10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2022

Or

o 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.)
11100 Santa Monica Blvd., Suite 800 Los Angeles, CA	90025
(Address of Principal Executive Offices)	(Zip Code)

(310) 966-1444

(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 6.875% share of Series A  Cumulative Perpetual Preferred Stock	RILYP	Nasdaq Global Market
Depositary Shares, each representing a 1/1000th  fractional interest in a 7.375% share of Series B  Cumulative Perpetual Preferred Stock	RILYL	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
6.00% Senior Notes due 2028	RILYT	Nasdaq Global Market
5.50% Senior Notes due 2026	RILYK	Nasdaq Global Market
5.25% Senior Notes due 2028	RILYZ	Nasdaq Global Market
5.00% Senior Notes due 2026	RILYG	Nasdaq Global Market

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 x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the 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	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

If an emerging growth company, indicate by check mark 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. o

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

As of October 28, 2022, there were 28,582,004 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

B. Riley Financial, Inc.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended September 30, 2022

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	1
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2022 and 2021 (unaudited)	3
	Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2022 and 2021 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited)	8
	Notes to Unaudited Condensed Consolidated Financial Statements (unaudited)	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Controls and Procedures	69
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	70
Item 1A.	Risk Factors	70
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	71
Item 5.	Other Information	71
Item 6.	Exhibits	71
SIGNATURES		73

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share and per share data)

	September 30, 2022		December 31, 2021
	(Unaudited)
ASSETS
Assets:
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Due from clearing brokers	53,472		29,657
Securities and other investments owned, at fair value	1,238,613		1,532,095
Securities borrowed	2,243,306		2,090,966
Accounts receivable, net	64,707		49,673
Due from related parties	814		2,074
Loans receivable, at fair value (includes $68,575 and $167,744 from related parties as of September 30, 2022 and December 31, 2021, respectively)	814,715		873,186
Prepaid expenses and other assets	355,875		463,502
Operating lease right-of-use assets	84,550		56,969
Property and equipment, net	16,174		12,870
Goodwill	429,187		250,568
Other intangible assets, net	296,346		207,651
Deferred tax assets, net	2,845		2,848
Total assets	$	5,833,987	$	5,851,919
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	22,167	$	6,326
Accrued expenses and other liabilities	278,889		343,750
Deferred revenue	89,157		69,507
Deferred tax liabilities, net	10,932		93,055
Due to related parties and partners	396		—
Due to clearing brokers	3,942		69,398
Securities sold not yet purchased	17,751		28,623
Securities loaned	2,239,250		2,088,685
Operating lease liabilities	96,049		69,072
Notes payable	25,075		357
Revolving credit facility	74,700		80,000
Term loans, net	558,035		346,385
Senior notes payable, net	1,661,191		1,606,560
Total liabilities	5,077,534		4,801,718
Commitments and contingencies (Note 15)
Redeemable noncontrolling interests in equity of subsidiaries	178,759		345,000
B. Riley Financial, Inc. equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,535 and 4,512 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; and liquidation preference of $113,380 and $112,790 as of September 30, 2022 and December 31, 2021, respectively	—		—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,300,003 and 27,591,028 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	3		3
Additional paid-in capital	473,420		413,486
Retained earnings	46,916		248,862
Accumulated other comprehensive loss	(6,726)		(1,080)
Total B. Riley Financial, Inc. stockholders’ equity	513,613		661,271
Noncontrolling interests	64,081		43,930
Total equity	577,694		705,201
Total liabilities and equity	$	5,833,987	$	5,851,919

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Services and fees	$	266,485	$	301,497	$	678,065	$	857,109
Trading income (losses) and fair value adjustments on loans	12,154		18,197		(280,163)		317,818
Interest income - Loans and securities lending	57,594		26,869		182,855		89,280
Sale of goods	4,130		34,959		7,895		54,244
Total revenues	340,363		381,522		588,652		1,318,451
Operating expenses:
Direct cost of services	44,523		18,019		73,959		41,435
Cost of goods sold	3,089		12,442		7,334		21,394
Selling, general and administrative expenses	163,727		244,218		506,062		635,484
Restructuring charge	8,016		—		8,016		—
Interest expense - Securities lending and loan participations sold	17,447		10,097		43,757		40,269
Total operating expenses	236,802		284,776		639,128		738,582
Operating income (loss)	103,561		96,746		(50,476)		579,869
Other income (expense):
Interest income	686		70		1,253		175
Change in fair value of financial instruments and other	(574)		1,758		9,728		8,267
(Loss) income from equity investments	(91)		1,149		3,285		1,172
Interest expense	(34,587)		(25,372)		(96,787)		(66,014)
Income (loss) before income taxes	68,995		74,351		(132,997)		523,469
(Provision for) benefit from income taxes	(16,350)		(22,693)		39,858		(140,113)
Net income (loss)	52,645		51,658		(93,139)		383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808		1,108		9,245		2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837		50,550		(102,384)		380,882
Preferred stock dividends	2,002		1,929		6,006		5,467
Net income (loss) available to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415
Basic income (loss) per common share	$	1.62	$	1.76	$	(3.86)	$	13.75
Diluted income (loss) per common share	$	1.53	$	1.69	$	(3.86)	$	13.07
Weighted average basic common shares outstanding	28,293,064		27,570,716		28,068,160		27,297,917
Weighted average diluted common shares outstanding	29,968,417		28,794,066		28,068,160		28,726,492

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollars in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss)	$	52,645	$	51,658	$	(93,139)	$	383,356
Other comprehensive income (loss):
Change in cumulative translation adjustment	(2,842)		(1,029)		(5,646)		(1,384)
Other comprehensive loss, net of tax	(2,842)		(1,029)		(5,646)		(1,384)
Total comprehensive income (loss)	49,803		50,629		(98,785)		381,972
Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests	6,187		1,108		10,751		2,474
Comprehensive income (loss) attributable to B. Riley Financial, Inc.	$	43,616	$	49,521	$	(109,536)	$	379,498

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity

(Unaudited)

(Dollars in thousands, except share and per share data)

For the Three Months Ended September 30, 2022 and 2021

	Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
	Shares	Amount		Shares	Amount
Balance, July 1, 2022	4,535	$	—	28,290,458	$	3	$	459,220	$	32,570	$	(3,884)	$	55,467	$	543,376
Vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		10,116	—		(293)		—		—		—		(293)
Stock repurchased and retired	—	—		(571)	—		(27)		—		—		—		(27)
Share based payments	—	—		—	—		14,498		—		—		—		14,498
Share based payments in equity of subsidiary	—	—		—	—		57		—		—		—		57
Vesting of shares in equity of subsidiary	—	—		—	—		(35)		—		—		35		—
Dividends on common stock ($1.00 per share)	—	—		—	—		—		(31,061)		—		—		(31,061)
Dividends on preferred stock	—	—		—	—		—		(2,002)		—		—		(2,002)
Net income	—	—		—	—		—		47,837		—		6,187		54,024
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	—	—		—	—		—		(428)		—		—		(428)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(431)		(431)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		2,823		2,823
Other comprehensive loss	—	—		—	—		—		—		(2,842)		—		(2,842)
Balance, September 30, 2022	4,535	$	—	28,300,003	$	3	$	473,420	$	46,916	$	(6,726)	$	64,081	$	577,694
Balance, July 1, 2021	4,275	$	—	27,580,300	$	3	$	387,084	$	320,078	$	(1,178)	$	37,578	$	743,565
Preferred stock issued	210	—		—	—		5,716		—		—		—		5,716
Vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		7,359	—		(169)		—		—		—		(169)
Common stock repurchased and retired	—	—		(44,650)	—		(2,656)		—		—		—		(2,656)
Warrants exercised	—	—		11,655	—		—		—		—				—
Share based payments	—	—		—	—		9,374		—		—		—		9,374
Dividends on common stock ($2.00 per share)	—	—		—	—		—		(59,149)		—		—		(59,149)
Dividends on preferred stock	—	—		—	—		—		(1,929)		—		—		(1,929)
Net income	—	—		—	—		—		50,550		—		1,108		51,658
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(841)		(841)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		2,084		2,084
Acquisition of noncontrolling interests	—	—		—	—		—		—		—		583		583
Other comprehensive loss	—	—		—	—		—		—		(1,029)		—		(1,029)
Balance, September 30, 2021	4,485	$	—	27,554,664	$	3	$	399,349	$	309,550	$	(2,207)	$	40,512	$	747,207

4

The accompanying notes are an integral part of these condensed consolidated financial statements.

For the Nine Months Ended September 30, 2022 and 2021

5

	Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interests		Total Equity
	Shares	Amount		Shares	Amount
Balance, January 1, 2022	4,512	$	—	27,591,028	$	3	$	413,486	$	248,862	$	(1,080)	$	43,930	$	705,201
Preferred stock issued	23	—		—	—		639		—		—		—		639
ESPP shares issued and vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		404,668	—		(6,733)		—		—		—		(6,733)
Common stock repurchased and retired	—	—		(571)	—		(27)		—		—		—		(27)
Shares issued for the acquisition of FocalPoint	—	—		304,878	—		20,320		—		—		—		20,320
Share based payments	—	—		—	—		45,713		—		—		—		45,713
Share based payments in equity of subsidiary	—	—		—	—		57		—		—		—		57
Vesting of shares in equity of subsidiary	—	—		—	—		(35)		—		—		35		—
Dividends on common stock ($3.00 per share)	—	—		—	—		—		(93,128)		—		—		(93,128)
Dividends on preferred stock	—	—		—	—		—		(6,006)		—		—		(6,006)
Net income	—	—		—	—		—		(102,384)		—		10,751		(91,633)
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	—	—		—	—		—		(428)		—		—		(428)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(2,167)		(2,167)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		11,350		11,350
Acquisition of noncontrolling interests	—	—		—	—		—		—		—		182		182
Other comprehensive loss	—	—		—	—		—		—		(5,646)		—		(5,646)
Balance, September 30, 2022	4,535	$	—	28,300,003	$	3	$	473,420	$	46,916	$	(6,726)	$	64,081	$	577,694
Balance, January 1, 2021	3,971	$	—	25,777,796	$	3	$	310,326	$	203,080	$	(823)	$	26,374	$	538,960
Common stock issued, net of offering costs	—	—		1,413,045	—		64,713		—		—		—		64,713
Preferred stock issued	514	—		—	—		13,997		—		—		—		13,997
ESPP shares issued and vesting of restricted stock and other, net of shares withheld for employer taxes	—	—		396,818	—		(10,539)		—		—		—		(10,539)
Common stock repurchased and retired	—	—		(44,650)	—		(2,656)		—		—		—		(2,656)
Warrants exercised	—	—		11,655	—		—		—		—		—		—
Share based payments	—	—		—	—		23,508		—		—		—		23,508
Dividends on common stock ($8.50 per share)	—	—		—	—		—		(250,763)		—		—		(250,763)
Dividends on preferred stock	—	—		—	—		—		(5,467)		—		—		(5,467)
Net income	—	—		—	—		—		380,882		—		2,474		383,356
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	—	—		—	—		—		(18,182)		—		—		(18,182)
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(14,695)		(14,695)
Contributions from noncontrolling interests	—	—		—	—		—		—		—		12,734		12,734
Acquisition of noncontrolling interests	—	—		—	—		—		—		—		13,625		13,625
Other comprehensive loss	—	—		—	—		—		—		(1,384)		—		(1,384)
Balance, September 30, 2021	4,485	$	—	27,554,664	$	3	$	399,349	$	309,550	$	(2,207)	$	40,512	$	747,207

6

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

	Nine Months Ended September 30,
	2022		2021
Cash flows from operating activities:
Net (loss) income	$	(93,139)	$	383,356
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	26,526		19,066
Provision for doubtful accounts	2,786		1,248
Share-based compensation	45,828		23,508
Fair value adjustments, non-cash	6,251		(10,728)
Non-cash interest and other	(5,392)		(15,742)
Effect of foreign currency on operations	3,157		(1,327)
Income from equity investments	(3,285)		(1,172)
Dividends from equity investments	2,491		1,373
Deferred income taxes	(81,832)		28,550
Impairment of intangibles and loss (gain) on disposal of fixed assets	5,537		(137)
Gain on extinguishment of loan	(1,102)		(6,509)
Loss on extinguishment of debt	—		4,888
Gain on equity investment	(6,790)		(3,544)
De-consolidation of BRPM 150	(8,294)		—
Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests	792		548
Change in operating assets and liabilities:
Amounts due to/from clearing brokers	(89,271)		(598,828)
Securities and other investments owned	295,411		(401,789)
Securities borrowed	(152,340)		(582,199)
Accounts receivable and advances against customer contracts	3,933		7,031
Prepaid expenses and other assets	(50,688)		(18,390)
Accounts payable, accrued payroll and related expenses, accrued expenses and other liabilities	(128,028)		13,655
Amounts due to/from related parties and partners	2,378		(678)
Securities sold, not yet purchased	(10,873)		408,598
Deferred revenue	12,565		(3,445)
Securities loaned	150,565		586,015
Net cash used in operating activities	(72,814)		(166,652)
Cash flows from investing activities:
Purchases of loans receivable	(421,718)		(186,317)
Repayments of loans receivable	408,654		132,542
Repayment of loan participations sold	—		(15,216)
Acquisition of businesses, net of $32,135 and $34,924 cash acquired for 2022 and 2021, respectively	(113,605)		(2,122)
Purchases of property, equipment and intangible assets	(1,385)		(552)
Proceeds from sale of property, equipment and intangible assets	2		3

8

Investment of subsidiaries initial public offering proceeds into trust account	—		(345,000)
Funds received from trust account of subsidiary	172,584		—
Purchase of equity and other investments	(2,786)		—
Net cash provided by (used in) investing activities	41,746		(416,662)
Cash flows from financing activities:
Proceeds from revolving line of credit, net	—		80,000
Repayment of revolving line of credit	(5,300)		—
Repayment of notes payable	(409)		(37,610)
Repayment of term loan	(60,879)		(16,084)
Proceeds from term loan	275,700		200,000
Proceeds from issuance of senior notes	51,215		890,568
Redemption of senior notes	—		(390,465)
Payment of debt issuance and offering costs	(1,355)		(30,968)
Payment of contingent consideration	(674)		(1,560)
Payment of employment taxes on vesting of restricted stock	(6,733)		(10,540)
Common dividends paid	(90,351)		(236,554)
Preferred dividends paid	(6,006)		(5,467)
Repurchase of common stock	(27)		(2,656)
Distributions to noncontrolling interests	(3,408)		(15,742)
Contributions from noncontrolling interests	11,350		12,732
Redemption of subsidiary temporary equity and distributions	(172,584)		—
Proceeds from initial public offering of subsidiaries	—		345,000
Proceeds from issuance of common stock	—		64,713
Proceeds from issuance of preferred stock	639		13,997
Net cash (used in) provided by financing activities	(8,822)		859,364
(Decrease) increase in cash, cash equivalents and restricted cash	(39,890)		276,050
Effect of foreign currency on cash, cash equivalents and restricted cash	(6,587)		(1,755)
Net (decrease) increase in cash, cash equivalents and restricted cash	(46,477)		274,295
Cash, cash equivalents and restricted cash, beginning of period	279,860		104,837
Cash, cash equivalents and restricted cash, end of period	$	233,383	$	379,132
Supplemental disclosures:
Interest paid	$	133,359	$	100,997
Taxes paid	$	45,390	$	87,857

The accompanying notes are an integral part of these condensed consolidated financial statements.

9

B. RILEY FINANCIAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share data)

NOTE 1 — ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

B. Riley Financial, Inc. and its subsidiaries (collectively, the “Company”) provide investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, financial consulting, appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe and consumer Internet access and cloud communication services through its wholly-owned subsidiaries United Online, Inc. (“UOL” or “United Online”), magicJack VocalTec Ltd. (“magicJack”), and Marconi Wireless ("Marconi"), and majority ownership interest in Lingo Management, LLC (“Lingo”). The Company also has a majority ownership interest in BR Brands Holding, LLC (“BR Brands” or “Brands”), which provides licensing of trademarks.

The Company operates in six operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, research, sales and trading services to corporate and institutional clients; (ii) Wealth Management, through which the Company provides wealth management and tax services to corporate, institutional and high net worth clients; (iii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iv) Financial Consulting, through which the Company provides bankruptcy, financial advisory, forensic accounting, real estate consulting and valuation and appraisal services; (v) Principal Investments - Communications and Other, through which the Company provides consumer Internet access and related subscription services from United Online, cloud communication services primarily through the magicJack devices, global cloud/unified communications and managed services from Lingo, mobile phone voice, text, and data services and devices through a mobile virtual network operator, and single source communications and cloud technology services from BullsEye Telecom (“BullsEye”); and (vi) Brands, which is focused on generating revenue through the licensing of trademarks.

On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company, entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders for a five-year $148,200 term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable discussed in Note 2.

On August 25, 2022, certain Company subsidiaries acquired the assets of Atlantic Coast Fibers, LLC (and related businesses), which provides residential and commercial recycling services in the New York City metropolitan area. The purchase price consideration totaled $27,541, which consisted of $14,482 in cash, $1,642 in assumed debt, and $11,416 in contingent consideration payable over approximately the next two years. In accordance with Accounting Standards Codification (“ASC”) 805, the Company used the acquisition method of accounting for this acquisition. Goodwill of $3,913 and other intangible assets of $13,080 were recorded as a result of the acquisition.

On August 16, 2022, the Company's majority-owned subsidiary, Lingo, acquired BullsEye, a single source communications and cloud technology provider. The purchase price consideration totaled $64,907, which Lingo partially funded using a $52,500 term loan that is discussed in Note 9. In accordance with ASC 805, the Company used the acquisition method of accounting for this acquisition. Goodwill of $29,284 and other intangible assets of $28,700 were recorded as a result of the acquisition. The acquisition is expected to bring revenue from multi-location enterprise business customers to Lingo, improving scale and flexibility.

On August 16, 2022, Lingo entered into a credit agreement (the “Lingo Credit Agreement”) by and among Lingo, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500.

On May 31, 2022, the Company's ownership interest in Lingo increased from 40% to 80% as a result of the conversion of $17,500 of debt owed by Lingo to equity. As a result of the consolidation of Lingo, the pre-existing equity investment was remeasured at fair value resulting in the recognition of a gain of $6,790, which is included in trading (losses) income and fair value adjustments on loans in the condensed consolidated statement of operations. In accordance with ASC 805,

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the Company used the acquisition method of accounting. The total fair value of the acquired assets of Lingo was $115,538 and the fair value of the 20% noncontrolling interest was $8,021 at May 31, 2022. Goodwill of $33,622 and other intangible assets of $63,000 were recorded as a result of the acquisition. The acquisition is expected to expand the services offered in the Company's Principal Investments - Communications and Other segment.

On January 19, 2022, the Company acquired FocalPoint Securities, LLC (“FocalPoint”), an independent investment bank headquartered in Los Angeles, California. The purchase price consideration totaled $124,479, which consisted of $64,248 in cash, $20,320 in issuance of common stock of the Company, and $39,911 in deferred cash and contingent consideration payable over the next three years. The Company used the acquisition method of accounting for this acquisition. Goodwill of $110,512 and other intangible assets of $10,780 that were recorded as a result of the acquisition will be deductible for tax purposes. The acquisition is expected to expand B. Riley Securities’ mergers and acquisitions (“M&A”) advisory business and enhance its debt capital markets and financial restructuring capabilities.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of Great American Global Partners, LLC, which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. All intercompany accounts and transactions have been eliminated upon consolidation

Applicable accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a Variable Interest Entity (“VIE”); to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE.

The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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 presentation of the financial position and the results of operations for the periods presented have been included. These 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, 2021, filed with the SEC on February 28, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

(b) Use of Estimates

The preparation of the 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 condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for doubtful accounts, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, accounting for income tax valuation allowances, recovery of contract assets, 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 differ.

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(c) Interest Expense — Securities Lending Activities

Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $17,447 and $9,945 during the three months ended September 30, 2022 and 2021, respectively, and $43,757 and $39,391 during the nine months ended September 30, 2022 and 2021, respectively. Interest expense from loan participations sold totaled $152 and $878 during the three and nine months ended September 30, 2021, respectively.

(d) Concentration of Risk

Revenues in the Capital Markets, Financial Consulting, Wealth Management, Brands and Principal Investments — Communications and Other segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation 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. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements.

(e) Advertising Expenses

The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,584 and $808 during the three months ended September 30, 2022 and 2021, respectively, and $5,941 and $1,964 during the nine months ended September 30, 2022 and 2021, respectively. Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

(f) Share-Based Compensation

The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest.

In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan (“Purchase Plan”) which allows eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. In accordance with the provisions of ASC 718 - Compensation — Stock Compensation (“ASC 718”), the Company is required to recognize compensation expense relating to shares offered under the Purchase Plan. During the three months ended September 30, 2022 and 2021, the Company recognized compensation expense of $120 and $132, respectively, related to the Purchase Plan. During the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense of $316 and $474, respectively, related to the Purchase Plan.

(g) Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.

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The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.

(h) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

(i) Restricted Cash

As of September 30, 2022 and December 31, 2021, restricted cash included $1,578 and $927 of cash collateral for leases, respectively.

Cash, cash equivalents and restricted cash consist of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Total cash, cash equivalents and restricted cash	$	233,383	$	279,860

(j) Securities Borrowed and Securities Loaned

Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.

The Company accounts for securities lending transactions in accordance with ASC 210 - Balance Sheet, which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets.

(k) Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation expense on property and equipment was $1,327 and $986 during the three months ended September 30, 2022 and 2021, respectively, and $3,380 and $2,890 during the nine months ended September 30, 2022 and 2021, respectively.

(l) Loans Receivable

Under ASC 326 - Financial Instruments – Credit Losses, the Company elected the fair value option for all outstanding loans receivable. Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the consolidated statements of operations.

Loans receivable, at fair value totaled $814,715 and $873,186 as of September 30, 2022 and December 31, 2021, respectively. The loans have various maturities through March 2027. As of September 30, 2022 and December 31, 2021, the historical cost of loans receivable accounted for under the fair value option was $846,933 and $877,527, respectively, which included principal balances of $851,689 and $886,831 respectively, and unamortized costs, origination fees,

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premiums and discounts, totaling $4,756 and $9,304, respectively. During the three months ended September 30, 2022 and 2021, the Company recorded net unrealized loss of $19,158 and $1,317, respectively, and during the nine months ended September 30, 2022 and 2021, the Company recorded a net unrealized loss of $19,287 and net unrealized gain of $8,729, respectively, on the loans receivable at fair value, which was included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations.

The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of September 30, 2022, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 15. In accordance with the credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of September 30, 2022, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statements of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology.

Badcock Loans Receivable

On September 23, 2022, the Company's subsidiary, B Riley Receivables II, LLC, a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement II”) with W.S. Badcock Corporation, a Florida corporation (“WSBC”), an indirect wholly owned subsidiary of Franchise Group, Inc., a Delaware corporation (“FRG”). This purchase of $168,363 consumer credit receivables of WSBC (“2022 Badcock Receivable”) was partially financed by a $148,200 term loan discussed in Note 9. As of September 30, 2022, the principal outstanding for the 2022 Badcock Receivable was $168,363 and included in loans receivable, at fair value on the condensed consolidated balance sheets.

On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement”) with WSBC. The Company paid $400,000 in cash to WSBC for the purchase of certain consumer credit receivables of WSBC (“2021 Badcock Receivable”), which was collateralized by the performance of the consumer credit receivables of WSBC. In connection with the Receivables Purchase Agreement, the Company entered into a Servicing Agreement (the “Servicing Agreement”) with WSBC pursuant to which WSBC will provide to the Company certain customary servicing and account management services in respect of the receivables purchased by the Company under the Receivables Purchase Agreement. In addition, subject to certain terms and conditions, FRG has agreed to guarantee the performance by WSBC of its obligations under the Receivables Purchase Agreement and the Servicing Agreement. As of September 30, 2022 and December 31, 2021, the principal outstanding for the 2021 Badcock Receivable was $212,551 and $400,000, respectively, and included in loans receivable, at fair value on the condensed consolidated balance sheets.

(m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased

Securities and other investments owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations.

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As of September 30, 2022 and December 31, 2021, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

	September 30, 2022		December 31, 2021
Securities and other investments owned:
Equity securities	$	1,140,728	$	1,444,474
Corporate bonds	6,761		7,632
Other fixed income securities	8,649		2,606
Partnership interests and other	82,475		77,383
	$	1,238,613	$	1,532,095
Securities sold not yet purchased:
Equity securities	$	10,801	$	20,302
Corporate bonds	6,264		6,327
Other fixed income securities	686		1,994
	$	17,751	$	28,623

(n) 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”) in accordance with ASC 820 - Fair Value Measurements. As of September 30, 2022 and December 31, 2021, partnership and investment fund interests valued at NAV of $82,475 and $77,383, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

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Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of September 30, 2022 and December 31, 2021, investments in nonpublic entities valued using a measurement alternative of $84,280 and $59,745, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Funds held in trust represents U.S. treasury bills that were purchased with funds raised through the initial public offering of B. Riley Principal 250 Merger Corporation (“BRPM 250”), a consolidated special purpose acquisition corporation (“SPAC”). The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC as set forth in the trust agreement. The funds held in trust are included within Level 1 of the fair value hierarchy and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

The Company has warrant liabilities related to warrants of the SPAC that are held by investors in BRPM 250. The warrants are accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter markets. Warrant liabilities are included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets in the amount of $633 for BRPM 250 and $12,938 for B. Riley Principal 150 Merger Corporation (“BRPM 150”) and BRPM 250 as of September 30, 2022 and December 31, 2021, respectively. Changes in fair value of warrants are included within change in fair value of financial instruments and other as part of other income (expense) in the condensed consolidated statements of operations. The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models.

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The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2022 and December 31, 2021.

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of September 30, 2022 Using
	Fair value as of September 30, 2022		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	173,216	$	173,216	$	—	$	—
Securities and other investments owned:
Equity securities	1,056,448		717,092		—		339,356
Corporate bonds	6,761		—		6,761		—
Other fixed income securities	8,649		—		8,649		—
Total securities and other investments owned	1,071,858		717,092		15,410		339,356
Loans receivable, at fair value	814,715		—		—		814,715
Total assets measured at fair value	$	2,059,789	$	890,308	$	15,410	$	1,154,071
Liabilities:
Securities sold not yet purchased:
Equity securities	$	10,801	$	10,801	$	—	$	—
Corporate bonds	6,264		—		6,264		—
Other fixed income securities	686		—		686		—
Total securities sold not yet purchased	17,751		10,801		6,950		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322		—		—		4,322
Warrant liabilities	633		633		—		—
Contingent consideration	29,578		—		—		29,578
Total liabilities measured at fair value	$	52,284	$	11,434	$	6,950	$	33,900

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	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2021 Using
	Fair value at December 31, 2021		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	345,024	$	345,024	$	—	$	—
Securities and other investments owned:
Equity securities	1,384,729		1,007,180		—		377,549
Corporate bonds	7,632		—		7,632		—
Other fixed income securities	2,606		—		2,606		—
Total securities and other investments owned	1,394,967		1,007,180		10,238		377,549
Loans receivable, at fair value	873,186		—		—		873,186
Total assets measured at fair value	$	2,613,177	$	1,352,204	$	10,238	$	1,250,735
Liabilities:
Securities sold not yet purchased:
Equity securities	$	20,302	$	20,302	$	—	$	—
Corporate bonds	6,327		—		6,327		—
Other fixed income securities	1,994		—		1,994		—
Total securities sold not yet purchased	28,623		20,302		8,321		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		—		4,506
Warrant liabilities	12,938		12,938		—		—
Total liabilities measured at fair value	$	46,067	$	33,240	$	8,321	$	4,506

As of September 30, 2022 and December 31, 2021, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $1,154,071 and $1,250,735, respectively, or 20.0% and 21.4%, 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 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 September 30, 2022:

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	Fair value at September 30, 2022		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	267,745	Market approach	Multiple of EBITDA	1.80x - 13.00x	6.49x
				Multiple of Sales	1.00x	1.00x
				Market price of related security	$10.03 - $16.81	$13.72
	65,044		Discounted cash flow	Market interest rate	17.8%	17.8%
	6,567		Option pricing model	Annualized volatility	30.0% - 200.0%	57.4%
Loans receivable at fair value	814,715		Discounted cash flow/Market approach	Market interest rate/Market price of related security	6.0% - 33.5%	21.9%
Total level 3 assets measured at fair value	$	1,154,071
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,322	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	29,578		Discounted cash flow	EBITDA volatility	65.0%	65.0%
				Market interest rate	8.5%	8.5%
Total level 3 liabilities measured at fair value	$	33,900

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The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2022 and 2021 were as follows:

	Level 3 Balance at Beginning of Year		Level 3 Changes During the Period								Level 3 Balance at End of Period
			Fair Value Adjustments		Relating to Undistributed Earnings		Purchases, Sales and Settlements		Transfer in and/or out of Level 3
Nine Months Ended September 30, 2022
Equity securities	$	377,549	$	(18,594)	$	—	$	18,457	$	(38,056)	$	339,356
Loans receivable at fair value	873,186		(19,205)		9,554		(7,983)		(40,837)		814,715
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		824		(1,008)		—		4,322
Contingent consideration	—		(3,880)		—		33,458		—		29,578
Nine Months Ended September 30, 2021
Equity securities	$	149,292	$	52,102	$	—	$	125,794	$	5,777	$	332,965
Loans receivable at fair value	390,689		9,059		9,003		(57,989)		—		350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,700		—		(504)		—		—		4,196
Warrant liabilities	—		—		—		10,466		(10,466)		—

The amount reported in the table above during the nine months ended September 30, 2022 and 2021 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the 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 September 30, 2022 and December 31, 2021, the senior notes payable had a carrying amount of $1,661,191 and $1,606,560, respectively, and fair value of $1,539,876 and $1,661,189, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments are consistent with current market rates of interest for instruments of comparable credit risk.

The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

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The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022. These investments were measured due to an observable price change or impairment during the nine months ended September 30, 2022.

	Fair Value Measurement Using
	Total		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
As of September 30, 2022
Investments in nonpublic entities that do not report NAV	$	16,387	$	—	$	15,737	$	650

(o) Derivative and Foreign Currency Translation

The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of September 30, 2022, there were no forward exchange contracts outstanding. As of December 31, 2021, €6,000 forward exchange contracts were outstanding.

The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $248 during the three months ended September 30, 2022 and 2021, respectively, and $68 and $921 during the nine months ended September 30, 2022 and 2021, respectively. This amount was reported as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gain was $783 and $689 during the three months ended September 30, 2022 and 2021, respectively, and gain was $1,913 and $855 during the nine months ended September 30, 2022 and 2021, respectively. These amounts were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

As disclosed in Note 2(s) below, the Company consolidated a VIE, BRPM 250, which has outstanding warrants that were issued in its initial public offering. The warrants were recorded as a liability since the warrants contain a provision to be settled in cash in the event of a qualifying cash tender offer for BRPM 250, which is outside the control of the Company. The outstanding warrants are considered derivative instruments with the warrant liability measured at fair value at each reporting date until exercised or upon expiration, with changes in fair value reported in other income in the condensed consolidated statements of operations. As of September 30, 2022 and December 31, 2021, the warrant liability for BRPM 250 totaled $633 and BRPM 150 and BRPM 250 totaled $12,938, respectively, which was included in accrued expenses and other liabilities in the condensed consolidated balance sheet.

(p) Redeemable Noncontrolling Interests in Equity of Subsidiaries

The Company records redeemable noncontrolling interests in equity of subsidiaries to reflect the economic interests of the class A ordinary shareholders in the BRPM 250 sponsored SPAC and the 20% noncontrolling interest of Lingo. These interests are presented as redeemable noncontrolling interests in equity of subsidiaries within the condensed consolidated balance sheet, outside of the permanent equity section. The class A ordinary shareholders of BRPM 250 have redemption rights that are considered to be outside of the Company’s control. Remeasurements to the redemption value of the redeemable noncontrolling interest in equity of subsidiaries are recorded within retained earnings. The operating agreement with Lingo has provisions which result in the noncontrolling interest being accounted for as temporary equity. Net income (losses) are reflected in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in the condensed consolidated statement of operations.

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Changes to redeemable noncontrolling interest consist of the following:

	Nine Months Ended September 30, 2022
Balance, January 1, 2022	$	345,000
Net loss	(1,078)
De-consolidation of BRPM 150	(172,584)
Contributions	8,021
Distributions	(600)
Balance, September 30, 2022	$	178,759

(q) Equity Investments

As of September 30, 2022 and December 31, 2021, equity investments of $42,560 and $39,190, respectively, were accounted for under the equity method of accounting and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees was included in income from equity investments in the accompanying condensed consolidated statements of operations.

bebe stores, inc.

As of September 30, 2022 and December 31, 2021, the Company had a 40.1% ownership interest in bebe stores, inc. (“bebe”). In December 2021, the Company purchased an additional 71,970 shares of newly issued common stock of bebe for $612 and increased its ownership interest from 39.5% to 40.1%. The equity ownership in bebe was accounted for under the equity method of accounting and was included in prepaid expenses and other assets in the condensed consolidated balance sheets.

As of September 30, 2022, the carrying value of the Company’s equity investment in bebe exceeded the fair value based on the quoted market prices. In consideration of these facts, the Company evaluated its investment for other than temporary impairment under ASC 323. The Company did not utilize bright-line tests in the evaluation. Based on the available facts and information regarding the operating results of bebe, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor the investment and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions.

(r) Supplemental Non-cash Disclosures

During the nine months ended September 30, 2022, non-cash investing activities included $20,320 in issuance of the Company's common stock as part of the purchase price consideration from the FocalPoint acquisition and $22,661 in seller financing for deferred cash consideration, the conversion of $17,500 of debt owed by Lingo to equity, and the repayment of loans receivable in the amount of $850 with equity securities. During the nine months ended September 30, 2021, non-cash investing activities included the repayment of a loan receivable in full in the amount of $133,453 with equity securities, a $51,000 note receivable issued for the sale of equity securities to a third party, $35,000 of loans receivable were exchanged for $35,000 of newly issued debt securities, the repayment of a loan receivable in full in the amount of $2,800 with equity securities, and a $200 note receivable was issued for the sale of equity securities to a third party.

(s) Variable Interest Entities

The Company holds interests in various entities that meet the characteristics of a VIE but are not consolidated as the Company is not the primary beneficiary. Interests in these entities are generally in the form of equity interests, loans receivable, or fee arrangements.

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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 consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.

The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered VIEs 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 during the three months ended September 30, 2022 and 2021 were $349 and $26,732, respectively, and for the nine months ended September 30, 2022 and 2021 were $12,437 and $52,114, respectively, and are included in services and fees in the condensed consolidated statements of operations.

The carrying value of the Company’s investments in the VIEs that were not consolidated is shown below.

	September 30, 2022		December 31, 2021
Securities and other investments owned, at fair value	$	35,291	$	27,445
Loans receivable, at fair value	70,400		205,265
Other assets	3,129		4,956
Maximum exposure to loss	$	108,820	$	237,666

B. Riley Principal 150 and 250 Merger Corporations

In 2021, the Company along with B. Riley Principal 150 Merger Corporation (“BRPM 150”) and BRPM 250, both special purpose acquisition companies incorporated as Delaware corporations, consummated the initial public offerings of 17,250,000 units of BRPM 150 and 17,250,000 units of BRPM 250. Each Unit of BRPM 150 and BRPM 250 consisted of one share of class A common stock and one-third of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of BRPM 150 or BRPM 250 class A common stock at an exercise price of $11.50 per share. The BRPM 150 and BRPM 250 Units were each sold at a price of $10.00 per unit, generating gross proceeds to BRPM 150 of $172,500 and BRPM 250 of $172,500. These proceeds which totaled $345,000 were deposited in a trust account established for the benefit of the BRPM 150 and BRPM 250 class A public shareholders and was included in prepaid expenses and other assets in the condensed balance sheet. These proceeds are invested only in U.S. treasury securities in accordance with the governing documents of BRPM 150 and BRPM 250. Under the terms of the BRPM 150 and BRPM 250 initial public offerings, BRPM 150 and BRPM 250 are required to consummate a business combination transaction within 24 months (or 27 months under certain circumstances) of the completion of their respective initial public offerings.

In connection with the completion of the initial public offerings of BRPM 150 and BRPM 250, the Company invested in the private placement units of BRPM 150 and BRPM 250. Both BRPM 150 and BRPM 250 are determined to be VIE’s because each of the entities do not have enough equity at risk to finance their activities without additional subordinated financial support. The Company has determined that the class A shareholders of BRPM 150 and BRPM 250 do not have substantive rights as shareholders of BRPM 150 and BRPM 250 since these equity interests are determined to be temporary equity. As such, the Company has determined that it is the primary beneficiary of BRPM 150 and BRPM 250 as it has the right to receive benefits or the obligation to absorb losses of each of the entities, as well as the power to direct a majority of the activities that significantly impact BRPM 150 and BRPM 250’s economic performance. Since the Company is determined to be the primary beneficiary, BRPM 150 and BRPM 250 were consolidated into the Company’s financial statements.

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On July 19, 2022, BRPM 150 completed a business combination with FaZeClan Holdings, Inc. (“Faze Holdings”) in a reverse merger transaction resulting in BRPM 150 no longer being a VIE of the Company and no longer being included in the consolidated group of the Company. In connection with the de-consolidation of BRPM 150, among other items, prepaid expenses and other assets decreased by $172,584 related to funds held in a trust account and redeemable noncontrolling interests in equity of subsidiaries decreased by $172,500. During the three and nine months ended September 30, 2022, the Company recognized incentive fees of $41,885 included in services and fees in the condensed consolidated statement of operations. See Note 18 for further discussion.

(t) Recent Accounting Standards

Not yet adopted

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material impact on its financial position and results of operations.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820). This update clarifies that a contractual restriction on the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Therefore, a contractual sale restriction should not be considered when measuring an equity security's fair value. The update also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Specific disclosures related to equity securities subject to contractual sale restrictions are required and include the fair value of such equity securities on the balance sheet, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. Investment companies as defined by Topic 946 should apply the amendments in this update to an equity security with a contract containing a sale restriction that was executed or modified on or after the date of adoption. For an equity security with a contract containing a sale restriction that was executed before the date of adoption, investment companies should continue to account for the equity security under their historical accounting policy for measuring such securities until the contractual restrictions expire or are modified. The Company has not yet adopted this update and is currently evaluating the effect, if any, this new standard will have on its financial position and results of operations.

Recently adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to require acquiring entities to apply Topic 606 when recognizing and measuring contract assets and contract liabilities instead of only recognizing such items at fair value on the acquisition date. The update addressed diversity in practice related to the acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company early adopted the ASU on January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provided optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments applied only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which refined the scope of Topic 848 through optional expedients and exceptions when accounting for derivative contracts and certain

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hedging relationships. The Company adopted the ASU effective January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

NOTE 3 — RESTRUCTURING CHARGE

The Company recorded $8,016 in restructuring charges during the three and nine months ended September 30, 2022. The Company did not record any restructuring charges for the three and nine months ended September 30, 2021.

The restructuring charges during the three and nine months ended September 30, 2022 were primarily related to the reorganization and consolidation activities in the Wealth Management segment and the Principal Investments - Communications and Other segment. Reorganization and consolidation activities consisted of reductions in workforce, facility closures, and related intangible impairments and asset disposals.

The following tables summarize the changes in accrued restructuring charge during the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	574	$	676	$	624	$	727
Restructuring charge	8,016		—		8,016		—
Cash paid	(1,448)		(29)		(1,503)		(86)
Non-cash items	(4,620)		3		(4,615)		9
Balance, end of period	$	2,522	$	650	$	2,522	$	650

The following tables summarize the restructuring activities by reportable segment during the three and nine months ended September 30, 2022.

	Wealth Management		Principal Investments - Communications and Other		Total
Restructuring charge (recovery) for the three and nine months ended September 30, 2022
Employee termination	$	354	$	906	$	1,260
Impairment of intangibles	2,012		2,162		4,174
Facility closure and consolidation	1,741		841		2,582
Total restructuring charge	$	4,107	$	3,909	$	8,016

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NOTE 4 — SECURITIES LENDING

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2022 and December 31, 2021:

	Gross amounts recognized		Gross amounts offset in the consolidated balance sheets (1)		Net amounts included in the consolidated balance sheets		Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default(2)		Net amounts
As of September 30, 2022
Securities borrowed	$	2,243,306	$	—	$	2,243,306	$	2,243,306	$	—
Securities loaned	$	2,239,250	$	—	$	2,239,250	$	2,239,250	$	—
As of December 31, 2021
Securities borrowed	$	2,090,966	$	—	$	2,090,966	$	2,090,966	$	—
Securities loaned	$	2,088,685	$	—	$	2,088,685	$	2,088,685	$	—

_________________________

(1)Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.

(2)Includes the amount of cash collateral held/posted.

NOTE 5 — ACCOUNTS RECEIVABLE

The components of accounts receivable, net, include the following:

	September 30, 2022		December 31, 2021
Accounts receivable	$	60,137	$	39,045
Investment banking fees, commissions and other receivables	8,165		14,286
Total accounts receivable	68,302		53,331
Allowance for doubtful accounts	(3,595)		(3,658)
Accounts receivable, net	$	64,707	$	49,673

Additions and changes to the allowance for doubtful accounts consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,773	$	3,565	$	3,658	$	3,599
Add: Additions to reserve	1,510		493		2,786		1,248
Less: Write-offs	(688)		(266)		(2,857)		(1,087)
Less: Recovery	—		—		8		32
Balance, end of period	$	3,595	$	3,792	$	3,595	$	3,792

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NOTE 6 — PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consist of the following:

	September 30, 2022		December 31, 2021
Funds held in trust account	$	173,216	$	345,024
Equity investments	42,560		39,190
Prepaid expenses	21,322		14,965
Unbilled receivables	12,483		12,315
Other receivables	71,797		40,483
Other assets	34,497		11,525
Prepaid expenses and other assets	$	355,875	$	463,502

Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based contracts in the Auction and Liquidation segment, mobile handsets in the Principal Investments – Communications and Other segment, and consulting related engagements in the Financial Consulting segment.

NOTE 7 — GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $429,187 and $250,568 as of September 30, 2022 and December 31, 2021, respectively.

The changes in the carrying amount of goodwill during the nine months ended September 30, 2022, resulting primarily from the acquisitions of FocalPoint in the Capital Markets segment and Lingo and BullsEye in the Principal Investments – Communications and Other segment (as previously discussed in Note 1), were as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments- Communications and Other Segment		Total
Balance as of December 31, 2021	$	51,338	$	51,195	$	1,975	$	23,680	$	122,380	$	250,568
Goodwill acquired during the period:
Acquisition of other businesses	110,512		—		—		—		68,107		178,619
Balance as of September 30, 2022	$	161,850	$	51,195	$	1,975	$	23,680	$	190,487	$	429,187

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Intangible assets consisted of the following:

		As of September 30, 2022						As of December 31, 2021
	Useful Life	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Customer relationships	1.9 to 16 Years	$	220,811	$	(80,900)	$	139,911	$	130,801	$	(59,671)	$	71,130
Domain names	7 years	185		(162)		23		185		(143)		42
Advertising relationships	8 years	100		(78)		22		100		(69)		31
Internally developed software and other intangibles	0.5 to 5 Years	24,295		(11,016)		13,279		15,275		(8,820)		6,455
Trademarks	3 to 10 Years	20,683		(2,848)		17,835		6,369		(1,652)		4,717
Total		266,074		(95,004)		171,070		152,730		(70,355)		82,375
Non-amortizable assets:
Tradenames		125,276		—		125,276		125,276		—		125,276
Total intangible assets		$	391,350	$	(95,004)	$	296,346	$	278,006	$	(70,355)	$	207,651

Amortization expense was $9,390 and $5,156 during the three months ended September 30, 2022 and 2021, respectively, and $23,146 and $16,176 during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, estimated future amortization expense was $9,466, $32,249, $28,169, $23,685, and $20,916 for the years ended December 31, 2022 (remaining three months), 2023, 2024, 2025 and 2026, respectively. The estimated future amortization expense after December 31, 2026 is $56,585.

NOTE 8 — NOTES PAYABLE

Asset Based Credit Facility

The Company is party to a credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $200,000 and a maturity date of April 20, 2027. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts more fully described in Note 2(d) in the Annual Report on Form 10-K. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The interest rate for each revolving credit advance under the Credit Agreement is subject to certain terms and conditions, equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility provides for success fees in the amount of 1.0% to 10.0% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. The credit facility also provides for funding fees in the amount of 0.05% to 0.20% of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale. Interest expense totaled $18 and $109 during the three months ended September 30, 2022 and 2021, respectively, and $165 and $325 during the nine months ended September 30, 2022 and 2021, respectively. There was no outstanding balance on this credit facility as of September 30, 2022 and December 31, 2021. As of September 30, 2022, there were no open letters of credit outstanding.

The Company is in compliance with all financial covenants in the asset based credit facility as of September 30, 2022.

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Other Notes Payable

As of September 30, 2022 and December 31, 2021, the outstanding balance for the other notes payable was $25,075 and $357, respectively. Interest expense was $298 and $4 during the three months ended September 30, 2022 and 2021, respectively, and $825 and $16 during the nine months ended September 30, 2022 and 2021, respectively. Notes payable consisted of additional deferred cash consideration owed to the sellers of FocalPoint as of September 30, 2022. Notes payable to a clearing organization for one of the Company’s broker dealers, which accrued interest at the prime rate plus 2.0%, matured on January 31, 2022 and was repaid during the nine months ended September 30, 2022.

NOTE 9 — TERM LOANS AND REVOLVING CREDIT FACILITY

Pathlight Credit Agreement

On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders (collectively, “Pathlight”) for a five-year $148,200 term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable discussed in Note 2.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus an applicable margin of 6.50%. As of September 30, 2022, the interest rate on the Pathlight Credit Agreement was 10.00%.

The Pathlight Credit Agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Pathlight Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding Pathlight Credit Agreement.

Principal outstanding under the Pathlight Credit Agreement is repaid based on collections of the 2022 Badcock Receivable less other application of payments as defined in the Pathlight Credit Agreement and the remaining principal balance is due at final maturity on September 23, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $144,584 (net of unamortized debt issuance costs of $3,616). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $418 (including amortization of deferred debt issuance costs of $89).

Lingo Credit Agreement

On August 16, 2022, the Company's subsidiary, Lingo, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Lingo Credit Agreement”) by and among the Borrower, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the “New Lender”) for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment. As of September 30, 2022, the interest rate on the Lingo Credit Agreement was 6.29%.

The agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the agreement requires the Borrower to maintain certain financial ratios. The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of

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default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding agreement.

Principal outstanding is due in quarterly installments starting on March 31, 2023. Quarterly installments from March 31, 2023 to December 31, 2023 are in the amount of $1,641 per quarter, from March 31, 2024 to December 31, 2024 are in the amount of $1,969 per quarter, from March 31, 2025 to June 30, 2027 are in the amount of $2,625, and the remaining principal balance is due at final maturity on August 16, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $51,595 (net of unamortized debt issuance costs of $905). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $403 (including amortization of deferred debt issuance costs of $26).

Nomura Credit Agreement

On June 23, 2021, the Company, and its wholly owned subsidiaries, BR Financial Holdings, LLC (the “Primary Guarantor”), and BR Advisory & Investments, LLC (the “Borrower”) entered into a credit agreement (as amended, the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, N.A., as collateral agent (the “Collateral Agent”), for a four-year $200,000 secured term loan credit facility (the “Term Loan Facility”) and a four-year $80,000 secured revolving loan credit facility (the “Revolving Credit Facility”).

On December 17, 2021 (the “Amendment Date”), the Company, the Primary Guarantor, and the Borrower entered into a Second Incremental Amendment to Credit Agreement, pursuant to which the Borrower established an incremental facility in an aggregate principal amount of $100,000 (the “Incremental Facility” and the incremental term loans made thereunder, the “Incremental Term Loans”) of secured term loans under the Credit Agreement on terms identical to those applicable to the Term Loan Facility. The Borrower borrowed the full amount of the Incremental Term Loans on the Amendment Date. The Term Loan Facility, Revolving Credit Facility, and Incremental Facility (together, the “Credit Facilities”), mature on June 23, 2025, subject to acceleration or prepayment.

Eurodollar loans under the Credit Facilities accrue interest at the Eurodollar Rate plus an applicable margin of 4.50%. Base rate loans accrue interest at the Base Rate plus an applicable margin of 3.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by the average utilization of the facility for the immediately preceding fiscal quarter.

Subject to certain eligibility requirements, the assets of certain subsidiaries of the Company that hold credit assets, private equity assets, and public equity assets are placed into a borrowing base, which serves to limit the borrowings under the Credit Facilities. If borrowings under the facilities exceed the borrowing base, the Company is obligated to prepay the loans in an aggregate amount equal to such excess. The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit the Company’s, the Primary Guarantor’s, the Borrower’s, and the Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain operating earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of at least $135,000 and the Primary Guarantor to maintain net asset value of at least $1,100,000. The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

Commencing on September 30, 2022, the Term Loan Facility and Incremental Facility will amortize in equal quarterly installments of 1.25% of the aggregate principal amount of the term loan as of the closing date with the remaining balance due at final maturity. Quarterly installments from September 30, 2022 to March 31, 2025 are in the amount of $3,750 per quarter.

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As of September 30, 2022 and December 31, 2021, the outstanding balances on the Term Loan Facility and Incremental Facility were $290,448 (net of unamortized debt issuance costs of $5,802) and $292,650 (net of unamortized debt issuance costs of $7,350), respectively. Interest on the term loan during the three months ended September 30, 2022 and 2021 was $5,720 (including amortization of deferred debt issuance costs of $523) and $2,720 (including amortization of deferred debt issuance costs of $350), respectively. Interest on the term loan during the nine months ended September 30, 2022 and 2021 was $14,557 (including amortization of deferred debt issuance costs of $1,548) and $2,956 (including amortization of deferred debt issuance costs of $380), respectively. The interest rate on the term loan as of September 30, 2022 and December 31, 2021 was 8.10% and 4.72%, respectively.

The Company had an outstanding balance of $74,700 and $80,000 under the Revolving Credit Facility as of September 30, 2022 and December 31, 2021, respectively. Interest on the revolving facility during the three months ended September 30, 2022 and 2021 was $1,410 (including unused commitment fee of $6 and amortization of deferred financing costs of $146) and $790 (including unused commitment fee of $58 and amortization of deferred financing costs of $146), respectively. Interest on the revolving facility during the nine months ended September 30, 2022 and 2021 was $3,737 (including unused commitment fee of $6 and amortization of deferred financing costs of $434) and $820 (including unused commitment fee of $76 and amortization of deferred financing costs of $159). The interest rate on the revolving facility as of September 30, 2022 and December 31, 2021 was 7.64% and 4.67%, respectively.

BRPAC Credit Agreement

On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A. in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”). Certain of the Borrowers’ U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”; and together with the Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral.

The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security, and other related agreements.

The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement.

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things: (i) the Lenders agreed to make a new $75,000 term loan to the Borrowers, the proceeds of which the Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless Holdings, LLC was added to the Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the Borrowers were permitted to make certain distributions to the parent company of the Borrowers.

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the

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BRPAC Credit Agreement. As of September 30, 2022 and December 31, 2021, the interest rate on the BRPAC Credit Agreement was 6.04% and 3.17%, respectively.

Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments. Quarterly installments on December 31, 2022 are in the amount of $2,813, from March 31, 2023 to December 31, 2023 are in the amount of $4,688 per quarter, from March 31, 2024 to December 31, 2026 are in the amount of $3,750 per quarter, on March 31, 2027 is in the amount of $2,813, and the remaining principal balance is due at final maturity on June 30, 2027.

As of September 30, 2022 and December 31, 2021, the outstanding balance on the term loan was $71,408 (net of unamortized debt issuance costs of $779) and $53,735 (net of unamortized debt issuance costs of $582), respectively. Interest expense on the term loan during the three months ended September 30, 2022 and 2021 was $1,088 (including amortization of deferred debt issuance costs of $81) and $554 (including amortization of deferred debt issuance costs of $72), respectively. Interest expense on the term loan during the nine months ended September 30, 2022 and 2021 was $2,168 (including amortization of deferred debt issuance costs of $252) and $1,931 (including amortization of deferred debt issuance costs of $229), respectively.

NOTE 10 — SENIOR NOTES PAYABLE

Senior notes payable, net, are comprised of the following:

	September 30, 2022		December 31, 2021
6.750% Senior notes due May 31, 2024	$	138,712	$	111,170
6.500% Senior notes due September 30, 2026	180,532		178,787
6.375% Senior notes due February 28, 2025	146,432		144,521
6.000% Senior notes due January 31, 2028	266,058		259,347
5.500% Senior notes due March 31, 2026	217,440		214,243
5.250% Senior notes due August 31, 2028	405,483		397,302
5.000% Senior notes due December 31, 2026	324,714		322,679
	1,679,371		1,628,049
Less: Unamortized debt issuance costs	(18,180)		(21,489)
	$	1,661,191	$	1,606,560

During the three months ended September 30, 2022 and 2021, the Company issued $15,448 and $97,715, respectively, of senior notes, and during the nine months ended September 30, 2022 and 2021, the Company issued $51,321 and $183,042, respectively, of senior notes with maturity dates ranging from May 2024 to August 2028 pursuant to At the Market Issuance Sales Agreements with B. Riley Securities, Inc. which governs the program of at-the-market sales of the Company’s senior notes. A series of prospectus supplements were filed by the Company with the SEC in respect of the Company’s offerings of these senior notes.

As of September 30, 2022 and December 31, 2021, the total senior notes outstanding was $1,661,191 (net of unamortized debt issue costs of $18,180) and $1,606,560 (net of unamortized debt issue costs of $21,489) with a weighted average interest rate of 5.70% and 5.69%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $25,149 and $21,458 for the three months ended September 30, 2022 and 2021, respectively, and totaled $74,221 and $60,010 for the nine months ended September 30, 2022 and 2021, respectively.

Sales Agreement Prospectus to Issue Up to $250,000 of Senior Notes

The most recent sales agreement prospectus was filed by the Company with the SEC on January 5, 2022 (the “Sales Agreement Prospectus”) superseding the prospectus filed with the SEC on August 11, 2021, the prospectus filed with the SEC on April 6, 2021, and the prospectus filed with the SEC on January 28, 2021. This program provides for the sale by the Company of up to $250,000 of certain of the Company’s senior notes. As of September 30, 2022 and December 31, 2021, the Company had $60,590 and $111,911, respectively, remaining availability under the Sales Agreement Prospectus.

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NOTE 11 — ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

	September 30, 2022		December 31, 2021
Accrued payroll and related expenses	$	79,532	$	107,904
Dividends payable	31,263		28,486
Income taxes payable	34,129		39,776
Other tax liabilities	25,699		20,106
Contingent consideration	29,578		—
Accrued expenses	23,723		96,250
Other liabilities	54,965		51,228
Accrued expenses and other liabilities	$	278,889	$	343,750

Other tax liabilities primarily consist of uncertain tax positions, sales and VAT taxes payable, and other non-income tax liabilities. Accrued expenses primarily consist of accrued trade payables, investment banking payables, and legal settlements. Other liabilities primarily consist of interest payables, customer deposits, and accrued legal fees.

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NOTE 12 — REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers by reportable segment for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	41,302	$	—	$	—	$	12,342	$	—	$	—	$	53,644
Wealth and asset management fees	3,280		44,322		—		—		—		—		47,602
Commissions, fees and reimbursed expenses	8,827		1,728		1,949		10,493		—		—		22,997
Subscription services	—		—		—		—		70,152		—		70,152
Advertising, licensing and other (1)	—		—		2,550		—		7,744		5,023		15,317
Total revenues from contracts with customers	53,409		46,050		4,499		22,835		77,896		5,023		209,712
Interest income - Loans and securities lending	55,054		—		2,540		—		—		—		57,594
Trading gains on investments	15,171		1,027		—		—		—				16,198
Fair value adjustment on loans	(4,044)		—		—		—		—		—		(4,044)
Other	59,808		1,095		—		—		—		—		60,903
Total revenues	$	179,398	$	48,172	$	7,039	$	22,835	$	77,896	$	5,023	$	340,363

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $1,580 in Principal Investments - Communications and Other.

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	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	116,044	$	—	$	—	$	12,350	$	—	$	—	$	128,394
Wealth and asset management fees	679		86,579		—		—		—		—		87,258
Commissions, fees and reimbursed expenses	10,893		28,379		2,740		8,941		—		—		50,953
Subscription services	—		—		—		—		16,303		—		16,303
Service contract revenues	—		—		5		—		—		—		5
Advertising, licensing and other (1)	—		—		34,327		—		2,997		6,372		43,696
Total revenues from contracts with customers	127,616		114,958		37,072		21,291		19,300		6,372		326,609
Interest income - Loans and securities lending	26,869		—		—		—		—		—		26,869
Trading gains on investments	18,184		1,262		—		—		—		—		19,446
Fair value adjustment on loans	(1,249)		—		—		—		—		—		(1,249)
Other	7,233		2,614		—				—		—		9,847
Total revenues	$	178,653	$	118,834	$	37,072	$	21,291	$	19,300	$	6,372	$	381,522

(1)Includes sale of goods of $34,327 in Auction and Liquidation and $631 in Principal Investments - Communications and Other.

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	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	118,448	$	—	$	—	$	44,958	$	—	$	—	$	163,406
Wealth and asset management fees	8,199		161,835		—		—		—		—		170,034
Commissions, fees and reimbursed expenses	32,208		17,889		7,792		28,123		—		—		86,012
Subscription services	—		—		—		—		135,774		—		135,774
Advertising, licensing and other (1)	—		—		2,550		—		17,319		14,754		34,623
Total revenues from contracts with customers	158,855		179,724		10,342		73,081		153,093		14,754		589,849
Interest income - Loans and securities lending	178,879		—		3,976		—		—		—		182,855
Trading (losses) gains on investments	(279,172)		3,077		—		—		—		—		(276,095)
Fair value adjustment on loans	(4,068)		—		—		—		—		—		(4,068)
Other	90,872		5,239		—		—		—		—		96,111
Total revenues	$	145,366	$	188,040	$	14,318	$	73,081	$	153,093	$	14,754	$	588,652

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $5,345 in Principal Investments - Communications and Other.

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	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	370,337	$	—	$	—	$	40,290	$	—	$	—	$	410,627
Wealth and asset management fees	5,557		204,107		—		—		—		—		209,664
Commissions, fees and reimbursed expenses	37,703		59,979		14,547		26,145		—		—		138,374
Subscription services	—		—		—		—		50,802		—		50,802
Service contract revenues	—		—		1,090		—		—		—		1,090
Advertising, licensing and other (1)	—		—		52,162		—		8,673		15,261		76,096
Total revenues from contracts with customers	413,597		264,086		67,799		66,435		59,475		15,261		886,653
Interest income - Loans and securities lending	89,280		—		—		—		—		—		89,280
Trading (losses) gains on investments	302,539		6,483		—		—		—		—		309,022
Fair value adjustment on loans	8,796		—		—		—		—		—		8,796
Other	18,228		6,472		—		—		—		—		24,700
Total revenues	$	832,440	$	277,041	$	67,799	$	66,435	$	59,475	$	15,261	$	1,318,451

(1)Includes sale of goods of $52,162 in Auction and Liquidation and $2,081 in Principal Investments - Communications and Other.

Contract Balances

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied. Receivables related to revenues from contracts with customers totaled $64,707 and $49,673 as of September 30, 2022 and December 31, 2021, respectively. The Company had no significant impairments related to these receivables during the three and nine months ended September 30, 2022 and 2021. The Company also had $12,483 and $12,315 of unbilled receivables included in prepaid expenses and other assets as of September 30, 2022 and December 31, 2021, respectively. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, financial consulting engagements, subscription services where the performance obligation has not yet been satisfied and license agreements with guaranteed minimum royalty payments and advertising/marketing fees with

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additional royalty revenue based on a percentage of defined sales. Deferred revenue as of September 30, 2022 and December 31, 2021 was $89,157 and $69,507, respectively. The Company expects to recognize the deferred revenue of $89,157 as of September 30, 2022 as service and fee revenues when the performance obligation is met during the years December 31, 2022 (remaining three months), 2023, 2024, 2025 and 2026 in the amount of $57,058, $13,519, $8,637, $4,496, and $2,105, respectively. The Company expects to recognize the deferred revenue of $3,342 after December 31, 2026.

During the three months ended September 30, 2022 and 2021, the Company recognized revenue of $7,293 and $4,728 that was recorded as deferred revenue at the beginning of the respective year. During the nine months ended September 30, 2022 and 2021, the Company recognized revenue of $32,287 and $31,377 that was recorded as deferred revenue at the beginning of the respective year.

Contract Costs

Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable; (2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied; and (3) commissions paid to obtain magicJack and Lingo contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period.

The capitalized costs to fulfill a contract were $5,483 and $1,605 as of September 30, 2022 and December 31, 2021, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets. During the three months ended September 30, 2022 and 2021, the Company recognized expenses of $723 and $324 related to capitalized costs to fulfill a contract, respectively. During the nine months ended September 30, 2022 and 2021, the Company recognized expenses of $1,813 and $433 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three and nine months ended September 30, 2022 and 2021.

Remaining Performance Obligations and Revenue Recognized from Past Performance

The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of September 30, 2022. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of September 30, 2022.

NOTE 13 — INCOME TAXES

The Company’s effective income tax rate was a benefit of 30.0% and a provision of 26.8% for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, the Company had federal net operating loss carryforwards of $48,869 and state net operating loss carryforwards of $52,548. The Company’s federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2031 through December 31, 2038. The state net operating loss carryforwards will expire in the tax years commencing in December 31, 2025.

The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of September 30, 2022, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that

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it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a valuation allowance in the amount of $65,900 against these deferred tax assets.

The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2018 to 2021.

NOTE 14 — EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Remeasurements to the carrying value of the redeemable noncontrolling interests in equity of subsidiaries are not deemed to be a dividend (see Note 2(p)). According to ASC 480 - Distinguishing Liabilities from Equity, there is no impact on earnings per share in the computation of basic and diluted earnings per share to common shareholders for changes in the carrying value of the redeemable noncontrolling interests in equity, when such changes in carrying value which in substance approximates fair value.

Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,721,132 and 1,069,184 for the three months ended September 30, 2022 and 2021, respectively, and 1,609,425 and 911,302 for the nine months ended September 30, 2022 and 2021, respectively, because to do so would have been anti-dilutive.

Basic and diluted earnings per share were calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) attributable to B. Riley Financial, Inc.	$	47,837	$	50,550	$	(102,384)	$	380,882
Preferred stock dividends	(2,002)		(1,929)		(6,006)		(5,467)
Net income (loss) applicable to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415
Weighted average common shares outstanding:
Basic	28,293,064		27,570,716		28,068,160		27,297,917
Effect of dilutive potential common shares:
Restricted stock units and warrants	1,675,353		1,223,350		—		1,428,575
Diluted	29,968,417		28,794,066		28,068,160		28,726,492
Basic income (loss) per common share	$	1.62	$	1.76	$	(3.86)	$	13.75
Diluted income (loss) per common share	$	1.53	$	1.69	$	(3.86)	$	13.07

NOTE 15 — COMMITMENTS AND CONTINGENCIES

(a) Legal Matters

The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some

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of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations.

(b) Babcock & Wilcox Commitments and Guarantees

On June 30, 2021, the Company agreed to guaranty (the “B. Riley Guaranty”) up to $110,000 of obligations that B&W may owe to providers of cash collateral pledged in connection with B&W’s debt financing. The B. Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of B&W’s obligations under a reimbursement agreement with respect to such cash collateral. B&W will pay the Company $935 per annum in connection with the B. Riley Guaranty. B&W has agreed to reimburse the Company to the extent the B. Riley Guaranty is called upon.

On August 10, 2020, the Company entered into a project specific indemnity rider to a general agreement of indemnity made by B&W in favor of one of its sureties. Pursuant to the indemnity rider, the Company agreed to indemnify the surety in connection with a default by B&W under the underlying indemnity agreement relating to a $29,970 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity rider, B&W paid the Company fees in the amount of $600 on August 26, 2020.

On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties. Pursuant to this indemnity agreement, the Company agreed to indemnify the surety in connection with a default by B&W under a €30,000 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity, B&W paid the Company fees in the amount of $1,694 on January 20, 2022.

(c) Other Commitments

In the normal course of business, the Company enters into commitments to its clients in connection with capital raising transactions, such as firm commitment underwritings, equity lines of credit, or other commitments to provide financing on specified terms and conditions. These commitments require the Company to purchase securities at a specified price or otherwise provide debt or equity financing on specified terms. Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated.

NOTE 16 — SHARE-BASED PAYMENTS

(a) Employee Stock Incentive Plans

The 2021 Stock Incentive Plan (the “2021 Plan”) replaced the Amended and Restated 2009 Stock Incentive Plan on May 27, 2021. Share-based compensation expense for restricted stock units under the Company’s 2021 Plan was $14,378 and $9,243 for the three months ended September 30, 2022 and 2021, respectively, and $45,397 and $23,035 for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022, in connection with employee stock incentive plans, the Company granted 559,168 restricted stock units with a grant date fair value of $31,859 and 65,000 performance based restricted stock units with a grant date fair value of $2,329. During the nine months ended September 30, 2021, in connection with employee stock incentive plans, the Company granted 423,660 restricted stock units with a grant date fair value of $29,439 and 1,100,000 performance based restricted stock units with a grant date fair value of $40,876. The restricted stock units generally vest over a period of one to five years based on continued service. Performance based restricted stock units generally vest based on both the employee’s continued service and the achievement of a set threshold of the Company’s common stock price, as defined in the grant, during the two to three-year period following the grant. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company’s anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period.

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(b) Employee Stock Purchase Plan

In connection with the Company’s Employee Stock Purchase Plan ("Purchase Plan"), share based compensation was $120 and $132 during the three months ended September 30, 2022 and 2021, respectively, and $316 and $474 during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, there were 398,442 and 450,717 shares reserved for issuance under the Purchase Plan, respectively.

(c) Common Stock

Since October 30, 2018, the Company’s Board of Directors has authorized annual share repurchase programs of up to $50,000 of its outstanding common shares. All share repurchases were effected on the open market at prevailing market prices or in privately negotiated transactions. During the nine months ended September 30, 2022 and 2021, the Company repurchased 571 shares of its common stock for $27 and 44,650 shares of its common stock for $2,656, respectively. The shares repurchased under the program are retired. On October 31, 2022, the share repurchase program was reauthorized by the Board of Directors for share repurchases up to $50,000 of its outstanding common shares and expires in October 2023.

(d) Preferred Stock

During the nine months ended September 30, 2022 and 2021, the Company issued 19,659 and 207,599 depository shares of the Series A Preferred Stock, respectively. There were 2,834,144 and 2,814,485 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. Total liquidation preference for the Series A Preferred Stock as of September 30, 2022 and December 31, 2021, was $70,854 and $70,362, respectively. Dividends on the Series A preferred paid during the nine months ended September 30, 2022 and 2021, were $0.4296875 per depository share.

During the nine months ended September 30, 2022 and 2021, the Company issued 3,941 and 307,148 depository shares of the Series B Preferred Stock. There were 1,701,075 and 1,697,134 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. Total liquidation preference for the Series B Preferred Stock as of September 30, 2022 and December 31, 2021, was $42,527 and $42,428, respectively. Dividends on the Series B preferred paid during the nine months ended September 30, 2022 and 2021, were $0.4609375 per depository share.

NOTE 17 — NET CAPITAL REQUIREMENTS

B. Riley Securities (“BRS”) and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. As of September 30, 2022, BRS had net capital of $153,244, which was $146,718 in excess of required minimum net capital of $6,526, and BRWM had net capital of $14,915, which was $12,415 in excess of required minimum net capital of $2,500.

As of December 31, 2021, BRS had net capital of $277,611, which was $265,093 in excess of its required minimum net capital of $12,518, and BRWM had net capital of $13,833, which was $12,819 in excess of its required minimum net capital of $1,014.

NOTE 18 — RELATED PARTY TRANSACTIONS

The Company provides asset management and placement agent services to unconsolidated funds affiliated with the Company (the “Funds”). In connection with these services, the Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Funds.

As of September 30, 2022, amounts due from related parties of $814 were from the Funds for management fees and other operating expenses. As of December 31, 2021, amounts due from related parties of $2,306 included $621 from the Funds for management fees and other operating expenses, and $1,635 due from CA Global Partners (“CA Global”) for operating expenses related to wholesale and industrial liquidation engagements managed by CA Global on behalf of GA Global Partners.

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No interest expense was recorded related to loan participations sold to BRC Partners Opportunity Fund, LP (“BRCPOF”), a private equity fund managed by one of the Company's subsidiaries, during the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded interest expense of $46 and $525 related to loan participations sold to BRCPOF, respectively. No commission income was recorded from introducing trades on behalf of BRCPOF during the three and nine months ended September 30, 2022, respectively. The Company recorded commission income of $131 and $553 from introducing trades on behalf of BRCPOF during the three and nine months ended September 30, 2021, respectively. Our executive officers and members of our board of directors have a 46.8% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 27.8% in BRCPOF as of September 30, 2022.

In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P. (“Whitehawk”), a limited partnership controlled by Mr. J. Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer. Whitehawk has agreed to provide investment advisory services for two of the funds, GACP I, L.P. and GACP II, L.P. During the three months ended September 30, 2022 and 2021, management fees paid for investment advisory services by Whitehawk was zero and $142, respectively, and during the nine months ended September 30, 2022 and 2021 management fees paid was $1,173 and $1,588, respectively.

The Company periodically participates in loans and financing arrangements for which the Company has an equity ownership and representation on the board of directors (or similar governing body). The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions can be summarized as follows:

Babcock and Wilcox

During the three months ended September 30, 2022 and 2021, the Company earned $65 and $401, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities. During the nine months ended September 30, 2022 and 2021, the Company earned $129 and $12,749, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities.

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. The agreement was extended through December 31, 2023. 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 bonus or bonuses may also be earned and payable to the Company. In March 2022, a $1,000 performance fee was approved in accordance with the Executive Consulting Agreement.

The Company is also a party to indemnification agreements for the benefit of B&W, and the B. Riley Guaranty, each as disclosed above in Note 15 – Commitments and Contingencies.

The Arena Group Holdings, Inc. (fka the Maven, Inc.)

The Company has loans receivable due from The Arena Group Holdings, Inc. (fka the Maven, Inc.) ("Arena") included in loans receivable, at fair value with a fair value of $68,575 and $69,835 as of September 30, 2022 and December 31, 2021, respectively. Interest on these loans is payable at 10% per annum with maturity dates through December 2023. During the three and nine months ended September 30, 2022, the Company earned zero and $2,023, respectively, in underwriting and financial advisory and other fees from Arena in connection with Arena's capital raising activities.

California Natural Resources Group, LLC

On November 1, 2021, the Company extended a $34,393 bridge promissory note bearing interest at up to 10.0% per annum to California Natural Resources Group, LLC (“CalNRG”). On January 3, 2022, CalNRG repaid the promissory note using proceeds from a new credit facility with a third party bank (the “CalNRG Credit Facility”). The Company has guaranteed CalNRG’s obligations, up to $10,375, under the CalNRG Credit Facility.

Faze Clan

On March 9, 2022, the Company loaned $10,000 to Faze Clan, Inc. (“Faze”) pursuant to a bridge credit agreement (the “Bridge Agreement”). On April 25, 2022, the Company loaned an additional $10,000 pursuant to the Bridge Agreement.

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All principal and accrued interest pursuant to the Bridge Agreement was repaid upon closing of Faze’s business combination (the “Business Combination”) with BRPM 150, which following the Business Combination changed its name to Faze Holdings. As a result of the Business Combination, BRPM 150 is no longer a VIE of the Company. On July 19, 2022, in connection with the Business Combination, the Company purchased 5,342,500 shares of Faze Holdings Class A common stock for $10.00 per share. During the three months ended September 30, 2022, the Company earned $41,885 of incentive fees for the de-consolidation of BRPM 150 and $9,632 of underwriting and financial advisory fees from Faze and BRPM 150 in connection with the Business Combination and capital raising activities.

Targus

On October 18, 2022, a subsidiary of the Company acquired all of the issued and outstanding shares of Targus Cayman Holdco Limited (“Targus”) in a transaction with an enterprise value of approximately $250,000, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Targus, the sellers identified therein, and the other parties thereto. The purchase price consisted of a combination of cash, 6.75% senior notes due 2024, shares of common stock of the Company, and seller financing (the “Targus Transaction”). Mikel Williams, the chief executive officer of Targus and formerly a member of the Company’s board of directors, resigned from the Company’s board upon the closing of the Targus Transaction. Mr. Williams continues to serve as the chief executive officer of Targus.

Other

As of September 30, 2022 and December 31, 2021, the Company had loans receivable due from other related parties in the amount of zero and $4,201, respectively.

The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. Other than the fees described above, during the three months ended September 30, 2022 and 2021, the Company earned $35 and $20,868, respectively, of fees related to these services and during the nine months ended September 30, 2022 and 2021, the Company earned $4,071 and $25,059, respectively, of fees related to these services.

NOTE 19 — BUSINESS SEGMENTS

The Company’s business is classified into the Capital Markets segment, Wealth Management segment, Auction and Liquidation segment, Financial Consulting segment, Principal Investments — Communications and Other segment, and Brands segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. In 2022, the segment results in the Capital Markets segment include the operations of FocalPoint and the segment results in the Principal Investments – Communications and Other segment include the operations from Lingo and BullsEye (as previously discussed in Note 1) in each case from the date of acquisition.

The following is a summary of certain financial data for each of the Company’s reportable segments:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Capital Markets segment:
Revenues - Services and fees	$	113,217	$	134,849	$	249,727	$	431,825
Trading income (loss) and fair value adjustments on loans	11,127		16,935		(283,240)		311,335
Interest income - Loans and securities lending	55,054		26,869		178,879		89,280
Total revenues	179,398		178,653		145,366		832,440
Selling, general and administrative expenses	(35,673)		(80,152)		(115,655)		(231,765)
Interest expense - Securities lending and loan participations sold	(17,447)		(10,097)		(43,757)		(40,269)
Depreciation and amortization	(2,174)		(514)		(6,271)		(1,526)
Segment income (loss)	124,104		87,890		(20,317)		558,880
Wealth Management segment:
Revenues - Services and fees	47,145		117,572		184,963		270,558

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Trading income and fair value adjustments on loans	1,027	1,262	3,077	6,483
Total revenues	48,172	118,834	188,040	277,041
Selling, general and administrative expenses	(52,302)	(110,157)	(206,438)	(260,331)
Restructuring charge	(4,106)	—	(4,106)	—
Depreciation and amortization	(1,261)	(2,093)	(4,402)	(6,832)
Segment (loss) income	(9,497)	6,584	(26,906)	9,878
Auction and Liquidation segment:
Revenues - Services and fees	1,949	2,745	7,792	15,637
Revenues - Sale of goods	2,550	34,327	2,550	52,162
Interest income - Loans and securities lending	2,540	—	3,976	—
Total revenues	7,039	37,072	14,318	67,799
Direct cost of services	(2,999)	(13,622)	(6,630)	(27,742)
Cost of goods sold	(1,235)	(11,999)	(1,235)	(19,578)
Selling, general and administrative expenses	(2,228)	(5,153)	(6,225)	(9,719)
Segment income	577	6,298	228	10,760
Financial Consulting segment:
Revenues - Services and fees	22,835	21,291	73,081	66,435
Selling, general and administrative expenses	(20,056)	(18,436)	(60,947)	(55,896)
Depreciation and amortization	(75)	(86)	(234)	(273)
Segment income	2,704	2,769	11,900	10,266
Principal Investments - Communications and Other segment:
Revenues - Services and fees	76,316	18,669	147,748	57,394
Revenues - Sale of goods	1,580	631	5,345	2,081
Total revenues	77,896	19,300	153,093	59,475
Direct cost of services	(41,524)	(4,397)	(67,329)	(13,693)
Cost of goods sold	(1,854)	(443)	(6,099)	(1,816)
Selling, general and administrative expenses	(22,267)	(5,458)	(44,103)	(15,096)
Restructuring charge	(3,910)	—	(3,910)	—
Depreciation and amortization	(6,435)	(2,496)	(13,255)	(7,558)
Segment income	1,906	6,506	18,397	21,312
Brands segment:
Revenues - Services and fees	5,023	6,372	14,754	15,261
Selling, general and administrative expenses	(845)	(972)	(2,419)	(2,338)
Depreciation and amortization	(579)	(714)	(1,745)	(2,143)
Segment income	3,599	4,686	10,590	10,780
Consolidated operating income (loss) from reportable segments	123,393	114,733	(6,108)	621,876
Corporate and other expenses	(19,832)	(17,987)	(44,368)	(42,007)
Interest income	686	70	1,253	175
Change in fair value of financial instruments and other	(574)	1,758	9,728	8,267
(Loss) income from equity investments	(91)	1,149	3,285	1,172
Interest expense	(34,587)	(25,372)	(96,787)	(66,014)
Income (loss) before income taxes	68,995	74,351	(132,997)	523,469

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(Provision for) benefit from income taxes	(16,350)		(22,693)		39,858		(140,113)
Net income (loss)	52,645		51,658		(93,139)		383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808		1,108		9,245		2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837		50,550		(102,384)		380,882
Preferred stock dividends	2,002		1,929		6,006		5,467
Net income (loss) available to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415

The following table presents revenues by geographical area:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Revenues - Services and fees:
North America	$	261,600	$	300,340	$	667,969	$	854,429
Europe	4,885		1,157		10,096		2,680
Total Revenues - Services and fees	266,485		301,497		$	678,065	$	857,109
Trading income (losses) and fair value adjustments on loans
North America	12,154		18,197		$	(280,163)	$	317,818
Revenues - Sale of goods
North America	4,130		631		$	7,895	$	8,169
Europe	—		34,328		—		46,075
Total Revenues - Sale of goods	4,130		34,959		$	7,895	$	54,244
Revenues - Interest income - Loans and securities lending:
North America	57,594		26,869		$	182,855	$	89,280
Total Revenues:
North America	335,478		346,037		$	578,556	$	1,269,696
Europe	4,885		35,485		10,096		48,755
Total Revenues	$	340,363	$	381,522	$	588,652	$	1,318,451

As of September 30, 2022 and December 31, 2021, long-lived assets, which consist of property and equipment and other assets, of $16,174 and $12,870, respectively, were located in North America.

Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “seek,” “likely,” “potential” or “continue,” the negative of such terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Moreover, neither we, nor any other person, assume responsibility for the accuracy and completeness of the forward-looking statements. We are under no obligation to update any of the forward-looking statements after the filing of this Quarterly Report to conform such statements to actual results or to changes in our expectations.

The following discussion of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes and other financial information appearing elsewhere in this Quarterly Report. Readers are also urged to carefully review and consider the various disclosures made by us which attempt to advise interested parties of the factors which affect our business, including without limitation the disclosures made in Item 1A of Part II of this Quarterly Report under the caption “Risk Factors.”

Risk factors that could cause actual results to differ from those contained in the forward-looking statements include but are not limited to risks related to: volatility in our revenues and results of operations; changing conditions in the financial markets; our ability to generate sufficient revenues to achieve and maintain profitability; our exposure to credit risk; the short term nature of our engagements; the accuracy of our estimates and valuations of inventory or assets in “guarantee” based engagements; competition in the asset management business; potential losses related to our auction or liquidation engagements; our dependence on communications, information and other systems and third parties; potential losses related to purchase transactions in our auction and liquidations business; the potential loss of financial institution clients; potential losses from or illiquidity of our proprietary investments; changing economic and market conditions, including increasing inflation and actions by the Federal Reserve to address inflation and the possibility of recession; the continuing effects of the COVID-19 pandemic, or other pandemics or severe public health crises, and other related impacts including supply chain disruptions, labor shortages and increased labor costs; potential liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation; potential mark-downs in inventory in connection with purchase transactions; failure to successfully compete in any of our segments; loss of key personnel; our ability to borrow under our credit facilities or at-the-market offering as necessary; failure to comply with the terms of our credit agreements or senior notes; our ability to meet future capital requirements; our ability to realize the benefits of our completed acquisitions, including our ability to achieve anticipated opportunities and cost savings, and accretion to reported earnings estimated to result from completed and proposed acquisitions in the time frame expected by management or at all; the diversion of management time on acquisition-related issues; the failure of our brand investment portfolio licensees to pay us royalties; the intense competition to which our brand investment portfolio is subject; and the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine. 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 otherwise required by the context, references in this Quarterly 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.

Overview

General

B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) is a diversified financial services platform and opportunistically invests in companies or assets with attractive risk-adjusted return profiles to benefit its shareholders. Through its affiliated subsidiaries, B. Riley provides a full suite of investment banking, corporate finance research, sales, and trading, as well as advisory, valuation, and wealth management, services. The Company’s major business lines include:

•B. Riley Securities, a leading, full service investment bank that provides corporate finance, lending, research, securities lending and sales and trading services to corporate, institutional, and high net worth individual clients. It

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is nationally recognized for its proprietary small and mid-cap equity research. B. Riley Securities was established from the merger of B. Riley & Co, LLC and FBR Capital Markets & Co. in 2017.

•B. Riley Wealth Management, which provides comprehensive wealth management and brokerage services to individuals and families, corporations and non-profit organizations, including qualified retirement plans, trusts, foundations, and endowments. The firm was formerly known as Wunderlich Securities, Inc., which the Company acquired in July 2017.

•National Holdings Corporation (“National”), which provides wealth management, brokerage, insurance brokerage, tax preparation and advisory services, was acquired in February 2021.

•B. Riley Capital Management, which is a Securities and Exchange Commission (“SEC”) registered investment advisor, that includes B. Riley Asset Management, an advisor to and/or manager of certain private funds.

•B. Riley Advisory Services, which provides expert witness, bankruptcy, financial advisory, forensic accounting, valuation and appraisal, and operations management services to companies, financial institutions, and the legal community. B. Riley Advisory Services is primarily comprised of the bankruptcy and restructuring, forensic accounting, litigation support, and appraisal and valuation practices.

•B. Riley Retail Solutions, which is a leading provider of asset disposition, liquidation, and auction solutions to a wide range of retail and industrial clients.

•B. Riley Real Estate, which advises companies, financial institutions, investors, family offices and individuals on real estate projects worldwide. A core focus of B. Riley Real Estate, LLC is the restructuring of lease obligations in both distressed and non-distressed situations, both inside and outside of the bankruptcy process, on behalf of corporate tenants.

•B. Riley Principal Investments, which identifies attractive investment opportunities and seeks to control or influence the operations of our portfolio company investments to deliver financial and operational improvements that will maximize the Company’s free cash flow, and therefore, shareholder returns. The team concentrates on opportunities presented by distressed companies or divisions that exhibit challenging market dynamics. Representative transactions include recapitalization, direct equity investment, debt investment, active minority investment and buyouts.

•Communications and other primarily consist of United Online, Inc. (“UOL” or “United Online”), which was acquired in July 2016, magicJack VocalTec Ltd. (“magicJack”), which was acquired in November 2018, Lingo Management, LLC (“Lingo”) in which the Company increased its ownership interest from 40% to 80% in May 2022, a mobile virtual network operator business (“Marconi Wireless”), which was acquired in October 2021, and BullsEye Telecom (“BullsEye”), which was acquired in August 2022. The following briefly describes each such business:

◦UOL is a communications company that offers consumer subscription services and products, consisting of Internet access services and devices under the NetZero and Juno brands.

◦magicJack is a Voice over IP (“VoIP”) cloud-based technology and services and wireless mobile communications provider.

◦Lingo is a global cloud/unified communications and managed service provider.

◦Marconi Wireless is a mobile virtual network operator business that provides mobile phone voice, text, and data services and devices.

◦BullsEye is a single source communications and cloud technology provider.

•BR Brand Holding (“BR Brands”), in which the Company owns a majority interest, provides licensing of certain brand trademarks. BR Brands owns the assets and intellectual property related to licenses of six brands: Catherine Malandrino, English Laundry, Joan Vass, Kensie Girl, Limited Too and Nanette Lepore as well as investments in the Hurley and Justice brands with Bluestar Alliance LLC (“Bluestar”), a brand management company.

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We are headquartered in Los Angeles with offices in major cities throughout the United States including New York, Chicago, Boston, Atlanta, Dallas, Memphis, Metro Washington D.C., West Palm Beach, and Boca Raton.

For financial reporting purposes we classify our businesses into six operating segments: (i) Capital Markets, (ii) Wealth Management, (iii) Auction and Liquidation, (iv) Financial Consulting, (v) Principal Investments – Communications and Other and (vi) Brands.

Capital Markets Segment. Our Capital Markets segment provides a full array of investment banking, corporate finance, financial advisory, research, securities lending and sales and trading services to corporate, institutional, and individual clients. Our corporate finance and investment banking services include merger and acquisitions as well as restructuring advisory services to public and private companies, initial and secondary public offerings, and institutional private placements. In addition, we trade equity securities as a principal for our account, including investments in funds managed by our subsidiaries. Our Capital Markets segment also includes our asset management businesses that manage various private and public funds for institutional and individual investors. This segment also includes the results of operations of FocalPoint Securities, LLC (“FocalPoint”) from the date of acquisition on January 19, 2022.

Wealth Management Segment. Our Wealth Management segment provides wealth management and tax services to corporate and high net worth clients. We offer comprehensive wealth management services for corporate businesses that include investment strategies, executive services, retirement plans, lending & liquidity resources, and settlement solutions. Our wealth management services for individual client services provide investment management, education planning, retirement planning, risk management, trust coordination, lending & liquidity solutions, legacy planning, and wealth transfer. In addition, we supply market insights to provide unbiased guidance to make important financial decisions. Wealth management resources include market views from our investment strategists and B. Riley Securities’ proprietary equity research.

Auction and Liquidation Segment. Our Auction and Liquidation segment utilizes our significant industry experience, a scalable network of independent contractors and industry-specific advisors to tailor our services to the specific needs of a multitude of clients, logistical challenges, and distressed circumstances. Our scale and pool of resources allow us to offer our services across North America as well as parts of Europe, Asia, and Australia. Our Auction and Liquidation segment operates through two main divisions, retail store liquidations and wholesale and industrial assets dispositions. Our wholesale and industrial assets dispositions division operates through limited liability companies that are controlled by us.

Financial Consulting Segment. Our Financial Consulting segment provides services to law firms, corporations, financial institutions, lenders, and private equity firms. These services primarily include bankruptcy, financial advisory, forensic accounting, litigation support, operations management consulting, real estate consulting, and valuation and appraisal services. Our Financial Consulting segment operates through limited liability companies that are wholly owned or majority owned by us.

Principal Investments - Communications and Other Segment. Our Principal Investments - Communications and Other segment consists of businesses which have been acquired primarily for attractive investment return characteristics. Currently, this segment includes, among other investments, UOL, through which we provide consumer Internet access, magicJack, through which we provide VoIP communication and related product and subscription services, and Marconi Wireless, through which we provide mobile phone services and devices. This segment also includes the results of operations of Lingo from the date of acquisition on May 31, 2022 and BullsEye from the date of acquisition on August 16, 2022.

Brands Segment. Our Brands segment consists of our brand investment portfolio that is focused on generating revenue through the licensing of trademarks and is held by BR Brands.

Recent Developments

On October 18, 2022, a subsidiary of ours acquired all of the issued and outstanding shares of Targus Cayman Holdco Limited (“Targus”) in a transaction with an enterprise value of approximately $250.0 million, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Targus, the sellers identified therein, and the other parties thereto. The purchase price consisted of a combination of cash, 6.75% senior notes due 2024, shares of our common stock, and seller financing (the “Targus Transaction”). Mikel Williams, the chief executive officer of Targus and formerly a member

48

of our board of directors, resigned from our board upon the closing of the Targus Transaction. Mr. Williams continues to serve as the chief executive officer of Targus.

On September 23, 2022, our subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company, entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders for a five-year $148.2 million term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable.

On August 25, 2022, certain of our subsidiaries acquired the assets of Atlantic Coast Fibers, LLC (and related businesses), which provides residential and commercial recycling services in the New York City metropolitan area. The purchase price consideration totaled $27.5 million, which consisted of $14.5 million in cash, $1.6 million in assumed debt, and $11.4 million in contingent consideration payable over approximately the next two years. In accordance with Accounting Standards Codification (“ASC”) 805, we used the acquisition method of accounting for this acquisition. Goodwill of $3.9 million and other intangible assets of $13.1 million were recorded as a result of the acquisition.

On August 16, 2022, our majority-owned subsidiary, Lingo, acquired BullsEye, a single source communications and cloud technology provider. The purchase price consideration totaled $64.9 million, which Lingo partially funded using a $52.5 million term loan. In accordance with ASC 805, we used the acquisition method of accounting for this acquisition. Goodwill of $29.3 million and other intangible assets of $28.7 million were recorded as a result of the acquisition. The acquisition is expected to bring revenue from multi-location enterprise business customers to Lingo, improving scale and flexibility in our Principal Investments - Communications and Other segment.

On August 16, 2022, Lingo entered into a credit agreement (the “Lingo Credit Agreement”) by and among Lingo, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45.0 million term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank for an incremental term loan of $7.5 million, increasing the principal balance of the term loan to $52.5 million.

On May 31, 2022, our ownership interest in Lingo increased from 40% to 80% as a result of the conversion of $17.5 million of existing debt owed by Lingo to equity. As a result of the consolidation of Lingo, the pre-existing equity investment was remeasured at fair value resulting in the recognition of a gain of $6.8 million, which is included in trading (losses) income and fair value adjustments on loans in the condensed consolidated statement of operations. In accordance with ASC 805, we used the acquisition method of accounting. The total fair value of the assets of Lingo was $115.5 million and the fair value of the 20% noncontrolling interest was $8.0 million at May 31, 2022. Goodwill of $33.6 million and other intangible assets of $63.0 million were recorded as a result of the acquisition. The acquisition is expected to expand the services offered in our Principal Investments - Communications and Other segment.

On January 19, 2022, we acquired FocalPoint, an independent investment bank headquartered in Los Angeles, California. The purchase price consideration totaled $124.5 million, which consisted of $64.2 million in cash, $20.3 million in issuance of our common stock, and $39.9 million in deferred cash and contingent consideration payable over the next three years. We used the acquisition method of accounting for this acquisition. Goodwill of $110.5 million and other intangible assets of $10.8 million that was recorded as a result of the acquisition will be deductible for tax purposes. The acquisition is expected to expand B. Riley Securities’ mergers and acquisitions (“M&A”) advisory business and enhance its debt capital markets and financial restructuring capabilities.

Our diversified financial platform is affected by a variety of factors including the continuing impact of the COVID-19 pandemic, higher inflation, the actions by the Federal Reserve to address inflation, the possibility of recession, Russia's invasion of Ukraine, and rising energy prices. These factors create uncertainty about the future economic environment which will continue to evolve and may impact our business in future periods. These developments and the impact on the financial markets and the overall economy continue to be highly uncertain and cannot be predicted. If the financial markets and/or the overall economy continue to be impacted, our results of operations, financial position, and cash flows may be materially adversely affected.

49

Results of Operations

The following period to period comparisons of our financial results and our interim results are not necessarily indicative of future results.

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

Condensed Consolidated Statements of Operations

(Dollars in thousands)

	Three Months Ended September 30,				Change
	2022		2021		Amount		%
Revenues:
Services and fees	$	266,485	$	301,497	$	(35,012)	(11.6)	%
Trading income and fair value adjustments on loans	12,154		18,197		(6,043)		(33.2)	%
Interest income - Loans and securities lending	57,594		26,869		30,725		114.4	%
Sale of goods	4,130		34,959		(30,829)		(88.2)	%
Total revenues	340,363		381,522		(41,159)		(10.8)	%
Operating expenses:
Direct cost of services	44,523		18,019		26,504		147.1	%
Cost of goods sold	3,089		12,442		(9,353)		(75.2)	%
Selling, general and administrative expenses	163,727		244,218		(80,491)		(33.0)	%
Restructuring charge	8,016		—		8,016		100.0	%
Interest expense - Securities lending and loan participations sold	17,447		10,097		7,350		72.8	%
Total operating expenses	236,802		284,776		(47,974)		(16.8)	%
Operating income	103,561		96,746		6,815		7.0	%
Other income (expense):
Interest income	686		70		616		n/m
Change in fair value of financial instruments and other	(574)		1,758		(2,332)		(132.7)	%
(Loss) income from equity investments	(91)		1,149		(1,240)		(107.9)	%
Interest expense	(34,587)		(25,372)		(9,215)		36.3	%
Income before income taxes	68,995		74,351		(5,356)		(7.2)	%
Provision for income taxes	(16,350)		(22,693)		6,343		(28.0)	%
Net income	52,645		51,658		987		1.9	%
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808		1,108		3,700		n/m
Net income attributable to B. Riley Financial, Inc.	47,837		50,550		(2,713)		(5.4)	%
Preferred stock dividends	2,002		1,929		73		3.8	%
Net income available to common shareholders	$	45,835	$	48,621	$	(2,786)	(5.7)	%
n/m - Not applicable or not meaningful.

50

Revenues

The table below and the discussion that follows are based on how we analyze our business.

	Three Months Ended September 30,				Change
	2022		2021		Amount		%
Revenues - Services and fees:
Capital Markets segment	$	113,217	$	134,849	$	(21,632)	(16.0)	%
Wealth Management segment	47,145		117,572		(70,427)		(59.9)	%
Auction and Liquidation segment	1,949		2,745		(796)		(29.0)	%
Financial Consulting segment	22,835		21,291		1,544		7.3	%
Principal Investments - Communications and Other segment	76,316		18,669		57,647		n/m
Brands segment	5,023		6,372		(1,349)		(21.2)	%
Subtotal	266,485		301,498		(35,013)		(11.6)	%
Revenues - Sale of goods:
Auction and Liquidation segment	2,550		34,327		(31,777)		(92.6)	%
Principal Investments - Communications and Other segment	1,580		631		949		150.4	%
Subtotal	4,130		34,958		(30,828)		(88.2)	%
Trading income and fair value adjustments on loans
Capital Markets segment	11,127		16,935		(5,808)		(34.3)	%
Wealth Management segment	1,027		1,262		(235)		(18.6)	%
Subtotal	12,154		18,197		(6,043)		(33.2)	%
Interest income - Loans and securities lending:
Capital Markets segment	55,054		26,869		28,185		104.9	%
Auction and Liquidation segment	2,540		—		2,540		100.0	%
Subtotal	57,594		$	26,869	30,725		114.4	%
Total revenues	$	340,363	$	381,522	$	(41,159)	(10.8)	%

_______________________________________________

n/m - Not applicable or not meaningful.

Total revenues decreased approximately $41.2 million to $340.4 million during the three months ended September 30, 2022 from $381.5 million during the three months ended September 30, 2021. The decrease in revenues during the three months ended September 30, 2022 was primarily due to decreases in services and fees of $35.0 million, sale of goods of $30.8 million and the fair value of the portfolio of securities and other investments owned and fair value adjustments on loans of $6.0 million, which is included in trading (losses) income and fair value adjustments on loans above, partially offset by an increase in interest income from loans and securities lending of $30.7 million. The decrease in the fair value of the portfolio of securities and other investments owned as of September 30, 2022 was primarily due to the decrease in overall values in the stock market. The decrease in revenue from services and fees in the three months ended September 30, 2022 consisted of decreases in revenue of $70.4 million in the Wealth Management segment, $21.6 million in the Capital Markets segment, $1.3 million in the Brands segment, and $0.8 million in the Auction and Liquidation segment, partially offset by increases in revenues of $57.6 million in the Principal Investments — Communications and Other segment and $1.5 million in the Financial Consulting segment.

51

Revenues from services and fees in the Capital Markets segment decreased $21.6 million to $113.2 million during the three months ended September 30, 2022 from $134.8 million during the three months ended September 30, 2021. The decrease in revenues was primarily due to decreases of $74.7 million from corporate finance, consulting, and investment banking fees, partially offset by increases of $41.9 million in incentive fees, $6.2 million in dividends, $2.6 million in asset management fees, and $2.4 million in interest income.

Revenues from services and fees in the Wealth Management segment decreased $70.4 million to $47.1 million during the three months ended September 30, 2022 from $117.6 million during the three months ended September 30, 2021. The decrease in revenues was primarily due to decreases in revenue of $42.3 million in wealth and asset management fees, $26.7 million in commission fees, and $1.5 million in other income.

Revenues from services and fees in the Auction and Liquidation segment decreased $0.8 million to $1.9 million during the three months ended September 30, 2022 from $2.7 million during the three months ended September 30, 2021. The decrease in revenues was primarily due to fewer large retail fee liquidation engagements.

Revenues from services and fees in the Financial Consulting segment increased $1.5 million to $22.8 million during the three months ended September 30, 2022 from $21.3 million during three months ended September 30, 2021. The increase in revenues was primarily due to an increase of $1.4 million within our Advisory Services division.

Revenues from services and fees in the Principal Investments - Communications and Other segment increased $57.6 million to $76.3 million during the three months ended September 30, 2022 from $18.7 million during the three months ended September 30, 2021. The increase in revenues was primarily due to increases in subscription services of $27.8 million from the acquisition of an additional equity interest in Lingo in the second quarter of 2022, $15.3 million from the acquisition of BullsEye in the third quarter of 2022, $12.3 million from the acquisition of Marconi in the fourth quarter of 2021, and $3.3 million from another acquisition in the third quarter of 2022. We expect the UOL and magicJack subscription revenues to continue to decline year over year.

Revenues from services and fees in the Brands segment decreased $1.3 million to $5.0 million during the three months ended September 30, 2022 from $6.4 million during the three months ended September 30, 2021. The primary source of revenue included in this segment is the licensing of trademarks.

Trading income and fair value adjustments on loans decreased $6.0 million to $12.2 million during the three months ended September 30, 2022 compared to $18.2 million during the three months ended September 30, 2021. This decrease was primarily due to a decrease of $5.8 million in the Capital Markets segment and a decrease of $0.2 million in the Wealth Management segment. The income of $12.2 million during the three months ended September 30, 2022 was primarily due to realized and unrealized gains on investments made in our proprietary trading accounts of $31.3 million, partially offset by an unrealized loss on our loans receivable, at fair value of $19.2 million.

Interest income – loans and securities lending increased $30.7 million to $57.6 million during the three months ended September 30, 2022 from $26.9 million during the three months ended September 30, 2021. Interest income from securities lending was $21.9 million and $13.0 million during the three months ended September 30, 2022 and 2021, respectively. Interest income from loans was $35.7 million and $13.9 million during the three months ended September 30, 2022 and 2021, respectively.

Revenues – Sale of Goods

Revenues from the sale of goods decreased $30.8 million to $4.1 million during the three months ended September 30, 2022 from $35.0 million during three months ended September 30, 2021. Revenues from sale of goods were attributable to a decrease of $31.8 million from sales of retail goods related to retail liquidation engagements in Europe that ended, partially offset by an increase of $1.1 million from sales of retail goods due to the acquisition of Marconi Wireless in the fourth quarter of 2021. Cost of goods sold for three months ended September 30, 2022 was $3.1 million, resulting in a gross margin of 25.2%.

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Operating Expenses

Direct Cost of Services

Direct cost of services increased $26.5 million to $44.5 million during the three months ended September 30, 2022 from $18.0 million during the three months ended September 30, 2021. The activity is primarily driven by an increase of $37.1 million from the Principal Investments — Communications and Other segment, partially offset by a decrease of $10.6 million from the Auction and Liquidation segment. The increase in the Principal Investments — Communications and Other segment was primarily due to increases of $20.2 million from the acquisition of Lingo in the second quarter of 2022, $9.7 million from the acquisition of BullsEye in the third quarter of 2022, $4.8 million from the acquisition Marconi Wireless in the fourth quarter of 2021, and $3.0 million from an other acquisition in the third quarter of 2022. The decrease in the Auction and Liquidation segment was primarily due to retail liquidation engagements in Europe that ended.

Selling, General and Administrative Expenses

Selling, general and administrative expenses during the three months ended September 30, 2022 and 2021 were comprised of the following:

	Three Months Ended September 30, 2022				Three Months Ended September 30, 2021				Change
	Amount		%		Amount		%		Amount		%
Capital Markets segment	$	37,847	23.1	%	$	80,666	32.9	%	$	(42,819)	(53.1)	%
Wealth Management segment	53,563		32.7	%	112,250		46.0	%	(58,687)		(52.3)	%
Auction and Liquidation segment	2,228		1.4	%	5,153		2.1	%	(2,925)		(56.8)	%
Financial Consulting segment	20,131		12.3	%	18,522		7.6	%	1,609		8.7	%
Principal Investments -Communications and Other segment	28,702		17.5	%	7,954		3.3	%	20,748		n/m
Brands segment	1,424		0.9	%	1,686		0.7	%	(262)		(15.5)	%
Corporate and Other segment	19,832		12.1	%	17,987		7.4	%	1,845		10.3	%
Total selling, general & administrative expenses	$	163,727	100.0	%	$	244,218	100.0	%	$	(80,491)	(33.0)	%

____________________________________

n/m - Not applicable or not meaningful.

Total selling, general and administrative expenses decreased approximately $80.5 million to $163.7 million during the three months ended September 30, 2022 from $244.2 million during the three months ended September 30, 2021. The decrease was primarily due to decreases of $58.7 million in the Wealth Management segment, $42.8 million in the Capital Markets segment, and $2.9 million in the Auction and Liquidation segment, partially offset by increases of $20.7 million in the Principal Investments — Communications and Other segment, $1.8 million in the Corporate and Other segment, and $1.6 million in the Financial Consulting segment.

Capital Markets

Selling, general and administrative expenses in the Capital Markets segment decreased by $42.8 million to $37.8 million during the three months ended September 30, 2022 from $80.7 million during the three months ended September 30, 2021. The decrease was primarily due to decreases of $21.5 million in consulting expenses and $20.1 million in payroll and related expenses.

Wealth Management

Selling, general and administrative expenses in the Wealth Management segment decreased by $58.7 million to $53.6 million during the three months ended September 30, 2022 from $112.3 million during the three months ended September 30, 2021. The decrease was primarily due to a decrease of $58.3 million in payroll and related expenses.

53

Auction and Liquidation

Selling, general and administrative expenses in the Auction and Liquidation segment decreased $2.9 million to $2.2 million during the three months ended September 30, 2022 from $5.2 million during the three months ended September 30, 2021. The decrease was primarily due to decreases of $2.6 million in business development expenses and $0.2 million in payroll and related expenses.

Financial Consulting

Selling, general and administrative expenses in the Financial Consulting segment increased by $1.6 million to $20.1 million during the three months ended September 30, 2022 from $18.5 million during the three months ended September 30, 2021. The increase was primarily due to increases of $1.3 million in payroll and related expenses and $0.3 million in travel and entertainment expenses.

Principal Investments — Communications and Other

Selling, general and administrative expenses in the Principal Investments — Communications and Other segment increased $20.7 million to $28.7 million for the three months ended September 30, 2022 from $8.0 million for the three months ended September 30, 2021. The increase was primarily due to increases of $12.4 million from the acquisition of additional equity interest in Lingo in the second quarter of 2022, $5.0 million from the acquisition of BullsEye in the third quarter of 2022, and $3.5 million from the acquisition of Marconi in the fourth quarter of 2021.

Brands

Selling, general and administrative expenses in the Brands segment decreased $0.3 million to $1.4 million during the three months ended September 30, 2022 from $1.7 million during the three months ended September 30, 2021.

Corporate and Other

Selling, general and administrative expenses for the Corporate and Other segment increased approximately $1.8 million to $19.8 million during the three months ended September 30, 2022 from $18.0 million during the three months ended September 30, 2021. The increase was primarily due to an increase of $1.6 million in payroll and related expenses.

Other Income (Expense). Other income included interest income of $0.7 million and $0.1 million during the three months ended September 30, 2022 and 2021, respectively. Change in fair value of financial instruments and other in the amount of $0.6 million during the three months ended September 30, 2022 was primarily due to the change in fair value of warrant liabilities. Interest expense was $34.6 million during the three months ended September 30, 2022 compared to $25.4 million during the three months ended September 30, 2021. The increase in interest expense was primarily due to increases in interest expense of $3.5 million from the issuance of senior notes, $3.0 million from the Nomura term loan, $0.9 million from the Nomura revolving credit facility, and a total of $0.8 million from the Pathlight and Lingo term loans entered into during the third quarter of 2022. During the three months ended September 30, 2022, loss from equity investments was $0.1 million compared to income of $1.1 million during the three months ended September 30, 2021.

Income Before Income Taxes. Income before income taxes was $69.0 million during the three months ended September 30, 2022 compared to income of $74.4 million during the three months ended September 30, 2021. The increase was primarily due to a decrease in operating expenses of approximately $48.0 million and an increase in interest income of $0.6 million, partially offset by a decrease in revenue of $41.2 million, increase in interest expense of $9.2 million, decrease in change in fair value of financial instruments and other of $2.3 million, and an increase in loss from equity investments of $1.2 million.

Provision for Income Taxes. Provision for income taxes was $16.4 million during the three months ended September 30, 2022 compared to a provision of $22.7 million during the three months ended September 30, 2021. The effective income tax rate was 23.7% for the three months ended September 30, 2022 as compared to 30.5% for the three months ended September 30, 2021.

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests. Net income attributable to noncontrolling interests and redeemable noncontrolling interests represents the proportionate share of net income generated by membership interests of partnerships that we do not own. The net income attributable to

54

noncontrolling interests and redeemable noncontrolling interests was $4.8 million during the three months ended September 30, 2022 compared to $1.1 million during the three months ended September 30, 2021.

Net Income Attributable to the Company. Net income attributable to the Company was $47.8 million during the three months ended September 30, 2022 compared to $50.6 million during the three months ended September 30, 2021. The increase was primarily due to an increase in operating income of $6.8 million, a decrease in provision for income taxes of $6.3 million, and an increase in interest income of $0.6 million, partially offset by an increase in interest expense of $9.2 million, increase in net income attributable to noncontrolling interests and redeemable noncontrolling interests of $3.7 million, decrease in change in fair value of financial instruments and other of $2.3 million, and an increase in loss from equity investments of $1.2 million,

Preferred Stock Dividends. Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $25,000 liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears. On January 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Holders of Series B Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $25,000 liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends are payable quarterly in arrears. On January 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Net Income Available to Common Shareholders. Net income available to common shareholders was $45.8 million during the three months ended September 30, 2022 compared to $48.6 million during the three months ended September 30, 2021. The increase was primarily due to an increase in operating income of $6.8 million, a decrease in provision for income taxes of $6.3 million, and an increase in interest income of $0.6 million, partially offset by an increase in interest expense of $9.2 million, increase in net income attributable to noncontrolling interests and redeemable noncontrolling interests of $3.7 million, decrease in change in fair value of financial instruments and other of $2.3 million, and an increase in loss from equity investments of $1.2 million.

55

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

Condensed Consolidated Statements of Operations

(Dollars in thousands)

	Nine Months Ended September 30,				Change
	2022		2021		Amount		%
Revenues:
Services and fees	$	678,065	$	857,109	$	(179,044)	(20.9)	%
Trading (losses) income and fair value adjustments on loans	(280,163)		317,818		(597,981)		(188.2)	%
Interest income - Loans and securities lending	182,855		89,280		93,575		104.8	%
Sale of goods	7,895		54,244		(46,349)		(85.4)	%
Total revenues	588,652		1,318,451		(729,799)		(55.4)	%
Operating expenses:
Direct cost of services	73,959		41,435		32,524		78.5	%
Cost of goods sold	7,334		21,394		(14,060)		(65.7)	%
Selling, general and administrative expenses	506,062		635,484		(129,422)		(20.4)	%
Restructuring charge	8,016		—		8,016		100.0	%
Interest expense - Securities lending and loan participations sold	43,757		40,269		3,488		8.7	%
Total operating expenses	639,128		738,582		(99,454)		(13.5)	%
Operating (loss) income	(50,476)		579,869		(630,345)		(108.7)	%
Other income (expense):
Interest income	1,253		175		1,078		n/m
Change in fair value of financial instruments and other	9,728		8,267		1,461		17.7	%
Income from equity investments	3,285		1,172		2,113		180.3	%
Interest expense	(96,787)		(66,014)		(30,773)		46.6	%
(Loss) income before income taxes	(132,997)		523,469		(656,466)		(125.4)	%
Benefit from (provision for) income taxes	39,858		(140,113)		179,971		(128.4)	%
Net (loss) income	$	(93,139)	383,356		(476,495)		(124.3)	%
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	9,245		2,474		6,771		n/m
Net (loss) income attributable to B. Riley Financial, Inc.	$	(102,384)	$	380,882	$	(483,266)	(126.9)	%
Preferred stock dividends	6,006		5,467		539		9.9	%
Net (loss) income available to common shareholders	$	(108,390)	$	375,415	$	(483,805)	(128.9)	%
n/m - Not applicable or not meaningful.

56

Revenues

The table below and the discussion that follows are based on how we analyze our business.

	Nine Months Ended September 30,				Change
	2022		2021		Amount		%
Revenues - Services and fees:
Capital Markets segment	$	249,727	$	431,825	$	(182,098)	(42.2)	%
Wealth Management segment	184,963		270,558		(85,595)		(31.6)	%
Auction and Liquidation segment	7,792		15,637		(7,845)		(50.2)	%
Financial Consulting segment	73,081		66,435		6,646		10.0	%
Principal Investments - Communications and Other segment	147,748		57,394		90,354		157.4	%
Brands segment	14,754		15,261		(507)		(3.3)	%
Subtotal	678,065		857,110		(179,045)		(20.9)	%
Revenues - Sale of goods:
Auction and Liquidation segment	2,550		52,162		(49,612)		(95.1)	%
Principal Investments - Communications and Other segment	5,345		2,081		3,264		156.8	%
Subtotal	7,895		54,243		(46,348)		(85.4)	%
Trading (losses) income and fair value adjustments on loans
Capital Markets segment	(283,240)		311,335		(594,575)		(191.0)	%
Wealth Management segment	3,077		6,483		(3,406)		(52.5)	%
Subtotal	(280,163)		317,818		(597,981)		(188.2)	%
Interest income - Loans and securities lending:
Capital Markets segment	178,879		89,280		89,599		100.4	%
Auction and Liquidation segment	3,976		—		3,976		100.0	%
	182,855		89,280		93,575		104.8	%
Total revenues	$	588,652	$	1,318,451	$	(729,799)	(55.4)	%

_______________________________________________

n/m - Not applicable or not meaningful.

Total revenues decreased approximately $729.8 million to $588.7 million during the nine months ended September 30, 2022 from $1,318.5 million during the nine months ended September 30, 2021. The decrease in revenues during the nine months ended September 30, 2022 was primarily due to decreases in the fair value of the portfolio of securities and other investments owned and fair value adjustments on loans of $598.0 million, which is included in trading (losses) income and fair value adjustments on loans above, services and fees of $179.0 million, and sale of goods of $46.3 million, partially offset by an increase in interest income from loans and securities lending of $93.6 million. The decrease in the fair value of the portfolio of securities and other investments owned as of September 30, 2022 was primarily due to the decrease in overall values in the stock market. The decrease in revenue from services and fees in the nine months ended September 30, 2022 consisted of decreases in revenue of $182.1 million in the Capital Markets segment, $85.6 million in the Wealth Management segment, $7.8 million in the Auction and Liquidation segment, and $0.5 million in the Brands segment, partially offset by increases in revenues of $90.4 million in the Principal Investments — Communications and Other segment and $6.6 million in the Financial Consulting segment.

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Revenues from services and fees in the Capital Markets segment decreased $182.1 million to $249.7 million during the nine months ended September 30, 2022 from $431.8 million during the nine months ended September 30, 2021. The decrease in revenues was primarily due to decreases in revenue of $251.9 million from corporate finance, consulting, and investment banking fees, partially offset by increases of $41.9 million in incentive fees, $20.8 million in dividends, $4.4 million in interest income, and $2.6 million in asset management fees.

Revenues from services and fees in the Wealth Management segment decreased $85.6 million to $185.0 million during the nine months ended September 30, 2022 from $270.6 million during the nine months ended September 30, 2021. The decrease in revenues was primarily due to decreases of $42.3 million in wealth and asset management fees and $42.1 million in commission fees.

Revenues from services and fees in the Auction and Liquidation segment decreased $7.8 million to $7.8 million during the nine months ended September 30, 2022 from $15.6 million during the nine months ended September 30, 2021. The decrease in revenues was primarily due to fewer large retail fee liquidation engagements.

Revenues from services and fees in the Financial Consulting segment increased $6.6 million to $73.1 million during the nine months ended September 30, 2022 from $66.4 million during the nine months ended September 30, 2021. The increase in revenues was primarily due to increases of $3.5 million within our Real Estate division and $3.1 million within our Advisory Services division.

Revenues from services and fees in the Principal Investments - Communications and Other segment increased $90.4 million to $147.7 million during the nine months ended September 30, 2022 from $57.4 million during the nine months ended September 30, 2021. The increase in revenues was primarily due to an increase in subscription services of $38.4 million from the acquisition of an additional equity interest in Lingo in the second quarter of 2022, $37.1 million from the acquisition of Marconi Wireless in the fourth quarter of 2021, $15.3 million from the acquisition of BullsEye in the third quarter of 2022, and $5.4 million from other acquisitions in 2022, partially offset by a decrease of $5.8 million in subscription services for UOL and magicJack. We expect the UOL and magicJack subscription revenues to continue to decline year over year.

Revenues from services and fees in the Brands segment decreased $0.5 million to $14.8 million during the nine months ended September 30, 2022 from $15.3 million during the nine months ended September 30, 2021. The primary source of revenue included in this segment is the licensing of trademarks.

Trading (losses) income and fair value adjustments on loans decreased $598.0 million to a loss of $280.2 million during the nine months ended September 30, 2022 compared to income of $317.8 million during the nine months ended September 30, 2021. This decrease was primarily due to decreases of $594.6 million in the Capital Markets segment and $3.4 million in the Wealth Management segment. The loss of $280.2 million during the nine months ended September 30, 2022 was primarily due to realized and unrealized losses on investments made in our proprietary trading accounts of $267.8 million and unrealized loss on our loans receivable, at fair value of $19.2 million, partially offset by a realized gain on disposal of equity method investment of $6.8 million.

Interest income – loans and securities lending increased $93.6 million to $182.9 million during the nine months ended September 30, 2022 from $89.3 million during the nine months ended September 30, 2021. Interest income from securities lending was $55.7 million and $49.8 million during the nine months ended September 30, 2022 and 2021, respectively. Interest income from loans was $127.2 million and $39.5 million during the nine months ended September 30, 2022 and 2021, respectively.

Revenues – Sale of Goods

Revenues from the sale of goods decreased $46.3 million to $7.9 million during the nine months ended September 30, 2022 from $54.2 million during nine months ended September 30, 2021. Revenues from sale of goods were attributable to a decrease of $49.6 million from sales of retail goods related to retail liquidation engagements in Europe that ended, partially offset by an increase of $3.7 million from sales of retail goods due to the acquisition of Marconi Wireless in the fourth quarter of 2021. Cost of goods sold for nine months ended September 30, 2022 was $7.3 million, resulting in a gross margin of 7.1%.

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Operating Expenses

Direct Cost of Services

Direct cost of services increased $32.5 million to $74.0 million during the nine months ended September 30, 2022 from $41.4 million during the nine months ended September 30, 2021. The increase in direct cost of services was primarily driven by an increase of $53.6 million in the Principal Investments — Communications and Other segment, partially offset by a decrease of $21.1 million in the Auction and Liquidation segment. The increase in the Principal Investments — Communications and Other segment was primarily due to increases of $27.6 million from the acquisition of an additional equity interest in Lingo in the second quarter of 2022, $15.2 million from the acquisition Marconi Wireless in the fourth quarter of 2021, and $9.7 million from the acquisition of BullsEye in the third quarter of 2022, partially offset by decreases in magicJack and UOL. The decrease in the Auction and Liquidation segment was primarily due to a large retail liquidation engagements in Europe in 2021.

Selling, General and Administrative Expenses

Selling, general and administrative expenses during the nine months ended September 30, 2022 and 2021 were comprised of the following:

	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021				Change
	Amount		%		Amount		%		Amount		%
Capital Markets segment	$	121,926	24.1	%	$	233,291	36.8	%	$	(111,365)	(47.7)	%
Wealth Management segment	210,840		41.7	%	267,163		42.0	%	(56,323)		(21.1)	%
Auction and Liquidation segment	6,225		1.2	%	9,719		1.5	%	(3,494)		(36.0)	%
Financial Consulting segment	61,181		12.1	%	56,169		8.8	%	5,012		8.9	%
Principal Investments -Communications and Other segment	57,358		11.3	%	22,654		3.6	%	34,704		153.2	%
Brands segment	4,164		0.8	%	4,481		0.7	%	(317)		(7.1)	%
Corporate and Other segment	44,368		8.8	%	42,007		6.6	%	2,361		5.6	%
Total selling, general & administrative expenses	$	506,062	100.0	%	$	635,484	100.0	%	$	(129,422)	(20.4)	%

____________________________________

n/m - Not applicable or not meaningful.

Total selling, general and administrative expenses decreased approximately $129.4 million to $506.1 million during the nine months ended September 30, 2022 from $635.5 million during the nine months ended September 30, 2021. The decrease was primarily due to decreases of $111.4 million in the Capital Markets segment, $56.3 million in the Wealth Management segment, and $3.5 million in the Auction and Liquidation segment, partially offset by increases of $34.7 million in the Principal Investments — Communications and Other segment and $5.0 million in the Financial Consulting segment, and $2.4 million in the Corporate and Other segment.

Capital Markets

Selling, general and administrative expenses in the Capital Markets segment decreased by $111.4 million to $121.9 million during the nine months ended September 30, 2022 from $233.3 million during the nine months ended September 30, 2021. The decrease was primarily due to decreases of $64.7 million in consulting expenses and $56.2 million in payroll and related expenses, partially offset by increases of $4.9 million from the settlement of a regulatory matter and $4.7 million in depreciation and amortization.

Wealth Management

Selling, general and administrative expenses in the Wealth Management segment decreased by $56.3 million to $210.8 million during the nine months ended September 30, 2022 from $267.2 million during the nine months ended September 30, 2021. The decrease was primarily due to a decrease of $75.3 million in payroll and related expenses, partially offset by

59

increases of $13.7 million from settlements and penalties, $1.4 million in clearing charges, $1.2 million in other expenses, $0.5 million in occupancy expenses, and $0.5 million in insurance costs.

Auction and Liquidation

Selling, general and administrative expenses in the Auction and Liquidation segment decreased $3.5 million to $6.2 million during the nine months ended September 30, 2022 from $9.7 million during the nine months ended September 30, 2021. The decrease was primarily due to decreases of $3.0 million in business development expenses and $0.2 million in other expenses.

Financial Consulting

Selling, general and administrative expenses in the Financial Consulting segment increased by $5.0 million to $61.2 million during the nine months ended September 30, 2022 from $56.2 million during the nine months ended September 30, 2021. The increase was primarily due to increases of $4.0 million in payroll and related expenses and $1.1 million in travel and entertainment expenses.

Principal Investments — Communications and Other

Selling, general and administrative expenses in the Principal Investments — Communications and Other segment increased $34.7 million to $57.4 million for the nine months ended September 30, 2022 from $22.7 million for the nine months ended September 30, 2021. The increase was primarily due to increases of $15.7 million from the acquisition of an additional equity interest in Lingo in the second quarter of 2022, $12.2 million from the acquisition of Marconi in the fourth quarter of 2021, $5.0 million from the acquisition of Bullseye in the third quarter of 2022, and $3.1 million from other acquisitions in 2022.

Brands

Selling, general and administrative expenses in the Brands segment decreased $0.3 million to $4.2 million during the nine months ended September 30, 2022 from $4.5 million for the nine months ended September 30, 2021.

Corporate and Other

Selling, general and administrative expenses for the Corporate and Other segment increased approximately $2.4 million to $44.4 million during the nine months ended September 30, 2022 from $42.0 million for the nine months ended September 30, 2021. The increase was primarily due to increases of $1.6 million in transaction expenses and $1.2 million in software and equipment expenses, partially offset by a decrease of $0.2 million in communication expenses.

Other Income (Expense). Other income included interest income of $1.3 million and $0.2 million during the nine months ended September 30, 2022 and 2021, respectively. Change in fair value of financial instruments and other in the amount of $9.7 million during the nine months ended September 30, 2022 was primarily due to the change in fair value of warrant liabilities and the forgiveness of a Paycheck Protection Program loan issued to FocalPoint prior to its acquisition by the Company during the first quarter of 2022. Interest expense was $96.8 million during the nine months ended September 30, 2022 compared to $66.0 million during the nine months ended September 30, 2021. The increase in interest expense was primarily due to increases in interest expense of $14.2 million from the issuance of senior notes, $11.6 million from the Nomura term loan, $3.2 million from the Nomura revolving credit facility, and a total of $0.8 million from the Pathlight and Lingo term loans entered into during the third quarter of 2022. During the nine months ended September 30, 2022, income from equity investments was $3.3 million compared to $1.2 million during the nine months ended September 30, 2021. The increase was primarily due to $6.9 million in earnings related to the bebe equity method investment, partially offset by $3.7 million loss recognized from the conversion of debt to equity in the acquisition of an additional equity interest in Lingo during the second quarter of 2022.

(Loss) Income Before Income Taxes. Loss before income taxes was $133.0 million during the nine months ended September 30, 2022 compared to income of $523.5 million during the nine months ended September 30, 2021. The change was primarily due to a decrease in revenue of $729.8 million and an increase in interest expense of $30.8 million, partially offset by a decrease in operating expenses of approximately $99.5 million, increase in income from equity investments of $2.1 million, increase in change in fair value of financial instruments and other of $1.5 million, and an increase in interest income of $1.1 million.

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Benefit from (Provision for) Income Taxes. Benefit from income taxes was $39.9 million during the nine months ended September 30, 2022 compared to a provision for income taxes of $140.1 million during the nine months ended September 30, 2021. The effective income tax rate was 30.0% for the nine months ended September 30, 2022 compared to 26.8% for the nine months ended September 30, 2021.

Net Income Attributable to Noncontrolling Interests and Redeemable Noncontrolling Interests. Net income attributable to noncontrolling interests and redeemable noncontrolling interests represents the proportionate share of net income generated by membership interests of partnerships that we do not own. The net income attributable to noncontrolling interests and redeemable noncontrolling interests was $9.2 million during the nine months ended September 30, 2022 compared to $2.5 million during the nine months ended September 30, 2021.

Net (Loss) Income Attributable to the Company. Net loss attributable to the Company was $102.4 million during the nine months ended September 30, 2022 compared to net income attributable to the Company of $380.9 million during the nine months ended September 30, 2021. The change was primarily due to a change from operating income to loss of $630.3 million, increase in interest expense of $30.8 million, and an increase in net income attributable to noncontrolling interests and redeemable noncontrolling interests of $6.8 million, partially offset by a change from provision for to benefit from income taxes of $180.0 million, increase in income from equity investments of $2.1 million, increase in change in fair value of financial instruments and other of $1.5 million, and an increase in interest income of $1.1 million.

Preferred Stock Dividends. Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $25,000 liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends are payable quarterly in arrears. On January 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Holders of Series B Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $25,000 liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends are payable quarterly in arrears. On January 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Net (Loss) Income Available to Common Shareholders. Net loss available to common shareholders was $108.4 million during the nine months ended September 30, 2022 compared to net income available to common shareholders of $375.4 million during the nine months ended September 30, 2021. The change was primarily due to a change from operating income to loss of $630.3 million, increase in interest expense of $30.8 million, increase in net income attributable to noncontrolling interests and redeemable noncontrolling interests of $6.8 million, and an increase in preferred stock dividends of $0.5 million, partially offset by a change from provision for to benefit from income taxes of $180.0 million, increase in income from equity investments of $2.1 million, increase in change in fair value of financial instruments and other of $1.5 million, and an increase in interest income of $1.1 million.

Liquidity and Capital Resources

Our operations are funded through a combination of existing cash on hand, cash generated from operations, borrowings under our senior notes payable, term loans and credit facilities, and special purposes financing arrangements. During the nine months ended September 30, 2022 and 2021, we generated a net loss of $93.1 million and net income of $383.4 million, respectively. Our net loss of $93.1 million included $280.2 million of losses that primarily related to a decrease in the fair value of our portfolio of securities and other investments owned during the nine months ended September 30, 2022. Our cash flows and profitability are impacted by capital market engagements performed on a quarterly and annual basis and amounts realized from the sale of our investments in marketable securities.

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As of September 30, 2022, we had $231.8 million of unrestricted cash and cash equivalents, $1.6 million of restricted cash, $1,238.6 million of securities and other investments owned at fair value, $814.7 million of loans receivable, at fair value, and $2,319.0 million of borrowings outstanding. The borrowings outstanding of $2,319.0 million as of September 30, 2022 included $1,661.2 million of borrowings from the issuance of the series of senior notes that are due at various dates ranging from May 31, 2024 to August 31, 2028 with interest rates ranging from 5.00% to 6.75%, $558.0 million in term loans borrowed pursuant to the Pathlight, Lingo, BRPI Acquisition Co LLC (“BRPAC”), and Nomura Credit Agreements discussed below, $74.7 million of revolving credit under the Nomura Credit Agreement discussed below, and $25.1 million of notes payable.

We believe that our current cash and cash equivalents, securities and other investments owned, funds available under our asset based credit facility, funds available under the Pathlight, Lingo, BRPAC, and Nomura term loans, funds available under the Nomura revolving credit facility, and cash expected to be generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months from issuance date of the accompanying financial statements. We continue to monitor our financial performance to ensure sufficient liquidity to fund operations and execute on our business plan.

From time to time, we may decide to pay dividends which will be dependent upon our financial condition and results of operations. On November 3, 2022, we declared a regular dividend of $1.00 per share that will be paid on or about November 29, 2022 to stockholders of record as of November 15, 2022. On July 28, 2022, we declared a regular dividend of $1.00 per share that was paid on August 23, 2022 to stockholders of record as of August 11, 2022. On April 28, 2022, we declared a regular dividend of $1.00 per share that was paid on May 20, 2022 to stockholders of record as of May 11, 2022. On February 23, 2022, the Company declared a regular quarterly dividend of $1.00 per share, which was paid on March 23, 2022 to stockholders of record as of March 9, 2022. During the year ended December 31, 2021, we paid cash dividends on our common stock of $347.1 million. While it is the Board’s current intention to make regular dividend payments of $1.00 per share each quarter and special dividend payments dependent upon exceptional circumstances from time to time, our Board of Directors may reduce or discontinue the payment of dividends at any time for any reason it deems relevant. The declaration and payment of any future dividends or repurchases of our common stock will be made at the discretion of our Board of Directors and will be dependent upon our financial condition, results of operations, cash flows, capital expenditures, and other factors that may be deemed relevant by our Board of Directors.

A summary of dividend activity for the nine months ended September 30, 2022 and the year ended December 31, 2021 was as follows:

Date Declared	Date Paid	Stockholder Record Date	Regular Dividend Amount		Special Dividend Amount		Total Dividend Amount
July 8, 2022	August 23, 2022	August 11, 2022	$	1.000	$	—	$	1.000
April 28, 2022	May 20, 2022	May 11, 2022	1.000		—		1.000
February 23, 2022	March 23, 2022	March 9, 2022	1.000		—		1.000
October 28, 2021	November 23, 2021	November 9, 2021	1.000		3.000		4.000
July 29, 2021	August 26, 2021	August 13, 2021	0.500		1.500		2.000
May 3, 2021	May 28, 2021	May 17, 2021	0.500		2.500		3.000
February 25, 2021	March 24, 2021	March 10, 2021	0.500		3.000		3.500

Holders of Series A Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 6.875% per annum of the $25 thousand liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,718.75 or $1.71875 per Depositary Share). Dividends will be payable quarterly in arrears, on or about the last day of January, April, July, and October. As of September 30, 2022, dividends in arrears in respect of the Depositary Shares were $0.8 million. On January 11, 2021, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on January 29, 2021 to holders of record as of the close of business on January 21, 2021. On April 5, 2021, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on April 30, 2021 to holders of record as of the close of business on April 20, 2021. On July 8, 2021, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on August 2, 2021 to holders of record as of the close of business on July 21, 2021. On October 6, 2021, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on November 1, 2021 to holders of record as of the close of business on October 21, 2021.On January 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4296875 per Depositary

62

Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4296875 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Holders of Series B Preferred Stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 7.375% per annum of the $25 thousand liquidation preference ($25.00 per Depositary Share) per year (equivalent to $1,843.75 or $1.84375 per Depositary Share). Dividends will be payable quarterly in arrears, on or about the last day of January, April, July, and October. As of September 30, 2022, dividends in arrears in respect of the Depositary Shares were $0.5 million. On January 11, 2021, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on January 29, 2021 to holders of record as of the close of business on January 21, 2021. On April 5, 2021, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on April 30, 2021 to holders of record as of the close of business on April 20, 2021. On July 8, 2021, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on August 2, 2021 to holders of record as of the close of business on July 21, 2021. On October 6, 2021, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on November 1, 2021 to holders of record as of the close of business on October 21, 2021. On January 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid January 31, 2022 to holders of record as of the close of business on January 21, 2022. On April 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on April 29, 2022 to holders of record as of the close of business on April 19, 2022. On July 7, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on July 29, 2022 to holders of record as of the close of business on July 19, 2022. On October 10, 2022, the Company declared a cash dividend $0.4609375 per Depositary Share, which was paid on October 31, 2022 to holders of record as of the close of business on October 21, 2022.

Our principal sources of liquidity to finance our business is our existing cash on hand, cash flows generated from operating activities, funds available under revolving credit facilities and special purpose financing arrangements.

Cash Flow Summary

	Nine Months Ended September 30,
	2022		2021
	(Dollars in thousands)
Net cash (used in) provided by:
Operating activities	$	(72,814)	$	(166,652)
Investing activities	41,746		(416,662)
Financing activities	(8,822)		859,364
Effect of foreign currency on cash	(6,587)		(1,755)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(46,477)	$	274,295

Cash used in operating activities was $72.8 million during the nine months ended September 30, 2022 compared to cash used in operating activities of $166.7 million during the nine months ended September 30, 2021. Cash used in operating activities for the nine months ended September 30, 2022 consisted of the negative impact of net loss of $93.1 million, noncash items of $13.3 million, and changes in operating assets and liabilities of $33.7 million. The negative cash flow impact from noncash items of $13.3 million included deferred income taxes of $81.8 million, de-consolidation of B. Riley Principal 150 Merger Corporation (“BRPM 150”) of $8.3 million, gain on equity investment of $6.8 million, noncash interest and other of $5.4 million, income from equity investments of $3.3 million, and gain on extinguishment of loan of $1.1 million, partially offset by share-based compensation of $45.8 million, depreciation and amortization of $26.5 million, fair value adjustments of $6.3 million, impairment of intangibles and loss on disposal of fixed assets of $5.5 million, effect of foreign currency of $3.2 million, provision for doubtful accounts of $2.8 million, dividends from equity investments of $2.5 million, and income allocated for mandatorily redeemable noncontrolling interests of $0.8 million. Cash used in operating activities for the nine months ended September 30, 2021 consisted of the positive impact of net income of $383.4 million and noncash items of $40.0 million, partially offset by the negative impact of changes in operating assets and liabilities of $590.0 million. The positive cash flow impact from noncash items of $40.0 million included deferred income taxes of $28.6 million, share-based compensation of $23.5 million, depreciation and amortization of $19.1 million, loss on extinguishment of debt of $4.9 million, dividends from equity investments of $1.4 million, provision for doubtful accounts of $1.2 million, and income allocated for mandatorily redeemable noncontrolling interests of $0.5 million, partially offset by noncash interest and other of $15.7 million, fair value adjustments of $10.7 million, gain on extinguishment of loans of

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$6.5 million gain on equity investment of $3.5 million, and effect of foreign currency on operations of $1.3 million, income from equity investments of $1.2 million, and gain on disposal of fixed assets and other of $0.1 million.

Cash used in investing activities was $41.7 million during the nine months ended September 30, 2022 compared to cash used in investing activities of $416.7 million for the nine months ended September 30, 2021. During the nine months ended September 30, 2022, cash used in investing activities consisted of cash used for purchases of loans receivable of $421.7 million, cash used for acquisition of businesses of $113.6 million, purchases of equity and other investments of $2.8 million, and purchases of property and equipment of $1.4 million, partially offset by cash received from loans receivable repayment of $408.7 million and funds received from trust account of subsidiary of $172.6 million. During the nine months ended September 30, 2021, cash used in investing activities consisted of cash used to fund a trust account for the future redemption of one of our subsidiaries’ redeemable common stock of $345.0 million, purchases of loans receivable of $186.3 million, repayments of loan participations sold of $15.2 million, acquisition of businesses of $2.1 million, and purchases of property and equipment of $0.6 million, partially offset by cash received from loans receivable repayment of $132.5 million.

Cash used in financing activities was $8.8 million during the nine months ended September 30, 2022 compared to cash provided by financing activities of $859.4 million during the nine months ended September 30, 2021. During the nine months ended September 30, 2022, cash used in financing activities primarily consisted of $172.6 million used in the redemption of subsidiary temporary equity and distributions, $90.4 million used to pay dividends on our common shares, $60.9 million used in the repayment of term loan, $6.7 million used in payment of employment taxes on vesting of restricted stock, $6.0 million used to pay dividends on our preferred shares, $5.3 million used in repayment of revolving line of credit, $3.4 million in distributions to noncontrolling interests, $1.4 million used in the payment of debt issuance and offering costs, $0.7 million used in the payment of contingent consideration, and $0.4 million used to repay our notes payable, partially offset by cash provided by $275.7 million in proceeds from borrowings under a term loan, $51.2 million in proceeds from issuance of senior notes, $11.4 million in contributions from noncontrolling interests, and $0.6 million in proceeds from issuance of preferred stock. During the nine months ended September 30, 2021, cash provided by financing activities primarily consisted of $890.6 million in proceeds from issuance of senior notes, $345.0 million in proceeds from initial public offering of subsidiaries, $200.0 million in proceeds from the Nomura term loan, $80.0 million in proceeds from Nomura revolving credit line, $64.7 million in net proceeds from issuance of common stock, $14.0 million in net proceeds from offerings of preferred stock and $12.7 million contributions from noncontrolling interests, partially offset by $390.5 million used to repurchase our senior notes, $236.6 million used to pay dividends on our common shares, $37.6 million used to repay our notes payable, $31.0 million used to pay debt issuance costs, $16.1 million used for repayment on our BRPAC term loan, $15.7 million in distributions to noncontrolling interests, $10.5 million used to pay employment taxes on vesting of restricted stock, $5.5 million used to pay dividends on our preferred shares, $2.7 million used in the repurchase of common stock, and $1.6 million used to pay for contingent consideration.

Credit Agreements

Pathlight Credit Agreement

On September 23, 2022, our subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders (collectively, “Pathlight”) for a five-year $148.2 million term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus an applicable margin of 6.50%. As of September 30, 2022, the interest rate on the Pathlight Credit Agreement was 10.00%.

The Pathlight Credit Agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Pathlight Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be

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entitled to take various actions, including the acceleration of amounts due under the outstanding Pathlight Credit Agreement.

Principal outstanding under the Pathlight Credit Agreement is repaid based on collections of the 2022 Badcock Receivable less other application of payments as defined in the Pathlight Credit Agreement and the remaining principal balance is due at final maturity on September 23, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $144.6 million (net of unamortized debt issuance costs of $3.6 million). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $0.4 million (including amortization of deferred debt issuance costs of $0.1 million).

Lingo Credit Agreement

On August 16, 2022, our subsidiary, Lingo, a Delaware limited liability company, (the “Borrower”) entered into a credit agreement (the “Lingo Credit Agreement”) by and among the borrower, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45.0 million term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the “New Lender”) for an incremental term loan of $7.5 million, increasing the principal balance of the term loan to $52.5 million.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment. As of September 30, 2022, the interest rate on the Lingo Credit Agreement was 6.29%.

The agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the agreement requires the Borrower to maintain certain financial ratios. The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding agreement.

Principal outstanding is due in quarterly installments starting on March 31, 2023. Quarterly installments from March 31, 2023 to December 31, 2023 are in the amount of $1.6 million per quarter, from March 31, 2024 to December 31, 2024 are in the amount of $2.0 million per quarter, from March 31, 2025 to June 30, 2027 are in the amount of $2.6 million, and the remaining principal balance is due at final maturity on August 16, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $51.6 million (net of unamortized debt issuance costs of $0.9 million). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $0.4 million (including amortization of deferred debt issuance costs of $0.03 million).

Nomura Credit Agreement

On June 23, 2021, we, and our wholly owned subsidiaries, BR Financial Holdings, LLC (the “Primary Guarantor”), and BR Advisory & Investments, LLC (the “Borrower”) entered into a credit agreement (as amended, the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, N.A., as collateral agent (the “Collateral Agent”), for a four-year $200.0 million secured term loan credit facility (the “Term Loan Facility”) and a four-year $80.0 million revolving loan credit facility (the “Revolving Credit Facility”).

On December 17, 2021 (the “Amendment Date”), we, the Primary Guarantor, and the Borrower entered into a Second Incremental Amendment to Credit Agreement, pursuant to which the Borrower established an incremental facility in an aggregate principal amount of $100.0 million (the “Incremental Facility” and the incremental term loans made thereunder, the “Incremental Term Loans”) of secured term loans under the Credit Agreement on terms identical to those applicable to the Term Loan Facility. The Borrower borrowed the full amount of the Incremental Term Loans on the Amendment Date. The Term Loan Facility, Revolving Credit Facility, and Incremental Facility (together, the “Credit Facilities”), mature on June 23, 2025, subject to acceleration or prepayment.

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Eurodollar loans under the Credit Facilities accrue interest at the Eurodollar Rate plus an applicable margin of 4.50%. Base rate loans accrue interest at the Base Rate plus an applicable margin of 3.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, we are required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by the average utilization of the Revolving Credit Facility for the immediately preceding fiscal quarter.

Subject to certain eligibility requirements, the assets of certain subsidiaries of ours that hold credit assets, private equity assets, and public equity assets are placed into a borrowing base, which serves to limit the borrowings under the Credit Facilities. If borrowings under the Credit Facilities exceed the borrowing base, we are obligated to prepay the loans in an aggregate amount equal to such excess. The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit our, the Primary Guarantor’s, the Borrower’s, and the Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In addition, the Credit Agreement contains a financial covenant that requires us to maintain operating earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of at least $135.0 million and the Primary Guarantor to maintain net asset value of at least $1,100.0 million. The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

Commencing on September 30, 2022, the Term Loan Facility and Incremental Facility will amortize in equal quarterly installments of 1.25% of the aggregate principal amount of the term loan as of the closing date with the remaining balance due at final maturity. Quarterly installments from September 30, 2022 to March 31, 2025 are in the amount of $3.8 million per quarter.

As of September 30, 2022 and December 31, 2021, the outstanding balances on the Term Loan Facility and Incremental Facility were $290.4 million (net of unamortized debt issuance costs of $5.8 million) and $292.7 million (net of unamortized debt issuance costs of $7.4 million), respectively. Interest on the term loan during the three months ended September 30, 2022 and 2021 was $5.7 million (including amortization of deferred debt issuance costs of $0.5 million) and $2.7 million (including amortization of deferred debt issuance costs of $0.4 million), respectively. Interest on the term loan during the nine months ended September 30, 2022 and 2021 was $14.6 million (including amortization of deferred debt issuance costs of $1.5 million) and $3.0 million (including amortization of deferred debt issuance costs of $0.4 million), respectively. The interest rate on the term loan as of September 30, 2022 and December 31, 2021 was 8.10% and 4.72%, respectively.

We had an outstanding balance of $74.7 million and $80.0 million under the Revolving Credit Facility as of September 30, 2022 and December 31, 2021, respectively. Interest on the revolving facility during the three months ended September 30, 2022 and 2021 was $1.4 million (including unused commitment fee of $0.01 million and amortization of deferred financing costs of $0.1 million) and $0.8 million (including unused commitment fee of $0.1 million and amortization of deferred financing costs of $0.1 million), respectively. Interest on the revolving facility during the nine months ended September 30, 2022 and 2021 was $3.7 million (including unused commitment fee of $0.01 million and amortization of deferred financing costs of $0.4 million) and $0.8 million (including unused commitment fee of $0.08 million and amortization of deferred financing costs of $0.2 million). The interest rate on the revolving facility as of September 30, 2022 and December 31, 2021 was 7.64% and 4.67%, respectively.

Wells Fargo Credit Agreement

We are party to a credit agreement (as amended, the “Credit Agreement”) governing our asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $200.0 million and a maturity date of April 20, 2027. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The interest rate for each revolving credit advance under the related credit agreement is, subject to certain terms and conditions,

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equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility provides for success fees in the amount of 1.0% to 10.0% of the net profits, if any, earned on liquidation engagements that are financed under the credit facility as set forth in the related Credit Agreement. The credit facility also provides for funding fees in the amount of 0.05% to 0.20% of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale. There was no outstanding balance on this credit facility as of September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, there were no open letters of credit outstanding.

BRPAC Credit Agreement

On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of ours, in the capacity of borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with Banc of California, N.A. in its capacity as agent (the “Agent”) and lender and with the other lenders party (the “Closing Date Lenders”).

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things: (i) the Lenders agreed to make a new $75.0 million term loan to the Borrowers, the proceeds of which the Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless Holdings, LLC was added to the Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the Borrowers were permitted to make certain distributions to the parent company of the Borrowers.

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the BRPAC Credit Agreement. As of September 30, 2022 and December 31, 2021, the interest rate on the amended BRPAC Credit Agreement was at 6.04% and 3.17%, respectively.

Principal outstanding under the amended BRPAC Credit Agreement is due in quarterly installments. Quarterly installments on December 31, 2022 are in the amount of $2.8 million, from March 31, 2023 to December 31, 2023 are in the amount of $4.7 million per quarter, from March 31, 2024 to December 31, 2026 are in the amount of $3.8 million per quarter, on March 31, 2027 is in the amount of $2.8 million, and the remaining principal balance is due at final maturity on June 30, 2027.

As of September 30, 2022 and December 31, 2021, the outstanding balance on the term loan was $71.4 million (net of unamortized debt issuance costs of $0.8 million), and $53.7 million (net of unamortized debt issuance costs of $0.6 million), respectively. Interest expense on the term loan during the three months ended September 30, 2022 and 2021 was $1.1 million (including amortization of deferred debt issuance costs of $0.1 million) and $0.6 million (including amortization of deferred debt issuance costs of $0.07 million), respectively. Interest expense on the term loan during the nine months ended September 30, 2022 and 2021 was $2.2 million (including amortization of deferred debt issuance costs of $0.3 million) and $1.9 million (including amortization of deferred debt issuance costs of $0.2 million), respectively.

Senior Note Offerings

During the three months ended September 30, 2022 and 2021, we issued $15.4 million and $97.7 million, respectively, of senior notes, and during the nine months ended September 30, 2022 and 2021, we issued $51.3 million and $183.0 million, respectively, of senior notes due with maturities dates ranging from May 2024 to August 2028 pursuant to At the Market Issuance Sales Agreements with B. Riley Securities, Inc. which governs the program of at-the-market sales of the Company’s senior notes. A series of prospectus supplements were filed by the Company with the SEC which allowed the Company to sell these senior notes.

As of September 30, 2022 and December 31, 2021, the total senior notes outstanding was $1,661.2 million (net of unamortized debt issue costs of $18.2 million) and $1,606.6 million (net of unamortized debt issue costs of $21.5 million) with a weighted average interest rate of 5.70% and 5.69%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $25.1 million and $21.5 million for the three months ended September 30, 2022 and 2021, respectively, and totaled $74.2 million and $60.0 million for the nine months ended September 30, 2022 and 2021, respectively.

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The most recent sales agreement prospectus was filed by us with the SEC on January 5, 2022 (the “January 2022 Sales Agreement Prospectus”), supplementing the prospectus filed on August 11, 2021, the prospectus filed on April 6, 2021, and the prospectus filed on January 28, 2021. This program provides for the sale by the Company of up to $250.0 million of certain of the Company’s senior notes. As of September 30, 2022, and December 31, 2021 the Company had $60.6 million and $111.9 million, respectively, remaining availability under the January 2022 Sales Agreement.

Off Balance Sheet Arrangements

Information about our off-balance sheet arrangements is included in Note 15 of the Notes to the Condensed Consolidated Financial Statements. Such information is hereby incorporated by reference.

Recent Accounting Standards

See Note 2(t) to the accompanying financial statements for recent accounting standards we have not yet adopted and recently adopted.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We periodically use derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of September 30, 2022, there were no forward exchange contracts outstanding. As of December 31, 2021, €6.0 million forward exchange contracts were outstanding.

The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $0.2 million during the three months ended September 30, 2022 and 2021, respectively, and $0.1 million and $0.9 million during the nine months ended September 30, 2022 and 2021, respectively. This amount is reported as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

We transact business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. Transaction gains (losses) are included in selling, general and administrative expenses in our condensed consolidated statements of operations.

Interest Rate Risk

Our primary exposure to market risk consists of risk related to changes in interest rates. We utilize borrowings under our senior notes payable and credit facilities to fund costs and expenses incurred in connection with our acquisitions and retail liquidation engagements. Borrowings under our senior notes payable are at fixed interest rates and borrowings under our credit facilities bear interest at a floating rate of interest. We invest in loans receivable that primarily bear interest at floating rates of interest. If floating rates of interest had increased by 1% during the nine months ended September 30, 2022, the rate increase would have resulted in an increase in interest expense of $3.3 million.

The primary objective of our investment activities is to preserve capital for the purpose of funding operations while at the same time maximizing the income that we receive from investments without significantly increasing risk. To achieve these objectives, our investments allow us to maintain a portfolio of cash equivalents, short-term investments through a variety of securities owned that primarily includes common stocks, corporate bonds and investments in partnership interests, and loans receivable. Our cash and cash equivalents through September 30, 2022 included amounts in bank checking and liquid money market accounts. We may be exposed to interest rate risk through trading activities in convertible and fixed income securities as well as U.S. Treasury securities, however, based on our daily monitoring of this risk, we believe we currently have limited exposure to interest rate risk in these activities.

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Foreign Currency Risk

The majority of our operating activities are conducted in U.S. dollars. Revenues generated from our foreign subsidiaries totaled $10.1 million during the nine months ended September 30, 2022 or 1.7% of our total revenues of $588.7 million during the nine months ended September 30, 2022. The financial statements of our foreign subsidiaries are translated into U.S. dollars at period-end rates, with the exception of revenues, costs, and expenses, which are translated at average rates during the reporting period. We include gains and losses resulting from foreign currency transactions in income, while we exclude those resulting from translation of financial statements from income and include them as a component of accumulated other comprehensive income (loss). Transaction gains (losses), which were included in our condensed consolidated statements of operations, amounted to a gain of $1.9 million and $0.9 million during the nine months ended September 30, 2022 and 2021, respectively. We may be exposed to foreign currency risk; however, our operating results during the nine months ended September 30, 2022 included $10.1 million of revenues and $6.5 million of operating expenses from our foreign subsidiaries and a 10% appreciation or depreciation of the U.S. dollar relative to the local currency exchange rates would result in an approximately $0.9 million change in our operating income during the nine months ended September 30, 2022.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that is designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Under the supervision and with the participation of our management, including our Co-Chief Executive Officers and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. Based upon the foregoing evaluation, our Co-Chief Executive Officers and our Chief Financial Officer concluded that as of September 30, 2022 our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes to our internal control over financial reporting during the fiscal quarter covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitation on Effectiveness of Controls

Our management, including our Co-Chief Executive Officers and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well- designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations.

Item 1A. Risk Factors.

There are certain risks and uncertainties in our business that could cause our actual results to differ materially from those anticipated. A detailed discussion of our risk factors was included in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 28, 2022. These risk factors should be read carefully in connection with evaluating our business and in connection with the forward-looking statements and other information contained in this Quarterly Report on Form 10-Q. Any of the risks described in the Annual Report on Form 10-K for the year ended December 31, 2021, could materially affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. There have been no material changes to the risk factors set forth in the Annual Report on Form 10-K for the year ended December 31, 2021.

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

During the three months ended September 30, 2022, we made the following purchases of our equity securities that are registered pursuant to Section 12(b) of the Exchange Act.

Period	Total Number of Shares Purchased(1)(2)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Program
July 1 through July 31, 2022	—	$	—	—	$	50,000
August 1 through August 31, 2022	3,326	$	52.62	—	$	50,000
September 1 through September 30, 2022	2,822	$	50.31	571	$	49,973
Total	6,148	$	51.94	571

______________________________

(1) Includes purchases of 5,577 shares made to satisfy the income tax withholding obligations of certain employees upon the vesting and delivery of restricted stock units issued under our 2021 Stock Incentive Plan.

(2) Includes purchases of 571 shares under the Company's annual share repurchase program. On October 31, 2022, the share repurchase program was reauthorized by the Board of Directors for share repurchases of up to $50,000 of the Company's outstanding common shares and expires in October 2023.

Item 3. Defaults Upon Senior Securities.

None.

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Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits filed as part of this Quarterly Report are listed in the index to exhibits immediately preceding such exhibits, which index to exhibits is incorporated herein by reference.

Exhibit Index

		Incorporated by Reference
Exhibit No.	Description	Form	Exhibit	Filing Date
31.1*	Certification of Co-Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
31.2*	Certification of Co-Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
31.3*	Certification of Chief Financial Officer and Chief Operating Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934
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 and Chief Operating Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	Inline XBRL Instance Document.
101.SCH*	Inline XBRL Taxonomy Extension Schema Document.
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

_______________________________________________

71

*    Filed herewith.

**    Furnished herewith.

#    Management contract or compensatory plan or arrangement

72

SIGNATURES

Pursuant to the requirements 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.

	B. Riley Financial, Inc.
Date: November 4, 2022	By:	/s/ PHILLIP J. AHN
	Name:	Phillip J. Ahn
	Title:	Chief Financial Officer and Chief Operating Officer
		(Principal Financial Officer)

73

EX-31.1

Exhibit 31.1

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryant R. Riley, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B. Riley Financial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022
	/s/ BRYANT R. RILEY
	Bryant R. Riley
	Co-Chief Executive Officer
	Chairman of the Board
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Thomas J. Kelleher, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B. Riley Financial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022
	/s/ THOMAS J. KELLEHER
	Thomas J. Kelleher
	Co-Chief Executive Officer
	(Director)

EX-31.3

Exhibit 31.3

CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Phillip J. Ahn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of B. Riley Financial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2022
	/s/ PHILLIP J. AHN
	Phillip J. Ahn
	Chief Financial Officer and Chief Operating Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of B. Riley Financial, Inc. (the “Company”) for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bryant R. Riley, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ BRYANT R. RILEY

Bryant R. Riley

Co-Chief Executive Officer

Chairman of the Board

November 4, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of B. Riley Financial, Inc. (the “Company”) for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas J. Kelleher, Co-Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ THOMAS J. KELLEHER

Thomas J. Kelleher

Co-Chief Executive Officer

Director

November 4, 2022

EX-32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of B. Riley Financial, Inc. (the “Company”) for the quarter ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Phillip J. Ahn, Chief Financial Officer and Chief Operating Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ PHILLIP J. AHN

Phillip J. Ahn

Chief Financial Officer and Chief Operating Officer

November 4, 2022

XML

Cover - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-37503
Entity Registrant Name	B. RILEY FINANCIAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	27-0223495
Entity Address, Address Line One	11100 Santa Monica Blvd
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90025
City Area Code	(310)
Local Phone Number	966-1444
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,582,004
Entity Central Index Key	0001464790
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock, par value $0.0001 per share
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	RILY
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/1000th fractional interest in a 6.875% share of Series A Cumulative Perpetual Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1000th  fractional interest in a 6.875% share of Series A  Cumulative Perpetual Preferred Stock
Trading Symbol	RILYP
Security Exchange Name	NASDAQ
Depositary Shares, each representing a 1/1000th fractional interest in a 7.375% share of Series B Cumulative Perpetual Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	Depositary Shares, each representing a 1/1000th  fractional interest in a 7.375% share of Series B  Cumulative Perpetual Preferred Stock
Trading Symbol	RILYL
Security Exchange Name	NASDAQ
6.50% Senior Notes due 2026
Document Information [Line Items]
Title of 12(b) Security	6.50% Senior Notes due 2026
Trading Symbol	RILYN
Security Exchange Name	NASDAQ
6.375% Senior Notes due 2025
Document Information [Line Items]
Title of 12(b) Security	6.375% Senior Notes due 2025
Trading Symbol	RILYM
Security Exchange Name	NASDAQ
6.75% Senior Notes due 2024
Document Information [Line Items]
Title of 12(b) Security	6.75% Senior Notes due 2024
Trading Symbol	RILYO
Security Exchange Name	NASDAQ
6.00% Senior Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	6.00% Senior Notes due 2028
Trading Symbol	RILYT
Security Exchange Name	NASDAQ
5.50% Senior Notes due 2026
Document Information [Line Items]
Title of 12(b) Security	5.50% Senior Notes due 2026
Trading Symbol	RILYK
Security Exchange Name	NASDAQ
5.25% Senior Notes due 2028
Document Information [Line Items]
Title of 12(b) Security	5.25% Senior Notes due 2028
Trading Symbol	RILYZ
Security Exchange Name	NASDAQ
5.00% Senior Notes due 2026
Document Information [Line Items]
Title of 12(b) Security	5.00% Senior Notes due 2026
Trading Symbol	RILYG
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets:
Cash and cash equivalents	$ 231,805	$ 278,933
Restricted cash	1,578	927
Due from clearing brokers	53,472	29,657
Securities and other investments owned, at fair value	1,238,613	1,532,095
Securities borrowed	2,243,306	2,090,966
Accounts receivable, net	64,707	49,673
Due from related parties	814	2,074
Loans receivable, at fair value (includes $68,575 and $167,744 from related parties as of September 30, 2022 and December 31, 2021, respectively)	814,715	873,186
Prepaid expenses and other assets	355,875	463,502
Operating lease right-of-use assets	84,550	56,969
Property and equipment, net	16,174	12,870
Goodwill	429,187	250,568
Other intangible assets, net	296,346	207,651
Deferred tax assets, net	2,845	2,848
Total assets	5,833,987	5,851,919
Liabilities:
Accounts payable	22,167	6,326
Accrued expenses and other liabilities	278,889	343,750
Deferred revenue	89,157	69,507
Deferred tax liabilities, net	10,932	93,055
Due to related parties and partners	396	0
Due to clearing brokers	3,942	69,398
Securities sold not yet purchased	17,751	28,623
Securities loaned	2,239,250	2,088,685
Operating lease liabilities	96,049	69,072
Notes payable	25,075	357
Revolving credit facility	74,700	80,000
Term loans, net	558,035	346,385
Senior notes payable, net	1,661,191	1,606,560
Total liabilities	5,077,534	4,801,718
Commitments and contingencies (Note 15)
Redeemable noncontrolling interests in equity of subsidiaries	178,759	345,000
B. Riley Financial, Inc. equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 4,535 and 4,512 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively; and liquidation preference of $113,380 and $112,790 as of September 30, 2022 and December 31, 2021, respectively	0	0
Common stock, $0.0001 par value; 100,000,000 shares authorized; 28,300,003 and 27,591,028 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively	3	3
Additional paid-in capital	473,420	413,486
Retained earnings	46,916	248,862
Accumulated other comprehensive loss	(6,726)	(1,080)
Total B. Riley Financial, Inc. stockholders’ equity	513,613	661,271
Noncontrolling interests	64,081	43,930
Total equity	577,694	705,201
Total liabilities and equity	$ 5,833,987	$ 5,851,919

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Loans receivable, at fair value (includes $68,575 and $167,744 from related parties as of September 30, 2022 and December 31, 2021, respectively)	$ 68,575	$ 167,744
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	4,535	4,512
Preferred stock, shares outstanding (in shares)	4,535	4,512
Preferred stock, liquidation preference	$ 113,380	$ 112,790
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	28,300,003	27,591,028
Common stock, shares outstanding (in shares)	28,300,003	27,591,028

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Services and fees	$ 266,485	$ 301,497	$ 678,065	$ 857,109
Trading income (losses) and fair value adjustments on loans	12,154	18,197	(280,163)	317,818
Interest income - Loans and securities lending	57,594	26,869	182,855	89,280
Sale of goods	4,130	34,959	7,895	54,244
Total revenues	340,363	381,522	588,652	1,318,451
Operating expenses:
Direct cost of services	44,523	18,019	73,959	41,435
Cost of goods sold	3,089	12,442	7,334	21,394
Selling, general and administrative expenses	163,727	244,218	506,062	635,484
Restructuring charge	8,016	0	8,016	0
Interest expense - Securities lending and loan participations sold	17,447	10,097	43,757	40,269
Total operating expenses	236,802	284,776	639,128	738,582
Operating income (loss)	103,561	96,746	(50,476)	579,869
Other income (expense):
Interest income	686	70	1,253	175
Change in fair value of financial instruments and other	(574)	1,758	9,728	8,267
(Loss) income from equity investments	(91)	1,149	3,285	1,172
Interest expense	(34,587)	(25,372)	(96,787)	(66,014)
Income (loss) before income taxes	68,995	74,351	(132,997)	523,469
(Provision for) benefit from income taxes	(16,350)	(22,693)	39,858	(140,113)
Net income (loss)	52,645	51,658	(93,139)	383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808	1,108	9,245	2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837	50,550	(102,384)	380,882
Preferred stock dividends	2,002	1,929	6,006	5,467
Net income (loss) available to common shareholders	45,835	48,621	(108,390)	375,415
Net income (loss) available to common shareholders	$ 45,835	$ 48,621	$ (108,390)	$ 375,415
Basic (loss) income per common share (in dollars per share)	$ 1.62	$ 1.76	$ (3.86)	$ 13.75
Diluted (loss) income per common share (in dollars per share)	$ 1.53	$ 1.69	$ (3.86)	$ 13.07
Weighted average basic common shares outstanding (in shares)	28,293,064	27,570,716	28,068,160	27,297,917
Weighted average diluted common shares outstanding (in shares)	29,968,417	28,794,066	28,068,160	28,726,492

XML

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 52,645	$ 51,658	$ (93,139)	$ 383,356
Other comprehensive income (loss):
Change in cumulative translation adjustment	(2,842)	(1,029)	(5,646)	(1,384)
Other comprehensive loss, net of tax	(2,842)	(1,029)	(5,646)	(1,384)
Total comprehensive income (loss)	49,803	50,629	(98,785)	381,972
Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interests	6,187	1,108	10,751	2,474
Comprehensive income (loss) attributable to B. Riley Financial, Inc.	$ 43,616	$ 49,521	$ (109,536)	$ 379,498

XML

Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Noncontrolling Interests
Balance (in shares) at Dec. 31, 2020		3,971	25,777,796
Balance at Dec. 31, 2020	$ 538,960	$ 0	$ 3	$ 310,326	$ 203,080	$ (823)	$ 26,374
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares)			396,818
Vesting of restricted stock and other, net of shares withheld for employer taxes	(10,539)			(10,539)
Common stock issued, net of offering costs (in shares)			1,413,045
Common stock issued, net of offering costs	64,713			64,713
Common stock repurchased and retired (in shares)			(44,650)
Common stock repurchased and retired	(2,656)			(2,656)
Preferred stock issued (in shares)		514
Preferred stock issued	13,997			13,997
Share based payments	23,508			23,508
Warrants exercised (in shares)			11,655
Dividends on common stock	(250,763)				(250,763)
Dividends on preferred stock	(5,467)				(5,467)
Net income (loss)	383,356				380,882		2,474
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	(18,182)				(18,182)
Distributions to noncontrolling interests	(14,695)						(14,695)
Contributions from noncontrolling interests	12,734						12,734
Acquisition of noncontrolling interests	13,625						13,625
Other comprehensive loss	(1,384)					(1,384)
Balance (in shares) at Sep. 30, 2021		4,485	27,554,664
Balance at Sep. 30, 2021	747,207	$ 0	$ 3	399,349	309,550	(2,207)	40,512
Balance (in shares) at Jun. 30, 2021		4,275	27,580,300
Balance at Jun. 30, 2021	743,565	$ 0	$ 3	387,084	320,078	(1,178)	37,578
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares)			7,359
Vesting of restricted stock and other, net of shares withheld for employer taxes	(169)			(169)
Common stock repurchased and retired	(2,656)			(2,656)
Preferred stock issued (in shares)		210
Preferred stock issued	5,716			5,716
Share based payments	9,374			9,374
Warrants exercised (in shares)			11,655
Dividends on common stock	(59,149)				(59,149)
Dividends on preferred stock	(1,929)				(1,929)
Net income (loss)	51,658				50,550		1,108
Distributions to noncontrolling interests	(841)						(841)
Contributions from noncontrolling interests	2,084						2,084
Acquisition of noncontrolling interests	583						583
Other comprehensive loss	(1,029)					(1,029)
Balance (in shares) at Sep. 30, 2021		4,485	27,554,664
Balance at Sep. 30, 2021	747,207	$ 0	$ 3	399,349	309,550	(2,207)	40,512
Balance (in shares) at Dec. 31, 2021		4,512	27,591,028
Balance at Dec. 31, 2021	705,201	$ 0	$ 3	413,486	248,862	(1,080)	43,930
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares)			404,668
Vesting of restricted stock and other, net of shares withheld for employer taxes	(6,733)			(6,733)
Common stock repurchased and retired (in shares)			(571)
Common stock repurchased and retired	(27)			(27)
Preferred stock issued (in shares)		23
Preferred stock issued	639			639
Shares issued for the acquisition of FocalPoint (in shares)			304,878
Shares issued for the acquisition of FocalPoint	20,320			20,320
Share based payments	45,713			45,713
Share based payments in equity of subsidiary	57			57
Vesting of shares in equity of subsidiary	0			(35)			35
Dividends on common stock	(93,128)				(93,128)
Dividends on preferred stock	(6,006)				(6,006)
Net income (loss)	(91,633)				(102,384)		10,751
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	(428)				(428)
Distributions to noncontrolling interests	(2,167)						(2,167)
Contributions from noncontrolling interests	11,350						11,350
Acquisition of noncontrolling interests	182						182
Other comprehensive loss	(5,646)					(5,646)
Balance (in shares) at Sep. 30, 2022		4,535	28,300,003
Balance at Sep. 30, 2022	577,694	$ 0	$ 3	473,420	46,916	(6,726)	64,081
Balance (in shares) at Jun. 30, 2022		4,535	28,290,458
Balance at Jun. 30, 2022	543,376	$ 0	$ 3	459,220	32,570	(3,884)	55,467
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Vesting of restricted stock and other, net of shares withheld for employer taxes (in shares)			10,116
Vesting of restricted stock and other, net of shares withheld for employer taxes	(293)			(293)
Common stock repurchased and retired (in shares)			(571)
Common stock repurchased and retired	(27)			(27)
Share based payments	14,498			14,498
Share based payments in equity of subsidiary	57			57
Vesting of shares in equity of subsidiary	0			(35)			35
Dividends on common stock	(31,061)				(31,061)
Dividends on preferred stock	(2,002)				(2,002)
Net income (loss)	54,024				47,837		6,187
Remeasurement of B. Riley Principal 150 and 250 Merger Corporations subsidiary temporary equity	(428)				(428)
Distributions to noncontrolling interests	(431)						(431)
Contributions from noncontrolling interests	2,823						2,823
Other comprehensive loss	(2,842)					(2,842)
Balance (in shares) at Sep. 30, 2022		4,535	28,300,003
Balance at Sep. 30, 2022	$ 577,694	$ 0	$ 3	$ 473,420	$ 46,916	$ (6,726)	$ 64,081

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Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Statement of Stockholders' Equity [Abstract]
Dividends on common stock per share (in dollars per share)	$ 1.00	$ 2.00	$ 3.00	$ 8.50

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities:
Net income (loss)	$ (93,139)	$ 383,356
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization	26,526	19,066
Provision for doubtful accounts	2,786	1,248
Share-based compensation	45,828	23,508
Fair value adjustments, non-cash	6,251	(10,728)
Non-cash interest and other	(5,392)	(15,742)
Effect of foreign currency on operations	3,157	(1,327)
Income from equity investments	(3,285)	(1,172)
Dividends from equity investments	2,491	1,373
Deferred income taxes	(81,832)	28,550
Impairment of intangibles and loss (gain) on disposal of fixed assets	5,537	(137)
Gain on extinguishment of loan	(1,102)	(6,509)
Loss on extinguishment of debt	0	4,888
Gain on equity investment	(6,790)	(3,544)
De-consolidation of BRPM 150	(8,294)	0
Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests	792	548
Change in operating assets and liabilities:
Amounts due to/from clearing brokers	(89,271)	(598,828)
Securities and other investments owned	295,411	(401,789)
Securities borrowed	(152,340)	(582,199)
Accounts receivable and advances against customer contracts	3,933	7,031
Prepaid expenses and other assets	(50,688)	(18,390)
Accounts payable, accrued payroll and related expenses, accrued expenses and other liabilities	(128,028)	13,655
Amounts due to/from related parties and partners	2,378	(678)
Securities sold, not yet purchased	(10,873)	408,598
Deferred revenue	12,565	(3,445)
Securities loaned	150,565	586,015
Net cash used in operating activities	(72,814)	(166,652)
Cash flows from investing activities:
Purchases of loans receivable	(421,718)	(186,317)
Repayments of loans receivable	408,654	132,542
Repayment of loan participations sold	0	(15,216)
Acquisition of businesses, net of $32,135 and $34,924 cash acquired for 2022 and 2021, respectively	(113,605)	(2,122)
Purchases of property, equipment and intangible assets	(1,385)	(552)
Proceeds from sale of property, equipment and intangible assets	2	3
Investment of subsidiaries initial public offering proceeds into trust account	0	(345,000)
Funds received from trust account of subsidiary	172,584	0
Purchase of equity and other investments	(2,786)	0
Net cash provided by (used in) investing activities	41,746	(416,662)
Cash flows from financing activities:
Proceeds from revolving line of credit, net	0	80,000
Repayment of revolving line of credit	(5,300)	0
Repayment of notes payable	(409)	(37,610)
Repayment of term loan	(60,879)	(16,084)
Proceeds from term loan	275,700	200,000
Proceeds from issuance of senior notes	51,215	890,568
Redemption of senior notes	0	(390,465)
Payment of debt issuance and offering costs	(1,355)	(30,968)
Payment of contingent consideration	(674)	(1,560)
Payment of employment taxes on vesting of restricted stock	(6,733)	(10,540)
Common dividends paid	(90,351)	(236,554)
Preferred dividends paid	(6,006)	(5,467)
Repurchase of common stock	(27)	(2,656)
Distributions to noncontrolling interests	(3,408)	(15,742)
Contributions from noncontrolling interests	11,350	12,732
Redemption of subsidiary temporary equity and distributions	(172,584)	0
Proceeds from initial public offering of subsidiaries	0	345,000
Proceeds from issuance of common stock	0	64,713
Proceeds from issuance of preferred stock	639	13,997
Net cash (used in) provided by financing activities	(8,822)	859,364
(Decrease) increase in cash, cash equivalents and restricted cash	(39,890)	276,050
Effect of foreign currency on cash, cash equivalents and restricted cash	(6,587)	(1,755)
Net (decrease) increase in cash, cash equivalents and restricted cash	(46,477)	274,295
Cash, cash equivalents and restricted cash, beginning of period	279,860	104,837
Cash, cash equivalents and restricted cash, end of period	233,383	379,132
Supplemental disclosures:
Interest paid	133,359	100,997
Taxes paid	$ 45,390	$ 87,857

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Statement of Cash Flows [Abstract]
Net of cash acquired	$ 32,135	$ 34,924

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ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

ORGANIZATION AND NATURE OF BUSINESS OPERATIONS

B. Riley Financial, Inc. and its subsidiaries (collectively, the “Company”) provide investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, financial consulting, appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe and consumer Internet access and cloud communication services through its wholly-owned subsidiaries United Online, Inc. (“UOL” or “United Online”), magicJack VocalTec Ltd. (“magicJack”), and Marconi Wireless ("Marconi"), and majority ownership interest in Lingo Management, LLC (“Lingo”). The Company also has a majority ownership interest in BR Brands Holding, LLC (“BR Brands” or “Brands”), which provides licensing of trademarks.

The Company operates in six operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, research, sales and trading services to corporate and institutional clients; (ii) Wealth Management, through which the Company provides wealth management and tax services to corporate, institutional and high net worth clients; (iii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iv) Financial Consulting, through which the Company provides bankruptcy, financial advisory, forensic accounting, real estate consulting and valuation and appraisal services; (v) Principal Investments - Communications and Other, through which the Company provides consumer Internet access and related subscription services from United Online, cloud communication services primarily through the magicJack devices, global cloud/unified communications and managed services from Lingo, mobile phone voice, text, and data services and devices through a mobile virtual network operator, and single source communications and cloud technology services from BullsEye Telecom (“BullsEye”); and (vi) Brands, which is focused on generating revenue through the licensing of trademarks.

On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company, entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders for a five-year $148,200 term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable discussed in Note 2.

On August 25, 2022, certain Company subsidiaries acquired the assets of Atlantic Coast Fibers, LLC (and related businesses), which provides residential and commercial recycling services in the New York City metropolitan area. The purchase price consideration totaled $27,541, which consisted of $14,482 in cash, $1,642 in assumed debt, and $11,416 in contingent consideration payable over approximately the next two years. In accordance with Accounting Standards Codification (“ASC”) 805, the Company used the acquisition method of accounting for this acquisition. Goodwill of $3,913 and other intangible assets of $13,080 were recorded as a result of the acquisition.

On August 16, 2022, the Company's majority-owned subsidiary, Lingo, acquired BullsEye, a single source communications and cloud technology provider. The purchase price consideration totaled $64,907, which Lingo partially funded using a $52,500 term loan that is discussed in Note 9. In accordance with ASC 805, the Company used the acquisition method of accounting for this acquisition. Goodwill of $29,284 and other intangible assets of $28,700 were recorded as a result of the acquisition. The acquisition is expected to bring revenue from multi-location enterprise business customers to Lingo, improving scale and flexibility.

On August 16, 2022, Lingo entered into a credit agreement (the “Lingo Credit Agreement”) by and among Lingo, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500.

On May 31, 2022, the Company's ownership interest in Lingo increased from 40% to 80% as a result of the conversion of $17,500 of debt owed by Lingo to equity. As a result of the consolidation of Lingo, the pre-existing equity investment was remeasured at fair value resulting in the recognition of a gain of $6,790, which is included in trading (losses) income and fair value adjustments on loans in the condensed consolidated statement of operations. In accordance with ASC 805,

the Company used the acquisition method of accounting. The total fair value of the acquired assets of Lingo was $115,538 and the fair value of the 20% noncontrolling interest was $8,021 at May 31, 2022. Goodwill of $33,622 and other intangible assets of $63,000 were recorded as a result of the acquisition. The acquisition is expected to expand the services offered in the Company's Principal Investments - Communications and Other segment. On January 19, 2022, the Company acquired FocalPoint Securities, LLC (“FocalPoint”), an independent investment bank headquartered in Los Angeles, California. The purchase price consideration totaled $124,479, which consisted of $64,248 in cash, $20,320 in issuance of common stock of the Company, and $39,911 in deferred cash and contingent consideration payable over the next three years. The Company used the acquisition method of accounting for this acquisition. Goodwill of $110,512 and other intangible assets of $10,780 that were recorded as a result of the acquisition will be deductible for tax purposes. The acquisition is expected to expand B. Riley Securities’ mergers and acquisitions (“M&A”) advisory business and enhance its debt capital markets and financial restructuring capabilities.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of Great American Global Partners, LLC, which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. All intercompany accounts and transactions have been eliminated upon consolidation

Applicable accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a Variable Interest Entity (“VIE”); to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE.

The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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 presentation of the financial position and the results of operations for the periods presented have been included. These 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, 2021, filed with the SEC on February 28, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

(b) Use of Estimates

The preparation of the 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 condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for doubtful accounts, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, accounting for income tax valuation allowances, recovery of contract assets, 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 differ.

(c) Interest Expense — Securities Lending Activities

Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $17,447 and $9,945 during the three months ended September 30, 2022 and 2021, respectively, and $43,757 and $39,391 during the nine months ended September 30, 2022 and 2021, respectively. Interest expense from loan participations sold totaled $152 and $878 during the three and nine months ended September 30, 2021, respectively.

(d) Concentration of Risk

Revenues in the Capital Markets, Financial Consulting, Wealth Management, Brands and Principal Investments — Communications and Other segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation 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. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements.

(e) Advertising Expenses

The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,584 and $808 during the three months ended September 30, 2022 and 2021, respectively, and $5,941 and $1,964 during the nine months ended September 30, 2022 and 2021, respectively. Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

(f) Share-Based Compensation

The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest.

In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan (“Purchase Plan”) which allows eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. In accordance with the provisions of ASC 718 - Compensation — Stock Compensation (“ASC 718”), the Company is required to recognize compensation expense relating to shares offered under the Purchase Plan. During the three months ended September 30, 2022 and 2021, the Company recognized compensation expense of $120 and $132, respectively, related to the Purchase Plan. During the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense of $316 and $474, respectively, related to the Purchase Plan.

(g) Income Taxes

The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.

The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.

(h) Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

(i) Restricted Cash

As of September 30, 2022 and December 31, 2021, restricted cash included $1,578 and $927 of cash collateral for leases, respectively.

Cash, cash equivalents and restricted cash consist of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Total cash, cash equivalents and restricted cash	$	233,383	$	279,860

(j) Securities Borrowed and Securities Loaned

Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.

The Company accounts for securities lending transactions in accordance with ASC 210 - Balance Sheet, which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets.

(k) Property and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation expense on property and equipment was $1,327 and $986 during the three months ended September 30, 2022 and 2021, respectively, and $3,380 and $2,890 during the nine months ended September 30, 2022 and 2021, respectively.

(l) Loans Receivable

Under ASC 326 - Financial Instruments – Credit Losses, the Company elected the fair value option for all outstanding loans receivable. Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the consolidated statements of operations.

Loans receivable, at fair value totaled $814,715 and $873,186 as of September 30, 2022 and December 31, 2021, respectively. The loans have various maturities through March 2027. As of September 30, 2022 and December 31, 2021, the historical cost of loans receivable accounted for under the fair value option was $846,933 and $877,527, respectively, which included principal balances of $851,689 and $886,831 respectively, and unamortized costs, origination fees,

premiums and discounts, totaling $4,756 and $9,304, respectively. During the three months ended September 30, 2022 and 2021, the Company recorded net unrealized loss of $19,158 and $1,317, respectively, and during the nine months ended September 30, 2022 and 2021, the Company recorded a net unrealized loss of $19,287 and net unrealized gain of $8,729, respectively, on the loans receivable at fair value, which was included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations.

The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of September 30, 2022, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 15. In accordance with the credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of September 30, 2022, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statements of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology.

Badcock Loans Receivable

On September 23, 2022, the Company's subsidiary, B Riley Receivables II, LLC, a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement II”) with W.S. Badcock Corporation, a Florida corporation (“WSBC”), an indirect wholly owned subsidiary of Franchise Group, Inc., a Delaware corporation (“FRG”). This purchase of $168,363 consumer credit receivables of WSBC (“2022 Badcock Receivable”) was partially financed by a $148,200 term loan discussed in Note 9. As of September 30, 2022, the principal outstanding for the 2022 Badcock Receivable was $168,363 and included in loans receivable, at fair value on the condensed consolidated balance sheets.

On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement”) with WSBC. The Company paid $400,000 in cash to WSBC for the purchase of certain consumer credit receivables of WSBC (“2021 Badcock Receivable”), which was collateralized by the performance of the consumer credit receivables of WSBC. In connection with the Receivables Purchase Agreement, the Company entered into a Servicing Agreement (the “Servicing Agreement”) with WSBC pursuant to which WSBC will provide to the Company certain customary servicing and account management services in respect of the receivables purchased by the Company under the Receivables Purchase Agreement. In addition, subject to certain terms and conditions, FRG has agreed to guarantee the performance by WSBC of its obligations under the Receivables Purchase Agreement and the Servicing Agreement. As of September 30, 2022 and December 31, 2021, the principal outstanding for the 2021 Badcock Receivable was $212,551 and $400,000, respectively, and included in loans receivable, at fair value on the condensed consolidated balance sheets.

(m) Securities and Other Investments Owned and Securities Sold Not Yet Purchased

Securities and other investments owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations.

As of September 30, 2022 and December 31, 2021, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

	September 30, 2022		December 31, 2021
Securities and other investments owned:
Equity securities	$	1,140,728	$	1,444,474
Corporate bonds	6,761		7,632
Other fixed income securities	8,649		2,606
Partnership interests and other	82,475		77,383
	$	1,238,613	$	1,532,095
Securities sold not yet purchased:
Equity securities	$	10,801	$	20,302
Corporate bonds	6,264		6,327
Other fixed income securities	686		1,994
	$	17,751	$	28,623

(n) 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”) in accordance with ASC 820 - Fair Value Measurements. As of September 30, 2022 and December 31, 2021, partnership and investment fund interests valued at NAV of $82,475 and $77,383, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of September 30, 2022 and December 31, 2021, investments in nonpublic entities valued using a measurement alternative of $84,280 and $59,745, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Funds held in trust represents U.S. treasury bills that were purchased with funds raised through the initial public offering of B. Riley Principal 250 Merger Corporation (“BRPM 250”), a consolidated special purpose acquisition corporation (“SPAC”). The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC as set forth in the trust agreement. The funds held in trust are included within Level 1 of the fair value hierarchy and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

The Company has warrant liabilities related to warrants of the SPAC that are held by investors in BRPM 250. The warrants are accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter markets. Warrant liabilities are included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets in the amount of $633 for BRPM 250 and $12,938 for B. Riley Principal 150 Merger Corporation (“BRPM 150”) and BRPM 250 as of September 30, 2022 and December 31, 2021, respectively. Changes in fair value of warrants are included within change in fair value of financial instruments and other as part of other income (expense) in the condensed consolidated statements of operations. The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models.

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2022 and December 31, 2021.

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of September 30, 2022 Using
	Fair value as of September 30, 2022		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	173,216	$	173,216	$	—	$	—
Securities and other investments owned:
Equity securities	1,056,448		717,092		—		339,356
Corporate bonds	6,761		—		6,761		—
Other fixed income securities	8,649		—		8,649		—
Total securities and other investments owned	1,071,858		717,092		15,410		339,356
Loans receivable, at fair value	814,715		—		—		814,715
Total assets measured at fair value	$	2,059,789	$	890,308	$	15,410	$	1,154,071
Liabilities:
Securities sold not yet purchased:
Equity securities	$	10,801	$	10,801	$	—	$	—
Corporate bonds	6,264		—		6,264		—
Other fixed income securities	686		—		686		—
Total securities sold not yet purchased	17,751		10,801		6,950		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322		—		—		4,322
Warrant liabilities	633		633		—		—
Contingent consideration	29,578		—		—		29,578
Total liabilities measured at fair value	$	52,284	$	11,434	$	6,950	$	33,900

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2021 Using
	Fair value at December 31, 2021		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	345,024	$	345,024	$	—	$	—
Securities and other investments owned:
Equity securities	1,384,729		1,007,180		—		377,549
Corporate bonds	7,632		—		7,632		—
Other fixed income securities	2,606		—		2,606		—
Total securities and other investments owned	1,394,967		1,007,180		10,238		377,549
Loans receivable, at fair value	873,186		—		—		873,186
Total assets measured at fair value	$	2,613,177	$	1,352,204	$	10,238	$	1,250,735
Liabilities:
Securities sold not yet purchased:
Equity securities	$	20,302	$	20,302	$	—	$	—
Corporate bonds	6,327		—		6,327		—
Other fixed income securities	1,994		—		1,994		—
Total securities sold not yet purchased	28,623		20,302		8,321		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		—		4,506
Warrant liabilities	12,938		12,938		—		—
Total liabilities measured at fair value	$	46,067	$	33,240	$	8,321	$	4,506

As of September 30, 2022 and December 31, 2021, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $1,154,071 and $1,250,735, respectively, or 20.0% and 21.4%, 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 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 September 30, 2022:

	Fair value at September 30, 2022		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	267,745	Market approach	Multiple of EBITDA	1.80x - 13.00x	6.49x
				Multiple of Sales	1.00x	1.00x
				Market price of related security	$10.03 - $16.81	$13.72
	65,044		Discounted cash flow	Market interest rate	17.8%	17.8%
	6,567		Option pricing model	Annualized volatility	30.0% - 200.0%	57.4%
Loans receivable at fair value	814,715		Discounted cash flow/Market approach	Market interest rate/Market price of related security	6.0% - 33.5%	21.9%
Total level 3 assets measured at fair value	$	1,154,071
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,322	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	29,578		Discounted cash flow	EBITDA volatility	65.0%	65.0%
				Market interest rate	8.5%	8.5%
Total level 3 liabilities measured at fair value	$	33,900

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2022 and 2021 were as follows:

	Level 3 Balance at Beginning of Year		Level 3 Changes During the Period								Level 3 Balance at End of Period
			Fair Value Adjustments		Relating to Undistributed Earnings		Purchases, Sales and Settlements		Transfer in and/or out of Level 3
Nine Months Ended September 30, 2022
Equity securities	$	377,549	$	(18,594)	$	—	$	18,457	$	(38,056)	$	339,356
Loans receivable at fair value	873,186		(19,205)		9,554		(7,983)		(40,837)		814,715
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		824		(1,008)		—		4,322
Contingent consideration	—		(3,880)		—		33,458		—		29,578
Nine Months Ended September 30, 2021
Equity securities	$	149,292	$	52,102	$	—	$	125,794	$	5,777	$	332,965
Loans receivable at fair value	390,689		9,059		9,003		(57,989)		—		350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,700		—		(504)		—		—		4,196
Warrant liabilities	—		—		—		10,466		(10,466)		—

The amount reported in the table above during the nine months ended September 30, 2022 and 2021 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the 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 September 30, 2022 and December 31, 2021, the senior notes payable had a carrying amount of $1,661,191 and $1,606,560, respectively, and fair value of $1,539,876 and $1,661,189, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments are consistent with current market rates of interest for instruments of comparable credit risk.

The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022. These investments were measured due to an observable price change or impairment during the nine months ended September 30, 2022.

	Fair Value Measurement Using
	Total		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
As of September 30, 2022
Investments in nonpublic entities that do not report NAV	$	16,387	$	—	$	15,737	$	650

(o) Derivative and Foreign Currency Translation

The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of September 30, 2022, there were no forward exchange contracts outstanding. As of December 31, 2021, €6,000 forward exchange contracts were outstanding.

The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $248 during the three months ended September 30, 2022 and 2021, respectively, and $68 and $921 during the nine months ended September 30, 2022 and 2021, respectively. This amount was reported as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gain was $783 and $689 during the three months ended September 30, 2022 and 2021, respectively, and gain was $1,913 and $855 during the nine months ended September 30, 2022 and 2021, respectively. These amounts were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

As disclosed in Note 2(s) below, the Company consolidated a VIE, BRPM 250, which has outstanding warrants that were issued in its initial public offering. The warrants were recorded as a liability since the warrants contain a provision to be settled in cash in the event of a qualifying cash tender offer for BRPM 250, which is outside the control of the Company. The outstanding warrants are considered derivative instruments with the warrant liability measured at fair value at each reporting date until exercised or upon expiration, with changes in fair value reported in other income in the condensed consolidated statements of operations. As of September 30, 2022 and December 31, 2021, the warrant liability for BRPM 250 totaled $633 and BRPM 150 and BRPM 250 totaled $12,938, respectively, which was included in accrued expenses and other liabilities in the condensed consolidated balance sheet.

(p) Redeemable Noncontrolling Interests in Equity of Subsidiaries

The Company records redeemable noncontrolling interests in equity of subsidiaries to reflect the economic interests of the class A ordinary shareholders in the BRPM 250 sponsored SPAC and the 20% noncontrolling interest of Lingo. These interests are presented as redeemable noncontrolling interests in equity of subsidiaries within the condensed consolidated balance sheet, outside of the permanent equity section. The class A ordinary shareholders of BRPM 250 have redemption rights that are considered to be outside of the Company’s control. Remeasurements to the redemption value of the redeemable noncontrolling interest in equity of subsidiaries are recorded within retained earnings. The operating agreement with Lingo has provisions which result in the noncontrolling interest being accounted for as temporary equity. Net income (losses) are reflected in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in the condensed consolidated statement of operations.

Changes to redeemable noncontrolling interest consist of the following:

	Nine Months Ended September 30, 2022
Balance, January 1, 2022	$	345,000
Net loss	(1,078)
De-consolidation of BRPM 150	(172,584)
Contributions	8,021
Distributions	(600)
Balance, September 30, 2022	$	178,759

(q) Equity Investments

As of September 30, 2022 and December 31, 2021, equity investments of $42,560 and $39,190, respectively, were accounted for under the equity method of accounting and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees was included in income from equity investments in the accompanying condensed consolidated statements of operations.

bebe stores, inc.

As of September 30, 2022 and December 31, 2021, the Company had a 40.1% ownership interest in bebe stores, inc. (“bebe”). In December 2021, the Company purchased an additional 71,970 shares of newly issued common stock of bebe for $612 and increased its ownership interest from 39.5% to 40.1%. The equity ownership in bebe was accounted for under the equity method of accounting and was included in prepaid expenses and other assets in the condensed consolidated balance sheets.

As of September 30, 2022, the carrying value of the Company’s equity investment in bebe exceeded the fair value based on the quoted market prices. In consideration of these facts, the Company evaluated its investment for other than temporary impairment under ASC 323. The Company did not utilize bright-line tests in the evaluation. Based on the available facts and information regarding the operating results of bebe, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor the investment and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions.

(r) Supplemental Non-cash Disclosures

During the nine months ended September 30, 2022, non-cash investing activities included $20,320 in issuance of the Company's common stock as part of the purchase price consideration from the FocalPoint acquisition and $22,661 in seller financing for deferred cash consideration, the conversion of $17,500 of debt owed by Lingo to equity, and the repayment of loans receivable in the amount of $850 with equity securities. During the nine months ended September 30, 2021, non-cash investing activities included the repayment of a loan receivable in full in the amount of $133,453 with equity securities, a $51,000 note receivable issued for the sale of equity securities to a third party, $35,000 of loans receivable were exchanged for $35,000 of newly issued debt securities, the repayment of a loan receivable in full in the amount of $2,800 with equity securities, and a $200 note receivable was issued for the sale of equity securities to a third party.

(s) Variable Interest Entities

The Company holds interests in various entities that meet the characteristics of a VIE but are not consolidated as the Company is not the primary beneficiary. 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 consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.

The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered VIEs 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 during the three months ended September 30, 2022 and 2021 were $349 and $26,732, respectively, and for the nine months ended September 30, 2022 and 2021 were $12,437 and $52,114, respectively, and are included in services and fees in the condensed consolidated statements of operations.

The carrying value of the Company’s investments in the VIEs that were not consolidated is shown below.

	September 30, 2022		December 31, 2021
Securities and other investments owned, at fair value	$	35,291	$	27,445
Loans receivable, at fair value	70,400		205,265
Other assets	3,129		4,956
Maximum exposure to loss	$	108,820	$	237,666

B. Riley Principal 150 and 250 Merger Corporations

In 2021, the Company along with B. Riley Principal 150 Merger Corporation (“BRPM 150”) and BRPM 250, both special purpose acquisition companies incorporated as Delaware corporations, consummated the initial public offerings of 17,250,000 units of BRPM 150 and 17,250,000 units of BRPM 250. Each Unit of BRPM 150 and BRPM 250 consisted of one share of class A common stock and one-third of one redeemable warrant, each whole warrant entitling the holder thereof to purchase one share of BRPM 150 or BRPM 250 class A common stock at an exercise price of $11.50 per share. The BRPM 150 and BRPM 250 Units were each sold at a price of $10.00 per unit, generating gross proceeds to BRPM 150 of $172,500 and BRPM 250 of $172,500. These proceeds which totaled $345,000 were deposited in a trust account established for the benefit of the BRPM 150 and BRPM 250 class A public shareholders and was included in prepaid expenses and other assets in the condensed balance sheet. These proceeds are invested only in U.S. treasury securities in accordance with the governing documents of BRPM 150 and BRPM 250. Under the terms of the BRPM 150 and BRPM 250 initial public offerings, BRPM 150 and BRPM 250 are required to consummate a business combination transaction within 24 months (or 27 months under certain circumstances) of the completion of their respective initial public offerings.

In connection with the completion of the initial public offerings of BRPM 150 and BRPM 250, the Company invested in the private placement units of BRPM 150 and BRPM 250. Both BRPM 150 and BRPM 250 are determined to be VIE’s because each of the entities do not have enough equity at risk to finance their activities without additional subordinated financial support. The Company has determined that the class A shareholders of BRPM 150 and BRPM 250 do not have substantive rights as shareholders of BRPM 150 and BRPM 250 since these equity interests are determined to be temporary equity. As such, the Company has determined that it is the primary beneficiary of BRPM 150 and BRPM 250 as it has the right to receive benefits or the obligation to absorb losses of each of the entities, as well as the power to direct a majority of the activities that significantly impact BRPM 150 and BRPM 250’s economic performance. Since the Company is determined to be the primary beneficiary, BRPM 150 and BRPM 250 were consolidated into the Company’s financial statements.

On July 19, 2022, BRPM 150 completed a business combination with FaZeClan Holdings, Inc. (“Faze Holdings”) in a reverse merger transaction resulting in BRPM 150 no longer being a VIE of the Company and no longer being included in the consolidated group of the Company. In connection with the de-consolidation of BRPM 150, among other items, prepaid expenses and other assets decreased by $172,584 related to funds held in a trust account and redeemable noncontrolling interests in equity of subsidiaries decreased by $172,500. During the three and nine months ended September 30, 2022, the Company recognized incentive fees of $41,885 included in services and fees in the condensed consolidated statement of operations. See Note 18 for further discussion.

(t) Recent Accounting Standards

Not yet adopted

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material impact on its financial position and results of operations.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820). This update clarifies that a contractual restriction on the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Therefore, a contractual sale restriction should not be considered when measuring an equity security's fair value. The update also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Specific disclosures related to equity securities subject to contractual sale restrictions are required and include the fair value of such equity securities on the balance sheet, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. Investment companies as defined by Topic 946 should apply the amendments in this update to an equity security with a contract containing a sale restriction that was executed or modified on or after the date of adoption. For an equity security with a contract containing a sale restriction that was executed before the date of adoption, investment companies should continue to account for the equity security under their historical accounting policy for measuring such securities until the contractual restrictions expire or are modified. The Company has not yet adopted this update and is currently evaluating the effect, if any, this new standard will have on its financial position and results of operations.

Recently adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to require acquiring entities to apply Topic 606 when recognizing and measuring contract assets and contract liabilities instead of only recognizing such items at fair value on the acquisition date. The update addressed diversity in practice related to the acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company early adopted the ASU on January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provided optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments applied only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which refined the scope of Topic 848 through optional expedients and exceptions when accounting for derivative contracts and certain

hedging relationships. The Company adopted the ASU effective January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

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RESTRUCTURING CHARGE

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

RESTRUCTURING CHARGE

RESTRUCTURING CHARGE

The Company recorded $8,016 in restructuring charges during the three and nine months ended September 30, 2022. The Company did not record any restructuring charges for the three and nine months ended September 30, 2021.

The restructuring charges during the three and nine months ended September 30, 2022 were primarily related to the reorganization and consolidation activities in the Wealth Management segment and the Principal Investments - Communications and Other segment. Reorganization and consolidation activities consisted of reductions in workforce, facility closures, and related intangible impairments and asset disposals.

The following tables summarize the changes in accrued restructuring charge during the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	574	$	676	$	624	$	727
Restructuring charge	8,016		—		8,016		—
Cash paid	(1,448)		(29)		(1,503)		(86)
Non-cash items	(4,620)		3		(4,615)		9
Balance, end of period	$	2,522	$	650	$	2,522	$	650

The following tables summarize the restructuring activities by reportable segment during the three and nine months ended September 30, 2022.

	Wealth Management		Principal Investments - Communications and Other		Total
Restructuring charge (recovery) for the three and nine months ended September 30, 2022
Employee termination	$	354	$	906	$	1,260
Impairment of intangibles	2,012		2,162		4,174
Facility closure and consolidation	1,741		841		2,582
Total restructuring charge	$	4,107	$	3,909	$	8,016

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SECURITIES LENDING

9 Months Ended

Sep. 30, 2022

Securities Lending [Abstract]

SECURITIES LENDING

SECURITIES LENDING

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2022 and December 31, 2021:

	Gross amounts recognized		Gross amounts offset in the consolidated balance sheets (1)		Net amounts included in the consolidated balance sheets		Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default(2)		Net amounts
As of September 30, 2022
Securities borrowed	$	2,243,306	$	—	$	2,243,306	$	2,243,306	$	—
Securities loaned	$	2,239,250	$	—	$	2,239,250	$	2,239,250	$	—
As of December 31, 2021
Securities borrowed	$	2,090,966	$	—	$	2,090,966	$	2,090,966	$	—
Securities loaned	$	2,088,685	$	—	$	2,088,685	$	2,088,685	$	—

_________________________

(1)Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.

(2)Includes the amount of cash collateral held/posted.

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ACCOUNTS RECEIVABLE

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE

The components of accounts receivable, net, include the following:

	September 30, 2022		December 31, 2021
Accounts receivable	$	60,137	$	39,045
Investment banking fees, commissions and other receivables	8,165		14,286
Total accounts receivable	68,302		53,331
Allowance for doubtful accounts	(3,595)		(3,658)
Accounts receivable, net	$	64,707	$	49,673

Additions and changes to the allowance for doubtful accounts consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,773	$	3,565	$	3,658	$	3,599
Add: Additions to reserve	1,510		493		2,786		1,248
Less: Write-offs	(688)		(266)		(2,857)		(1,087)
Less: Recovery	—		—		8		32
Balance, end of period	$	3,595	$	3,792	$	3,595	$	3,792

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PREPAID EXPENSES AND OTHER ASSETS

9 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER ASSETS

PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consist of the following:

	September 30, 2022		December 31, 2021
Funds held in trust account	$	173,216	$	345,024
Equity investments	42,560		39,190
Prepaid expenses	21,322		14,965
Unbilled receivables	12,483		12,315
Other receivables	71,797		40,483
Other assets	34,497		11,525
Prepaid expenses and other assets	$	355,875	$	463,502

Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based contracts in the Auction and Liquidation segment, mobile handsets in the Principal Investments – Communications and Other segment, and consulting related engagements in the Financial Consulting segment.

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $429,187 and $250,568 as of September 30, 2022 and December 31, 2021, respectively.

The changes in the carrying amount of goodwill during the nine months ended September 30, 2022, resulting primarily from the acquisitions of FocalPoint in the Capital Markets segment and Lingo and BullsEye in the Principal Investments – Communications and Other segment (as previously discussed in Note 1), were as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments- Communications and Other Segment		Total
Balance as of December 31, 2021	$	51,338	$	51,195	$	1,975	$	23,680	$	122,380	$	250,568
Goodwill acquired during the period:
Acquisition of other businesses	110,512		—		—		—		68,107		178,619
Balance as of September 30, 2022	$	161,850	$	51,195	$	1,975	$	23,680	$	190,487	$	429,187

Intangible assets consisted of the following:

		As of September 30, 2022						As of December 31, 2021
	Useful Life	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Customer relationships	1.9 to 16 Years	$	220,811	$	(80,900)	$	139,911	$	130,801	$	(59,671)	$	71,130
Domain names	7 years	185		(162)		23		185		(143)		42
Advertising relationships	8 years	100		(78)		22		100		(69)		31
Internally developed software and other intangibles	0.5 to 5 Years	24,295		(11,016)		13,279		15,275		(8,820)		6,455
Trademarks	3 to 10 Years	20,683		(2,848)		17,835		6,369		(1,652)		4,717
Total		266,074		(95,004)		171,070		152,730		(70,355)		82,375
Non-amortizable assets:
Tradenames		125,276		—		125,276		125,276		—		125,276
Total intangible assets		$	391,350	$	(95,004)	$	296,346	$	278,006	$	(70,355)	$	207,651

Amortization expense was $9,390 and $5,156 during the three months ended September 30, 2022 and 2021, respectively, and $23,146 and $16,176 during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, estimated future amortization expense was $9,466, $32,249, $28,169, $23,685, and $20,916 for the years ended December 31, 2022 (remaining three months), 2023, 2024, 2025 and 2026, respectively. The estimated future amortization expense after December 31, 2026 is $56,585.

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NOTES PAYABLE

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTES PAYABLE

Asset Based Credit Facility

The Company is party to a credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $200,000 and a maturity date of April 20, 2027. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts more fully described in Note 2(d) in the Annual Report on Form 10-K. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The interest rate for each revolving credit advance under the Credit Agreement is subject to certain terms and conditions, equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility provides for success fees in the amount of 1.0% to 10.0% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. The credit facility also provides for funding fees in the amount of 0.05% to 0.20% of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale. Interest expense totaled $18 and $109 during the three months ended September 30, 2022 and 2021, respectively, and $165 and $325 during the nine months ended September 30, 2022 and 2021, respectively. There was no outstanding balance on this credit facility as of September 30, 2022 and December 31, 2021. As of September 30, 2022, there were no open letters of credit outstanding.

The Company is in compliance with all financial covenants in the asset based credit facility as of September 30, 2022.

Other Notes Payable

As of September 30, 2022 and December 31, 2021, the outstanding balance for the other notes payable was $25,075 and $357, respectively. Interest expense was $298 and $4 during the three months ended September 30, 2022 and 2021, respectively, and $825 and $16 during the nine months ended September 30, 2022 and 2021, respectively. Notes payable consisted of additional deferred cash consideration owed to the sellers of FocalPoint as of September 30, 2022. Notes payable to a clearing organization for one of the Company’s broker dealers, which accrued interest at the prime rate plus 2.0%, matured on January 31, 2022 and was repaid during the nine months ended September 30, 2022.

TERM LOANS AND REVOLVING CREDIT FACILITY

Pathlight Credit Agreement

On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders (collectively, “Pathlight”) for a five-year $148,200 term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable discussed in Note 2.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus an applicable margin of 6.50%. As of September 30, 2022, the interest rate on the Pathlight Credit Agreement was 10.00%.

The Pathlight Credit Agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Pathlight Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding Pathlight Credit Agreement.

Principal outstanding under the Pathlight Credit Agreement is repaid based on collections of the 2022 Badcock Receivable less other application of payments as defined in the Pathlight Credit Agreement and the remaining principal balance is due at final maturity on September 23, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $144,584 (net of unamortized debt issuance costs of $3,616). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $418 (including amortization of deferred debt issuance costs of $89).

Lingo Credit Agreement

On August 16, 2022, the Company's subsidiary, Lingo, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Lingo Credit Agreement”) by and among the Borrower, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the “New Lender”) for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment. As of September 30, 2022, the interest rate on the Lingo Credit Agreement was 6.29%.

The agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the agreement requires the Borrower to maintain certain financial ratios. The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of

default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding agreement.

Principal outstanding is due in quarterly installments starting on March 31, 2023. Quarterly installments from March 31, 2023 to December 31, 2023 are in the amount of $1,641 per quarter, from March 31, 2024 to December 31, 2024 are in the amount of $1,969 per quarter, from March 31, 2025 to June 30, 2027 are in the amount of $2,625, and the remaining principal balance is due at final maturity on August 16, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $51,595 (net of unamortized debt issuance costs of $905). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $403 (including amortization of deferred debt issuance costs of $26).

Nomura Credit Agreement

On June 23, 2021, the Company, and its wholly owned subsidiaries, BR Financial Holdings, LLC (the “Primary Guarantor”), and BR Advisory & Investments, LLC (the “Borrower”) entered into a credit agreement (as amended, the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, N.A., as collateral agent (the “Collateral Agent”), for a four-year $200,000 secured term loan credit facility (the “Term Loan Facility”) and a four-year $80,000 secured revolving loan credit facility (the “Revolving Credit Facility”).

On December 17, 2021 (the “Amendment Date”), the Company, the Primary Guarantor, and the Borrower entered into a Second Incremental Amendment to Credit Agreement, pursuant to which the Borrower established an incremental facility in an aggregate principal amount of $100,000 (the “Incremental Facility” and the incremental term loans made thereunder, the “Incremental Term Loans”) of secured term loans under the Credit Agreement on terms identical to those applicable to the Term Loan Facility. The Borrower borrowed the full amount of the Incremental Term Loans on the Amendment Date. The Term Loan Facility, Revolving Credit Facility, and Incremental Facility (together, the “Credit Facilities”), mature on June 23, 2025, subject to acceleration or prepayment.

Eurodollar loans under the Credit Facilities accrue interest at the Eurodollar Rate plus an applicable margin of 4.50%. Base rate loans accrue interest at the Base Rate plus an applicable margin of 3.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by the average utilization of the facility for the immediately preceding fiscal quarter.

Subject to certain eligibility requirements, the assets of certain subsidiaries of the Company that hold credit assets, private equity assets, and public equity assets are placed into a borrowing base, which serves to limit the borrowings under the Credit Facilities. If borrowings under the facilities exceed the borrowing base, the Company is obligated to prepay the loans in an aggregate amount equal to such excess. The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit the Company’s, the Primary Guarantor’s, the Borrower’s, and the Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain operating earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of at least $135,000 and the Primary Guarantor to maintain net asset value of at least $1,100,000. The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

Commencing on September 30, 2022, the Term Loan Facility and Incremental Facility will amortize in equal quarterly installments of 1.25% of the aggregate principal amount of the term loan as of the closing date with the remaining balance due at final maturity. Quarterly installments from September 30, 2022 to March 31, 2025 are in the amount of $3,750 per quarter.

As of September 30, 2022 and December 31, 2021, the outstanding balances on the Term Loan Facility and Incremental Facility were $290,448 (net of unamortized debt issuance costs of $5,802) and $292,650 (net of unamortized debt issuance costs of $7,350), respectively. Interest on the term loan during the three months ended September 30, 2022 and 2021 was $5,720 (including amortization of deferred debt issuance costs of $523) and $2,720 (including amortization of deferred debt issuance costs of $350), respectively. Interest on the term loan during the nine months ended September 30, 2022 and 2021 was $14,557 (including amortization of deferred debt issuance costs of $1,548) and $2,956 (including amortization of deferred debt issuance costs of $380), respectively. The interest rate on the term loan as of September 30, 2022 and December 31, 2021 was 8.10% and 4.72%, respectively.

The Company had an outstanding balance of $74,700 and $80,000 under the Revolving Credit Facility as of September 30, 2022 and December 31, 2021, respectively. Interest on the revolving facility during the three months ended September 30, 2022 and 2021 was $1,410 (including unused commitment fee of $6 and amortization of deferred financing costs of $146) and $790 (including unused commitment fee of $58 and amortization of deferred financing costs of $146), respectively. Interest on the revolving facility during the nine months ended September 30, 2022 and 2021 was $3,737 (including unused commitment fee of $6 and amortization of deferred financing costs of $434) and $820 (including unused commitment fee of $76 and amortization of deferred financing costs of $159). The interest rate on the revolving facility as of September 30, 2022 and December 31, 2021 was 7.64% and 4.67%, respectively.

BRPAC Credit Agreement

On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A. in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”). Certain of the Borrowers’ U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”; and together with the Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral.

The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security, and other related agreements.

The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement.

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things: (i) the Lenders agreed to make a new $75,000 term loan to the Borrowers, the proceeds of which the Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless Holdings, LLC was added to the Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the Borrowers were permitted to make certain distributions to the parent company of the Borrowers.

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the

BRPAC Credit Agreement. As of September 30, 2022 and December 31, 2021, the interest rate on the BRPAC Credit Agreement was 6.04% and 3.17%, respectively.

Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments. Quarterly installments on December 31, 2022 are in the amount of $2,813, from March 31, 2023 to December 31, 2023 are in the amount of $4,688 per quarter, from March 31, 2024 to December 31, 2026 are in the amount of $3,750 per quarter, on March 31, 2027 is in the amount of $2,813, and the remaining principal balance is due at final maturity on June 30, 2027.

As of September 30, 2022 and December 31, 2021, the outstanding balance on the term loan was $71,408 (net of unamortized debt issuance costs of $779) and $53,735 (net of unamortized debt issuance costs of $582), respectively. Interest expense on the term loan during the three months ended September 30, 2022 and 2021 was $1,088 (including amortization of deferred debt issuance costs of $81) and $554 (including amortization of deferred debt issuance costs of $72), respectively. Interest expense on the term loan during the nine months ended September 30, 2022 and 2021 was $2,168 (including amortization of deferred debt issuance costs of $252) and $1,931 (including amortization of deferred debt issuance costs of $229), respectively.

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TERM LOANS AND REVOLVING CREDIT FACILITY

9 Months Ended

Sep. 30, 2022

Term Loans And Revolving Credit Facility [Abstract]

TERM LOANS AND REVOLVING CREDIT FACILITY

NOTES PAYABLE

Asset Based Credit Facility

The Company is party to a credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) with a maximum borrowing limit of $200,000 and a maturity date of April 20, 2027. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts more fully described in Note 2(d) in the Annual Report on Form 10-K. All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The interest rate for each revolving credit advance under the Credit Agreement is subject to certain terms and conditions, equal to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility provides for success fees in the amount of 1.0% to 10.0% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. The credit facility also provides for funding fees in the amount of 0.05% to 0.20% of the aggregate principal amount of all credit advances and letters of credit issued in connection with a liquidation sale. Interest expense totaled $18 and $109 during the three months ended September 30, 2022 and 2021, respectively, and $165 and $325 during the nine months ended September 30, 2022 and 2021, respectively. There was no outstanding balance on this credit facility as of September 30, 2022 and December 31, 2021. As of September 30, 2022, there were no open letters of credit outstanding.

The Company is in compliance with all financial covenants in the asset based credit facility as of September 30, 2022.

Other Notes Payable

As of September 30, 2022 and December 31, 2021, the outstanding balance for the other notes payable was $25,075 and $357, respectively. Interest expense was $298 and $4 during the three months ended September 30, 2022 and 2021, respectively, and $825 and $16 during the nine months ended September 30, 2022 and 2021, respectively. Notes payable consisted of additional deferred cash consideration owed to the sellers of FocalPoint as of September 30, 2022. Notes payable to a clearing organization for one of the Company’s broker dealers, which accrued interest at the prime rate plus 2.0%, matured on January 31, 2022 and was repaid during the nine months ended September 30, 2022.

TERM LOANS AND REVOLVING CREDIT FACILITY

Pathlight Credit Agreement

On September 23, 2022, the Company's subsidiary, B. Riley Receivables II, LLC, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Pathlight Credit Agreement”) by and among PLC Agent, LLC in the capacity as administrative agent and Pathlight Capital Fund I LP, Pathlight Capital Fund II LP, and Pathlight Capital Fund III LP as the lenders (collectively, “Pathlight”) for a five-year $148,200 term loan. The Pathlight Credit Agreement was entered in connection with the purchase of the 2022 Badcock Receivable discussed in Note 2.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus an applicable margin of 6.50%. As of September 30, 2022, the interest rate on the Pathlight Credit Agreement was 10.00%.

The Pathlight Credit Agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. The Pathlight Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding Pathlight Credit Agreement.

Principal outstanding under the Pathlight Credit Agreement is repaid based on collections of the 2022 Badcock Receivable less other application of payments as defined in the Pathlight Credit Agreement and the remaining principal balance is due at final maturity on September 23, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $144,584 (net of unamortized debt issuance costs of $3,616). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $418 (including amortization of deferred debt issuance costs of $89).

Lingo Credit Agreement

On August 16, 2022, the Company's subsidiary, Lingo, a Delaware limited liability company (the “Borrower”), entered into a credit agreement (the “Lingo Credit Agreement”) by and among the Borrower, the Company as the secured guarantor, and Banc of California, N.A. in its capacity as administrative agent and lender, for a five-year $45,000 term loan. On September 9, 2022, Lingo entered into the First Amendment to the Lingo Credit Agreement with Grasshopper Bank (the “New Lender”) for an incremental term loan of $7,500, increasing the principal balance of the term loan to $52,500.

The term loan bears interest on the outstanding principal amount equal to the Term SOFR rate plus a margin of 3.00% to 3.75% per annum, depending on the consolidated total funded debt ratio as defined in the Lingo Credit Agreement, plus applicable spread adjustment. As of September 30, 2022, the interest rate on the Lingo Credit Agreement was 6.29%.

The agreement contains certain covenants, including those limiting the Borrower’s ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the agreement requires the Borrower to maintain certain financial ratios. The agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of

default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding agreement.

Principal outstanding is due in quarterly installments starting on March 31, 2023. Quarterly installments from March 31, 2023 to December 31, 2023 are in the amount of $1,641 per quarter, from March 31, 2024 to December 31, 2024 are in the amount of $1,969 per quarter, from March 31, 2025 to June 30, 2027 are in the amount of $2,625, and the remaining principal balance is due at final maturity on August 16, 2027.

As of September 30, 2022, the outstanding balance on the term loan was $51,595 (net of unamortized debt issuance costs of $905). Interest expense on the term loan during the three and nine months ended September 30, 2022 was $403 (including amortization of deferred debt issuance costs of $26).

Nomura Credit Agreement

On June 23, 2021, the Company, and its wholly owned subsidiaries, BR Financial Holdings, LLC (the “Primary Guarantor”), and BR Advisory & Investments, LLC (the “Borrower”) entered into a credit agreement (as amended, the “Credit Agreement”) with Nomura Corporate Funding Americas, LLC, as administrative agent (the “Administrative Agent”), and Wells Fargo Bank, N.A., as collateral agent (the “Collateral Agent”), for a four-year $200,000 secured term loan credit facility (the “Term Loan Facility”) and a four-year $80,000 secured revolving loan credit facility (the “Revolving Credit Facility”).

On December 17, 2021 (the “Amendment Date”), the Company, the Primary Guarantor, and the Borrower entered into a Second Incremental Amendment to Credit Agreement, pursuant to which the Borrower established an incremental facility in an aggregate principal amount of $100,000 (the “Incremental Facility” and the incremental term loans made thereunder, the “Incremental Term Loans”) of secured term loans under the Credit Agreement on terms identical to those applicable to the Term Loan Facility. The Borrower borrowed the full amount of the Incremental Term Loans on the Amendment Date. The Term Loan Facility, Revolving Credit Facility, and Incremental Facility (together, the “Credit Facilities”), mature on June 23, 2025, subject to acceleration or prepayment.

Eurodollar loans under the Credit Facilities accrue interest at the Eurodollar Rate plus an applicable margin of 4.50%. Base rate loans accrue interest at the Base Rate plus an applicable margin of 3.50%. In addition to paying interest on outstanding borrowings under the Revolving Credit Facility, the Company is required to pay a quarterly commitment fee based on the unused portion of the Revolving Credit Facility, which is determined by the average utilization of the facility for the immediately preceding fiscal quarter.

Subject to certain eligibility requirements, the assets of certain subsidiaries of the Company that hold credit assets, private equity assets, and public equity assets are placed into a borrowing base, which serves to limit the borrowings under the Credit Facilities. If borrowings under the facilities exceed the borrowing base, the Company is obligated to prepay the loans in an aggregate amount equal to such excess. The Credit Agreement contains certain representations and warranties (subject to certain agreed qualifications) that are customary for financings of this kind.

The Credit Agreement contains certain affirmative and negative covenants customary for financings of this type that, among other things, limit the Company’s, the Primary Guarantor’s, the Borrower’s, and the Borrower’s subsidiaries’ ability to incur additional indebtedness or liens, to dispose of assets, to make certain fundamental changes, to enter into restrictive agreements, to make certain investments, loans, advances, guarantees and acquisitions, to prepay certain indebtedness and to pay dividends or to make other distributions or redemptions/repurchases in respect of their respective equity interests. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain operating earnings before interest, taxes, depreciation, and amortization (“EBITDA”) of at least $135,000 and the Primary Guarantor to maintain net asset value of at least $1,100,000. The Credit Agreement contains customary events of default, including with respect to a failure to make payments under the credit facilities, cross-default, certain bankruptcy and insolvency events and customary change of control events.

Commencing on September 30, 2022, the Term Loan Facility and Incremental Facility will amortize in equal quarterly installments of 1.25% of the aggregate principal amount of the term loan as of the closing date with the remaining balance due at final maturity. Quarterly installments from September 30, 2022 to March 31, 2025 are in the amount of $3,750 per quarter.

As of September 30, 2022 and December 31, 2021, the outstanding balances on the Term Loan Facility and Incremental Facility were $290,448 (net of unamortized debt issuance costs of $5,802) and $292,650 (net of unamortized debt issuance costs of $7,350), respectively. Interest on the term loan during the three months ended September 30, 2022 and 2021 was $5,720 (including amortization of deferred debt issuance costs of $523) and $2,720 (including amortization of deferred debt issuance costs of $350), respectively. Interest on the term loan during the nine months ended September 30, 2022 and 2021 was $14,557 (including amortization of deferred debt issuance costs of $1,548) and $2,956 (including amortization of deferred debt issuance costs of $380), respectively. The interest rate on the term loan as of September 30, 2022 and December 31, 2021 was 8.10% and 4.72%, respectively.

The Company had an outstanding balance of $74,700 and $80,000 under the Revolving Credit Facility as of September 30, 2022 and December 31, 2021, respectively. Interest on the revolving facility during the three months ended September 30, 2022 and 2021 was $1,410 (including unused commitment fee of $6 and amortization of deferred financing costs of $146) and $790 (including unused commitment fee of $58 and amortization of deferred financing costs of $146), respectively. Interest on the revolving facility during the nine months ended September 30, 2022 and 2021 was $3,737 (including unused commitment fee of $6 and amortization of deferred financing costs of $434) and $820 (including unused commitment fee of $76 and amortization of deferred financing costs of $159). The interest rate on the revolving facility as of September 30, 2022 and December 31, 2021 was 7.64% and 4.67%, respectively.

BRPAC Credit Agreement

On December 19, 2018, BRPI Acquisition Co LLC (“BRPAC”), a Delaware limited liability company, UOL, and YMAX Corporation, Delaware corporations (collectively, the “Borrowers”), indirect wholly owned subsidiaries of the Company, in the capacity as borrowers, entered into a credit agreement (the “BRPAC Credit Agreement”) with the Banc of California, N.A. in the capacity as agent (the “Agent”) and lender and with the other lenders party thereto (the “Closing Date Lenders”). Certain of the Borrowers’ U.S. subsidiaries are guarantors of all obligations under the BRPAC Credit Agreement and are parties to the BRPAC Credit Agreement in such capacity (collectively, the “Secured Guarantors”; and together with the Borrowers, the “Credit Parties”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of BRPAC and a subsidiary of the Company, are guarantors of the obligations under the BRPAC Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares outstanding membership interests of BRPAC are pledged as collateral.

The obligations under the BRPAC Credit Agreement are secured by first-priority liens on, and first priority security interest in, substantially all of the assets of the Credit Parties, including a pledge of (a) 100% of the equity interests of the Credit Parties, (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India; and (c) 65% of the equity interests in magicJack VocalTec LTD., a limited company organized under the laws of Israel. Such security interests are evidenced by pledge, security, and other related agreements.

The BRPAC Credit Agreement contains certain covenants, including those limiting the Credit Parties’, and their subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the BRPAC Credit Agreement requires the Credit Parties to maintain certain financial ratios. The BRPAC Credit Agreement also contains customary representations and warranties, affirmative covenants, and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the agent would be entitled to take various actions, including the acceleration of amounts due under the outstanding BRPAC Credit Agreement.

Through a series of amendments, including the most recent Fourth Amendment to the BRPAC Credit Agreement (the “Fourth Amendment”) on June 21, 2022, the Borrowers, the Secured Guarantors, the Agent and the Closing Date Lenders agreed to the following, among other things: (i) the Lenders agreed to make a new $75,000 term loan to the Borrowers, the proceeds of which the Borrowers’ used to repay the outstanding principal amount of the existing terms loans and optional loans and will use for other general corporate purposes, (ii) a new applicable margin level of 3.50% was established as set forth from the date of the Fourth Amendment, (iii) Marconi Wireless Holdings, LLC was added to the Borrowers, (iv) the maturity date of the term loan was set to June 30, 2027, and (v) the Borrowers were permitted to make certain distributions to the parent company of the Borrowers.

The borrowings under the amended BRPAC Credit Agreement bear interest equal to the Term SOFR rate plus a margin of 2.75% to 3.50% per annum, depending on the Borrowers’ consolidated total funded debt ratio as defined in the

BRPAC Credit Agreement. As of September 30, 2022 and December 31, 2021, the interest rate on the BRPAC Credit Agreement was 6.04% and 3.17%, respectively.

Principal outstanding under the Amended BRPAC Credit Agreement is due in quarterly installments. Quarterly installments on December 31, 2022 are in the amount of $2,813, from March 31, 2023 to December 31, 2023 are in the amount of $4,688 per quarter, from March 31, 2024 to December 31, 2026 are in the amount of $3,750 per quarter, on March 31, 2027 is in the amount of $2,813, and the remaining principal balance is due at final maturity on June 30, 2027.

As of September 30, 2022 and December 31, 2021, the outstanding balance on the term loan was $71,408 (net of unamortized debt issuance costs of $779) and $53,735 (net of unamortized debt issuance costs of $582), respectively. Interest expense on the term loan during the three months ended September 30, 2022 and 2021 was $1,088 (including amortization of deferred debt issuance costs of $81) and $554 (including amortization of deferred debt issuance costs of $72), respectively. Interest expense on the term loan during the nine months ended September 30, 2022 and 2021 was $2,168 (including amortization of deferred debt issuance costs of $252) and $1,931 (including amortization of deferred debt issuance costs of $229), respectively.

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SENIOR NOTES PAYABLE

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

SENIOR NOTES PAYABLE

SENIOR NOTES PAYABLE

Senior notes payable, net, are comprised of the following:

	September 30, 2022		December 31, 2021
6.750% Senior notes due May 31, 2024	$	138,712	$	111,170
6.500% Senior notes due September 30, 2026	180,532		178,787
6.375% Senior notes due February 28, 2025	146,432		144,521
6.000% Senior notes due January 31, 2028	266,058		259,347
5.500% Senior notes due March 31, 2026	217,440		214,243
5.250% Senior notes due August 31, 2028	405,483		397,302
5.000% Senior notes due December 31, 2026	324,714		322,679
	1,679,371		1,628,049
Less: Unamortized debt issuance costs	(18,180)		(21,489)
	$	1,661,191	$	1,606,560

During the three months ended September 30, 2022 and 2021, the Company issued $15,448 and $97,715, respectively, of senior notes, and during the nine months ended September 30, 2022 and 2021, the Company issued $51,321 and $183,042, respectively, of senior notes with maturity dates ranging from May 2024 to August 2028 pursuant to At the Market Issuance Sales Agreements with B. Riley Securities, Inc. which governs the program of at-the-market sales of the Company’s senior notes. A series of prospectus supplements were filed by the Company with the SEC in respect of the Company’s offerings of these senior notes.

As of September 30, 2022 and December 31, 2021, the total senior notes outstanding was $1,661,191 (net of unamortized debt issue costs of $18,180) and $1,606,560 (net of unamortized debt issue costs of $21,489) with a weighted average interest rate of 5.70% and 5.69%, respectively. Interest on senior notes is payable on a quarterly basis. Interest expense on senior notes totaled $25,149 and $21,458 for the three months ended September 30, 2022 and 2021, respectively, and totaled $74,221 and $60,010 for the nine months ended September 30, 2022 and 2021, respectively.

Sales Agreement Prospectus to Issue Up to $250,000 of Senior Notes

The most recent sales agreement prospectus was filed by the Company with the SEC on January 5, 2022 (the “Sales Agreement Prospectus”) superseding the prospectus filed with the SEC on August 11, 2021, the prospectus filed with the SEC on April 6, 2021, and the prospectus filed with the SEC on January 28, 2021. This program provides for the sale by the Company of up to $250,000 of certain of the Company’s senior notes. As of September 30, 2022 and December 31, 2021, the Company had $60,590 and $111,911, respectively, remaining availability under the Sales Agreement Prospectus.

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ACCRUED EXPENSES AND OTHER LIABILITIES

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

ACCRUED EXPENSES AND OTHER LIABILITIES

ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following:

	September 30, 2022		December 31, 2021
Accrued payroll and related expenses	$	79,532	$	107,904
Dividends payable	31,263		28,486
Income taxes payable	34,129		39,776
Other tax liabilities	25,699		20,106
Contingent consideration	29,578		—
Accrued expenses	23,723		96,250
Other liabilities	54,965		51,228
Accrued expenses and other liabilities	$	278,889	$	343,750

Other tax liabilities primarily consist of uncertain tax positions, sales and VAT taxes payable, and other non-income tax liabilities. Accrued expenses primarily consist of accrued trade payables, investment banking payables, and legal settlements. Other liabilities primarily consist of interest payables, customer deposits, and accrued legal fees.

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REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from contracts with customers by reportable segment for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	41,302	$	—	$	—	$	12,342	$	—	$	—	$	53,644
Wealth and asset management fees	3,280		44,322		—		—		—		—		47,602
Commissions, fees and reimbursed expenses	8,827		1,728		1,949		10,493		—		—		22,997
Subscription services	—		—		—		—		70,152		—		70,152
Advertising, licensing and other (1)	—		—		2,550		—		7,744		5,023		15,317
Total revenues from contracts with customers	53,409		46,050		4,499		22,835		77,896		5,023		209,712
Interest income - Loans and securities lending	55,054		—		2,540		—		—		—		57,594
Trading gains on investments	15,171		1,027		—		—		—				16,198
Fair value adjustment on loans	(4,044)		—		—		—		—		—		(4,044)
Other	59,808		1,095		—		—		—		—		60,903
Total revenues	$	179,398	$	48,172	$	7,039	$	22,835	$	77,896	$	5,023	$	340,363

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $1,580 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	116,044	$	—	$	—	$	12,350	$	—	$	—	$	128,394
Wealth and asset management fees	679		86,579		—		—		—		—		87,258
Commissions, fees and reimbursed expenses	10,893		28,379		2,740		8,941		—		—		50,953
Subscription services	—		—		—		—		16,303		—		16,303
Service contract revenues	—		—		5		—		—		—		5
Advertising, licensing and other (1)	—		—		34,327		—		2,997		6,372		43,696
Total revenues from contracts with customers	127,616		114,958		37,072		21,291		19,300		6,372		326,609
Interest income - Loans and securities lending	26,869		—		—		—		—		—		26,869
Trading gains on investments	18,184		1,262		—		—		—		—		19,446
Fair value adjustment on loans	(1,249)		—		—		—		—		—		(1,249)
Other	7,233		2,614		—				—		—		9,847
Total revenues	$	178,653	$	118,834	$	37,072	$	21,291	$	19,300	$	6,372	$	381,522

(1)Includes sale of goods of $34,327 in Auction and Liquidation and $631 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	118,448	$	—	$	—	$	44,958	$	—	$	—	$	163,406
Wealth and asset management fees	8,199		161,835		—		—		—		—		170,034
Commissions, fees and reimbursed expenses	32,208		17,889		7,792		28,123		—		—		86,012
Subscription services	—		—		—		—		135,774		—		135,774
Advertising, licensing and other (1)	—		—		2,550		—		17,319		14,754		34,623
Total revenues from contracts with customers	158,855		179,724		10,342		73,081		153,093		14,754		589,849
Interest income - Loans and securities lending	178,879		—		3,976		—		—		—		182,855
Trading (losses) gains on investments	(279,172)		3,077		—		—		—		—		(276,095)
Fair value adjustment on loans	(4,068)		—		—		—		—		—		(4,068)
Other	90,872		5,239		—		—		—		—		96,111
Total revenues	$	145,366	$	188,040	$	14,318	$	73,081	$	153,093	$	14,754	$	588,652

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $5,345 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	370,337	$	—	$	—	$	40,290	$	—	$	—	$	410,627
Wealth and asset management fees	5,557		204,107		—		—		—		—		209,664
Commissions, fees and reimbursed expenses	37,703		59,979		14,547		26,145		—		—		138,374
Subscription services	—		—		—		—		50,802		—		50,802
Service contract revenues	—		—		1,090		—		—		—		1,090
Advertising, licensing and other (1)	—		—		52,162		—		8,673		15,261		76,096
Total revenues from contracts with customers	413,597		264,086		67,799		66,435		59,475		15,261		886,653
Interest income - Loans and securities lending	89,280		—		—		—		—		—		89,280
Trading (losses) gains on investments	302,539		6,483		—		—		—		—		309,022
Fair value adjustment on loans	8,796		—		—		—		—		—		8,796
Other	18,228		6,472		—		—		—		—		24,700
Total revenues	$	832,440	$	277,041	$	67,799	$	66,435	$	59,475	$	15,261	$	1,318,451

(1)Includes sale of goods of $52,162 in Auction and Liquidation and $2,081 in Principal Investments - Communications and Other.

Contract Balances

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. The Company records a receivable when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligation(s) are satisfied. Receivables related to revenues from contracts with customers totaled $64,707 and $49,673 as of September 30, 2022 and December 31, 2021, respectively. The Company had no significant impairments related to these receivables during the three and nine months ended September 30, 2022 and 2021. The Company also had $12,483 and $12,315 of unbilled receivables included in prepaid expenses and other assets as of September 30, 2022 and December 31, 2021, respectively. The Company’s deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, financial consulting engagements, subscription services where the performance obligation has not yet been satisfied and license agreements with guaranteed minimum royalty payments and advertising/marketing fees with

additional royalty revenue based on a percentage of defined sales. Deferred revenue as of September 30, 2022 and December 31, 2021 was $89,157 and $69,507, respectively. The Company expects to recognize the deferred revenue of $89,157 as of September 30, 2022 as service and fee revenues when the performance obligation is met during the years December 31, 2022 (remaining three months), 2023, 2024, 2025 and 2026 in the amount of $57,058, $13,519, $8,637, $4,496, and $2,105, respectively. The Company expects to recognize the deferred revenue of $3,342 after December 31, 2026.

During the three months ended September 30, 2022 and 2021, the Company recognized revenue of $7,293 and $4,728 that was recorded as deferred revenue at the beginning of the respective year. During the nine months ended September 30, 2022 and 2021, the Company recognized revenue of $32,287 and $31,377 that was recorded as deferred revenue at the beginning of the respective year.

Contract Costs

Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable; (2) costs to fulfill Auction and Liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied; and (3) commissions paid to obtain magicJack and Lingo contracts which are recognized ratably over the contract term and third party support costs for magicJack and related equipment purchased by customers which are recognized ratably over the service period.

The capitalized costs to fulfill a contract were $5,483 and $1,605 as of September 30, 2022 and December 31, 2021, respectively, and are recorded in prepaid expenses and other assets in the condensed consolidated balance sheets. During the three months ended September 30, 2022 and 2021, the Company recognized expenses of $723 and $324 related to capitalized costs to fulfill a contract, respectively. During the nine months ended September 30, 2022 and 2021, the Company recognized expenses of $1,813 and $433 related to capitalized costs to fulfill a contract, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three and nine months ended September 30, 2022 and 2021.

Remaining Performance Obligations and Revenue Recognized from Past Performance

The Company does not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material as of September 30, 2022. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price as of September 30, 2022.

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INCOME TAXES

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective income tax rate was a benefit of 30.0% and a provision of 26.8% for the nine months ended September 30, 2022 and 2021, respectively.

As of September 30, 2022, the Company had federal net operating loss carryforwards of $48,869 and state net operating loss carryforwards of $52,548. The Company’s federal net operating loss carryforwards will expire in the tax years commencing in December 31, 2031 through December 31, 2038. The state net operating loss carryforwards will expire in the tax years commencing in December 31, 2025.

The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of September 30, 2022, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company does not believe that

it is more likely than not that the Company will be able to utilize the benefits related to capital loss carryforwards and has provided a valuation allowance in the amount of $65,900 against these deferred tax assets.

The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2018 to 2021.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Remeasurements to the carrying value of the redeemable noncontrolling interests in equity of subsidiaries are not deemed to be a dividend (see Note 2(p)). According to ASC 480 - Distinguishing Liabilities from Equity, there is no impact on earnings per share in the computation of basic and diluted earnings per share to common shareholders for changes in the carrying value of the redeemable noncontrolling interests in equity, when such changes in carrying value which in substance approximates fair value.

Securities that could potentially dilute basic net income per share in the future that were not included in the computation of diluted net income per share were 1,721,132 and 1,069,184 for the three months ended September 30, 2022 and 2021, respectively, and 1,609,425 and 911,302 for the nine months ended September 30, 2022 and 2021, respectively, because to do so would have been anti-dilutive.

Basic and diluted earnings per share were calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) attributable to B. Riley Financial, Inc.	$	47,837	$	50,550	$	(102,384)	$	380,882
Preferred stock dividends	(2,002)		(1,929)		(6,006)		(5,467)
Net income (loss) applicable to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415
Weighted average common shares outstanding:
Basic	28,293,064		27,570,716		28,068,160		27,297,917
Effect of dilutive potential common shares:
Restricted stock units and warrants	1,675,353		1,223,350		—		1,428,575
Diluted	29,968,417		28,794,066		28,068,160		28,726,492
Basic income (loss) per common share	$	1.62	$	1.76	$	(3.86)	$	13.75
Diluted income (loss) per common share	$	1.53	$	1.69	$	(3.86)	$	13.07

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

(a) Legal Matters

The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from the Company’s securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some

of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding the Company’s business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against the Company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, the Company cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations.

(b) Babcock & Wilcox Commitments and Guarantees

On June 30, 2021, the Company agreed to guaranty (the “B. Riley Guaranty”) up to $110,000 of obligations that B&W may owe to providers of cash collateral pledged in connection with B&W’s debt financing. The B. Riley Guaranty is enforceable in certain circumstances, including, among others, certain events of default and the acceleration of B&W’s obligations under a reimbursement agreement with respect to such cash collateral. B&W will pay the Company $935 per annum in connection with the B. Riley Guaranty. B&W has agreed to reimburse the Company to the extent the B. Riley Guaranty is called upon.

On August 10, 2020, the Company entered into a project specific indemnity rider to a general agreement of indemnity made by B&W in favor of one of its sureties. Pursuant to the indemnity rider, the Company agreed to indemnify the surety in connection with a default by B&W under the underlying indemnity agreement relating to a $29,970 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity rider, B&W paid the Company fees in the amount of $600 on August 26, 2020.

On December 22, 2021, the Company entered into a general agreement of indemnity in favor of one of B&W’s sureties. Pursuant to this indemnity agreement, the Company agreed to indemnify the surety in connection with a default by B&W under a €30,000 payment and performance bond issued by the surety in connection with a construction project undertaken by B&W. In consideration for providing the indemnity, B&W paid the Company fees in the amount of $1,694 on January 20, 2022.

(c) Other Commitments

In the normal course of business, the Company enters into commitments to its clients in connection with capital raising transactions, such as firm commitment underwritings, equity lines of credit, or other commitments to provide financing on specified terms and conditions. These commitments require the Company to purchase securities at a specified price or otherwise provide debt or equity financing on specified terms. Securities underwriting exposes the Company to market and credit risk, primarily in the event that, for any reason, securities purchased by the Company cannot be distributed at the anticipated price and to balance sheet risk in the event that debt or equity financing commitments cannot be syndicated.

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SHARE-BASED PAYMENTS

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

SHARE-BASED PAYMENTS

SHARE-BASED PAYMENTS

(a) Employee Stock Incentive Plans

The 2021 Stock Incentive Plan (the “2021 Plan”) replaced the Amended and Restated 2009 Stock Incentive Plan on May 27, 2021. Share-based compensation expense for restricted stock units under the Company’s 2021 Plan was $14,378 and $9,243 for the three months ended September 30, 2022 and 2021, respectively, and $45,397 and $23,035 for the nine months ended September 30, 2022 and 2021, respectively. During the nine months ended September 30, 2022, in connection with employee stock incentive plans, the Company granted 559,168 restricted stock units with a grant date fair value of $31,859 and 65,000 performance based restricted stock units with a grant date fair value of $2,329. During the nine months ended September 30, 2021, in connection with employee stock incentive plans, the Company granted 423,660 restricted stock units with a grant date fair value of $29,439 and 1,100,000 performance based restricted stock units with a grant date fair value of $40,876. The restricted stock units generally vest over a period of one to five years based on continued service. Performance based restricted stock units generally vest based on both the employee’s continued service and the achievement of a set threshold of the Company’s common stock price, as defined in the grant, during the two to three-year period following the grant. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company’s anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period.

(b) Employee Stock Purchase Plan

In connection with the Company’s Employee Stock Purchase Plan ("Purchase Plan"), share based compensation was $120 and $132 during the three months ended September 30, 2022 and 2021, respectively, and $316 and $474 during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022 and December 31, 2021, there were 398,442 and 450,717 shares reserved for issuance under the Purchase Plan, respectively.

(c) Common Stock

Since October 30, 2018, the Company’s Board of Directors has authorized annual share repurchase programs of up to $50,000 of its outstanding common shares. All share repurchases were effected on the open market at prevailing market prices or in privately negotiated transactions. During the nine months ended September 30, 2022 and 2021, the Company repurchased 571 shares of its common stock for $27 and 44,650 shares of its common stock for $2,656, respectively. The shares repurchased under the program are retired. On October 31, 2022, the share repurchase program was reauthorized by the Board of Directors for share repurchases up to $50,000 of its outstanding common shares and expires in October 2023.

(d) Preferred Stock

During the nine months ended September 30, 2022 and 2021, the Company issued 19,659 and 207,599 depository shares of the Series A Preferred Stock, respectively. There were 2,834,144 and 2,814,485 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. Total liquidation preference for the Series A Preferred Stock as of September 30, 2022 and December 31, 2021, was $70,854 and $70,362, respectively. Dividends on the Series A preferred paid during the nine months ended September 30, 2022 and 2021, were $0.4296875 per depository share.

During the nine months ended September 30, 2022 and 2021, the Company issued 3,941 and 307,148 depository shares of the Series B Preferred Stock. There were 1,701,075 and 1,697,134 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively. Total liquidation preference for the Series B Preferred Stock as of September 30, 2022 and December 31, 2021, was $42,527 and $42,428, respectively. Dividends on the Series B preferred paid during the nine months ended September 30, 2022 and 2021, were $0.4609375 per depository share.

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NET CAPITAL REQUIREMENTS	9 Months Ended
	Sep. 30, 2022
Broker-Dealer [Abstract]
NET CAPITAL REQUIREMENTS	NET CAPITAL REQUIREMENTSB. Riley Securities (“BRS”) and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the maintenance of minimum net capital and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. As of September 30, 2022, BRS had net capital of $153,244, which was $146,718 in excess of required minimum net capital of $6,526, and BRWM had net capital of $14,915, which was $12,415 in excess of required minimum net capital of $2,500. As of December 31, 2021, BRS had net capital of $277,611, which was $265,093 in excess of its required minimum net capital of $12,518, and BRWM had net capital of $13,833, which was $12,819 in excess of its required minimum net capital of $1,014.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

The Company provides asset management and placement agent services to unconsolidated funds affiliated with the Company (the “Funds”). In connection with these services, the Funds may bear certain operating costs and expenses which are initially paid by the Company and subsequently reimbursed by the Funds.

As of September 30, 2022, amounts due from related parties of $814 were from the Funds for management fees and other operating expenses. As of December 31, 2021, amounts due from related parties of $2,306 included $621 from the Funds for management fees and other operating expenses, and $1,635 due from CA Global Partners (“CA Global”) for operating expenses related to wholesale and industrial liquidation engagements managed by CA Global on behalf of GA Global Partners.

No interest expense was recorded related to loan participations sold to BRC Partners Opportunity Fund, LP (“BRCPOF”), a private equity fund managed by one of the Company's subsidiaries, during the three and nine months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded interest expense of $46 and $525 related to loan participations sold to BRCPOF, respectively. No commission income was recorded from introducing trades on behalf of BRCPOF during the three and nine months ended September 30, 2022, respectively. The Company recorded commission income of $131 and $553 from introducing trades on behalf of BRCPOF during the three and nine months ended September 30, 2021, respectively. Our executive officers and members of our board of directors have a 46.8% financial interest, which includes a financial interest of Bryant Riley, our Co-Chief Executive Officer, of 27.8% in BRCPOF as of September 30, 2022.

In June 2020, the Company entered into an investment advisory services agreement with Whitehawk Capital Partners, L.P. (“Whitehawk”), a limited partnership controlled by Mr. J. Ahn, who is the brother of Phil Ahn, the Company’s Chief Financial Officer and Chief Operating Officer. Whitehawk has agreed to provide investment advisory services for two of the funds, GACP I, L.P. and GACP II, L.P. During the three months ended September 30, 2022 and 2021, management fees paid for investment advisory services by Whitehawk was zero and $142, respectively, and during the nine months ended September 30, 2022 and 2021 management fees paid was $1,173 and $1,588, respectively.

The Company periodically participates in loans and financing arrangements for which the Company has an equity ownership and representation on the board of directors (or similar governing body). The Company may also provide consulting services or investment banking services to raise capital for these companies. These transactions can be summarized as follows:

Babcock and Wilcox

During the three months ended September 30, 2022 and 2021, the Company earned $65 and $401, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities. During the nine months ended September 30, 2022 and 2021, the Company earned $129 and $12,749, respectively, of underwriting and financial advisory and other fees from B&W in connection with B&W’s capital raising activities.

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. The agreement was extended through December 31, 2023. 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 bonus or bonuses may also be earned and payable to the Company. In March 2022, a $1,000 performance fee was approved in accordance with the Executive Consulting Agreement.

The Company is also a party to indemnification agreements for the benefit of B&W, and the B. Riley Guaranty, each as disclosed above in Note 15 – Commitments and Contingencies.

The Arena Group Holdings, Inc. (fka the Maven, Inc.)

The Company has loans receivable due from The Arena Group Holdings, Inc. (fka the Maven, Inc.) ("Arena") included in loans receivable, at fair value with a fair value of $68,575 and $69,835 as of September 30, 2022 and December 31, 2021, respectively. Interest on these loans is payable at 10% per annum with maturity dates through December 2023. During the three and nine months ended September 30, 2022, the Company earned zero and $2,023, respectively, in underwriting and financial advisory and other fees from Arena in connection with Arena's capital raising activities.

California Natural Resources Group, LLC

On November 1, 2021, the Company extended a $34,393 bridge promissory note bearing interest at up to 10.0% per annum to California Natural Resources Group, LLC (“CalNRG”). On January 3, 2022, CalNRG repaid the promissory note using proceeds from a new credit facility with a third party bank (the “CalNRG Credit Facility”). The Company has guaranteed CalNRG’s obligations, up to $10,375, under the CalNRG Credit Facility.

Faze Clan

On March 9, 2022, the Company loaned $10,000 to Faze Clan, Inc. (“Faze”) pursuant to a bridge credit agreement (the “Bridge Agreement”). On April 25, 2022, the Company loaned an additional $10,000 pursuant to the Bridge Agreement.

All principal and accrued interest pursuant to the Bridge Agreement was repaid upon closing of Faze’s business combination (the “Business Combination”) with BRPM 150, which following the Business Combination changed its name to Faze Holdings. As a result of the Business Combination, BRPM 150 is no longer a VIE of the Company. On July 19, 2022, in connection with the Business Combination, the Company purchased 5,342,500 shares of Faze Holdings Class A common stock for $10.00 per share. During the three months ended September 30, 2022, the Company earned $41,885 of incentive fees for the de-consolidation of BRPM 150 and $9,632 of underwriting and financial advisory fees from Faze and BRPM 150 in connection with the Business Combination and capital raising activities.

Targus

On October 18, 2022, a subsidiary of the Company acquired all of the issued and outstanding shares of Targus Cayman Holdco Limited (“Targus”) in a transaction with an enterprise value of approximately $250,000, pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with Targus, the sellers identified therein, and the other parties thereto. The purchase price consisted of a combination of cash, 6.75% senior notes due 2024, shares of common stock of the Company, and seller financing (the “Targus Transaction”). Mikel Williams, the chief executive officer of Targus and formerly a member of the Company’s board of directors, resigned from the Company’s board upon the closing of the Targus Transaction. Mr. Williams continues to serve as the chief executive officer of Targus.

Other

As of September 30, 2022 and December 31, 2021, the Company had loans receivable due from other related parties in the amount of zero and $4,201, respectively.

The Company often provides consulting or investment banking services to raise capital for companies in which the Company has significant influence through equity ownership, representation on the board of directors (or similar governing body), or both. Other than the fees described above, during the three months ended September 30, 2022 and 2021, the Company earned $35 and $20,868, respectively, of fees related to these services and during the nine months ended September 30, 2022 and 2021, the Company earned $4,071 and $25,059, respectively, of fees related to these services.

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BUSINESS SEGMENTS

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENTS

BUSINESS SEGMENTS

The Company’s business is classified into the Capital Markets segment, Wealth Management segment, Auction and Liquidation segment, Financial Consulting segment, Principal Investments — Communications and Other segment, and Brands segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. In 2022, the segment results in the Capital Markets segment include the operations of FocalPoint and the segment results in the Principal Investments – Communications and Other segment include the operations from Lingo and BullsEye (as previously discussed in Note 1) in each case from the date of acquisition.

The following is a summary of certain financial data for each of the Company’s reportable segments:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Capital Markets segment:
Revenues - Services and fees	$	113,217	$	134,849	$	249,727	$	431,825
Trading income (loss) and fair value adjustments on loans	11,127		16,935		(283,240)		311,335
Interest income - Loans and securities lending	55,054		26,869		178,879		89,280
Total revenues	179,398		178,653		145,366		832,440
Selling, general and administrative expenses	(35,673)		(80,152)		(115,655)		(231,765)
Interest expense - Securities lending and loan participations sold	(17,447)		(10,097)		(43,757)		(40,269)
Depreciation and amortization	(2,174)		(514)		(6,271)		(1,526)
Segment income (loss)	124,104		87,890		(20,317)		558,880
Wealth Management segment:
Revenues - Services and fees	47,145		117,572		184,963		270,558

Trading income and fair value adjustments on loans	1,027	1,262	3,077	6,483
Total revenues	48,172	118,834	188,040	277,041
Selling, general and administrative expenses	(52,302)	(110,157)	(206,438)	(260,331)
Restructuring charge	(4,106)	—	(4,106)	—
Depreciation and amortization	(1,261)	(2,093)	(4,402)	(6,832)
Segment (loss) income	(9,497)	6,584	(26,906)	9,878
Auction and Liquidation segment:
Revenues - Services and fees	1,949	2,745	7,792	15,637
Revenues - Sale of goods	2,550	34,327	2,550	52,162
Interest income - Loans and securities lending	2,540	—	3,976	—
Total revenues	7,039	37,072	14,318	67,799
Direct cost of services	(2,999)	(13,622)	(6,630)	(27,742)
Cost of goods sold	(1,235)	(11,999)	(1,235)	(19,578)
Selling, general and administrative expenses	(2,228)	(5,153)	(6,225)	(9,719)
Segment income	577	6,298	228	10,760
Financial Consulting segment:
Revenues - Services and fees	22,835	21,291	73,081	66,435
Selling, general and administrative expenses	(20,056)	(18,436)	(60,947)	(55,896)
Depreciation and amortization	(75)	(86)	(234)	(273)
Segment income	2,704	2,769	11,900	10,266
Principal Investments - Communications and Other segment:
Revenues - Services and fees	76,316	18,669	147,748	57,394
Revenues - Sale of goods	1,580	631	5,345	2,081
Total revenues	77,896	19,300	153,093	59,475
Direct cost of services	(41,524)	(4,397)	(67,329)	(13,693)
Cost of goods sold	(1,854)	(443)	(6,099)	(1,816)
Selling, general and administrative expenses	(22,267)	(5,458)	(44,103)	(15,096)
Restructuring charge	(3,910)	—	(3,910)	—
Depreciation and amortization	(6,435)	(2,496)	(13,255)	(7,558)
Segment income	1,906	6,506	18,397	21,312
Brands segment:
Revenues - Services and fees	5,023	6,372	14,754	15,261
Selling, general and administrative expenses	(845)	(972)	(2,419)	(2,338)
Depreciation and amortization	(579)	(714)	(1,745)	(2,143)
Segment income	3,599	4,686	10,590	10,780
Consolidated operating income (loss) from reportable segments	123,393	114,733	(6,108)	621,876
Corporate and other expenses	(19,832)	(17,987)	(44,368)	(42,007)
Interest income	686	70	1,253	175
Change in fair value of financial instruments and other	(574)	1,758	9,728	8,267
(Loss) income from equity investments	(91)	1,149	3,285	1,172
Interest expense	(34,587)	(25,372)	(96,787)	(66,014)
Income (loss) before income taxes	68,995	74,351	(132,997)	523,469

(Provision for) benefit from income taxes	(16,350)		(22,693)		39,858		(140,113)
Net income (loss)	52,645		51,658		(93,139)		383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808		1,108		9,245		2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837		50,550		(102,384)		380,882
Preferred stock dividends	2,002		1,929		6,006		5,467
Net income (loss) available to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415

The following table presents revenues by geographical area:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Revenues - Services and fees:
North America	$	261,600	$	300,340	$	667,969	$	854,429
Europe	4,885		1,157		10,096		2,680
Total Revenues - Services and fees	266,485		301,497		$	678,065	$	857,109
Trading income (losses) and fair value adjustments on loans
North America	12,154		18,197		$	(280,163)	$	317,818
Revenues - Sale of goods
North America	4,130		631		$	7,895	$	8,169
Europe	—		34,328		—		46,075
Total Revenues - Sale of goods	4,130		34,959		$	7,895	$	54,244
Revenues - Interest income - Loans and securities lending:
North America	57,594		26,869		$	182,855	$	89,280
Total Revenues:
North America	335,478		346,037		$	578,556	$	1,269,696
Europe	4,885		35,485		10,096		48,755
Total Revenues	$	340,363	$	381,522	$	588,652	$	1,318,451

As of September 30, 2022 and December 31, 2021, long-lived assets, which consist of property and equipment and other assets, of $16,174 and $12,870, respectively, were located in North America.

Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Principles of Consolidation and Basis of Presentation

(a) Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of Great American Global Partners, LLC, which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations. All intercompany accounts and transactions have been eliminated upon consolidation

Applicable accounting guidance requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity; to require ongoing reassessments of whether an enterprise is the primary beneficiary of a Variable Interest Entity (“VIE”); to eliminate the solely quantitative approach previously required for determining the primary beneficiary of a VIE; to add an additional reconsideration event for determining whether an entity is a VIE when any changes in facts and circumstances occur such that holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of the entity that most significantly impact the entity’s economic performance; and to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise’s involvement in a VIE.

The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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 presentation of the financial position and the results of operations for the periods presented have been included. These 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, 2021, filed with the SEC on February 28, 2022. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

Use of Estimates

Use of Estimates The preparation of the 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 condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, allowance for doubtful accounts, the fair value of loans receivables, intangible assets and goodwill, share based arrangements, contingent consideration, accounting for income tax valuation allowances, recovery of contract assets, 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 differ.

Interest Expense — Securities Lending Activities

Interest Expense — Securities Lending Activities Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company and totaled $17,447 and $9,945 during the three months ended September 30, 2022 and 2021, respectively, and $43,757 and $39,391 during the nine months ended September 30, 2022 and 2021, respectively. Interest expense from loan participations sold totaled $152 and $878 during the three and nine months ended September 30, 2021, respectively.

Concentration of Risk

Concentration of Risk

Revenues in the Capital Markets, Financial Consulting, Wealth Management, Brands and Principal Investments — Communications and Other segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation 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. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements.

Advertising Expenses

Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $1,584 and $808 during the three months ended September 30, 2022 and 2021, respectively, and $5,941 and $1,964 during the nine months ended September 30, 2022 and 2021, respectively. Advertising expense was included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

Share-Based Compensation

Share-Based CompensationThe Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of operations over the requisite service or performance period the award is expected to vest.In June 2018, the Company adopted the 2018 Employee Stock Purchase Plan (“Purchase Plan”) which allows eligible employees to purchase common stock through payroll deductions at a price that is 85% of the market value of the common stock on the last day of the offering period. In accordance with the provisions of ASC 718 - Compensation — Stock Compensation (“ASC 718”), the Company is required to recognize compensation expense relating to shares offered under the Purchase Plan. During the three months ended September 30, 2022 and 2021, the Company recognized compensation expense of $120 and $132, respectively, related to the Purchase Plan. During the nine months ended September 30, 2022 and 2021, the Company recognized compensation expense of $316 and $474, respectively, related to the Purchase Plan.

Income Taxes

Income TaxesThe Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.

Cash and Cash Equivalents

Cash and Cash EquivalentsThe Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Restricted Cash

Restricted Cash

As of September 30, 2022 and December 31, 2021, restricted cash included $1,578 and $927 of cash collateral for leases, respectively.

Cash, cash equivalents and restricted cash consist of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Total cash, cash equivalents and restricted cash	$	233,383	$	279,860

Securities Borrowed and Securities Loaned

Securities Borrowed and Securities Loaned

Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.

The Company accounts for securities lending transactions in accordance with ASC 210 - Balance Sheet, which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets.

Property and Equipment

Property and Equipment Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under finance leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation expense on property and equipment was $1,327 and $986 during the three months ended September 30, 2022 and 2021, respectively, and $3,380 and $2,890 during the nine months ended September 30, 2022 and 2021, respectively.

Loans Receivable

Loans Receivable

Under ASC 326 - Financial Instruments – Credit Losses, the Company elected the fair value option for all outstanding loans receivable. Under the fair value option, loans receivables are measured at each reporting period based upon their exit value in an orderly transaction and unrealized gains or losses from changes in fair value are recorded in the consolidated statements of operations.

Loans receivable, at fair value totaled $814,715 and $873,186 as of September 30, 2022 and December 31, 2021, respectively. The loans have various maturities through March 2027. As of September 30, 2022 and December 31, 2021, the historical cost of loans receivable accounted for under the fair value option was $846,933 and $877,527, respectively, which included principal balances of $851,689 and $886,831 respectively, and unamortized costs, origination fees,

premiums and discounts, totaling $4,756 and $9,304, respectively. During the three months ended September 30, 2022 and 2021, the Company recorded net unrealized loss of $19,158 and $1,317, respectively, and during the nine months ended September 30, 2022 and 2021, the Company recorded a net unrealized loss of $19,287 and net unrealized gain of $8,729, respectively, on the loans receivable at fair value, which was included in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations.

The Company may periodically provide limited guarantees to third parties for loans that are made to investment banking and lending clients. As of September 30, 2022, the Company has outstanding limited guarantee arrangements with respect to Babcock & Wilcox Enterprises, Inc. (“B&W”) as further described in Note 15. In accordance with the credit loss standard, the Company evaluates the need to record an allowance for credit losses for these loan guarantees since they have off-balance sheet credit exposures. As of September 30, 2022, the Company has not recorded any provision for credit losses on the B&W guarantees since the Company believes that there is sufficient collateral to protect the Company from any credit loss exposure.

Interest income on loans receivable is recognized based on the stated interest rate of the loan on the unpaid principal balance plus the amortization of any costs, origination fees, premiums and discounts and is included in interest income - loans and securities lending on the condensed consolidated statements of operations. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology.

Badcock Loans Receivable

On September 23, 2022, the Company's subsidiary, B Riley Receivables II, LLC, a Delaware limited liability company, entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement II”) with W.S. Badcock Corporation, a Florida corporation (“WSBC”), an indirect wholly owned subsidiary of Franchise Group, Inc., a Delaware corporation (“FRG”). This purchase of $168,363 consumer credit receivables of WSBC (“2022 Badcock Receivable”) was partially financed by a $148,200 term loan discussed in Note 9. As of September 30, 2022, the principal outstanding for the 2022 Badcock Receivable was $168,363 and included in loans receivable, at fair value on the condensed consolidated balance sheets.

On December 20, 2021, the Company entered into a Master Receivables Purchase Agreement (“Receivables Purchase Agreement”) with WSBC. The Company paid $400,000 in cash to WSBC for the purchase of certain consumer credit receivables of WSBC (“2021 Badcock Receivable”), which was collateralized by the performance of the consumer credit receivables of WSBC. In connection with the Receivables Purchase Agreement, the Company entered into a Servicing Agreement (the “Servicing Agreement”) with WSBC pursuant to which WSBC will provide to the Company certain customary servicing and account management services in respect of the receivables purchased by the Company under the Receivables Purchase Agreement. In addition, subject to certain terms and conditions, FRG has agreed to guarantee the performance by WSBC of its obligations under the Receivables Purchase Agreement and the Servicing Agreement. As of September 30, 2022 and December 31, 2021, the principal outstanding for the 2021 Badcock Receivable was $212,551 and $400,000, respectively, and included in loans receivable, at fair value on the condensed consolidated balance sheets.

Securities and Other Investments Owned and Securities Sold Not Yet Purchased

Securities and Other Investments Owned and Securities Sold Not Yet PurchasedSecurities and other investments owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations.

As of September 30, 2022 and December 31, 2021, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

	September 30, 2022		December 31, 2021
Securities and other investments owned:
Equity securities	$	1,140,728	$	1,444,474
Corporate bonds	6,761		7,632
Other fixed income securities	8,649		2,606
Partnership interests and other	82,475		77,383
	$	1,238,613	$	1,532,095
Securities sold not yet purchased:
Equity securities	$	10,801	$	20,302
Corporate bonds	6,264		6,327
Other fixed income securities	686		1,994
	$	17,751	$	28,623

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”) in accordance with ASC 820 - Fair Value Measurements. As of September 30, 2022 and December 31, 2021, partnership and investment fund interests valued at NAV of $82,475 and $77,383, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Securities and other investments owned also include investments in nonpublic entities that do not have a readily determinable fair value and do not report NAV per share. These investments are accounted for using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Observable price changes result from, among other things, equity transactions for the same issuer executed during the reporting period, including subsequent equity offerings or other reported equity transactions related to the same issuer. For these transactions to be considered observable price changes of the same issuer, we evaluate whether these transactions have similar rights and obligations, including voting rights, distribution preferences, conversion rights, and other factors, to the investments we hold. Any investments adjusted to their fair value by applying the measurement alternative are disclosed as nonrecurring fair value measurements, including the level in the fair value hierarchy that was used. As of September 30, 2022 and December 31, 2021, investments in nonpublic entities valued using a measurement alternative of $84,280 and $59,745, respectively, are included in securities and other investments owned in the accompanying condensed consolidated balance sheets.

Funds held in trust represents U.S. treasury bills that were purchased with funds raised through the initial public offering of B. Riley Principal 250 Merger Corporation (“BRPM 250”), a consolidated special purpose acquisition corporation (“SPAC”). The funds raised are held in a trust account that is restricted for use and may only be used for purposes of completing an initial business combination or redemption of the class A public common shares of the SPAC as set forth in the trust agreement. The funds held in trust are included within Level 1 of the fair value hierarchy and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets.

The Company has warrant liabilities related to warrants of the SPAC that are held by investors in BRPM 250. The warrants are accounted for as liabilities in accordance with ASC 815 - Derivatives and Hedging and are measured at fair value at inception and on a recurring basis using quoted prices in over-the-counter markets. Warrant liabilities are included in accrued expenses and other liabilities in the accompanying condensed consolidated balance sheets in the amount of $633 for BRPM 250 and $12,938 for B. Riley Principal 150 Merger Corporation (“BRPM 150”) and BRPM 250 as of September 30, 2022 and December 31, 2021, respectively. Changes in fair value of warrants are included within change in fair value of financial instruments and other as part of other income (expense) in the condensed consolidated statements of operations. The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models.

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2022 and December 31, 2021.

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of September 30, 2022 Using
	Fair value as of September 30, 2022		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	173,216	$	173,216	$	—	$	—
Securities and other investments owned:
Equity securities	1,056,448		717,092		—		339,356
Corporate bonds	6,761		—		6,761		—
Other fixed income securities	8,649		—		8,649		—
Total securities and other investments owned	1,071,858		717,092		15,410		339,356
Loans receivable, at fair value	814,715		—		—		814,715
Total assets measured at fair value	$	2,059,789	$	890,308	$	15,410	$	1,154,071
Liabilities:
Securities sold not yet purchased:
Equity securities	$	10,801	$	10,801	$	—	$	—
Corporate bonds	6,264		—		6,264		—
Other fixed income securities	686		—		686		—
Total securities sold not yet purchased	17,751		10,801		6,950		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322		—		—		4,322
Warrant liabilities	633		633		—		—
Contingent consideration	29,578		—		—		29,578
Total liabilities measured at fair value	$	52,284	$	11,434	$	6,950	$	33,900

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2021 Using
	Fair value at December 31, 2021		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	345,024	$	345,024	$	—	$	—
Securities and other investments owned:
Equity securities	1,384,729		1,007,180		—		377,549
Corporate bonds	7,632		—		7,632		—
Other fixed income securities	2,606		—		2,606		—
Total securities and other investments owned	1,394,967		1,007,180		10,238		377,549
Loans receivable, at fair value	873,186		—		—		873,186
Total assets measured at fair value	$	2,613,177	$	1,352,204	$	10,238	$	1,250,735
Liabilities:
Securities sold not yet purchased:
Equity securities	$	20,302	$	20,302	$	—	$	—
Corporate bonds	6,327		—		6,327		—
Other fixed income securities	1,994		—		1,994		—
Total securities sold not yet purchased	28,623		20,302		8,321		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		—		4,506
Warrant liabilities	12,938		12,938		—		—
Total liabilities measured at fair value	$	46,067	$	33,240	$	8,321	$	4,506

As of September 30, 2022 and December 31, 2021, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $1,154,071 and $1,250,735, respectively, or 20.0% and 21.4%, 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 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 September 30, 2022:

	Fair value at September 30, 2022		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	267,745	Market approach	Multiple of EBITDA	1.80x - 13.00x	6.49x
				Multiple of Sales	1.00x	1.00x
				Market price of related security	$10.03 - $16.81	$13.72
	65,044		Discounted cash flow	Market interest rate	17.8%	17.8%
	6,567		Option pricing model	Annualized volatility	30.0% - 200.0%	57.4%
Loans receivable at fair value	814,715		Discounted cash flow/Market approach	Market interest rate/Market price of related security	6.0% - 33.5%	21.9%
Total level 3 assets measured at fair value	$	1,154,071
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,322	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	29,578		Discounted cash flow	EBITDA volatility	65.0%	65.0%
				Market interest rate	8.5%	8.5%
Total level 3 liabilities measured at fair value	$	33,900

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2022 and 2021 were as follows:

	Level 3 Balance at Beginning of Year		Level 3 Changes During the Period								Level 3 Balance at End of Period
			Fair Value Adjustments		Relating to Undistributed Earnings		Purchases, Sales and Settlements		Transfer in and/or out of Level 3
Nine Months Ended September 30, 2022
Equity securities	$	377,549	$	(18,594)	$	—	$	18,457	$	(38,056)	$	339,356
Loans receivable at fair value	873,186		(19,205)		9,554		(7,983)		(40,837)		814,715
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		824		(1,008)		—		4,322
Contingent consideration	—		(3,880)		—		33,458		—		29,578
Nine Months Ended September 30, 2021
Equity securities	$	149,292	$	52,102	$	—	$	125,794	$	5,777	$	332,965
Loans receivable at fair value	390,689		9,059		9,003		(57,989)		—		350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,700		—		(504)		—		—		4,196
Warrant liabilities	—		—		—		10,466		(10,466)		—

The amount reported in the table above during the nine months ended September 30, 2022 and 2021 included the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the 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 September 30, 2022 and December 31, 2021, the senior notes payable had a carrying amount of $1,661,191 and $1,606,560, respectively, and fair value of $1,539,876 and $1,661,189, respectively. The carrying amount of the term loans approximates fair value because the effective yield of such instruments are consistent with current market rates of interest for instruments of comparable credit risk.

The investments in nonpublic entities that do not report NAV are measured at cost, adjusted for observable price changes and impairments, with changes recognized in trading income (losses) and fair value adjustments on loans on the condensed consolidated statements of operations. These investments are evaluated on a nonrecurring basis based on the observable price changes in orderly transactions for the identical or similar investment of the same issuer. Further adjustments are not made until another observable transaction occurs. Therefore, the determination of fair values of these investments in nonpublic entities that do not report NAV does not involve significant estimates and assumptions or subjective and complex judgments. Investments in nonpublic entities that do not report NAV are subject to a qualitative assessment for indicators of impairment. If indicators of impairment are present, the Company is required to estimate the investment’s fair value and immediately recognize an impairment charge in an amount equal to the investment’s carrying value in excess of its estimated fair value.

The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022. These investments were measured due to an observable price change or impairment during the nine months ended September 30, 2022.

	Fair Value Measurement Using
	Total		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
As of September 30, 2022
Investments in nonpublic entities that do not report NAV	$	16,387	$	—	$	15,737	$	650

Derivative and Foreign Currency Translation

Derivative and Foreign Currency Translation

The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain loans receivable and Auction and Liquidation engagements with operations outside the United States. As of September 30, 2022, there were no forward exchange contracts outstanding. As of December 31, 2021, €6,000 forward exchange contracts were outstanding.

The forward exchange contracts were entered into to improve the predictability of cash flows related to a retail store liquidation engagement and a loan receivable. The net gain from forward exchange contracts was zero and $248 during the three months ended September 30, 2022 and 2021, respectively, and $68 and $921 during the nine months ended September 30, 2022 and 2021, respectively. This amount was reported as a component of selling, general and administrative expenses in the condensed consolidated statements of operations.

The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction gain was $783 and $689 during the three months ended September 30, 2022 and 2021, respectively, and gain was $1,913 and $855 during the nine months ended September 30, 2022 and 2021, respectively. These amounts were included in selling, general and administrative expenses in the Company’s condensed consolidated statements of operations.

As disclosed in Note 2(s) below, the Company consolidated a VIE, BRPM 250, which has outstanding warrants that were issued in its initial public offering. The warrants were recorded as a liability since the warrants contain a provision to be settled in cash in the event of a qualifying cash tender offer for BRPM 250, which is outside the control of the Company. The outstanding warrants are considered derivative instruments with the warrant liability measured at fair value at each reporting date until exercised or upon expiration, with changes in fair value reported in other income in the condensed consolidated statements of operations. As of September 30, 2022 and December 31, 2021, the warrant liability for BRPM 250 totaled $633 and BRPM 150 and BRPM 250 totaled $12,938, respectively, which was included in accrued expenses and other liabilities in the condensed consolidated balance sheet.

Redeemable Noncontrolling Interests in Equity of Subsidiaries

Redeemable Noncontrolling Interests in Equity of Subsidiaries The Company records redeemable noncontrolling interests in equity of subsidiaries to reflect the economic interests of the class A ordinary shareholders in the BRPM 250 sponsored SPAC and the 20% noncontrolling interest of Lingo. These interests are presented as redeemable noncontrolling interests in equity of subsidiaries within the condensed consolidated balance sheet, outside of the permanent equity section. The class A ordinary shareholders of BRPM 250 have redemption rights that are considered to be outside of the Company’s control. Remeasurements to the redemption value of the redeemable noncontrolling interest in equity of subsidiaries are recorded within retained earnings. The operating agreement with Lingo has provisions which result in the noncontrolling interest being accounted for as temporary equity. Net income (losses) are reflected in net income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests in the condensed consolidated statement of operations.

Changes to redeemable noncontrolling interest consist of the following:

	Nine Months Ended September 30, 2022
Balance, January 1, 2022	$	345,000
Net loss	(1,078)
De-consolidation of BRPM 150	(172,584)
Contributions	8,021
Distributions	(600)
Balance, September 30, 2022	$	178,759

Equity Investments

Equity Investments

As of September 30, 2022 and December 31, 2021, equity investments of $42,560 and $39,190, respectively, were accounted for under the equity method of accounting and included in prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. The Company’s share of earnings or losses from equity method investees was included in income from equity investments in the accompanying condensed consolidated statements of operations.

bebe stores, inc.

As of September 30, 2022 and December 31, 2021, the Company had a 40.1% ownership interest in bebe stores, inc. (“bebe”). In December 2021, the Company purchased an additional 71,970 shares of newly issued common stock of bebe for $612 and increased its ownership interest from 39.5% to 40.1%. The equity ownership in bebe was accounted for under the equity method of accounting and was included in prepaid expenses and other assets in the condensed consolidated balance sheets.

As of September 30, 2022, the carrying value of the Company’s equity investment in bebe exceeded the fair value based on the quoted market prices. In consideration of these facts, the Company evaluated its investment for other than temporary impairment under ASC 323. The Company did not utilize bright-line tests in the evaluation. Based on the available facts and information regarding the operating results of bebe, the Company’s ability and intent to hold the investments until recovery, the relative amount of the declines, and the length of time that the fair values were less than the carrying values, the Company concluded that recognition of impairment losses in earnings was not required. However, the Company will continue to monitor the investment and it is possible that impairment losses will be recorded in earnings in future periods based on changes in facts and circumstances or intentions.

Variable Interest Entities

Variable Interest EntitiesThe Company holds interests in various entities that meet the characteristics of a VIE but are not consolidated as the Company is not the primary beneficiary. 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 consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed.

The Company has entered into agreements to provide investment banking and advisory services to numerous investment funds (the “Funds”) that are considered VIEs 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.

Recent Accounting Standards

Recent Accounting Standards

Not yet adopted

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-04, Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations to enhance transparency about an entity’s use of supplier finance programs. Under the ASU, the buyer in a supplier finance program is required to disclose information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. An entity should also consider whether the existence of a supplier finance program changes the appropriate presentation of the payables in the program from trade payables to borrowings. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2022, including interim periods within those fiscal years, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the effect of this new standard, which is not expected to have a material impact on its financial position and results of operations.

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (Topic 820). This update clarifies that a contractual restriction on the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Therefore, a contractual sale restriction should not be considered when measuring an equity security's fair value. The update also prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Specific disclosures related to equity securities subject to contractual sale restrictions are required and include the fair value of such equity securities on the balance sheet, the nature and remaining duration of the corresponding restrictions, and any circumstances that could cause a lapse in the restrictions. The amendments in this update are effective for the Company for fiscal periods beginning after December 15, 2023, including interim periods within those fiscal years, with early adoption permitted. Investment companies as defined by Topic 946 should apply the amendments in this update to an equity security with a contract containing a sale restriction that was executed or modified on or after the date of adoption. For an equity security with a contract containing a sale restriction that was executed before the date of adoption, investment companies should continue to account for the equity security under their historical accounting policy for measuring such securities until the contractual restrictions expire or are modified. The Company has not yet adopted this update and is currently evaluating the effect, if any, this new standard will have on its financial position and results of operations.

Recently adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers to require acquiring entities to apply Topic 606 when recognizing and measuring contract assets and contract liabilities instead of only recognizing such items at fair value on the acquisition date. The update addressed diversity in practice related to the acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. The Company early adopted the ASU on January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), which provided optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as the London Interbank Offered Rate (“LIBOR”). The amendments applied only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which refined the scope of Topic 848 through optional expedients and exceptions when accounting for derivative contracts and certain

hedging relationships. The Company adopted the ASU effective January 1, 2022. The impact of adopting the ASU was immaterial to the consolidated results of operations, cash flows, financial position, and disclosures.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Schedule of cash and cash equivalents

Cash, cash equivalents and restricted cash consist of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Total cash, cash equivalents and restricted cash	$	233,383	$	279,860

Restrictions on cash and cash equivalents

Cash, cash equivalents and restricted cash consist of the following:

	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	231,805	$	278,933
Restricted cash	1,578		927
Total cash, cash equivalents and restricted cash	$	233,383	$	279,860

Schedule of securities and other investments owned and securities sold not yet purchased at fair value

As of September 30, 2022 and December 31, 2021, the Company’s securities and other investments owned and securities sold not yet purchased at fair value consisted of the following securities:

	September 30, 2022		December 31, 2021
Securities and other investments owned:
Equity securities	$	1,140,728	$	1,444,474
Corporate bonds	6,761		7,632
Other fixed income securities	8,649		2,606
Partnership interests and other	82,475		77,383
	$	1,238,613	$	1,532,095
Securities sold not yet purchased:
Equity securities	$	10,801	$	20,302
Corporate bonds	6,264		6,327
Other fixed income securities	686		1,994
	$	17,751	$	28,623

Schedule of financial assets and liabilities measured on recurring basis

The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2022 and December 31, 2021.

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis as of September 30, 2022 Using
	Fair value as of September 30, 2022		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	173,216	$	173,216	$	—	$	—
Securities and other investments owned:
Equity securities	1,056,448		717,092		—		339,356
Corporate bonds	6,761		—		6,761		—
Other fixed income securities	8,649		—		8,649		—
Total securities and other investments owned	1,071,858		717,092		15,410		339,356
Loans receivable, at fair value	814,715		—		—		814,715
Total assets measured at fair value	$	2,059,789	$	890,308	$	15,410	$	1,154,071
Liabilities:
Securities sold not yet purchased:
Equity securities	$	10,801	$	10,801	$	—	$	—
Corporate bonds	6,264		—		6,264		—
Other fixed income securities	686		—		686		—
Total securities sold not yet purchased	17,751		10,801		6,950		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322		—		—		4,322
Warrant liabilities	633		633		—		—
Contingent consideration	29,578		—		—		29,578
Total liabilities measured at fair value	$	52,284	$	11,434	$	6,950	$	33,900

	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2021 Using
	Fair value at December 31, 2021		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
Assets:
Funds held in trust account	$	345,024	$	345,024	$	—	$	—
Securities and other investments owned:
Equity securities	1,384,729		1,007,180		—		377,549
Corporate bonds	7,632		—		7,632		—
Other fixed income securities	2,606		—		2,606		—
Total securities and other investments owned	1,394,967		1,007,180		10,238		377,549
Loans receivable, at fair value	873,186		—		—		873,186
Total assets measured at fair value	$	2,613,177	$	1,352,204	$	10,238	$	1,250,735
Liabilities:
Securities sold not yet purchased:
Equity securities	$	20,302	$	20,302	$	—	$	—
Corporate bonds	6,327		—		6,327		—
Other fixed income securities	1,994		—		1,994		—
Total securities sold not yet purchased	28,623		20,302		8,321		—
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		—		4,506
Warrant liabilities	12,938		12,938		—		—
Total liabilities measured at fair value	$	46,067	$	33,240	$	8,321	$	4,506

Schedule of fair value measurement inputs and valuation techniques

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 September 30, 2022:

	Fair value at September 30, 2022		Valuation Technique	Unobservable Input	Range	Weighted Average
Assets:
Equity securities	$	267,745	Market approach	Multiple of EBITDA	1.80x - 13.00x	6.49x
				Multiple of Sales	1.00x	1.00x
				Market price of related security	$10.03 - $16.81	$13.72
	65,044		Discounted cash flow	Market interest rate	17.8%	17.8%
	6,567		Option pricing model	Annualized volatility	30.0% - 200.0%	57.4%
Loans receivable at fair value	814,715		Discounted cash flow/Market approach	Market interest rate/Market price of related security	6.0% - 33.5%	21.9%
Total level 3 assets measured at fair value	$	1,154,071
Liabilities:
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$	4,322	Market approach	Operating income multiple	6.0x	6.0x
Contingent consideration	29,578		Discounted cash flow	EBITDA volatility	65.0%	65.0%
				Market interest rate	8.5%	8.5%
Total level 3 liabilities measured at fair value	$	33,900

Schedule of fair value measurement of level 3 financial assets and liabilities

The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2022 and 2021 were as follows:

	Level 3 Balance at Beginning of Year		Level 3 Changes During the Period								Level 3 Balance at End of Period
			Fair Value Adjustments		Relating to Undistributed Earnings		Purchases, Sales and Settlements		Transfer in and/or out of Level 3
Nine Months Ended September 30, 2022
Equity securities	$	377,549	$	(18,594)	$	—	$	18,457	$	(38,056)	$	339,356
Loans receivable at fair value	873,186		(19,205)		9,554		(7,983)		(40,837)		814,715
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,506		—		824		(1,008)		—		4,322
Contingent consideration	—		(3,880)		—		33,458		—		29,578
Nine Months Ended September 30, 2021
Equity securities	$	149,292	$	52,102	$	—	$	125,794	$	5,777	$	332,965
Loans receivable at fair value	390,689		9,059		9,003		(57,989)		—		350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,700		—		(504)		—		—		4,196
Warrant liabilities	—		—		—		10,466		(10,466)		—

Schedule of financial assets measured on nonrecurring basis

The following table presents information on the assets measured at fair value on a nonrecurring basis by level within the fair value hierarchy as of September 30, 2022. These investments were measured due to an observable price change or impairment during the nine months ended September 30, 2022.

	Fair Value Measurement Using
	Total		Quoted prices in active markets for identical assets  (Level 1)		Other observable inputs  (Level 2)		Significant unobservable inputs  (Level 3)
As of September 30, 2022
Investments in nonpublic entities that do not report NAV	$	16,387	$	—	$	15,737	$	650

Redeemable Noncontrolling Interest

Changes to redeemable noncontrolling interest consist of the following:

	Nine Months Ended September 30, 2022
Balance, January 1, 2022	$	345,000
Net loss	(1,078)
De-consolidation of BRPM 150	(172,584)
Contributions	8,021
Distributions	(600)
Balance, September 30, 2022	$	178,759

Schedule of investments in the VIE

The carrying value of the Company’s investments in the VIEs that were not consolidated is shown below.

	September 30, 2022		December 31, 2021
Securities and other investments owned, at fair value	$	35,291	$	27,445
Loans receivable, at fair value	70,400		205,265
Other assets	3,129		4,956
Maximum exposure to loss	$	108,820	$	237,666

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RESTRUCTURING CHARGE (Tables)

9 Months Ended

Sep. 30, 2022

Restructuring and Related Activities [Abstract]

Schedule of changes in accrued restructuring charge

The following tables summarize the changes in accrued restructuring charge during the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	574	$	676	$	624	$	727
Restructuring charge	8,016		—		8,016		—
Cash paid	(1,448)		(29)		(1,503)		(86)
Non-cash items	(4,620)		3		(4,615)		9
Balance, end of period	$	2,522	$	650	$	2,522	$	650

Restructuring and Related Costs

The following tables summarize the restructuring activities by reportable segment during the three and nine months ended September 30, 2022.

	Wealth Management		Principal Investments - Communications and Other		Total
Restructuring charge (recovery) for the three and nine months ended September 30, 2022
Employee termination	$	354	$	906	$	1,260
Impairment of intangibles	2,012		2,162		4,174
Facility closure and consolidation	1,741		841		2,582
Total restructuring charge	$	4,107	$	3,909	$	8,016

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SECURITIES LENDING (Tables)

9 Months Ended

Sep. 30, 2022

Securities Lending [Abstract]

Schedule of contractual gross and net securities borrowing and lending balances

The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2022 and December 31, 2021:

	Gross amounts recognized		Gross amounts offset in the consolidated balance sheets (1)		Net amounts included in the consolidated balance sheets		Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default(2)		Net amounts
As of September 30, 2022
Securities borrowed	$	2,243,306	$	—	$	2,243,306	$	2,243,306	$	—
Securities loaned	$	2,239,250	$	—	$	2,239,250	$	2,239,250	$	—
As of December 31, 2021
Securities borrowed	$	2,090,966	$	—	$	2,090,966	$	2,090,966	$	—
Securities loaned	$	2,088,685	$	—	$	2,088,685	$	2,088,685	$	—

_________________________

(1)Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.

(2)Includes the amount of cash collateral held/posted.

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ACCOUNTS RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2022

Receivables [Abstract]

Schedule of components of accounts receivable, net

The components of accounts receivable, net, include the following:

	September 30, 2022		December 31, 2021
Accounts receivable	$	60,137	$	39,045
Investment banking fees, commissions and other receivables	8,165		14,286
Total accounts receivable	68,302		53,331
Allowance for doubtful accounts	(3,595)		(3,658)
Accounts receivable, net	$	64,707	$	49,673

Schedule of allowance for doubtful accounts

Additions and changes to the allowance for doubtful accounts consist of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Balance, beginning of period	$	2,773	$	3,565	$	3,658	$	3,599
Add: Additions to reserve	1,510		493		2,786		1,248
Less: Write-offs	(688)		(266)		(2,857)		(1,087)
Less: Recovery	—		—		8		32
Balance, end of period	$	3,595	$	3,792	$	3,595	$	3,792

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PREPAID EXPENSES AND OTHER ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of prepaids and other assets

Prepaid expenses and other assets consist of the following:

	September 30, 2022		December 31, 2021
Funds held in trust account	$	173,216	$	345,024
Equity investments	42,560		39,190
Prepaid expenses	21,322		14,965
Unbilled receivables	12,483		12,315
Other receivables	71,797		40,483
Other assets	34,497		11,525
Prepaid expenses and other assets	$	355,875	$	463,502

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of carrying amount of goodwill

The changes in the carrying amount of goodwill during the nine months ended September 30, 2022, resulting primarily from the acquisitions of FocalPoint in the Capital Markets segment and Lingo and BullsEye in the Principal Investments – Communications and Other segment (as previously discussed in Note 1), were as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments- Communications and Other Segment		Total
Balance as of December 31, 2021	$	51,338	$	51,195	$	1,975	$	23,680	$	122,380	$	250,568
Goodwill acquired during the period:
Acquisition of other businesses	110,512		—		—		—		68,107		178,619
Balance as of September 30, 2022	$	161,850	$	51,195	$	1,975	$	23,680	$	190,487	$	429,187

Schedule of intangible assets

Intangible assets consisted of the following:

		As of September 30, 2022						As of December 31, 2021
	Useful Life	Gross Carrying Value		Accumulated Amortization		Intangibles Net		Gross Carrying Value		Accumulated Amortization		Intangibles Net
Amortizable assets:
Customer relationships	1.9 to 16 Years	$	220,811	$	(80,900)	$	139,911	$	130,801	$	(59,671)	$	71,130
Domain names	7 years	185		(162)		23		185		(143)		42
Advertising relationships	8 years	100		(78)		22		100		(69)		31
Internally developed software and other intangibles	0.5 to 5 Years	24,295		(11,016)		13,279		15,275		(8,820)		6,455
Trademarks	3 to 10 Years	20,683		(2,848)		17,835		6,369		(1,652)		4,717
Total		266,074		(95,004)		171,070		152,730		(70,355)		82,375
Non-amortizable assets:
Tradenames		125,276		—		125,276		125,276		—		125,276
Total intangible assets		$	391,350	$	(95,004)	$	296,346	$	278,006	$	(70,355)	$	207,651

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SENIOR NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of senior notes payable, net

Senior notes payable, net, are comprised of the following:

	September 30, 2022		December 31, 2021
6.750% Senior notes due May 31, 2024	$	138,712	$	111,170
6.500% Senior notes due September 30, 2026	180,532		178,787
6.375% Senior notes due February 28, 2025	146,432		144,521
6.000% Senior notes due January 31, 2028	266,058		259,347
5.500% Senior notes due March 31, 2026	217,440		214,243
5.250% Senior notes due August 31, 2028	405,483		397,302
5.000% Senior notes due December 31, 2026	324,714		322,679
	1,679,371		1,628,049
Less: Unamortized debt issuance costs	(18,180)		(21,489)
	$	1,661,191	$	1,606,560

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ACCRUED EXPENSES AND OTHER LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Schedule of accrued expenses and other liabilities

Accrued expenses and other liabilities consist of the following:

	September 30, 2022		December 31, 2021
Accrued payroll and related expenses	$	79,532	$	107,904
Dividends payable	31,263		28,486
Income taxes payable	34,129		39,776
Other tax liabilities	25,699		20,106
Contingent consideration	29,578		—
Accrued expenses	23,723		96,250
Other liabilities	54,965		51,228
Accrued expenses and other liabilities	$	278,889	$	343,750

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Schedule of revenues from contracts with customers

Revenue from contracts with customers by reportable segment for the three and nine months ended September 30, 2022 and 2021 was as follows:

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	41,302	$	—	$	—	$	12,342	$	—	$	—	$	53,644
Wealth and asset management fees	3,280		44,322		—		—		—		—		47,602
Commissions, fees and reimbursed expenses	8,827		1,728		1,949		10,493		—		—		22,997
Subscription services	—		—		—		—		70,152		—		70,152
Advertising, licensing and other (1)	—		—		2,550		—		7,744		5,023		15,317
Total revenues from contracts with customers	53,409		46,050		4,499		22,835		77,896		5,023		209,712
Interest income - Loans and securities lending	55,054		—		2,540		—		—		—		57,594
Trading gains on investments	15,171		1,027		—		—		—				16,198
Fair value adjustment on loans	(4,044)		—		—		—		—		—		(4,044)
Other	59,808		1,095		—		—		—		—		60,903
Total revenues	$	179,398	$	48,172	$	7,039	$	22,835	$	77,896	$	5,023	$	340,363

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $1,580 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the three months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	116,044	$	—	$	—	$	12,350	$	—	$	—	$	128,394
Wealth and asset management fees	679		86,579		—		—		—		—		87,258
Commissions, fees and reimbursed expenses	10,893		28,379		2,740		8,941		—		—		50,953
Subscription services	—		—		—		—		16,303		—		16,303
Service contract revenues	—		—		5		—		—		—		5
Advertising, licensing and other (1)	—		—		34,327		—		2,997		6,372		43,696
Total revenues from contracts with customers	127,616		114,958		37,072		21,291		19,300		6,372		326,609
Interest income - Loans and securities lending	26,869		—		—		—		—		—		26,869
Trading gains on investments	18,184		1,262		—		—		—		—		19,446
Fair value adjustment on loans	(1,249)		—		—		—		—		—		(1,249)
Other	7,233		2,614		—				—		—		9,847
Total revenues	$	178,653	$	118,834	$	37,072	$	21,291	$	19,300	$	6,372	$	381,522

(1)Includes sale of goods of $34,327 in Auction and Liquidation and $631 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2022
Corporate finance, consulting and investment banking fees	$	118,448	$	—	$	—	$	44,958	$	—	$	—	$	163,406
Wealth and asset management fees	8,199		161,835		—		—		—		—		170,034
Commissions, fees and reimbursed expenses	32,208		17,889		7,792		28,123		—		—		86,012
Subscription services	—		—		—		—		135,774		—		135,774
Advertising, licensing and other (1)	—		—		2,550		—		17,319		14,754		34,623
Total revenues from contracts with customers	158,855		179,724		10,342		73,081		153,093		14,754		589,849
Interest income - Loans and securities lending	178,879		—		3,976		—		—		—		182,855
Trading (losses) gains on investments	(279,172)		3,077		—		—		—		—		(276,095)
Fair value adjustment on loans	(4,068)		—		—		—		—		—		(4,068)
Other	90,872		5,239		—		—		—		—		96,111
Total revenues	$	145,366	$	188,040	$	14,318	$	73,081	$	153,093	$	14,754	$	588,652

(1)Includes sale of goods of $2,550 in Auction and Liquidation and $5,345 in Principal Investments - Communications and Other.

	Capital Markets Segment		Wealth Management Segment		Auction and Liquidation Segment		Financial Consulting Segment		Principal Investments - Communications and Other Segment		Brands Segment		Total
Revenues for the nine months ended September 30, 2021
Corporate finance, consulting and investment banking fees	$	370,337	$	—	$	—	$	40,290	$	—	$	—	$	410,627
Wealth and asset management fees	5,557		204,107		—		—		—		—		209,664
Commissions, fees and reimbursed expenses	37,703		59,979		14,547		26,145		—		—		138,374
Subscription services	—		—		—		—		50,802		—		50,802
Service contract revenues	—		—		1,090		—		—		—		1,090
Advertising, licensing and other (1)	—		—		52,162		—		8,673		15,261		76,096
Total revenues from contracts with customers	413,597		264,086		67,799		66,435		59,475		15,261		886,653
Interest income - Loans and securities lending	89,280		—		—		—		—		—		89,280
Trading (losses) gains on investments	302,539		6,483		—		—		—		—		309,022
Fair value adjustment on loans	8,796		—		—		—		—		—		8,796
Other	18,228		6,472		—		—		—		—		24,700
Total revenues	$	832,440	$	277,041	$	67,799	$	66,435	$	59,475	$	15,261	$	1,318,451

(1)Includes sale of goods of $52,162 in Auction and Liquidation and $2,081 in Principal Investments - Communications and Other.

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

Basic and diluted earnings per share were calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net income (loss) attributable to B. Riley Financial, Inc.	$	47,837	$	50,550	$	(102,384)	$	380,882
Preferred stock dividends	(2,002)		(1,929)		(6,006)		(5,467)
Net income (loss) applicable to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415
Weighted average common shares outstanding:
Basic	28,293,064		27,570,716		28,068,160		27,297,917
Effect of dilutive potential common shares:
Restricted stock units and warrants	1,675,353		1,223,350		—		1,428,575
Diluted	29,968,417		28,794,066		28,068,160		28,726,492
Basic income (loss) per common share	$	1.62	$	1.76	$	(3.86)	$	13.75
Diluted income (loss) per common share	$	1.53	$	1.69	$	(3.86)	$	13.07

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BUSINESS SEGMENTS (Tables)

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Schedule of segment reporting information, by segment

The following is a summary of certain financial data for each of the Company’s reportable segments:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Capital Markets segment:
Revenues - Services and fees	$	113,217	$	134,849	$	249,727	$	431,825
Trading income (loss) and fair value adjustments on loans	11,127		16,935		(283,240)		311,335
Interest income - Loans and securities lending	55,054		26,869		178,879		89,280
Total revenues	179,398		178,653		145,366		832,440
Selling, general and administrative expenses	(35,673)		(80,152)		(115,655)		(231,765)
Interest expense - Securities lending and loan participations sold	(17,447)		(10,097)		(43,757)		(40,269)
Depreciation and amortization	(2,174)		(514)		(6,271)		(1,526)
Segment income (loss)	124,104		87,890		(20,317)		558,880
Wealth Management segment:
Revenues - Services and fees	47,145		117,572		184,963		270,558

Trading income and fair value adjustments on loans	1,027	1,262	3,077	6,483
Total revenues	48,172	118,834	188,040	277,041
Selling, general and administrative expenses	(52,302)	(110,157)	(206,438)	(260,331)
Restructuring charge	(4,106)	—	(4,106)	—
Depreciation and amortization	(1,261)	(2,093)	(4,402)	(6,832)
Segment (loss) income	(9,497)	6,584	(26,906)	9,878
Auction and Liquidation segment:
Revenues - Services and fees	1,949	2,745	7,792	15,637
Revenues - Sale of goods	2,550	34,327	2,550	52,162
Interest income - Loans and securities lending	2,540	—	3,976	—
Total revenues	7,039	37,072	14,318	67,799
Direct cost of services	(2,999)	(13,622)	(6,630)	(27,742)
Cost of goods sold	(1,235)	(11,999)	(1,235)	(19,578)
Selling, general and administrative expenses	(2,228)	(5,153)	(6,225)	(9,719)
Segment income	577	6,298	228	10,760
Financial Consulting segment:
Revenues - Services and fees	22,835	21,291	73,081	66,435
Selling, general and administrative expenses	(20,056)	(18,436)	(60,947)	(55,896)
Depreciation and amortization	(75)	(86)	(234)	(273)
Segment income	2,704	2,769	11,900	10,266
Principal Investments - Communications and Other segment:
Revenues - Services and fees	76,316	18,669	147,748	57,394
Revenues - Sale of goods	1,580	631	5,345	2,081
Total revenues	77,896	19,300	153,093	59,475
Direct cost of services	(41,524)	(4,397)	(67,329)	(13,693)
Cost of goods sold	(1,854)	(443)	(6,099)	(1,816)
Selling, general and administrative expenses	(22,267)	(5,458)	(44,103)	(15,096)
Restructuring charge	(3,910)	—	(3,910)	—
Depreciation and amortization	(6,435)	(2,496)	(13,255)	(7,558)
Segment income	1,906	6,506	18,397	21,312
Brands segment:
Revenues - Services and fees	5,023	6,372	14,754	15,261
Selling, general and administrative expenses	(845)	(972)	(2,419)	(2,338)
Depreciation and amortization	(579)	(714)	(1,745)	(2,143)
Segment income	3,599	4,686	10,590	10,780
Consolidated operating income (loss) from reportable segments	123,393	114,733	(6,108)	621,876
Corporate and other expenses	(19,832)	(17,987)	(44,368)	(42,007)
Interest income	686	70	1,253	175
Change in fair value of financial instruments and other	(574)	1,758	9,728	8,267
(Loss) income from equity investments	(91)	1,149	3,285	1,172
Interest expense	(34,587)	(25,372)	(96,787)	(66,014)
Income (loss) before income taxes	68,995	74,351	(132,997)	523,469

(Provision for) benefit from income taxes	(16,350)		(22,693)		39,858		(140,113)
Net income (loss)	52,645		51,658		(93,139)		383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808		1,108		9,245		2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837		50,550		(102,384)		380,882
Preferred stock dividends	2,002		1,929		6,006		5,467
Net income (loss) available to common shareholders	$	45,835	$	48,621	$	(108,390)	$	375,415

Schedule of revenues by geographical area

The following table presents revenues by geographical area:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues:
Revenues - Services and fees:
North America	$	261,600	$	300,340	$	667,969	$	854,429
Europe	4,885		1,157		10,096		2,680
Total Revenues - Services and fees	266,485		301,497		$	678,065	$	857,109
Trading income (losses) and fair value adjustments on loans
North America	12,154		18,197		$	(280,163)	$	317,818
Revenues - Sale of goods
North America	4,130		631		$	7,895	$	8,169
Europe	—		34,328		—		46,075
Total Revenues - Sale of goods	4,130		34,959		$	7,895	$	54,244
Revenues - Interest income - Loans and securities lending:
North America	57,594		26,869		$	182,855	$	89,280
Total Revenues:
North America	335,478		346,037		$	578,556	$	1,269,696
Europe	4,885		35,485		10,096		48,755
Total Revenues	$	340,363	$	381,522	$	588,652	$	1,318,451

XML

ORGANIZATION AND NATURE OF BUSINESS OPERATIONS (Details) $ in Thousands						9 Months Ended
	Sep. 23, 2022 USD ($)	Aug. 25, 2022 USD ($)	Aug. 16, 2022 USD ($)	May 31, 2022 USD ($)	Jan. 19, 2022 USD ($)	Sep. 30, 2022 USD ($) segment	Sep. 09, 2022 USD ($)	May 30, 2022	Dec. 31, 2021 USD ($)
Business Acquisition [Line Items]
Number of operating segments | segment						6
Contingent consideration						$ 29,578			$ 0
Goodwill						$ 429,187			$ 250,568
Secured Debt | Line of Credit
Business Acquisition [Line Items]
Term loan							$ 52,500
Secured Debt | Term Loan | Line of Credit
Business Acquisition [Line Items]
Debt instrument, term	5 years		5 years
Term loan	$ 148,200
Lingo
Business Acquisition [Line Items]
Fair value of noncontrolling interest (in percentage)				20.00%
Atlantic Coast Fibers, LLC
Business Acquisition [Line Items]
Business combination, consideration transferred		$ 27,541
Payments to acquire businesses, gross		14,482
Consideration transferred, liabilities incurred		1,642
Contingent consideration		$ 11,416
Business combination, consideration transferred, deferred cash, equity and contingent consideration payable term		2 years
Goodwill		$ 3,913
Other intangible assets		$ 13,080
BullsEye
Business Acquisition [Line Items]
Business combination, consideration transferred			$ 64,907
Goodwill			29,284
Other intangible assets			$ 28,700
Lingo
Business Acquisition [Line Items]
Goodwill				$ 33,622
Other intangible assets				$ 63,000
Business acquisition, percentage of voting interests acquired				80.00%				40.00%
Conversion feature, principal amount				$ 17,500
Remeasurement gain				6,790
Total fair value of assets				115,538
Fair value of noncontrolling interest				$ 8,021
FocalPoint Securities, LLC ("FocalPoint")
Business Acquisition [Line Items]
Business combination, consideration transferred					$ 124,479
Payments to acquire businesses, gross					$ 64,248
Business combination, consideration transferred, deferred cash, equity and contingent consideration payable term					3 years
Goodwill					$ 110,512
Other intangible assets					10,780
Business combination, consideration transferred, equity interests issued and issuable					20,320
Business combination, consideration transferred, deferred cash, equity and contingent consideration payable					$ 39,911

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) $ / shares in Units, € in Thousands, $ in Thousands		1 Months Ended			3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 23, 2022 USD ($)	Jul. 29, 2022 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Jun. 30, 2018	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Sep. 30, 2022 EUR (€)	Sep. 09, 2022 USD ($)	May 31, 2022	Dec. 31, 2021 EUR (€) shares	Dec. 20, 2021 USD ($)	Dec. 01, 2021	Nov. 30, 2021
Accounting Policies [Line Items]
Interest expense from loan participations						$ 152		$ 878
Advertising costs					$ 1,584	808	$ 5,941	1,964
Market value percentage				85.00%
Recognized compensation expense					120	132	316	474
Restricted cash			$ 927		1,578		1,578		$ 927
Depreciation and amortization					1,327	986	3,380	2,890
Net of unamortized costs, origination fees, premiums and discounts			9,304		4,756		4,756		9,304
Unrealized gains (losses)					(19,158)	(1,317)	(19,287)	8,729
Loans receivable, at fair value			873,186		814,715		814,715		873,186
Partnership investment interests							82,475		77,383
Investment securities			59,745		84,280		84,280		59,745
Warrant liability			12,938		633		633		12,938
Fair value assets			2,613,177		2,059,789		2,059,789		2,613,177
Senior notes payable			1,606,560		1,661,191		1,661,191		1,606,560
Fair value			1,661,189		1,539,876		1,539,876		1,661,189
Forward exchange contracts | €										€ 0			€ 6,000
Transaction gains (losses)					783	689	1,913	855
Redemption value			345,000		178,759		178,759		345,000
Equity investments			$ 39,190		42,560		42,560		$ 39,190
Stock issued							20,320
Equity securities					850	2,800	850	2,800
Notes reduction								133,453
Loan receivable amount								35,000
Debt securities issued								35,000
Agent fees					349	26,732	$ 12,437	52,114
Sold price per unit (in dollars per share) | $ / shares			$ 10.00						$ 10.00
Assets held in trust			$ 345,000						$ 345,000
Consummate business combination transaction term									24 months
Consummate business combination transaction term, circumstance based									27 months
Secured Debt | Line of Credit
Accounting Policies [Line Items]
Senior notes payable											$ 52,500
Secured Debt | Term Loan | Line of Credit
Accounting Policies [Line Items]
Senior notes payable	$ 148,200
BRPM 150
Accounting Policies [Line Items]
Gross proceeds									$ 172,500
BRPM 250
Accounting Policies [Line Items]
Gross proceeds									$ 172,500
FaZeClan Holdings, Inc
Accounting Policies [Line Items]
Decrease in prepaid expenses and other assets		$ 172,584
De-consolidation of BRPM 150		$ 172,500
FaZeClan Holdings, Inc | Incentive Fee
Accounting Policies [Line Items]
Revenue from related parties					41,885
Common Class A
Accounting Policies [Line Items]
Exercise price per share (in dollars per share) | $ / shares			$ 11.50						$ 11.50
Minimum
Accounting Policies [Line Items]
Cash fee percentage							7.00%
Carried interest percentage							8.00%
Maximum
Accounting Policies [Line Items]
Cash fee percentage							10.00%
Carried interest percentage							15.00%
FocalPoint Securities, LLC ("FocalPoint")
Accounting Policies [Line Items]
Business combination, deferred cash consideration							$ 22,661
Lingo
Accounting Policies [Line Items]
Debt conversion, converted instrument, amount							17,500
Warrant
Accounting Policies [Line Items]
Warrant liability			$ 12,938		633		633		$ 12,938
IPO
Accounting Policies [Line Items]
Consummated units (in shares) | shares									17,250,000
IPO | Redeemable warrant
Accounting Policies [Line Items]
Class of warrant or right, number of securities called by each warrant or right (in shares) | shares			0.33						0.33				0.33
IPO | Common Class A
Accounting Policies [Line Items]
Class of warrant or right, number of securities called by each warrant or right (in shares) | shares			1						1				1
Significant unobservable inputs (Level 3)
Accounting Policies [Line Items]
Loans receivable, at fair value			$ 873,186		814,715		814,715		$ 873,186
Warrant liability			0		0		0		0
Fair value assets			1,250,735		1,154,071		1,154,071		1,250,735
W.S. Badcock Corporation
Accounting Policies [Line Items]
Payments to acquire finance receivables	$ 168,363
Cash														$ 400,000
Loans receivable, at fair value			400,000		212,551		212,551		400,000
Fair Value, Measurements, Recurring
Accounting Policies [Line Items]
Loans receivable carrying value			877,527		846,933		846,933		877,527
Loans receivable			$ 886,831		$ 851,689		$ 851,689		$ 886,831
Fair Value, Measurements, Recurring | Significant unobservable inputs (Level 3)
Accounting Policies [Line Items]
Percentage of total assets measured in Level 3 of the hierarchy level			21.40%		20.00%		20.00%		21.40%	20.00%			21.40%
Loans Receivable
Accounting Policies [Line Items]
Loans receivable fair value							$ 814,715		$ 873,186
Loans Receivable | W.S. Badcock Corporation
Accounting Policies [Line Items]
Receivable					$ 168,363
Note 1 Issued For Sale Of Equity Securities
Accounting Policies [Line Items]
Notes issued								51,000
Note 2 Issued For Sale Of Equity Securities
Accounting Policies [Line Items]
Notes issued								200
Fixed Income Securities
Accounting Policies [Line Items]
Interest expense					17,447	9,945	43,757	39,391
Forward Contracts
Accounting Policies [Line Items]
Net gain (loss) forward exchange contract					$ 0	$ 248	$ 68	$ 921
Lingo
Accounting Policies [Line Items]
Fair value of noncontrolling interest (in percentage)												20.00%
Great American Global Partners, LLC
Accounting Policies [Line Items]
Ownership, percentage					50.00%		50.00%			50.00%
Bebe Stores Inc. ("bebe")
Accounting Policies [Line Items]
Ownership, percentage			40.10%		40.10%		40.10%		40.10%	40.10%			40.10%		40.10%	39.50%
Additional purchase of shares (in shares) | shares			71,970
Additional purchase of value			$ 612

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 231,805	$ 278,933
Restricted cash	1,578	927
Total cash, cash equivalents and restricted cash	$ 233,383	$ 279,860

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of securities and other investments owned and securities sold not yet purchased at fair value (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Securities and other investments owned:
Total securities and other investments owned	$ 1,238,613	$ 1,532,095
Securities sold not yet purchased:
Total securities sold not yet purchased	17,751	28,623
Corporate bonds
Securities and other investments owned:
Total securities and other investments owned	6,761	7,632
Securities sold not yet purchased:
Total securities sold not yet purchased	6,264	6,327
Other fixed income securities
Securities and other investments owned:
Total securities and other investments owned	8,649	2,606
Securities sold not yet purchased:
Total securities sold not yet purchased	686	1,994
Partnership interests and other
Securities and other investments owned:
Total securities and other investments owned	82,475	77,383
Equity securities
Securities and other investments owned:
Total securities and other investments owned	1,140,728	1,444,474
Securities sold not yet purchased:
Total securities sold not yet purchased	$ 10,801	$ 20,302

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of financial assets and liabilities measured on recurring basis (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Assets:
Funds held in trust account	$ 173,216	$ 345,024
Securities and other investments owned:
Total securities and other investments owned	1,071,858	1,394,967
Loans receivable, at fair value	814,715	873,186
Total assets measured at fair value	2,059,789	2,613,177
Securities sold not yet purchased:
Total securities sold not yet purchased	17,751	28,623
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322	4,506
Warrant liabilities	633	12,938
Contingent consideration	29,578	0
Total liabilities measured at fair value	52,284	46,067
Quoted prices in active markets for identical assets (Level 1)
Assets:
Funds held in trust account	173,216	345,024
Securities and other investments owned:
Total securities and other investments owned	717,092	1,007,180
Loans receivable, at fair value	0	0
Total assets measured at fair value	890,308	1,352,204
Securities sold not yet purchased:
Total securities sold not yet purchased	10,801	20,302
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	0	0
Warrant liabilities	633	12,938
Contingent consideration	0
Total liabilities measured at fair value	11,434	33,240
Other observable inputs (Level 2)
Assets:
Funds held in trust account	0	0
Securities and other investments owned:
Total securities and other investments owned	15,410	10,238
Loans receivable, at fair value	0	0
Total assets measured at fair value	15,410	10,238
Securities sold not yet purchased:
Total securities sold not yet purchased	6,950	8,321
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	0	0
Warrant liabilities	0	0
Contingent consideration	0
Total liabilities measured at fair value	6,950	8,321
Significant unobservable inputs (Level 3)
Assets:
Funds held in trust account	0	0
Securities and other investments owned:
Total securities and other investments owned	339,356	377,549
Loans receivable, at fair value	814,715	873,186
Total assets measured at fair value	1,154,071	1,250,735
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322	4,506
Warrant liabilities	0	0
Contingent consideration	29,578
Total liabilities measured at fair value	33,900	4,506
Equity securities
Securities and other investments owned:
Total securities and other investments owned	1,056,448	1,384,729
Securities sold not yet purchased:
Total securities sold not yet purchased	10,801	20,302
Equity securities | Quoted prices in active markets for identical assets (Level 1)
Securities and other investments owned:
Total securities and other investments owned	717,092	1,007,180
Securities sold not yet purchased:
Total securities sold not yet purchased	10,801	20,302
Equity securities | Other observable inputs (Level 2)
Securities and other investments owned:
Total securities and other investments owned	0	0
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Equity securities | Significant unobservable inputs (Level 3)
Securities and other investments owned:
Total securities and other investments owned	339,356	377,549
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Corporate bonds
Securities and other investments owned:
Total securities and other investments owned	6,761	7,632
Securities sold not yet purchased:
Total securities sold not yet purchased	6,264	6,327
Corporate bonds | Quoted prices in active markets for identical assets (Level 1)
Securities and other investments owned:
Total securities and other investments owned	0	0
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Corporate bonds | Other observable inputs (Level 2)
Securities and other investments owned:
Total securities and other investments owned	6,761	7,632
Securities sold not yet purchased:
Total securities sold not yet purchased	6,264	6,327
Corporate bonds | Significant unobservable inputs (Level 3)
Securities and other investments owned:
Total securities and other investments owned	0	0
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Other fixed income securities
Securities and other investments owned:
Total securities and other investments owned	8,649	2,606
Securities sold not yet purchased:
Total securities sold not yet purchased	686	1,994
Other fixed income securities | Quoted prices in active markets for identical assets (Level 1)
Securities and other investments owned:
Total securities and other investments owned	0	0
Securities sold not yet purchased:
Total securities sold not yet purchased	0	0
Other fixed income securities | Other observable inputs (Level 2)
Securities and other investments owned:
Total securities and other investments owned	8,649	2,606
Securities sold not yet purchased:
Total securities sold not yet purchased	686	1,994
Other fixed income securities | Significant unobservable inputs (Level 3)
Securities and other investments owned:
Total securities and other investments owned	0	0
Securities sold not yet purchased:
Total securities sold not yet purchased	$ 0	$ 0

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of significant unobservable inputs of level 3 financial assets and liabilities (Details) $ in Thousands	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 814,715	$ 873,186
Total assets measured at fair value	2,059,789	2,613,177
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322	4,506
Contingent consideration	29,578	0
Total liabilities measured at fair value	52,284	46,067
Significant unobservable inputs (Level 3)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	814,715	873,186
Total assets measured at fair value	1,154,071	1,250,735
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	4,322	4,506
Contingent consideration	29,578
Total liabilities measured at fair value	$ 33,900	$ 4,506
Significant unobservable inputs (Level 3) | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent earnout, measurement input	0.085
Significant unobservable inputs (Level 3) | Weighted Average | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent earnout, measurement input	0.085
Significant unobservable inputs (Level 3) | Market approach
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 267,745
Mandatorily redeemable noncontrolling interests issued after November 5, 2003	$ 4,322
Significant unobservable inputs (Level 3) | Market approach | Operating income multiple
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Mandatorily redeemable noncontrolling interesting, measurement input	6.0
Significant unobservable inputs (Level 3) | Market approach | Minimum | Multiple of EBITDA
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	1.80
Significant unobservable inputs (Level 3) | Market approach | Minimum | Multiple of Sales
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	1.00
Significant unobservable inputs (Level 3) | Market approach | Minimum | Market price of related security
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	10.03
Significant unobservable inputs (Level 3) | Market approach | Maximum | Multiple of EBITDA
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	13.00
Significant unobservable inputs (Level 3) | Market approach | Maximum | Market price of related security
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	16.81
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Multiple of EBITDA
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	6.49
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Multiple of Sales
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	1.00
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Market price of related security
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	13.72
Significant unobservable inputs (Level 3) | Market approach | Weighted Average | Operating income multiple
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Mandatorily redeemable noncontrolling interesting, measurement input	6.0
Significant unobservable inputs (Level 3) | Discounted cash flow
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 65,044
Fair value	814,715
Contingent consideration	$ 29,578
Significant unobservable inputs (Level 3) | Discounted cash flow | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	0.178
Significant unobservable inputs (Level 3) | Discounted cash flow | EBITDA volatility
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent earnout, measurement input	0.650
Significant unobservable inputs (Level 3) | Discounted cash flow | Minimum | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Loans receivable at fair value, measurement input	0.060
Significant unobservable inputs (Level 3) | Discounted cash flow | Maximum | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Loans receivable at fair value, measurement input	0.335
Significant unobservable inputs (Level 3) | Discounted cash flow | Weighted Average | Market interest rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	0.178
Loans receivable at fair value, measurement input	0.219
Significant unobservable inputs (Level 3) | Discounted cash flow | Weighted Average | EBITDA volatility
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Contingent earnout, measurement input	0.650
Significant unobservable inputs (Level 3) | Option pricing model
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value	$ 6,567
Significant unobservable inputs (Level 3) | Option pricing model | Minimum | Annualized volatility
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	0.300
Significant unobservable inputs (Level 3) | Option pricing model | Maximum | Annualized volatility
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	2.000
Significant unobservable inputs (Level 3) | Option pricing model | Weighted Average | Annualized volatility
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Equity securities, measurement input	0.574

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of fair value measurement of level 3 financial assets and liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Equity securities | Significant unobservable inputs (Level 3)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period	$ 377,549	$ 149,292
Fair Value Adjustments	(18,594)	52,102
Relating to Undistributed Earnings	0	0
Purchases, Sales and Settlements	18,457	125,794
Transfer in and/or out of Level 3	(38,056)	5,777
Balance at end of period	339,356	332,965
Loans receivable at fair value | Significant unobservable inputs (Level 3)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period	873,186	390,689
Fair Value Adjustments	(19,205)	9,059
Relating to Undistributed Earnings	9,554	9,003
Purchases, Sales and Settlements	(7,983)	(57,989)
Transfer in and/or out of Level 3	(40,837)	0
Balance at end of period	814,715	350,762
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | Significant unobservable inputs (Level 3)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period	4,506	4,700
Fair Value Adjustments	0	0
Relating to Undistributed Earnings	824	(504)
Purchases, Sales and Settlements	(1,008)	0
Transfer in and/or out of Level 3	0	0
Balance at end of period	4,322	4,196
Contingent consideration
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period	0
Fair Value Adjustments	(3,880)
Relating to Undistributed Earnings	0
Purchases, Sales and Settlements	33,458
Transfer in and/or out of Level 3	0
Balance at end of period	$ 29,578
Warrant liabilities | Significant unobservable inputs (Level 3)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Balance at beginning of period		0
Fair Value Adjustments		0
Relating to Undistributed Earnings		0
Purchases, Sales and Settlements		10,466
Transfer in and/or out of Level 3		(10,466)
Balance at end of period		$ 0

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of financial assets measured on nonrecurring basis (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in nonpublic entities that do not report NAV	$ 16,387
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in nonpublic entities that do not report NAV	0
Other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in nonpublic entities that do not report NAV	15,737
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments in nonpublic entities that do not report NAV	$ 650

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Redeemable noncontrolling interest (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Redeemable Noncontrolling Interest [Roll Forward]
Balance, January 1, 2022			$ 345,000
Distributions	$ (431)	$ (841)	(2,167)	$ (14,695)
Balance, September 30, 2022	178,759		178,759
Lingo, BRPM 150 and 250
Redeemable Noncontrolling Interest [Roll Forward]
Balance, January 1, 2022			345,000
Net income attributable to noncontrolling interests and redeemable noncontrolling interests			(1,078)
De-consolidation of BRPM 150			(172,584)
Contributions			8,021
Distributions			(600)
Balance, September 30, 2022	$ 178,759		$ 178,759

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of investments in the VIE (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Variable Interest Entity [Line Items]
Securities and other investments owned, at fair value	$ 1,238,613	$ 1,532,095
Other assets	34,497	11,525
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Securities and other investments owned, at fair value	35,291	27,445
Loans receivable, at fair value	70,400	205,265
Other assets	3,129	4,956
Maximum exposure to loss	$ 108,820	$ 237,666

XML

RESTRUCTURING CHARGE - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring and Related Activities [Abstract]
Restructuring charge	$ 8,016	$ 0	$ 8,016	$ 0

XML

RESTRUCTURING CHARGE - Schedule of changes in accrued restructuring charge (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring Reserve [Roll Forward]
Balance, beginning of period	$ 574	$ 676	$ 624	$ 727
Restructuring charge	8,016	0	8,016	0
Cash paid	(1,448)	(29)	(1,503)	(86)
Non-cash items	(4,620)	3	(4,615)	9
Balance, end of period	$ 2,522	$ 650	$ 2,522	$ 650

XML

RESTRUCTURING CHARGE - Schedule of restructuring activities by segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Restructuring Cost and Reserve [Line Items]
Employee termination			$ 1,260
Impairment of intangibles			4,174
Restructuring charge	$ 8,016	$ 0	8,016	$ 0
Facility Closing
Restructuring Cost and Reserve [Line Items]
Facility and other restructuring costs			2,582
Wealth Management Segment
Restructuring Cost and Reserve [Line Items]
Employee termination			354
Impairment of intangibles			2,012
Restructuring charge			4,107
Wealth Management Segment | Facility Closing
Restructuring Cost and Reserve [Line Items]
Facility and other restructuring costs			1,741
Principal Investments- Communications and Other Segment
Restructuring Cost and Reserve [Line Items]
Employee termination			906
Impairment of intangibles			2,162
Restructuring charge			3,909
Principal Investments- Communications and Other Segment | Facility Closing
Restructuring Cost and Reserve [Line Items]
Facility and other restructuring costs			$ 841

XML

SECURITIES LENDING (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Securities borrowed
Gross amounts recognized	$ 2,243,306	$ 2,090,966
Gross amounts offset in the consolidated balance sheets	0	0
Net amounts included in the consolidated balance sheets	2,243,306	2,090,966
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default	2,243,306	2,090,966
Net amounts	0	0
Securities loaned
Gross amounts recognized	2,239,250	2,088,685
Gross amounts offset in the consolidated balance sheets	0	0
Net amounts included in the consolidated balance sheets	2,239,250	2,088,685
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default	2,239,250	2,088,685
Net amounts	$ 0	$ 0

XML

ACCOUNTS RECEIVABLE - Schedule of components of accounts receivable, net (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Receivables [Abstract]
Accounts receivable	$ 60,137	$ 39,045
Investment banking fees, commissions and other receivables	8,165	14,286
Total accounts receivable	68,302	53,331
Allowance for doubtful accounts	(3,595)	(3,658)
Accounts receivable, net	$ 64,707	$ 49,673

XML

ACCOUNTS RECEIVABLE - Schedule of allowance for doubtful accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 2,773	$ 3,565	$ 3,658	$ 3,599
Add: Additions to reserve	1,510	493	2,786	1,248
Less: Write-offs	(688)	(266)	(2,857)	(1,087)
Less: Recovery	0	0	8	32
Balance, end of period	$ 3,595	$ 3,792	$ 3,595	$ 3,792

XML

PREPAID EXPENSES AND OTHER ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Funds held in trust account	$ 173,216	$ 345,024
Equity investments	42,560	39,190
Prepaid expenses	21,322	14,965
Unbilled receivables	12,483	12,315
Other receivables	71,797	40,483
Other assets	34,497	11,525
Prepaid expenses and other assets	$ 355,875	$ 463,502

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GOODWILL AND OTHER INTANGIBLE ASSETS - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 429,187		$ 429,187		$ 250,568
Amortization expense	9,390	$ 5,156	23,146	$ 16,176
Estimated future amortization expense remainder of fiscal year	9,466		9,466
Estimated future amortization expense 2023	32,249		32,249
Estimated future amortization expense 2024	28,169		28,169
Estimated future amortization expense 2025	23,685		23,685
Estimated future amortization expense 2026	20,916		20,916
Estimated future amortization expense after 2026	$ 56,585		$ 56,585

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of carrying amount of goodwill (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2022 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 250,568
Acquisition of other businesses	178,619
Ending balance	429,187
Capital Markets Segment
Goodwill [Roll Forward]
Beginning balance	51,338
Acquisition of other businesses	110,512
Ending balance	161,850
Wealth Management Segment
Goodwill [Roll Forward]
Beginning balance	51,195
Acquisition of other businesses	0
Ending balance	51,195
Auction and Liquidation Segment
Goodwill [Roll Forward]
Beginning balance	1,975
Acquisition of other businesses	0
Ending balance	1,975
Financial Consulting Segment
Goodwill [Roll Forward]
Beginning balance	23,680
Acquisition of other businesses	0
Ending balance	23,680
Principal Investments- Communications and Other Segment
Goodwill [Roll Forward]
Beginning balance	122,380
Acquisition of other businesses	68,107
Ending balance	$ 190,487

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GOODWILL AND OTHER INTANGIBLE ASSETS - Schedule of intangible assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 266,074	$ 152,730
Accumulated Amortization	(95,004)	(70,355)
Intangibles Net	171,070	82,375
Indefinite lived intangible assets	125,276	125,276
Gross Carrying Value	391,350	278,006
Intangibles Net	296,346	207,651
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	220,811	130,801
Accumulated Amortization	(80,900)	(59,671)
Intangibles Net	$ 139,911	71,130
Customer relationships | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	1 year 10 months 24 days
Customer relationships | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	16 years
Domain names
Finite-Lived Intangible Assets [Line Items]
Useful Life	7 years
Gross Carrying Value	$ 185	185
Accumulated Amortization	(162)	(143)
Intangibles Net	$ 23	42
Advertising relationships
Finite-Lived Intangible Assets [Line Items]
Useful Life	8 years
Gross Carrying Value	$ 100	100
Accumulated Amortization	(78)	(69)
Intangibles Net	22	31
Internally developed software and other intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	24,295	15,275
Accumulated Amortization	(11,016)	(8,820)
Intangibles Net	$ 13,279	6,455
Internally developed software and other intangibles | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	6 months
Internally developed software and other intangibles | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	5 years
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 20,683	6,369
Accumulated Amortization	(2,848)	(1,652)
Intangibles Net	$ 17,835	$ 4,717
Trademarks | Minimum
Finite-Lived Intangible Assets [Line Items]
Useful Life	3 years
Trademarks | Maximum
Finite-Lived Intangible Assets [Line Items]
Useful Life	10 years

XML

NOTES PAYABLE (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Interest expense	$ 34,587	$ 25,372	$ 96,787	$ 66,014
Other Notes Payable | Clearing Organization
Debt Instrument [Line Items]
Interest expense	298	4	825	16
Notes payable outstanding	25,075		$ 25,075		$ 357
Accrued interest, percentage			2.00%
Wells Fargo Bank, National Association
Debt Instrument [Line Items]
Line of credit, outstanding	0		$ 0		$ 0
Credit facility	0		0
Wells Fargo Bank, National Association | Asset Based Credit Facility
Debt Instrument [Line Items]
Borrowing capacity credit facility	200,000		200,000
Interest expense	$ 18	$ 109	$ 165	$ 325
Wells Fargo Bank, National Association | Asset Based Credit Facility | Minimum
Debt Instrument [Line Items]
Credit facility success fees, percentage			1.00%
Funding fees, percentage			0.05%
Wells Fargo Bank, National Association | Asset Based Credit Facility | Minimum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			2.25%
Wells Fargo Bank, National Association | Asset Based Credit Facility | Maximum
Debt Instrument [Line Items]
Credit facility success fees, percentage			10.00%
Funding fees, percentage			0.20%
Wells Fargo Bank, National Association | Asset Based Credit Facility | Maximum | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			3.25%

XML

TERM LOANS AND REVOLVING CREDIT FACILITY (Details) - USD ($) $ in Thousands				3 Months Ended				9 Months Ended				12 Months Ended	33 Months Ended
	Sep. 23, 2022	Aug. 16, 2022	Jun. 23, 2021	Jun. 30, 2027	Dec. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2024	Dec. 31, 2023	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2026	Sep. 09, 2022	Jun. 21, 2022	Dec. 17, 2021	Dec. 19, 2018
Debt Instrument [Line Items]
Interest expense						$ 34,587	$ 25,372			$ 96,787	$ 66,014
Secured Debt | Line of Credit
Debt Instrument [Line Items]
Senior notes payable														$ 52,500
Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term			4 years
Borrowing capacity credit facility			$ 200,000
Operating value						135,000				135,000
Financial covenant, net asset value						1,100,000				1,100,000
Revolving credit facility						74,700				74,700		$ 80,000
Interest on revolving facility						1,410	790			3,737	820
Amount of unused commitment fees						6	58			6	76
Amortization of deferred financing costs						$ 146	146			$ 434	159
Revolving facility interest rate										7.64%		4.67%
BRPAC Credit Agreement | United Online Software Development (India) Private Limited
Debt Instrument [Line Items]
Rate of equity interests																	65.00%
BRPAC Credit Agreement | MagicJack VocalTec LTD
Debt Instrument [Line Items]
Rate of equity interests																	65.00%
BRPAC Credit Agreement | Forecast
Debt Instrument [Line Items]
Quarterly installments for term loan				$ 2,813	$ 2,813				$ 4,688				$ 3,750
BRPAC Credit Agreement | Credit Parties | United Online Software Development (India) Private Limited
Debt Instrument [Line Items]
Rate of equity interests																	100.00%
BRPAC Credit Agreement | BRPI Acquisition Co LLC
Debt Instrument [Line Items]
Amortization of deferred debt issuance costs											229
BRPAC Credit Agreement | BRPI Acquisition Co LLC | City National Bank
Debt Instrument [Line Items]
Amortization of deferred debt issuance costs										$ 779		$ 582
Minimum | BRPAC Credit Agreement | BRPI Acquisition Co LLC
Debt Instrument [Line Items]
Interest rate						2.75%				2.75%
Maximum | BRPAC Credit Agreement | BRPI Acquisition Co LLC
Debt Instrument [Line Items]
Interest rate						3.50%				3.50%
Term Loan
Debt Instrument [Line Items]
Outstanding balance						$ 290,448				$ 290,448		292,650
Amortization of deferred debt issuance costs						523	350			$ 1,548	380
Term loan facility amortize in equal installments percentage										1.25%
Term loan facility amount										$ 3,750
Unamortized debt issuance costs										5,802		$ 7,350
Interest on the term loan						$ 5,720	2,720			$ 14,557	2,956
Interest rate						8.10%				8.10%		4.72%
Term Loan | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Debt instrument, term	5 years	5 years
Senior notes payable	$ 148,200
Credit facility, interest rate						10.00%				10.00%
Outstanding balance						$ 144,584				$ 144,584
Unamortized debt issuance costs						3,616				3,616
Interest expense						418				418
Amortization of deferred debt issuance costs						89				89
Term Loan | Revolving Credit Facility
Debt Instrument [Line Items]
Debt instrument, term			4 years
Secured loan			$ 80,000
Term Loan | BRPAC Credit Agreement | BRPI Acquisition Co LLC
Debt Instrument [Line Items]
Outstanding balance						71,408				71,408		$ 53,735
Interest expense						1,088	554			2,168	$ 1,931
Amortization of deferred debt issuance costs						$ 81	$ 72			$ 252
Interest rate						6.04%				6.04%		3.17%
Lingo Credit Agreement | Line of Credit
Debt Instrument [Line Items]
Interest expense										$ 403
Amortization of deferred debt issuance costs										26
Lingo Credit Agreement | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Debt instrument, term		5 years
Senior notes payable		$ 45,000
Outstanding balance						$ 51,595				51,595
Unamortized debt issuance costs						905				$ 905
Interest expense						403
Amortization of deferred debt issuance costs						$ 26
Aggregate principal amount														$ 7,500
Interest rate						6.29%				6.29%
Lingo Credit Agreement | Forecast | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Quarterly installments for term loan				$ 2,625				$ 1,969	$ 1,641
Second Amendment
Debt Instrument [Line Items]
Aggregate principal amount																$ 100,000
Fourth Amendment | BRPAC Credit Agreement
Debt Instrument [Line Items]
Aggregate principal amount															$ 75,000
Interest rate															3.50%
Eurodollar
Debt Instrument [Line Items]
Interest rate						4.50%				4.50%
Base Rate
Debt Instrument [Line Items]
Interest rate						3.50%				3.50%
Secured Overnight Financing Rate (SOFR) | Term Loan | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	6.50%
Secured Overnight Financing Rate (SOFR) | Lingo Credit Agreement | Minimum | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		3.00%
Secured Overnight Financing Rate (SOFR) | Lingo Credit Agreement | Maximum | Secured Debt | Line of Credit
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		3.75%

XML

SENIOR NOTES PAYABLE - Schedule of senior notes payable, net (Details) - Senior Notes - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Senior notes payable	$ 1,679,371	$ 1,628,049
Less: Unamortized debt issuance costs	(18,180)	(21,489)
Senior notes payable, net	1,661,191	1,606,560
6.750% Senior notes due May 31, 2024
Debt Instrument [Line Items]
Senior notes payable	$ 138,712	111,170
Interest rate	6.75%
6.500% Senior notes due September 30, 2026
Debt Instrument [Line Items]
Senior notes payable	$ 180,532	178,787
Interest rate	6.50%
6.375% Senior notes due February 28, 2025
Debt Instrument [Line Items]
Senior notes payable	$ 146,432	144,521
Interest rate	6.375%
6.000% Senior notes due January 31, 2028
Debt Instrument [Line Items]
Senior notes payable	$ 266,058	259,347
Interest rate	6.00%
5.500% Senior notes due March 31, 2026
Debt Instrument [Line Items]
Senior notes payable	$ 217,440	214,243
Interest rate	5.50%
5.250% Senior notes due August 31, 2028
Debt Instrument [Line Items]
Senior notes payable	$ 405,483	397,302
Interest rate	5.25%
5.000% Senior notes due December 31, 2026
Debt Instrument [Line Items]
Senior notes payable	$ 324,714	$ 322,679
Interest rate	5.00%

XML

SENIOR NOTES PAYABLE - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Jan. 05, 2022
Debt Instrument [Line Items]
Proceeds from issuance of debt			$ 51,321	$ 183,042
Senior Notes
Debt Instrument [Line Items]
Proceeds from issuance of debt	$ 15,448	$ 97,715
Outstanding balance	1,661,191		1,661,191		$ 1,606,560
Net of unamortized debt issue costs	$ 18,180		$ 18,180		$ 21,489
Debt, weighted average interest rate	5.70%		5.70%		5.69%
Interest expense on senior notes total	$ 25,149	$ 21,458	$ 74,221	$ 60,010
Senior notes payable	$ 1,679,371		1,679,371		$ 1,628,049
Senior Notes | Sales Agreement Prospectus
Debt Instrument [Line Items]
Outstanding notes payable			$ 60,590		$ 111,911
Senior Notes | Sales Agreement Prospectus | Maximum
Debt Instrument [Line Items]
Senior notes payable						$ 250,000

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ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued payroll and related expenses	$ 79,532	$ 107,904
Dividends payable	31,263	28,486
Income taxes payable	34,129	39,776
Other tax liabilities	25,699	20,106
Contingent consideration	29,578	0
Accrued expenses	23,723	96,250
Other liabilities	54,965	51,228
Accrued expenses and other liabilities	$ 278,889	$ 343,750

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REVENUE FROM CONTRACTS WITH CUSTOMERS - Schedule of revenues from contracts with customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	$ 209,712	$ 326,609	$ 589,849	$ 886,653
Interest income - Loans and securities lending	57,594	26,869	182,855	89,280
Trading gains on investments	16,198	19,446	(276,095)	309,022
Fair value adjustment on loans	(4,044)	(1,249)	(4,068)	8,796
Other	60,903	9,847	96,111	24,700
Total revenues	340,363	381,522	588,652	1,318,451
Sale of goods	4,130	34,959	7,895	54,244
Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	53,409	127,616	158,855	413,597
Interest income - Loans and securities lending	55,054	26,869	178,879	89,280
Trading gains on investments	15,171	18,184	(279,172)	302,539
Fair value adjustment on loans	(4,044)	(1,249)	(4,068)	8,796
Other	59,808	7,233	90,872	18,228
Total revenues	179,398	178,653	145,366	832,440
Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	46,050	114,958	179,724	264,086
Interest income - Loans and securities lending	0	0	0	0
Trading gains on investments	1,027	1,262	3,077	6,483
Fair value adjustment on loans	0	0	0	0
Other	1,095	2,614	5,239	6,472
Total revenues	48,172	118,834	188,040	277,041
Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	4,499	37,072	10,342	67,799
Interest income - Loans and securities lending	2,540	0	3,976	0
Trading gains on investments	0	0	0	0
Fair value adjustment on loans	0	0	0	0
Other	0	0	0	0
Total revenues	7,039	37,072	14,318	67,799
Sale of goods	2,550	34,327	2,550	52,162
Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	22,835	21,291	73,081	66,435
Interest income - Loans and securities lending	0	0	0	0
Trading gains on investments	0	0	0	0
Fair value adjustment on loans	0	0	0	0
Other	0		0	0
Total revenues	22,835	21,291	73,081	66,435
Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	77,896	19,300	153,093	59,475
Interest income - Loans and securities lending	0	0	0	0
Trading gains on investments	0	0	0	0
Fair value adjustment on loans	0	0	0	0
Other	0	0	0	0
Total revenues	77,896	19,300	153,093	59,475
Sale of goods		631		2,081
Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	5,023	6,372	14,754	15,261
Interest income - Loans and securities lending	0	0	0	0
Trading gains on investments		0	0	0
Fair value adjustment on loans	0	0	0	0
Other	0	0	0	0
Total revenues	5,023	6,372	14,754	15,261
Corporate finance, consulting and investment banking fees
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	53,644	128,394	163,406	410,627
Corporate finance, consulting and investment banking fees | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	41,302	116,044	118,448	370,337
Corporate finance, consulting and investment banking fees | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Corporate finance, consulting and investment banking fees | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Corporate finance, consulting and investment banking fees | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	12,342	12,350	44,958	40,290
Corporate finance, consulting and investment banking fees | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Corporate finance, consulting and investment banking fees | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Wealth and asset management fees
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	47,602	87,258	170,034	209,664
Wealth and asset management fees | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	3,280	679	8,199	5,557
Wealth and asset management fees | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	44,322	86,579	161,835	204,107
Wealth and asset management fees | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Wealth and asset management fees | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Wealth and asset management fees | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Wealth and asset management fees | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Commissions, fees and reimbursed expenses
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	22,997	50,953	86,012	138,374
Commissions, fees and reimbursed expenses | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	8,827	10,893	32,208	37,703
Commissions, fees and reimbursed expenses | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	1,728	28,379	17,889	59,979
Commissions, fees and reimbursed expenses | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	1,949	2,740	7,792	14,547
Commissions, fees and reimbursed expenses | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	10,493	8,941	28,123	26,145
Commissions, fees and reimbursed expenses | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Commissions, fees and reimbursed expenses | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Subscription services
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	70,152	16,303	135,774	50,802
Subscription services | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Subscription services | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Subscription services | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Subscription services | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Subscription services | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	70,152	16,303	135,774	50,802
Subscription services | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Advertising, licensing and other
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	15,317	43,696	34,623	76,096
Advertising, licensing and other | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Advertising, licensing and other | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Advertising, licensing and other | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	2,550	34,327	2,550	52,162
Advertising, licensing and other | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	0	0	0	0
Advertising, licensing and other | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	7,744	2,997	17,319	8,673
Sale of goods	1,580		5,345
Advertising, licensing and other | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers	$ 5,023	6,372	$ 14,754	15,261
Service contract revenues
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		5		1,090
Service contract revenues | Capital Markets Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		0		0
Service contract revenues | Wealth Management Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		0		0
Service contract revenues | Auction and Liquidation Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		5		1,090
Service contract revenues | Financial Consulting Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		0		0
Service contract revenues | Principal Investments- Communications and Other Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		0		0
Service contract revenues | Brands Segment
Revenue from External Customer [Line Items]
Total revenues from contracts with customers		$ 0		$ 0

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REVENUE FROM CONTRACTS WITH CUSTOMERS - Additional information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Accounts receivable, net	$ 64,707		$ 64,707		$ 49,673
Unbilled receivables	12,483		12,483		12,315
Recognized revenue	7,293	$ 4,728	32,287	$ 31,377
Capitalized costs	5,483		5,483		1,605
Capitalized cost, recognized	723	$ 324	1,813	$ 433
Service and Fee
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Deferred revenue	89,157		89,157		$ 69,507
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 57,058		$ 57,058
Revenue, remaining performance obligation, expected timing of satisfaction, period	3 months		3 months
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 13,519		$ 13,519
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year		1 year
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 8,637		$ 8,637
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year		1 year
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 4,496		$ 4,496
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year		1 year
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 2,105		$ 2,105
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year		1 year
Service and Fee | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, amount	$ 3,342		$ 3,342
Revenue, remaining performance obligation, expected timing of satisfaction, period

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INCOME TAXES (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Effective income tax rate	(30.00%)	26.80%
Federal net operating loss carryforwards	$ 48,869
State net operating loss carryforwards	52,548
Deferred tax assets valuation allowance	$ 65,900

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EARNINGS PER SHARE - Additional information (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Number of antidilutive securities were excluded from the computation of diluted net income (loss) per share (in shares)	1,721,132	1,069,184	1,609,425	911,302

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EARNINGS PER SHARE - Schedule of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net income (loss) attributable to B. Riley Financial, Inc.	$ 47,837	$ 50,550	$ (102,384)	$ 380,882
Preferred stock dividends	(2,002)	(1,929)	(6,006)	(5,467)
Net income (loss) available to common shareholders	45,835	48,621	(108,390)	375,415
Net income (loss) available to common shareholders	$ 45,835	$ 48,621	$ (108,390)	$ 375,415
Weighted average common shares outstanding:
Basic (in shares)	28,293,064	27,570,716	28,068,160	27,297,917
Effect of dilutive potential common shares:
Restricted stock units and warrants (in shares)	1,675,353	1,223,350	0	1,428,575
Diluted (in shares)	29,968,417	28,794,066	28,068,160	28,726,492
Basic (loss) income per common share (in dollars per share)	$ 1.62	$ 1.76	$ (3.86)	$ 13.75
Diluted (loss) income per common share (in dollars per share)	$ 1.53	$ 1.69	$ (3.86)	$ 13.07

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COMMITMENTS AND CONTINGENCIES (Details) - Babcock & Wilcox Enterprises, Inc. € in Thousands, $ in Thousands					6 Months Ended	9 Months Ended
	Jan. 20, 2022 USD ($)	Dec. 22, 2021 EUR (€)	Aug. 26, 2020 USD ($)	Aug. 10, 2020 USD ($)	Jun. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)
Related Party Transaction [Line Items]
Services fees						$ 750
Indemnity amount		€ 30,000		$ 29,970
Indemnity rider received			$ 600
Payments for other fees	$ 1,694
Guarantees
Related Party Transaction [Line Items]
Services fees					$ 935
Maximum | Guarantees
Related Party Transaction [Line Items]
Contractual obligation					$ 110,000

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SHARE-BASED PAYMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Oct. 31, 2022	Dec. 31, 2021	Oct. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 45,828	$ 23,508
Repurchase shares of common stock (in shares)			571	44,650
Repurchase of common stock amount			$ 27	$ 2,656
Preferred stock, shares issued (in shares)	4,535		4,535			4,512
Preferred stock, shares outstanding (in shares)	4,535		4,535			4,512
Preferred stock, liquidation preference	$ 113,380		$ 113,380			$ 112,790
Common Stock, par value $0.0001 per share
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized amount							$ 50,000
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized amount					$ 50,000
Depositary Shares for Series A Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)	19,659	207,599	19,659	207,599
Dividends per share (in dollars per share)	$ 0.4296875	$ 0.4296875	$ 0.4296875	$ 0.4296875
Series A Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, shares issued (in shares)	2,834,144		2,834,144			2,814,485
Preferred stock, shares outstanding (in shares)	2,834,144		2,834,144			2,814,485
Preferred stock, liquidation preference	$ 70,854		$ 70,854			$ 70,362
Depositary Shares for Series B Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares)	3,941	307,148	3,941	307,148
Dividends per share (in dollars per share)	$ 0.4609375	$ 0.4609375	$ 0.4609375	$ 0.4609375
Series B Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Preferred stock, shares issued (in shares)	1,701,075		1,701,075			1,697,134
Preferred stock, shares outstanding (in shares)	1,701,075		1,701,075			1,697,134
Preferred stock, liquidation preference	$ 42,527		$ 42,527			$ 42,428
2021 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	14,378	$ 9,243	$ 45,397	$ 23,035
2021 Stock Incentive Plan | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			559,168	423,660
Grant date fair value			$ 31,859	$ 29,439
2021 Stock Incentive Plan | Restricted Stock Units | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			1 year
2021 Stock Incentive Plan | Restricted Stock Units | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			5 years
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)			65,000	1,100,000
Grant date fair value			$ 2,329	$ 40,876
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
2021 Stock Incentive Plan | Restricted Stock Units, Performance Based | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 120	$ 132	$ 316	$ 474
Shares reserved for issuance (in shares)	398,442		398,442			450,717

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NET CAPITAL REQUIREMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
B. Riley Securities (“BRS”)
Broker-Dealer, Net Capital Requirement [Line Items]
Net capital	$ 153,244	$ 277,611
Excess capital	146,718	265,093
Required minimum net capital	6,526	12,518
B. Riley Wealth Management (“BRWM”)
Broker-Dealer, Net Capital Requirement [Line Items]
Net capital	14,915	13,833
Excess capital	12,415	12,819
Required minimum net capital	$ 2,500	$ 1,014

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RELATED PARTY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 18, 2022	Jul. 19, 2022	Mar. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021	Apr. 25, 2022	Mar. 09, 2022	Jan. 03, 2022	Nov. 01, 2021
Related Party Transaction [Line Items]
Due from related party				$ 814		$ 814		$ 2,306
Interest expense				34,587	$ 25,372	96,787	$ 66,014
Loans receivable, at fair value				$ 814,715		$ 814,715		$ 873,186
Price per share acquired (in dollars per share)								$ 10.00
Subsequent Event | Targus
Related Party Transaction [Line Items]
Interest bears	6.75%
Business combination, consideration transferred	$ 250
Common Class A | FaZeClan Holdings, Inc
Related Party Transaction [Line Items]
Price per share acquired (in dollars per share)		$ 10.00
Common Class A | FaZeClan Holdings, Inc | B. Riley Financial
Related Party Transaction [Line Items]
Shares acquired (in shares)		5,342,500
Executive Officer's and Board of Directors | B. Riley Partners Opportunity Fund
Related Party Transaction [Line Items]
Financial interest				46.80%		46.80%
Co-Chief Executive Officer | B. Riley Partners Opportunity Fund
Related Party Transaction [Line Items]
Financial interest				27.80%		27.80%
Funds from Mananagement Fees
Related Party Transaction [Line Items]
Due from related party								$ 621
CA Global Partners, LLC
Related Party Transaction [Line Items]
Other operating expenses								1,635
B. Riley Partners Opportunity Fund
Related Party Transaction [Line Items]
Interest expense				$ 0	46	$ 0	525
Commissions trade Income				0	131	0	553
Whitehawk Capital Partners, L.P.
Related Party Transaction [Line Items]
Management fees				0	142	1,173	1,588
Babcock and Wilcox
Related Party Transaction [Line Items]
Underwriting and financial advisory fees				65	401	$ 129	12,749
Written notice termination period						30 days
Services fees						$ 750
Performance fee			$ 1,000
The Arena Group Holdings, Inc.
Related Party Transaction [Line Items]
Loans receivable, at fair value				68,575		$ 68,575		69,835
Interest on loan payable percentage						10.00%
Revenue from related parties				0		$ 2,023
California Natural Resources Group, LLC
Related Party Transaction [Line Items]
Loans receivable, at fair value												$ 34,393
Interest bears												10.00%
California Natural Resources Group, LLC | Indirect Guarantee of Indebtedness
Related Party Transaction [Line Items]
Debt and lease obligation											$ 10,375
Investee
Related Party Transaction [Line Items]
Loans receivable, at fair value									$ 10,000	$ 10,000
Investee | Underwriting and Financial Advisory Fee
Related Party Transaction [Line Items]
Revenue from related parties				9,632
Other Related Party
Related Party Transaction [Line Items]
Loans receivable, at fair value				0		0		$ 4,201
Underwriting and financial advisory and other fees				$ 35	$ 20,868	$ 4,071	$ 25,059

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BUSINESS SEGMENTS - Schedule of reportable segments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Services and fees	$ 266,485	$ 301,497	$ 678,065	$ 857,109
Trading income (losses) and fair value adjustments on loans	12,154	18,197	(280,163)	317,818
Interest income - Loans and securities lending	57,594	26,869	182,855	89,280
Sale of goods	4,130	34,959	7,895	54,244
Total revenues	340,363	381,522	588,652	1,318,451
Direct cost of services	(44,523)	(18,019)	(73,959)	(41,435)
Cost of goods sold	(3,089)	(12,442)	(7,334)	(21,394)
Selling, general and administrative expenses	(163,727)	(244,218)	(506,062)	(635,484)
Restructuring charge	(8,016)	0	(8,016)	0
Interest expense - Securities lending and loan participations sold	(17,447)	(10,097)	(43,757)	(40,269)
Depreciation and amortization			(26,526)	(19,066)
Operating income (loss)	103,561	96,746	(50,476)	579,869
Corporate and other expenses	(19,832)	(17,987)	(44,368)	(42,007)
Interest income	686	70	1,253	175
Change in fair value of financial instruments and other	(574)	1,758	9,728	8,267
(Loss) income from equity investments	(91)	1,149	3,285	1,172
Interest expense	(34,587)	(25,372)	(96,787)	(66,014)
Income (loss) before income taxes	68,995	74,351	(132,997)	523,469
(Provision for) benefit from income taxes	(16,350)	(22,693)	39,858	(140,113)
Net income (loss)	52,645	51,658	(93,139)	383,356
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	4,808	1,108	9,245	2,474
Net income (loss) attributable to B. Riley Financial, Inc.	47,837	50,550	(102,384)	380,882
Preferred stock dividends	2,002	1,929	6,006	5,467
Net income (loss) available to common shareholders	45,835	48,621	(108,390)	375,415
Net income (loss) available to common shareholders	45,835	48,621	(108,390)	375,415
Operating Segments
Segment Reporting Information [Line Items]
Operating income (loss)	123,393	114,733	(6,108)	621,876
Capital Markets Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	55,054	26,869	178,879	89,280
Total revenues	179,398	178,653	145,366	832,440
Capital Markets Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	113,217	134,849	249,727	431,825
Trading income (losses) and fair value adjustments on loans	11,127	16,935	(283,240)	311,335
Interest income - Loans and securities lending	55,054	26,869	178,879	89,280
Total revenues	179,398	178,653	145,366	832,440
Selling, general and administrative expenses	(35,673)	(80,152)	(115,655)	(231,765)
Interest expense - Securities lending and loan participations sold	(17,447)	(10,097)	(43,757)	(40,269)
Depreciation and amortization	(2,174)	(514)	(6,271)	(1,526)
Operating income (loss)	124,104	87,890	(20,317)	558,880
Wealth Management Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	0	0	0	0
Total revenues	48,172	118,834	188,040	277,041
Restructuring charge			(4,107)
Wealth Management Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	47,145	117,572	184,963	270,558
Trading income (losses) and fair value adjustments on loans	1,027	1,262	3,077	6,483
Total revenues	48,172	118,834	188,040	277,041
Selling, general and administrative expenses	(52,302)	(110,157)	(206,438)	(260,331)
Restructuring charge	(4,106)	0	(4,106)	0
Depreciation and amortization	(1,261)	(2,093)	(4,402)	(6,832)
Operating income (loss)	(9,497)	6,584	(26,906)	9,878
Auction and Liquidation Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	2,540	0	3,976	0
Sale of goods	2,550	34,327	2,550	52,162
Total revenues	7,039	37,072	14,318	67,799
Auction and Liquidation Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	1,949	2,745	7,792	15,637
Interest income - Loans and securities lending	2,540	0	3,976	0
Sale of goods	2,550	34,327	2,550	52,162
Total revenues	7,039	37,072	14,318	67,799
Direct cost of services	(2,999)	(13,622)	(6,630)	(27,742)
Cost of goods sold	(1,235)	(11,999)	(1,235)	(19,578)
Selling, general and administrative expenses	(2,228)	(5,153)	(6,225)	(9,719)
Operating income (loss)	577	6,298	228	10,760
Financial Consulting Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	0	0	0	0
Total revenues	22,835	21,291	73,081	66,435
Financial Consulting Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	22,835	21,291	73,081	66,435
Selling, general and administrative expenses	(20,056)	(18,436)	(60,947)	(55,896)
Depreciation and amortization	(75)	(86)	(234)	(273)
Operating income (loss)	2,704	2,769	11,900	10,266
Principal Investments- Communications and Other Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	0	0	0	0
Sale of goods		631		2,081
Total revenues	77,896	19,300	153,093	59,475
Restructuring charge			(3,909)
Principal Investments- Communications and Other Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	76,316	18,669	147,748	57,394
Sale of goods	1,580	631	5,345	2,081
Total revenues	77,896	19,300	153,093	59,475
Direct cost of services	(41,524)	(4,397)	(67,329)	(13,693)
Cost of goods sold	(1,854)	(443)	(6,099)	(1,816)
Selling, general and administrative expenses	(22,267)	(5,458)	(44,103)	(15,096)
Restructuring charge	(3,910)	0	(3,910)	0
Depreciation and amortization	(6,435)	(2,496)	(13,255)	(7,558)
Operating income (loss)	1,906	6,506	18,397	21,312
Brands Segment
Segment Reporting Information [Line Items]
Interest income - Loans and securities lending	0	0	0	0
Total revenues	5,023	6,372	14,754	15,261
Brands Segment | Operating Segments
Segment Reporting Information [Line Items]
Services and fees	5,023	6,372	14,754	15,261
Selling, general and administrative expenses	(845)	(972)	(2,419)	(2,338)
Depreciation and amortization	(579)	(714)	(1,745)	(2,143)
Operating income (loss)	$ 3,599	$ 4,686	$ 10,590	$ 10,780

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BUSINESS SEGMENTS - Schedule of revenues by geographical area (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Services and fees	$ 266,485	$ 301,497	$ 678,065	$ 857,109
Trading income (losses) and fair value adjustments on loans	12,154	18,197	(280,163)	317,818
Sale of goods	4,130	34,959	7,895	54,244
Interest income - Loans and securities lending	57,594	26,869	182,855	89,280
Revenues	340,363	381,522	588,652	1,318,451
North America
Segment Reporting Information [Line Items]
Services and fees	261,600	300,340	667,969	854,429
Trading income (losses) and fair value adjustments on loans	12,154	18,197	(280,163)	317,818
Sale of goods	4,130	631	7,895	8,169
Interest income - Loans and securities lending	57,594	26,869	182,855	89,280
Revenues	335,478	346,037	578,556	1,269,696
Europe
Segment Reporting Information [Line Items]
Services and fees	4,885	1,157	10,096	2,680
Sale of goods	0	34,328	0	46,075
Revenues	$ 4,885	$ 35,485	$ 10,096	$ 48,755

XML

BUSINESS SEGMENTS - Additional information (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Segment Reporting Information [Line Items]
Property and equipment, net	$ 16,174	$ 12,870
North America
Segment Reporting Information [Line Items]
Property and equipment, net		$ 12,870