# B. RILEY WEALTH MANAGEMENT, INC. X-17A-5 (2026-03-31) — Broker-dealer annual report - Company: B. RILEY WEALTH MANAGEMENT, INC. - Form: X-17A-5 - Filed: 2026-03-31 - Period: 2025-12-31 - Accession: 0000739337-26-000001 - CIK: 739337 - File #: 8-31206 - Type: Broker-dealer - Material weakness: No - Auditor: Ryan & Juraska LLP - Auditor location: Chicago, IL - Contact: Mary Swain - Phone: (901) 259-9435 - Signed by: Mary Ann N. Swain (Chief Financial Officer) Original filing: https://www.sec.gov/Archives/edgar/data/739337/000073933726000001/BRWM_Public_FS_2025.pdf --- {0}------------------------------------------------ # B. Riley Wealth Management, Inc. (A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) Financial Report December 31, 2025 This report is filed in accordance with with Rule 17a-5(e)(3) under the Securities Exchange Act of 1934 as a PUBLIC DOCUMENT. {1}------------------------------------------------ | OMB APPROVAL | |--------------------------| | OMB Number: 3235-0123 | | Expires: Nov. 30, 2026 | | Estimated average burden | | hours per response: 12 | | SEC FILE NUMBER | | |-----------------|--| | 8-31206 | | {2}------------------------------------------------ | I Marv Ann N. Swain | | swear (or affirm) that, to the best of my knowledge and belief, the | | | |-----------------------------------------------------------------------------|-------|---------------------------------------------------------------------|--|-------| | financial report pertaining to the firm of B. Riley Wealth Management, Inc. | | | | as of | | 17/21 | a not | | | | - - - - - - - - - - - - - - - - - - - - - - - - - - - {3}------------------------------------------------ # Contents | Contents | |---------------------------------------------------------| | | | | | Report of Independent Registered Public Accounting Firm | | Financial Statement | | Statement of Financial Condition | {4}------------------------------------------------ ![](_page_4_Picture_0.jpeg) RYAN & JURASKA LLP # REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholder of B. Riley Wealth Management, Inc. # Opinion on the Financial Statement We have audited the accompanying statement of financial condition of B. Riley Wealth Management, Inc. (the Company) as of December 31, 2025, and the related notes (collectively referred to as the financial statement). In our opinion, the statement of financial condition presents fairly, in all material respects, the financial position of B. Riley Wealth Management, Inc. as of December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. # Basis for Opinion This financial statement is the responsibility of B. Riley Wealth Management, Inc.s management. Our responsibility is to express an opinion on the Companys financial statement based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to B. Riley Wealth Management, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion. We have served as B. Riley Wealth Management, Inc.s auditor since 2023. Chicago, Illinois March 31, 2026 {5}------------------------------------------------ # Statement of Financial Condition | B. Riley Wealth Management, Inc.
(A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) | | |--------------------------------------------------------------------------------------------------------------|-------------------| | | | | Statement of Financial Condition | | | | December 31, 2025 | | Assets | | | Cash and cash equivalents | \$
12,821,852 | | Securities and other investments owned, at fair value | 589,051 | | Due from clearing brokers | 6,172,686 | | Prepaid expenses and other assets | 2,654,814 | | Forgivable loans, net of allowance for doubtful accounts of \$58,058 | 1,402,129 | | Property and equipment, net of accumulated depreciation | 454,905 | | Goodwill | 4,978,234 | | Operating lease right-of-use assets | 4,831,331 | | Receivable from affiliates | 1,240,010 | | Total Assets | \$
35,145,012 | | Liabilities and Stockholder's Equity | | | Liabilities | | | Accounts payable and accrued expenses | \$
3,823,119 | | Accrued compensation | 3,763,775 | | Payable to affiliates | 225,646 | | Deferred revenue | 443,635 | | Operating lease liabilities | 8,602,880 | | Total Liabilities | 16,859,055 | | Stockholder's Equity | | | Total Stockholder's Equity | 18,285,957 | | Total Stockholder's Equity | 18,285,957 | | Total Liabilities and Stockholder's Equity | \$
35,145,012 | {6}------------------------------------------------ # Notes to Financial Statement # NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS OPERATIONS #### General The Company is a securities broker-dealer providing several classes of services including principal, agency, and The Company operates under the provisions of Paragraphs (k)(2)(ii) of Rule 15c3-3 and Footnote 74 Release No. 34- 70073 of the SEC and, accordingly, is exempt from the remaining provisions of the Rule. The requirement of Paragraph (k)(2)(ii) provides that the Company clear all transactions on behalf of customers on a fully disclosed basis with a clearing broker-dealer. The clearing broker-dealer carries all customer accounts and custodian responsibility includes maintenance and The requirement under Footnote 74 of the SEC Release No. 34-70073 with adopting amendments to 17 C.F.R. § 240.17a-B. Riley Wealth Management, Inc. (the "Company") is a fully disclosed broker-dealer of investment securities. The Company is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") and regulated by Financial Industry Regulatory Authority ("FINRA"). The Company is a full-service brokerage firm incorporated under the laws of the state of Tennessee and has offices throughout the United States with main offices in Memphis, Chicago, Boston, and New York regions. The Company is a fully disclosed broker-dealer and substantially all transactions are cleared through a clearing firm. The Company is a wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc. ("BRWH"). BRWH is a subsidiary of BRC Group Holdings, Inc. ("BRCG"). investment advisory services. preservation of all related books and records as are customarily retained by the clearing broker-dealer. All customer accounts, other than certain mutual funds and annuities, are carried with National Financial Services, LLC ("NFS") and Axos COR Clearing ("AXOS") as of December 31, 2025. The Company completed a clearing firm conversion of customer accounts held at Wells Fargo Clearing Services, LLC ("WFC") to NFS in October 2025. The Company's commissions are collected by the Company's clearing firms. The clearing firms remit commissions, net of clearing charges, to Proprietary securities transactions and related revenues and expenses are recorded on a trade date basis, as if transactions 5 are limited. The Company effectuates securities transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent. The Company does not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent). The Company does not carry accounts of or for customers which includes PAB accounts (as defined in Rule 15c3-3). The Company follows Generally Accepted Accounting Principles ("GAAP"), as established by the Financial Accounting # Clearing Arrangements the Company at least monthly. Amounts receivable and payable for securities transactions that have not reached their contractual settlement date are recorded net in the due from clearing brokers on the statement of financial condition. Customers' securities transactions are #### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Standards Board ("FASB"), to ensure consistent reporting of financial condition. #### (a) Securities Transactions had settled. reported on a settlement date basis with related commission revenues and expenses record trade date basis. {7}------------------------------------------------ # Notes to Financial Statement # NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) #### (b) Receivables Due From Clearing Organizations financial condition, netted by clearing organization. The Company maintains a margin account with WFC and NFS. Depending on daily cash requirements or securities held in inventory at the time, these accounts may represent excess cash on deposit or a margin loan payable. Receivables relating to trade transactions pending settlement are netted in due from clearing brokers in the statement of #### (c) Allowance for Doubtful Accounts The Company recognizes an allowance for losses on forgivable loans in an amount equal to the estimated probable losses net of recoveries. The allowance is based on an analysis of historical bad debt experience, current receivables aging, and expected future write-offs, as well as an assessment of specific identifiable receivables considered at risk or uncollectable. Property and equipment are recorded at cost. Depreciation expense is calculated using the straight-line method over the # (d) Property and Equipment estimated useful lives of the assets, which range from three to seven years. #### (e) Intangible Assets and Goodwill The Company acquired goodwill in the NSC retail brokerage asset acquisition. The Company evaluates its goodwill balance to determine if any impairment exists. The Company calculated the estimated fair value of its reporting unit and compared it to the carrying amount of its reporting unit. An impairment loss is recognized if the carrying value of goodwill asset exceeds fair value. The Company's evaluation indicated no impairment of goodwill for the year ended December 31, Intangible assets determined to have finite lives are amortized based upon the estimated economic benefits received. Intangible assets are tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value has decreased below the carrying value. An impairment loss is recognized if the carrying value of the intangible asset is unrecoverable and exceeds fair value. The carrying value of the intangible asset is considered unrecoverable if it exceeds the sum of the undiscounted cash flows expected to result from use of the asset. There was no impairment loss determined for the year ended December 31, 2025. The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are determined based The Company is included in the consolidated federal income tax return of BRWH. Federal income taxes are calculated as if the Company filed on a separate return basis and the current tax or benefit calculated is either remitted to or received from BRWH. The provision for income tax expense is calculated based on the estimated federal and state effective income tax rates and payable to the parent company on an annual basis; however, the Company will benefit only from net operating losses in 2025. # (f) Income Taxes the event the parent company is able to utilize the net operating losses in the consolidated tax return of the parent company. on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company's deferred taxes primarily result from timing differences in the recognition of depreciation and not operating loss carryforwards for financial reporting and tax reporting purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all the deferred tax assets will not be realized. {8}------------------------------------------------ # Notes to Financial Statement #### NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) # (f) Income Taxes (continued) The preparation of financial statements in conformity with GAAP requires management to calculate estimates and make FASB guidance requires the evaluation of income tax positions taken or expected to be taken while preparing the Company's tax return to determine whether the tax positions are "more likely-than-not" of being sustained "when challenged" or "when examined" by the applicable tax authority. Tax positions not deemed to meet the "more likely-than-not" threshold would be recorded as a tax benefit or expense and liability in the current year. For the year ended December 31, 2025, management has determined that there are no material uncertain income tax positions. The Company files U.S. Federal tax returns as well as returns with various state and local jurisdictions. The Company generally is no longer subject to U.S. Federal, state, and local tax examination by tax authorities for years prior to fiscal year 2022. # (g) Use of Estimates The Company recognizes in earnings an allowance for losses that reflects management's estimate of credit losses for newly recognized financial assets, as well as changes to expected credit losses during the period. Expected credit losses are measured based on historical experience, current conditions, and forecasts that affect the collectability of the reported amount Rebates received from the Company's clearing firm related to customer cash balances held at the clearing firm are recorded assumptions that affect the reported assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and reported revenues and expenses 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 receivable, and intangible assets and goodwill. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under circumstances. Due to inherent uncertainty involved with estimates, actual results could differ from those estimates. # (h) Investment Advisory Fees Investment advisory fees are billed and received quarterly but recognized as earned on a pro-rata basis over the contract term. # (i) Rebate Income when earned. ### (j) Current Expected Credit Losses and are generally recognized earlier than under current standards. # (k) Segment Reporting The Company is engaged in a single line of business as a securities broker-dealer, which is comprised of several classes of services, including principal transactions and agency transactions businesses. The Company has identified its Chief Executive Officer as the chief operating decision maker ("CODM"), who uses net income (loss) to evaluate the results of the business, predominantly in the forecasting process, to manage the Company. Additionally, the CODM uses excess net capital, which is not a measure of profit and loss, to make operational decisions while maintaining capital adequacy, such as whether to reinvest profits or pay dividends. The Company's operations constitute a single operating segment and the CODM manages the business activities using information of the Company as a whole. Therefore, the Company is considered a single reportable segment. The operating revenue and expenses for the entire segment are reflected in the Statement of Operations. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies. {9}------------------------------------------------ # Notes to Financial Statement # NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) # (l) Variable Interest Entities Receivable from clearing organizations 5,444,408 \$ 6,172,686 The Company has entered into agreements acting as a placement agent for the offering of membership interests in numerous investment funds (the "Funds") that are considered variable interest entities under the accounting guidance.The Company earns fees from the Funds in the form of placement agent fees. For placement agent fees, the Company receives a cash fee of generally 7% to 10% of the amount of capital raised for the Funds and the fee is recognized at the time the placement services occurred. As the fee arrangements under such agreements are arm's length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs. The Company clears certain of its proprietary transactions through clearing organizations. Cash and financial instruments owned and held at the clearing organizations may collateralize securities sold not yet purchased and amounts payable and may # NOTE 3 - RECEIVABLES FROM CLEARING ORGANIZATIONS Receivables from clearing organizations at December 31, 2025 consist of the following: | Clearing Deposit, WFC | \$
252,531 | |----------------------------|---------------| | Clearing Deposit, NFS | 400,000 | | Clearing Deposit, Axos COR | 75,747 | | | | | | | serve to satisfy regulatory capital or margin requirements. # NOTE 4 - FAIR VALUE MEASUREMENT 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. The Company utilizes valuation techniques to maximize the use of observable inputs and minimize the use of unobservable inputs. Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. Assets and liabilities recorded at fair value are categorized with the fair value hierarchy based upon the level of judgment associated with the inputs used to measure their value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of fair value hierarchy are described below: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date of identical, unrestricted Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly, and the fair value is determined by applying models or other valuation methodologies. A significant adjustment to Level 3 – Inputs are unobservable for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The inputs into the determination of fair value are based upon the best information in the assets or liabilities. a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement. circumstances and may require significant management judgment or estimation. {10}------------------------------------------------ # Notes to Financial Statement # NOTE 4 - FAIR VALUE MEASUREMENT (continued) A description of the valuation techniques applied to the Company's major categories of assets and liabilities measured at fair In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, a financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. 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 instrument. U.S. Government agency securities – U.S. Government agency securities are comprised of agency issued debt. Agency issued debt securities are generally valued in a manner the same as U.S. Government securities and are categorized in Level 2 value on a recurring basis follows: of the hierarchy. Certificates of deposit – Certificates of deposit are comprised of two main categories consisting of securities traded on national exchanges and securities that are privately held by banks. These securities are valued based on market quotations if available or at the principal balance provided the maturity is less than one year and are typically categorized in Level 1 or Equity securities (common & preferred stock and equity options) – Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded, and valuation adjustments are not applied, they are categorized as Level 1 in the fair value hierarchy. Preferred stock and other securities traded on inactive markets or valued by reference to similar instruments are categorized in Level 2. Level 2 of the fair value hierarchy. Warrants - Warrants are carried at fair value as determined by using the Black-Scholes option pricing model. This model takes into account the underlying securities current market values, the underlying securities market volatility, the terms of the warrants, exercise prices, and risk-free return rate. The market value of the underlying securities' market value is discounted based on the value of a protective put. Depending on market activity, warrants are categorized as Level 2 or Level 3 of the fair Money Market Funds – Money market funds are commonly considered cash equivalents when all of the following attributes are present. A fund's policies include a provision that requires the weighted average maturity of the fund's securities holdings not to exceed 90 days. The investor has the ability to redeem the fund's shares daily in accordance with its cash management policy. The fund's investment attributes are consistent with the investment attributes of an SEC-registered money market Fixed income securities – Fixed income securities are comprised of corporate bonds and municipal securities. The fair value of these securities is estimated using various techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads, fundamental data relating to the issuer, and credit default swap spreads adjusted for any basis difference between cash and derivative instruments. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 1 or Level 2 of the fair value hierarchy. U.S. Government securities – U.S. Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers, and reference data. Certain securities are valued principally using dealer quotation. U.S. Government securities are categorized in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities. value hierarchy. fund. Money market funds are categorized as Level 1 of the fair value hierarchy. {11}------------------------------------------------ # Notes to Financial Statement #### NOTE 4 - FAIR VALUE MEASUREMENT (continued) | | B. Riley Wealth Management, Inc. | | | | |---------------------------------------------------------------------------------------------------------------------|-----------------------------------|--------------------------|-----------------------------|--------------------| | (A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) | Notes to Financial Statement | | | | | | | | | | | NOTE 4 - FAIR VALUE MEASUREMENT (continued) | | | | | | The
following
table
summarizes
the
levels
liabilities carried at fair value on a recurring basis: | assigned,
as
of
December | 31,
2025,
in | valuing
the
Company's | assets
and | | | Level 1 | Level 2 | Level 3 | Total | | Assets | | | | | | Securities and other investments owned, fair value | | | | | | U.S. Government Agency Securities | \$
- | \$
1,151 | \$
- | \$
1,151 | | Equity Securities | 24,118 | - | - | 24,118 | | Municipal Securities
Corporate Bonds | 90,850
- | -
122,082 | -
- | 90,850
122,082 | | Warrants | - | - | 350,850 | 350,850 | | | \$
114,968 | \$
123,233 | \$
350,850 | \$
589,051 | | The
following
reconciliation
table
summarizes | the
beginning
and | ending
balances
of | Level
3
assets | and
liabilities | | measured at fair value on a recurring basis during the year ended December 31, 2025: | | | | | | | | | Unrealized | | | | Beginning
Balance | Purchases
and Sales | Gains
(Losses) | Ending
Balance | | | | | | | | | | | | | | Level 3 | | | | | | Securities and other investments owned, fair value
Warrants | \$
729,665 | \$
- | \$
(378,815) | \$
350,850 | | | \$ | 114,968 | \$ | 123,233 | \$ | 350,850 | \$ | 589,051 | |-----------------------------------------------------------------------------------------------------------------------------|----------------|-----------------------|-------------|------------------------|----------|-------------------|-----------|------------------------| | | | | | | | | | | | | | | | | | | | | | measured at fair value on a recurring basis during the year ended December 31, 2025: | | | | | | | | | | | | | | | | Unrealized | | | | | | Beginning | | Purchases | | Gains | | Ending | | | | Balance | | and Sales | | (Losses) | | Balance | | Level 3 | | | | | | | | | | Securities and other investments owned, fair value | | | | | | | | | | | | | | | | | | | | | \$ | 729,665 | \$ | - | \$ | (378,815) | \$ | 350,850 | | NOTE 5 - REVENUE FROM CONTRACTS WITH CUSTOMERS | | | | | | | | | | | | | | | | | | | | The
Company
recognizes
revenue
in
accordance | with
FASB | ASC
606, | | Revenue
from | | Contracts
with | | Customers.
That | | guidance
requires
public
entities
to
recognize
revenue | when
it | transfers
promised | | goods
or | services | to
customers | in | an
amount | | that
reflects
the
consideration
to
which
the
entity
expects | to
be | entitled
in | exchange | for
those | | goods
or | services. | Revenue
is | | recognized in the period fees are earned and securities transactions are recorded on a trade date basis. | | | | | | | | | | Commissions
is
a
classification
of
revenue
that | include | trades
where | the | Company | enters | arrangements | | with
fund | | companies
to
distribute
shares
to
investors.
The
Company | may | receive | sales-based | commissions | | paid
by | the | fund
up
front | | which
are
recognized
on
the
trade
date
when
the
Company's | | performance | obligation | to
sell | | securities
to | investors | is
fulfilled. | | Sales-based commission revenue varies by investment product and is based on a percentage of an investment product's current | | | | | | | | | | market
value
at
the
time
of
purchase.
The
Company
also | receives | trailing | | commission
revenue, | | also
known | as | 12b-l
fees,
for | | servicing
performance
obligations
relating
to
the | funds
which | are
fulfilled | | over
time. | Trailing | commission | | revenue
is | | recognized
over
the
period
during
which
services
are | performed. | Trailing | commission | revenue | is | variable | | consideration
based | #### NOTE 5 - REVENUE FROM CONTRACTS WITH CUSTOMERS which are recognized on the trade date when the Company's performance obligation to sell securities to investors is fulfilled. Sales-based commission revenue varies by investment product and is based on a percentage of an investment product's current market value at the time of purchase. The Company also receives trailing commission revenue, also known as 12b-l fees, for servicing performance obligations relating to the funds which are fulfilled over time. Trailing commission revenue is recognized over the period during which services are performed. Trailing commission revenue is variable consideration based on an annual percentage rate of the average daily net assets of clients' investment holdings in trail-eligible assets. The rates may differ depending on fund and share class. Any fixed amounts and variable amounts are recognized to the extent that it is probable that a significant revenue reversal will not occur. For variable amounts, commissions earned are dependent on the value of shares as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company's influence. Consideration is constrained until the market value is determinable, which is usually monthly or quarterly. For fixed and variable annuity and life insurance sales, commissions are recognized when earned and related expenses are recorded when incurred. Commissions earned and commissions paid to registered representatives on these products are based on schedules that differ by insurance company. {12}------------------------------------------------ # Notes to Financial Statement #### NOTE 6 - PROPERTY AND EQUIPMENT | | B. Riley Wealth Management, Inc.
(A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) | |-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Notes to Financial Statement | | NOTE 6 - PROPERTY AND EQUIPMENT | | | Property
and
equipment
and
the
related
accumulated
following: | depreciation
and
amortization
at
December
31,
2025
consisted
of | | Furniture and Fixtures | \$
789,527 | | Office Equipment | 150,047 | | Computer Hardware | 865,717 | | Network Equipment | 30,643 | | Software Purchased | 537,724 | | Leasehold Improvements | 899,493 | | | 3,273,151 | | Less accumulated depreciation | (2,818,246)
\$
454,905 | | | | | NOTE 7 - PROFIT-SHARING PLAN | | | The
Company
has
a
401(k)-profit-sharing
plan
401(k)
plan
provides
for
voluntary
contributions
to | administrated
by
B.
Riley
Financial,
Inc.
for
all
full-time
employees.
The
the
plan.
The
Company
matches
25
percent
of
employees'
contributions
up to 6 percent of employees' eligible compensation. Employees become fully vested in employer contributions. | | NOTE 8 - FORGIVABLE LOANS | | | The
Company
entered
into
employment
agreements
employees
in
return
for
the
employees'
commitment
Company
to
forgive
advanced
amounts
over
the
are
expensed
ratably
over
the
term
of
the
agreements.
balances
to
B.
Riley
Wealth
Advisors,
Inc.
("BRWA")
agreement. | with
certain
employees.
The
Company
advanced
amounts
to
to
be
employed
for
a
specified
period.
The
agreements
call
for
respective
employment
periods
which
range
from
30
to
96
months.
Advances
The
Company
transferred
\$1,852,502
included
in
forgivable
loan
for
advisory
activities
of
employees
as
provided
in
shared
services | | NOTE 9 - RELATED-PARTY TRANSACTIONS | | | The
Company
is
a
wholly
owned
subsidiary
of | BRWH.
Through
the
common
ownership
of
BRWH,
the
Company
has | # NOTE 7 - PROFIT-SHARING PLAN #### NOTE 8 - FORGIVABLE LOANS #### NOTE 9 - RELATED-PARTY TRANSACTIONS The Company is a wholly owned subsidiary of BRWH. Through the common ownership of BRWH, the Company has six sister companies: B. Riley Wealth Advisors, Inc, ("BRWA"), B. Riley Wealth Insurance, Inc. ("BRWI"), B. Riley Wealth Tax Services, Inc. ("BRWT"), B. Riley Wealth Portfolio Advisors, LLC ("BRWPA"), B. Riley Wealth Private Shares, LLC ("BRWPS"), and National Securities Corporation ("NSC"). BRWH is a wholly owned subsidiary of BRC Group Holdings, Inc. ("BRCG"). Through BRCG, the Company has related-party relationships with B. Riley Corporate Services, Inc. ("BCS"), B. Riley Principal Investments ("BRPI"), Focal Point Securities, LLC ("FPS"), Glass Ratner ("GRA"), B. Riley Principal Capital II LLC ("BPCT"), B. Riley Capital Management ("BRCM"), and B. Riley Securities, Inc. ("BRS"). Periodically the Company engages in transactions with related parties. Transactions with BRWH include allocation of overhead expenses, payment of expenses on behalf of BRWH, and cash transfers for repayment of amounts due and for operating purposes. Transactions with sister companies include payment of expenses on their behalf and cash transfers for repayment of amounts due and for operating purposes. {13}------------------------------------------------ # Notes to Financial Statement # NOTE 9 - RELATED-PARTY TRANSACTIONS (continued) Freedom VCM Holdings, LLC (fka Franchise Group, Inc.) ("Freedom VCM") - Freedom VCM became a related party to the Company when Bryant Riley, the Co-CEO and Chairman of BRC Group Holdings, Inc was given a Board seat. As of December 31, 2025, Freedom VCM had declared bankruptcy. The Company received commissions while acting as the placement agent for the offering of membership interests in variable interest entities, B. Riley Private Shares 2023-2 QP and B. Riley Private Shares 2023-2 QC. The Company recorded the following related party receivables from and payables to its parent and sister companies that | | B. Riley Wealth Management, Inc. | | | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|-------------------------------------------------------------------------------------------------| | | (A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) | | | | | Notes to Financial Statement | | | | NOTE 9 - RELATED-PARTY TRANSACTIONS (continued) | | | | | B. Riley Private Shares 2023-2 QC. | | | | | The
Company
recorded
the
following
related
arose during the ordinary course of business as of December 31, 2025: | party
receivables
from
and
payables | to
its
parent | and
sister
companies | | Receivable from affiliates | | | | | BCS | | \$ | 393,675 | | BRS | | | 146,599 | | BRWA | | | 588,606 | | BRWT | | | 11,170 | | BRWH | | | 99,960 | | Receivable from affiliates | | \$ | 1,240,010 | | Payable to affiliates | | | | | BRCG | | | 117,167 | | NSC | | | 108,479 | | Payable to affiliates | | \$ | 225,646 | | NOTE 10 - LEASING ARRANGEMENTS | | | | | The
Company's
operating
lease
assets
primarily
operations
with
the
weighted
average
lease
term
of
to
twelve
years.
The
weighted
average
discount
December 31, 2025. | represent
the
lease
of
office
6.7
years.
The
operating
leases
rate
used
to
calculate
the
present | space
where
have
lease
terms
value
of | the
Company
conducts
ranging
from
one
month
lease
payments
was
7% | | As of December 31, 2025, maturities of operating lease liabilities were as follows: | | | | | 2026 | \$
2,889,777 | | | | 2027 | 2,242,309 | | | | 2028 | 2,114,529 | | | | 2029 | 2,027,180 | | | | 2030 | 887,618 | | | | Thereafter | 51,027 | | | | Total lease payments | \$ 10,212,440 | | | | Less: imputed interest | (1,609,560) | | | | Total operating lease liability | \$
8,602,880 | | | #### NOTE 10 - LEASING ARRANGEMENTS | Payable to affiliates | | | | | | |-----------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------|-----------------|--------------|-----------------|--| | | | | | | | | | | | | | | | | | | | | | | NOTE 10 - LEASING ARRANGEMENTS | | | | | | | December 31, 2025. | | | | | | | As of December 31, 2025, maturities of operating lease liabilities were as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2030 | 887,618 | | | | | | Thereafter | 51,027 | | | | | | Total lease payments | \$ 10,212,440 | | | | | | Less: imputed interest | (1,609,560) | | | | | | Total operating lease liability | \$
8,602,880 | | | | | | As of December 31, 2025, the Company did not have any significant leases executed that had not yet commenced. | | | | | | | NOTE 11 - GOODWILL | | | | | | | Goodwill assets as of December 31, 2025, consisted of the following: | | | | | | | | | | Accumulated | Net Carrying | | | | | Cost | Amortization | Value | | | Goodwill | | 4,978,234 | - | 4,978,234 | | | | | \$
4,978,234 | \$
- | \$
4,978,234 | | | During the year ending December 31, 2025, the Company recorded an impairment loss that was related to the sale of a
business disclosed in footnote 15. | | | | | | | | | | | | | #### NOTE 11 - GOODWILL | | Accumulated | Net Carrying | |------|--------------|--------------| | Cost | Amortization | Value | | | | | | | | | {14}------------------------------------------------ # Notes to Financial Statement # NOTE 12 - INCOME TAXES | | B. Riley Wealth Management, Inc. | |---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | (A wholly owned subsidiary of B. Riley Wealth Management Holdings, Inc.) | | | Notes to Financial Statement | | NOTE 12 - INCOME TAXES | | | The
tax
effects
of
temporary
differences
that
defined as follows: | give
rise
to
significant
positions
of
deferred
tax
assets
on
December
31,
2025
are | | Deferred Tax Assets | | | Net Operating Loss Carryforwards
Deferred Revenue | \$
2,733,664
- | | Property and Equipment, net | (26,517) | | Intangible Assets, net | 164,222 | | Lease Liability | 2,385,579 | | Other Accrued | 569,262
5,826,210 | | Deferred Tax Liabilities | | | Property and Equipment, net | - | | Right of Use Asset | (1,339,728) | | Intangible Assets, net | - | | Other | (334,294)
(1,674,022) | | | | | Valuation Allowance
Net Deferred Tax Asset | (4,152,188)
\$
- | | The
Company
is
treated
as
a
disregarded
Inc.
(BRCG)
includes
the
taxable
income
(loss)
had
fully
reserved
the
amount
of
the
deferred
asset / deferred tax liability and corresponding valuation allowance. | entity
for
federal
and
certain
state
income
tax
purposes
and
BRC
Group
Holdings,
of
the
Company
on
its
tax
return.
As
of
December
31,
2025,
the
Company
tax
asset.
Future
transactions
and
taxable
events
could
impact
the
deferred
tax | | This
amount
represented
the
Company's
Company
based
on
pre-tax
income
(loss)
as
income
tax
returns
of
BRCG.
The
Company
December
31,
2025,
tax
years
subsequent
to
the
Company's
significant
state
jurisdictions.
positions. | share
of
the
current
year
and
future
deferred
income
taxes
charged
to
the
part
of
the
consolidated
group
that
will
be
included
in
the
federal
and
state
is
not
currently
under
audit
related
to
its
federal
income
tax
returns.
As
of
December
31,
2021
remain
open
under
the
federal
statute
of
limitations
and
for
As
of
December
31,
2025,
the
Company
had
no
liability
for
uncertain
tax | | As
of
December
31,
2025,
the
Company
million
and
\$9.4
million,
respectively.
The
2026, respectively. | had
federal
and
state
net
operating
loss
carryforwards
of
approximately
\$9.8
federal
and
state
net
operating
losses
expire
beginning
June
30,
2031
and
June
30, | As of December 31, 2025, the Company had federal and state net operating loss carryforwards of approximately \$9.8 million and \$9.4 million, respectively. The federal and state net operating losses expire beginning June 30, 2031 and June 30, positions. Prior to the July 3, 2017 acquisition of the Company by BRCG, management determined that it was more likely than not that the net operating loss carryforwards would expire unused and a valuation allowance equal to 100% of the deferred tax asset was recorded. Subsequent to the acquisition of the Company by BRCG, a portion of the valuation allowance was released as part of the purchase accounting entries. BRCG recorded the purchase accounting entries and did not make an election under ASC 805 to push down the accounting to the Company. Consistent with the release of the valuation allowance by BRCG, the Company did not record a valuation allowance for the loss carryforwards generated after the acquisition but reduces the pre-acquisition net operating loss and valuation allowance as they are utilized in BRCG's consolidated tax returns. {15}------------------------------------------------ # Notes to Financial Statement # NOTE 13 - COMMITMENTS AND CONTINGENCIES #### Legal Matters The Company is subject to certain legal and regulatory matters that arise in the ordinary course of business. In particular, the Company is named in and subject to various proceedings and claims including lawsuits, arbitration claims, and regulatory matters. The Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. Maximum exposure based on damages alleged is \$9,071,000 but not accrued because actual damages have not been reasonably estimated. Liabilities for potential losses are established where management believes that it is probable that a liability was incurred and an amount of loss can be reasonably estimated. In making these decisions, management performs due diligence in a comprehensive review for knowledge about situations, consultations with legal counsel, and historical experience in resolving similar matters. In many lawsuits, arbitrations and regulatory proceedings, it is not possible to determine whether a liability has been incurred, or to estimate the amount of that liability until the matter is close to resolution. However, accruals are reviewed regularly and adjusted to reflect management's estimates on impact of developments, rulings, advice of counsel and any other information pertinent to a particular matter. On July 11, 2025, the Company, and affiliated entities, received a demand letter from certain parties that invested in a special purpose entity (the "SPV") 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 In the normal course of business, the Company is subject to various regulatory inquiries that may result in claims from potential violations which may possibly involve sanctions and or fines. These matters are rigorously defended as they arise. As of December 31, 2025, the Company is currently undergoing its annual cycle exam by FINRA, its designated self-In accordance with applicable accounting standards, the Company has accrued liabilities for contingent litigation and arbitration regulatory matters when present loss contingencies are both probable and can be reasonably estimated. The Company accrued approximately \$291,300 for legal matters and included in accounts payable and other accrued expenses in regulatory organization. No estimate can be made at December 31, 2025. the statement of financial condition. Association on October 10, 2025 against the Company 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 plus interest thereon and related fees and expenses. The Company believes such claims are meritless and intends to defend such action. As of December 31, 2025, legal counsel has not provided an opinion as the demand is in the preliminary stages. {16}------------------------------------------------ # Notes to Financial Statement # NOTE 14 - OFF-BALANCE SHEET RISK, CONCENTRATION OF CREDIT RISK AND GUARANTEES Market risk is the potential change in an instrument's value caused by fluctuations in interest rates, equity prices, credit spreads, or other risks. Exposure to market risk is influenced by many factors including the relationships between financial instruments and the volatility and liquidity in the markets in which the financial instruments are traded. The Company attempts to control its exposure to market risk arising from the use of these financial instruments through various analytical monitoring techniques. Securities sold, not yet purchased (short sales) represent obligations of the Company to make a future delivery of a specific security at a specified price and, correspondingly, create an obligation to purchase the security at the prevailing market price (or deliver the security if owned by the Company) at the later delivery date. As a result, short sales create the risk that the The Company conducts business with several broker-dealers and clearing organizations for its trading activities. The clearing and depository operations of the Company's trading activities are performed by these brokers pursuant to agreements. The Company monitors the credit standing of these brokers on an ongoing basis. In the event a broker is unable Company's ultimate obligation to satisfy the delivery requirements may exceed the amount of the proceeds initially received. to fulfill its obligations, the Company will be subject to credit risk. In the normal course of business, the Company enters contracts that contain a variety of representations and warranties that provide indemnifications under certain circumstances. The Company's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Company that have not yet occurred. The Company believes that it is unlikely it will have to make material payments under these arrangements and has not recorded The Company maintains cash balances at creditworthy financial institutions in bank accounts that, at times, may exceed the \$250,000 insured limit set by the Federal Deposit Insurance Corporation ("FDIC"). The Company maintains fluctuating cash balances in proprietary accounts at the Company's clearing firms identified in Clearing Arrangements. Cash and cash equivalents held in proprietary accounts may be reported in due from clearing brokers. The Company had cash and cash equivalents at WFC \$1,962,505 and NFS \$4,141,405 included in due from clearing broker on statement of financial condition for the year ended December 31, 2025. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on its cash and cash equivalents, or due from clearing broker. The Company completed the sale of a portion of the Company's traditional (W-2) Wealth Management business to Stifel Financial Corp. ("Stifel") on April 4, 2025. The transaction was based on the number of advisors that joined Stifel which included up to 12% of the wealth management advisors and support staff, along with the associated customer accounts. The brokerage and advisory accounts managed by these advisors represented \$4.1 billion or 24% of total assets under management as of March 31, 2025. The Company's assets and liabilities associated with the transaction have been adjusted any contingent liability in the financial statements for these indemnifications. ### NOTE 15 - SALE OF BUSINESS UNIT Goodwill 454,322 ROU Leases, net of lease liabilities 10,145 Fixed Assets, net of accumulated depreciation 67,290 Security Deposits 29,792 Total assets (net liabilities) associated with transaction \$ 2,416,972 according to terms of purchase agreement and included balances described in the table. | Assets & Liabilities Associated with Transaction | | | |--------------------------------------------------|--------------|--| | Forgivable Loans | \$ 1,855,423 | | | | | | | | | | | | | | | | | | | | | | {17}------------------------------------------------ # Notes to Financial Statement # NOTE 16 - REGULATORY REQUIREMENTS The Company has evaluated subsequent events for potential recognition and/or disclosure through March 31, 2026 the The Company is subject to the Securities and Exchange Commission Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and that the percentage of aggregate indebtedness to net capital, both as defined, shall not exceed 1500 percent. On December 31, 2025, the Company had net capital of \$7,520,727 which was \$6,185,545 in excess of required net capital of \$1,335,182. For aggregate indebtedness calculation only, the Company is required to include \$8,000,000 in unrecorded contingent clearing firm termination fees. The Company's net capital percentage of aggregated indebtedness to net capital was 266.30. # NOTE 17 - SUBSEQUENT EVENT date the financial statements were available to be issued. No significant events have occurred. Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.