B. Riley Financial
B. Riley Financial, Inc. (Form: 8-K, Received: 12/13/2017 16:44:31)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 13, 2017

 

B. Riley Financial, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-37503   27-0223495
         

(State or other jurisdiction

of incorporation)

  (Commission File Number)   (IRS Employer Identification No.)

 

21255 Burbank Boulevard, Suite 400

Woodland Hills, California

  91367
     
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (818) 884-3737

 

  (Former name or former address, if changed since last report.)  

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
     
  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
     
  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
     
  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company         

 

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

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On December 13, 2017, B. Riley Financial, Inc. (the “ Company ”) entered into a supplemental indenture (the “ Third Supplemental Indenture ”) with U.S. Bank National Association, as trustee (the “ Trustee ”), further supplementing the indenture dated as of November 2, 2016 (the “ Base Indenture ”), as previously supplemented by a First Supplemental Indenture dated as of November 2, 2016 (the “ First Supplemental Indenture ”) and a Second Supplemental Indenture dated as of May 31, 2017 (the “ Second Supplemental Indenture ,” and together with the Base Indenture, the First Supplemental Indenture and the Third Supplemental Indenture, the “ Indenture ”) among the Company and the Trustee.

 

The Indenture establishes the form and, provides for the issuance, of a series of the Company’s senior notes designated as its 7.25% Senior Notes due 2027, in an initial aggregate principal amount of $70,000,000 (the “ Firm Notes ”) plus an additional $10,500,000 aggregate principal amount of the Notes to cover underwriter overallotments (the “ Additional Notes ” and together with the Firm Notes, the “ Notes ”). The Notes were issued pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-221715) initially filed with the Securities and Exchange Commission (the “ Commission ”) on November 22, 2017, and declared effective by the Commission on November 29, 2017 (the “ Registration Statement ”).

 

The Notes will be senior unsecured obligations of the Company and rank equally in right of payment with all of the Company’s other existing and future senior unsecured and unsubordinated indebtedness. The Notes will be effectively subordinated in right of payment to all of the Company’s existing and future secured indebtedness and structurally subordinated to all existing and future indebtedness of the Company’s subsidiaries, including trade payables. The Notes will bear interest at the rate of 7.25% per annum. Interest on the Notes is payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on January 31, 2018. The Notes will mature on December 31, 2027.

   

The Company may, at its option, at any time and from time to time, on or after December 31, 2020, redeem the Notes at a redemption price equal to 100% of the outstanding principal amount thereof plus accrued and unpaid interest payments otherwise payable for the then-current quarterly interest period accrued, but excluding, the date fixed for redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes.

 

The Indenture contains customary events of default and cure provisions. If an uncured default occurs and is continuing, the Trustee or the holders of at least 25% of the principal amount of the Notes may declare the entire amount of the Notes, together with accrued and unpaid interest, if any, to be immediately due and payable. In the case of an event of default involving the Company’s bankruptcy, insolvency or reorganization, the principal of, and accrued and unpaid interest on, the principal amount of the Notes, together with accrued and unpaid interest, if any, will automatically, and without any declaration or other action on the part of the Trustee or the holders of the Notes, become due and payable.

 

The foregoing description of the Base Indenture, First Supplemental Indenture, Second Supplemental Indenture, Third Supplemental Indenture and the Notes does not purport to be complete and is qualified in its entirety by reference to the full text of the Base Indenture, First Supplemental Indenture, Second Supplemental Indenture, Third Supplemental Indenture and the form of Note which is attached as an exhibit to the Third Supplemental Indenture. A copy of the Third Supplemental Indenture and the form of Note are attached to this Current Report on Form 8-K as Exhibit 4.1 and 4.2, respectively, and are incorporated herein by reference and into the Registration Statement. Copies of the Base Indenture and First Supplemental Indenture are attached to the Current Report on Form 8-K, filed with the Commission on November 2, 2016, as Exhibits 4.1 and 4.2, respectively, and are incorporated herein by reference and into the Registration Statement. A copy of of the Second Supplemental Indenture is attached to the Current Report on Form 8-K, filed with the Commission on May 31, 2017, as Exhibit 4.1, and is incorporated herein by reference and into the Registration Statement.

 

Attached as Exhibit 5.1 to this Current Report and incorporated herein by reference is a copy of the opinion of Morrison & Foerster LLP relating to the validity of the Notes that may be sold in the offering (the “ Legal Opinion ”). The Legal Opinion is also filed with reference to, and is hereby incorporated by reference into, the Registration Statement.

 

 

 

 

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information regarding the Notes and the Indenture set forth in Item 1.01 is incorporated herein by reference.

 

Item 8.01. Other Events.

 

On December 13, 2017, the Company issued a press release announcing the closing of the offering.  A copy of the press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference. 

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits .

 

Exhibit No.

 

Description

4.1   Third Supplemental Indenture, dated as of December 13, 2017, by and between the Company and U.S. Bank National Association, as Trustee.

 

4.2

 

 

Form of 7.25% Senior Note due 2027 (included in Exhibit 4.1).

     
5.1   Opinion of Morrison & Foerster LLP.
     
23.1   Consent of Morrison & Foerster LLP to the filing of Exhibit 5.1 herewith (included in Exhibit 5.1).
     
99.1   Press release, dated December 13, 2017.

 

 

 


 

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 hereunto duly authorized.

 

December 13, 2017

B. RILEY FINANCIAL, INC.

 
     
  By:   /s/ Phillip J. Ahn  
    Name:   Phillip J. Ahn  
    Title:  

Chief Financial Officer &

Chief Operating Officer

 

 

 

 

 

Exhibit 4.1

 

B. Riley Financial, Inc.

 

and

 

U.S. Bank National Association,

 

as Trustee

 

THIRD SUPPLEMENTAL INDENTURE

 

Dated as of December 13, 2017

 

to the Indenture dated as of November 2, 2016

 

7.25% Senior Notes due 2027

 

 

 

Table of Contents

 

    Page
     
ARTICLE 1 APPLICATION OF THIRD SUPPLEMENTAL INDENTURE 1
     
Section 1.01. Application of Third Supplemental Indenture. 1
     
ARTICLE 2 DEFINITIONS 2
     
Section 2.01. Certain Terms Defined in the Indenture. 2
     
Section 2.02. Definitions. 2
     
ARTICLE 3 FORM AND TERMS OF THE NOTES 2
     
Section 3.01. Form and Dating. 2
     
Section 3.02. Terms of the Notes. 3
     
Section 3.03. Optional Redemption. 4
     
ARTICLE 4 CERTAIN COVENANTS 4
     
Section 4.01. Merger, Consolidation or Sale of Assets. 4
     
Section 4.02. Reporting. 5
     
Section 4.03. Payment of Taxes. 5
     
ARTICLE 5 EVENTS OF DEFAULT 5
     
Section 5.01. Events of Default. 5
     
ARTICLE 6 MISCELLANEOUS 6
     
Section 6.01. Trust Indenture Act Controls. 6
     
Section 6.02. New York Law to Govern. 6
     
Section 6.03. Counterparts. 7
     
Section 6.04. Severability. 7
     
Section 6.05. Ratification. 7
     
Section 6.06. Effectiveness. 7
     
Section 6.07. Trustee Makes No Representation. 7
     
EXHIBIT A Form of 7.25% Senior Note due 2027 A-1

 

 

 

THIRD SUPPLEMENTAL INDENTURE

 

THIRD SUPPLEMENTAL INDENTURE (this “Third Supplemental Indenture”), dated as of December 13, 2017, between B. Riley Financial, Inc., a Delaware corporation (the “Company”), and U.S. Bank National Association, as trustee (the “Trustee”).

 

RECITALS OF THE COMPANY

 

WHEREAS , the Company and the Trustee executed and delivered an Indenture, dated as of November 2, 2016 (the “Base Indenture,” as supplemented by the First Supplemental Indenture, dated November 2, 2016 (the “First Supplemental Indenture”), and as supplemented by the Second Supplemental Indenture, dated May 31, 2017 (the “Second Supplemental Indenture”) and together with this Third Supplemental Indenture, the “Indenture”), to provide for the issuance by the Company from time to time of Securities to be issued in one or more series as provided in the Indenture;

 

WHEREAS , Section 9.1 of the Base Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Base Indenture, without the consent of any Holders of Securities, to establish the form of any Security, as permitted by Section 2.1 of the Base Indenture, and to provide for the issuance of the Notes (as defined below), as permitted by Section 3.1 of the Base Indenture, and to set forth the terms thereof;

 

WHEREAS, the Company desires to execute this Third Supplemental Indenture, pursuant to Section 2.1 of the Base Indenture, to establish the form and, pursuant to Section 3.1 of the Base Indenture, to provide for the issuance, of a series of its senior notes designated as its 7.25% Senior Notes due 2027 (the “Notes”), in an initial aggregate principal amount of $70,000,000. The Notes are a series of securities as referred to in Section 3.1 of the Base Indenture.

 

WHEREAS, the Company has requested that the Trustee execute and deliver this Third Supplemental Indenture;

 

WHEREAS, all things necessary have been done by the Company to make this Third Supplemental Indenture, when executed and delivered by the Company, a valid supplement to the Indenture; and

 

WHEREAS, all things necessary have been done by the Company to make the Notes, when executed by the Company and authenticated and delivered in accordance with the provisions of the Indenture, the valid obligations of the Company;

 

NOW, THEREFORE, in consideration of the premises stated herein and the purchase of the Notes by the Holders thereof, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of the respective Holders from time to time of the Notes as follows:

 

ARTICLE 1
APPLICATION OF THIRD SUPPLEMENTAL INDENTURE

 

Section 1.01. Application of Third Supplemental Indenture .

 

Notwithstanding any other provision of this Third Supplemental Indenture, all provisions of this Third Supplemental Indenture are expressly and solely for the benefit of the Holders of the Notes, and any such provisions shall not be deemed to apply to any other securities issued under the Base Indenture and shall not be deemed to amend, modify or supplement the Base Indenture for any purpose other than with respect to the Notes. Unless otherwise expressly specified, references in this Third Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this Third Supplemental Indenture as they amend or supplement the Base Indenture, and not the Base Indenture or any other document. All Initial Notes and Additional Notes, if any, shall be treated as a single class for all purposes of this Indenture, including waivers, amendments, redemptions and offers to purchase.

 

ARTICLE 2
DEFINITIONS

 

Section 2.01. Certain Terms Defined in the Indenture .

 

For purposes of this Third Supplemental Indenture, all capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Base Indenture, as amended hereby.

 

 

 

Section 2.02. Definitions . (a) For the benefit of the Holders of the Notes, the following terms shall have the meanings set forth in this Section 2.02:

 

“Additional Notes” has the meaning specified in Section 3.02(b) of this Third Supplemental Indenture.

 

“Depositary” has the meaning specified in Section 3.01(c) of this Third Supplemental Indenture.

 

“Global Notes” means the Notes in the form of Global Securities issued to the Depositary or its nominee, substantially in the form of Exhibit A.

 

“Initial Notes” has the meaning specified in Section 3.02(b) of this Third Supplemental Indenture.

 

“Notes” has the meaning specified in the recitals of this Third Supplemental Indenture.

 

“Person” has the meaning given thereto in Section 13(d)(3) of the Exchange Act.

 

ARTICLE 3
FORM AND TERMS OF THE NOTES

 

Section 3.01. Form and Dating .

 

a) The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A attached hereto. The Notes shall be executed on behalf of the Company by an Officer of the Company. The Notes may have notations, legends or endorsements required by law, stock exchange rules or usage. Each Note shall be dated the date of its authentication. The Notes and any beneficial interest in the Notes shall be in minimum denominations of $25 and integral multiples of $25 in excess thereof.

 

b) The terms and notations contained in the Notes shall constitute, and are hereby expressly made, a part of the Indenture, and the Company and the Trustee, by their execution and delivery of this Third Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby.

 

c) Global Notes. The Notes shall be issued initially in the form of fully registered Global Securities, which shall be deposited on behalf of the purchasers of the Notes represented thereby with The Depository Trust Company, New York, New York (the “Depositary”) and registered in the name of Cede & Co., the Depositary’s nominee, duly executed by the Company and authenticated by the Trustee.

 

d) Book-Entry Provisions. This Section 3.01(d) shall apply only to the Global Notes deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in accordance with this Section 3.01(d), authenticate and deliver the Global Notes that shall be registered in the name of the Depositary or the nominee of the Depositary and shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instructions.

 

e) Paying Agent. The Company initially appoints the Trustee as Paying Agent for the payment of the principal of (and premium, if any) and interest on the Notes and the office of the Trustee at U.S. Bank National Association, 633 West Fifth Street, 24th Floor Los Angeles, California 90071, is hereby designated as the Place of Payment where the Notes may be presented for payment.

 

Section 3.02. Terms of the Notes . The following terms relating to the Notes are hereby established:

 

a) Title . The Notes shall constitute a series of Securities having the title “7.25% Senior Notes due 2027”.

 

b) Principal Amount . The aggregate principal amount of the Notes that may be initially authenticated and delivered under the Indenture (the “Initial Notes”) shall be $70,000,000 (except for Notes authenticated and delivered upon registration of, transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 3.4, 3.5, 3.6, 9.6 or 11.7 of the Base Indenture). The Company may from time to time, without the consent of the Holders of Notes, issue additional Notes (in any such case “Additional Notes”) having the same ranking and the same interest rate, Maturity and other terms as the Initial Notes. Any Additional Notes and the Initial Notes shall constitute a single series under the Indenture and all references to the Notes shall include the Initial Notes and any Additional Notes unless the context otherwise requires.

 

c) Maturity Date . The entire outstanding principal amount of the Notes shall be payable on December 31, 2027.

 

 

 

 

d) Interest Rate . The rate at which the Notes shall bear interest shall be 7.25% per annum; the date from which interest shall accrue on the Notes shall be December 13, 2017, or the most recent Interest Payment Date to which interest has been paid or provided for; the Interest Payment Dates for the Notes shall be January 31, April 30, July 31 and October 31 of each year, beginning January 31, 2018; the interest so payable, and punctually paid or duly provided for, on any Interest Payment Date, will be paid, in immediately available funds, to the Persons in whose names the Notes (or predecessor Notes) are registered (which shall initially be the Depositary) at the close of business on the Regular Record Date for such interest, which shall be the January 15, April 15, July 15 or October 15 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date. Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. For so long as the Notes are represented in global form by one or more Global Securities, all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Notes. In the event that definitive Notes shall have been issued, all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the accounts of the registered Holders thereof; provided, that the Company may elect to make such payments at the office of the Paying Agent in The City of Los Angeles; and provided further, that the Company may at its option pay interest by check to the registered address of each Holder of a definitive Note.

 

e) Currency . The currency of denomination of the Notes is United States Dollars. Payment of principal of and interest and premium, if any, on the Notes shall be made in United States Dollars.

 

f) Sinking Fund . The Notes are not subject to any sinking fund.

 

g) Additional Interest . At the Company’s election, the sole remedy with respect to an Event of Default due to a failure to comply with reporting requirements under the Trust Indenture Act or under Section 4.02 below, for the first 180 calendar days after the occurrence of such Event of Default, consists exclusively of the right to receive additional interest on the Notes at an annual rate equal to (1) 0.25% for the first 90 calendar days after such default and (2) 0.50% for calendar days 91 through 180 after such default. On the 181st day after such Event of Default, if such violation is not cured or waived, the Trustee or the Holders of not less than 25% of the outstanding principal amount of the Notes may declare the principal, together with accrued and unpaid interest, if any, on the Notes to be due and payable immediately. If the Company chooses to pay such additional interest, the Company must notify the Trustee and the Holders of the Notes by certificate of the Company’s election at any time on or before the close of business on the first business day following the Event of Default.

 

Section 3.03. Optional Redemption .

 

a) The provisions of Article 11 of the Base Indenture, as supplemented by the provisions of this Third Supplemental Indenture, shall apply to the Notes.

 

b) The Notes shall be redeemable as a whole or in part at any time and from time to time on or after December 31, 2020 at the Company’s option, upon notice not fewer than 30 days and not more than 60 days prior to the date fixed for redemption to each Holder of Notes to be redeemed, at a redemption price equal to the principal amount plus any unpaid interest payable thereon accrued to, but excluding, the date fixed for redemption.

 

c) If less than all of the Notes are to be redeemed, the particular Notes to be redeemed will be selected not more than 45 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Notes will be in an authorized denomination (which will not be less than the minimum authorized denomination) for such Notes. The Trustee will promptly notify us in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.

 

d) Unless the Company defaults on the payment of the redemption price, on and after the date of redemption, interest will cease to accrue on the Notes called for redemption.

 

ARTICLE 4
CERTAIN COVENANTS

 

The following covenants shall be applicable to the Company for so long as any of the Notes are Outstanding. Nothing in this Article will, however, affect the Company’s rights or obligations under any other provision of the Base Indenture, the First Supplemental Indenture, the Second Supplemental Indenture or this Third Supplemental Indenture.

 

 

 

Section 4.01. Merger, Consolidation or Sale of Assets .

 

The Company shall not merge or consolidate with or into any other Person (other than a merger of a wholly owned Subsidiary of the Company into the Company) or sell, transfer, lease, convey or otherwise dispose of all or substantially all of its property (provided that, for the avoidance of doubt, a pledge of assets pursuant to any secured debt instrument of the Company or its Subsidiaries shall not be deemed to be any such sale, transfer, lease, conveyance or disposition) in one transaction or series of related transactions unless:

 

a) the Company shall be the surviving Person (the “Surviving Person”) or the Surviving Person (if other than the Company) formed by such merger or consolidation or to which such sale, transfer, lease, conveyance or disposition is made shall be a corporation or limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia;

 

b) the Surviving Person (if other than the Company) expressly assumes, by supplemental indenture in form reasonably satisfactory to the Trustee, executed and delivered to the Trustee by such Surviving Person, the due and punctual payment of the principal of, and premium, if any, and interest on, all the Notes Outstanding, and the due and punctual performance and observance of all the covenants and conditions of this Indenture to be performed by the Company;

 

c) immediately before and immediately after giving effect to such transaction or series of related transactions, no Default or Event of Default shall have occurred and be continuing; and

 

d) in the case of a merger where the Surviving Person is other than the Company, the Company shall deliver, or cause to be delivered, to the Trustee, an Officer’s Certificate and an Opinion of Counsel, each stating that such transaction and the supplemental indenture, if any, in respect thereto comply with this Section 4.01 and that all conditions precedent in this Indenture relating to such transaction have been complied with.

 

Section 4.02. Reporting .

 

If, at any time, the Company is not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports with the Securities and Exchange Commission, the Company agrees to furnish to Holders and Trustee, for the period of time during which the Notes are outstanding, its audited annual consolidated financial statements, within 90 days of its fiscal year end, and unaudited interim consolidated financial statements, within 45 days of its fiscal quarter end (other than our fourth fiscal quarter). All such financial statements will be prepared, in all material respects, in accordance with Generally Accepted Accounting Principles, as applicable.

 

Section 4.03. Payment of Taxes.

 

The Company will pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges levied or imposed upon the Company or upon the income, profits or property of the Company, except where the failure to do so would not be reasonably expected to have a material adverse effect on the business, assets, financial condition or results of operations of the Company; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings.

 

ARTICLE 5

EVENTS OF DEFAULT

 

Section 5.01. Events of Default .

 

Solely for the benefit of the Holders of the Notes, Section 5.1 of the Base Indenture is hereby deleted in its entirety and replaced with the following:

 

“Section 5.1 Events of Default

 

“Event of Default”, wherever used herein with respect to the Notes means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(1) default in the payment of any interest upon any Note when it becomes due and payable, and continuance of such default for a period of 30 days;

 

 

 

(2) default in the payment of the principal of any Note when due and payable;

 

(3) default in the performance, or breach, of any covenant of the Company in this Indenture with respect to the Notes, and continuance of such default or breach for a period of 60 days after there has been sent to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Notes, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder;

 

(4) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or

 

(5) the commencement by the Company of a voluntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal or state law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any substantial part of its property, or the making by the Company of an assignment for the benefit of creditors, or the admission by the Company in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action.

 

Subject to the provisions of Section 6.1 hereof, the Trustee shall not be deemed to have knowledge of an Event of Default hereunder (except for those described in paragraphs (1) and (2) above if the Trustee is then the Paying Agent) unless a Responsible Officer of the Trustee shall have actual knowledge thereof or shall have received written notice thereof and such notice references the Notes and this Indenture.

 

ARTICLE 6
MISCELLANEOUS

 

Section 6.01. Trust Indenture Act Controls .

 

If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with another provision which is required to be included in this Third Supplemental Indenture by the Trust Indenture Act, the required provision shall control. If any provision of this Third Supplemental Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Third Supplemental Indenture as so modified or to be excluded, as the case may be.

 

Section 6.02. New York Law to Govern .

 

This Third Supplemental Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York.

 

Section 6.03. Counterparts .

 

This Third Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Third Supplemental Indenture and of signature pages by facsimile, PDF or other electronic transmission shall constitute effective execution and delivery of this Third Supplemental Indenture as to the parties hereto and may be used in lieu of the original Third Supplemental Indenture and signature pages for all purposes.

 

Section 6.04. Severability . If any provision of this Third Supplemental Indenture or the Notes shall be held to be illegal or unenforceable under applicable law, then the remaining provisions hereof shall be construed as though such invalid, illegal or unenforceable provision were not contained therein.

 

 

 

Section 6.05. Ratification .

 

The Base Indenture, as supplemented and amended by the First Supplemental Indenture, as supplemented and amended by the Second Supplemental Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects ratified and confirmed. The Indenture shall be read, taken and construed as one and the same instrument. All provisions included in this Third Supplemental Indenture supersede any conflicting provisions included in the Base Indenture, as supplemented and amended by the First Supplemental Indenture, as supplemented and amended by the Second Supplemental Indenture, unless not permitted by law. The Trustee accepts the trusts created by the Indenture, and agrees to perform the same upon the terms and conditions of the Indenture.

 

Section 6.06. Effectiveness .

 

The provisions of this Third Supplemental Indenture shall become effective as of the date hereof.

 

Section 6.07. Trustee Makes No Representation .

 

The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Third Supplemental Indenture. All rights, protections, privileges, indemnities and benefits granted or afforded to the Trustee under the Indenture shall be deemed incorporated herein by this reference and shall be deemed applicable to all actions taken, suffered or omitted by the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act under this Third Supplemental Indenture.

 

[Remainder of page intentionally left blank.]

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be duly executed as of the date first above written.

 

  B. RILEY FINANCIAL, INC.
   
  By: /s/ Phillip J. Ahn
    Name: Phillip J. Ahn
    Title: Chief Financial Officer & Chief Operating Officer

 

[Signature Page to Supplemental Indenture]

 

 

  

  U.S. Bank National Association, as Trustee
   
  By: /s/ Bradley Scarbrough
    Name: Bradley Scarbrough
    Title: Vice President

 

[Signature Page to Supplemental Indenture]

 

 

 

EXHIBIT A

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY (AS DEFINED IN THE INDENTURE) OR A NOMINEE THEREOF. THIS GLOBAL SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR ITS NOMINEE ONLY IN LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

B. RILEY FINANCIAL, INC.

 

7.25% Senior Note due 2027

 

No. 1 Principal Amount
CUSIP No. 05580M 405 $70,000,000

 

B. Riley Financial, Inc., a Delaware corporation (hereinafter called the “Company”, which term includes any successor Person under the Indenture referred to below), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of Seventy Million U.S. Dollars (U.S. $70,000,000) on December 31, 2027 and to pay interest thereon from December 13, 2017 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly on January 31, April 30, July 31 and October 31 in each year (each an “Interest Payment Date”), beginning January 31, 2018 at the rate of 7.25% per annum, until the principal hereof is paid or duly made available for payment. The interest so payable and punctually paid or duly provided for on any Interest Payment Date shall, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the January 15, April 15, July 15 or October 15 (whether or not a Business Day), as the case may be, preceding such Interest Payment Date. Any such interest which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date shall forthwith cease to be payable to the Holder hereof on the relevant Regular Record Date by virtue of having been such Holder, and may be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Notes not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture.

 

Payment of the principal of (and premium, if any) and the interest on this Note shall be made at the designated office of the Trustee (as defined below) at U.S. Bank National Association, 633 West Fifth Street, 24th Floor Los Angeles, California 90071, in such currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, for so long as the Notes are represented in global form by one or more Global Securities, all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the Depositary or its nominee, as the case may be, as the registered owner of the Global Security representing such Notes. In the event that definitive Notes shall have been issued, all payments of principal (and premium, if any) and interest shall be made by wire transfer of immediately available funds to the accounts of the registered Holders thereof; provided, that the Company may at its option pay interest by check to the registered address of each Holder of a definitive Note.

 

 

 

This Note is one of the duly authorized series of Securities of the Company, designated as the Company’s “7.25% Senior Notes due 2027”, initially limited to an aggregate principal amount of $70,000,000 all issued or to be issued under and pursuant to an Indenture (the “Base Indenture”), dated as of November 2, 2016, between the Company and U.S. Bank National Association, as trustee (hereinafter referred to as the “Trustee”), as supplemented by the First Supplemental Indenture thereto, dated as of November 2, 2016 (the “First Supplemental Indenture”), as supplemented by the Second Supplemental Indenture thereto, dated as of May 31, 2017(the “Second Supplemental Indenture”), as supplemented by the Third Supplemental Indenture (the “Third Supplemental Indenture,” and together with the Base Indenture, the First Supplemental Indenture, and the Second Supplemental Indenture, the “Indenture”). Reference is hereby made to the Indenture for a description of the respective rights, limitation of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.

 

The Company may redeem the Notes as a whole or in part, at any time and from time to time on or after December 31, 2020 at the Company’s option, upon notice sent not fewer than 30 days and not more than 60 days prior to the date fixed for redemption to each Holder of Notes to be redeemed, at a redemption price equal to the principal amount plus any unpaid interest payable thereon accrued to, but excluding, the date fixed for redemption.

 

If less than all of the Notes are to be redeemed, the Notes to be redeemed shall be selected not more than 45 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption, by lot, or in the Trustee’s discretion, on a pro-rata basis, provided that the unredeemed portion of the principal amount of any Notes will be in an authorized denomination (which will not be less than the minimum authorized denomination) for such Notes. The Trustee will promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.

 

The Notes are not subject to any sinking fund.

 

If an Event of Default with respect to the Notes shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of each series affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Securities of any series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the right of the Holder of this Note, which is absolute and unconditional, to receive payment of the principal of and interest on this Note at the times herein and in the Indenture prescribed and to institute suit for the enforcement of any such payment unless the Holder of this Note shall have consented to the impairment of such right.

 

As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of any authorized denominations and of a like aggregate principal amount and tenor, shall be issued to the designated transferee or transferees.

 

The Notes are issuable only in registered form without coupons in minimum denominations of $25 and integral multiples of $25 in excess thereof. Subject to certain limitations therein set forth in the Indenture and in this Note, the Notes are exchangeable for a like aggregate principal amount of Notes of this series in different authorized denominations, as requested by the Holders surrendering the same.

 

No service charge shall be made for any such registration of transfer or for exchange of this Note, but the Company or the Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of a Note, other than in certain cases provided in the Indenture.

 

 

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Indenture contains provisions whereby (i) the Company may be discharged from its obligations with respect to the Notes (subject to certain exceptions) or (ii) the Company may be released from its obligations under specified covenants and agreements in the Indenture, in each case if the Company irrevocably deposits with the Trustee money or U.S. Government Obligations sufficient to pay and discharge the entire indebtedness on all Notes of this series, and satisfies certain other conditions, all as more fully provided in the Indenture.

 

This Note shall be governed by and construed in accordance with the laws of the State of New York.

 

All terms used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

 

Unless the certificate of authentication hereon has been executed by or on behalf of the Trustee under the Indenture by the manual signature of one of its authorized signatories, this Note shall not be entitled to any benefits under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

Dated: December 13, 2017

 

  B. RILEY FINANCIAL, INC.
   
  By:  
    Name: Phillip J. Ahn
    Title: Chief Financial Officer & Chief Operating Officer

 

[Signature Page to Global Note]

 

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.

 

Dated: December 13, 2017

 

  U.S. BANK NATIONAL ASSOCIATION, as Trustee
   
  By:  
    Authorized Signatory

 

[Signature Page to Global Note]

 

 

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations.

 

TEN COM - as tenants UNIF GIFT MIN ACT - . . .Custodian
in common (Cust) (Minor)
TEN ENT - as tenants by Under Uniform Gifts to
the entireties Minor Act
JT TEN - as joint tenants    
with right of  
survivorship and  
not as tenants in  
common   (State)

 

Additional abbreviations may also be used though not in the above list.

 

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

 

(Please insert Assignee’s legal name)

 

(Please insert Social Security or other identifying number of Assignee)

 

(Please print or typewrite name and address including postal zip code of Assignee)

 

the within Note of B. RILEY FINANCIAL, INC. and does hereby irrevocably constitute and appoint   attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

 

Dated:

 

  Your Signature:  
    (Sign exactly as your name appears on the face of this Note)
   

 

 

[NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever.]

 

 

 

Exhibit 5.1

 

(MORRISON FOERSTER LOGO)

425 Market Street
San Francisco
California 94105-2482

 

Telephone: 415.268.7000

Facsimile: 415.268.7522

 

www.mofo.com

morrison foerster llp

 

beijing, berlin, brussels,
denver, hong kong, london,
los angeles, new york,
northern virginia, palo alto,
san diego, san francisco, shanghai,
singapore, tokyo, washington, d.c.

 

December 13, 2017

 

B. Riley Financial, Inc.

21255 Burbank Blvd., Suite 400
Woodland Hills, California 91367

 

Ladies and Gentlemen:

 

We have acted as counsel to B. Riley Financial, Inc., a Delaware corporation (the “ Company ”), in connection with the issuance and sale by the Company of $70,000,000 aggregate principal amount of its 7.25% Senior Notes due 2027 (the “ Firm Notes ”), and in connection with the Underwriters’ (as defined below) over-allotment option to purchase an additional $10,500,000 aggregate principal amount of the Company’s 7.25% Senior Notes due 2027 (the “ Additional Notes ” and together with the Firm Notes, the “ Notes ”), pursuant to the terms of an Underwriting Agreement, dated December 6, 2017 (the “ Underwriting Agreement ”), by and among the Company and B. Riley FBR, Inc., as representative of the several underwriters named in Schedule A thereto (the “ Underwriters ”). The Notes are to be issued pursuant to the terms and conditions of, and in the form set forth in, an Indenture entered into by and between the Company and U.S. Bank National Association, as trustee (the “ Trustee ”), dated as of November 2, 2016 (the “ Base Indenture ”), as supplemented by the First Supplemental Indenture relating to the Notes, dated as of November 2, 2016 (the “ First Supplemental Indenture ”), as supplemented by the Second Supplemental Indenture, dated as of May 31, 2017 (the “ Second Supplemental Indenture ”), and as supplemented by the Third Supplemental Indenture to be dated as of December 13, 2017 (together with the Base Indenture, the First Supplemental Indenture and the Second Supplemental Indenture, the “ Indenture ”). This opinion is furnished to you in connection with the shelf registration statement on Form S-3 (Registration No. 333-221715), initially filed by the Company with the Securities and Exchange Commission (the “ Commission ”) on November 22, 2017, and declared effective by the Commission on November 29, 2017 (the “ Registration Statement ”), in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder (collectively, the “ Act ”), relating to the issuance and sale of the Notes.

 

 

 

 

(MORRISON FOERSTER LOGO)  

 

December 13, 2017

Page Two

 

In connection with this opinion, we have examined originals, copies or forms of: (i) the Registration Statement; (ii) the prospectus, dated November 29, 2017 (the “ Base Prospectus ”), which forms a part of the Registration Statement; (iii) the preliminary prospectus supplement, dated December 6, 2017, relating to the Notes (together with the Base Prospectus, the “ Preliminary Prospectus ”); (iv) the prospectus supplement, dated December 6, 2017, in the form filed with the Commission pursuant to Rule 424(b) under the Act (the Base Prospectus, together with Preliminary Prospectus and the documents incorporated and deemed to be incorporated by reference therein, herein collectively referred to as the “ Prospectus ”); and (v) the Indenture (such documents the “ Documents ”). In addition, we have examined such records, documents, certificates of public officials and of the Company, made such inquiries of officers of the Company, and considered such questions of law as we have deemed necessary for the purpose of rendering the opinions set forth herein.

 

In connection with this opinion, we have assumed: (i) the authenticity of original documents and the genuineness of all signatures; (ii) the conformity to the originals of all documents submitted to us as copies; (iii) the truth, accuracy and completeness of the information, representations and warranties contained in the instruments, documents, certificates and records we have reviewed; (iv) that all Notes will be issued and sold in compliance with applicable U.S. federal and state securities laws and in the manner stated in the Registration Statement and the Prospectus; (v) that each party thereto (other than the Company) has the corporate or other power and authority to execute, deliver and perform such Documents; (vi) that each party thereto (other than the Company) has duly authorized, executed and delivered such Documents; (vii) that each Document is the legal, valid and binding obligation of such party (other than the Company) enforceable against such party in accordance with its terms; (viii) that the Indenture constitutes the legal, valid and binding obligations of the Trustee and has been duly authenticated by the Trustee and will be duly qualified under the Trust Indenture Act of 1939, as amended; and (ix) the legal capacity of all natural persons. As to any facts material to the opinions expressed herein that were not independently established or verified, we have relied upon oral or written statements and representations of officers and other representatives of the Company, including a certificate from officers of the Company with respect to certain factual matters.

 

The opinions hereinafter expressed are subject to the following further qualifications and exceptions:

 

(1) We express no opinion as to the effect of bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws relating to or affecting the rights of creditors generally, including, without limitation, laws relating to fraudulent transfers or conveyances, preferences and equitable subordination.

 

(2) We express no opinion as to limitations imposed by general principles of equity upon the availability of equitable remedies or the enforcement of provisions of the Documents; and the effect of judicial decisions which have held that certain provisions are unenforceable where their enforcement would violate the implied covenant of good faith and fair dealing, or would be commercially unreasonable, or where a default under the Documents is not material.

 

 

 

 

(MORRISON FOERSTER LOGO)  

 

December 13, 2017

Page Three

 

(3) We express no opinion as to the effect of judicial decisions permitting the introduction of extrinsic evidence to supplement the terms or aid in the interpretation of the Documents.

 

(4) We express no opinion as to the effect on the opinions expressed herein of (i) the compliance or non-compliance of any party to the Documents with any law, regulation or order applicable to it, or (ii) the legal or regulatory status or the nature of the business of any such party.

 

(5) We express no opinion as to the enforceability of provisions of the Documents providing for indemnification or contribution, to the extent such indemnification or contribution is against public policy.

 

(6) We express no opinion as to the enforceability of provisions of the Documents imposing or which are construed as effectively imposing a penalty.

 

(7) We express no opinion as to the enforceability of any provision of the Documents which purports to establish evidentiary standards or to make determinations conclusive or powers absolute.

 

(8) We express no opinion as to the enforceability of the waiver of stay or extension laws contained in Section 5.15 of the Base Indenture.

 

(9) We express no opinion as to the enforceability of any choice of law provisions contained in the Documents or the enforceability of any provisions which purport to establish a particular court as the forum for adjudication of any controversy relating to the Documents or which purport to cause any party to waive or alter any right to a trial by jury or which waive objection to jurisdiction.

 

Further, we express no opinion as to the effect on the opinions expressed herein of (i) the compliance or non-compliance of any party to the Indenture and the Notes with any law, regulation or order applicable to it, (ii) the legal or regulatory status or the nature of the business of any such party, (iii) provisions of the Indenture under which the Company submits to the jurisdiction of one or more New York courts or federal courts located in the State of New York are subject to the application of the doctrine of forum non conveniens or a similar statutory principle or as to the subject matter jurisdiction of the federal courts located in the State of New York to adjudicate any dispute under the Indenture, (iv) provisions of the Indenture which purport to prohibit or restrict a transfer of rights under the Indenture or (v) provisions of the Indenture providing for rights of setoff.

 

 

 

 

(MORRISON FOERSTER LOGO)  

 

December 13, 2017

Page Four

 

Our opinion is based upon current statutes, rules, regulations, cases and official interpretive opinions, and it covers certain items that are not directly or definitively addressed by such authorities.

 

Based upon and subject to the limitations and qualifications set forth herein, we are of the opinion that:

 

The Notes, when issued, executed and authenticated in accordance with the provisions of the Indenture and delivered against payment therefor in the manner contemplated by the Underwriting Agreement and the terms of the Registration Statement, will be legally issued and binding obligations of the Company pursuant to the terms of the Indenture, enforceable against the Company in accordance with their terms.

 

We express no opinion as to matters governed by any laws other than the substantive laws of the State of New York and the federal laws of the United States (without reference to choice of law rules), which are in effect on the date hereof.

 

We hereby consent to the filing of this opinion as exhibit 5.1 to the Company’s Current Report on Form 8-K to be filed by the Company with the Commission on or about December 13, 2017, which will be incorporated by reference in the Registration Statement and any amendments thereto and to the reference to our firm under the caption “Legal Matters” in the Prospectus. In giving such consent, we do not hereby admit that we are acting within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder.

 

Very truly yours,

 

/s/ Morrison & Foerster LLP

 

 

 

 

Exhibit 99.1

 

  (GRAPHIC)

 

Source: B. Riley Financial, Inc.

 

B. Riley Financial Announces Closing of

Senior Notes Offering

 

LOS ANGELES—December 13, 2017 — B. Riley Financial, Inc. (NASDAQ: RILY) (the “ Company ”) announced today that it has closed an underwritten registered public offering of $70,000,000 aggregate principal amount of 7.25% Senior Notes due 2027 (the “ Notes ”). The Company also granted to the underwriters a 30-day option to purchase up to $10,500,000 aggregate principal amount of Notes. B. Riley FBR, Inc., Incapital LLC, and Ladenburg Thalmann & Co. Inc. are acting as book-running managers for this offering, and Boenning & Scattergood, Inc., Wedbush Securities Inc. and William Blair & Company, L.L.C. are acting as co-managers for this offering. The Company and the Notes received an investment grade rating of “A-” from Egan-Jones Rating Company, an independent unaffiliated rating agency.

 

The offering resulted in net proceeds of approximately $67.8 million after deducting underwriting discounts and commissions, but before expenses. The Company intends to use the net proceeds from this offering for general corporate purposes.

 

The Notes were offered under the Company's shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission. The offering of these Notes was made only by means of a prospectus supplement and accompanying base prospectus, which was filed with the Securities and Exchange Commission. This announcement shall not constitute an offer to sell or the solicitation of an offer to buy the Notes, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would not be permitted.

 

About B. Riley Financial, Inc.

B. Riley Financial, Inc. is a publicly traded, diversified financial services company which takes a collaborative approach to the capital raising and financial advisory needs of public and private companies and high net worth individuals. The Company also makes proprietary investments in other businesses where B. Riley Financial, Inc. is uniquely positioned to leverage its expertise and assets in order to maximize value. The Company operates through several wholly-owned subsidiaries, including B. Riley FBR, Inc., Wunderlich Securities, Inc., Great American Group, LLC (www.greatamerican.com), Great American Group Advisory and Valuation Services, LLC, and B. Riley Capital Management, LLC (which includes B. Riley Asset Management, B. Riley Wealth Management (www.brileywealth.com), and Great American Capital Partners (www.gacapitalpartners.com)). The Company also makes proprietary investments in other businesses, such as the acquisition of United Online, Inc. Since the acquisition of United Online, Inc. (www.untd.com) in July 2016, B. Riley Financial, Inc. also provides internet access services under the NetZero and Juno brands.

 

B. Riley Financial is headquartered in Los Angeles with offices in major financial markets throughout the United States and Europe. For more information on B. Riley Financial, visit www.brileyfin.com.

 

 

 

 

(GRAPHIC)  

 

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, statements regarding our expectations, hopes or intentions regarding the future. These forward looking statements can often be identified by their use of words such as “will”, “predict”, “continue”, “forecast”, “expect”, “believe”, “anticipate”, “outlook”, “could”, “target”, “project”, “intend”, “plan”, “seek”, “estimate”, “should”, “may” and “assume”, as well as variations of such words and similar expressions referring to the future, and may include (without limitation) statements regarding the intended use of proceeds. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in each such statement. Factors that could cause actual results to differ include (without limitation) the Company’s plans regarding future uses of cash; and the Company’s financial performance. Additional factors are discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, and in the Company’s other current and periodic reports filed from time to time with the Securities and Exchange Commission. All forward-looking statements in this document are made based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

 

Investor Contact :
Scott Liolios  or  Matt Glover
Liolios Group, Inc.
1-949-574-3860
RILY@liolios.com