Company: RILYN
Filing Date: 2025-02-21
Form Type: 10-Q
Source: 0001628280-25-007082
Chunk: 102

Company: B. Riley Financial, Inc.
Filing Date: 2025-02-21
Form: 10-Q
Item: Part I, Item 1
Chunk 102
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, amended and restated a promissory note (the “Amended and Restated Note”), pursuant to which VCM owes our subsidiary the aggregate principal amount of $200,506 and bears interest at the rate of 12.00% per annum payable-in-kind with a maturity date of December 31, 2027. The Amended and Restated Note requires repayments prior to the maturity date from certain proceeds received by VCM, Mr. Kahn, or his affiliates from, among other proceeds, distributions or dividends paid by Freedom VCM in amount equal to the greater of (i) 80% of the net after-tax proceeds, and (ii) 50% of gross proceeds. The obligations under the Amended and Restated Note are primarily secured by a first priority perfected security interest in Freedom VCM equity interests owned by Mr. Kahn and his spouse with a value (based on the transaction price in the FRG take-private transaction) of $227,296 as of August 21, 2023. Interest income was $3,409 and $15,573 during the three and nine months ended September 30, 2024, respectively. Interest income was $2,740 during the three and nine months ended September 30, 2023. The fair value of the Freedom VCM equity interest owned by Mr. Kahn and his spouse was zero and $232,065 as of September 30, 2024 and December 31, 2023, respectively. On November 3, 2024, Freedom VCM filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code which impacts the collateral for this loan receivable. The fair value of the loan $2,250 at September 30, 2024 has been determined based on the underlying collateral for this loan which is primarily comprised of other securities. The fair value adjustment on the VCM loan receivable was $(54,333) and $(222,718) for the three and nine months ended September 30, 2024. The fair value of the underlying collateral for this loan decreased to a fair value of $2,154 at February 7, 2025. The $2,154 is comprised of other public securities. In light of the Company’s determination that the repayment of the Amended and Restated Note will be paid primarily from the cash distributions from Freedom VCM or foreclosure on the underlying collateral provided by Mr. Kahn and his spouse being in Freedom VCM equity interests, the Company has determined