SecProbe.io

September 20, 2024
Phillip Ahn
Chief Financial Officer
B. Riley Financial, Inc.
11100 Santa Monica Blvd., Suite 800
Los Angeles, CA 90025
Re:B. Riley Financial, Inc.
Form 10-K for Fiscal Year Ended December 31, 2023
Form 10-Q for Quarter Ended March 31, 2024
File No. 001-37503
Dear Phillip Ahn:
            We have reviewed your filings and have the following comments.
            Please respond to this letter within ten business days by providing the requested
information or advise us as soon as possible when you will respond. If you do not believe a
comment applies to your facts and circumstances, please tell us why in your response.
            After reviewing your response to this letter, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2023
General
1.We note that in recent investor calls you have referenced the importance of your senior
notes or "baby bond" business. For example, during the earnings call on February 22,
2023, you stated that "one of the smartest things we did is we sold a lot of baby bonds at
yields of 5.5% and 6%." During the earnings call on February 23, 2022, you stated that
you "have a really meaningful baby bond business." In future filings, please revise
Business and Management's Discussion and Analysis to provide additional quantitative
and qualitative detail about your baby bond business and its relative importance to your
operations and liquidity.
Business, page 1
We note the statement on page 2 that you "periodically participate in loans and financing
arrangements for entities in which [you] have an equity ownership and representation on
the board of directors." We also note your disclosure on page 157 that
identifies certain transactions, beginning with Babcock and Wilcox. In future filings here 2.

September 20, 2024
Page 2
and where appropriate, please clarify the nature and scope of these transactions,
including, for example, their approximate, aggregate size, your underwriting or loan
approval process and standards and how these transactions fit within your business
segments and overall approach to investing and operating the "platform."
Wealth Management Segment, page 3
3.Please revise future filings to discuss the composition of wealth management revenue by
activity (e.g.; advisory, brokerage, etc.) and discuss any material trends.  To the extent
that revenue from the advisory business is material, please revise to include a rollforwards
of assets under management (AUM) in appropriate detail and disclose average asset
management fees.
Item 3. Legal Proceedings, page 48
4.Please ensure you describe in future filings any material pending legal proceedings
including proceedings contemplated by governmental authorities. Refer to Item 103 of
Regulation S-K for guidance.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations,
page 51
5.Please revise future filings to provide information and analysis, including rollforwards if
appropriate, to enhance a reader’s understanding of your financial condition including
discussion of trends. Specifically include appropriate detail, in a tabular format, of the
loans receivable balance and the securities and other investments owned balance at each
period end presented. For loans receivable, to the extent that each item continues to be
material, include sub-sections for related party amounts, balances by type of borrower or
risk and separately present each individually significant loan balance. For investments,
include appropriate classes such as private equity, public equity, etc. and separately
present each individually significant investment. Refer to Item 303 of Regulation S-K.
6.Please revise future filings to provide an analysis, in a tabular format, of the fair value
adjustments on loans recognized in each period presented. Specifically identify each
individual loan that had a significant change in fair value during any period presented and
discuss the reasons for the change. For the remainder of the fair value adjustments,
include appropriate detail for an investor to clearly understand what is driving the
gains/losses recognized in this line item. Refer to Item 303 of Regulation S-K.
7.Please revise future filing to provide an analysis, in a tabular format, of the underlying
sources and drivers of realized and unrealized gains/losses on investments for each period
presented. Specifically, identify each individual investment that had a significant realized
or unrealized gain/loss during any period presented. For the remainder of the gains/losses
recognized, include appropriate detail for an investor to clearly understand what is driving
the gains/losses recognized in this line item including whether they are related to public or
private equities. Additionally, please separately identify realized and unrealized
gains/losses recognized each period. Refer to Item 303 of Regulation S-K.
We note your several business segments and emphasis of the diversity of operations
referenced in a recent earnings call. Please revise future filings to provide more
informative, clear and understandable descriptions in Management's Discussion and 8.

September 20, 2024
Page 3
Analysis. For example, given the complexity and wide range of operations, consider
providing an introductory section addressing the most important matters on which the
company's executives focus in evaluating financial condition and operating performance,
and provide context for the discussion and analysis of the financial statements. Future
disclosures should enable an investor to better understand the reasons underlying
material fluctuations and to see the analysis through the eyes of management. We refer
you to Item 303(a) of Regulation S-K and Release 33-8350.
Overview - Description of the Company, page 52
9.Please revise future filings to provide additional information, similar to disclosure in your
December 31, 2022 Form 10-K, related to your investments in brands including how you
account for and report them.  For example, specifically identify the brands that you
consolidate and the brands that you account for using the fair value option as discussed on
page 108.
Operating Expenses - Capital Markets, page 58
10.We note your disclosure that the increase in Selling, general and administrative expenses
in the Capital Markets segment in 2023 was primarily due to an increase of $77.3 million
related to the Advisory Agreement with Brian Kahn. Please explain to us in detail and
revise future filings as appropriate to discuss the nature of costs related to the Advisory
Agreement, how they were incurred, why they increased so substantially in 2023 as
compared to 2022 and any another other facts and circumstances needed to understand the
magnitude and amounts recognized.
Liquidity and Capital Resources, page 61
11.We note your disclosure on page 63 that you breached financial covenants as of
September 30, 2023 and December 31, 2023 related to Targus Credit Agreement. To the
extent you have breached or are reasonably likely to breach any debt covenants, please
revise to disclose material information about the breach or potential breach and discuss
any material impact on the company.  For example, discuss:

•the steps you took or are taking to avoid the breach;
•the steps you took or intend to take to cure, obtain a waiver of or otherwise address
the breach;
•the reasonably likely impact of the breach (including the effects of any cross-default
or cross-acceleration or similar provisions) on your financial condition and operating
performance; and
•alternate sources of funding and any reasonably likely impact your ability to access
these sources.

Refer to SEC Interpretive Release No. 33-8350 and Rule 4-08(c) of Regulation S-X.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk, page 71
We note that your primary exposure to market risk consists of risk related to changes in
interest rates, and that you utilize borrowings under your senior notes payable and credit 12.

September 20, 2024
Page 4
facilities to fund costs and expenses incurred in connection with your acquisitions and
operations. We also note your risk factor disclosure on page 42 that an increase in market
interest rates could result in a decrease in the value of your senior notes and increase your
future borrowing costs. In future filings, please provide a materially complete description
of how you seek to manage risks due to changes in interest rates and other material
impacts on your operational facts and circumstances, including any management or
corporate governance controls or procedures for identifying and responding to rapid
increases and decreases in interest rates due to or as a result of exogenous or
unknown factors. For example, please clarify if there are any board approved limits and,
with a view to disclosure, advise us of the extent to which there has been approved risk
profiles that do not conform to management and board risk tolerances. If applicable, also
clarify the extent to which such limits and other policies and controls have been changed
due to the economic and other developments.
Item 13. Certain Relationships and Related Party Transactions, and Director Independence, page
76
13.We note that there appears to be several related party transactions identified in Note 22
beginning on page 157 that are not disclosed in this section or in the proxy statement that
is incorporated by reference. For example, we don't see any discussion in the related party
transactions section beginning on page 13 of the proxy statement about transactions with
Applied Digital, Freedom VCM Holdings, LLC, Vintage Capital Management, Torticity,
LLC, or Kanaci Technologies, LLC. We also note your disclosure on pages 6 and 54
regarding a loan to Conn's Inc. that is reported as a related party loan receivable, but do
not see any disclosure in this section or the related party transaction section of the proxy
statement related to this loan. Please revise your future filings to disclose in this section
all related party transactions that are required by Item 404 of Regulation S-K, or advise.
Item 15. Financial Statements, page 91
14.Please revise future filings to separately present or disclose amounts from related party
transactions on the face of your balance sheet, statement of operations, and statement of
cash flows. Refer to Rule 4-08(k) of Regulation S-X.
Consolidated Statements of Operations, page 92
15.Please revise future filings to separately present each item that is greater than 10% of total
revenue in your consolidated statements of operations.  For example, separately present
trading income (loss), fair value adjustments on loans, interest income – loans, and
interest income from securities lending, if appropriate.
Note 2 - Summary of Significant Accounting Policies, page 98
16.Please revise future filings to disclosure your accounting policies related to contingent
consideration. Additionally, please tell us and disclose the transaction, as needed, that
resulted in the recognition of the contingent consideration in 2022.
(f) Concentration of Risk, page 102
17.Please revise future filings to more clearly quantify and discuss your direct and indirect
risk and exposure to loss from Freedom VCM.

September 20, 2024
Page 5
(r) Loans Receivable, page 105
18.We note your disclosure that you have provided limited guarantees with respect to
Babcock & Wilcox Enterprises, Inc. (“B&W”) up to a maximum of $150,000 as further
described in Note 18(b) and that you have 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. Based on disclosure in Note 18(b) it
appears you have off-balance sheet credit exposures significantly greater than $150,000
related to B&W commitments and guarantees. Please explain to us why you limited your
credit loss assessment to $150,000 and/or revise future filings as needed.
Badcock Loan Receivable, page 106
19.Please revise future filings to more clearly describe the key terms regarding the
underlying transactions described as Badcock Loan Receivable. For example, describe
whether you purchased consumer credit card receivables, whether you loaned amounts to
a corporate entity and the receivables serve as collateral, etc. Clearly describe any
collateral underlying the loans, any guarantees provided by other entities, and any other
material terms to ensure you clearly describe the credit risk assumed in each transaction.
(s) Securities and Other Investments Owned and Securities Sold Not Yet Purchased, page 107
20.Please revise future filings to disclose for each period presented the portion of unrealized
gains and losses for the period that relates to equity securities still held at the reporting
date. Refer to ASC 321-10-50-4 for guidance.
Freedom VCM Holdings, LLC Equity Interest and Take-Private Transaction, page 109
21.We note your disclosure that Freedom VCM can exercise influence over Conn’s. Please
revise future filings to disclose the key terms of the sale of Badcock by Freedom VCM to
Conn’s on December 18, 2023. For example, disclose the sales price, the securities and
related rights Freedom VCM received, the ownership percentage of Conn’s, etc.
22.Given the materiality of the concentration of risk related to Freedom VCM, please tell us
what consideration was given to including financial statements of Freedom VCM as an
exhibit, and revise future filings as applicable.
(u) Fair Value Measurements, page 113
23.Please revise future filings to separately disclose purchases, sales and settlements in the
“Level 3 Changes During the Period” table on page 119. Refer to ASC 820-10-50-2.c.2
for guidance.
24.For Level 3 fair value measurements, please revise future filings to disclose under the
“Level 3 Changes During the Period” table on page 119, the amount of total gains or
losses recognized in earnings for the period that is attributable to the change in unrealized
gains or losses relating to those assets and liabilities held at the end of the reporting period
and the line item(s) in the statement of operations in which those unrealized gains or
losses are recognized. Refer to ASC 820-10-50-2.d for guidance.

September 20, 2024
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Acquisition of Targus, page 126
25.Please tell us how the seller financing of $54 million was accounted for and presented on
your balance sheet at December 31, 2022 and 2023 and revise future filings as needed.
Note 12 - Term Loans and Revolving Credit Facilities , page 136
26.Please revise future filings to disclose the carrying amount and classification of any assets
pledged as collateral.  Refer to ASC 860-30-50-1A.b.1 for guidance.
Note 15 - Income Taxes, page 148
27.We note you had net operating loss carryforward deferred tax assets of $103 million at
December 31, 2023.  We also note your disclosure that 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
deferred tax assets and that you have not provided an additional valuation allowance. We
also note you disclose a valuation allowance of $104 million at December 31, 2023.
Please revise your disclosure in future filings to address the following:

•provide a rollforward of the deferred tax asset valuation allowance for each period
presented;
•clarify that you have a valuation allowance for a portion of the net operating loss
carryforwards and other net deferred tax assets;
•clarify if the remaining net deferred tax asset relates to net operating loss
carryforwards;
•clarify how you determined the level of valuation allowance required and/or the
portion of net operating loss carryforwards that did not require a valuation allowance;
and
•provide an assessment of the likelihood that future net operating losses will require a
valuation allow