8-K: B. Riley Financial Faces Nasdaq Delinquency Notice Due to Delayed 10-K Filing

B. Riley Financial received a notification from Nasdaq regarding non-compliance with listing rules due to the delayed filing of its 2024 Form 10-K.

Summary

• B. Riley Financial received a delinquency notification from Nasdaq on April 3, 2025, because it didn't file its 2024 Form 10-K on time.
• This means the company isn't following Nasdaq Listing Rule 5250(c)(1), which requires timely filing of financial reports.
• The notification doesn't immediately affect the listing of B. Riley's securities on Nasdaq.
• B. Riley has until June 2, 2025, to submit a plan to Nasdaq on how it will regain compliance.
• If Nasdaq accepts the plan, B. Riley could get an extension until September 29, 2025, to file the report.
• The company expects to file its 2024 Form 10-K before the June 2, 2025 deadline.
• Previously, B. Riley estimated impairment charges of $73 million to $79 million for the quarter ended December 31, 2024, primarily related to Nogin Commerce, LLC.
• The company has revised the estimated impairment charges to approximately $68 million to $74 million.
• Nogin signed a Deed of Assignment for the Benefit of Creditors on March 31, 2025, and B. Riley will no longer control Nogin's assets, which were approximately $9 million at December 31, 2024.
• B. Riley completed the sale of a portion of its Wealth Management business to Stifel Financial Corp. on April 4, 2025, for $26.0 million in cash.
• The sale included 36 financial advisors whose managed accounts represented approximately $4.0 billion in assets under management (AUM) as of March 31, 2025.
• Following the transaction, B. Riley's Wealth Management business has approximately 240 financial advisors with approximately $15 billion in AUM as of March 31, 2025.

Sentiment

Score: 4

Explanation: The sentiment is negative due to the Nasdaq delinquency notice and impairment charges, offset slightly by the completion of the Wealth Management business sale. The delay in filing the 10-K raises concerns about financial reporting and internal controls.

Positives

• The Nasdaq notification has no immediate effect on the listing of B. Riley's securities.
• B. Riley expects to file its 2024 Form 10-K before the Nasdaq deadline to submit a plan.
• The sale of a portion of the Wealth Management business to Stifel Financial Corp. was completed for $26.0 million in cash.

Negatives

• B. Riley received a delinquency notification from Nasdaq due to the delayed filing of its 2024 Form 10-K.
• The company is not in compliance with Nasdaq Listing Rule 5250(c)(1).
• Nogin Commerce, LLC experienced challenges in executing its growth plans, leading to impairment charges.
• B. Riley will no longer control Nogin's assets after March 31, 2025.

Risks

• Failure to submit an acceptable plan to Nasdaq by June 2, 2025, could lead to delisting.
• The company's business, operating results, financial condition, and stock price could be materially negatively affected if risks or uncertainties materialize or assumptions prove incorrect.
• The estimated impairment charges related to Nogin Commerce, LLC could impact the company's financial results.

Future Outlook

The company plans to file its Annual Report as promptly as possible to regain compliance with Nasdaq listing rules and assumes no duty to update forward-looking statements, except as required by law.

Management Comments

• The Company continues to work diligently to complete its Annual Report and plans to file its Annual Report as promptly as possible to regain compliance with the Rule.

Industry Context

The delay in filing the 10-K and the impairment charges related to Nogin could raise concerns among investors about B. Riley's internal controls and the performance of its investments. The sale of a portion of the Wealth Management business to Stifel Financial Corp. suggests a strategic shift or streamlining of operations.

Comparison to Industry Standards

• Many financial services companies, such as Goldman Sachs, JP Morgan Chase, and Morgan Stanley, are expected to file their 10-K reports on time.
• Delays in filing can be viewed negatively by the market, as timely reporting is a key aspect of corporate governance and transparency.
• Impairment charges are not uncommon, but their size and the reasons behind them are scrutinized by investors.
• The sale of a business unit is a strategic decision that can be compared to similar moves by competitors to optimize their portfolios.

Stakeholder Impact

• Shareholders may be concerned about the potential delisting and the impact on the stock price.
• Employees in the Wealth Management business may have been affected by the sale to Stifel Financial Corp.
• Creditors of Nogin Commerce, LLC will be impacted by the Deed of Assignment for the Benefit of Creditors.

Next Steps

• B. Riley must submit a plan to Nasdaq by June 2, 2025, to regain compliance.
• The company needs to file its 2024 Form 10-K as promptly as possible.
• The company will continue to operate its Wealth Management business with approximately 240 financial advisors.

Key Dates

Keywords

B. Riley Financial, Nasdaq, Delinquency Notice, Form 10-K, Financial Reporting, Nogin Commerce, Impairment Charges, Wealth Management, Stifel Financial, Assets Under Management