B. Riley Sheds $600M Debt Via Strategic Asset Sales

TL;DR

**B. Riley is aggressively selling assets to pay down debt, signaling a necessary but potentially dilutive move for future growth.**

AI Summary

B. Riley Financial, Inc. (RILY) reported a strategic shift in 2024 and early 2025, focusing on reducing its indebtedness from $2.4 billion at December 31, 2023, to $1.8 billion at December 31, 2024. This reduction was primarily achieved through significant asset dispositions and monetizations. Key transactions included the Brands Transaction in October 2024, generating approximately $189.3 million, and the sale of bebe stores, inc. brand assets for $46.6 million in net cash proceeds. The company also divested its Great American Group businesses for approximately $203.0 million in November 2024, with $167.1 million distributed to B. Riley. Further dispositions in 2025 included Atlantic Coast Recycling for $68.6 million in cash proceeds, a portion of its Wealth Management business to Stifel Financial Corp. for $26.0 million, and GlassRatner and Farber for $117.8 million. As of December 31, 2024, the Wealth Management segment managed approximately $20.7 billion in AUM, which decreased to $14.4 billion after the Stifel transaction in April 2025, impacting 36 financial advisors and $4.0 billion in AUM.

Why It Matters

B. Riley's aggressive debt reduction strategy, cutting $600 million in 2024, signals a pivot towards financial stability and potentially higher shareholder returns, but also a leaner operational footprint. For investors, this could mean a de-risked balance sheet, but also a shift in revenue streams as core assets are sold. Employees in divested units, like those in Wealth Management moving to Stifel, face new corporate environments. Customers of the sold businesses will experience new service providers, while the broader market sees a diversified financial services firm streamlining its operations in a competitive landscape.

Risk Assessment

Risk Level: medium — The company is an 'accelerated filer' but indicated 'No' to having filed all required reports in the preceding 12 months, and 'No' to being subject to filing requirements for the past 90 days, which is a red flag for regulatory compliance. While debt reduction from $2.4 billion to $1.8 billion is positive, the reliance on significant asset dispositions, such as the $189.3 million Brands Transaction and $203.0 million Great American Group sale, suggests a need for substantial liquidity, potentially impacting future revenue generation from these divested segments.

Analyst Insight

Investors should closely monitor B. Riley's ongoing debt reduction efforts and the impact of asset sales on its core business segments. Evaluate the quality of remaining assets and the sustainability of future earnings given the significant divestitures, especially the $4.0 billion AUM reduction in Wealth Management, before making any investment decisions.

Key Numbers

• $2.4B — Total outstanding indebtedness (at December 31, 2023)
• $1.8B — Total outstanding indebtedness (at December 31, 2024, representing a $600M reduction)
• $189.3M — Proceeds from Brands Transaction (upfront payment in October 2024)
• $46.6M — Net cash proceeds from bebe Brands sale (in October 2024)
• $167.1M — Distributed to Company from Great American Group sale (in November 2024)
• $68.6M — Cash proceeds from Atlantic Coast Recycling sale (in March 2025)
• $26.0M — Net cash consideration from Wealth Management sale to Stifel (in April 2025)
• $117.8M — Cash consideration from GlassRatner and Farber sale (in June 2025)
• $20.7B — Assets Under Management (AUM) in Wealth Management (as of December 31, 2024)
• $14.4B — Assets Under Management (AUM) in Wealth Management (after Stifel transaction in April 2025)

Key Players & Entities

• B. Riley Financial, Inc. (company) — registrant
• Bryant Riley (person) — Co-Chief Executive Officer
• Tom Kelleher (person) — Co-Chief Executive Officer
• Stifel Financial Corp. (company) — purchaser of Wealth Management business
• Marcum LLP (company) — Auditor
• NASDAQ Global Market (regulator) — exchange for common stock
• SEC (regulator) — Securities and Exchange Commission
• bebe stores, inc. (company) — majority owned subsidiary

FAQ

Risk Factors

• Indebtedness Reduction Strategy [high — financial]: The company's primary focus in 2024 and 2025 has been reducing its substantial indebtedness, which stood at $2.4 billion at the end of 2023 and was reduced to $1.8 billion by the end of 2024. This strategy relies heavily on asset dispositions and monetizations, creating a risk if these transactions do not generate sufficient proceeds or if market conditions hinder future sales.
• Dependence on Asset Dispositions [high — operational]: The company's deleveraging plan is contingent on successful execution of asset sales, such as the Brands Transaction ($189.3 million), bebe stores sale ($46.6 million), Great American Group ($203.0 million), Atlantic Coast Recycling ($68.6 million), a portion of Wealth Management ($26.0 million), and GlassRatner/Farber ($117.8 million). Any delays or failures in these dispositions could impede debt reduction targets.
• Wealth Management AUM Volatility [medium — market]: The Wealth Management segment experienced a significant decrease in Assets Under Management (AUM) from $20.7 billion at December 31, 2024, to $14.4 billion after the Stifel transaction in April 2025. This $6.3 billion reduction, impacting 36 advisors, highlights the sensitivity of this segment to market fluctuations and strategic decisions.
• Diversified Financial Services Regulation [medium — regulatory]: As a diversified financial services platform, B. Riley is subject to a complex web of regulations across its various business lines, including investment banking, brokerage, and wealth management. Changes in regulatory requirements or increased scrutiny could lead to compliance costs and operational disruptions.
• Interest Rate Sensitivity [medium — financial]: With $1.8 billion in outstanding indebtedness as of December 31, 2024, the company is exposed to interest rate fluctuations. Rising interest rates could increase the cost of servicing its debt, impacting profitability, especially if refinancing is required.
• Integration of Acquired Businesses [low — operational]: The company's strategy includes opportunistically investing in and acquiring companies. The success of these investments depends on effective operational improvements and integration, which carries inherent risks of execution challenges and failure to achieve expected returns.
• Litigation and Legal Proceedings [medium — legal]: While not detailed in the provided text, financial services firms are routinely subject to litigation and legal proceedings. Any significant adverse outcomes could materially impact the company's financial condition and reputation.
• Economic Downturn Impact [medium — market]: The company's performance is tied to the overall health of the economy and capital markets. A significant economic downturn could reduce client demand for its services, impact asset valuations, and hinder the success of its investment and disposition strategies.

Industry Context

B. Riley operates within the highly competitive and regulated financial services industry. The sector is characterized by a wide array of players, from large investment banks to specialized boutique firms. Key trends include ongoing consolidation, increasing demand for integrated solutions across investment banking, wealth management, and asset management, and the impact of technological advancements on service delivery and client engagement. Regulatory scrutiny remains a constant factor, influencing operational practices and compliance requirements.

Regulatory Implications

As a diversified financial services provider, B. Riley is subject to extensive regulation by bodies such as the SEC and FINRA. Changes in regulations concerning capital requirements, client protection, or market conduct could impose additional compliance burdens and operational costs. The company's strategic shift towards debt reduction through asset sales may also attract regulatory attention regarding the nature and valuation of these transactions.

What Investors Should Do

1. Monitor Debt Reduction Progress
2. Assess Wealth Management Strategy
3. Analyze Profitability of Core Businesses
4. Evaluate Risk Management Practices

Key Dates

• 2024-10-01: Brands Transaction Completion — Generated approximately $189.3 million, contributing to the company's debt reduction strategy.
• 2024-10-01: bebe stores, inc. Brand Sale — Generated $46.6 million in net cash proceeds, further supporting deleveraging efforts.
• 2024-11-01: Great American Group Sale — Resulted in approximately $203.0 million in proceeds, with $167.1 million distributed to B. Riley, a key step in debt reduction.
• 2024-12-31: Year-End Indebtedness Update — Total outstanding indebtedness reduced to $1.8 billion from $2.4 billion at the end of 2023, demonstrating progress on strategic priorities.
• 2025-03-01: Atlantic Coast Recycling Sale — Generated $68.6 million in cash proceeds, continuing the asset disposition strategy for debt reduction.
• 2025-04-01: Wealth Management Sale to Stifel — Generated $26.0 million in net cash consideration and reduced AUM, reflecting a strategic shift and impacting the scale of the Wealth Management segment.
• 2025-06-01: GlassRatner and Farber Sale — Generated $117.8 million in cash consideration, further advancing the company's debt reduction initiatives through divestitures.

Glossary

AUM

Assets Under Management, representing the total market value of investments that a financial institution manages on behalf of its clients. (Key metric for the Wealth Management segment, indicating the scale of business managed and potential fee generation. Its fluctuation impacts segment valuation and revenue.)

Indebtedness

The total amount of money a company owes to external parties, including loans and bonds. (A critical focus for B. Riley in 2024-2025, with a strategic goal to reduce its $2.4 billion outstanding debt.)

Asset Dispositions

The sale or divestiture of company assets or business units. (The primary method B. Riley is using to reduce its indebtedness, involving the sale of brands, businesses, and equity investments.)

Monetizations

The process of converting an asset into cash. (Used by B. Riley alongside asset dispositions to generate liquidity for debt reduction.)

Securitization Financing Vehicle

An entity created to pool assets and issue securities backed by the cash flows from those assets. (Mentioned in the context of the Brands Transaction, indicating a complex financial structure used for asset management and potential financing.)

Equity Method Investments

An accounting method where an investment in another company is recorded at cost and adjusted for the investor's share of the investee's net income or loss. (These investments were part of the Brands Transaction, indicating B. Riley's holdings in other entities that were monetized.)

Consolidated Subsidiaries

Companies that are owned or controlled by a parent company and whose financial results are combined with the parent's financial statements. (B. Riley operates through these entities to deliver its diverse financial services.)

Diversified Financial Services Platform

A company offering a wide range of financial services, such as investment banking, brokerage, wealth management, and asset management. (Describes B. Riley's business model, highlighting its broad operational scope and potential for cross-selling.)

Year-Over-Year Comparison

The company's 2024 filings reflect a significant strategic pivot compared to previous periods, with a pronounced emphasis on debt reduction. While specific revenue and net income figures for the full year 2024 are not detailed here, the reduction in total indebtedness from $2.4 billion to $1.8 billion is a key differentiator. This deleveraging has been driven by substantial asset dispositions, contrasting with potentially more growth-oriented strategies in prior years. The decrease in Wealth Management AUM also signals a shift in the business composition.

Key Financial Figures

• $0.0001 — ich registered Common Stock, par value $0.0001 per share RILY NASDAQ Global Market D
• $2.4 billion — its total outstanding indebtedness from $2.4 billion at December 31, 2023 to $1.8 billion at
• $1.8 billion — om $2.4 billion at December 31, 2023 to $1.8 billion at December 31, 2024. The Company antic
• $189.3 million — payment to the Company of approximately $189.3 million. In addition, in October 2024, bebe st
• $46.6 million — third party purchaser for approximately $46.6 million in net cash proceeds. Upon closing of t
• $22.2 million — ng of the bebe Brands sale, proceeds of $22.2 million was used to pay off the outstanding bal
• $224 — f the bebe Credit Agreement in full and $224 of loan-related pay off expenses. The r
• $203.0 million — o for a purchase price of approximately $203.0 million. After amounts paid to minority stockho
• $167.1 million — ain transaction expenses, approximately $167.1 million was distributed to the Company. Atlant
• $102.5 m — r for a purchase price of approximately $102.5 million, subject to certain adjustments r
• $68.6 million — justments resulting in cash proceeds of $68.6 million to the Company after adjustments for am
• $26.0 million — "Stifel") for net cash consideration of $26.0 million. GlassRatner and Farber : In June 2025
• $117.8 million — for cash consideration of approximately $117.8 million. Others : The Company also engaged in
• $20.7 billion — anagement segment totaled approximately $20.7 billion as of December 31, 2024. On April 4, 20
• $4.0 billion — aged accounts represented approximately $4.0 billion in AUM as of December 31, 2024. Followi

Filing Documents

• rily-20241231.htm (10-K) — 5934KB
• exhibit1019twelfthamendmen.htm (EX-10.19) — 79KB
• exhibit1020thirteenthamend.htm (EX-10.20) — 74KB
• exhibit1039greatamericanho.htm (EX-10.39) — 1046KB
• exhibit1040creditagreement.htm (EX-10.40) — 1260KB
• exhibit1041firstamendmentt.htm (EX-10.41) — 76KB
• exhibit1042secondamendment.htm (EX-10.42) — 92KB
• exhibit1043thirdamendmentt.htm (EX-10.43) — 117KB
• exhibit1044fourthamendment.htm (EX-10.44) — 69KB
• exhibit1045fifthamendmentt.htm (EX-10.45) — 70KB
• exhibit1046sixthamendmentt.htm (EX-10.46) — 114KB
• exhibit1052twelfthamendmen.htm (EX-10.52) — 72KB
• exhibit1053thirteenthamend.htm (EX-10.53) — 66KB
• exhibit191briley-insidertr.htm (EX-19.1) — 58KB
• exhibit211subsidiarylist.htm (EX-21.1) — 122KB
• rily-20241231xexx311.htm (EX-31.1) — 10KB
• rily-20241231xexx312.htm (EX-31.2) — 10KB
• rily-20241231xexx313.htm (EX-31.3) — 10KB
• rily-20241231xexx321.htm (EX-32.1) — 5KB
• rily-20241231xexx322.htm (EX-32.2) — 5KB
• rily-20241231xexx323.htm (EX-32.3) — 5KB
• image_0.jpg (GRAPHIC) — 7KB
• image_02.jpg (GRAPHIC) — 4KB
• rily-20241231_g1.jpg (GRAPHIC) — 115KB
• 0001464790-25-000011.txt ( ) — 34671KB
• rily-20241231.xsd (EX-101.SCH) — 169KB
• rily-20241231_cal.xml (EX-101.CAL) — 225KB
• rily-20241231_def.xml (EX-101.DEF) — 1404KB
• rily-20241231_lab.xml (EX-101.LAB) — 1786KB
• rily-20241231_pre.xml (EX-101.PRE) — 1658KB
• rily-20241231_htm.xml (XML) — 5714KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 12 Item 1B. Unresolved Staff Comments 49 Item 1C. Cybersecurity 49 Item 2.

Properties

Properties 50 Item 3.

Legal Proceedings

Legal Proceedings 50 Item 4. Mine Safety Disclosures 52 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6. Reserved 54 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 54 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 93 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 94 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 94 Item 9A.

Controls and Procedures

Controls and Procedures 94 Item 9B. Other Information 97 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 98 PART III Item 10. Directors, Executive Officers and Corporate Governance 99 Item 11.

Executive Compensation

Executive Compensation 113 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 121 Item 13. Certain Relationships and Related Transactions, and Director Independence 122 Item 14. Principal Accountant Fees and Services 124 PART IV Item 15. Exhibits and Financial Statement Schedules 126 Item 16. Form 10-K Summary 132

Signatures

Signatures 133 i Table of Contents PART I This Annual Report on Form 10-K (this "Annual Report") contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "may," "will," "should," "could," "future," "likely," "predict," "project," "potential," "continue," "estimate" and similar expressions are generally intended to identify forward-looking statements but are not exclusive means of identifying forward-looking statements in this Annual Report. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date on which this Annual Report was filed with the Securities and Exchange Commission (the "SEC"). Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements, including our plans, objectives, expectations and intentions and other factors discussed in "Part I—Item 1A. Risk Factors" contained in this Annual Report. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Except as otherwise required by the context, references in this Annual Report 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.

BUSINESS

Item 1. BUSINESS Overview B. Riley Financial, Inc. (NASDAQ: RILY) (the "Company") is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. We operate through several consolidated subsidiaries (collectively, "B. Riley") that provide investment banking, brokerage, wealth management, asset management, direct lending, and business advisory services to a broad client base spanning public and private companies, financial sponsors, investors, financial institutions, legal and professional services firms, and individuals. The Company also opportunistically invests in and acquires companies or assets with attractive risk-adjusted return, with a focus on making operational improvements within these companies in an effort to maximize free cash flow. However, during 2024 and continuing into 2025, our focus has been on reducing indebtedness, including through the net proceeds from a number of strategic asset dispositions or other monetizations as described in additional detail below under "—Disposition and Monetization Transactions". The Company has reduced its total outstanding indebtedness from $2.4 billion at December 31, 2023 to $1.8 billion at December 31, 2024. The Company anticipates that reduction of indebtedness, including potentially through additional asset disposition or monetization transactions, will remain a key priority for the foreseeable future. We refer to B. Riley as a "platform" because of the unique composition of our business and diversification of its operations. Our platform is comprised of more than 2,500 affiliated professionals, including employees and independent contractors. We are headquartered in Los Angeles, California and maintain offices throughout the U.S., including in New York, Chicago, Atlanta, Boston, Dallas, Metro Detroit, Houston, Memphis, Miami, San Francisco, Boca Raton, and West Palm Beach, as well as additional offices located

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