RILY 10-Q

BRC Group Holdings, Inc. (RILY)

10-Q 2023-05-08 For: 2023-03-31

View Original

Added on April 08, 2026


Delaware						27-0223495
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

11100 Santa Monica Blvd., Suite 800 Los Angeles, CA						90025
(Address of Principal Executive Offices)						(Zip Code)


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 202 3 and December 31, 20 2 2	1
	Condensed Consolidated Statements of Operations for the three months ended March 31, 202 3 and 202 2	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 202 3 and 202 2	3
	Condensed Consolidated Statements of Equity for the three months ended March 31, 202 3 and 202 2	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 202 3 and 202 2	6
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	64
Item 5.	Other Information	65
Item 6.	Exhibits	65

SIGNATURES		67


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Assets:
Cash and cash equivalents	$	209,971	$	268,618
Restricted cash	2,351		2,308
Due from clearing brokers	19,145		48,737
Securities and other investments owned, at fair value	1,049,230		1,129,268
Securities borrowed	2,942,843		2,343,327
Accounts receivable, net	120,853		149,110
Due from related parties	372		1,081
Loans receivable, at fair value (includes $97,062 and $98,729 from related parties as of March 31, 2023 and December 31, 2022, respectively)	772,085		701,652
Prepaid expenses and other assets	491,872		460,696
Operating lease right-of-use assets	88,989		88,593
Property and equipment, net	27,577		27,141
Goodwill	523,997		512,595
Other intangible assets, net	366,060		374,098
Deferred income taxes	2,845		3,978
Total assets	$	6,618,190	$	6,111,202
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	59,969	$	81,384
Accrued expenses and other liabilities	263,335		322,974
Deferred revenue	84,019		85,441
Deferred income taxes	34,274		29,548
Due to related parties and partners	431		2,210
Due to clearing brokers	6,033		19,307
Securities sold not yet purchased	7,806		5,897
Securities loaned	2,937,982		2,334,031
Operating lease liabilities	100,075		99,124
Notes payable	19,882		25,263

Revolving credit facility	139,463		127,678
Term loans, net	626,613		572,079
Senior notes payable, net	1,722,977		1,721,751
Total liabilities	6,002,859		5,426,687

Commitments and contingencies (Note 17)
Redeemable noncontrolling interests in equity of subsidiaries	174,967		178,622
B. Riley Financial, Inc. equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,563 and 4,545 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; and liquidation preference of $114,082 and $113,615 as of March 31, 2023 and December 31, 2022, respectively	—		—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,135,636 and 28,523,764 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	3		3
Additional paid-in capital	445,352		494,201
Accumulated deficit	(62,566)		(45,220)
Accumulated other comprehensive loss	(1,604)		(2,470)
Total B. Riley Financial, Inc. stockholders’ equity	381,185		446,514
Noncontrolling interests	59,179		59,379
Total equity	440,364		505,893
Total liabilities and equity	$	6,618,190	$	6,111,202


	Three Months Ended March 31,
	2023		2022
Revenues:			As Restated
Services and fees	$	235,559	$	202,814
Trading income (loss) and fair value adjustments on loans	51,568		(19,278)
Interest income - Loans and securities lending	77,186		61,426
Sale of goods	67,777		1,878
Total revenues	432,090		246,840
Operating expenses:
Direct cost of services	54,397		11,651
Cost of goods sold	47,626		2,251
Selling, general and administrative expenses	212,627		175,199
Restructuring charge	93		—

Interest expense - Securities lending and loan participations sold	32,424		11,766
Total operating expenses	347,167		200,867
Operating income	84,923		45,973
Other income (expense):
Interest income	2,574		67
Dividend income	13,204		7,861
Realized and unrealized losses on investments	(28,442)		(49,112)
Change in fair value of financial instruments and other	(209)		5,981
(Loss) income from equity investments	(10)		6,775
Interest expense	(47,561)		(30,436)
Income (loss) before income taxes	24,479		(12,891)
(Provision for) benefit from income taxes	(7,919)		3,695
Net income (loss)	16,560		(9,196)
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests	(595)		866
Net income (loss) attributable to B. Riley Financial, Inc.	17,155		(10,062)
Preferred stock dividends	2,012		2,002
Net income (loss) available to common shareholders	$	15,143	$	(12,064)

Basic income (loss) per common share	$	0.53	$	(0.43)
Diluted income (loss) per common share	$	0.51	$	(0.43)

Weighted average basic common shares outstanding	28,585,337		27,855,033
Weighted average diluted common shares outstanding	29,513,435		27,855,033


	Three Months Ended March 31,
	2023		2022
Net income (loss)	$	16,560	$	(9,196)
Other comprehensive income (loss):
Change in cumulative translation adjustment	866		(488)
Other comprehensive income (loss), net of tax	866		(488)
Total comprehensive income (loss)	17,426		(9,684)
Comprehensive (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests	(449)		866
Comprehensive income (loss) attributable to B. Riley Financial, Inc.	$	17,875	$	(10,550)


	Preferred Stock			Common Stock			Additional Paid-in Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
	Shares	Amount		Shares	Amount
Balance, January 1, 2023	4,545	$	—	28,523,764	$	3	$	494,201	$	(45,220)	$	(2,470)	$	59,379	$	505,893
Preferred stock issued	18	—		—	—		467		—		—		—		467
Vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		1,012,751	—		(4,819)		—		—		—		(4,819)
Common stock repurchased and retired	—	—		(1,452,831)	—		(53,803)		—		—		—		(53,803)
Shares issued for the acquisition of a business	—	—		51,952	—		2,111		—		—		—		2,111
Remeasurement of Lingo redeemable minority interest	—	—		—	—		(6,483)		—		—		—		(6,483)
Share based payments	—	—		—	—		13,678		—		—		—		13,678
Dividends on common stock ($1.00 per share)	—	—		—	—		—		(31,291)		—		—		(31,291)
Dividends on preferred stock	—	—		—	—		—		(2,012)		—		—		(2,012)
Net income	—	—		—	—		—		17,155		—		(449)		16,706
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(720)		(720)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		431		431
Remeasurement of B. Riley Principal 250 Merger Corporation subsidiary temporary equity	—	—		—	—		—		(1,198)		—		—		(1,198)
Acquisition of noncontrolling interest	—	—		—	—		—		—		—		538		538
Other comprehensive income	—	—		—	—		—		—		866		—		866
Balance, March 31, 2023	4,563	$	—	28,135,636	$	3	$	445,352	$	(62,566)	$	(1,604)	$	59,179	$	440,364

Balance, January 1, 2022	4,512	$	—	27,591,028	$	3	$	413,486	$	248,862	$	(1,080)	$	43,930	$	705,201
Preferred stock issued	23	—		—	—		639		—		—		—		639
Vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		32,328	—		(1,294)		—		—		—		(1,294)
Shares issued for the acquisition of FocalPoint	—	—		304,878	—		20,320		—		—		—		20,320
Share based payments	—	—		—	—		17,013		—		—		—		17,013
Dividends on common stock ($1.00 per share)	—	—		—	—		—		(31,033)		—		—		(31,033)
Dividends on preferred stock	—	—		—	—		—		(2,002)		—		—		(2,002)
Net loss	—	—		—	—		—		(10,062)		—		866		(9,196)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(935)		(935)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		1,770		1,770
Acquisition of noncontrolling interests	—	—		—	—		—		—		—		182		182
Other comprehensive loss	—	—		—	—		—		—		(488)		—		(488)
Balance, March 31, 2022	4,535	$	—	27,928,234	$	3	$	450,164	$	205,765	$	(1,568)	$	45,813	$	700,177


Proceeds from revolving line of credit	29,021		—
Repayment of revolving line of credit	(17,237)		—
Repayment of notes payable	(11,510)		(357)
Repayment of term loan	(72,924)		(4,116)
Proceeds from term loan	128,187		—
Proceeds from issuance of senior notes	—		20,037

Payment of debt issuance and offering costs	(1,957)		—
Payment of contingent consideration	(1,302)		(181)
Payment of employment taxes on vesting of restricted stock	(4,819)		(1,294)
Common dividends paid	(46,856)		(27,886)
Preferred dividends paid	(2,012)		(2,002)
Repurchase of common stock	(53,803)		—
Distribution to noncontrolling interests	(1,023)		(1,051)
Contribution from noncontrolling interests	431		1,770



Proceeds from issuance of preferred stock	467		639
Net cash used in financing activities	(55,337)		(14,441)
Decrease in cash, cash equivalents and restricted cash	(59,884)		(64,852)
Effect of foreign currency on cash, cash equivalents and restricted cash	1,280		(496)
Net decrease in cash, cash equivalents and restricted cash	(58,604)		(65,348)
Cash, cash equivalents and restricted cash, beginning of period	270,926		279,860
Cash, cash equivalents and restricted cash, end of period	$	212,322	$	214,512

Supplemental disclosures:
Interest paid	$	81,423	$	38,272
Taxes paid	$	2,932	$	73


	Three Months Ended March 31, 2022
	As Previously Reported		Restatement Adjustments		Restatement Reference	As Restated
Statement of Operations
Revenues:
Services and fees	$	210,675	$	(7,861)	(a)	$	202,814
Trading (loss) income and fair value adjustments on loans	(68,390)		49,112		(b)	(19,278)
Interest income - Loans and securities lending	61,426		—			61,426
Sale of goods	1,878		—			1,878
Total revenues	205,589		41,251			246,840

Operating expenses:
Direct cost of services	11,651		—			11,651
Cost of goods sold	2,251		—			2,251
Selling, general and administrative expenses	175,199		—			175,199


Interest expense - Securities lending and loan participations sold	11,766		—			11,766
Total operating expenses	200,867		—			200,867
Operating income	4,722		41,251			45,973

Other income (expense):
Interest income	67		—			67
Dividend income	—		7,861		(a)	7,861
Realized and unrealized gains (losses) on investments	—		(49,112)		(b)	(49,112)
Change in fair value of financial instruments and other	5,981		—			5,981
Income from equity method investments	6,775		—			6,775
Interest expense	(30,436)		—			(30,436)
Loss before income taxes	(12,891)		—			(12,891)
Provision for income taxes	3,695		—			3,695
Net loss	(9,196)		—			(9,196)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	866		—			866
Net loss attributable to B. Riley Financial, Inc.	(10,062)		—			(10,062)
Preferred stock dividends	2,002		—			2,002
Net loss available to common shareholders	$	(12,064)	$	—		$	(12,064)

Basic loss per common share	$	(0.43)				$	(0.43)
Diluted loss per common share	$	(0.43)				$	(0.43)

Weighted average basic common shares outstanding	27,855,033					27,855,033
Weighted average diluted common shares outstanding	27,855,033					27,855,033


	March 31, 2023		December 31, 2022
Securities and other investments owned:
Equity securities	$	929,582	$	1,046,710
Corporate bonds	65,470		8,539
Other fixed income securities	5,248		3,956
Partnership interests and other	48,930		70,063
	$	1,049,230	$	1,129,268

Securities sold not yet purchased:
Equity securities	$	6,122	$	4,466
Corporate bonds	480		1,162
Other fixed income securities	1,204		269
	$	7,806	$	5,897


	December 31, 2022		September 30, 2022
Total assets	$	197,101	$	202,520
Total liabilities	$	6,789	$	5,737
Equity attributable to investee	$	190,312	$	196,783


	For the three months ended December 31,
	2022		2021
Revenues	$	27,971	$	27,209
Net income (loss) attributable to investees	$	11,808	$	12,882


	December 31, 2022		September 30, 2022
Total assets	$	942,655	$	881,567
Total liabilities	$	944,744	$	898,695
Equity attributable to investee	$	(2,089)	$	(17,128)


	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2023 Using
	Fair value as of March 31, 2023		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Funds held in trust account	$	176,182	$	176,182	$	—	$	—
Securities and other investments owned:
Equity securities	842,662		483,621		—		359,041
Corporate bonds	65,470		53,716		11,754		—
Other fixed income securities	5,248		—		5,248		—
Total securities and other investments owned	913,380		537,337		17,002		359,041
Loans receivable, at fair value	772,085		—		—		772,085
Total assets measured at fair value	$	1,861,647	$	713,519	$	17,002	$	1,131,126

Liabilities:
Securities sold not yet purchased:
Equity securities	$	6,122	$	6,122	$	—	$	—
Corporate bonds	480		—		480		—
Other fixed income securities	1,204		—		1,204		—
Total securities sold not yet purchased	7,806		6,122		1,684		—

Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,654		—		—		4,654
Warrant liabilities	381		381		—		—
Contingent consideration	28,884		—		—		28,884
Total liabilities measured at fair value	$	41,725	$	6,503	$	1,684	$	33,538


	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2022 Using
	Fair value at December 31, 2022		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Funds held in trust account	$	174,437	$	174,437	$	—	$	—
Securities and other investments owned:
Equity securities	952,601		584,136		—		368,465
Corporate bonds	8,539		—		8,539		—
Other fixed income securities	3,956		—		3,956		—
Total securities and other investments owned	965,096		584,136		12,495		368,465
Loans receivable, at fair value	701,652		—		—		701,652
Total assets measured at fair value	$	1,841,185	$	758,573	$	12,495	$	1,070,117

Liabilities:
Securities sold not yet purchased:
Equity securities	$	4,466	$	4,466	$	—	$	—
Corporate bonds	1,162		—		1,162		—
Other fixed income securities	269		—		269		—
Total securities sold not yet purchased	5,897		4,466		1,431		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,648		—		—		4,648
Warrant liabilities	173		173		—		—
Contingent consideration	31,046		—		—		31,046
Total liabilities measured at fair value	$	41,764	$	4,639	$	1,431	$	35,694


	Fair value at March 31, 2023		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	297,136	Market approach	Multiple of EBITDA	1.5x - 16.0x	6.3x
				Multiple of Sales	3.8x	3.8x
				Market price of related security	$0.01 - $14.05	$7.33
	57,974		Discounted cash flow	Market interest rate	23.8%	23.8%
	3,931		Option pricing model	Annualized volatility	30.0% - 510.0%	80.0%
Loans receivable at fair value	744,018		Discounted cash flow	Market interest rate	9.7% - 35.6%	18.1%
	28,067		Market approach	Market price of related security	$13.25	$13.25
Total level 3 assets measured at fair value	$	1,131,126

Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,654	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	28,884		Discounted cash flow	EBITDA volatility	75%	75%
				Asset volatility	69.0%	69.0%
				Market interest rate	8.5%	8.5%
				Revenue volatility	5.1%	5.1%
Total level 3 liabilities measured at fair value	$	33,538


	Three Months Ended March 31,
	2023		2022
Balance, beginning of period	$	3,664	$	3,658
Add: Additions to reserve	3,173		405
Less: Write-offs	(488)		(960)
Less: Recovery	(25)		—
Balance, end of period	$	6,324	$	3,103


	Fair value at December 31, 2022		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	304,172	Market approach	Multiple of EBITDA	1.5x - 10.5x	6.0x

				Multiple of Sales	3.0x	3.0x
				Market price of related security	$10.01 - $18.88	$16.91
	57,267		Discounted cash flow	Market interest rate	23.8%	23.8%
	7,026		Option pricing model	Annualized volatility	0.3% - 26.1%	70.0%
Loans receivable at fair value	694,499		Discounted cash flow	Market interest rate	6.0% - 83.5%	23.9%
	7,153		Market approach	Multiple of EBITDA	4.5x	4.5x
Total level 3 assets measured at fair value	$	1,070,117

Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,648	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	31,046		Discounted cash flow	EBITDA volatility	80.0%	80.0%
				Asset volatility	69.0%	69.0%
				Market interest rate	8.5%	8.5%
Total level 3 liabilities measured at fair value	$	35,694


	Level 3 Balance at Beginning of Year		Level 3 Changes During the Period								Level 3 Balance at End of Period
			Fair Value Adjustments		Relating to Undistributed Earnings		Purchases, Sales and Settlements		Transfer in and/or out of Level 3
Three Months Ended March 31, 2023
Equity securities	$	368,465	$	(9,016)	$	—	$	6,487	$	(6,895)	$	359,041
Loans receivable at fair value	701,652		43,459		231		26,743		—		772,085
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,648		—		308		(302)		—		4,654
Contingent consideration	31,046		(3,447)		—		1,285		—		28,884


Three Months Ended March 31, 2022
Equity securities	$	377,549	$	(4,543)	$	—	$	19,912	$	(4,254)	$	388,664
Loans receivable at fair value	873,186		10,937		3,238		(4,970)		—		882,391
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		247		(251)		—		4,502
Contingent consideration	—		—		—		22,464		—		22,464


	Fair Value Measurement Using
	Total		Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
As of March 31, 2023
Investments in nonpublic entities that do not report NAV	$	4,271	$	—	$	—	$	4,271
As of December 31, 2022
Investments in nonpublic entities that do not report NAV	$	20,251	$	—	$	18,659	$	1,592


	Three Months Ended March 31, 2023
Balance, December 31, 2022	$	178,622
Net loss	(146)
Purchase of Lingo minority interest	(11,190)
Remeasurement adjustments for Lingo and BRPM 250	7,681
Balance, March 31, 2023	$	174,967


Consideration paid:
Cash	$	112,686
Fair value of seller financing	54,000
Fair value of 2,400,000 RILYO shares issued in senior notes at $24.59 per share	59,016
Fair value of 227,491 B. Riley common shares issued at $42.11 per share	9,580
Fair value of 215,876 stock options attributable to service period prior to acquisition	5,749
Fair value of deferred payments	6,515
Total consideration	$	247,546

Assets acquired and liabilities assumed:
Cash and cash equivalents	$	18,810
Accounts receivable	91,039
Prepaid and other assets	90,289
Right-of-use assets	7,665
Property and equipment	8,320
Other intangible assets	89,000

Accounts payable	(54,553)
Accrued expenses and other liabilities	(61,677)
Deferred income taxes	(9,989)
Contingent consideration	(2,212)
Lease liability	(7,665)
Net tangible assets acquired and liabilities assumed	169,027
Goodwill	78,519
Total	$	247,546


	Pro Forma (unaudited)
	Three Months Ended March 31, 2022

Revenues	$	341,287
Net loss	$	(7,313)
Net loss attributable to B. Riley Financial, Inc.	$	(8,179)
Net loss attributable to common shareholders	$	(10,181)


	Wealth Management		Communications		Total
Restructuring charges for the three months ended March 31, 2023:
Employee termination	$	—	$	60	$	60
Facility closure and consolidation	33		—		33
Total restructuring charge	$	33	$	60	$	93


	Gross amounts recognized		Gross amounts offset in the consolidated balance sheets (1)		Net amounts included in the consolidated balance sheets		Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default(2)		Net amounts
As of March 31, 2023
Securities borrowed	$	2,942,843	$	—	$	2,942,843	$	2,942,843	$	—
Securities loaned	$	2,937,982	$	—	$	2,937,982	$	2,937,982	$	—
As of December 31, 2022
Securities borrowed	$	2,343,327	$	—	$	2,343,327	$	2,343,327	$	—
Securities loaned	$	2,334,031	$	—	$	2,334,031	$	2,334,031	$	—


	March 31, 2023		December 31, 2022
Funds held in trust account for BRPM 250 to redeem noncontrolling interests in equity of subsidiaries	$	176,182	$	174,437
Inventory	113,107		101,675
Equity method investments	41,816		41,298
Prepaid expenses	23,699		17,623
Unbilled receivables	14,857		14,144

Other receivables	67,902		66,403
Other assets	54,309		45,116
Prepaid expenses and other assets	$	491,872	$	460,696


	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Communications Segment		Consumer Segment		All Other		Total
Balance as of December 31, 2022	$	162,018	$	51,195	$	1,975	$	23,680	$	193,195	$	75,753	$	4,779	$	512,595

Acquisition of other business	—		—		—		7,273		—		—		2,428		9,701
Other	—		—		—		36		(1,101)		2,766		—		1,701
Balance as of March 31, 2023	$	162,018	$	51,195	$	1,975	$	30,989	$	192,094	$	78,519	$	7,207	$	523,997


		As of March 31, 2023						As of December 31, 2022
	Useful Life	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Customer relationships	1.0 to 16 Years	$	270,511	$	(94,872)	$	175,639	$	268,253	$	(87,049)	$	181,204
Domain names	7 years	185		(176)		9		185		(169)		16
Advertising relationships	8 years	100		(84)		16		100		(81)		19
Internally developed software and other intangibles	0.5 to 5 Years	28,295		(14,522)		13,773		28,295		(12,714)		15,581
Trademarks	3 to 10 Years	21,532		(5,185)		16,347		23,309		(6,307)		17,002
Total		320,623		(114,839)		205,784		320,142		(106,320)		213,822

Non-amortizable assets:
Tradenames		160,276		—		160,276		160,276		—		160,276
Total intangible assets		$	480,899	$	(114,839)	$	366,060	$	480,418	$	(106,320)	$	374,098


	March 31, 2023		December 31, 2022



6.750% Senior notes due May 31, 2024	$	199,232	$	199,232
6.500% Senior notes due September 30, 2026	180,532		180,532
6.375% Senior notes due February 28, 2025	146,432		146,432
6.000% Senior notes due January 31, 2028	266,058		266,058
5.500% Senior notes due March 31, 2026	217,440		217,440
5.250% Senior notes due August 31, 2028	405,483		405,483
5.000% Senior notes due December 31, 2026	324,714		324,714
	1,739,891		1,739,891
Less: Unamortized debt issuance costs	(16,914)		(18,140)
	$	1,722,977	$	1,721,751


	March 31, 2023		December 31, 2022
Accrued payroll and related expenses	$	60,141	$	86,798
Dividends payable	18,360		33,923
Income taxes payable	12,100		14,760
Other tax liabilities	19,617		23,426
Contingent consideration	28,884		31,046
Accrued expenses	79,520		68,180
Other liabilities	44,713		64,841
Accrued expenses and other liabilities	$	263,335	$	322,974


Selling, general and administrative expenses	(47,322)	(85,742)
Restructuring charge	(33)	—
Depreciation and amortization	(1,086)	(1,833)
Segment income (loss)	1,373	(10,096)
Auction and Liquidation segment:
Revenues - Services and fees	5,444	3,355
Revenues - Sale of goods	216	—
Total revenues	5,660	3,355
Direct cost of services	(3,128)	(2,335)
Cost of goods sold	(52)	—
Selling, general and administrative expenses	(2,280)	(1,820)


Segment income (loss)	200	(800)
Financial Consulting segment:
Revenues - Services and fees	25,010	25,936

Selling, general and administrative expenses	(21,149)	(20,943)

Depreciation and amortization	(78)	(81)
Segment income	3,783	4,912
Communications segment:
Revenues - Services and fees	85,052	30,087
Revenues - Sale of goods	1,867	1,878
Total revenues	86,919	31,965
Direct cost of services	(44,733)	(9,316)
Cost of goods sold	(2,168)	(2,251)
Selling, general and administrative expenses	(22,544)	(8,245)
Restructuring charge	(60)	—
Depreciation and amortization	(6,631)	(3,184)
Segment income	10,783	8,969
Consumer segment:
Revenues - Services and fees	4,309	4,557
Revenues - Sale of goods	65,694	—

Total revenues	70,003	4,557
Cost of goods sold	(45,406)	—
Selling, general and administrative expenses	(20,112)	(756)
Depreciation and amortization	(2,839)	(583)

Segment income	1,646	3,218
Consolidated operating income from reportable segments	103,805	61,276
All Other:
Revenues - Services and fees	9,273	699
Direct cost of services	(6,536)	—
Corporate and other expenses	(21,619)	(16,002)
Interest income	2,574	67
Dividend income	13,204	7,861
Realized and unrealized losses on investments	(28,442)	(49,112)
Change in fair value of financial instruments and other	(209)	5,981
(Loss) income on equity investments	(10)	6,775
Interest expense	(47,561)	(30,436)


	March 31, 2023		December 31, 2022
Long-lived Assets - Property and Equipment, net:
North America	$	26,770	$	26,276
Europe	532		577
Asia Pacific	165		162
Australia	110		126
Total	$	27,577	$	27,141


	Three Months Ended March 31,				Change
	2023		2022		Amount		%
Revenues:			(As Restated)
Services and fees	$	235,559	$	202,814	$	32,745	16.1	%
Trading income (loss) and fair value adjustments on loans	51,568		(19,278)		70,846		n/m
Interest income - Loans and securities lending	77,186		61,426		15,760		25.7	%
Sale of goods	67,777		1,878		65,899		n/m
Total revenues	432,090		246,840		185,250		75.0	%
Operating expenses:
Direct cost of services	54,397		11,651		42,746		n/m
Cost of goods sold	47,626		2,251		45,375		n/m
Selling, general and administrative expenses	212,627		175,199		37,428		21.4	%
Restructuring charge	93		—		93		100.0	%
Interest expense - Securities lending and loan participations sold	32,424		11,766		20,658		175.6	%
Total operating expenses	347,167		200,867		146,300		72.8	%
Operating income	84,923		45,973		38,950		84.7	%
Other income (expense):
Interest income	2,574		67		2,507		n/m
Dividend income	13,204		7,861		5,343		68.0	%
Realized and unrealized losses on investments	(28,442)		(49,112)		20,670		(42.1)	%
Change in fair value of financial instruments and other	(209)		5,981		(6,190)		100.0	%
(Loss) income from equity investments	(10)		6,775		(6,785)		(100.1)	%
Interest expense	(47,561)		(30,436)		(17,125)		56.3	%
Income (loss) before income taxes	24,479		(12,891)		37,370		n/m
(Provision for) benefit from income taxes	(7,919)		3,695		(11,614)		n/m
Net income (loss)	16,560		(9,196)		25,756		n/m
Net (loss) income attributable to noncontrolling interests and redeemable noncontrolling interests	(595)		866		(1,461)		(168.7)	%
Net income (loss) attributable to B. Riley Financial, Inc.	17,155		(10,062)		27,217		n/m
Preferred stock dividends	2,012		2,002		10		0.5	%
Net income (loss) available to common shareholders	$	15,143	$	(12,064)	$	27,207	n/m

n/m - Not applicable or not meaningful.


	Three Months Ended March 31, 2023				Three Months Ended March 31, 2022				Change
	Amount		%		Amount		%		Amount		%
Capital Markets segment	$	66,967	31.4	%	$	36,010	20.6	%	$	30,957	86.0	%
Wealth Management segment	48,408		22.8	%	87,575		50.0	%	(39,167)		(44.7)	%
Auction and Liquidation segment	2,280		1.1	%	1,820		1.0	%	460		25.3	%
Financial Consulting segment	21,227		10.0	%	21,024		12.0	%	203		1.0	%
Communications segment	29,175		13.7	%	11,429		6.5	%	17,746		155.3	%
Consumer segment	22,951		10.8	%	1,339		0.8	%	21,612		n/m
Corporate and All Other	21,619		10.2	%	16,002		9.1	%	5,617		35.1	%
Total selling, general & administrative expenses	$	212,627	100.0	%	$	175,199	100.0	%	$	37,428	21.4	%


Date Declared	Date Paid	Stockholder Record Date	Regular Dividend Amount		Special Dividend Amount		Total Dividend Amount
February 22, 2023	March 23, 2023	March 10, 2023	$	1.000	$	—	$	1.000
November 3, 2022	November 29, 2022	November 15, 2022	1.000		—		1.000
July 28, 2022	August 23, 2022	August 11, 2022	1.000		—		1.000
April 28, 2022	May 20, 2022	May 11, 2022	1.000		—		1.000
February 23, 2022	March 23, 2022	March 9, 2022	1.000		—		1.000


Period	Total Number of Shares Purchased(1)(2)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
January 1 through January 31, 2023	80,142	$	36.51	70,939	$	41,021,994
February 1 through February 28, 2023	550,863	$	40.69	548,712	$	18,695,396
March 1 through March 31, 2023	833,393	$	34.66	833,180	$	30,978,861
Total	1,464,398	$	37.03	1,452,831


	B. Riley Financial, Inc.

Date: May 8, 2023	By:	/s/ PHILLIP J. AHN
	Name:	Phillip J. Ahn
	Title:	Chief Financial Officer and Chief Operating Officer
		(Principal Financial Officer)