UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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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 2.06 Material Impairments.
On August 12, 2024, B. Riley Financial, Inc. (the “Company”) announced that it expected to report for the quarter ended June 30, 2024 a non-cash markdown of approximately $330 million to $370 million related to its (i) equity investment (the “Freedom VCM Investment”) in Freedom VCM Holdings, LLC (“Freedom VCM”), the parent corporation of Franchise Group, Inc. (“Franchise Group”), and (ii) loan receivable (the “Vintage Loan Receivable”) from Vintage Capital Management, LLC (“Vintage”), which is primarily secured by a first priority perfected security interest in Freedom VCM equity interests owned by Brian Kahn and his spouse.
On November 3, 2024, Franchise Group, its operating businesses, and certain other affiliates, including Freedom VCM, commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
On November 4, 2024, the Company concluded that it is required to record an additional impairment with respect to the Freedom VCM Investment and the Vintage Loan Receivable. The Company expects that the non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivable will be approximately $120 million in the aggregate. As of the date of this report, the Company remains in compliance with the Nomura credit agreement notwithstanding the items described in this report.
Item 7.01 Regulation FD Disclosure.
On November 4, 2024, the Company will circulate an email communication to employees, a copy of which 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
The exhibit listed in the following Exhibit Index is furnished as part of this Current Report on Form 8-K.
| Exhibit No. | Description | |
| 99.1 | Email communication to employees dated November 4, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Forward-looking statements
This Current Report on Form 8-K and the related exhibit contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These forward-looking statement include statements regarding the Company’s ability to monetize additional assets and pay down additional debt and the Company’s prospects and management’s outlook for the Company generally. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company’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 the Company assumes no 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, 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 in B. Riley Financial’s Quarterly Reports on Form 10-Q for the period ended March 31, 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 the Company undertakes no duty to update this information, except as required by law.
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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.
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B. Riley Financial, Inc. | |
| By: | /s/ Phillip J. Ahn | |
| Name: | Phillip J. Ahn | |
| Title: | Chief Financial Officer and Chief Operating Officer | |
Date: November 4, 2024
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