Company: RILY
Filing Date: 2025-12-15
Form Type: 10-Q
Source: 0001464790-25-000029
Chunk: 322

Company: B. Riley Financial, Inc.
Filing Date: 2025-12-15
Form: 10-Q
Item: Part I, Item 8
Chunk 322
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 assets and liabilities of BRC Partners Opportunity Fund, L.P., a Delaware limited partnership (“BRCPOF”), and liquidating the transferred net assets. BRCPOF transferred its assets and liabilities upon formation of the BRC Trust. The Company determined that the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights and substantially all of the activities are conducted on behalf of the Company and its related parties which own 13.4% and 58.2% (see Note 21 - Related Party Transactions), respectively, of the equity interest in the BRC Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidates the BRC Trust upon formation on January 6, 2025. Additionally, the BRC Trust does not meet the definition of a business and the initial consolidation of the BRC Trust did not result in a gain or loss upon initial consolidation.The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of June 30, 2025 and formation on January 6, 2025, are as follows:June 30, 2025January 6, 2025AssetsCash and cash equivalents$365 $359 Securities and other investments owned, at fair value503 577 Loans receivable, at fair value— 10,276 Prepaid expenses and other assets3,800 3,497 Total assets$4,668 $14,709 LiabilitiesAccrued expenses and other liabilities253 290 Total liabilities$253 $290 Noncontrolling interest$3,826 $12,494 

(p) DerivativesCertain contracts may contain explicit terms that affect some or all of the cash flows or the value of other exchanges required by the contract. When these embedded features in a contract act in a manner similar to a derivative financial instrument and are not clearly and closely related to the economic characteristics of the host contract, the Company bifurcates the embedded feature and accounts for it as an embedded derivative asset or liability in accordance with guidance under ASC 815-15, Derivatives and Hedging – Embedded Derivatives. Embedded derivatives are measured at fair value with changes in fair value reported in the “Other income (expense)” section in our unaudited condensed consolidated statements of operations. Refer to Note 11