Company: RILY
Filing Date: 2025-12-15
Form Type: 10-Q
Source: 0001464790-25-000029
Chunk: 106

Company: B. Riley Financial, Inc.
Filing Date: 2025-12-15
Form: 10-Q
Item: Part I, Item 1
Chunk 106
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 the warrants were $4,160 at June 30, 2025 (see Note 2(l) - Fair Value Measurements). The warrant liability of $4,160 at June 30, 2025 is included in other liabilities in Note 13 - Accrued Expenses and Other Liabilities and the change in value of the warrant liability of $1,000 and $3,700 for the three and six months ended June 30, 2025, respectively, is included in the “Change in fair value of financial instruments and other” line item in the unaudited condensed consolidated statements of operations.In conjunction with the debt exchanges (see Note 12 - Senior Notes Payable), the Company issued seven-year warrants to the investors to purchase up to 464,236 and 815,248 shares of common stock at an exercise price of $10.00 as of the three and six months ended June 30, 2025, respectively. The warrants contain certain anti-dilution provisions and upon 

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exercise, the warrant holders are entitled to dividends and distributions as if the warrants had been exercised in full prior to the dividend or distribution date. The warrants meet the definition of a derivative and were classified within stockholder’s equity.The following table summarizes the fair value of the warrants at issuance:Exchange DateMarch 26, 2025April 7, 2025May 21, 2025June 30, 2025Fair value at issuance$863 $67 $590 $80 The estimated fair value of the warrants issued was determined using the Black-Scholes Option Pricing Model which included the following inputs: value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants of seven years, risk-free interest rates ranging from 4.0% to 4.4%, expected dividend yield of 0.0%, and expected volatility of the price of the underlying common stock of 75.0%. (c) Preferred StockThere were 2,834 shares of the Series A Preferred Stock issued and outstanding as of June 30, 2025 and December 31, 2024. The total liquidation preference for the Series A Preferred Stock as of June 30, 2025 and December 31, 2024 was $73,289 (inclusive of cumulative unpaid dividends of $2,436) and $70,854, respectively. There were no dividends declared or paid on the Series A Preferred Stock during the three and six