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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 10, 2025
B. RILEY FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-37503 | 27-0223495 | ||
|
(State or other jurisdiction |
(Commission File Number) |
(IRS Employer |
11100 Santa Monica Blvd., Suite 800
Los Angeles, CA 90025
(310) 966-1444
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | RILY | Nasdaq Global Market | ||
| Depositary Shares (each representing a 1/1000th interest in a 6.875% Series A Cumulative Perpetual Preferred Share, par value $0.0001 per share) | RILYP | Nasdaq Global Market | ||
| Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock | RILYL | Nasdaq Global Market | ||
| 5.00% Senior Notes due 2026 | RILYG | Nasdaq Global Market | ||
| 5.50% Senior Notes due 2026 | RILYK | Nasdaq Global Market | ||
| 6.50% Senior Notes due 2026 | RILYN | Nasdaq Global Market | ||
| 5.25% Senior Notes due 2028 | RILYZ | Nasdaq Global Market | ||
| 6.00% Senior Notes due 2028 | RILYT | Nasdaq Global Market |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 10, 2025, in connection with the
transaction described below in Item 8.01, Andrew Moore, Co-Chief Executive Officer of BRS Holdings (as defined below), received a
grant from BRS Holdings of 187,360 RSAs (as defined below). Under the terms of the grant of RSAs to Mr. Moore, 50% of the RSAs will
vest on the third anniversary of the date of grant, and 25% of the RSAs will vest on each of the fourth and fifth anniversaries of
the date of grant.
Item 7.01 Regulation FD Disclosure.
On March 10, 2025, B. Riley Financial, Inc. (the “Company”) completed a transaction (the “Transaction”), pursuant to which, among other things, B. Riley Securities Holdings, LLC, the immediate intermediate parent company of the Company’s broker-dealer subsidiary, B. Riley Securities, Inc. (“BRS”), converted into a Delaware corporation and is now known as B. Riley Securities Holdings, Inc. (“BRS Holdings”) and formed a merger subsidiary that merged with Cascadia Investments, Inc. (OTC: CDIV) (“Cascadia”) as a result of which certain investors in Cascadia became minority stockholders in BRS Holdings.
In connection with the Transaction, BRS Holdings granted restricted stock awards in respect of BRS Holdings common stock (“RSAs”) to certain members of management and employees, representing in the aggregate 10% of the shares of BRS Holdings common stock outstanding after giving effect to the merger, and that are subject to time-vesting requirements. Recipients of RSAs will be entitled to cash dividends and voting rights with respect to the RSAs even if such shares are not vested, provided that such rights shall terminate as to any unvested RSAs immediately upon forfeiture of such unvested RSAs. Subject to certain exceptions, including as described above with respect to the RSAs granted to Mr. Moore, the RSAs generally vest in equal annual tranches over the four year period following the date of grant. In addition, BRS Holdings created a pool of shares of its common stock, representing approximately 9.2% of the shares of BRS Holdings common stock after giving effect to the merger and the issuance of the RSAs, available for the future issuance of grants of equity based awards to current and future BRS management and employees.
At the closing of the Transaction, BRS Holdings entered into a stockholders agreement with BR Financial Holdings LLC (“BRFH”), a wholly owned subsidiary of the Company, BRS, and certain other stockholders of BRS Holdings. Pursuant to the stockholders agreement, the BRS Holdings board of directors will consist of five members, of which four directors will be appointed by BRFH including, no later than 30 days from the date of the Transaction, two directors independent of the Company and BRS Holdings, and one director will be appointed by the executive committee of BRS.
In connection with the Transaction, Andrew Moore and James Baker were appointed as Co-Chief Executive Officers of BRS Holdings. Following the closing of the Transaction and the grants described above, the Company owns 89.4% of the outstanding shares of common stock of BRS Holdings.
On March 11, 2025, the Company issued a press release announcing the closing of the Transaction. A copy of such press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01 shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except in the event that the Company expressly states that such information is to be considered filed under the Exchange Act or incorporates it by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number |
Description | |
| 99.1 | Press Release, dated March 11, 2025, issued by B. Riley Financial, Inc. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Cautionary Language Regarding Forward-looking statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, including the ability of BRS Holdings to successfully execute under its own operating and governance structure, our business, operating results, financial condition, and stock price could be materially negatively affected. Investors should not place undue reliance on such forward-looking statements, which are based on the information currently available to the Company and speak only as of the date of this Current Report on Form 8-K. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s or BRS Holdings’ performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and neither the Company nor BRS Holdings assumes any duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company and BRS Holdings, including, but not limited to, the risks described from time to time in the Company’s periodic filings with the Securities and Exchange Commission, including, without limitation, the risks described in the Company’s 2023Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (as applicable). These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date of this Current Report on Form 8-K, and neither the Company nor BRS Holdings undertakes any duty to update this information.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| B. Riley Financial, Inc. | ||
| By: | /s/ Bryant Riley | |
| Name: | Bryant Riley | |
| Title: | Chairman & Co-CEO | |
Date: March 14, 2025
3
Exhibit 99.1
B. Riley Financial Announces Carve Out Transaction with B. Riley Securities
B. Riley Securities (BRS) to Serve Distinct Needs of Companies Across Middle Market Segments
Well Capitalized and Debt Free, BRS to Benefit from Separate Operating and Governance Structures
B. Riley Financial to Retain ~89% Ownership Stake in BRS with Remaining Shares Exclusively Held by Employees of BRS in Form of Restricted Stock Awards and Certain Existing Shareholders of Cascadia
LOS ANGELES, March 11, 2025 – B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley,” the “Company” or “BRF”), a diversified financial services company, today announced that a formerly wholly-owned subsidiary of the Company has merged with Cascadia Investments, Inc. (OTC: CDIV) (“Cascadia”), a shell entity, as a result of which certain investors in Cascadia became minority stockholders of BRF’s investment banking subsidiary, B. Riley Securities (“BRS”).
As part of the tax-free transaction, BRS is implementing its own operating and governance structure, and its common stock will now be quoted on the OTC Pink market under the ticker symbol “BRLY.” BRS will independently report financial results, which will provide stakeholders with enhanced transparency and the ability to independently value a pure-play investment bank focused on the small cap and middle markets.
Since acquiring FBR in 2017, BRS has led more than 250 capital markets transactions, raised in excess of $115 billion in debt and equity for clients, and advised on M&A and restructuring transactions totaling more than $33 billion in aggregate value. The firm, which will be led by Andy Moore, Chairman and Co-Chief Executive Officer, and Jimmy Baker, Co-Chief Executive Officer, will be debt free and leverage the same strong leadership team that has guided the business for nearly two decades.
Bryant Riley, Chairman and Co-Chief Executive Officer of BRF, commented: “BRS has been the foundation of our firm’s success ever since we started a smaller broker dealer focused on small cap companies in 1997. Through this transaction, we are enabling the leadership team of BRS to return to those roots, operate separately and execute a distinct growth strategy. As we demonstrated at our 2023 Investor Day, BRS has historically delivered steady EBITDA and strong cash flow, and we expect that as a separate entity, the firm will be able to return to and eventually exceed those levels of growth and profitability. Through BRF’s 89% ownership stake, BRF shareholders will retain important upside potential as BRS capitalizes on an expected recovery in M&A and Capital Markets activity.”
Mr. Moore and Mr. Baker added: “We are extremely enthusiastic about how this transaction repositions our firm and what it means for our ability to serve our clients. With a well-capitalized balance sheet, no debt and an exceptional team, BRS is purpose-built to serve the middle market with unmatched capabilities across Capital Markets, Research and M&A Advisory. We will stay true to our heritage and relentlessly focus on executing on behalf of our clients. We look forward to embarking on this next chapter and delivering for all stakeholders.”
Transaction Details
The transaction has been structured as a tax-free separation with minimal costs. After giving effect to the transaction, BRF owns approximately 89% of the outstanding shares of BRS, with the remaining shares exclusively held by the employees of BRS in the form of restricted stock awards and certain of the existing shareholders of Cascadia.
| www.brileyfin.com | NASDAQ: RILY | 1 |
BRS is quoted on the OTC Pink market under the ticker symbol “BRLY.” The BRS Board of Directors consists of five members, with four appointed by BRF including, no later than 30 days from the date of the transaction, two directors independent of BRF and BRS. BRF will continue to consolidate the financial results for BRS in its financial results.
Advisors
Sullivan & Cromwell served as legal counsel to BRF, and O’Melveny & Meyers served as legal counsel to BRS in conjunction with the announcement.
About B. Riley Financial
B. Riley Financial (BRF) is a financial services company that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. BRF leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, BRF provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. BRF opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley or BRF refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.
About BRS
BRS provides a full suite of investment banking and capital markets services to corporations, financial sponsors, and institutional investors across all industry verticals. Investment banking services include initial, secondary, and follow-on offerings, institutional private placements, merger and acquisition (M&A) advisory, SPACs, corporate restructuring and liability management. Widely recognized for its thematic proprietary equity research, clients benefit from BRS’ extensive network, industry expertise, and proven execution capabilities of our end-to-end financial services platform. For more information, visit www.brileysecurities.com.
# # #
Forward-Looking Statements
Statements made in this press release that are not descriptions of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, including the ability of BRS to successfully execute under its own operating and governance structure, our business, operating results, financial condition, and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of today’s date. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s or BRS’s performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and neither the Company nor BRS assumes any duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company and the BRS, including, but not limited to, the risks described from time to time in the Company’s periodic filings with the SEC, including, without limitation, the risks described in the Company’s 2023 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (as applicable). These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and neither the Company nor BRS undertakes any duty to update this information.
Contacts
Investors
ir@brileyfin.com
Media
press@brileyfin.com
| www.brileyfin.com | NASDAQ: RILY | 2 |