaid dividends will accrue until paid in full.

On April 30, 2026, the Company did not pay the quarterly dividend that would otherwise have been payable on its Series A Preferred Stock and Series B Preferred Stock for the Dividend Period (as defined in the applicable Certificate of Designation) ended April 30, 2026. This was the sixth quarterly Dividend Period for which dividends on the Series A Preferred Stock and Series B Preferred Stock have not been paid since the Company’s announcement on January 21, 2025 of the temporary suspension of preferred dividends. As a result, a “Preferred Dividend Default” has occurred under each Certificate of Designation. Pursuant to each Certificate of Designation, upon the occurrence of a Preferred Dividend Default, the size of the Company’s Board of Directors is automatically increased bytwo seats, and the holders of the Series A Preferred Stock and the Series B Preferred Stock (voting together as a single class with the holders of any other parity preferred stock with similar voting rights then exercisable) become entitled to electtwo additional directors to the Board of Directors (the “Preferred Directors”) until all dividends accumulated and unpaid on the Series A Preferred Stock and Series B Preferred Stock for all past Dividend Periods shall have been fully paid. The election of Preferred Directors will take place at (i) either (A) a special meeting called in accordance with the Certificate of Designation requirements and the Company’s by-laws if the request is received more than 90 days before the date fixed for the Corporation’s next annual or special meeting of stockholders or (B) the next annual or special meeting of stockholders if the request is received within 90 days of the date fixed for the Corporation’s next annual or special meeting of stockholders, and (ii) at each subsequent annual meeting of stockholders, or special meeting at which Preferred Directors are to be elected, until the right of holders of Series A Preferred Stock and Series B Preferred Stock to elect Preferred Directors shall have terminated. As of the date of this Quarterly Report, the Company has not received a written demand from holders that satisfies the requirements of the Company’s Certificates of Designation and by-laws of the Series A Preferred Stock or Series B Preferred Stock to call a special meeting for the election of Preferred Directors.

NOTE 24 —NET CAPITAL REQUIREMENTS

BRS and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, to not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC.

NOTE 25 —RELATED PARTY TRANSACTIONS

For bebe’s rent to own stores that are franchised through Freedom VCM, during the three and nine months ended September 30, 2025, royalty fees, marketing, and IT services charged to bebe by Freedom VCM totaled $1,001 and $3,286, respectively, and inventory purchases by bebe from Freedom VCM totaled $3,612 and $8,951, respectively.

In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P. (“Whitehawk”), a limited partnership controlled by Mr. J. Ahn, who is the brother of one of the Company’s executive officers who was the Company’s Chief Financial Officer and Chief Operating Officer until the executive officer’s departure on June 3, 2025. Whitehawk agreed to provide investment advisory services for GACP I, L.P. and GACP II, L.P. There wereno management fees paid to Whitehawk during 2025. Whitehawk is no longer a related party upon the departure of the executive officer on June 3, 2025.

The Company periodically participates in loans and financing arrangements for which the Company has an equity ownership and representation on the board of directors (or similar governing body). The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions are summarized as follows:

Babcock and Wilcox

B&W is a related party as a result of the Company’s equity investment as more fully described in Note 7 - Securities and Other Investments Owned and Securities Sold Not Yet Purchased for which the Company is deemed to have significant influence. One of the Company’s wholly owned subsidiaries entered into a services agreement with B&W that provided for the President of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the “Executive Consulting Agreement”), unless terminated by either party with thirty days written notice. The agreement was extended through December 31, 2028. Under this agreement, fees for services provided are $750 per annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W’s compensation committee of the board, a bonus or bonuses may also be earned and payable to the Company. On September 20, 2024, Kenny Young resigned from his position as the President of the Company, the Executive Consulting Agreement with B&W was terminated, and concurrently, Kenny Young entered into aone-year consulting agreement to provide services to the Company, pursuant to which he was paid an annual fee of $250 paid on a monthly basis, subject to deduction of damages, fees and expenses that he may owe to the Company pursuant to this agreement. The consulting agreement expired on September 20, 2025 in accordance with its original terms.

During the three months ended September 30, 2026 and 2025, the Company earned $11 and $1,121, respectively, and during the nine months ended September 30, 2026 and 2025, the Company earned $12,510 and $4,939, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities which are included in services and fees in the accompanying unaudited condensed consolidated statements of operations.

The Company is also a party to indemnification agreements for the benefit of B&W and the B. Riley Guaranty, each as disclosed in Note 27 - Commitments and Contingencies.

Vintage Capital Management - Brian Kahn

In connection with the completion of the FRG take-private transaction, one of the Company’s subsidiaries and VCM, an affiliate of Brian Kahn, entered into the Amended and Restated Note. The Amended and Restated Note in the aggregate principal amount of $200,506 bears interest at the rate of 12% per annum paid-in-kind with a maturity date of December 31, 2027. The Amended and Restated Note requires repayments prior to the maturity date from certain proceeds received by VCM, Mr. Kahn, or his affiliates from, among other proceeds, distributions or dividends paid by Freedom VCM in amount equal to the greater of (i)80% of the net after-tax proceeds, and (ii)50% of gross proceeds. The obligations under the Amended and Restated Note are primarily secured by a first priority perfected security interest in Freedom VCM equity interests owned by Mr. Kahn and his spouse with a value (based on the transaction price in the FRG take-private transaction) of $227,296 as of the closing of the FRG take-private transaction. On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code which impacted the Freedom VCM equity interest, which served as the collateral for this loan receivable. Fair value adjustments on the VCM loan receivable were zero and a decrease of $(165) during the three months ended September 30, 2026 and 2025, respectively. Fair value adjustments on the VCM loan receivable were an increase and (decrease) of $20 and $(754) during the nine months ended September 30, 2026 and 2025, respectively. In light of the Company’s determination that any repayment of the Amended and Restated Note would have been paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying Freedom VCM equity interest and other collateral provided by Mr. Kahn and his spouse, the Company has determined that both VCM and Mr. Kahn are related parties as of September 30, 2026 and December 31, 2025. There wasno interest income during the three and nine months ended September 30, 2026 and 2025. During the three months ended March 31, 2026, the Company collected $1,855 on the loan receivable from the sale of all of the collateral that the Company held for the Vintage loan. No additional collections are expected on the loan receivable.

Torticity, LLC

Torticity is a related party as a result of the Company’s equity ownership in the limited liability company and BRC’s representation on the board of directors (board representation through January 12, 2025). On November 2, 2023, the Company agreed to lend up to $15,369 to Torticity, LLC, of which $6,690 was drawn upon with $8,679 remaining, with interest payable of 15.0% per annum and a maturity date of November 2, 2026. There were amendments to the loan during 2025; however, the entire loan receivable remains impaired withno fair value at September 30, 2026. There wasno interest income on the loan receivable during the three and nine months ended September 30, 2026 and all of 2025.

GA Holdings

GA Holdings is a related party as a result of the Company’s equity investment as fully described in Note 11 - Equity Method Investments and BRC’s representation on the board of directors. The Company provided GA Holdings with a $25,000 secured revolving credit facility upon closing the Great American Transaction on November 15, 2024, which had an initial outstanding balance of $1,698. As subsequently amended, the revolving commitment was revised to $40,000 for the period from March 10, 2025 to June 30, 2025 and reduced back to $25,000 from July 1, 2025 until the maturity date of November 15, 2025. The secured revolving credit facility was secured by all of the assets of GA Holdings and accrued interest at the annual rate of SOFR plus 4.75%. Interest income recorded on the loan receivable was $126 and $828 during the three and nine months ended September 30, 2025, respectively. On October 16, 2025, all outstanding amounts due and owing under this facility were repaid in full to BRF and the facility was terminated.

During the period from November 15, 2024 to October 16, 2025, the Company provided services to GA Holdings in accordance with a transition services agreement for accounting, information technology and other administration services. During the three and nine months ended September 30, 2025, the Company recorded fee revenues for these services in the amount of $239 and $1,933, respectively. Pursuant to an existing consulting arrangement, as amended on December 31, 2025 to extend the term through December 31, 2026, the Company also paid $13 and $118 of consulting fees to the consultant, who was hired in July 2025 as the chief executive officer of GA Holdings, during the three and nine months ended September 30, 2026, respectively.

On November 3, 2026, the Company sold its interest in GA Holdings for $62,250, including $10,570 in cash, and entered into Amendment No. 7 to the Oaktree Credit Facility, which provided for the prepayment of $51,680 of the Oaktree Term Loan, provided additional term loans of $26,500, and eliminated the prepayment premium on the remaining balance. See Note 11 - Equity Method Investments, Note 15 - Term Loans and Revolving Credit Facilities and Note 28 - Subsequent Events.

GA Joann Retail Partnership, LLC

GA Joann Retail Partnership, LLC, formed in February 2025, is a related party as a result of the Company’s equity investment as more fully described in Note 11 - Equity Method Investments for which the Company is deemed to have significant influence. On February 27, 2025, BRF, along with other lenders, entered into a credit agreement with GA Joann Retail Partnership, LLC for an aggregate commitment of $52,000, of which BRF is committed to $24,653. The credit agreement bore interest at 10.00% to be paid monthly as payment-in-kind and capitalized into the outstanding principal balance and had a maturity date of November 26, 2025. This loan receivable was paid in full on April 7, 2025. Interest income recorded on the loan receivable waszero and $223 during the three and nine months ended September 30, 2025, respectively.

Other

The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. During the three months ended September 30, 2026 and 2025, the Company earned $195 and $198 of fees related to these services, respectively. During the nine months ended September 30, 2026 and 2025, the Company earned $595 and $2,819 of fees related to these services, respectively.

The Company established BRC Trust on January 6, 2025, for the purpose of transferring and liquidating the assets of BRCPOF. After the formation of the BRC Trust, BRCPOF transferred its assets and liabilities to the BRC Trust. The Company determined the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights, and substantially all of the activities are conducted on behalf of the Company which owns 13.3%, and related parties of the Company which include executive officers and members of the board of directors of the Company owning 58.2% of the equity interest in the Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidated the BRC Trust upon its formation.

NOTE 26 —BUSINESS SEGMENTS

The following is a summary of certain financial data for each of the Company’s reportable segments:

Reconciliation of Segment (Loss) Income to Net (Loss) Income:

The following table presents revenues by geographical area:

The following table presents long-lived assets, which consists of property and equipment, net, by geographical area:

Segment assets are not reported to, or used by, the Company’s chief operating decision maker to allocate resources to, or assess performance of the segments and therefore, total segment assets have not been disclosed.

NOTE 27 —COMMITMENTS AND CONTINGENCIES

(a) Legal Matters

The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In addition to such legal and other claims, reviews, investigations, and proceedings, the Company and its subsidiaries are subject to the risk of unasserted claims, including, among others, as it relates to matters related to Mr. Kahn and our investment in Freedom VCM. If such claims are made, however, the Company believes it has valid defenses from any such claim and any such claim would be without merit. The Company has not accrued for any such contingent liabilities, but such contingent liabilities could be realized which could have a material adverse impact on the Company’s financial condition.

On August 18, 2026, the FRG Litigation Trust filed a lawsuit in the Court of Chancery for the State of Delaware against Brian Kahn; Matthew Avril; BRC Group Holdings, Inc. (f/k/a B. Riley Financial, Inc.); B. Riley Securities, Inc.; GlassRatner Advisory & Capital Group, LLC (d/b/a B. Riley Advisory Services); Bryant Riley; Willkie Farr & Gallagher LLP; and Jefferies LLC. The complaint alleges that Kahn, aided by Avril, engineered the FRG take-private transaction in 2023 to fraudulently hide financial improprieties with FRG. The complaint alleges that the remaining defendants each played a role in the scheme. The complaint seeks the following damages against all of the defendants: compensatory damages in excess of $700,000, with disgorgement of professional and other fees, plus interest. On August 20, 2026, the lenders who participated in the financing of the FRG take-private transaction in 2023 filed a substantially identical lawsuit in the Court of Chancery for the State of Delaware against the same defendants alleging the same wrongdoing. The complaint seeks the following damages against all of the defendants: unspecified compensatory damages consisting of the full amount of plaintiffs’ losses on the credit agreements plus consequential damages, with disgorgement of professional and other fees, plus interest. The Company believes that these claims are meritless and intends to defend these actions.

On February 2, 2026, a stockholder derivative complaint was filed by Adrian Rubio in the U.S. Federal District Court, Central District of California on behalf of the Company and against the members of the Company’s Board of Directors and certain of the Company’s executive officers. The complaint alleges that certain of the Company’s officers and the board of directors substantially damaged the Company by filing false and misleading statements that omitted material adverse facts regarding Brian Kahn’s involvement in the Prophecy fraud and the regulatory scrutiny that the Company would face because of its entanglements with Kahn and Franchise Group. Claims include breach of fiduciary duties and unjust enrichment. The parties have agreed to stay this action pending decisions in the other derivative matters, and a stipulation to that effect has been accepted by the court. The Company believes that these claims are meritless and intends to defend this action.

On January 2, 2026, a stockholder derivative complaint was filed by Joel Friedman in the U.S. Federal District Court, Central District of California on behalf of the Company and against the members of the Company’s Board of Directors and certain of the Company’s executive officers. The complaint alleges that certain of the Company’s officers and the board of directors substantially damaged the Company by filing false and misleading statements that omitted material adverse facts regarding Brian Kahn’s involvement in the Prophecy fraud and the regulatory scrutiny that the Company would face because of its entanglements with Kahn and Franchise Group. Claims include breach of fiduciary duties, waste of corporate assets, and unjust enrichment. The parties have agreed to stay this action pending decisions in the other derivative matters, and a stipulation to that effect has been submitted to the court. The Company believes that these claims are meritless and intends to defend this action.

On July 11, 2025, the Company’s subsidiary, BRS, received a demand letter from certain parties that invested in a special purpose entity that in turn invested in the going private transaction (the “Transaction”) in August 2023 of Franchise Group, Inc. An arbitration demand (the “Demand”) was filed by such parties with the American Arbitration Association on October 10, 2025 against BRS and related entities (the “BR Defendants”). The Demand alleges that the BR Defendants (i) failed to disclose certain material facts regarding FRG and the Transaction in violation of certain securities laws, (ii) committed fraud and/or civil conspiracy, and (iii) breached fiduciary duties and aided and abetted the breach of fiduciary duties. Such investors seek rescission of the aggregate investment amount of $37,500 plus interest thereon and related fees and expenses. The Company believes such claims are meritless and intends to defend such action.

On February 14, 2025, a stockholder derivative complaint was filed by Michael Marchner in the Delaware Chancery Court on behalf of the Company and against the members of the Company’s Board of Directors. The complaint alleges that certain of the Company’s officers and the board of directors (i) breached their fiduciary duties related to the Company’s involvement with Mr. Kahn and subsequent legal issues, (ii) engaged in misconduct, and (iii) wasted corporate assets, including the approval of improper compensation. On March 30, 2026, the Court of Chancery dismissed the complaint in full. On April 29, 2026, Marchner filed an appeal to the Delaware Supreme Court.

On January 22, 2025, a stockholder derivative complaint was filed by James Smith in the Superior Court for Los Angeles County against the Company, certain of the Company’s executive officers and the members of the Company’s Board of Directors. The complaint alleges that certain of the Company’s officers and directors (i) breached their fiduciary duties related to the Company’s involvement with Mr. Kahn and subsequent legal issues, (ii) engaged in a waste of corporate assets, and (iii) received unjust enrichment. The Company believes that these claims are meritless and intends to defend this action.

On July 19, 2024, the Company received a demand from two stockholders, Renato Rene Amio and Stephen Edwards, to inspect certain of the Company’s books and records pursuant to Section 220 of the Delaware General Corporation Law, focused on the Company’s business dealings with Mr. Kahn and the FRG take-private transaction, and the Company produced documents in response. On January 16, 2026, the same stockholders delivered a pre-suit litigation demand to the Company’s Board of Directors demanding that the Board pursue claims against certain officers and directors for alleged breaches of fiduciary duty, citing Mr. Kahn’s December 2025 guilty plea, alleging that the Board knew or should have known of Mr. Kahn’s history, criticizing the Company’s internal investigations, and seeking disgorgement of compensation, personnel action, and corporate governance reforms. The demand does not specify an amount of alleged damages. The Company believes any resulting claims would be without merit and intends to respond in due course.

On July 9, 2024, a putative class action was filed by Brian Gale, Mark Noble, Terry Philippas and Lawrence Bass in the Delaware Chancery Court against Freedom VCM, Mr. Kahn, Andrew Laurence, Matthew Avril, and the Company. This complaint alleges that former shareholders of FRG suffered damages due to alleged breaches of fiduciary duties by officers, directors and other participants in the August 2023 management-led take-private transaction of FRG and that the Company aided and abetted those alleged breaches of fiduciary duties. The claim seeks an award of unspecified damages, rescissory damages and/or quasi-appraisal damages, disgorgement of profits, attorneys’ fees and expenses, and interest thereon. The Company believes these claims are meritless and intends to defend this action.

On July 3, 2024, each of the Company and Bryant Riley, Chairman and Co-Chief Executive Officer, received a subpoena from the SEC requesting the production of certain documents and other information primarily related to (i) the Company’s business dealings with Mr. Kahn, (ii) certain transactions in an unrelated public company’s securities, and (iii) the communications and related compliance and other policies and procedures of certain of its regulated subsidiaries. On November 22, 2024, each of the Company and Mr. Riley received an additional SEC subpoena requesting the production of certain additional documents and information relating to Franchise Group, Inc. (including its holding company, Freedom VCM Holdings, LLC) as well as Mr. Riley’s personal loan and his pledge of shares of the Company’s common stock as collateral for such loan. In June 2026, the SEC issued subpoenas to certain current and former employees seeking their testimony. As previously disclosed on April 23, 2024, the Audit Committee of the Company’s Board of Directors, with the assistance of Sullivan & Cromwell LLP, the Company’s legal counsel, conducted an internal review, and separately the Audit Committee retained Winston & Strawn LLP, independent legal counsel, to conduct an independent investigation, to review transactions among Mr. Kahn (and his affiliates) and the Company (and its affiliates). The review and the investigation both confirmed that the Company and its executives, including Mr. Riley, had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates. The receipt of subpoenas is not an indication that the SEC or its staff has determined that any violations of law have occurred. Both the Company and Mr. Riley are responding to the subpoenas and are fully cooperating with the SEC.

On May 2, 2024, a putative class action was filed by Ted Donaldson in the Superior Court for the State of California, County of Los Angeles on behalf of all persons who acquired the Company’s senior notes pursuant to the shelf registration statement filed with the SEC on Form S-3 dated January 28, 2021, and the prospectuses filed and published on August 4, 2021 and December 2, 2021 (the “Offerings”). The action asserts claims under §§ 11, 12, and 15 of the Securities Act of 1933 against the Company, some of the Company’s current and former officers and directors, and the financial institutions that served as underwriters and book runners for the Offerings. An amended complaint was filed on September 27, 2024. The amended complaint alleges that the offering documents failed to advise investors that Brian Kahn and/or one or more of his controlled entities was engaged in illicit business activities, that the Company, despite the foregoing, continued to finance transactions for Kahn, eventually enabling him and others to take FRG private, and that the foregoing was reasonably likely to draw regulatory scrutiny and reputational harm to the Company. The Company believes these claims are meritless and intends to defend this action.

On January 24, 2024, a putative securities class action complaint was filed by Mike Coan in U.S. Federal District Court, Central District of California, against the Company, Mr. Riley, Tom Kelleher and Phillip Ahn. The purported class includes persons and entities that purchased shares of the Company’s common stock between May 10, 2023 and November 9, 2023. A second putative class action lawsuit was filed on March 15, 2024 by the KL Kamholz Joint Revocable Trust (“Kamholz”). On August 8, 2024, this matter was consolidated with the Kamholz matter and an amended complaint was then filed on April 21, 2025. The amended complaint alleges that the Company failed to disclose to investors material financial details concerning a going private transaction involving FRG, and that the Company made false or misleading statements concerning the Company’s lending practices, its high concentration of risk in transactions involving Mr. Kahn and his affiliates, the condition and composition of the Company’s loan portfolio, the Company’s due diligence and risk management procedures, and the Company’s level of concern and internal scrutiny concerning Mr. Kahn after it learned he was potentially implicated in a fraud involving an unrelated third party. The amended complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On December 12, 2025, the District Court granted in part and denied in part the Company’s motion to dismiss the consolidated amended complaint. The matter will now move into discovery and class certification proceedings. The Company believes these claims are meritless and intends to defend these actions.

On September 21, 2023, BRCC, a wholly owned subsidiary of the Company, received a demand alleging that certain payments to BRCC in the aggregate amount of approximately $32,166 made by Sorrento Therapeutics, Inc. (“Sorrento”), a Chapter 11 debtor in U.S. Bankruptcy Court, Southern District of Texas (the “Court”), pursuant to that certain Bridge Loan Agreement dated September 30, 2022 between Sorrento and BRCC, are avoidable as preferential transfers (the “Alleged Preferences”). On June 16, 2025, the liquidating trustee (the “Trustee”) on behalf of the Sorrento Liquidating Trust filed a complaint with the Court in an adversary proceeding seeking to avoid and recover the Alleged Preferences. On September 12, 2025, the Court denied BRCC’s motion to dismiss. The Company believes that the Trustee’s claims lack merit and intends to continue to assert its statutory defenses to defeat such claims.

In light of the significant factual issues to be resolved with respect to the asserted claims and other proceedings described above and uncertainties regarding unasserted claims described above, at the present time reasonably possible losses cannot be estimated with respect to the asserted and unasserted claims described in the preceding paragraphs.

(b) Babcock and Wilcox Commitments and Guarantees

On January 18, 2024, the Company entered into a guaranty (the “Axos Guaranty”) in favor of (i) Axos Bank, in its capacity as administrative agent (the “Administrative Agent”) for the secured parties under that certain credit agreement, dated as of January 18, 2024, among B&W, the guarantors party thereto, the lenders party thereto and the Administrative Agent (the “B&W Axos Credit Agreement”), and (ii) the secured parties. Subject to the terms and conditions of the Axos Guaranty, the Company has guaranteed certain obligations of B&W (subject to certain limitations) under the B&W Axos Credit Agreement, including the obligation to repay outstanding loans and letters of credit and to pay earned interest, fees costs and expenses of enforcing the Axos Guaranty, provided however, that the Company’s obligations with respect to the principal amount of credit extensions and unreimbursed letter of credit obligations under the B&W Axos Credit Agreement shall not at any time exceed $150,000 in the aggregate, which is the maximum potential amount of future payments under the guaranty. In consideration for the agreements and commitments under the Axos Guaranty and pursuant to a separate fee and reimbursement agreement, B&W has agreed to pay the Company a fee equal to 2.00% of the aggregate revolving commitments (as defined in the B&W Axos Credit Agreement) under the B&W Axos Credit Agreement, payable quarterly and, at B&W’s election, in cash in full or 50% in cash and 50% in the form of penny warrants. On June 18, 2025, an amendment was made to the Axos Guaranty whereby the Company’s obligations as guarantor were suspended until January 1, 2027. On February 25, 2026, the Axos Guaranty was terminated and is of no further force and effect.

On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties. Pursuant to this indemnity agreement, the Company agreed to indemnify the surety in connection with a default by B&W under a €30,000 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. Under the agreement, the performance bond amount was reduced upon the satisfaction of specified contractual performance obligations. As of September 30, 2026, the Company’s indemnity obligation under the performance bond was €5,000.

(c) Other Commitments

In the normal course of business, the Company enters into commitments to its clients in connection with capital raising transactions, such as firm commitment underwritings, equity lines of credit, or other commitments to provide financing on specified terms and conditions. Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated.

The Company entered intotwo Written Put agreements in April of 2025 (as amended, “April 2025 agreement”) and September of 2025 and the September 2025 Written Put agreement has been subsequently amended (as amended, “September 2025 agreement” and together, with the April 2025 agreement, the “Written Put agreements”). Under the Written Put agreements, the Issuers may require the Company to purchase up to: (i) $15,000 of the Issuer’s convertible preferred stock prior to March 24, 2027 and (ii) $2,000,000 of the Issuer’s convertible preferred stock prior to August 27, 2029, subject to limitations. The maximum put notice is (i) $500 per week in the aggregate and (ii) $150,000 per issuance and no more than one put notice a week, respectively. Conversion of the preferred stock is subject to a 19.99% conversion limitation pursuant to the applicable Nasdaq Listing Rules.

If exercised, the Company would remit cash and receive preferred shares at a discount to their stated value, with the preferred stock convertible at the Company’s option into common shares of the Issuer based on a formula tied to market prices. The preferred stock also includes a contingent redemption feature if the Issuer’s common stock declines below a specified price threshold.

During the three and nine months ended September 30, 2026, the Company purchased an aggregate of $125,000 and $500,000 of preferred shares pursuant to the April 2025 agreement. As of September 30, 2026, future commitments for the Written Puts include: (i) $12,700, which does not meet the requirements to be put by one Issuer, due to a decrease in stock price below the required floor as of the balance sheet date and (ii) $835,000, which remained outstanding from another Issuer and had not been exercised, and no amounts were due (see Note 6 - Fair Value Measurements).

NOTE 28 —SUBSEQUENT EVENTS

Sale of Remaining Interest in GA Holdings

On November 3, 2026, the Company sold its interest in GA Holdings to Oaktree for $62,250, consisting of $10,570 in cash and $51,680 of reduction of indebtedness owed under the Oaktree Term Loan as more fully described in Note 11 - Equity Method Investments and Note 15 - Term Loans and Revolving Credit Facilities. The Company recorded an impairment charge of $14,552 as of September 30, 2026, that resulted in a reduction in the carrying value of the GA Holdings equity investment from $76,802 to its estimated fair value of $62,250.