UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-K/A

(Amendment
No. 1)



(Mark
One)

☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934



For the fiscal year ended December 31, 2019

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934



For the transition period from 
_____________  to  _____________



Commission
File Number 001-37503



B.
RILEY FINANCIAL, INC.

(Exact
name of registrant as specified in its charter)



|Delaware                                                                                                       |  | 27-0223495                               
|-------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|(State
    or Other Jurisdiction of
    Incorporation or Organization)                                         |  | (I.R.S. Employer 
    Identification No.)
|                                                                                                               |  |                                          
|21255
                                         Burbank Boulevard, Suite 400
        Woodland
        Hills, CA |  | 91367                                    
|(Address
    of Principal Executive Offices)                                                                   |  | (Zip Code)                               



(818) 884-3737

(Registrant’s
telephone number, including area code)



Securities
registered pursuant to Section 12(b) of the Act:



|Title
    of each class                                                                                                             |  | Trading
    Symbol(s) |  | Name
    of each exchange on which registered
|----------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | ---------------------------------------------
|Common Stock, par value $0.0001 per share                                                                                           |  | RILY                  |  | Nasdaq Global Market                         
|Depositary Shares, each representing a 1/1000th
    fractional interest in a share of Series A Cumulative Perpetual Preferred Stock |  | RILYP                 |  | Nasdaq Global Market                         
|7.25% Senior Notes due 2027                                                                                                         |  | RILYG                 |  | Nasdaq Global Market                         
|7.50% Senior Notes due 2027                                                                                                         |  | RILYZ                 |  | Nasdaq Global Market                         
|6.50% Senior Notes due 2026                                                                                                         |  | RILYN                 |  | Nasdaq Global Market                         
|6.375% Senior Notes due 2025                                                                                                        |  | RILYM                 |  | Nasdaq Global Market                         
|6.75% Senior Notes due 2024                                                                                                         |  | RILYO                 |  | Nasdaq Global Market                         
|7.375% Senior Notes due 2023                                                                                                        |  | RILYH                 |  | Nasdaq Global Market                         
|6.875% Senior Notes due 2023                                                                                                        |  | RILYI                 |  | Nasdaq Global Market                         



Securities
registered pursuant to Section 12(g) of the Act:

Common
Stock, par value $0.0001 per share

(Title
of Class)



Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes: ☐ No ☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No ☒



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes:  
☒     No   ☐



Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter
period that the registrant was required to submit and post such files).    Yes:   ☒  No   ☐



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter)
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☒



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



|Large accelerated filer ☐ | Accelerated filer ☒          
|------------------------- | -----------------------------
|Non-accelerated filer ☐   | Smaller reporting company   ☐
|                          | Emerging growth company   ☐  



If
an emerging growth company, indicate by check if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes: ☐    No   ☒



The
aggregate market value of the registrant’s common stock held by non-affiliates, based on the closing price of the registrant’s
common stock as reported on the NASDAQ Global Market on June 30, 2019, the last business day of the registrant’s most recently
completed second fiscal quarter, was approximately $413.9 million. For purposes of this calculation, it has been assumed that
all shares of the registrant’s common stock held by directors, executive officers and stockholders beneficially owning ten
percent or more of the registrant’s common stock are held by affiliates. The treatment of these persons as affiliates for
purposes of this calculation is not conclusive as to whether such persons are, in fact, affiliates of the registrant.



The number
of shares outstanding of the registrant’s Common Stock as of March 31, 2020 was 25,988,565.


















EXPLANATORY
NOTE



This
Amendment No. 1 on Form 10-K/A (this “Amendment No. 1”) amends the Annual Report on Form 10-K for the fiscal year
ended December 31, 2019 of B. Riley Financial, Inc. (the “Original Form 10-K”), as originally filed with the Securities
and Exchange Commission (“SEC”) on March 9, 2020 (the “Original Filing Date”). We are filing this Amendment
No. 1 to include the information required by Part III of Form 10-K that was previously omitted from the Original Form 10-K in
reliance on General Instruction G(3) to Form 10-K because a definitive proxy statement containing such information may not be
filed within 120 days after the end of our fiscal year ended December 31, 2019. The reference on the cover of the Original Form
10-K to the incorporation by reference to portions of our definitive proxy statement into Part III of the Original Form 10-K is
hereby deleted. Except as otherwise specifically defined herein, all defined terms used in the Original Form 10-K shall have the
same meanings in this Amendment No. 1.



In
accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), Part III, Items
10 through 14 and Part IV, Item 15 of the Original Form 10-K are hereby amended and restated in their entirety. This Amendment
No. 1 does not amend, modify, or otherwise update any other information in the Original Form 10-K. Accordingly, this Amendment
No. 1 should be read in conjunction with the Original Form 10-K and with our filings with the SEC subsequent to the filing of
the Original Form 10-K. In addition, this Amendment No. 1 does not reflect events that may have occurred subsequent to the Original
Filing Date.



Pursuant
to Rule 12b-15 under the Exchange Act, this Amendment No. 1 also contains new certifications pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002, which are attached hereto. Because no financial statements are included in this Amendment No. 1 and this Amendment
No. 1 does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation S-K, paragraphs 3, 4, and 5 of
the certifications have been omitted.



Except
as otherwise required by the context, references in this Amendment No. 1 to “the Company,” “B. Riley,”
“B. Riley Financial,” “we,” “us” or “our” refer to the combined business of B.
Riley Financial, Inc. and all of its subsidiaries.













PART III



Item 10. Directors, Executive
Officers and Corporate Governance.



Our
board of directors (the “Board”) are elected annually to a one year term to serve as directors until the next annual
meeting of stockholders, or until their respective successors are duly elected and qualified or their earlier death, resignation
or removal. There are no familial relationships between any of our directors and any other director or any of our executive officers.
No arrangement or understanding exists between any of our directors and any other person or persons pursuant to which any director
was or is to be selected as our director. The following table provides the name, age and position(s) of each of our directors
as of March 31, 2020:



|Name               |  | Age |  | Committees                                             
|------------------ |  | --- |  | -------------------------------------------------------
|Bryant R. Riley    |  | 53  |  | None.                                                  
|Thomas J. Kelleher |  | 52  |  | None.                                                  
|Andrew Gumaer      |  | 59  |  | None.                                                  
|Robert L. Antin    |  | 70  |  | Compensation Committee, Corporate Governance Committee*
|Robert D’Agostino  |  | 53  |  | Audit Committee, Compensation Committee*               
|Michael J. Sheldon |  | 60  |  | Compensation Committee                                 
|Todd D. Sims       |  | 50  |  | Audit Committee                                        
|Mimi K. Walters    |  | 57  |  | Corporate Governance Committee                         
|Mikel H. Williams  |  | 63  |  | Audit Committee*, Corporate Governance Committee       



| | * | Chairman
                                         of the respective committee.
| | - | ------------------------------------------------------------------------------



Bryant
R. Rileyhas served as our Chairman and Co-Chief Executive Officer since June 2014 and July 2018 respectively, and as
a director since August 2009. He also previously served as our Chief Executive Officer from June 2014 to July 2018. In addition,
Mr. Riley served as the Chairman of B. Riley & Co., LLC since founding the stock brokerage firm in 1997 until its combination
with FBR Capital Markets & Co., LLC in 2017; Chief Executive Officer of B. Riley & Co., LLC from 1997 to 2006; and as
Chairman of B. Riley Principal Merger Corp. from April 2019 to February 2020, at which time it had completed its business combination
with Alta Equipment Group, Inc. (NYSE: ALTG). Mr. Riley has served as director of Babcock & Wilcox Enterprises, Inc. (NYSE:
BW) since April 2019, and Select Interior Concepts, Inc. (NASDAQ: SIC) since November 2019. He also previously served on the board
of Sonim Technologies, Inc. (NASDAQ: SONM) from October 2017 to March 2019 and Franchise Group, Inc. (NASDAQ: FRG) (fka Liberty
Tax, Inc.) from September 2018 through March 2020. Mr. Riley received his B.S. in Finance from Lehigh University. Mr. Riley’s
experience and expertise in the investment banking industry provides the Board with valuable insight into the capital markets.
Mr. Riley’s extensive experience serving on other public company boards is an important resource for the Board.





1







Thomas
J. Kelleher has served as our Co-Chief Executive Officer since July 2018 and as a member of our board since October 2015.
He also previously served as President from August 2014 to July 2018. Mr. Kelleher previously served as Chief Executive Officer
of B. Riley & Co., LLC, a position he held from 2006 to 2014. From the firm’s founding in 1997 to 2006, Mr. Kelleher
held several senior management positions with B. Riley & Co., LLC, including Chief Financial Officer and Chief Compliance
Officer. Mr. Kelleher served on the board of directors of Special Diversified Opportunities Inc. from October 2015 to June
2017. He received his Bachelor of Science in Mechanical Engineering from Lehigh University. Mr. Kelleher’s experience
and expertise in the investment banking industry provides the Board with valuable insight into the capital markets. Mr. Kelleher’s
experience serving on other public company boards is an important resource for the Board.



Andrew
Gumaer has served as the Chief Executive Officer of Great American Group, LLC, which we refer to as GAG, LLC, our wholly owned
subsidiary, since July 2009 and as a member of the Board since July 2009. Mr. Gumaer also served as our Chief Executive Officer
from July 2009 until June 2014, and as our Chairman from March 2012 until June 2014. Prior to July 2009, Mr. Gumaer was a
co-founder of GAG, LLC, had served as GAG, LLC’s Chief Executive Officer since May 2007 and previously served as GAG, LLC’s
President from June 2006 to May 2007. Prior to assuming such role, Mr. Gumaer was the President of The Pride Capital Group,
LLC, predecessor in interest to GAG, LLC, from 2002 to May 2006. Mr. Gumaer also served as the Senior Vice President of Garcel,
Inc. from 1997 to 2002 and as a Senior Vice President with the investment banking firm Drexel Burnham Lambert prior to his service
with Garcel, Inc. Mr. Gumaer’s in depth knowledge of our business and operations, his experience in the investment
banking industry, and leadership as GAG, LLC’s Chief Executive Officer and/or President since 2006 positions him well to
serve as a member of the Board.



Robert
L. Antinhas served as a member of the Board since June 2017. Mr. Antin was a co-founder of VCA Inc., a national animal
healthcare company that provides veterinary services, diagnostic testing and various medical technology products and related services
to the veterinary market and was publicly traded (NASDAQ: WOOF) until the company was privately acquired in September 2017. Mr. Antin
has served as a Chief Executive Officer and President at VCA Inc. since its inception in 1986. Mr. Antin also served as the Chairman
of the Board of VCA, Inc. from inception through the September 2017 acquisition. Mr. Antin also currently serves on the Board
of Directors of Rexford Industrial Realty, Inc. (NYSE: REXR) since July 2013. From September 1983 to 1985, Mr. Antin was President,
Chief Executive Officer, a director and co-founder of AlternaCare Corp., a publicly held company that owned, operated and developed
freestanding out-patient surgical centers. From July 1978 until September 1983, Mr. Antin was an officer of American Medical International,
Inc., an owner and operator of health care facilities. Mr. Antin received his MBA with a certification in hospital and health
administration from Cornell University. Mr. Antin’s executive leadership experience provides an important resource to the
Board.



Robert
D’Agostino has served as a member of the Board since October 2015. Mr. D’Agostino has served as President
of Q-mation, Inc. since 1999. Q-mation, Inc. is a leading supplier of software solutions targeted at increasing operational efficiencies
and asset performance in manufacturing companies. Mr. D’Agostino joined Q-mation, Inc. in 1990 and held various sales,
marketing and operations management positions prior to his appointment as President. He previously served on the board of Alliance
Semiconductor Corp. from July 2005 to February 2012. Mr. D’Agostino graduated from Lehigh University with a B.S. in
Chemical Engineering. Mr. D’Agostino’s executive leadership experience provides an important resource to the
Board.



Michael
J. Sheldon has served as a member of the Board since July 2017.  Mr. Sheldon served as CEO of Deutsch North
America, one of the most awarded creative agencies in the United States, from January 2015 until his retirement in December 2019. 
Mr. Sheldon had also served as CEO of Deutsch’s Los Angeles office from September 1997 to January 2015. Mr. Sheldon received
a B.A. degree from Michigan State University in Advertising. Mr. Sheldon’s entrepreneurial skills and marketing experience
provide an important resource to the Board.



Todd
D. Simshas served as a member of the Board since October 2016. Since August 2018, Mr. Sims also sits on the board of
directors of TheMaven, Inc. as a designee of B. Riley Financial, Inc. Since March 2010, Mr. Sims has served as Senior Vice
President of Digital Strategy of Anschutz Entertainment Group, Inc., one of the leading sports and entertainment presenters in
the world, overseeing business and corporate development for its ticketing business, AXS. Prior to that, Mr. Sims spent more
than 15 years building Internet businesses. In the mid 1990’s, he served as ESPN’s executive producer of NFL.com,
NBA.com and NASCAR Online. He also served on the management team of eCompanies, LLC, an incubator which has incubated a number
of companies including Jamdat Mobile Inc. (acquired by Electronic Arts Inc.), Business.com Inc. (acquired by R.H. Donnelley Corp.)
and Boingo Wireless, Inc. (initial public offering). Mr. Sims serves as an advisor to the L.A. Dodgers Tech Accelerator and
is a guest lecturer at the University of Southern California’s Marshall School of Business. Mr. Sims’ digital
experience provides an important resource to the Board.



2







Mimi
K. Walters has served as a member of the Board since July 12, 2019. She served from 2015 to 2019 as the U.S. Representative
for California’s 45th Congressional District. She has worked on key legislation, business and policy initiatives
related to technology, energy, environmental and healthcare, including the opioid crisis and veterans’ medical services.
As a member of House leadership, she served on the Energy and Commerce Committee, the Judiciary Committee and the Transportation
and Infrastructure Committee. Ms. Walters represented California’s 37th State Senate District from 2008 to 2014,
where she served on the Banking and Financial Institutions Committee and as vice chair for the Public Employment and Retirement
Committee. From 2004 to 2008, she represented California’s 73rd Assembly District. Ms. Walters was a member of
the Laguna Niguel city council from 1996 to 2004, serving as mayor in 2000, and chair of Laguna Niguel’s investment and
banking committee. Previously, Ms. Walters was an investment executive at Drexel Burnham Lambert and, subsequently, Kidder, Peabody
& Co. from 1988 to 1995. Walters earned a Bachelor of Arts in political science from the University of California, Los Angeles.
Ms. Walters extensive political and financial experience provides an important resource to the Board.



Mikel
H. Williamshas served as a member of the Board since October 2015. Mr. Williams has served as the Chief Executive
Officer and a director of Targus International LLC, a privately held, leading global supplier of carrying cases and accessories
for the mobile lifestyle, since February 2016. Mr. Williams formerly served as the Chief Executive Officer and a director
of JPS Industries, Inc., a composite materials manufacturer, from 2013 until its sale in 2015. Prior to that, Mr. Williams
was the President, Chief Executive Officer and a director of DDi Corporation (NASDAQ: DDIC), a leading provider of time-critical,
technologically advanced electronics manufacturing services, from November 2005 until its sale in May 2012. Mr. Williams
has also served in various management positions with several technology related companies in the manufacturing, telecommunications
and professional services industries. Since October 2014, Mr. Williams also serves on the board of directors of Centrus Energy
Corp. (NYSE: LEU; formerly USEC, until its bankruptcy restructuring in 2014). Mr. Williams formerly served on the board of
Tellabs, Inc. (NASDAQ: TLAB) until it was sold in 2013, Lightbridge Communications Corp. until it was sold in February 2015 and
Iteris, Inc. (NYSE:ITI) from 2011 until November 2019. Mr. Williams received his B.S. degree from the University of Maryland
in accounting and an M.B.A. from Georgetown University. Mr. Williams’s executive leadership experience provides an
important resource to the Board.



Executive Officers



Executive
officers are elected by our Board and serve at its discretion. There are no family relationships between any director or executive
officer and any other directors or executive officers. Set forth below is information regarding our executive officers as of March
31, 2020.





|Name               |  | Position                                                |  | Age
|------------------ |  | ------------------------------------------------------- |  | ---
|Bryant R. Riley    |  | Chairman and Co-Chief Executive Officer                 |  | 53 
|Thomas J. Kelleher |  | Co-Chief Executive Officer                              |  | 52 
|Kenneth Young      |  | President                                               |  | 56 
|Phillip J. Ahn     |  | Chief Financial Officer and Chief Operating Officer     |  | 50 
|Andrew Gumaer      |  | Chief Executive Officer of GAG, LLC                     |  | 59 
|Andrew Moore       |  | Chief Executive Officer of B. Riley FBR, Inc.           |  | 43 
|Alan N. Forman     |  | Executive Vice President, General Counsel and Secretary |  | 59 
|Howard Weitzman    |  | Senior Vice President, Chief Accounting Officer         |  | 58 



Messrs.
Riley, Kelleher and Gumaer’s biographical information is included with those of the other members of our Board.



Kenneth
Young has served as our President since July 2018, and previously served as a director of the Company from May 2015 to October
2016, during which he was chair of the Board’s Audit Committee and on the Board’s Compensation and Corporate Governance
committees.  Mr. Young also has served as Chief Executive Officer of B. Riley Principal Investments, LLC since October 2016.
He previously served as Chief Executive Officer of B. Riley Principal Merger Corp., from October 2018 to February 2020, at which
time it had completed its business combination with Alta Equipment Group, Inc. (NYSE: ALTG).  Mr. Young currently serves
as Chief Executive Officer at Babcock & Wilcox Enterprises, Inc. (NYSE:BW) since November 2018.  Mr. Young has served
as a member of the board of Orion Energy Systems, Inc. (NASDAQ:OESX) since 2017, and Sonim Technologies, Inc. (NASDAQ: SONM) since
2018. He also served on the board of bebe stores, inc. (OTC:BEBE) from January 2018 to April 2019, Standard Diversified (NYSE:SDI)
from 2015 to 2017, Globalstar, Inc. (NYSE: GSAT) from November 2015 to December 2018 and Franchise Group, Inc. (NASDAQ: FRG) (fka
Liberty Tax, Inc.), from 2018 to 2020.  From August 2008 to March 2016, Mr. Young served as the President and Chief Executive
Officer of Lightbridge Communications Corporation. Mr. Young holds a Master’s in Business Administration from the University
of Southern Illinois and a Bachelor of Science in Computer Sciences from Graceland University.

3







Phillip
J. Ahnhas served as our Chief Financial Officer and Chief Operating Officer since April 2013 and previously served as
our Senior Vice President, Strategy and Corporate Development from February 2010 to April 2013. Prior to joining B. Riley, Mr. Ahn
served as Vice President of Altpoint Capital Partners from June 2009 to February 2010 and as Vice President of Stone Tower Equity
Partners from June 2007 to June 2009. Prior to 2007, Mr. Ahn served as Senior Investment Officer at the NY State Common Retirement
Fund and also held investment banking positions at both Salomon Smith Barney and CIBC World Markets. Prior to starting his investment
banking career, Mr. Ahn was a research analyst at Standard & Poor’s J.J. Kenny division. Mr. Ahn received
his Bachelor of Arts in Economics from the University of Michigan in 1992 and his MBA in Finance from Columbia University in 1997,
graduating with Beta Gamma Sigma honors. Mr. Ahn is a CFA charterholder and member of the CFA Society New York.



Andrew
Moore was appointed Chief Executive Officer of B. Riley FBR, Inc. on July 10, 2018, prior to which he served as President
of B. Riley FBR, Inc. from 2016 to 2018. In 2006, Mr. Moore joined B. Riley & Co., LLC as an institutional sales professional,
promoted to Director of Sales in 2011. During his tenure with B. Riley FBR, Inc., Mr. Moore has played a critical role structuring
Issuer financings, placing the related instruments into the firm’s proprietary institutional client base, and ensuring appropriate
secondary market support. Previously, Mr. Moore held sales positions at Roth Capital Partners and Bear Stearns & Co. Mr. Moore
received a Bachelor of Science in Business Administration from the University of Kansas and a Master’s in Business Administration
in Finance from the University of Southern California, Marshall School of Business.



Alan
N. Formanhas served as our Executive Vice President, General Counsel and Secretary since May 2015. Prior to joining
us, Mr. Forman served as Senior Vice President and General Counsel of STR Holdings, Inc. from April 2012 until May 2015,
and as Vice President and General Counsel from May 2010 to April 2012. Mr. Forman was also a partner at Brown Rudnick LLP
from May 1998 to May 2010. Mr. Forman brings extensive experience in corporate and securities law including intellectual
property, licensing agreements, financing transactions, corporate governance, and mergers and acquisitions. Mr. Forman holds
a B.A. in Economics from Emory University and a J.D. from the George Washington University Law School.



Howard
Weitzmanhas served as our Senior Vice President, Chief Accounting Officer since December 2009. Prior to December 2009,
Mr. Weitzman served as a Senior Manager in the SEC Services Group in the audit practice at Moss Adams, LLP and also worked
twelve years in public accounting at two “Big 4” accounting firms, most recently as a Senior Manager in the financial
services audit practice of Deloitte & Touche, LLP. Mr. Weitzman also held various senior financial management positions,
with Banner Holdings, Inc. as the Chief Financial Officer of Central Financial Acceptance Corporation and Controller and Principal
Accounting Officer of Central Rents, Inc. Mr. Weitzman also served as a Senior Vice President and Chief Financial Officer
of Peoples Choice Financial Corporation. Mr. Weitzman received a B.S. in Accounting from California State University, Northridge
and is a California licensed Certified Public Accountant.



4







Committees of the Board of
Directors



Our
Board currently has three standing committees to facilitate and assist the Board in the execution of its responsibilities: the
Audit Committee, the Compensation Committee and the Corporate Governance Committee.



Audit Committee



Our
Audit Committee is composed of Messrs. Mikel H. Williams (Chairperson), Robert D’Agostino and Todd D. Sims. Our Board has
affirmatively determined that each member of the Audit Committee during 2019 was, and each current member is, independent under
Nasdaq Marketplace Rule 5605(a)(2), and meets all other qualifications under Nasdaq Marketplace Rule 5605(c) and the applicable
rules of the SEC. Our Board has also affirmatively determined that Mikel H. Williams qualifies as an “audit committee financial
expert” as such term is defined in Regulation S-K under the Securities Act of 1933. During 2019, the Audit Committee held
four meetings. The Audit Committee acts pursuant to a written charter, which is available for review on our website at http://ir.brileyfin.com/corporate-governance.
The responsibilities of the Audit Committee include overseeing, reviewing and evaluating our financial statements, accounting
and financial reporting processes, internal control functions and the audits of our financial statements. The Audit Committee
is also responsible for the appointment, compensation, retention, and as necessary, the termination of our independent auditors.



Compensation
Committee



Our
Compensation Committee is composed of Messrs. Robert D’Agostino (Chairperson), Robert L. Antin and Michael J. Sheldon. The
Board has affirmatively determined that each member of the Compensation Committee during 2019 was, and each current member is,
independent as such term is defined under Nasdaq Marketplace Rule 5605(a)(2) and the applicable rules of the SEC. During 2019,
the Compensation Committee held four meetings. The Board has adopted a charter for the Compensation Committee (the “Compensation
Committee Charter”), which is available for review on our website at http://ir.brileyfin.com/corporate-governance. The Compensation
Committee reviews and makes recommendations to the Board concerning the compensation and benefits of our executive officers, including
the Chief Executive Officer, and directors, oversees the administration of our stock incentive and employee benefits plans and
reviews general policies relating to compensation and benefits.



Corporate
Governance Committee



Our
Corporate Governance Committee is composed of Messrs. Robert L. Antin (Chairperson), and Mikel H. Williams and Ms. Mimi K. Walters.
Robert D’Agostino served as a member of the Corporate Governance Committee until July 12, 2019 at which point in time Mimi
K. Walters became a member of the Corporate Governance Committee replacing Mr. D’Agostino. The Board has affirmatively determined
that each member of the Corporate Governance Committee during 2019 was, and each current member is, independent as such term is
defined under Nasdaq Marketplace Rule 5605(a)(2). The Corporate Governance Committee evaluates and recommends to the Board nominees
for each election of directors. During 2019, the Corporate Governance Committee held three meetings. The Board has adopted a charter
for the Corporate Governance Committee (the “Corporate Governance Committee Charter”), and a copy of that charter
is available for review on our website at http://ir.brileyfin.com/corporate-governance. The responsibilities of the Corporate
Governance Committee include making recommendations to the Board with respect to the nominations or elections of directors and
providing oversight of our corporate governance policies and practices.



Section 16(a) Reports



Section
16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of our common
stock to file initial reports of ownership and reports of changes in ownership with the SEC. Such persons are required by SEC
regulations to furnish us with copies of all Section 16(a) forms filed by such person.



Based
solely on our review of such forms furnished to us and written representations from our reporting persons, we believe that all
filing requirements applicable to our executive officers, directors and more than 10% stockholders were met in a timely manner.



Code
of Business Conduct and Ethics



Our
Board has adopted a code of business conduct and ethics (the “Code of Ethics”), which applies to all of our directors,
officers and employees. The Code of Ethics is available for review on our website at http://ir.brileyfin.com/corporate-governance,
and is also available in print, without charge, to any stockholder who requests a copy by writing to us at B. Riley Financial,
Inc., 21255 Burbank Boulevard, Suite 400, Woodland Hills, California 91367, Attention: Investor Relations. Each of our directors,
employees and officers, including our chief executive officer, chief financial officer and chief accounting officer, and all of
our other principal executive officers, are required to comply with the Code of Ethics. There have not been any waivers of the
Code of Ethics relating to any of our executive officers or directors in the past year.





5







Corporate
Governance Documents



Our
corporate governance documents, including the Audit Committee Charter, Compensation Committee Charter, Corporate Governance Committee
Charter and Code of Ethics, are available, free of charge, on our website at http://ir.brileyfin.com/corporate-governance. Please
note, however, that the information contained on the website is not incorporated by reference in, or considered part of, this
Form 10-K. We will also provide copies of these documents, free of charge, to any stockholder upon written request to B. Riley
Financial, Inc., 21255 Burbank Boulevard, Suite 400, Woodland Hills, California, 91367, Attention: Investor Relations.



Changes
in Stockholder Nomination Procedures



There
have been no material changes to the procedures by which stockholders may recommend individuals for consideration by the Corporate
Governance Committee as potential nominees for director since such procedures were last described in our annual proxy statement
filed with the SEC on April 15, 2019.



Board Leadership Structure



Pursuant
to our Corporate Governance Guidelines and Bylaws, the Board may, but is not required to, select a Chairman of the Board on an
annual basis. In addition, the positions of Chairman of the Board and Co-Chief Executive Officer may be filled by one individual
or two different individuals. Mr. Riley, our Co-Chief Executive Officer, currently serves as Chairman of our Board.



The
Board has determined that its current structure, with a combined Chairman and Co-Chief Executive Officer and independent directors
as members of each Board committee, is in the best interests of our company and our stockholders. The Board believes that combining
the Chairman and Co-Chief Executive Officer positions is currently the most effective leadership structure for our company given
Mr. Riley’s in-depth knowledge of many of the businesses and industries in which we operate, his ability to formulate
and implement strategic initiatives, and his extensive contact with and knowledge of certain of our customers. In addition, as
a member of our Board of Directors since 2009, Executive Officer of B. Riley FBR, Inc. (formerly FBR Capital Markets & Co.,
LLC), Chairman of B. Riley & Co., LLC since founding the stock brokerage firm in 1997 and Chief Executive Officer of
B. Riley & Co., LLC from 1997 to 2006, Mr. Riley provides important continuity in the operation of our business
and its oversight by our Board. His knowledge and experience, as well as his role as our Co-Chief Executive Officer, provide that
he is in a position to elevate the most critical business issues for consideration by our independent directors.



6







Item 11. Executive Compensation.



Summary
Compensation Table



The
following table shows information concerning the annual compensation for services provided to us by our named executive officers
during fiscal 2019, 2018 and 2017.(1)



|Name
    and Principal Position                        |  | Year |  | Salary
     ($) |         |  | Bonus     (2) (3) ($) |  |         | Stock
    Awards (4) ($) |  |  | Non-Equity
    
Incentive Plan 
Compensation (5) ($) |  |  | All
    Other
Compensation (6) ($) |           |  | Total
     ($) | 
|------------------------------------------------------ |  | ---- |  | --------------- | ------- |  | --------------------- |  | ------- | ------------------------ |  |  | ---------------------------------------------------- |  |  | ---------------------------------- | --------- |  | -------------- | 
|Bryant
    R. Riley                                    |  | 2019 |  |                 | 600,000 |  |                       |  | -       |                          |  |  | 2,477,934                                            |  |  |                                    | 1,800,000 |  |                | 
|Chairman
    and                                       |  | 2018 |  |                 | 600,000 |  |                       |  | -       |                          |  |  | 830,000                                              |  |  |                                    | 1,223,266 |  |                | 
|Co-Chief
    Executive Officer                         |  | 2017 |  |                 | 363,462 |  |                       |  | 224,384 |                          |  |  | 600,005                                              |  |  |                                    | 1,086,963 |  |                | 
|                                                       |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|Thomas
    J. Kelleher                                 |  | 2019 |  |                 | 600,000 |  |                       |  | -       |                          |  |  | 2,477,934                                            |  |  |                                    | 1,800,000 |  |                | 
|Co-Chief
    Executive Officer                         |  | 2018 |  |                 | 545,769 |  |                       |  | -       |                          |  |  | 518,750                                              |  |  |                                    | 1,223,266 |  |                | 
|                                                       |  | 2017 |  |                 | 399,807 |  |                       |  | 95,044  |                          |  |  | 437,911                                              |  |  |                                    | 702,843   |  |                | 
|                                                       |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|Phillip
    J. Ahn                                     |  | 2019 |  |                 | 400,000 |  |                       |  | 125,000 |                          |  |  | 1,212,907                                            |  |  |                                    | 800,000   |  |                | 
|Chief
    Financial Officer and                        |  | 2018 |  |                 | 412,500 |  |                       |  | -       |                          |  |  | 373,500                                              |  |  |                                    | 543,674   |  |                | 
|Chief
    Operating Officer                            |  | 2017 |  |                 | 347,115 |  |                       |  | 56,096  |                          |  |  | 300,003                                              |  |  |                                    | 583,739   |  |                | 
|                                                       |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|Kenneth
    Young(6) (7)                               |  | 2019 |  |                 | 550,000 |  |                       |  | -       |                          |  |  | 1,265,027                                            |  |  |                                    | 1,100,000 |  |                | 
|President                                              |  | 2018 |  |                 | 519,039 |  |                       |  | -       |                          |  |  | 415,000                                              |  |  |                                    | 747,551   |  |                | 
|                                                       |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|Andrew
    Moore(7)                                    |  | 2019 |  |                 | 500,000 |  |                       |  | 125,000 |                          |  |  | 1,265,027                                            |  |  |                                    | 1,000,000 |  |                | 
|Chief
    Executive Officer,                           |  | 2018 |  |                 | 283,077 |  |                       |  | 50,000  |                          |  |  | 415,000                                              |  |  |                                    | 764,038   |  |                | 
|B.
    Riley FBR, Inc.                                 |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|                                                       |  |      |  |                 |         |  |                       |  |         |                          |  |  |                                                      |  |  |                                    |           |  |                | 
|Alan
    N. Forman(8)                                  |  | 2019 |  |                 | 375,000 |  |                       |  | 125,000 |                          |  |  | 684,645                                              |  |  |                                    | 750,000   |  |                | 
|Executive
Vice President,
 General Counsel & Secretary |  | 2017 |  |                 | 317,789 |  |                       |  | 56,096  |                          |  |  | 224,998                                              |  |  |                                    | 543,482   |  |                | 



| | (1) | The
                                         table above summarizes the total compensation earned by each of our named executive officers
                                         for the fiscal years ended December 31, 2019, 2018 and 2017. As our employees, neither
                                         Mr. Riley nor Mr. Kelleher, each of whom were directors during all or a portion
                                         of the fiscal years ended December 31, 2019, 2018 and 2017, received any compensation
                                         for his services as a director.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Bonus
                                         amounts in 2019 and 2017 were discretionary bonuses for named executive officers approved
                                         by the Compensation Committee.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Bonus
                                         paid to Mr. Moore in 2018 included discretionary bonus earned and paid prior to his becoming
                                         an executive officer.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Represents
                                         the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of
                                         RSU grants granted during the applicable fiscal year. The assumptions used in the calculations
                                         for these amounts are described in Note 18 of the Notes to Consolidated Financial Statements
                                         in our annual report on Form 10-K for the fiscal year ended December 31, 2019. For
                                         a discussion of the material terms of each outstanding RSU grant, see the table below
                                         entitled “Outstanding Equity Awards at 2019 Fiscal Year End.”
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The
                                         amounts listed in this column include non-equity incentive plan compensation earned by
                                         and paid to each of our named executive officers for the fiscal years ended December 31,
                                         2019, 2018 and 2017. In the case of Mr. Moore, $220,364 in 2018 sales commissions earned
                                         prior to his appointment as executive officer are included.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Includes
                                         accrued dividend rights paid upon vesting of RSUs in 2019, in accordance with award agreements,
                                         as approved by the Compensation Committee; matching contributions made under the B. Riley
                                         Financial 401(k) Plan; and payment to Mr. Young for consulting services to Babcock &
                                         Wilcox Enterprises, Inc.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Messrs.
                                         Young and Moore became executive officers of our company on July 10, 2018. For Messrs.
                                         Young and Moore, compensation is not shown for fiscal year 2017 because they were not
                                         named executive officers in fiscal year 2017.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Mr.
                                         Forman was a named executive officer of our company in 2017 and 2019. For Mr. Forman,
                                         compensation is not shown for fiscal year 2018 because he was not a named executive officer
                                         in fiscal year 2018.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7







Grants of Plan-Based Awards
Table for 2019



The following
table presents information concerning each grant made to our named executive officers in our fiscal year ended December 31,
2019, under any equity or non-equity incentive plan.



|                   |  |            |  | Estimated Future Payouts under Non-Equity
Incentive Plan Awards (1) |         |  | Estimated
Future
Payouts
under Equity
Incentive Plan
Awards (2) |  |         | All Other
Stock Awards:
 Number
of Units of |  |  | Grant Date
Fair | 
|------------------ |  | ---------- |  | ------------------------------------------------------------------- | ------- |  | --------------------------------------------------------------- |  | ------- | ------------------------------------------- |  |  | --------------- | 
|Name               |  | Grant Date |  | Threshold  ($)                                                      |         |  | Target  ($)                                                     |  |         | Maximum  ($)                                |  |  | Target  (#)     | 
|Bryant R. Riley    |  | -          |  |                                                                     | 150,000 |  |                                                                 |  | 900,000 |                                             |  |  | 1,800,000       | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  |            |  |                                                                     |         |  |                                                                 |  |         |                                             |  |  |                 | 
|Thomas J. Kelleher |  | -          |  |                                                                     | 150,000 |  |                                                                 |  | 900,000 |                                             |  |  | 1,800,000       | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  |            |  |                                                                     |         |  |                                                                 |  |         |                                             |  |  |                 | 
|Phillip J. Ahn     |  | -          |  |                                                                     | 100,000 |  |                                                                 |  | 400,000 |                                             |  |  | 800,000         | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  |            |  |                                                                     |         |  |                                                                 |  |         |                                             |  |  |                 | 
|Kenneth Young      |  | -          |  |                                                                     | 137,500 |  |                                                                 |  | 550,000 |                                             |  |  | 1,100,000       | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  |            |  |                                                                     |         |  |                                                                 |  |         |                                             |  |  |                 | 
|Andrew Moore       |  | -          |  |                                                                     | 125,000 |  |                                                                 |  | 500,000 |                                             |  |  | 1,000,000       | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  |            |  |                                                                     |         |  |                                                                 |  |         |                                             |  |  |                 | 
|Alan N. Forman     |  | -          |  |                                                                     | 93,750  |  |                                                                 |  | 375,000 |                                             |  |  | 750,000         | 
|                   |  | 5/24/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 
|                   |  | 7/12/2019  |  |                                                                     | -       |  |                                                                 |  | -       |                                             |  |  | -               | 



| | (1) | The
                                         amounts represent the threshold, target and maximum annual incentive award payout under
                                         the B. Riley Financial, Inc. Management Bonus Plan for the 2019 fiscal year. Actual 2019
                                         payments are reported in the “2019 Summary Compensation Table” in the “Non-
                                         Equity Incentive Plan Compensation” column.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | On
                                         July 12, 2019, we granted Messrs. Riley, Kelleher, Ahn, Young, Moore and Forman PRSU
                                         awards as a component of their annual compensation for the fiscal year ended December
                                         31, 2019. The PRSUs will vest upon the earlier to occur of: (a) the Issuer achieving
                                         the Adjusted Stock Price Hurdle of $35, defined as the consecutive five trading day average
                                         closing price of one share of Company common stock, plus the aggregate amount of dividends
                                         paid, within three years from the date of grant; or (b) immediately prior to a Change
                                         in Control (as defined in the Amended and Restated 2009 Stock Incentive Plan).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | On
                                         May 24, 2019, we granted Messrs. Riley, Kelleher, Ahn, Young, Moore and Forman RSU awards
                                         as a component of their annual compensation for the fiscal year ended December 31, 2019,
                                         scheduled to vest one-third on May 24, 2020, one-third on May 24, 2021 and one-third
                                         on May 24, 2022, subject to continued employment with our company. Each RSU awarded represents
                                         the right to receive one share of our common stock. Additionally, each of the above award
                                         recipients has the right to receive promptly following each vesting date an amount equal
                                         to the product of (i) the number of RSUs vested on such vesting date, multiplied by (ii)
                                         the total dividends declared and paid per share of common stock since the date of award.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Represents
                                         the grant date fair value, which has been computed in accordance with FASB ASC Topic
                                         718. For performance units granted on July 12, 2019, the fair value at the grant date
                                         was determined based on the probable outcome of the Issuer achieving the Adjusted Stock
                                         Price Hurdle of $35, defined as the consecutive five trading day average closing price
                                         of one share of Company common stock, plus the aggregate amount of dividends paid, within
                                         three years from the date of grant.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



8







Outstanding Equity Awards
at 2019 Fiscal Year End



The following
table provides information concerning outstanding equity awards held by our named executive officers as of December 31, 2019.



|Name                   |  | Number of Units of Stock That Have Not Vested (1) (#) |        |  | Market Value of Units of Stock That Have Not Vested (2) ($) |  |           | Equity Incentive Plan Awards: Number of Unearned Units of Stock That Have Not Vested (3) (#) |  |  | Equity Incentive Plan Awards: Market Value of Unearned Units of Stock That Have Not Vested (4) ($) | 
|---------------------- |  | ----------------------------------------------------- | ------ |  | ----------------------------------------------------------- |  | --------- | -------------------------------------------------------------------------------------------- |  |  | -------------------------------------------------------------------------------------------------- | 
|Bryant R. Riley(5)     |  |                                                       | 78,050 |  |                                                             |  | 1,965,299 |                                                                                              |  |  | 200,000                                                                                            | 
|                       |  |                                                       |        |  |                                                             |  |           |                                                                                              |  |  |                                                                                                    | 
|Thomas J. Kelleher (6) |  |                                                       | 63,211 |  |                                                             |  | 1,591,653 |                                                                                              |  |  | 200,000                                                                                            | 
|                       |  |                                                       |        |  |                                                             |  |           |                                                                                              |  |  |                                                                                                    | 
|Phillip J. Ahn(7)      |  |                                                       | 36,409 |  |                                                             |  | 916,779   |                                                                                              |  |  | 100,000                                                                                            | 
|                       |  |                                                       |        |  |                                                             |  |           |                                                                                              |  |  |                                                                                                    | 
|Kenneth Young(8)       |  |                                                       | 38,157 |  |                                                             |  | 960,793   |                                                                                              |  |  | 100,000                                                                                            | 
|                       |  |                                                       |        |  |                                                             |  |           |                                                                                              |  |  |                                                                                                    | 
|Andrew Moore(9)        |  |                                                       | 38,972 |  |                                                             |  | 981,315   |                                                                                              |  |  | 100,000                                                                                            | 
|                       |  |                                                       |        |  |                                                             |  |           |                                                                                              |  |  |                                                                                                    | 
|Alan N. Forman(10)     |  |                                                       | 26,665 |  |                                                             |  | 671,425   |                                                                                              |  |  | 50,000                                                                                             | 



| | (1) | Represents
                                         awards of RSUs granted under our Amended and Restated 2009 Stock Incentive Plan.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The
                                         market value of awards of RSUs that have not yet vested is based on the number of unvested
                                         shares of stock as of December 31, 2019, multiplied by the closing sale price of
                                         our common shares on December 31, 2019 ($25.18 per share).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Represents
                                         awards of PRSUs granted under our Amended and Restated 2009 Stock Incentive Plan. Each
                                         named executive officer’s unvested PRSUs will vest upon the earlier to occur of:
                                         (a) the Company achieving the Adjusted Stock Price Hurdle of $35, defined as the consecutive
                                         five trading day average closing price of one share of Company common stock, plus the
                                         aggregate amount of dividends paid, within three years from the date of grant; or (b)
                                         immediately prior to a Change in Control (as defined in the Amended and Restated 2009
                                         Stock Incentive Plan).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The
                                         market value of awards of PRSUs that have not yet vested is based on the number of unvested
                                         shares of stock as of December 31, 2019, multiplied by the closing sale price of
                                         our common shares on December 31, 2019 ($25.18 per share).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Unvested
                                         RSUs held by Mr. Riley at December 31, 2019 vest as follows: 39,063 RSUs will vest in
                                         full on May 24, 2020, 26,160 RSUs will vest in full on May 24, 2021, and 12,827 RSUs
                                         will vest in full on May 24, 2022.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Unvested
                                         RSUs held by Mr. Kelleher at December 31, 2019 vest as follows: 29,224 RSUs will vest
                                         in full on May 24, 2020, 21,160 RSUs will vest in full on May 24, 2021, and 12,827 RSUs
                                         will vest in full on May 24, 2022.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | Unvested
                                         RSUs held by Mr. Ahn at December 31, 2019 vest as follows: 18,437 RSUs will vest in full
                                         on May 24, 2020, 11,986 will vest in full on May 24, 2021, and 5,986 will vest in full
                                         on May 24, 2022.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | Unvested
                                         RSUs held by Mr. Young at December 31, 2019 vest as follows: 17,809 RSUs will vest in
                                         full on May 24, 2020, 13,507 RSUs will vest in full on May 24, 2021, and 6,841 RSUs will
                                         vest in full on May 24, 2022.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | Unvested
                                         RSUs held by Mr. Moore at December 31, 2019 vest as follows: 815 RSUs vested in full
                                         on January 31, 2020, 17,809 RSUs will vest in full on May 24, 2020, 13,507 RSUs will
                                         vest in full on May 24, 2021, and 6,841 RSUs will vest in full on May 24, 2022.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Unvested
                                         RSUs held by Mr. Forman at December 31, 2019 vest as follows: 13,614 RSUs will vest in
                                         full on May 24, 2020, 8,776 RSUs will vest in full on May 24, 2021, and 4,275 will vest
                                         in full on May 24, 2022.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



9







Stock
Vested



The
following table provides information on the value realized by each of our named executive officers as a result of the vesting
of RSUs during 2019.



|Name               |  | Number of Shares Acquired on Vesting (1) (#) |        |  | Value Realized on Vesting  ($) | 
|------------------ |  | -------------------------------------------- | ------ |  | ------------------------------ | 
|Bryant R. Riley    |  |                                              | 39,739 |  |                                | 
|                   |  |                                              |        |  |                                | 
|Thomas J. Kelleher |  |                                              | 24,838 |  |                                | 
|                   |  |                                              |        |  |                                | 
|Phillip J. Ahn     |  |                                              | 19,203 |  |                                | 
|                   |  |                                              |        |  |                                | 
|Kenneth Young      |  |                                              | 16,993 |  |                                | 
|                   |  |                                              |        |  |                                | 
|Andrew Moore       |  |                                              | 16,002 |  |                                | 
|                   |  |                                              |        |  |                                | 
|Alan N. Forman     |  |                                              | 14,402 |  |                                | 



| | (1) | RSUs
                                         of Messrs. Riley, Kelleher, Ahn, Young, Moore and Forman vested on May 24, 2019
                                         as follows: 39,739, 24,838, 19,203, 10,968, 15,187, and 14,402 respectively. The closing
                                         price of our common stock on that date was $20.32. Mr. Moore vested in an additional
                                         815 RSUs on January 31, 2019. The closing price of our common stock on that date was
                                         $15.25. Mr. Young vested in an additional 6,025 RSUs on October 1, 2019. The closing
                                         price of our common stock on that date was $22.98.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



All Other Compensation



The
following table sets forth additional information with respect to the amounts reported in the “All Other Compensation”
column of the Summary Compensation Table for Fiscal Year 2019.



|Name               |  | Dividend 
Rights Paid 
Upon 2019 
Vesting of 
RSUs (1) ($) |        |  | 401k Plan Match (2) ($) |  |       | Other (3) ($) |  |  | Total  ($) | 
|------------------ |  | ---------------------------------------------------------- | ------ |  | ----------------------- |  | ----- | ------------- |  |  | ---------- | 
|Bryant R. Riley    |  |                                                            | 27,828 |  |                         |  | 4,200 |               |  |  | -          | 
|                   |  |                                                            |        |  |                         |  |       |               |  |  |            | 
|Thomas J. Kelleher |  |                                                            | 17,394 |  |                         |  | 4,200 |               |  |  | -          | 
|                   |  |                                                            |        |  |                         |  |       |               |  |  |            | 
|Phillip J. Ahn     |  |                                                            | 13,381 |  |                         |  | 4,200 |               |  |  | -          | 
|                   |  |                                                            |        |  |                         |  |       |               |  |  |            | 
|Kenneth Young      |  |                                                            | 11,054 |  |                         |  | 4,200 |               |  |  | 1,150,000  | 
|                   |  |                                                            |        |  |                         |  |       |               |  |  |            | 
|Andrew Moore       |  |                                                            | 11,054 |  |                         |  | -     |               |  |  | -          | 
|                   |  |                                                            |        |  |                         |  |       |               |  |  |            | 
|Alan N. Forman     |  |                                                            | 10,036 |  |                         |  | 4,200 |               |  |  | -          | 



| | (1) | Includes
                                         accrued dividend rights paid upon May 24, 2019 vesting of RSU awards granted on June
                                         13, 2017 and June 13, 2018 in accordance with award agreements, as approved by the Compensation
                                         Committee.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The
                                         maximum 401k match for 2019 was $4,200. Our executive officers are eligible for the same
                                         401k match program as is available to all employees.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Payments
                                         to Mr. Young for consulting services to Babcock & Wilcox Enterprises, Inc. in the
                                         capacity of Chief Executive Officer of Babcock & Wilcox Enterprises.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





10







Potential Payments Upon Termination
or Change in Control



Of
our named executive officers, Messrs. Kelleher, Riley, Ahn and Forman, are each subject to an employment agreement that became
effective on January 1, 2018, and was amended on April 3, 2019. Additionally, Mr. Young and Mr. Moore are subject to employment
agreements which became effective on July 10, 2018 and were amended on April 3, 2019. Each of the employment agreements provides
for a severance payment equal to the sum of (1) one times the executive’s base salary as in effect immediately prior to
a qualifying termination plus (2) one times the executive’s target bonus for the calendar year in which the qualifying
termination occurs, or if no target bonus for such calendar year has been set, the target bonus for the prior year. The employment
agreements also provide for reimbursement of a portion of the executive’s COBRA premiums for up to twelve months following
a qualifying termination. Qualifying terminations include (i) termination without cause by the company, (ii) termination due to
death or disability and (iii) resignation for good reason. In addition, the employment agreements provide that all unvested awards,
including PRSUs, become fully vested upon a change of control.



The
descriptions below provide information about the payments and other benefits to which each of our named executive officers would
be entitled upon a termination of such Named Executive Officer or a change in control. The tables below show, for each Named Executive
Officer, our estimates of our potential cash payments and other benefits that would have been paid to the Named Executive Officer
assuming that (i) such a termination or change in control was effected as of December 31, 2019, (ii) the target bonus amounts
for each Named Executive Officer equal the target amounts established for fiscal year 2019 and (iii) the market value of RSUs
that have not vested as of December 31, 2019 was $25.18 per share, which was the closing price of our company’s common stock
on December 31, 2019, the last trading day of the year. The tables below also assume that all salary amounts earned by each Named
Executive Officer through the date of such a termination or change in control had already been paid. As a result, all amounts
in these tables are only estimates, and the actual amounts that would be paid can only be determined at the time of the event
triggering the payments.



Payments Due
Upon Termination Without Cause, for Death or Disability, or Resignation for Good Reason



|                   |  | Cash
 Payment (1) |           |  | Stock
 Awards (2) |  |           | Non-Equity 
Incentive Plan 
Compensation (3) |  |  | All Other
Compensation (4) |  |  | Benefits (5) |         |  | Total | 
|------------------ |  | ----------------- | --------- |  | ----------------- |  | --------- | -------------------------------------------- |  |  | -------------------------- |  |  | ------------ | ------- |  | ----- | 
|Name               |  | ($)               |           |  | ($)               |  |           | ($)                                          |  |  | ($)                        |  |  | ($)          |         |  | ($)   | 
|Bryant R. Riley    |  |                   | 1,500,000 |  |                   |  | 1,965,299 |                                              |  |  | 900,000                    |  |  |              | 128,251 |  |       | 
|Thomas J. Kelleher |  |                   | 1,500,000 |  |                   |  | 1,591,653 |                                              |  |  | 900,000                    |  |  |              | 96,751  |  |       | 
|Phillip J. Ahn     |  |                   | 800,000   |  |                   |  | 916,779   |                                              |  |  | 400,000                    |  |  |              | 60,050  |  |       | 
|Kenneth Young      |  |                   | 1,100,000 |  |                   |  | 960,793   |                                              |  |  | 550,000                    |  |  |              | 60,267  |  |       | 
|Andrew Moore       |  |                   | 1,000,000 |  |                   |  | 981,315   |                                              |  |  | 500,000                    |  |  |              | 60,267  |  |       | 
|Alan N. Forman     |  |                   | 750,000   |  |                   |  | 671,425   |                                              |  |  | 375,000                    |  |  |              | 44,299  |  |       | 



| | (1) | In
                                         the event of involuntary termination without Cause, for death or disability, or resignation
                                         for Good Reason, in accordance with their employment agreements, executives shall receive
                                         a severance payment equal to the sum of 1x the executive’s base salary and 1x the
                                         executive’s target bonus for the calendar year in which the termination occurs.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Upon
                                         termination without Cause or for death or disability, in accordance with award agreements,
                                         unvested time-based RSUs shall vest. The market value is based on the number of RSUs
                                         that would vest multiplied by $25.18, which was the closing price of our common stock
                                         on December 31, 2019, the last trading day of the year. In the event of resignation for
                                         Good Reason, RSUs would not vest and, therefore, numbers in this column would be zero.
                                         PRSUs would not vest in the event of any type of termination and are, therefore, not
                                         included in this column.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | A
                                         prorated portion of the target bonus for the year of termination is payable. It is assumed
                                         for purposes of this table that the termination occurred on December 31, 2019 and the
                                         full target bonus amount would be due.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | Upon
                                         vesting of RSUs, accrued dividend rights, equivalent to dividends declared and paid per
                                         share of common stock from July 1, 2017 through December 31, 2019, are paid for RSUs
                                         awarded in 2017, 2018 and 2019 in accordance with award agreements. In the case of resignation
                                         for Good Reason, RSUs would not vest and, therefore, numbers in this column would be
                                         zero.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | According
                                         to the terms of their employment agreements, executives shall be reimbursed the difference
                                         between the cost of health insurance coverage under COBRA and premiums paid by similarly
                                         situated employees for 12 months, or until the executive becomes eligible to receive
                                         substantially similar coverage from another employer.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

11







Payments Due Upon Termination
With Cause or Resignation Without Good Reason



|                   |  | Cash
Payment |   |  | Stock
Awards |  |   | Non-Equity
Incentive Plan
Compensation (1) |  |  | All Other
Compensation |  |  | Benefits |   |  | Total | 
|------------------ |  | ------------ | - |  | ------------ |  | - | ------------------------------------------ |  |  | ---------------------- |  |  | -------- | - |  | ----- | 
|Name               |  | ($)          |   |  | ($)          |  |   | ($)                                        |  |  | ($)                    |  |  | ($)      |   |  | ($)   | 
|Bryant R. Riley    |  |              | - |  |              |  | - |                                            |  |  | 900,000                |  |  |          | - |  |       | 
|Thomas J. Kelleher |  |              | - |  |              |  | - |                                            |  |  | 900,000                |  |  |          | - |  |       | 
|Phillip J. Ahn     |  |              | - |  |              |  | - |                                            |  |  | 400,000                |  |  |          | - |  |       | 
|Kenneth Young      |  |              | - |  |              |  | - |                                            |  |  | 550,000                |  |  |          | - |  |       | 
|Andrew Moore       |  |              | - |  |              |  | - |                                            |  |  | 500,000                |  |  |          | - |  |       | 
|Alan N. Forman     |  |              | - |  |              |  | - |                                            |  |  | 375,000                |  |  |          | - |  |       | 



| | (1) | In
                                         the event an executive is terminated by the Company with Cause or resigns without Good
                                         Reason, a prorated portion of the target bonus for the year of termination is payable.
                                         It is assumed for purposes of this table that the termination occurred on December 31,
                                         2019 and the full target bonus amount would be due.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Payments Due Upon Change
in Control



|                   |  | Cash
Payment |   |  | Stock
Awards (1) |  |           | Non-Equity
Incentive Plan
 Compensation |  |  | All Other
Compensation (2) |  |  | Benefits |         |  | Total | 
|------------------ |  | ------------ | - |  | ---------------- |  | --------- | --------------------------------------- |  |  | -------------------------- |  |  | -------- | ------- |  | ----- | 
|Name               |  | ($)          |   |  | ($)              |  |           | ($)                                     |  |  | ($)                        |  |  | ($)      |         |  | ($)   | 
|Bryant R. Riley    |  |              | - |  |                  |  | 7,001,299 |                                         |  |  | -                          |  |  |          | 358,251 |  |       | 
|Thomas J. Kelleher |  |              | - |  |                  |  | 6,627,653 |                                         |  |  | -                          |  |  |          | 326,751 |  |       | 
|Phillip J. Ahn     |  |              | - |  |                  |  | 3,434,779 |                                         |  |  | -                          |  |  |          | 175,050 |  |       | 
|Kenneth Young      |  |              | - |  |                  |  | 3,478,793 |                                         |  |  | -                          |  |  |          | 175,267 |  |       | 
|Andrew Moore       |  |              | - |  |                  |  | 3,499,315 |                                         |  |  | -                          |  |  |          | 175,267 |  |       | 
|Alan N. Forman     |  |              | - |  |                  |  | 1,930,425 |                                         |  |  | -                          |  |  |          | 101,799 |  |       | 



| | (1) | In
                                         accordance with executive employment agreements and PRSU award agreements, unvested RSUs
                                         and PRSUs shall vest upon Change in Control. The market value is based on the number
                                         of RSUs and PRSUs that would vest multiplied by $25.18, which was the closing price of
                                         our common stock on December 31, 2019, the last trading day of the year.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Upon
                                         RSU and PRSU vesting upon Change in Control, accrued dividend rights, equivalent to dividends
                                         declared and paid per share of common stock from July 1, 2017 through December 31, 2019,
                                         are paid for RSUs awarded in 2017, 2018 and 2019 in accordance with award agreements.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12







Risks
Related to Compensation Policies and Practices



The
Compensation Committee has considered and regularly monitors whether our overall employee compensation program creates incentives
for employees to take excessive or unreasonable risks that could materially harm our business. Although risk-taking is a necessary
part of building any business, the Compensation Committee focuses on aligning our compensation policies with the long-term interests
of the Company and its stockholders and avoiding short-term rewards for management or other employee decisions that could pose
long-term risks to the Company. We believe that several features of our compensation policies for management-level employees appropriately
mitigate these risks, including a mix of long- and short-term compensation incentives that we believe is properly weighted for
a company of our size, in our industry and with our stage of growth, and the uniformity of compensation policies and objectives
across our employees. We also believe our internal legal and financial controls appropriately mitigate the probability and potential
impact of an individual employee committing us to a harmful long-term business transaction in exchange for short-term compensation
benefits.



CEO Pay
Ratio



As
required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing disclosure regarding
the ratio of annual total compensation of Mr. Riley and Mr. Kelleher, our Co-CEOs, to that of our median employee. Our median
employee earned $105,300 in total compensation for 2019. Based upon the total 2019 compensation reported for Mr. Riley and Mr.
Kelleher of $4,909,962 and $4,899,528, respectively, as reported under “Total” in the Summary Compensation Table,
our ratio of Co-CEO to median employee pay was 47:1. Our median employee is employed in our Great American Group Advisory and
Valuation Services, LLC subsidiary.



Calculation Methodology



To
identify our median employee, we identified our total employee population worldwide as of December 30, 2019, excluding our Co-CEOS,
in accordance with SEC rules. On December 30, 2019, 87.6% of our employee population was located in the U.S., with 11.6% in India,
0.7% in Israel and 0.1% in Europe.



Consistently
Applied Compensation Measure. We collected full-year 2019 actual gross earnings data for the December 30, 2019 employee population,
including cash-based compensation and equity-based compensation that was realized in 2019, relying on our internal payroll records.
Compensation was annualized on a straight-line basis for non-temporary new hire employees who did not work with our company for
the full calendar year.



Once
we determined the median employee, we calculated total compensation for the median employee in the same manner in which we determine
the compensation shown for our named executive officers in the Summary Compensation Table, in accordance with SEC rules.



13







Compensation
Discussion and Analysis



The
following compensation discussion and analysis provides information regarding certain aspects of our overall compensation philosophy
and objectives and the elements of compensation paid to our named executive officers in 2019.



Executive
Summary



2019
Compensation Philosophy



Our
executive compensation program is designed (i) to provide incentives to our executive officers to manage and grow our businesses
and (ii) to attract, retain, and motivate top quality, effective executives. In addition to general senior management responsibilities,
each of our named executive officers also has revenue production or management responsibilities within our operating subsidiaries.
In determining compensation for our named executive officers, the primary emphasis is on our consolidated financial performance,
but each individual’s performance and/or business unit performance are considered. The effective implementation of this
program plays an integral role in our success.



The
Compensation Committee of the Board has responsibility for overseeing our compensation philosophy. The Compensation Committee
has the primary authority to determine and recommend to the Board for final approval the compensation of our named executive officers.



Compensation
Philosophy and Objectives



A
substantial portion of each named executive officer’s total compensation is variable and delivered on a pay-for-performance
basis. We believe this model provides a key incentive to motivate management to achieve our business objectives. The executive
compensation program provides compensation opportunities contingent upon performance that we believe are competitive with practices
of other similar financial services firms. We strongly believe that the components of our compensation programs align the interests
of our named executive officers with our stockholders and will promote long-term stockholder value creation.



We
link rewards to both corporate and individual performance, emphasizing long-term results and alignment with our stockholders’
interests. We align compensation with business strategy and risk and provide a mix of performance and retentive-based compensation.
Long-term equity compensation is an integral part of our compensation program with awards of equity subject to vesting requirements,
including continued employment. Although we do not have formal equity ownership guidelines for our executive officers and other
key leaders of our company, we encourage our executives to maintain a meaningful ownership interest in our company, aligning their
interests with those of our stockholders.



Our
executives are eligible for the same benefit plans available to all of our employees, and we do not provide any executive perquisites,
defined benefit plans, or other retirement benefits (other than the defined contribution plan available to employees generally).



Throughout
this report, we refer to our Co-Chief Executive Officers, our Chief Financial Officer, and each of our three other most highly
compensated executive officers for 2019 as our “named executive officers.” In addition to our Co-Chief Executive Officers
and our Chief Financial Officer, this group includes our President, our Chief Executive Officer of B. Riley FBR, Inc. and our
Executive Vice President, General Counsel and Secretary.



Principles
and Objectives of Our Compensation Program



The
Compensation Committee of our Board has discretionary authority over the compensation of our named executive officers. In developing
a compensation program for our named executive officers, the Compensation Committee’s goal is to link compensation decisions
to both corporate and individual performance, with a focus on rewarding the achievement of financial results, as well as rewarding
the individual performance and accomplishments of our named executive officers in light of their respective duties and responsibilities,
the impact of their actions on our strategic initiatives, and their overall contribution to the culture, strategic direction,
stability and performance of our company. Our Co-Chief Executive Officers recommend to the Compensation Committee the amount and
form of compensation for each of our named executive officers other than themselves, and the amount and form of compensation for
our Co-Chief Executive Officers are initially developed by the Chairman of the Compensation Committee with input from the committee’s
independent compensation consultant, as necessary, and are then reviewed and approved by the Compensation Committee. Our Compensation
Committee retains the discretion to compensate and reward our named executive officers based on a variety of other factors, including
subjective or qualitative factors.



14







Principles



Our
compensation program for our named executive officers is designed to attract, retain and motivate executives and professionals
of the highest quality and effectiveness while aligning their interests with the long-term interests of our stockholders. The
following five “Principles of Compensation” summarize key categories that our Board, the Compensation Committee,
and our management team believe are critical to recognize:



| | ● | Company
                                         Performance - All compensation decisions are made within the context of overall company
                                         performance. We evaluate company performance primarily from a financial perspective,
                                         but also from a strategic perspective.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Alignment- We believe that the interests of our employees and stockholders should be aligned.
                                         Compensation directly reflects both the annual and longer-term performance of the business.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Risk
                                         Management - Compensation practices and decisions are designed to neither encourage
                                         nor reward excessive or inappropriate risk taking.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Employee
                                         Contribution - An individual’s compensation, evaluated within the context of
                                         overall company results, is determined by the individual’s contribution to the
                                         business. We consider both financial and non-financial factors. In determining individual
                                         compensation, teamwork and unselfish behavior are recognized and appropriately rewarded.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Quality
                                         and Retention of Staff - Total compensation levels are calibrated to the market such
                                         that we remain competitive for attracting, motivating and retaining the very best people
                                         in light of our business strategy. We seek to maximize the value of an executive’s
                                         compensation through both appropriate pay design and effective communication of pay programs.
                                         Compensation is structured to encourage long-term service and loyalty.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Objectives



The
Compensation Committee seeks, through our compensation programs, to foster an entrepreneurial, results-focused culture that we
believe is critical to the success of our company and to the long-term growth of stockholder value. In addition to appropriately
rewarding individual performance, viewed in light of each named executive officer’s duties, responsibilities and function,
the Compensation Committee also believes that it is critical to encourage commitment among the named executive officers to our
overall corporate objectives and culture of partnership. A key objective of our overall compensation program is for the named
executive officers to have a significant portion of their compensation linked to building long-term value for our stockholders.



Role
of Independent Compensation Consultant



In
2017, the Compensation Committee retained Pricewaterhouse Coopers. (“PwC”), an independent consulting firm, to assist
the Compensation Committee in fulfilling its duties in setting compensation for our Chief Executive Officers. PwC was engaged
by and reported solely to the Compensation Committee, and the Compensation Committee had the sole authority to approve the terms
of the engagement. PwC did not provide any services to the company in 2017 other than executive compensation consulting services
provided to the Compensation Committee and did not provide any services to the Company in 2018 or 2019. Before engaging PwC, the
Compensation Committee determined that PwC is independent, after taking into account the factors set forth in Rule 10C-1 of the
Exchange Act and NASDAQ Marketplace Rule 5605(d)(3). PwC identified a group of public peer companies to benchmark our Chief Executive
Officer’s compensation against peer company Chief Executive Officers and market survey data. PwC’s analysis considered:
(i) base salary; (ii) annual incentive compensation; (iii) total cash compensation; (iv) long-term incentive compensation; and
(v) total direct compensation. There were no changes to our executive compensation plan in 2019.



In
December 2019, the Compensation Committee retained Mercer LLC, an independent consulting firm, to assist the Compensation Committee
in fulfilling its duties in setting compensation for our Chief Executive Officers and other named executive officers for 2020.
Mercer was engaged by and is reporting solely to the Compensation Committee, and the Compensation Committee has the sole authority
to approve the terms of the engagement. Mercer did not provide any services to the company in Fiscal 2019 other than executive
compensation consulting services provided to the Compensation Committee. Before engaging Mercer, the Compensation Committee determined
that Mercer is independent, after taking into account the factors set forth in Rule 10C-1 of the Exchange Act and NASDAQ
Marketplace Rule 5605(d)(3).



15







Peer
Group



As
part of its services, in 2017, PwC compiled data regarding Chief Executive Officer compensation from the following “peer”
companies: Cowen Group, Inc., FBR & Co., Gain Capital Holdings, Inc., Greenhill & Co., Inc., Houlihan Lokey Inc., INTL
FCStone Inc., Investment Technology Group, Inc., JMP Group Inc., Moelis & Co., Oppenheimer Holdings Inc., and Piper Jaffray
Companies. This peer group includes companies primarily consisting of investment banks with revenues and market capitalizations
most comparable to ours. While the Compensation Committee considered the level of compensation paid by the firms in the peer group
as a reference point that provides a framework for its decisions regarding the Co-Chief Executive Officers’ compensation,
in order to maintain competitiveness and flexibility, the Compensation Committee did not target compensation at a particular level
relative to the peer group. Similarly, the Compensation Committee did not employ a formal benchmarking strategy or rely upon specific
peer-derived targets. Subsequent to the receipt of the peer group data regarding Chief Executive Officer compensation from PwC,
the Compensation Committee reviewed executive compensation data more broadly from the peer group in evaluating the compensation
of the other named executive officers. This peer group market data is an important factor considered by the Compensation Committee
when setting compensation, but it is only one of multiple factors considered by the Compensation Committee, and the amount paid
to each named executive officer may be more or less than the composite market median based on individual performance, the roles
and responsibilities of the executive, experience level of the individual, internal equity and other factors that the Compensation
Committee deems important. There were no changes to our executive compensation plan in 2018 or 2019.



As
part of its services for 2020, Mercer will study our “peer” group and recommend to, and review any changes thereto
with, the Compensation Committee.



Review
of Stockholder Advisory Votes on Our Executive Compensation



Consistent
with the preference of our stockholders, which was expressed at our annual meeting of stockholders held in Beverly Hills, CA,
our stockholders currently have the opportunity to cast an advisory vote on our executive compensation once every three years.
At our 2019 annual meeting of stockholders, our executive compensation received a favorable advisory vote from 91.35% of the votes
cast on the proposal at the meeting (which excludes abstentions and broker non-votes). The Compensation Committee believes this
approval affirmed stockholders’ support of our approach to executive compensation, and therefore the Compensation Committee
did not significantly change our compensation policies, philosophy, structure or levels in response to such advisory vote. The
Compensation Committee will continue to consider the outcome of stockholder advisory votes on our executive compensation when
making compensation decisions for our named executive officers and in respect of our compensation programs generally.



16







Elements
of 2019 Compensation



This
section describes the various elements of our compensation program for our named executive officers in 2019, summarized in the
table below, and why the Compensation Committee chose to include the items in the compensation program. As detailed below, the
primary elements of our compensation program during 2019 consisted of base salary, performance-based cash bonuses, or “at
risk,” compensation opportunities, and long-term equity incentive compensation. We also provided benefit programs that apply
to all employees. The elements of our executive compensation program are summarized as follows:



|Element                                      |  | Description                                                                                                                                                                                                                     |  | Function                                                                                                                                                                                                           
|-------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Base Salary                                  |  | Fixed cash compensation                                                                                                                                                                                                         |  | Provides basic compensation at a level consistent with competitive
    practices; reflects role, responsibilities, skills, experience and performance; encourages retention                                        
|                                             |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                    
|Performance-Based Cash Bonuses               |  | Cash bonuses earned based on performance under the terms of the
    Management Bonus Plan (“B. Riley Bonus Plan”).                                                                                                              |  | Motivates and rewards for achievement of annual company financial
    performance goal                                                                                                                             
|                                             |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                    
|Discretionary Bonuses                        |  | Discretionary bonuses awarded in circumstances
    where individual contribution and performance was excellent; payable in cash or stock at the discretion of the Compensation
    Committee                                    |  | Rewards excellent performance relative to the duties, responsibilities,
    and functions of an individual executive officer                                                                                       
|                                             |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                    
|Long-Term Equity Incentives                  |  | Equity awards granted at the Compensation Committee’s discretion
    under the Amended and Restated 2009 Stock Incentive Plan.                                                                                                  |  | Motivates and rewards for financial performance over a sustained
    period; strengthens mutuality of interests between executives and stockholders; increases retention; rewards creation of shareholder
    value
|                                             |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                    
|Benefits                                     |  | Defined contribution savings plan, healthcare plan and other standard
    company benefit plans. Named executive officers receive same coverage as other employees.                                                             |  | Provides market competitive savings and health and welfare benefit
    programs available to other employees based on standard eligibility criteria                                                                
|                                             |  |                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                    
|Executive Perquisites and Other Arrangements |  | We do not provide perquisites, defined benefit plans (other than
    the defined contribution plan available to employees generally) or other retirement benefits or deferred compensation to our
    named executive officers. |  | Not applicable, except as noted                                                                                                                                                                                    

17





Base Salary



The
purpose of base salary is to provide a set amount of cash compensation for each named executive officer that is not variable in
nature and is generally competitive with market practices. Consistent with our performance-based compensation philosophy, the
base salary for each named executive officer is targeted to account for less than half of total compensation.



The
Compensation Committee seeks to pay our named executive officers a competitive base salary in recognition of their job responsibilities
for a publicly-held company by considering several factors, including competitive factors within our industry, past contributions
and individual performance of each named executive officer, as well as retention. In setting base salaries, the Compensation Committee
is mindful of total compensation and the overall goal of keeping the amount of cash compensation that is provided in the form
of base salary substantially lower than the amount of bonus opportunity that is available, assuming that performance targets are
met or exceeded. Base salaries for Messrs. Riley, Kelleher, Ahn, Young, Moore and Forman remained unchanged in 2019.



B. Riley Financial, Inc.
Management Bonus Plan



The
B. Riley Compensation Committee believes performance-based cash compensation is important to focus B. Riley’s executives
on, and reward B. Riley’s executives for, achieving key objectives. In furtherance of this, in August 2015, B. Riley adopted
the B. Riley Financial, Inc. Management Bonus Plan, which we refer to as the B. Riley Bonus Plan. The purpose of the B. Riley
Bonus Plan is to increase stockholder value and the success of B. Riley by motivating key employees, including B. Riley’s
named executive officers, to perform to the best of their abilities and to achieve B. Riley’s objectives. The B. Riley bonus
plan’s goals are to be achieved by providing such employees with incentive awards only after the achievement of specified
objective performance goals during specified performance periods, in each case determined by the Compensation Committee.



In
2019, the B. Riley Compensation Committee established financial targets pursuant to the B. Riley Bonus Plan for B. Riley’s
executive officers, including each of B. Riley’s named executive officers. The B. Riley Bonus Plan provided for: (i) a minimum
award of 25% of base salary upon B. Riley achieving at least $96 million Earnings before Interest, Taxes, Depreciation and Amortization,
Share Based Compensation, Transaction and Restructuring expenses and Other Non-recurring items and before factoring executive
bonuses for 2019, and which we refer to as 2019 Adjusted EBITDA; (ii) a target award of 100% to 150% of base salary upon B. Riley
achieving $120 million 2019 Adjusted EBITDA; and (iii) a maximum award of 200% to 300% of base salary upon B. Riley achieving
$144 million or more 2019 Adjusted EBITDA. Such plan also provided for target awards of a prorated percentage of base salary based
on the foregoing for 2019 Adjusted EBITDA levels between the foregoing targets. B. Riley achieved 2019 Adjusted EBITDA representing
181% of the target and the bonus awarded to each of our named executive officers was 200% of such individual’s respective
annual base salary, except for Co-Chief Executive Officers who each received a bonus equal to 300% of his adjusted base salary.



Long-Term Equity Incentive
Compensation



The
Compensation Committee believes that a significant portion of our named executive officer compensation should be in the form of
equity awards as a retention tool, and to align further the long-term interests of our named executive officers with those of
our other stockholders. In addition, the Compensation Committee makes annual grants of long-term, performance-based incentive
compensation awards to the named executive officers.



The
Compensation Committee understands that equity incentive compensation can promote high-risk behavior if the incentives it creates
for short-term performance are not properly aligned with the interests of our company over the long-term. The Compensation Committee
believes that the structure of our company’s long-term equity incentive compensation appropriately mitigates the risk by
directly aligning the recipients’ interests with those of our company. We use judgment and discretion rather than relying
solely on formulaic results, and do not use highly leveraged incentives that drive risky short-term behavior. Instead, we reward
consistent and longer-term performance. Our long-term equity incentive compensation rewards long-term performance on a per share
basis.



In
fiscal 2017, 2018 and 2019, the Compensation Committee awarded RSU grants under B. Riley’s Amended and Restated 2009
Stock Incentive Plan to B. Riley’s named executive officers as further described above in the “Management and
Executive Compensation-Summary Compensation Table.” The Compensation Committee believes that these grants, which vest over
a period of time, appropriately align the interests of our named executive officers with those of our stockholders and retain,
motivate and reward such executives.



18







In
fiscal 2019, the Compensation Committee awarded Performance-based RSU grants under B. Riley’s Amended and Restated
2009 Stock Incentive Plan to B. Riley’s named executive officers, as further described above in the “Management
and Executive Compensation-Summary Compensation Table” and “Grants of Plan-Based Awards Table for 2019.” These
PRSUs vest upon the earlier to occur of: (a) the Company achieving the Adjusted Stock Price Hurdle of $35, defined as the consecutive
five trading day average closing price of one share of Company common stock, plus the aggregate amount of dividends paid, within
three years from the date of grant; or (b) immediately prior to a Change in Control (as defined in the Amended and Restated 2009
Stock Incentive Plan). The Compensation Committee believes that these performance-based grants appropriately align the interests
of our named executive officers with those of our stockholders, and serve to retain, motivate and reward such executives.



Timing
Mix and Level of Equity Compensation Awards



In
determining the number and type of equity awards to grant in any fiscal year, the Compensation Committee considers a variety of
factors, including the responsibilities and seniority of the Named Executive Officer, the contribution that the Named Executive
Officer is expected to make to our company in the coming years and has made in the past, and the size and terms of prior equity
awards granted to the Named Executive Officer. Decisions regarding these equity awards are typically made at the Compensation
Committee’s first fiscal quarter meeting at which executive compensation for the coming year is determined. However, the
Compensation Committee may also grant equity awards from time to time based on individual and corporate achievements and other
factors it deems relevant, such as for retention purposes or to reflect changes in responsibilities or similar events or circumstances.



Change
in Control and Post-Termination Severance Benefits



The
employment agreements for each of our named executive officers provide them certain benefits if their employment is terminated
under specified conditions. The Compensation Committee believes these benefits are important elements of each Named Executive
Officer’s comprehensive compensation package, primarily for their retention value and their alignment of the interests of
our named executive officers with those of our stockholders. The details and amounts of these benefits are described in the Management
and Executive Compensation section under “Payment Due Upon Termination Without Cause, for Death or Disability, or Resignation
for Good Reason.”



Deductibility
of Executive Compensation



Section
162(m) of the Code generally limits our corporate tax deduction for compensation paid to certain executive officers to $1 million
per year. Prior to December 22, 2017, when the Tax Cuts and Jobs Act of 2017 (“TCJA”) was signed into law, this limitation
did not apply to compensation that qualified as “performance-based” compensation under Section 162(m) of the Code.
Under the TCJA, this “performance-based” exception is repealed for taxable years beginning after December 31, 2017,
except with respect to certain “grandfathered” compensation. The Compensation Committee intends to maximize our ability
to deduct executive compensation for tax purposes to the extent structuring our executive compensation for tax purposes is in
alignment with our compensation philosophy. The Compensation Committee nonetheless reserves the right to use its judgment to authorize
compensation payments that may not be deductible when the committee believes that such payments are appropriate and in the best
interests of our shareholders, after taking into account changing business conditions or the executive officer’s performance.
The Compensation Committee will continue to monitor developments under the TCJA and will continue to consider steps that might
be in our best interests to comply with Section 162(m) of the Code, including the impact from the TJCA.



Anti-Hedging
Policy



Our
insider trading policy prohibits any covered person, including directors, executive officers and employees, as well as such person’s
spouse and minor children, other persons living in their household and entities over which such person exercises control, from
entering into any hedging or monetization transactions or similar arrangements with respect to Company securities, unless advance
approval is obtained from the Compliance Officer.



19







Employment
Agreements



Prior
Employment Agreements



Employment
Agreement with Bryant R. Riley



On
June 18, 2014, we entered into an employment agreement with Bryant R. Riley. Pursuant to the terms of such employment agreement,
from and after June 18, 2014, Mr. Riley is entitled to receive an annual base salary of $300,000, subject to adjustment
in the sole discretion of the Compensation Committee. On October 2, 2017, the Compensation Committee approved an increase to Mr.
Riley’s annual base salary to $600,000. Such employment agreement also provides for the award of an annual discretionary
bonus and the reimbursement of certain business expenses. The employment agreement also contains an indemnification provision
wherein we promise to defend, indemnify, and hold Mr. Riley harmless to the fullest extent permitted by law against any and
all liabilities incurred by Mr. Riley in connection with his employment by us. The term of such employment agreement is three
years from June 18, 2014, which term shall be automatically extended for one-year terms, unless either party gives the other
party not less than 90 days’ prior written notice of the intention to not extend such employment agreement automatically.



Current
Employment Agreements, as Amended



On
December 29, 2017, the Compensation Committee approved the entrance by the company into new employment agreements with each of
the named executive officers effective January 1, 2018. The employment agreement of Mr. Riley replaced the prior employment agreement
he had with the Company. Mr. Kelleher, Mr. Ahn and Mr. Forman previously did not have employment agreements with the Company.
The employment agreements for Mr. Riley and Mr. Kelleher were subsequently amended effective July 10, 2018. The Company also entered
into employment agreements with Messrs. Young and Moore on July 10, 2018. Each of the employment agreements with the named executive
officers was amended on April 3, 2019, to remove a Change of Control as an event constituting “Good Reason” to terminate
the employment agreements.



The
terms of the new employment agreements, together with any amendments, generally provide, among other things, for the following
for each such individual:



| | ● | An
                                         annual base salary subject to review and adjustment on an annual basis, in the initial
                                         amounts of: $600,000 per year for Mr. Riley and Mr. Kelleher, $400,000 per year for Mr.
                                         Ahn, $550,000 per year for Mr. Young, and $500,000 per year for Mr. Moore and $375,000
                                         per year for Mr. Forman.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Eligibility
                                         for annual performance bonuses based on such individual’s performance and/or our
                                         performance in accordance with our Management Bonus Plan, with a target bonus equal to
                                         not less than 100% of such individual’s annual base salary for Messrs. Ahn, Young,
                                         Moore and Forman, and a target bonus equal to not less than 150% of such individual’s
                                         annual base salary for Messrs. Riley and Kelleher.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Eligibility
                                         for each fiscal year to receive an annual long-term incentive award under our equity
                                         incentive plan with a value of no less than 50% of such individual’s annual base
                                         salary (but in no event more than 50,000 restricted stock units). Each such award will
                                         be subject to approval of the Compensation Committee and vest annually over a three-year
                                         period.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Notwithstanding
                                         the terms of any existing agreement or plan, all outstanding unvested stock options,
                                         restricted stock units, stock appreciation rights and other unvested equity linked awards
                                         granted to such individual during the term of such individual’s employment agreement
                                         shall become fully vested upon a Change of Control and exercisable for the remainder
                                         of their full term.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Participation
                                         in benefit plans for our executives, reimbursement for all reasonable and necessary out-of-pocket
                                         expenses incurred by such individual in the performance of such individual’s respective
                                         duties and paid time off in accordance with our policies.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | A
                                         requirement for each party to give twenty (20) days prior written notice to terminate
                                         such individual’s employment.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | If
                                         such individual is terminated with Cause (as defined in the employment agreements) or
                                         resigns without Good Reason (as defined in the employment agreements), such individual
                                         receives such individual’s base salary, benefits and accrued unused leave through
                                         termination, as well as a pro rata portion of any target bonus for the year of termination
                                         (or if no target bonus for such calendar year has been set on or prior to the effective
                                         date of termination, the target bonus for the prior year).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | If
                                         such individual is terminated without Cause, for death or for Disability (as defined
                                         in the employment agreements) or resigns for Good Reason, such individual receives, subject
                                         to the execution of a general release, a severance payment payable in one lump sum within
                                         45 days of termination in an amount equal to the sum of (a) one (1) times such individual’s
                                         base salary and (b) one (1) times such individual’s target bonus for the year of
                                         termination (or if no target bonus for such calendar year has been set on or prior to
                                         the effective date of termination, the target bonus for the prior year). In such circumstances,
                                         such individual shall also be eligible for reimbursement for COBRA premiums for the difference
                                         between the monthly COBRA premium paid by such individual for himself (and his dependents,
                                         if applicable) and the monthly premium amount paid by similarly situated active executives,
                                         for a period ending upon the earliest of the twelve (12) month anniversary of such termination
                                         and the date on which such individual becomes eligible to receive substantially similar
                                         coverage from another employer.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20







Director
Compensation



We
use cash and equity-based compensation to attract and retain qualified candidates to serve on our Board. In setting director compensation,
we consider the significant amount of time that members of the Board expend in fulfilling their duties to us, the skill level
required of such members and other relevant information. The Compensation Committee and the Board have the primary responsibility
for reviewing, considering any revisions to, and approving director compensation. We do not pay our management directors for board
service in addition to their regular employee compensation.



In
2019, each of our non-employee directors has received annual fees of $50,000 in cash, payable in quarterly installments, and $50,000
in equity in the form of restricted stock units under our Amended and Restated 2009 Stock Incentive Plan. Such restricted stock
units are subject to vesting and will vest on the earlier of the date of our next annual meeting or May 21, 2020, subject to continued
service on the Board through such vesting date. In addition, each of our non-employee directors shall have the right to receive
promptly following the vesting date an amount equal to the product of (i) the number of RSUs vested on such date, multiplied by
(ii) the total dividends declared and paid per share of common stock since the date of award. Such vesting is subject to full
acceleration in the event of certain change in control transactions for us.



In
addition to the foregoing, the chairpersons of the Audit Committee, the Compensation Committee and Corporate Governance Committee
receive annual fees of $15,000, $10,000 and $5,000, respectively, and each of our non-employee directors that is a member of the
Audit Committee, Compensation Committee and Corporate Governance Committee receives annual fees of $5,000, $2,500 and $2,500,
respectively.



From
time to time, our non-employee directors may receive additional compensation through equity compensation or otherwise at the discretion
of the disinterested directors of the Board for extraordinary service relating to their capacity as members of the Board.



The
following table summarizes the total compensation that members of the Board (other than directors who are named executive officers)
earned during the fiscal year ended December 31, 2019 for services rendered as members of the Board.



|Name (1)                |  | Fees Earned or Paid in Cash
                                         (3) ($) |        |  | Stock Awards (4) ($) |  |        | Total ($) | 
|----------------------- |  | ---------------------------------------------------------------------------- | ------ |  | -------------------- |  | ------ | --------- | 
|Robert
    D’Agostino   |  |                                                                              | 67,456 |  |                      |  | 50,000 |           | 
|Robert
    L. Antin     |  |                                                                              | 58,631 |  |                      |  | 50,000 |           | 
|Michael
    J. Sheldon  |  |                                                                              | 53,631 |  |                      |  | 50,000 |           | 
|Todd
    D. Sims        |  |                                                                              | 56,131 |  |                      |  | 50,000 |           | 
|Mimi
    K. Walters (2) |  |                                                                              | 24,681 |  |                      |  | 43,014 |           | 
|Mikel
    H. Williams   |  |                                                                              | 68,631 |  |                      |  | 50,000 |           | 



| | (1) | Bryant
                                         R. Riley, a member of the Board, our Chairman and Co-Chief Executive Officer, Thomas
                                         J. Kelleher, a member of the Board and our Co-Chief Executive Officer, and Andrew Gumaer,
                                         a member of the Board and the Chief Executive Officer of GAG, LLC are not included in
                                         this table because as employees Messrs. Riley, Kelleher and Gumaer received no additional
                                         compensation for services as directors for 2019. The compensation received by Messrs. Riley
                                         and Kelleher as our employees is shown in the summary compensation table provided above
                                         in “Executive Compensation-Summary Compensation Table.”
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Mimi
                                         K. Walters was appointed as director effective July 12, 2019.
| | --- | -----------------------------------------------------------------------------------------------------------



| | (3) | The
                                         fees paid in cash also include dividends paid on stock or option awards.
| | --- | ---------------------------------------------------------------------------------------------------------------------



| | (4) | The
                                         amounts in the Stock Awards column reflect the aggregate grant date fair value of restricted
                                         stock units granted to the applicable director in 2019 calculated in accordance with
                                         FASB ASC 718. We granted 2,610 restricted stock units to Messrs. D’Agostino,
                                         Antin, Sheldon, Sims, and Williams on July 18, 2019 for such directors’ annual
                                         stock grant of $50,000 as a non-employee director. We granted 2,245 restricted stock
                                         units to Ms. Walters on July 18, 2019 for such directors’ annual stock grant of
                                         $50,000 as a non-employee director on a prorated basis from the period from her appointment
                                         on July 12, 2019 to the vest date of May 21, 2020. The grant date fair value of the restricted
                                         stock units was $19.16 per share on July 18, 2019. All awards vest on the earlier
                                         of May 21, 2020 or our 2020 annual meeting. In addition, each of our non-employee directors
                                         shall have the right to receive promptly following the vesting date an amount equal to
                                         the product of (i) the number of RSUs vested on such date, multiplied by (ii) the total
                                         dividends declared and paid per share of common stock since the date of award. Vesting
                                         for all such awards is subject to full acceleration in the event of certain change in
                                         control transactions with respect to us and is contingent upon continued service of the
                                         applicable director on the Board through the applicable vesting date. As of December 31,
                                         2019, a total of 15,295 restricted stock units granted to Messrs. D’Agostino, Antin,
                                         Sheldon, Sims, and Williams, and Ms. Walters remain outstanding.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21







Item 12. Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder Matters.



The
following table sets forth information concerning the beneficial ownership of the shares of our common stock as of April 20, 2020,
by (i) each person we know to be the beneficial owner of 5% or more of the outstanding shares of our common stock; (ii) each
named executive officer listed in the Summary Compensation Table; (iii) each of our directors; and (iv) all of our executive
officers and directors as a group. Unless otherwise indicated, the address of the individuals listed below is the address appearing
on the cover of this Annual Report.



|                                                                                     |  | Shares Beneficially Owned (2) |          
|------------------------------------------------------------------------------------ |  | ----------------------------- | ---------
|Name
    or Group of Beneficial Owners (1)                                           |  | Number                        |          
|Directors and Named Executive Officers:                                              |  |                               |          
|Bryant
    R. Riley (3)                                                              |  |                               | 4,761,472
|Thomas
    J. Kelleher (4)                                                           |  |                               | 583,382  
|Andrew
    Gumaer (5)                                                                |  |                               | 650,201  
|Phillip
    J. Ahn                                                                   |  |                               | 87,312   
|Kenneth
    Young                                                                    |  |                               | 64,910   
|Andrew
    Moore                                                                     |  |                               | 119,289  
|Alan
    N. Forman                                                                   |  |                               | 51,536   
|                                                                                     |  |                               |          
|Robert
    D’Agostino                                                                |  |                               | 135,053  
|Robert
    L. Antin                                                                  |  |                               | 209,478  
|Michael
    J. Sheldon                                                               |  |                               | 18,115   
|Todd
    D. Sims                                                                     |  |                               | 14,261   
|Mimi
    K. Walters                                                                  |  |                               | 2,245    
|Mikel
    H. Williams                                                                |  |                               | 60,582   
|                                                                                     |  |                               |          
|Executive
    officers and directors as a group (14 persons):                        |  |                               | 6,786,211
|                                                                                     |  |                               |          
|5%
    Stockholders:                                                                 |  |                               |          
|Daniel Asher and associated persons (6)                                              |  |                               | 2,244,104
|Neil
    S. Subin as President and Manager of MILFAM LLC. and associated persons (7) |  |                               | 1,819,030
|Funds
    associated with Punch & Associates Investment Management, Inc. (8)         |  |                               | 1,559,456
|Funds
    associated with Nokomis Capital, L.L.C. (9)                                |  |                               | 1,339,374
|Funds
    associated with Elliott Investment Management, LP (10)                     |  |                               | 1,301,036



| | * | Represents
                                         less than 1%.
| | - | -----------------------------------------------------------------



| | (1) | Unless
                                         otherwise indicated, the business address of each holder is c/o B. Riley Financial, Inc.,
                                         21255 Burbank Blvd., Suite 400, Woodland Hills, CA 91367.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Applicable
                                         percentage ownership is based on 25,948,734 shares of our common stock outstanding as
                                         of April 20, 2020. Beneficial ownership is determined in accordance with the rules
                                         of the SEC and is based on voting and investment power with respect to shares, subject
                                         to the applicable community property laws. Shares of our common stock subject to
                                         options or other contractual rights currently exercisable, or exercisable within 60 days
                                         after April 20, 2020, are deemed outstanding for the purpose of computing the percentage
                                         ownership of the person holding such options but are not deemed outstanding for computing
                                         the percentage ownership of any other person.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Represents
                                         4,429,292 of our common shares beneficially owned by Mr. Riley directly or jointly
                                         with his wife, 19,500 of our common shares beneficially owned by Mr. Riley in custodial
                                         accounts for his children, 73,617 of our common shares held of record by the B. Riley
                                         and Co., LLC 401(k) Profit Sharing Plan FBO Bryant Riley, which we refer to as the Riley
                                         profit sharing plan, and 200,000 of our common shares held of record by the Robert Antin
                                         Children Irrevocable Trust dtd 1/1/01, which we refer to as the Antin Trust. Mr. Riley
                                         serves as the trustee of the Riley profit-sharing plan and the Antin Trust and, as such,
                                         has the power to vote or dispose of the securities held of record by each of the Riley
                                         profit-sharing plan and the Antin Trust and may be deemed to beneficially own such securities.
                                         Mr. Riley pledged as collateral 4,024,714 shares in favor of Axos Bank pursuant to the
                                         terms of a Credit Agreement and Pledge Agreement, each dated as of March 19, 2019. The
                                         business address of each of Mr. Riley, the Riley profit-sharing plan and the Antin
                                         Trust is 11100 Santa Monica Blvd., Suite 800, Los Angeles, California 90025.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





22







| | (4) | Represents
                                         75,410 of our common shares beneficially owned by Mr. Kelleher, 454,748 of our common
                                         shares held of record by Mr. Kelleher and M. Meighan Kelleher as trustees for the
                                         Kelleher Family Trust, 15,100 of our common shares held
                                         by Mr. Kelleher’s self-directed IRA, Thomas John Kelleher IRA, 5,600 of
                                         our common shares held with dispositive power for Mary Meighan Kelleher IRA, 1,100 of
                                         our common shares held with dispositive power for Lyndsey Kelleher, 1,100 of our common
                                         shares held of record by Thomas J. Kelleher as UTMA custodian for daughter Kaitlin Kelleher
                                         and 1,100 of our common shares held with dispositive power for Mackenna Kelleher.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Represents
                                         (i) 299,470 of our common shares held of record by Mr. Gumaer and (ii) 336,000
                                         of our common shares held of record by Andrew & Dana Gumaer as Trustees for
                                         the Gumaer Living Trust, as to which Mr. Gumaer disclaims beneficial ownership except
                                         to the extent of such pecuniary interest.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | An
                                         amended Schedule 13D filed with the SEC on August 7, 2018 indicates that, as of
                                         August 3, 2018, Daniel Asher had (i) sole voting and dispositive power over 244,104
                                         of our common shares, and (ii) with DJ Fund Investments, LLC and associated persons,
                                         shared voting and dispositive power over 2,000,000 of our common shares. The business
                                         address of Daniel Asher and associates is: c/o Equitec Group LLC, 111 W. Jackson
                                         Blvd., Suite 2000, Chicago, IL  60604.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (7) | An
                                         amended Schedule 13G/A filed with the SEC on February 13, 2019 indicates that, as of
                                         December 31, 2018, Neil S. Subin, who has succeeded to the position of President and
                                         Manager of MILFAM LLC, which serves as manager, general partner, or investment advisor
                                         of a number of entities formerly managed or advised by the late Lloyd I. Miller, III. Mr.
                                         Subin also serves as trustee of a number of Miller family trusts had (i) sole voting
                                         and dispositive power with respect to 1,616,381 of our common shares as (A) manager
                                         of a limited liability company that is the adviser to certain trusts, (B) manager
                                         of a limited liability company that is the general partner of a certain limited partnership,
                                         (C) manager of a limited liability company, and (D) an individual, and (ii) shared
                                         voting and dispositive power with respect to 202,649 of our common shares as (A) an
                                         advisor to the trustee of a certain trust, and (B) with respect to shares owned
                                         by Mr. Miller’s wife. The business address of Neil S. Subin is 3300 South
                                         Dixie Hwy, Suite 1-365, West Palm Beach, FL  33405.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (8) | A
                                         Schedule 13F filed with the SEC on February 14, 2020 indicates that, as of December 31,
                                         2019, Punch & Associates Investment Management, Inc. had sole voting and dispositive
                                         power over 1,559,456 B. Riley common shares, and shared voting and dispositive power
                                         over no B. Riley common shares. The business address of Punch & Associates Investment
                                         Management, Inc. is 7701 France Ave So. Suite 300, Edina, MN 55435.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (9) | A
                                         Schedule 13G/A filed with the SEC on February 14, 2020 indicates that, as of December
                                         31, 2019, Nokomis Capital, L.L.C had sole voting and dispositive power over no B. Riley
                                         common shares, and shared voting and dispositive power with its principal, Brett Hendrickson,
                                         over 1,339,374 B. Riley common shares. The business address of Nokomis Capital,
                                         L.L.C and Mr. Brett Hendrickson is 2305 Cedar Springs Rd., Suite 420, Dallas, TX  75201.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (10) | Based
                                         on information provided on a Schedule 13D/A filed with the SEC on January 21, 2020 by
                                         Elliott Investment Management, L.P., a Delaware limited partnership (“EIM”).
                                         Represents 1,301,036 of our common shares beneficially owned by funds for which EIM is
                                         the investment manager. Elliott Investment Management GP LLC, a Delaware limited liability
                                         company (“EIM GP”), is the sole general partner of EIM. Paul E. Singer is
                                         the sole managing member of EIM GP. The business address of each of EIM, EIM GP and Mr.
                                         Singer is 40 West 57th Street, New York, New York 10019.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





23







Equity Compensation Plan Information



B.
Riley Financial, Inc. Amended and Restated 2009 Stock Incentive Plan and 2018 Employee Stock Purchase Plan



Information
about the B. Riley Financial, Inc. Amended and Restated 2009 (the “2009 Plan”) equity compensation plan and 2018 Employee
Stock Purchase Plan (“ESPP”) at December 31, 2019 was as follows:



|Plan Category                                               |  | Number of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) |           |     | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights (4)(b) |   |       | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | 
|----------------------------------------------------------- |  | ------------------------------------------------------------------------------------------- | --------- | --- | ----------------------------------------------------------------------------------- | - | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------- | 
|Equity compensation plans approved by our stockholders:     |  |                                                                                             | 2,710,367 | (1) |                                                                                     |   | -     |                                                                                                                                                 | 
|                                                            |  |                                                                                             | 383,505   | (2) |                                                                                     | $ | 22.06 |                                                                                                                                                 | 
|Equity compensation plans not approved by our stockholders: |  |                                                                                             | 38,655    | (3) |                                                                                     |   | -     |                                                                                                                                                 | 
|Total                                                       |  |                                                                                             | 3,132,527 |     |                                                                                     | $ | 22.06 |                                                                                                                                                 | 



| | (1) | Includes unvested RSU and
PRSU awards granted under our 2009 Plan.
| | --- | ------------------------------------------------------------------



| | (2) | This amount includes warrants
to purchase 183,505 shares of our common stock, issued in connection with our acquisition of Wunderlich Securities on July 3,
2017, and warrants to purchase 200,000 shares of our common stock issued on October 28, 2019 in connection with our acquisition
of a majority interest in BR Brand Holdings LLC.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Represents RSUs awarded under
the FBR & Co. 2006 Long Term Incentive Plan and 2016 Retention and Incentive Plan that were assumed in connection with our
acquisition of FBR on June 1, 2017.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | RSU and PRSU awards listed
in column (a) have no associated exercise price. The weighted average exercise price of outstanding Wunderlich and BR Brands warrants
is $22.06, reflecting Wunderlich and BR Brands warrant exercise prices of $17.50 and $26.24, respectively.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Includes 3,007,053 shares
remaining available for future issuance under our 2009 Plan and 591,674 shares remaining available for issuance under our ESPP.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Represents shares available
for issuance under the FBR & Co. 2006 Long Term Incentive Plan that was assumed in connection with our acquisition of FBR
on June 1, 2017. These shares may be issued to certain employees of the Company under the 2009 Plan.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



For
more information on our equity compensation plans, see Notes 18 and 19 to the Consolidated Financial Statements in our annual
report on Form 10-K for the fiscal year ended December 31, 2019.





24







Item 13. Certain Relationships
and Related Party Transactions, and Director Independence



Certain Relationships and
Related Party Transactions.



Other
than as described below, since the beginning of fiscal year 2019, there were no transactions with respect to which we were a participant
or currently proposed transactions with respect to which we are to be a participant in which the amount involved exceeds $120,000
and in which any director, executive officer or beneficial holder of more than 5% of any class of our voting securities or member
of such person’s immediate family had or will have a direct or indirect material interest.



John
Ahn, President of our subsidiary Great American Capital Partners, LLC, is the brother of Phillip J. Ahn, one of our executive
officers. Mr. J. Ahn was also President of B. Riley & Co, LLC until September 2016. Mr. J. Ahn’s total compensation,
consisting of base salary, bonus, dividend equivalent payment, and restricted stock units granted in fiscal year 2019 for services
rendered to us was $2,229,870, including the receipt of a restricted stock unit (“RSU”) grant of 14,110 of our common
shares with a grant date fair value of $286,715, calculated in accordance with the Financial Accounting Standards Board (“FASB”)
ASC 718, that vests as follows: 4,704 of such RSUs vest on May 24, 2020; 4,703 of such RSUs vest on May 24, 2021; and 4,703 of
such RSUs vest on May 24, 2022, subject to the individual’s Continuous Service (as defined in our Amended and Restated 2009
Stock Incentive Plan) through the applicable vesting date. Additionally, on July 12, 2019, Mr. J. Ahn was granted 50,000 shares
of performance restricted stock awards (“PRSUs”) with a grant date fair value of $424,000. This PRSU award will vest
upon the earlier to occur of: (a) the Issuer achieving the Adjusted Stock Price Hurdle of $35, defined as the consecutive five
trading day average closing price of one share of RILY stock, plus the aggregate amount of dividends paid, within three years
from the date of grant; or (b) immediately prior to a Change in Control (as defined in Amended and Restated 2009 Stock Incentive
Plan). Additionally, Mr. J. Ahn is entitled to receive promptly following each vesting date an amount equal to the product of
(i) the number of RSUs vested on such vesting date, multiplied by (ii) the total dividends declared and paid per share of common
stock since the date of award. Mr. J. Ahn participates in various of our employee benefit programs, including health insurance
benefits, life insurance benefits, and group life and long-term disability coverage, under the plans generally available to all
other salaried employees.



On
April 1, 2019, the Company entered into a Transfer Agreement (the “Transfer Agreement”) with GACP II, a fund managed
by GACP, and John Ahn, the President of GACP. The Transfer Agreement provides for among other things, the transfer to Mr. J. Ahn
55.56% of the Company’s limited partnership interest in GACP II (the “Transferred Interest”), which represents
a capital commitment in the aggregate amount of $5,000. In connection with the Transfer Agreement, the Company provided Mr. J.
Ahn with a non-recourse, secured line of credit in an aggregate amount of up to $5,003 pursuant to the terms of a Secured Line
of Credit Promissory Note (the “Note”) dated April 1, 2019, to fund the purchase price of the Transferred Interest.
We also entered into a Security Agreement with Mr. J. Ahn on April 1, 2019, which granted to the Company a security interest in
the Transferred Interest to secure Mr. J. Ahn’s obligations under the Note. The Note is subject to an interest rate per
annum of 7.00%. As of December 31, 2019, the principal and accrued interest on the Note were $3,798 (amount transferred as
of December 31, 2019) and $48, respectively. For the period from April 1, 2019 (inception) to December 31, 2019 interest earned
on the note was $48.



Line
of Credit and Security Agreement



At
December 31, 2019, amounts due from related parties of $5,832 includes $145 from GACP I, L.P. (“GACP I”) and $12 from
GACP II, L.P. (“GACP II”) for management fees and other operating expenses, $13 due from B. Riley Principal Merger
Corp. (“BRPM”), a company that consummated its initial public offering on April 11, 2019, and its business combination
with Alta Equipment Group, Inc. (the “Business Combination”; the combined company following the Business Combination
is referred to herein as “Alta”) and our wholly owned subsidiary, B. Riley Principal Sponsor Co. LLC (“Sponsor”),
is the Sponsor, and $3,846 due from John Ahn, President of Great American Partners, LLC, our indirect wholly owned subsidiary
(“GACP”), pursuant to a Secured Line of Promissory Note connected with a Transfer Agreement as further discussed below.
At December 31, 2019, the Company had outstanding loan to participations to BRC Partners Opportunity Fund, LP (“BRCPOF”),
a private equity fund managed by one of our subsidiaries, in the amount of $12,478, and recorded interest expense of $824 during
the year ended December 31, 2019 related to BRCPOF’s loan participations.  Our executive officers and board of
directors have a 65.3% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer,
of 52.8% in BRCPOF at December 31, 2019. At December 31, 2018, amounts due from related parties of $1,729 include $194 from
GACP I, $724 from GACP II, and $812 from CA Global for management fees, incentive fees and other operating expenses.



25







Babcock
& Wilcox



The
Company has a last-out term loan receivable due from Babcock & Wilcox Enterprises, Inc. (“B&W”) that is included
in loans receivable with a total carrying value of $109,147 at December 31, 2019. The carrying value of the loan is comprised
of the principal amount of $113,330 less original issue discount of $4,183 at December 31, 2019. Interest is payable monthly at
the fixed rate of 12.0% per annum. The loan was made to B&W as part of various amendments to B&W’s existing credit
agreement with other lenders not related to the Company. In connection with making the loan to B&W, in April 2019 the Company
received warrants to purchase 1,666,667 shares of common stock of B&W with an exercise price of $0.01 per share. The option
to exercise the warrants expires on April 5, 2022.



One
of the Company’s wholly owned subsidiaries entered into a services agreement with B&W that provided for the President
of the Company to serve as the Chief Executive Officer of B&W until November 30, 2020 (the “Executive Consulting Agreement”),
unless terminated by either party with thirty days written notice. Under this agreement, fees for services provided are $750 per
annum, paid monthly. In addition, subject to the achievement of certain performance objectives as determined by B&W’s
Compensation Committee of the Board, a performance fee may also be earned and payable to the Company. In June 2019, B&W’s
Compensation Committee of the Board approved a $2,000 performance fee in accordance with the Executive Consulting Agreement.
In March 2020, B&W’s Compensation Committee of the Board approved an additional $1,000 performance fee in accordance
with the Executive Consulting Agreement.



On
January 31, 2020, the Company agreed to provided B&W with $30,000 of additional last out term loans pursuant to new amendments
to B&W’s existing credit agreement discussed above. Pursuant to the new amendment, the company also agreed upon a term
sheet pursuant to which B&W would undertake a refinancing transaction on or prior to May 11, 2020 (the “Refinancing”)
and B&W and the existing lenders would amend and restate the credit agreement. As part of the Refinancing, the size of the
B&W’s board of directors may also be reduced to five members, with the Company retaining the ability to appoint two
members. On January 31, 2020, the Company also entered into a letter agreement with B&W pursuant to which the Company agreed
to fund any shortfall in the $200,000 of new debt or equity financing required as part of the terms of the Refinancing to the
extent such amounts have not been raised from third parties on the same terms contemplated by the Refinancing.



BRPM/Alta
Equipment



The
Company is the ultimate parent company of B. Riley FBR, the Sponsor and BRPI. Our President, Kenneth Young, was the Chief Executive
Officer of BRPM and a member of its board. Our Chairman and Co-Chief Executive Officer, Bryant Riley, was a member of BRPM’s
board. One of our officers, Daniel Shribman, is one of Alta’s directors and was the Chief Financial Officer of BRPM. BRCPOF
owns approximately 6.15% of Alta’s common stock.



Founder
Shares and Subscription Agreements



In
connection with the initial formation of BRPM, a wholly-owned subsidiary of the Company, the Company was issued all of BRPM’s
outstanding equity. On November 19, 2018, prior to the consummation of BRPM’s initial public offering (the “BRPM IPO”),
BRPM conducted a 1:3,593,750 stock split and reclassification of its common stock, resulting in an affiliate of the Company owning
3,593,750 founder shares. On March 12, 2019, 80,000 founder shares were transferred to BRPM’s then-independent directors,
and on April 4, 2019, the remaining 3,513,750 founder shares were contributed to the Sponsor.



In
connection with BRPM’s entry into the subscription agreements with certain institutional and accredited investors (“PIPE
investors”), the Sponsor forfeited 178,947 founder shares to BRPM for cancellation upon consummation of the Business Combination.
In addition, upon the consummation of the Business Combination, the Sponsor forfeited an additional 1,470,855 founder shares to
BRPM for cancellation.



BRCPOF
and BRPI, as PIPE investors, purchased $6,850,000 and $1,000,000, respectively, of BRPM’s shares of common stock at a price
of $10.00 per share, or 685,000 and 100,000 shares, respectively. BRPI did not receive any incentive shares or warrants in respect
of its subscription.



Promissory
Note



On
August 22, 2018, BRPM issued a promissory note to the Sponsor (the “Promissory Note”), pursuant to which it borrowed
an aggregate principal amount of $300,000. The Promissory Note was non-interest bearing, unsecured and due on the earlier of May
30, 2019 or the completion of the BRPM IPO. The Promissory Note was repaid upon the consummation of the BRPM IPO.



Private
Placement Securities



Simultaneously
with the closing of the BRPM IPO, the Sponsor purchased an aggregate of 462,500 private placement units at $10.00 per private
placement unit ($4,650,000 in the aggregate). Each private placement unit consisted of one share of Class A common stock and one-half
of one private placement warrant.





26







Forward
Purchase Agreement



At
the time of BRPM IPO, affiliates of the Company entered into the forward purchase agreement with BRPM, which provided for the
purchase, immediately prior to the closing of the Business Combination, by affiliates of the Company, or its designees of $25,000,000
of BRPM’s units at a price of $10.00 per unit, or an aggregate of 2,500,000 units, each comprised of one forward purchase
share and one-half of one forward purchase warrant. In connection with the closing of the Business Combination and the subscription
agreements with the PIPE investors, affiliates of the Company or its designees transferred 1,275,000 forward purchase warrants
to Alta for no consideration.



Business
Combination Marketing Agreement



Upon
closing of the Business Combination B. Riley FBR received from Alta a fee of $5,031,250 in consideration of services provided
in connection with marketing and completing the Business Combination.



Procedures
for Approval of Related Party Transactions



Under
its charter, the Audit Committee is charged with reviewing all potential related party transactions. Our policy has been that
the Audit Committee, which is comprised solely of independent, disinterested directors, reviews and then recommends such related
party transactions to the entire Board for further review and approval. All such related party transactions are then required
to be reported under applicable SEC rules. Aside from this policy, we have not adopted additional procedures for review of, or
standards for approval of, related party transactions, but instead review such transactions on a case-by-case basis.



Director Independence



Our
Board has unanimously determined that six (6) of our directors, Messrs. Antin, D’Agostino, Sheldon, Sims, and Williams,
and Ms. Walters, a majority of the Board, are “independent” directors as that term is defined by Nasdaq Marketplace
Rule 5605(a)(2). In addition, based upon such standards, the Board determined that Messrs. Riley, Gumaer, and Kelleher are
not “independent” because of their service as employees of the company.



27







Item 14. Principal Accounting
Fees and Services.



The
following table sets forth the aggregate fees for services provided to us by Marcum for the fiscal years ended December 31,
2019 and 2018:



|                       |  | Fiscal 2019 |           |  | Fiscal 2018 |  
|---------------------- |  | ----------- | --------- |  | ----------- | -
|Audit Fees (1)         |  | $           | 1,723,734 |  |             | $
|Audit-Related Fees (2) |  |             | -         |  |             |  
|Tax Fees               |  |             | -         |  |             |  
|All Other Fees         |  |             | -         |  |             |  
|TOTAL                  |  | $           | 1,723,734 |  |             | $



| | (1) | Audit Fees consist of audit
and various attest services performed by Marcum and include the following for the years ended December 31, 2019 and 2018: (a)
reviews of our financial statements for the quarterly periods ended March 31, June 30, and September 30, and (b) the audit of
our financial statements for the year ended December 31, and (c) services rendered in connection with the filing of registration
statements and underwriter comfort letters.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Audit-Related Fees consists
of fees for assurance and related services performed by Marcum related to the performance of the audit or review of the Company’s
financial statements other than audit fees.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Audit Committee Pre-Approval
Policy



As
a matter of policy, all audit and non-audit services provided by our independent registered public accounting firm are approved
in advance by the Audit Committee, which considers whether the provision of non-audit services is compatible with maintaining
such firm’s independence. All services provided by Marcum during fiscal years 2018 and 2019 were pre-approved by the Audit
Committee. The Audit Committee has considered the role of Marcum in providing services to us for the fiscal year ended December 31,
2019 and has concluded that such services are compatible with their independence as our auditors.



28







PART IV



Item 15. Exhibits, Financial
Statement Schedules.



INDEX
TO EXHIBITS



|Exhibit
    No. |  | Description                                                                                                                                         
|--------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|                |  |                                                                                                                                                     
|32.1***         |  | Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|                |  |                                                                                                                                                     
|32.2***         |  | Certification of Co-Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|                |  |                                                                                                                                                     
|32.3***         |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   



| | *** | Filed herewith.
| | --- | ---------------



29







SIGNATURES



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.



Date: April
22, 2020



| | B. RILEY FINANCIAL, INC.
| | ------------------------
| |                         
| | By:                     
| |                         
| |                         





30