Accessibility StatementSkip Navigation LOS ANGELES, Nov. 18, 2025 /PRNewswire/ -- B. Riley Financial, Inc. (NASDAQ: RILY) ("BRF" or the "Company"), a diversified holding company, today announced the filing of its Quarterly Report on Form 10-Q for the three-month period ended March 31, 2025. Bryant Riley, Chairman and Co-Chief Executive Officer of B. Riley Financial, commented: "Our first quarter 2025 Form 10-Q filing marks an important step towards timely financial reporting and compliance with Nasdaq listi ...

Financial Performance - Total revenues decreased by $111.5 million to $186.1 million for the three months ended March 31, 2025, compared to $297.6 million for the same period in 2024, representing a decline of 37.5%[348]. - Revenues from services and fees fell by $55.2 million, with significant decreases in the Capital Markets segment by $35.1 million and the Communications segment by $17.9 million[348][349]. - The operating loss for the three months ended March 31, 2025, was $61.5 million, compared to an operating loss of $16.0 million for the same period in 2024[345]. - Net loss attributable to B. Riley Financial, Inc. was $9.975 million for the three months ended March 31, 2025, a decrease of 79.7% compared to a net loss of $49.2 million in the same period in 2024[345]. - The Capital Markets segment's revenues from services and fees decreased to $25.2 million, down 58.2% from $60.3 million in the prior year[350]. - Wealth Management segment revenues from services and fees decreased by $4.5 million to $46.7 million for the three months ended March 31, 2025, down from $51.2 million in the same period of 2024, primarily due to an $8.8 million decrease in wealth and asset management fees[351]. - Communications segment revenues from services and fees decreased by $17.9 million to $63.2 million for the three months ended March 31, 2025, primarily due to a $17.6 million decline in subscription revenue[352]. - E-Commerce segment revenues were $3.5 million during the three months ended March 31, 2025, consisting of commission fees from Nogin, acquired in the second quarter of 2024[353]. - The company generated a net loss of $10.0 million for the three months ended March 31, 2025, compared to a net loss of $49.2 million in the same period of 2024[381]. Investment and Asset Management - As of March 31, 2025, total securities and other investments owned amounted to $231.8 million, down from $282.3 million as of December 31, 2024, representing a decrease of approximately 17.9%[331]. - The carrying value of public equity securities decreased to $79.7 million as of March 31, 2025, from $124.9 million as of December 31, 2024, a decline of about 36.2%[331]. - The carrying value of private equity securities was $97.7 million as of March 31, 2025, down from $107.6 million as of December 31, 2024, reflecting a decrease of approximately 9.2%[335]. - Total assets under management (AUM) were approximately $18.4 billion as of March 31, 2025, down from $25.8 billion as of March 31, 2024, reflecting a significant decline in AUM[351]. - The Company maintains a diverse investment portfolio, including public and private equities, corporate bonds, and other fixed income securities[331]. Corporate Actions and Changes - The Company completed the sale of a portion of its Wealth Management business for net cash consideration of $26.0 million, which included 36 financial advisors managing approximately $4.0 billion, or 23.6%, of assets under management as of March 31, 2025[336]. - The aggregate cash consideration for the sale of GlassRatner and Farber was $117.8 million, subject to adjustment based on working capital within 180 days following the sale date[338]. - The Company announced a name change to BRC Group Holdings, Inc., effective January 1, 2026[341]. - The company completed the sale of Atlantic Coast Recycling for approximately $68.6 million and the financial consulting business for $117.8 million[386]. Debt and Financing - The Targus/FGI Credit Agreement provides a $30.0 million revolving loan facility, with a final maturity date of August 20, 2028[339]. - The Targus/FGI Credit Agreement includes covenants that limit the ability of FGI Loan Parties to incur additional indebtedness and engage in certain transactions[340]. - An additional subordinated loan of $5.0 million was extended to the Targus Borrower, increasing the total principal amount of such loan to $10.0 million[340]. - Interest expense from securities lending and loan participations sold decreased by $34.7 million to $0.7 million for the three months ended March 31, 2025, due to a reduction in loaned securities from $2.0 billion to $33.0 million[370]. - The company has approximately 86% of its debt obligations at fixed interest rates, mitigating exposure to interest rate fluctuations[402]. Cash Flow and Expenses - Cash provided by operating activities decreased to $0.2 million in Q1 2025 from $135.4 million in Q1 2024, a reduction of $135.2 million[395]. - Cash provided by investing activities increased to $59.2 million in Q1 2025 from $18.3 million in Q1 2024, an increase of $40.9 million[397]. - Cash used in financing activities decreased to $172.5 million in Q1 2025 from $190.9 million in Q1 2024, a reduction of $18.4 million[398]. - Selling, general and administrative expenses decreased by $11.6 million to $167.4 million for the three months ended March 31, 2025, from $178.9 million in the same period of 2024[363]. - Direct cost of services decreased by $17.0 million to $42.7 million during the three months ended March 31, 2025, primarily due to a $16.2 million decrease in the Communications segment[361]. - Cost of goods sold decreased by $2.1 million to $36.7 million for the three months ended March 31, 2025, primarily due to lower sales volume in the Consumer Products segment[362]. Tax and Other Income - The benefit from income taxes was $3.0 million for the three months ended March 31, 2025, compared to $21.3 million in 2024, with an effective tax rate of 13.2% versus 25.8%[376]. - Other income included interest income of $1.5 million and dividend income of $0.1 million for the three months ended March 31, 2025, compared to $0.7 million and $3.0 million, respectively, in 2024[371]. - Realized and unrealized losses on investments were $14.5 million for the three months ended March 31, 2025, an improvement from a loss of $34.9 million in the same period of 2024[372]. Preferred and Common Stock Dividends - Preferred stock dividends were $2.0 million for the three months ended March 31, 2025, with a temporary suspension announced for future dividends[380]. - Common stock dividends declared for Q1 2025 were $0.50 per share, consistent with the previous quarter[391]. - Series A Preferred Stock dividends are at a cumulative rate of 6.875%, with $2.0 million in arrears as of March 31, 2025[392]. - Series B Preferred Stock dividends are at a cumulative rate of 7.375%, with $1.3 million in arrears as of March 31, 2025[393].

B. Riley Financial offices in Westwood in 2024. (Jason Armond / Los Angeles Times) The hedge fund investor at the heart of a scandal that damaged B. Riley Financial has been charged with criminal fraud as the West L.A. company continues efforts to dig out from under the debacle. Brian Kahn, 52, who led a disastrous management buyout of a retail holding company partly financed with $600 million in B. Riley debt, has been charged with conspiracy to commit securities fraud in a related case, according to a ...

B. Riley Financial's ( RILY ) thesis is basically based on solvency/reliability/leverage. This is because the company has a very hybrid business model based on being a broker-dealer and investment bank, as well as being activeEquity Research Analyst at DM Martins Research.The best opportunities often don’t scream for attention. I cover stocks that are often undercovered, focusing primarily on Brazil and Latin America — but I also occasionally write about global large caps. My work can also be found on TipRa ...

Core Points - The company B. Riley Financial, Inc. will change its name to BRC Group Holdings, Inc. effective January 1, 2026, reflecting its evolution into a diverse portfolio of companies [1][2] - BRC Group Holdings will encompass various sectors including financial services, telecom, and retail, along with investments in equity, debt, and venture capital [1][4] - The Nasdaq ticker symbol will remain "RILY," and there will be no changes to the ticker symbols for its preferred shares and tradeable senior notes [3] Company Overview - BRC Group Holdings will continue to provide a range of services including capital markets, sales, trading, research, merchant banking, M&A, and restructuring, targeting small cap and middle market companies [4] - The wealth management division will offer services such as brokerage, investment management, insurance, and tax preparation [4] - The telecom segment will provide consumer and business services including traditional, mobile, and cloud phone services, internet and data, security, and email [4] - Retail operations will focus on home furnishings and mobile computing accessories [4] - The company aims to generate shareholder value through opportunistic investments both within and outside its core financial services platform [4]

Financial Performance - For Q3 2025, B. Riley Securities reported total revenue of approximately $109.1 million and adjusted net revenue of approximately $75.7 million[3] - Net income for the third quarter was approximately $41.8 million, while adjusted net income totaled approximately $18.9 million[3] - Investment banking revenue was $53.9 million, while institutional brokerage revenue was $51.6 million for the quarter[14] Capital Management - The company raised approximately $10.5 billion in capital for clients through equity and debt financings during the quarter[2] - B. Riley Securities has a debt-free balance sheet with cash and securities totaling $145.9 million as of September 30, 2025[10] - The Board approved a dividend of $0.40 per common share, amounting to approximately $7.4 million in total distribution[10] - The company continues to evaluate future returns of capital to shareholders based on available excess capital and business growth prospects[10] Risk Management and Strategy - The company emphasized a disciplined approach to risk management and recruiting new talent to strengthen its platform[2] - Upcoming conferences, including the Convergence Conference focusing on AI and blockchain, reflect the company's commitment to high-quality engagement[2] Adjusted Financial Metrics - Adjusted net income excludes certain non-GAAP adjustments, providing a clearer view of the firm's operating performance[4]

Core Viewpoint - B. Riley Financial Inc. has filed its overdue audited results for 2024 but will miss Nasdaq's September 29 deadline for delayed quarterly reports, putting its stock exchange listing in jeopardy [1][2]. Group 1: Filing Status - B. Riley informed Nasdaq that it would be unable to file the required quarterly reports by the September 29 deadline [2]. - The company is required to complete all overdue filings, including the annual Form 10-K and the first and second-quarter 10-Qs, to maintain its listing on Nasdaq [2]. Group 2: Delisting Proceedings - B. Riley plans to request a hearing from Nasdaq if delisting proceedings begin on or before September 29, where it will argue for its continued listing [3]. - The company expressed hope that the Nasdaq hearings panel will allow it to continue trading pending the hearing and grant additional time to remain listed [4]. Group 3: Financial Performance - In its annual report, B. Riley reported a net loss to common shareholders of $772 million for 2024, an increase from a loss of $108 million in 2023 [5]. - The report identified 10 "material weaknesses" in the company's internal controls [5]. Group 4: Auditor Transition - Marcum LLP completed the 2024 audit and is transitioning its duties to BDO USA, which is currently reviewing the 2025 filings [6]. - B. Riley has indicated that it has made "substantial progress" on filings for the first two quarters of this year [6].

Debt Management - Total indebtedness reduced from $2.4 billion at December 31, 2023 to $1.8 billion at December 31, 2024, with a focus on further reductions through asset dispositions [368] - The company anticipates that the reduction of indebtedness will remain a key priority for the foreseeable future [368] - A new credit agreement was established on February 26, 2025, providing a three-year $125.0 million secured term loan credit facility [401] - The company redeemed all issued and outstanding 6.375% 2025 Notes on February 28, 2025, with a total redemption payment including approximately $0.7 million in accrued interest [405] - The outstanding balance on the term loan was zero as of December 31, 2024, compared to $17.8 million as of December 31, 2023 [523] - The outstanding balance on the revolver loan decreased from $43.8 million in 2023 to $16.3 million in 2024 [523] - Interest expense on loans for the year ended December 31, 2024, was $4.2 million, down from $7.3 million in 2023 [525] - The outstanding balance on the term loan was $117.3 million as of December 31, 2024, down from $475.1 million in 2023, reflecting a significant reduction in debt [548] - Interest on the term loan for the year ended December 31, 2024, was $23.5 million, compared to $11.7 million in 2023, indicating an increase in interest expenses due to higher outstanding balances [548] - The interest rate on the term loan as of December 31, 2024, was 11.52%, up from 11.37% in 2023 [548] Financial Performance - Total revenues for the year ended December 31, 2024, were $200.7 million, a slight increase from $198.2 million in 2023, but down from $234.3 million in 2022 [382] - The company recorded realized and unrealized losses of $(263.7) million for the year ended December 31, 2024, compared to $(162.1) million in 2023 [394] - Total revenues decreased by approximately $627.2 million to $838.6 million for the year ended December 31, 2024, compared to $1.5 billion for the year ended December 31, 2023, representing a decline of 42.8% [427] - Operating loss for the year ended December 31, 2024, was $475.7 million, compared to an operating income of $96.1 million for the previous year [422] - Net loss attributable to B. Riley Financial, Inc. was $764.3 million for the year ended December 31, 2024, compared to a net loss of $99.9 million for the year ended December 31, 2023 [422] - Loss from continuing operations before income taxes increased to $878.7 million in 2024 from a loss of $199.3 million in 2023, primarily due to a revenue decrease of approximately $627.2 million [454] - Net loss available to common shareholders was $772.3 million in 2024, compared to $108.0 million in 2023, reflecting similar factors affecting the overall net loss [463] Revenue Breakdown - Wealth management revenues are generated from retail brokerage, investment management, insurance, and tax preparation services [381] - Advisory revenues for 2024 were $77.3 million, compared to $73.9 million in 2023, with advisory assets under management totaling approximately $6.9 billion [382] - Revenues from services and fees in the Capital Markets segment decreased by approximately $56.5 million to $192.5 million, primarily due to declines in corporate finance and investment banking fees [429] - The Wealth Management segment saw an increase in revenues of $4.0 million to $197.5 million, driven by higher wealth and asset management fees [430] - The Financial Consulting segment experienced a revenue increase of $14.9 million to $92.2 million, mainly due to growth in bankruptcy and restructuring services [431] - The Communications segment's revenues decreased by $41.5 million to $289.4 million, largely due to a decline in subscription services [432] - E-Commerce segment revenues from services and fees were $13.9 million for the year ended December 31, 2024, including commission fees from the acquired Nogin [433] - Revenues from services and fees in All Other increased by $42.1 million to $90.0 million for the year ended December 31, 2024, driven by merchandise rental fees and sales from bebe [433] Asset Management - Total assets under management decreased to approximately $20.7 billion as of December 31, 2024, down from $25.4 billion in 2023 and $23.9 billion in 2022 [382] - The fair value of total securities and other investments owned was $282.3 million as of December 31, 2024, a significant decrease from $809.0 million in 2023 [389] - The investment in Freedom VCM Holdings, LLC was valued at zero as of December 31, 2024, down from $287.0 million in 2023, primarily due to bankruptcy filings and operational declines [393] Operational Changes - The company engages in opportunistic investments and acquisitions to maximize free cash flow, while focusing on operational improvements [368] - The company sold its interests in GlassRatner and Farber for an aggregate cash consideration of $117.8 million, with a transition services agreement in place [383] - The Communications Segment includes businesses like Lingo Management and magicJack, with plans for future acquisitions to expand this portfolio [384] - The Consumer Products Segment, acquired in October 2022, focuses on productivity products and has a global distribution network in over 100 countries [385] - The E-Commerce Segment operates Nogin, Inc., providing comprehensive e-commerce solutions on a revenue-sharing basis [386] - The company completed the sale of a portion of its Wealth Management business for net cash consideration of $26.0 million, representing approximately 19.3% of AUM as of December 31, 2024 [400] Impairments and Losses - The company recorded a significant non-cash markdown of $287.0 million related to its investment in Freedom VCM due to the unexpected announcement concerning FRG's former CEO [398] - As of December 31, 2024, the fair value of the Vintage Loan Receivable was $2.1 million, with additional non-cash impairments totaling $118.0 million [398] - Impairment charges recognized during the year ended December 31, 2024 totaled $105.4 million, compared to $70.3 million in the previous year [450] - Realized and unrealized losses on investments were $263.7 million in 2024, up from $162.1 million in 2023, due to a decrease in overall investment values [452] - Loss on extinguishment of debt was $18.7 million in 2024, compared to $5.4 million in 2023, primarily from accelerated paydowns of the Nomura facility [452] Cash Flow and Liquidity - Net cash provided by operating activities increased significantly to $263.6 million in 2024 from $24.5 million in 2023, despite a net loss of $774.9 million adjusted for noncash items [512] - Cash provided by investing activities rose to $440.5 million in 2024 compared to $301.2 million in 2023, driven by significant sales including $234.1 million from Brands Interests and $167.1 million from the Great American Group [514] - Cash used in financing activities increased to $671.9 million in 2024 from $365.9 million in 2023, primarily due to term loan repayments of $444.8 million and senior notes redemption of $140.5 million [515] - The Company’s liquidity is supported by cash flows from operations and proceeds from recent transactions, which are expected to meet working capital and capital expenditure requirements for at least the next 12 months [509]

Core Viewpoint - B. Riley Financial Inc. is facing significant challenges due to identified weaknesses in its controls, which may impact its financial reporting and regulatory compliance [1][2][3]. Group 1: Audit and Financial Reporting - B. Riley has reported 10 weaknesses in its controls, including issues related to technology and investment valuation, identified during consultations with Marcum LLP [1][2]. - The company is dismissing Marcum after the completion of the overdue 2024 annual report, which has not been given a specific completion date [2]. - Nasdaq has warned B. Riley of potential delisting on September 29 if audited results are not filed by then [3]. Group 2: Related Party Transactions - The auditor has emphasized the need for B. Riley to improve its processes for identifying and disclosing material related-party transactions, which could pose conflicts of interest [4]. Group 3: Past Issues and Investigations - The quality of B. Riley's reports came under scrutiny after the bankruptcy of Franchise Group Inc., one of its major holdings, leading to an SEC investigation [5]. Group 4: Financial Health and Future Audits - B. Riley is working on improving its balance sheet and cash flows by selling assets and refinancing debt, reporting positive net income from operating businesses for the first time since late 2023 [6]. - Marcum is currently handling the 2024 audit while preparing to transition duties to BDO USA for the 2025 filings [7]. - BDO USA has indicated it would not be independent for auditing due to prior non-audit services provided to B. Riley, which were terminated in April [8].

Group 1 - B. Riley Financial appointed BDO USA as its independent registered public accounting firm for the 2025 audit [1] - The appointment is part of the company's efforts to ensure timely financial reporting [1] - Following the announcement, shares of B. Riley Financial increased by 2.05% in pre-market trading, reaching $5.23 [1]