Company: RILYN
Filing Date: 2025-01-14
Form Type: 10-Q
Source: 0001628280-25-001398
Chunk: 278

Company: B. Riley Financial, Inc.
Filing Date: 2025-01-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 278
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, 2024, FRG, its operating businesses, and certain other affiliates, including Freedom VCM, filed voluntary petitions for relief (the “FRG Chapter 11 Cases”) under chapter 11 of the Bankruptcy Code. As a result, on November 4, 2024, we concluded that we were required to record an additional impairment with respect to the Freedom VCM Investment and the Vintage Loan Receivable. The non-cash impairments of the Freedom VCM Investment and the Vintage Loan Receivable are $118.0 million in the aggregate as of November 4, 2024. As a result of such additional impairment we have ascribed no value to the Freedom VCM Investment as of September 30, 2024 and a value of $2.0 million to the Vintage Loan Receivable as of December 20, 2024.

We expect that the Company may be subject to lawsuits and other claims related to the Conn’s Chapter 11 Cases and the FRG Chapter 11 Cases. See “Recent Developments—Conn’s and FRG”. These events and developments have exacerbated, and they and additional similar events and developments including additional litigation and claims will continue to exacerbate, the risk that we will continue to: (i) incur expenses in connection with these matters, which expenses may be material and, in some cases, are not or will not be covered by insurance; (ii) harm our reputation and 

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negatively impact employee morale and retention; (iii) lose customers or negative impact on our ability to attract new customers and increased competition for new clients and business; and (iv) result in additional write-downs, which may be material.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 

During the three months ended June 30, 2024, we entered into a series of privately negotiated exchange agreements, under which the Company issued an aggregate of 36,903 shares of the Company’s common stock in exchange for $1,130 aggregate principal amount of its 6.75% Senior Notes due 2025 (the “Exchange Transactions”). The Company may engage in similar transactions in the future but is under no obligation to do so. Based on the aggregate principal amount exchanged plus $5 in aggregate accrued interest thereon through the relevant date of exchange, the common stock issued had an implied value of $30.76 per share. Pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (