Company: RILY
Filing Date: 2025-12-15
Form Type: 10-Q
Source: 0001464790-25-000029
Chunk: 342

Company: B. Riley Financial, Inc.
Filing Date: 2025-12-15
Form: 10-Q
Item: Part I, Item 8
Chunk 342
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 an amount equal to the proceeds of such disposition multiplied by the percentage “credit” that is assigned to such asset in the Borrowing Base. The BRFH 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.) During the first and second quarters of 2025, the Company sold certain assets in the Borrowing Base and in accordance with the Credit Facility, the Company was required to prepay $30,521 and $4,479 of the Delayed Draw Facility, respectively. During the three and six months ended June 30, 2025, the Company made principal payments of $4,479 and $35,000, respectively, on the Delayed Draw Facility which paid the facility off in full. Through a series of principal payments in the amount of $62,500 during the three months ended June 30, 2025, the outstanding balance on the Oaktree Term Loan was reduced from $125,000 to $62,500 at June 30, 2025. Interest expense on the Credit Facility to Oaktree during the three and six months ended June 30, 2025 was $4,578 and $7,759, respectively.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