Company: RILYN
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001464790-25-000023
Chunk: 282

Company: B. Riley Financial, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 8
Chunk 282
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H Borrower may be obligated to prepay the loans or post cash in a controlled account in the event the Borrowing Base falls below a certain level as defined in the Credit Facility. The Company recorded a derivative liability of $11,244 related to this a mandatory repayment feature in the Credit Facility at the inception of the Credit Facility. (See Note 2(l), Fair Value Measurements.) The Company sold certain assets in the Borrowing Base during the first quarter of 2025, and in accordance with the Credit Facility the Company was required to prepay $30,521 of the Delayed Draw Facility.At March 31, 2025, the outstanding loan balance to Oaktree under the Credit Facility was $129,479 which is comprised of $125,000 related to the Oaktree Term Loan and $4,479 related to the Delayed Draw Facility. Interest expense on the Credit Facility to Oaktree during the three months ended March 31, 2025 was $3,181.Subsequent to March 31, 2025, the Company made a principal payment in the amount of $4,479 on April 3, 2025, which paid off the Delayed Draw Facility in full, and a series of principal payments in the amount of $62,500 through June 27, 2025 which reduced the outstanding balance on the Oaktree Term Loan from $125,000 to $62,500.The Company issued warrants to certain affiliates of Oaktree Capital Management, L.P. in connection with the Oaktree Term Loan to purchase approximately 1,832,290 shares (or 6% on a fully diluted basis) of the Company’s common stock at an exercise price of $5.14 per share. The warrants contain certain anti-dilution provisions pursuant to which, under certain circumstances, the warrant holders would be entitled to exercise the warrants for up to 19.9% of the then-outstanding shares of the Company’s common stock. The Company evaluated the warrants under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, and determined the warrants met the criteria for liability classification and recorded a warrant liability of $7,860.The initial measurement of the embedded derivative and warrant liability creates a discount on the carrying amount of the long-term debt, which together with the original issue discount, debt issuance costs, are amortized via the effective interest method under ASC 835-30, Interest – Imputation of Interest. Subsequent changes in fair value of the embedded derivative