10-Q: B. Riley Financial Reports Q1 Loss Amid Restructuring

Sentiment:

Quarterly Report 18 November 2025 4:06 PM

B. Riley Financial, Inc. reported a reduced net loss in Q1 2025, driven by significant asset sales and debt exchanges, while facing ongoing Nasdaq compliance issues and multiple legal challenges.

Delay expectedThe company has not yet filed its Quarterly Reports on Form 10-Q for the periods ended March 31, 2025, and June 30, 2025, leading to Nasdaq non-compliance.The company received a Staff Determination Letter from Nasdaq on October 1, 2025, regarding its failure to file the Q1 and Q2 2025 10-Q reports.

Capital raiseThe company may explore various funding options in the future, including additional debt exchanges, refinancing of existing senior notes and other debt, equity capital raises, the sale of operating companies, or the liquidation of securities and investments owned to provide liquidity to meet future debt obligations.The company completed four private exchange transactions from April 7, 2025, to July 11, 2025, exchanging $231.924 million of existing senior notes for $140.670 million of 8.00% Senior Secured Second Lien Notes due 2028, effectively a debt capital raise/restructuring.The new Oaktree Credit Agreement, entered into on February 26, 2025, provided a $125.0 million secured term loan and a $35.0 million secured delayed draw term loan, representing a significant capital infusion.

Worse than expectedTotal revenues decreased by 37.5% year-over-year, indicating a significant decline in business activity across multiple segments.Operating loss increased from $16.019 million to $61.477 million, showing a deterioration in core operational profitability.Net cash provided by operating activities fell dramatically from $135.357 million to $0.184 million, highlighting a severe reduction in cash generated from core operations.Assets under management (AUM) continued to decline, reflecting challenges in the wealth management segment.The company is in non-compliance with Nasdaq filing rules, indicating significant operational and regulatory issues.

Summary

Net loss attributable to B. Riley Financial, Inc. significantly decreased to $9.975 million for Q1 2025, compared to $49.165 million in Q1 2024.
Total revenues declined by 37.5% to $186.063 million in Q1 2025 from $297.590 million in Q1 2024, primarily due to decreases in services and fees, interest income from securities lending, and loans.
Operating loss increased to $61.477 million in Q1 2025 from $16.019 million in Q1 2024.
A substantial gain of $80.841 million was recognized from the sale and deconsolidation of businesses in Q1 2025, compared to $0.314 million in Q1 2024.
A gain of $10.532 million was recorded from senior note exchanges in Q1 2025.
The company completed the sale of its Atlantic Coast Recycling business on March 3, 2025, for approximately $68.638 million in net cash proceeds, recognizing a gain of $52.430 million.
A portion of the Wealth Management business was sold to Stifel Financial Corp. on April 4, 2025, for $26.037 million, representing 36 financial advisors and approximately $4.0 billion in AUM.
The financial consulting business (GlassRatner and Farber) was sold on June 27, 2025, for $117.800 million in cash consideration, with a gain of $66.795 million expected in Q2 2025.
Total assets decreased to $1.511 billion as of March 31, 2025, from $1.783 billion as of December 31, 2024.
Total liabilities decreased to $1.965 billion as of March 31, 2025, from $2.239 billion as of December 31, 2024.
Cash and cash equivalents decreased to $138.303 million as of March 31, 2025, from $146.852 million as of December 31, 2024.
Restricted cash significantly decreased to $1.375 million as of March 31, 2025, from $100.475 million as of December 31, 2024, primarily due to debt repayment.
Securities and other investments owned decreased to $231.760 million as of March 31, 2025, from $282.325 million as of December 31, 2024.
Loans receivable, at fair value, increased to $98.596 million as of March 31, 2025, from $90.103 million as of December 31, 2024.
Senior notes payable, net, decreased to $1.371 billion as of March 31, 2025, from $1.531 billion as of December 31, 2024.
Net cash provided by operating activities was $0.184 million in Q1 2025, a significant decrease from $135.357 million in Q1 2024.
Net cash provided by investing activities increased to $59.181 million in Q1 2025 from $18.278 million in Q1 2024, driven by asset sales.
Net cash used in financing activities decreased to $172.529 million in Q1 2025 from $190.933 million in Q1 2024.
Assets under management (AUM) decreased to approximately $18.4 billion at March 31, 2025, from $20.7 billion at December 31, 2024, and $25.8 billion at March 31, 2024.
The company temporarily suspended dividends on its Series A and B Preferred Stock on January 21, 2025, and on common stock in August 2024, to prioritize debt reduction.

Sentiment

Score: 3

Explanation: The company is undergoing significant restructuring and asset divestitures to address its debt burden and liquidity challenges. While these actions have led to a reduced net loss and improved cash from investing activities, core operational revenues and cash flow from operations have declined sharply. The ongoing Nasdaq non-compliance and numerous legal proceedings, particularly those related to Brian Kahn, cast a significant shadow over the company's stability and reputation. The suspension of dividends further signals financial strain. The overall outlook remains highly uncertain and risky despite active management efforts to stabilize the business.

Positives

Net loss attributable to B. Riley Financial, Inc. decreased significantly by 79.7% to $9.975 million in Q1 2025, compared to $49.165 million in Q1 2024.
Basic loss per common share improved to $(0.39) in Q1 2025 from $(1.71) in Q1 2024.
Realized and unrealized losses on investments decreased to $14.5 million in Q1 2025 from $34.9 million in Q1 2024, a favorable variance of $20.4 million.
The company generated substantial gains from the sale and deconsolidation of businesses, totaling $80.841 million in Q1 2025.
A gain of $10.532 million was recognized from senior note exchange transactions, contributing to debt restructuring efforts.
Strategic asset sales, including Atlantic Coast Recycling ($68.638 million net cash) and a portion of the Wealth Management business ($26.037 million net cash), are improving liquidity and reducing debt.
The company completed four private exchange transactions from April 7, 2025, to July 11, 2025, reducing aggregate principal of existing senior notes by $231.924 million in exchange for $140.670 million of new secured notes, effectively reducing overall debt obligations.
Management believes current cash, investments, credit facilities, and proceeds from recent sales will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months.

Negatives

Total revenues decreased by 37.5% to $186.063 million in Q1 2025, from $297.590 million in Q1 2024.
Operating loss increased to $61.477 million in Q1 2025, compared to an operating loss of $16.019 million in Q1 2024.
Interest income from loans decreased significantly by $18.9 million to $3.196 million in Q1 2025, primarily due to non-accrual of interest on several adjusted loans and a reduction in loan receivable balances.
Interest income from securities lending decreased substantially by $37.0 million to $0.840 million in Q1 2025, due to a decrease in securities borrowed balances and reduced business activity.
Assets under management (AUM) continued to decline, reaching $18.4 billion at March 31, 2025, down from $25.8 billion a year prior.
Net cash provided by operating activities plummeted to $0.184 million in Q1 2025, from $135.357 million in Q1 2024, indicating a significant reduction in operational cash generation.
The company incurred a loss on extinguishment of debt of $10.427 million in Q1 2025.
The company is in non-compliance with Nasdaq Listing Rule 5250(c)(1) for not filing its Q1 and Q2 2025 Quarterly Reports on Form 10-Q, receiving a Staff Determination Letter on October 1, 2025.
Dividends on both Series A and B Preferred Stock were temporarily suspended on January 21, 2025, and common stock dividends were suspended in August 2024, impacting shareholder returns.
The company identified multiple material weaknesses in internal controls, including IT general controls, management review controls over investment valuation, related party transactions, income tax provision, goodwill impairment, and journal entry controls.

Risks

Nasdaq delisting risk due to non-compliance with filing requirements for Q1 and Q2 2025 10-Q reports, which could lead to reduced liquidity and trading activity for its securities.
Ongoing SEC subpoenas and investigations related to business dealings with Brian Kahn, certain public company securities transactions, and compliance policies, which could result in adverse judgments or reputational harm.
Multiple pending legal proceedings, including arbitration demands and stockholder derivative and class action complaints, alleging securities law violations, fraud, breach of fiduciary duties, and corporate asset waste, with potential for substantial compensatory or punitive damages.
Exposure to credit risk from loans receivable, particularly the Vintage Capital Management, LLC loan ($224.968 million principal, $2.334 million fair value) where collateral is impacted by bankruptcy proceedings and the borrower is facing securities fraud charges.
Material weaknesses in internal control over financial reporting, including IT general controls, management review controls over investment valuation, related party transactions, income tax provision, goodwill impairment assessment, and journal entry controls, which could adversely affect financial reporting reliability.
Volatility in revenues and results of operations due to changing conditions in financial markets, which can impact investment banking, securities lending, and fair value adjustments on loans.
Dependence on communications, information, and other systems and third parties, with potential for disruptions or failures.
Illiquidity of, and potential losses from, proprietary investments, which can be subject to significant market fluctuations.
Changing economic and market conditions, including inflation and potential recession or economic downturn, which could adversely affect business segments.
The effects of tariffs and other governmental initiatives, including supply chain disruptions, labor shortages, and increased labor costs, particularly impacting the Consumer Products segment.
Potential liability and harm to reputation from inaccurate appraisals or valuations.
Loss of key personnel could disrupt operations and strategic initiatives.
Ability to borrow under credit facilities and comply with terms of credit agreements and senior notes, given the level of indebtedness and ongoing restructuring efforts.
Impact of geopolitical instability, including wars, conflicts, and terrorist attacks, on business operations and financial performance.
The company's decision to suspend preferred and common stock dividends may negatively impact investor confidence and access to capital markets.

Future Outlook

The company expects current cash and cash equivalents, securities and other investments owned, funds available under credit facilities, cash generated from operating activities, and proceeds from the Wealth Management Transaction and the sale of the GlassRatner and Farber financial consulting business to be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months. The company anticipates continued year-over-year decline in subscription revenue for Lingo, magicJack, Marconi Wireless, and UOL due to older technologies and higher customer acquisition costs for cellular services. The company is actively working towards filing its Q2 2025 and Q3 2025 Quarterly Reports on Form 10-Q to regain Nasdaq compliance. The company will change its name to BRC Group Holdings, Inc., effective January 1, 2026.

Management Comments

Management concluded that the sale of the GlassRatner business represented a strategic shift that had a major effect on the Company's operations in 2025.
We believe that the current cash and cash equivalents, securities and other investments owned, funds available under our credit facilities, cash expected to be generated from operating activities and proceeds received from the Wealth Management Transaction and the sale of the Company's GlassRatner and Farber financial consulting business will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements.
We expect Lingo, magicJack, Marconi Wireless and UOL subscription revenue to continue to decline year-over-year as landline and VoIP technologies are older and cellular services have a higher customer acquisition cost than profitability.
The decrease in investment banking revenues is related to the episodic nature of this business and the decline in business due to the late SEC filings of the parent company.
The benefit for income taxes in 2025 is primarily limited to the reversal of tax reserves due to the expiration of stature of limitations since the Company has a valuation allowance for deferred taxes.
In August 2024, we announced the suspension of our common stock dividend as we prioritize reducing our debt.

Industry Context

B. Riley Financial operates in a diversified financial services platform, including investment banking, wealth management, and asset management, alongside a portfolio of communications and consumer product businesses. The decline in traditional landline and VoIP technologies, as noted by management, reflects broader industry shifts towards mobile and cloud-based communication services. The strategic divestitures of non-core assets like environmental services and parts of wealth management indicate a focus on streamlining operations and strengthening the balance sheet in a challenging economic and regulatory environment. The decrease in AUM in the wealth management segment suggests competitive pressures or client outflows, potentially exacerbated by the company's recent financial and legal issues. The overall market for investment banking can be episodic, and the company's specific challenges with SEC filings likely impacted its ability to secure new mandates.

Comparison to Industry Standards

The decline in AUM in the Wealth Management segment to $18.4 billion at March 31, 2025, from $25.8 billion at March 31, 2024, is a significant reduction. For comparison, major wealth management firms like Morgan Stanley Wealth Management reported $5.3 trillion in client assets as of Q1 2025, while regional players like Stifel Financial Corp. (the acquirer of a portion of B. Riley's wealth management business) reported $480 billion in client assets as of Q1 2025. B. Riley's decline is substantial relative to its size and the broader market trends, which have generally seen AUM growth.
The company's Consolidated Total Funded Debt Ratio maximum of 2.00:1.00 for Q1 2025 and subsequent quarters is a key leverage metric. While specific industry benchmarks vary by sub-sector (e.g., investment banking vs. consumer products), a ratio of 2.00:1.00 indicates a moderate to high level of debt relative to EBITDA. For comparison, diversified financial services firms often aim for lower leverage, though highly acquisitive or asset-heavy models might tolerate higher ratios. The target of 1.50:1.00 from March 31, 2027, suggests a planned deleveraging.
The Consolidated Fixed Charge Coverage Ratio minimum of 1.10:1.00 for Q1 2025 is a relatively tight covenant, indicating that the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) must cover its fixed charges (interest and principal payments) by at least 1.1 times. This is a lower threshold compared to many financially healthy companies, which often target ratios of 2.0x or higher to provide a comfortable buffer against operational fluctuations. This suggests a degree of financial strain or aggressive financial structuring.
The significant decrease in net cash provided by operating activities from $135.357 million in Q1 2024 to $0.184 million in Q1 2025 is a stark contrast. This indicates a substantial weakening of core operational cash generation, which is a critical indicator of financial health. Leading financial services firms typically demonstrate robust and consistent positive operating cash flows, even during periods of market volatility, to fund investments and debt obligations without relying heavily on asset sales or external financing.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
President of the Company	Kenny Young	NA	September 20, 2024	Resigned from position, Executive Consulting Agreement with B&W terminated.
Chief Executive Officer and Board Member of Freedom VCM	Brian Kahn	NA	January 22, 2024	Resigned due to alleged involvement with misconduct concerning Prophecy Asset Management LP.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Control Weaknesses	Identified material weaknesses in IT general controls (Lingo, Targus, Bebe), management review controls (investment valuation, related party transactions, income tax, goodwill impairment), and journal entry controls.	Prior to March 31, 2025	Could adversely affect the reliability of financial reporting and the preparation of financial statements. Remediation efforts are ongoing.
Nasdaq Listing Compliance	Received Staff Determination Letter for non-compliance with Nasdaq Listing Rule 5250(c)(1) due to delayed Q1 and Q2 2025 10-Q filings.	October 1, 2025	No immediate delisting, but risk of delisting if compliance is not regained, potentially leading to reduced liquidity and trading activity for securities.
Name Change	Company will change its name to BRC Group Holdings, Inc.	January 1, 2026	Strategic rebranding, potential impact on market perception and corporate identity.

Legal Proceedings

SEC subpoenas to the company and Bryant Riley (Chairman and Co-CEO) requesting documents related to business dealings with Brian Kahn, transactions in an unrelated public company's securities, and compliance policies. Internal review and independent investigation found no involvement or knowledge of alleged misconduct.
Arbitration demand filed on October 10, 2025, against B. Riley Securities, Inc. (BRS) and related entities seeking $37.5 million plus interest for alleged failure to disclose material facts regarding Franchise Group, Inc. (FRG) take-private transaction, fraud, civil conspiracy, and breach of fiduciary duties.
Stockholder derivative complaint filed on February 14, 2025, by Michael Marchner in Delaware Chancery Court against the Board of Directors, alleging breach of fiduciary duties related to Brian Kahn involvement, misconduct, and waste of corporate assets.
Stockholder derivative complaint filed on January 22, 2025, by James Smith in Superior Court for Los Angeles County against the company, executive officers, and Board of Directors, alleging breach of fiduciary duties related to Brian Kahn involvement, waste of corporate assets, and unjust enrichment.
Putative class action filed on July 9, 2024, by Brian Gale et al. in Delaware Chancery Court against Freedom VCM, Brian Kahn, Andrew Laurence, Matthew Avril, and the company, alleging damages to former FRG shareholders due to alleged breaches of fiduciary duties in the August 2023 management-led take-private transaction of FRG, and that the company aided and abetted these breaches.
Putative securities class action filed on May 2, 2024, by Ted Donaldson in Superior Court for Los Angeles County against the company, current/former officers and directors, and underwriters, alleging offering documents failed to disclose Brian Kahn's illicit business activities and the company's continued financing of his transactions.
Putative securities class action filed on January 24, 2024, by Mike Coan (consolidated with KL Kamholz Joint Revocable Trust on August 8, 2024) in U.S. Federal District Court, Central District of California, alleging failure to disclose material financial details concerning the FRG take-private transaction, false/misleading statements on lending practices, risk concentration in Brian Kahn transactions, loan portfolio condition, due diligence, and risk management procedures.
Demand received on September 21, 2023, by B. Riley Commercial Capital, LLC (BRCC) alleging $32.2 million in payments from Sorrento Therapeutics, Inc. are avoidable preferential transfers. A complaint was filed on June 16, 2025, and BRCC's motion to dismiss was denied on September 12, 2025.

Related Party Transactions

Vintage Capital Management, LLC (VCM) loan receivable: $2,334k fair value, $224,968k principal balance as of March 31, 2025. Collateral (Freedom VCM equity interests) impacted by Freedom VCM's Chapter 11 bankruptcy filing. Brian Kahn, an affiliate of VCM, is facing securities fraud charges.
W.S. Badcock Corporation and Freedom VCM Receivables, Inc. loans receivable: Sold on February 7, 2025, resulting in net realized losses of $38,100k. These were related party loans due to the company's relationship with Freedom VCM.
Conns, Inc. loan receivable: Paid in full on January 24, 2025. Previously a related party loan due to Freedom VCM's influence over Conns.
Torticity, LLC loan receivable: Fair value was zero at March 31, 2025, and December 31, 2024, due to impairment. Torticity is a related party due to the company's equity ownership and board representation.
Great American Holdings, LLC revolving credit facility: Outstanding balance of $27,898k at March 31, 2025. Repaid in full on October 16, 2025. GA Holdings is a related party due to the company's equity investment and board representation.
GA Joann Retail Partnership, LLC loan receivable: Outstanding balance of $14,184k at March 31, 2025. Paid in full on April 7, 2025. GA Joann Retail Partnership, LLC is a related party due to the company's equity investment and significant influence.
Services and fees from related parties: $3,945k for Q1 2025, compared to $3,631k for Q1 2024.
Due from related parties: $438k as of March 31, 2025, including amounts from unconsolidated affiliated funds.
Due to related parties: $1,782k as of March 31, 2025, primarily related to bebe's rent-to-own stores franchised through Freedom VCM.
BRC Partners Opportunity Trust (BRC Trust): Formed January 6, 2025, with 58.2% of its equity interests owned by related parties, including executive officers and board members of the company. The company consolidates BRC Trust as its primary beneficiary.

Stakeholder Impact

Shareholders: Suspension of common and preferred stock dividends negatively impacts income-focused shareholders. Nasdaq non-compliance and potential delisting pose risks to liquidity and share price. Legal proceedings could result in significant financial liabilities.
Employees: Management changes, including the resignation of Kenny Young, and restructuring charges related to workforce reductions, indicate potential instability for employees. Share-based compensation plans are in place, but their value is tied to company performance.
Customers: The sale of a portion of the Wealth Management business to Stifel and the financial consulting business (GlassRatner and Farber) may lead to changes in service providers for affected clients. The decline in subscription revenue for communications segments suggests potential customer churn or reduced service offerings in older technologies.
Creditors: Debt restructuring efforts, including senior note exchanges and new credit facilities, aim to manage and reduce debt, which could be positive for creditors. However, the high level of indebtedness, financial covenants, and ongoing legal challenges present risks. The suspension of preferred stock dividends directly impacts preferred shareholders.
Regulatory Bodies: The company is under scrutiny from Nasdaq for filing delays and from the SEC regarding business dealings and compliance policies, indicating a need for improved regulatory adherence and transparency.

Next Steps

File the Quarterly Reports on Form 10-Q for the periods ended March 31, 2025, and June 30, 2025, to regain compliance with Nasdaq listing rules.
Timely file the Quarterly Report on Form 10-Q for the period ended September 30, 2025.
Await determination from the Nasdaq Hearings Panel following the hearing held on November 4, 2025.
Continue to implement measures to remediate identified material weaknesses in internal control over financial reporting.
Monitor financial performance to ensure sufficient liquidity to fund operations and execute the business plan.
Potentially explore additional funding options, including debt exchanges, refinancing, equity capital raises, or further asset sales.
Address ongoing legal proceedings and regulatory matters, including SEC subpoenas and class action lawsuits.

Key Dates

Date	Description
August 21, 2023	Company acquired an equity interest in Freedom VCM for $216,500k in cash in connection with the FRG take-private transaction. Also, a subsidiary and Vintage Capital Management, LLC (VCM) amended and restated a promissory note for $200,506k. All equity interests of BRRII were sold to Freedom VCM Receivables.
October 6, 2023	Company obtained a majority ownership interest in bebe, including its credit agreement with SLR Credit Solutions.
November 2, 2023	B. Riley Principal Investments, LLC (BRPI) and other lenders entered into a loan receivable with Torticity, LLC for an aggregate principal amount of $25,000k, with BRPI's commitment of $15,000k.
November 3, 2023	B. Riley Principal Investments, LLC (BRPI) along with other lenders entered into a loan receivable with Torticity, LLC for an aggregate principal amount of $25,000k, of which $15,000k was BRPI's total principal commitment.
November 21, 2023	Company agreed to lend up to $10,000k to Kanaci Technologies, LLC (Kanaci), of which $4,000k was drawn upon.
December 18, 2023	WSBC was sold by Freedom VCM to Conns, Inc. (Conns), and the company loaned Conns $108,000k pursuant to the Conns Term Loan.
January 18, 2024	Company entered into a guaranty (Axos Guaranty) in favor of Axos Bank for Babcock & Wilcox Enterprises, Inc. (B&W) obligations up to $150,000k.
January 22, 2024	Mr. Kahn resigned as CEO and a member of the board of directors of Freedom VCM. A stockholder derivative complaint was filed by James Smith in the Superior Court for Los Angeles County.
February 5, 2024	Company sold its interest in 272LP and 272 Advisors, LLC for a promissory note of $2,000k plus additional revenue sharing up to $4,100k. Unfunded loan commitment with Applied Digital (APLD) of $5,500k was terminated.
February 14, 2024	Company collected $15,000k of principal payments on the Conns loan, reducing the balance to $93,000k.
March 15, 2024	A second putative class action lawsuit was filed by the KL Kamholz Joint Revocable Trust.
March 31, 2024	End of the three-month reporting period for comparative financial statements.
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.
May 3, 2024	Company acquired a 50% equity interest in Bicoastal Alliance, LLC (Bicoastal) through a wholly owned subsidiary of Nogin. Nogin entered into a secured convertible promissory note agreement for $15,000k.
May 23, 2024	Company sold its equity interest in California Natural Resources Group, LLC (CalNRG) for $9,272k, resulting in a realized gain of $254k.
June 27, 2024	Conns entered into a Consulting Agreement with a then-subsidiary of the Company. Company entered into Amendment No. 3 to the Targus Credit Agreement.
July 3, 2024	Company and Bryant Riley received a subpoena from the SEC.
July 9, 2024	A putative class action was filed by Brian Gale, Mark Noble, Terry Philippas and Lawrence Bass in the Delaware Chancery Court.
July 23, 2024	Conns and certain of its subsidiaries filed voluntary positions for relief under Chapter 11 Cases of Title 11 of the Bankruptcy Code.
August 8, 2024	The Mike Coan class action matter was consolidated with the Kamholz matter.
August 14, 2024	Company contributed $1,602k to Targus to cure a minimum EBITDA covenant breach. Bicoastal entered into an agreement to acquire the remaining 50% equity interest upon paydown of a $700k note payable.
August 2024	Company announced the suspension of its common stock dividend.
September 17, 2024	Company entered into Amendment No. 4 to the Credit Agreement (Fourth Nomura Amendment) and made a payment of $85,857k.
September 20, 2024	Kenny Young resigned from his position as President of the Company, and the Executive Consulting Agreement with B&W was terminated.
September 27, 2024	An amended complaint was filed in the Ted Donaldson class action.
September 30, 2024	The Kanaci Technologies, LLC loan receivable in the amount of $11,453k was converted to equity.
October 9, 2024	The promissory note with Freedom VCM affiliate was cancelled, and certain receivables were transferred to B. Riley Receivables, LLC.
October 13, 2024	Company entered into an equity purchase agreement to sell a 52.6% ownership stake in the Great American Group to Oaktree.
October 25, 2024	Company completed a transaction contributing brand assets into a securitization financing vehicle for $189,300k in net proceeds. Bebe sold its equity interests in BB Brand Holdings and BKST Brand Management for $46,624k in net cash proceeds.
October 31, 2024	Company signed a definitive agreement to sell a portion of its Wealth Management business to Stifel Financial Corp.
November 3, 2024	Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code.
November 4, 2024	A hearing before the Nasdaq Hearings Panel was held regarding non-compliance.
November 7, 2024	Company entered into Amendment No. 4 to the Targus Credit Agreement, waiving the September 30, 2024 minimum EBITDA covenant breach.
November 10, 2024	News reports and a court filing indicated that the U.S. Attorneys Office has charged Brian Kahn with securities fraud.
November 15, 2024	Company completed the sale of a majority interest in Great American Holdings, LLC (GA Holdings) to Oaktree. BRCC entered into a senior secured revolving credit and guaranty agreement with Great American Holdings, LLC.
November 22, 2024	Company and Mr. Riley received an additional SEC subpoena.
December 9, 2024	Company entered into Amendment No. 5 to the Credit Agreement (Fifth Amendment).
December 17, 2024	Company entered into an agreement with the first-lien holder banks of the Conns loan receivable to assign the first-lien loan receivable to the Company for $27,738k.
December 31, 2024	End of the fiscal year for audited financial statements.
January 3, 2025	Company entered into Amendment No. 6 to the Credit Agreement (Sixth Amendment).
January 6, 2025	BRPI Acquisition Co LLC (BRPAC) entered into an amended and restated credit agreement (BRPAC Amended Credit Agreement) for a new five-year $80,000k term loan. BRC Trust was formed.
January 21, 2025	Company announced the temporary suspension of dividends on its Series A and B Preferred Stock.
January 24, 2025	The Conns loan receivable was paid in full.
February 7, 2025	Company sold the two loans related to W.S. Badcock Corporation and Freedom VCM Receivables, Inc., recording net realized losses of $38,100k.
February 14, 2025	A stockholder derivative complaint was filed by Michael Marchner in the Delaware Chancery Court.
February 26, 2025	Company and BRFH entered into a new credit agreement with Oaktree Capital Management, L.P. for a $125,000k secured term loan and a $35,000k secured delayed draw term loan. The senior secured revolving credit and guaranty agreement with Great American Holdings, LLC was transferred to BRF Finance Co., LLC.
February 27, 2025	BRF, along with other lenders, entered into a credit agreement with GA Joann Retail Partnership, LLC for an aggregate commitment of $52,000k, with BRF committed to $24,653k. Company contributed capital and financial support to GA Joann Retail Partnership, LLC.
February 28, 2025	Company redeemed all $145,211k of issued and outstanding 6.375% Senior Notes due February 28, 2025.
March 3, 2025	Company completed the sale of its majority owned subsidiary Atlantic Coast Recycling, LLC for proceeds of approximately $68,638k.
March 10, 2025	A merger subsidiary of B. Riley Securities Holdings, Inc. (BRSH) merged with a shell corporation, issuing 0.6% of equity in BRSH to certain investors. BRSH issued 1,873,600 restricted stock awards to employees and officers.
March 24, 2025	Company and BRFH Borrower entered into Amendment No. 1 to the Oaktree Credit Facility.
March 26, 2025	Company completed a private exchange transaction with an institutional investor, exchanging $86,309k of 5.50% Senior Notes due March 2026 and $36,745k of 5.00% Senior Notes due December 2026 for approximately $87,753k aggregate principal amount of New Notes. Company issued 351,012 warrants.
March 31, 2025	End of the current quarterly reporting period. Company signed a Deed of Assignment for the Benefit of Creditors (ABC) for Nogin, deconsolidating its results.
April 3, 2025	Company made a principal payment of $4,479k on the Oaktree Delayed Draw Facility, paying it off in full.
April 4, 2025	Sale of a portion of the Wealth Management business to Stifel Financial Corp. was completed for net cash consideration of $26,037k.
April 7, 2025	The GA Joann Retail Partnership, LLC loan receivable was paid in full.
April 7, 2025 to July 11, 2025	Company completed four private exchange transactions with institutional investors, exchanging $231,924k aggregate principal of existing senior notes for $140,670k aggregate principal of 8.00% Senior Secured Second Lien Notes due 2028.
April 21, 2025	An amended complaint was filed in the Mike Coan/Kamholz class action matter.
May 9, 2025	The Targus Borrower entered into Amendment No. 5 to the Targus Credit Agreement.
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.
June 16, 2025	The liquidating trustee on behalf of the Sorrento Liquidating Trust filed a complaint with the Court in an adversary proceeding seeking to avoid and recover alleged preferential transfers from BRCC.
June 18, 2025	An amendment was made to the Axos Guaranty, suspending the company's obligations as guarantor until January 1, 2027.
June 27, 2025	Company signed an equity purchase agreement to sell all of the membership interests of GlassRatner Advisory & Capital Group, LLC and B. Riley Farber Advisory Inc. Company made a principal payment of $62,500k on the Oaktree Term Loan.
July 8, 2025	Company and BRFH Borrower entered into Amendment No. 2 to the Oaktree Credit Facility.
July 25, 2025	The Targus Borrower entered into Amendment No. 6 to the Targus Credit Agreement.
August 15, 2025	The Targus Borrower entered into Amendment No. 7 to the Targus Credit Agreement.
August 20, 2025	The Targus Borrower and certain subsidiaries entered into a Revolving Credit, Receivables Purchase, Security and Guaranty Agreement with FGI Worldwide LLC to refinance the existing Targus Credit Agreement.
September 12, 2025	The Court denied BRCC's motion to dismiss in the Sorrento Therapeutics, Inc. legal proceeding.
September 19, 2025	Company filed its Form 10-K for the fiscal year ended December 31, 2024.
October 1, 2025	Company received a Staff Determination Letter from the Nasdaq Listing Qualifications Staff based on non-compliance with Nasdaq Listing Rule 5250(c)(1).
October 8, 2025	Company timely submitted a request for a hearing before a Nasdaq Hearings Panel. Company and BRFH Borrower entered into Amendment No. 3 to the Oaktree Credit Facility.
October 10, 2025	An arbitration demand was filed by certain parties with the American Arbitration Association against BRS and related entities.
October 16, 2025	All outstanding amounts due and owing under the Great American Holdings, LLC revolving credit facility were repaid in full and the facility was terminated.
November 11, 2025	Company announced that it will change its name to BRC Group Holdings, Inc.
November 18, 2025	Date of filing of this Quarterly Report on Form 10-Q.
December 10, 2025	Initial appearance, bond hearing, and plea agreement hearing scheduled for Brian Kahn before the New Jersey District Court.
January 1, 2026	Effective date for the company's name change to BRC Group Holdings, Inc.
March 31, 2027	Earliest possible maturity date for the Oaktree Term Loan after Amendment No. 3.
January 1, 2028	Maturity date for the 8.00% Senior Secured Second Lien Notes (New Notes).
August 20, 2028	Final maturity date of the Targus/FGI Credit Agreement.
January 6, 2030	Final maturity date for the BRPAC Amended Credit Agreement term loan.

Recommendation

hold

B. Riley Financial is in a complex transitional phase, actively divesting non-core assets and restructuring its debt to improve its financial position. The reduction in net loss and strategic debt exchanges are positive steps towards stabilization. However, significant headwinds persist, including a sharp decline in operating cash flow, continued AUM erosion, and critical Nasdaq non-compliance issues that could lead to delisting. The numerous ongoing legal and regulatory investigations, particularly those involving Brian Kahn, introduce substantial uncertainty and potential liabilities. While management is taking decisive actions, the company's financial health remains fragile, and the outcome of these challenges is uncertain. A 'hold' recommendation is appropriate, as the stock carries high risk but also potential for recovery if the restructuring efforts succeed and legal/regulatory issues are favorably resolved. Investors should monitor progress on Nasdaq compliance, legal outcomes, and sustained improvements in operating cash flow before considering further investment.

Keywords

Financial Services, Investment Banking, Wealth Management, SEC Filing, 10-Q, Earnings Report, Asset Sales, Debt Restructuring, Nasdaq Compliance, Legal Proceedings, Risk Factors, Corporate Governance, Liquidity, Capital Markets, Communications, Consumer Products, E-Commerce, Brian Kahn, Senior Notes, Preferred Stock, Dividends, Internal Controls, Financial Performance

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