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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2025
Accounting Policies [Abstract]  
Principles of Consolidation and Basis of Presentation Principles of Consolidation and Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations; see Note 1 - Organization and Nature of Business Operations and Note 4 - Discontinued Operations and Assets Held for Sale.
The Company consolidates all entities that it controls through a majority voting interest. In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE. See Note 2(o) - Variable Interest Entities.
The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to interim financial reporting guidelines and the rules and regulations of the SEC. The condensed consolidated balance sheet at December 31, 2024 was derived from our audited annual consolidated financial statements. Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the
financial position and the results of operations for the periods presented have been included. The disclosures presented in our notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis. These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The unaudited results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.
Consolidation Principles of Consolidation and Basis of Presentation
The unaudited condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly owned and majority-owned subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated upon consolidation. Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations; see Note 1 - Organization and Nature of Business Operations and Note 4 - Discontinued Operations and Assets Held for Sale.
The Company consolidates all entities that it controls through a majority voting interest. In addition, the Company performs an analysis to determine whether its variable interest or interests give it a controlling financial interest in a variable interest entity (“VIE”) including ongoing reassessments of whether it is the primary beneficiary of a VIE. See Note 2(o) - Variable Interest Entities.
The unaudited condensed consolidated financial statements have been prepared by the Company, pursuant to interim financial reporting guidelines and the rules and regulations of the SEC. The condensed consolidated balance sheet at December 31, 2024 was derived from our audited annual consolidated financial statements. Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the
financial position and the results of operations for the periods presented have been included. The disclosures presented in our notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis. These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The unaudited results of operations for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.
Risks and Uncertainties Risks and Uncertainties
In 2025, the United States introduced trade policy actions that have increased import tariffs across a wide range of countries at various rates, with certain exemptions. To the extent that trade tariffs and other restrictions imposed by the United States or other countries increase the price of, or limit the amount of, our products or components or materials used in our products imported into the United States or other countries, or create adverse tax consequences, the sales, cost, or gross margin of our products that are sold in our Consumer Products segment may be adversely affected and the demand from our customers for products may be diminished. Uncertainty surrounding international trade policy and regulations as well as disputes and protectionist measures could also have an adverse effect on consumer confidence and spending and may impact the Company’s results of operations.
Use of Estimates Use of Estimates
The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited condensed consolidated financial statements and reported amounts of revenue and expense during the reporting periods. Estimates are used when accounting for certain items such as valuation of securities, allowance for credit losses, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, embedded derivatives, warrant liabilities, accounting for income tax valuation allowances, and sales returns and allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may significantly differ.
Concentration of Risk Concentration of Risk
Revenues in the Capital Markets, Wealth Management, Communications, and E-Commerce segments are primarily generated in the United States. Revenues in the Consumer Products segment are primarily generated in the United States, Canada, and Europe.
The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts and mitigates this risk by utilizing financial institutions of high credit quality.
Cash and Cash Equivalents and Restricted Cash Cash and Cash Equivalents and Restricted CashThe Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Supplemental Non-cash Disclosures Supplemental Non-cash Disclosures
During the six months ended June 30, 2025, there was non-cash investing activity of $8,876 related to loans transferred to loans held for sale from loans receivable at fair value. During the six months ended June 30, 2025, there was non-cash financing activity related to the Company’s exchange of its 5.50% Senior Notes due March 2026 in the aggregate principal amount of $115,844, its 5.00% Senior Notes due December 2026 in the aggregate principal amount of $126,766, its 5.25% Senior Notes due August 2028 in the aggregate principal amount of $23,096, and its 6.00% Senior Notes due January 2028 in the aggregate principal amount of $46,429 for its New Notes in the aggregate principal amount of $247,468 for a net gain on exchange of senior notes of $54,986. There was also non-cash financing activity related to the recognition of capital from a noncontrolling interest of $12,494 upon the Company’s initial consolidation of a VIE, issuance of common stock in equity of subsidiary in the amount of $1,575 and the disposition of noncontrolling interests through the sale and deconsolidation of businesses of $2,918, the reclassification of restricted stock awards from equity-classified awards in the amount of $2,138, the issuance of warrants for a term loan of $7,860, a derivative liability for the exit fee of that term loan of $11,244, and warrants issued for senior notes of $1,600.
During the six months ended June 30, 2024, there was non-cash investing activity related to the receipt of a note receivable in the amount of $2,000 related to the sale of certain assets, $42,077 related to a loan receivable, at fair value that converted into equity securities, and DIP loan conversion to purchase consideration equity for the purchase of Nogin, Inc. (“Nogin”) in the amount of $37,700. There was also non-cash investing activity of $22,576 related to loans transferred to loans held for sale from loans receivable at fair value. During the six months ended June 30, 2024, there was non-cash financing activity related to the Company’s redemption of its 6.375% Senior Notes due 2025 in the aggregate principal amount of $1,130 in exchange for 36,903 shares of its common stock at fair value of $1,011 for a net gain on extinguishment of debt of $120.
Accounts Receivable Accounts Receivable
Accounts receivable represents amounts due from the Company’s Capital Markets, Wealth Management, Communications, and Consumer Products customers. The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes the expected loss model, which includes the pooling of receivables using the aging method, historical losses, current market conditions, and reasonable supportable forecasts of expected losses. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. The Company’s bad debt expense and changes in the allowance for credit losses are included in Note 7 - Accounts Receivable.
Inventories Inventories
Inventories are substantially all finished goods from the Consumer Products and Communications segments and are stated at the lower of cost, determined on the first-in, first-out (FIFO) basis, or net realizable value. The Company maintains an allowance for excess and obsolete inventories to reflect its estimate of realizable value of the inventory based on historical sales and recoveries. Inventories are included in the “Prepaid expenses and other assets” line item in the unaudited condensed consolidated balance sheets.
Rental Merchandise Rental Merchandise Rental merchandise is carried at cost, net of accumulated depreciation. When initially purchased, merchandise is not depreciated until it is leased to its rent-to-own customers. Leased merchandise is depreciated over the lease term of the rental agreement and recorded as cost of sales. Rental merchandise that is returned is depreciated from the net book value on the day of the return on a straight-line basis for 24 months until the item is leased again or reaches a zero-dollar salvage value. Damaged or lost merchandise is written off monthly.
Loans Receivable Loans Receivable
Under the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, the Company elected the fair value option for all outstanding loans receivable. Management evaluates the performance of the loan portfolio on a fair value basis. Under the fair value option, loans receivable are measured at each reporting period based upon their exit value in an orderly transaction, and unrealized gains or losses are included in the “Fair value adjustments on loans” line item in the unaudited condensed consolidated statements of
operations. At the time of origination, the Company’s loans receivable are collateralized by the assets of borrowers and other pledged collateral and may have guarantees to provide for protection of the payments due on loans receivable.
Securities and Other Investments Owned and Securities Sold Not Yet Purchased Securities and Other Investments Owned and Securities Sold Not Yet Purchased
Fair Value Measurements Fair Value Measurements
The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable, and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.
The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds loans receivable valued at fair value, nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company also invests in priority investment funds, and the underlying securities held by these funds are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. The Company’s partnership and investment fund interests are valued based on the Company’s proportionate share of the net assets of the partnerships and funds; the value for these investments is derived from the most recent statements received from the general partner or fund administrator. These partnership and investment fund interests are valued at net asset value (“NAV”) and are excluded from the fair value hierarchy in the table below in accordance with ASC 820, Fair Value Measurements. As of June 30, 2025 and December 31, 2024, partnership and investment fund interests valued at NAV of $22,069 and $15,867, respectively, are included in the “Securities and other investments owned, at fair value” line item in the accompanying unaudited condensed consolidated balance sheets.
The Company measures certain assets at fair value on a nonrecurring basis. These assets include equity method investments for which the measurement alternative has been elected, adjusted to fair value based on observable price changes or impairment, assets acquired and liabilities assumed in an acquisition or in a nonmonetary exchange, and property, plant and equipment and intangible assets that are written down to fair value when they are held for sale or determined to be impaired.
The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of June 30, 2025 and December 31, 2024.
Financial Assets and Liabilities Measured at Fair Value on a
Recurring Basis as of June 30, 2025 Using
Fair value as of June 30, 2025
Quoted prices in active markets
for identical assets
 (Level 1)		Other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Assets:
Securities and other investments owned:
Equity securities$116,655 $88,929 $— $27,726 
Corporate bonds33,252 125 33,127 — 
Other fixed income securities159 — 159 — 
Total securities and other investments owned150,066 89,054 33,286 27,726 
Loans receivable, at fair value48,980 — — 48,980 
Other assets1,029 — — 1,029 
Total assets measured at fair value$200,075 $89,054 $33,286 $77,735 
Liabilities:
Securities sold not yet purchased:
Equity securities$10,411 $10,411 $— $— 
Corporate bonds420 — 420 — 
Other fixed income securities1,516 — 1,516 — 
Total securities sold not yet purchased12,347 10,411 1,936 — 
Contingent consideration4,608 — — 4,608 
Liability-classified warrants4,160 — — 4,160 
Total liabilities measured at fair value$21,115 $10,411 $1,936 $8,768 
Financial Assets and Liabilities Measured at Fair Value on a
Recurring Basis at December 31, 2024 Using
Fair value at December 31, 2024
Quoted prices in active markets
for identical assets
 (Level 1)		Other observable inputs
 (Level 2)		Significant unobservable inputs
 (Level 3)
Assets:
Securities and other investments owned:
Equity securities$165,408 $124,892 $— $40,516 
Corporate bonds29,027 25,461 3,566 — 
Other fixed income securities4,923 — 4,923 — 
Total securities and other investments owned199,358 150,353 8,489 40,516 
Loans receivable, at fair value90,103 — — 90,103 
Total assets measured at fair value$289,461 $150,353 $8,489 $130,619 
Liabilities:
Securities sold not yet purchased:
Corporate bonds$1,891 $— $1,891 $— 
Other fixed income securities3,784 — 3,784 — 
Total securities sold not yet purchased5,675 — 5,675 — 
Contingent consideration4,538 — — 4,538 
Total liabilities measured at fair value$10,213 $— $5,675 $4,538 
As of June 30, 2025 and December 31, 2024, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $77,735 and $130,619, respectively, or 5.0% and 7.3%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The fair value for individual Level 3 financial assets and liabilities have various financial inputs which include multiple of sales, the market price of related securities, annualized volatility, discount rates, recovery rates and expected term inputs that may change at each reporting period and result in an increase or decrease in the valuation of Level 3 financial assets and liabilities.
The following table summarizes the significant unobservable inputs in the fair value measurement of Level 3 financial assets and liabilities by category of investment and valuation technique as of June 30, 2025 and December 31, 2024:
Fair value at June 30,
2025		Valuation
Technique		Unobservable
Input		Range
Weighted
Average(1)
Assets:
Equity securities$22,897 Market approach
Multiple of EBITDA(2)
4.5x - 5.5x
5.5x
Multiple of sales
0.8x - 7.3x
2.2x
Market price of related security
$10.57 - $11.62
$11.04
4,829 Option pricing modelAnnualized volatility
48.0% - 178.0%
62.0%
Loans receivable at fair value36,512 Discounted cash flowDiscount rate
19.9% - 22.9%
22.7%
11,000 Liquidation approachCash recovery rate12.4%12.4%
1,468 Market approachMarket price of related security
$6.85
$6.85
Other assets1,029 Market approachMarket price of related security
$1.47
$1.47
Options pricing modelAnnualized volatility90.4%90.4%
Total level 3 assets measured at fair value$77,735 
Liabilities:
Contingent consideration$4,608 Discounted cash flowRevenue volatility
5.0% - 7.5%
5.0%
Liability-classified warrants4,160 Monte Carlo simulation and Black-Scholes option pricing modelAnnualized volatility77.5%77.5%
Discount for lack of marketability
6.9%
6.9%
Total level 3 liabilities measured at fair value$8,768 
(1) Unobservable inputs were weighted by the relative fair value of the financial instruments.
(2) Multiple of earnings before interest, taxes, depreciation, and amortization (“EBITDA”).
Fair value at December 31,
2024		Valuation TechniqueUnobservable InputRange
Weighted
Average(1)
Assets:
Equity securities$34,654 Market approachMultiple of EBITDA
6.3x
6.3x
Multiple of Sales
2.1x - 8.0x
3.1x
Market price of related security
$9.97 - $11.10
$10.76
5,862 Option pricing modelAnnualized volatility
47.0% - 171.0%
87.0%
Loans receivable at fair value86,150 Discounted cash flowDiscount rate
7.3% - 69.1%
19.7%
3,953 Market approachMarket price of related security
$9.60 - $16.48
$12.90
Total level 3 assets measured at fair value$130,619 
Liabilities:
Contingent consideration4,538 Discounted cash flowDiscount rate
5.0% - 7.5%
5.1%
Total level 3 liabilities measured at fair value$4,538 
(1) Unobservable inputs were weighted by the relative fair value of the financial instruments.
The changes in Level 3 fair value hierarchy during the three months ended June 30, 2025 and 2024 were as follows:
Level 3
Balance at
Beginning of
Period		Level 3 Changes During the PeriodLevel 3
Balance at
End of
Period		Change in unrealized gains (losses) (2)
Fair
Value
Adjustments (1)		Relating to
Undistributed
Earnings		Purchases/ Originations
SalesSettlements/ RepaymentsTransfer in
and/or out
of Level 3
Three Months Ended June 30, 2025
Equity securities$27,530 $197 $— $24,998 $— $(24,999)$— $27,726 $197 
Loans receivable at fair value98,596 799 — 624 (3,575)(47,464)— 48,980 799 
Other assets— 1,029 — — — — — 1,029 1,029 
Contingent consideration4,593 63 — — — (48)— 4,608 (63)
Liability-classified warrants5,160 (1,000)— — — — — 4,160 1,000 
Embedded derivative14,593 (11,468)— — — (3,125)— — 11,468 
Three Months Ended June 30, 2024
Equity securities$386,244 $(202,573)$8 $181 $(68,875)$— $(3)$114,982 $(202,679)
Loans receivable at fair value452,496 (175,582)1,102 7,129 — (55,946)— 229,199 (177,060)
Contingent consideration24,976 288 — — — (48)— 25,216 (288)
(1) Fair value adjustments during the three months ended June 30, 2025 includes the following: $197 of realized and unrealized gains (losses) on equity securities is comprised of $(92) included in “Trading gains (losses), net” and $289 included in “Realized and unrealized gains (losses) on investments”, $799 of fair value adjustments on loans included in “Fair value adjustments on loans”, $1,029 of realized and unrealized gains related to other assets which is comprised of $902 recorded to “Trading gains (losses), net” and $127 recorded to “Realized and unrealized gains (losses) on investments”, $(63) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $1,000 of realized and unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $11,468 of realized and unrealized losses related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations. Fair value adjustments during the three months ended June 30, 2024 includes the
following: $(202,573) of realized and unrealized gains (losses) on equity securities is comprised of $(39,114) of realized and unrealized gains (losses) included in fair value adjustments on loans and $(163,458) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $(175,582) of fair value adjustments on loans included in fair value adjustments on loans, and $(288) related to contingent consideration included in “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.
(2) For the three months ended June 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.
The changes in Level 3 fair value hierarchy during the six months ended June 30, 2025 and 2024 were as follows:
Level 3
Balance at
Beginning of
Year		Level 3 Changes During the PeriodLevel 3
Balance at
End of
Period		Change in unrealized gains (losses) (2)
Fair
Value
Adjustments (1)		Relating to
Undistributed
Earnings		Purchases/ OriginationsSalesSettlements/ RepaymentsTransfer in
and/or out
of Level 3
Six Months Ended June 30, 2025
Equity securities$40,516 $(3,648)$— $25,867 $(10,000)$(25,009)$— $27,726 $(3,648)
Loans receivable at fair value90,103 (7,296)— 58,632 (10,415)(82,044)— 48,980 (8,834)
Other assets— 1,029 — — — — — 1,029 1,029 
Contingent consideration4,538 166 — — — (96)— 4,608 (166)
Liability-classified warrants— (3,700)— 7,860 — — — 4,160 3,700 
Embedded derivative— (8,119)— 11,244 — (3,125)— — 8,119 
Six Months Ended June 30, 2024
Equity securities$452,581 $(258,961)$20 $616 $(78,197)$— $(1,077)$114,982 $(262,154)
Loans receivable at fair value532,419 (187,783)4,262 38,105 (22,785)(135,019)— 229,199 (196,240)
Contingent consideration25,194 140 — — — (118)— 25,216 (140)
(1) Fair value adjustments during the six months ended June 30, 2025 includes the following: $(3,648) of realized and unrealized gains (losses) on equity securities is comprised of $(1,174) included in “Trading gains (losses), net” and $(2,474) of realized and unrealized gains (losses) included in “Realized and unrealized gains (losses) on investments”, $(7,296) of fair value adjustments on loans included in “Fair value adjustments on loans”, $1,029 of realized and unrealized gains related to other assets which is comprised of $902 recorded to “Trading gains (losses), net” and $127 recorded to “Realized and unrealized gains (losses) on investments”, $(166) of realized and unrealized losses related to contingent consideration included in “Selling, general and administrative expenses”, $3,700 of realized and unrealized gains related to liability-classified warrants included in “Change in fair value of financial instruments and other”, and $8,119 of realized and unrealized losses related to embedded derivatives included in “Change in fair value of financial instruments and other” line items in the unaudited condensed consolidated statements of operations. Fair value adjustments during the six months ended June 30, 2024 includes the following: $(258,961) of realized and unrealized gains (losses) on equity securities is comprised of $(49,505) of realized and unrealized gains (losses) included in fair value adjustments on loans and $(209,456) of realized and unrealized gains (losses) included in other income (loss) - realized and unrealized gains (losses) on investments, $(187,783) of fair value adjustments on loans included in fair value adjustments on loans, and $(140) related to contingent consideration included in “Selling, general and administrative expenses” line item in the unaudited condensed consolidated statements of operations.
(2) For the six months ended June 30, 2025 and 2024, the change in unrealized gains (losses) is related to financial instruments held at the end of each respective reporting period.
The carrying amounts reported in the unaudited condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments.
As of June 30, 2025 and December 31, 2024, the senior notes payable had a carrying amount of $1,323,727 and $1,530,561, respectively, and fair value of $391,198 and $769,476, respectively. The aggregate carrying amount of the Company’s notes payable, revolving credit facility, and term loans of $136,659 and $243,779 as of June 30, 2025 and December 31, 2024, respectively, approximates fair value because the effective yield of such instrument is consistent with current market rates of interest for instruments of comparable credit risk.
Equity Method Investment Equity Method Investment
As of June 30, 2025 and December 31, 2024, equity investments that are accounted for under the equity method of accounting had an aggregate carrying value of $86,042 and $85,487, respectively, which is included in “Prepaid expenses and other assets” in the accompanying unaudited condensed consolidated balance sheets (refer to Note 8 - Prepaid
Expenses and Other Assets). The Company’s share of earnings or losses from equity method investees included in the “Income from equity investments” line item was $25,603 and $10 during the three months ended June 30, 2025 and 2024, respectively, and $25,051 and $6 during the six months ended June 30, 2025 and 2024, respectively, in the accompanying unaudited condensed consolidated statements of operations.
Noncontrolling Interests Noncontrolling Interests
Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to the Company. The Company’s non-redeemable noncontrolling interest relates to the equity ownership interest of consolidated subsidiaries that it does not own.

The initial fair value of the noncontrolling interest is a nonrecurring Level 3 measurement determined by a weighing of the discounted cash flow method and market approach. The discounted cash flow method utilized five-year discrete projections of the operating results, working capital and depreciation and capital expenditures, along with a residual value subsequent to the discrete period. The five-year projections were based upon historical and anticipated future results,
general economic and market conditions, and considered the impact of planned business and operational strategies. The discount rates for the calculations represented the estimated required return on equity for market participants at the time of the analysis. The market approach included significant estimates using guideline public company data to identify an appropriate market multiple of earnings before income taxes in estimating the fair value of the noncontrolling interest.

B. Riley Securities Holdings, Inc. (“BRSH”)

On March 10, 2025, a merger subsidiary of the Company’s wholly-owned subsidiary B. Riley Securities Holdings, Inc. (“BRSH”), which is primarily comprised of the broker dealer operations within the Capital Markets segment, merged with a shell corporation and issued 0.6% of the equity in BRSH to certain investors in the shell corporation. Upon completion of the transaction, the investors in the shell corporation became minority stockholders of BRSH. The Company also issued restricted stock awards as more fully described in Note 18(c) - BRSH Stock Incentive Plan and assuming the full issuance of the restricted stock awards are vested, the Company continues to own 89.4% majority-interest in BRSH.
The shell corporation that merged with BRSH on March 10, 2025 did not meet the definition of a business, since it did not have any assets, liabilities, or operations. The consideration paid in connection with the merger consisted of $1,575 of common stock of BRSH, which represented the fair value of the 0.6% of outstanding common stock of BRSH. The Company recognized a loss of $1,575, which represented the fair value of the noncontrolling interest in BRSH that was issued to the investors in the shell corporation on March 10, 2025.

The table below summarizes the significant unobservable inputs in determining the fair value measurement on a nonrecurring basis of the noncontrolling interest issued on March 10, 2025 as described above. In determining the fair value below the valuation utilized a weighting of 75% for the discounted cash flow method and 25% for the market approach.
Fair Value at Measurement Date
Valuation TechniqueUnobservable InputRangeWeighted Average
Nonrecurring
Noncontrolling interest
$1,575 Discounted cash flow and market approachMarket interest rate and multiple of EBIT
Discount rate 21% and multiple of EBIT 5.75x-10.00x
Discount rate 21% and multiple of EBIT 7.3x(1)
(1) Unobservable inputs were weighted by the relative equity value of BRSH.
BRC Partners Opportunity Trust (the “BRC Trust”)
BRC Trust was formed on January 6, 2025, and is a variable interest entity as more fully described in Note 2(o) - Variable Interest Entities. The noncontrolling interest of BRC Trust that is not owned by the Company includes 86.6% of the equity interests in the BRC Trust. Of the 86.6% equity interests not owned by the Company, 58.2% is owned by related parties as more fully described in Note 21 - Related Party Transactions.
Variable Interest Entities
(o) Variable Interest Entities
The Company holds interests in various entities that meet the characteristics of a VIE. Interests in these entities are generally in the form of equity interests, loans receivable, or fee arrangements.
The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties.
The party with a controlling financial interest in a VIE is known as the primary beneficiary and consolidates the VIE. The Company determines whether it is the primary beneficiary of a VIE by performing an analysis that principally considers: (a) which variable interest holder has the power to direct the activities of the VIE that most significantly impact
the VIE’s economic performance; (b) which variable interest holder has the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE; (c) the VIE’s purpose and design, including the risks the VIE was designed to create and pass through to its variable interest holders; (d) the terms between the VIE and its variable interest holders and other parties involved with the VIE; and (e) related-party relationships with other parties that may also have a variable interest in the VIE. See Note 2(n) - Noncontrolling Interests for a variable interest entity consolidated during the period.
On August 21, 2023, in connection with the FRG take-private transaction, one of the Company’s subsidiaries (the “Lender”) and an affiliate of Mr. Kahn (the “Borrower”) entered into an amended and restated a promissory note as discussed further in above Note 2(j) - Loans Receivable and Note 2(k) - Securities and Other Investments Owned and Securities Sold Not Yet Purchased. The Company was not involved in the design of the Borrower, has no equity financial interest, and has no rights to make decisions or participate in the management of the Borrower that significantly impact the economics of the Borrower. Since the Company does not have the power to direct the activities of the Borrower, the Company is not the primary beneficiary and therefore does not consolidate the Borrower. The promissory note is included in the “Loans receivable, at fair value” line item in the Company’s unaudited condensed consolidated financial statements and is a variable interest in accordance with the accounting guidance. As of June 30, 2025 and December 31, 2024, the maximum amount of loss exposure to the VIE on a fair value basis was $1,468 and $2,057, respectively.
The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered variable interest entities under the accounting guidance.
The Company earns fees from the Funds in the form of placement agent fees and carried interest. For placement agent fees, the Company receives a cash fee of generally 7% to 10% of the amount of raised capital for the Funds and the fee is recognized at the time the placement services occurred. The Company receives carried interest as a percentage allocation (8% to 15%) of the profits of the Funds as compensation for asset management services provided to the Funds and it is recognized under the ownership model of ASC 323, Investments – Equity Method and Joint Ventures, as an equity method investment with changes in allocation recorded currently in the results of operations. As the fee arrangements under such agreements are arm’s length and contain customary terms and conditions and represent compensation that is considered fair value for the services provided, the fee arrangements are not considered variable interests and accordingly, the Company does not consolidate such VIEs.
Placement agent fees attributable to such arrangements were zero and $494 during the three months ended June 30, 2025 and 2024, respectively, and zero and $866 during the six months ended June 30, 2025 and 2024, respectively, and were included in the “Services and fees” line item in the unaudited condensed consolidated statements of operations.
The carrying amounts included in the Company’s unaudited condensed consolidated balance sheets related to variable interests in VIEs that were not consolidated is shown below.
June 30,
2025		December 31,
2024
Loans receivable, at fair value$20,603 $28,193 
Other assets3,741 3,359 
Maximum exposure to loss$24,344 $31,552 
Bicoastal Alliance, LLC (“Bicoastal”)
On May 3, 2024, as part of the acquisition of Nogin, the Company acquired a 50% equity interest in Bicoastal through a wholly owned subsidiary of Nogin. Bicoastal is a holding company designed to manage the investments, including strategy and operations, for two brand apparel operating companies. The Company determined Bicoastal is a variable interest entity as it does not have sufficient resources to carry out its management activities without additional financial support. The Company determined that it has the power to direct the activities that most significantly impact Bicoastal’s economic performance, has more equity capital at risk, and is expected to continue to fund operations. Therefore, the Company determined that it is the primary beneficiary of Bicoastal and has reported its investment in the assets and liabilities in the accompanying unaudited condensed consolidated balance sheets and consolidated its operating results in the Company’s unaudited condensed consolidated statements of operations.
On August 14, 2024, Bicoastal entered into an agreement to acquire the remaining 50% equity interest upon paydown of a $700 note payable to the noncontrolling interest noteholder with a final repayment date and equity ownership interest transfer date of June 30, 2025.
On March 31, 2025, the Company signed a Deed of Assignment for the Benefit of Creditors (“ABC”), (i) pursuant to which all of the assets of Nogin were transferred to an assignee for the benefit of Nogin’s creditors, and (ii) which provides the assignee the right to, among other things, sell or dispose of such assets and settle all claims against Nogin. The Company will no longer control or own the assets of Nogin, and the results of operations were deconsolidated on March 31, 2025 and are no longer reported in the Company’s financial statements after March 31, 2025. Management does not expect any recovery of the Company’s investment in Nogin. Subsequent to March 31, 2025, certain of Nogin’s creditors filed an involuntary petition for relief under chapter 7 of title 11 of the United States Code in the United States Bankruptcy Court for the District of New York and an order for relief was entered to move the ABC to a liquidation. A gain of $28,411 was recognized during the six months ended June 30, 2025 from deconsolidation of Nogin, which is included in “Gain on sale and deconsolidation of businesses” line item on the accompanying unaudited condensed consolidated statements of operations.
BRC Trust
BRC Trust was formed on January 6, 2025, for the purpose of transferring the assets and liabilities of BRC Partners Opportunity Fund, L.P., a Delaware limited partnership (“BRCPOF”), and liquidating the transferred net assets. BRCPOF transferred its assets and liabilities upon formation of the BRC Trust. The Company determined that the BRC Trust is a variable interest entity as the investors in the BRC Trust do not have voting rights and substantially all of the activities are conducted on behalf of the Company and its related parties which own 13.4% and 58.2% (see Note 21 - Related Party Transactions), respectively, of the equity interest in the BRC Trust. As the Company has the power to direct all of the activities of the BRC Trust, the Company is the primary beneficiary of the Trust and, therefore, consolidates the BRC Trust upon formation on January 6, 2025. Additionally, the BRC Trust does not meet the definition of a business and the initial consolidation of the BRC Trust did not result in a gain or loss upon initial consolidation.
The carrying amounts and classification of the assets, liabilities and noncontrolling interest of the BRC Trust as of June 30, 2025 and formation on January 6, 2025, are as follows:
June 30, 2025January 6, 2025
Assets
Cash and cash equivalents$365 $359 
Securities and other investments owned, at fair value503 577 
Loans receivable, at fair value— 10,276 
Prepaid expenses and other assets3,800 3,497 
Total assets$4,668 $14,709 
Liabilities
Accrued expenses and other liabilities253 290 
Total liabilities$253 $290 
Noncontrolling interest$3,826 $12,494 
Derivatives Derivatives
Certain contracts may contain explicit terms that affect some or all of the cash flows or the value of other exchanges required by the contract. When these embedded features in a contract act in a manner similar to a derivative financial instrument and are not clearly and closely related to the economic characteristics of the host contract, the Company bifurcates the embedded feature and accounts for it as an embedded derivative asset or liability in accordance with guidance under ASC 815-15, Derivatives and Hedging – Embedded Derivatives. Embedded derivatives are measured at fair value with changes in fair value reported in the “Other income (expense)” section in our unaudited condensed consolidated statements of operations. Refer to Note 11 - Term Loans and Revolving Credit Facility.
Warrant Liabilities Warrant Liabilities
The Company accounts for its warrant liabilities in accordance with guidance under ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, under which warrants that do not meet the criteria for equity classification must be recorded as liabilities. Warrant liabilities are included in the “Accrued expenses and other liabilities” line item in the unaudited condensed consolidated balance sheets. Changes in fair value of the warrant liabilities are reported in the “Other income (expense)” section in our unaudited condensed consolidated statements of operations. Refer to Note 11 - Term Loans and Revolving Credit Facility and Note 19(b) - Common Stock Warrants.
Reclassifications Reclassifications
Certain prior period amounts have been reclassified to conform with the current period presentation. Certain prior-year amounts have also been reclassified to conform to the current-year’s presentation as a result of discontinued operations and held for sale; see Note 4 - Discontinued Operations and Assets Held for Sale. These reclassifications had no effect on previously reported net income (loss), total assets, total liabilities, or stockholder’s equity (deficit).
Recent Accounting Standards Recent Accounting Standards
Not yet adopted

In September 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-06, Intangibles - Goodwill and Other Internal Use Software. This ASU was issued to modernize the accounting for software costs by removing references to prescriptive and sequential software development stages and providing an updated framework for capitalizing internal software costs. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This ASU requires additional expense disclosures by public entities in the notes to the financial statements. The ASU outlines the specific costs that are required to be disclosed which include such costs as: purchases of inventory, employee compensation, depreciation, intangible asset amortization, selling costs, and depreciation, depletion, and amortization related to oil and gas production. It also requires qualitative descriptions of the amounts remaining in the relevant expense income statement captions that are not separately disaggregated quantitatively in the notes to the financial statements and the entity’s definition of selling expenses. The disclosures are required for each interim and annual reporting period. In January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Claiming the Effective Date, which clarified the effective date for entities that do not have an annual reporting period that ends on December 31st. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company has not yet adopted this update and is currently evaluating the effect this new standard will have on its financial position and results of operations.
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires disclosure of additional categories of information about federal, state and foreign income taxes in the rate reconciliation table and requires companies to provide more information about the reconciling items in some categories if a quantitative threshold is met. ASU 2023-09 became effective for the Company on January 1, 2025. The Company will provide the required disclosures in its Annual Report on Form 10-K for the year ended December 31, 2025, and the adoption of ASU 2023-09 is not expected to have a material impact on the Company’s consolidated financial statements.