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): October 11, 2019 (October 10, 2019)
B. Riley FinanCIAl, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-37503 | 27-0223495 | ||
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(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
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21255 Burbank Boulevard, Suite 400 Woodland Hills, California 91367 |
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(818) 884-3737
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
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 interest in a 6.875% Series A Cumulative Perpetual Preferred Share, par value $0.0001 per share) | RILYP | Nasdaq Global Market | ||
| 7.25% Senior Notes due 2027 | RILYG | Nasdaq Global Market | ||
| 7.50% Senior Notes due 2027 | RILYZ | Nasdaq Global Market | ||
| 6.75% Senior Notes due 2024 | RILYO | Nasdaq Global Market | ||
| 7.375% Senior Notes due 2023 | RILYH | Nasdaq Global Market | ||
| 6.875% Senior Notes due 2023 | RILYI | Nasdaq Global Market | ||
| 7.50% Senior Notes due 2021 | RILYL | Nasdaq Global Market | ||
| 6.50% Senior Notes due 2026 | RILYN | Nasdaq Global Market | ||
| (Title of Class) |
Not Applicable
(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 8.01. Other Events.
As previously disclosed, on October 7, 2019, B. Riley Financial, Inc. (the “Company”) closed its underwritten public offering of 2,000,000 depositary shares (the “Depositary Shares”), each representing 1/1000th of a share of 6.875% Series A Cumulative Perpetual Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”), pursuant to an Underwriting Agreement dated October 2, 20129, by and among the Company and B. Riley FBR, Inc., as representative of the several underwriters named therein (the “Underwriters”). On October 11, 2019, the Company completed the sale of an additional 300,000 Depositary Shares (the “Option Shares”), pursuant to the Underwriters’ full exercise of their over-allotment option to purchase additional Depositary Shares.
The Depositary Shares were offered pursuant to the Company’s shelf registration statement on Form S-3 (Registration No. 333-233907) (the “Registration Statement”) initially filed with the Securities and Exchange Commission (the “Commission”) on September 23, 2019 and declared effective by the Commission on September 30, 2019.
In connection with the offering of the Option Shares, the Company is filing this Current Report on Form 8-K to add as an exhibit to the Registration Statement the opinion of counsel with respect to the status of the Option Shares as binding obligations (Exhibit 5.1 to this Current Report on Form 8-K (the “Legal Opinion”). The Legal Opinion is also filed with reference to, and is hereby incorporated by reference into, the Registration Statement.
On October 11, 2019, the Company issued a press release announcing the closing of the Option Shares pursuant to the full exercise of the Underwriters’ over-allotment option. 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. |
1
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.
| October 11, 2019 | B. RILEY FINANCIAL, INC. | ||
| By: | /s/ Phillip J. Ahn | ||
| Name: | Phillip J. Ahn | ||
| Title: |
Chief Financial Officer and
Chief Operating Officer |
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2
Exhibit 5.1
theNBDgroup.
A California Professional Corporation
Los Angeles and Palo Alto
https://nbdpro.co/
(408) 201-2662
October 11, 2019
B. Riley Financial, Inc.
21255 Burbank Blvd., Suite 400
Woodland Hills, California 91367
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-3 filed with the U.S. Securities and Exchange Commission (the “Commission”) (No. 333-233907) (the “Registration Statement”), under the Securities Act of 1933, as amended (the “Act”), by B. Riley Financial, Inc., a Delaware corporation (the “Company”). We also refer to our opinion dated September 23, 2019, which was included as Exhibit 5.1 to the Registration Statement, the prospectus supplement to the Registration Statement filed with the Commission on October 2, 2019 (the “Prospectus Supplement”), and our opinion dated October 7, 2019, which was included as Exhibit 5.1 to the Company’s Current Report on Form 8-K filed on October 7, 2019 and incorporated by reference into the Registration Statement.
The Prospectus Supplement relates to (i) the sale by the Company, and the purchase by the underwriters set forth therein (the “Underwriters”), of 2,000,000 depositary shares (the “Initial Depositary Shares”), representing an aggregate of 2,000 shares (the “Preferred Shares”) of the Company’s 6.875% Series A Cumulative Perpetual Preferred Stock, $0.0001 par value, with a liquidation preference of $25,000 per Preferred Share (or $25.00 per Depositary Share), and (ii) the grant by the Company to the Underwriters of the option to purchase all or any part of an additional 300,000 depositary shares to cover overallotments, if any (the “Option Shares,” and together with the Initial Depositary Shares, the “Depositary Shares”), representing an aggregate of 300 Preferred Shares. On October 10, 2019, the Representatives delivered to the Company a written notice (the “Notice of Exercise”) pursuant to Section 1 of the Underwriting Agreement of the exercise by the Underwriters of the option to purchase, on the date hereof, 300,000 Option Shares. All capitalized terms which are defined in the Underwriting Agreement (as defined below) shall have the same meanings when used herein, unless otherwise specified.
The Preferred Shares are to be deposited with Continental Stock Transfer and Trust Company, acting as depositary (the “Depositary”), pursuant to the Deposit Agreement dated October 7, 2019 (the “Deposit Agreement”), among the Company, the Depositary and the holders from time to time of receipts issued under the Deposit Agreement to evidence the Depositary Shares.
In connection with this opinion, we have examined originals, copies or forms of: (i) the Registration Statement; (ii) the prospectus, dated September 30, 2019 (the “Base Prospectus”), which forms a part of the Registration Statement; (iii) the Prospectus Supplement; (iv) the executed Underwriting Agreement, dated October 2, 2019, by and among the Company and B. Riley FBR, Inc., as representative of the Underwriters; (vi) an executed copy of the Deposit Agreement; (v) an executed certificate evidencing 300 Preferred Shares registered in the name of the Depositary; (viii) a form of depositary receipt registered in the name of Cede & Co., relating to 300,000 Depositary Shares (the “Receipt”); (ix) the Certificate of Designation of 6.875% Series A Cumulative Perpetual Preferred Stock of the Company, as filed on October 4, 2019 with the Secretary of State of the State of Delaware; (x) a copy of the Amended and Restated Certificate of Incorporation of the Company, as amended to the date hereof and currently in effect, as certified by the Secretary of the State of Delaware; (xi) a copy of the By-laws of the Company, as currently in effect, as certified by the Secretary of the Company; and (xii) certain resolutions of the Board of Directors of the Company, approved on October 1, 2019, and certain resolutions of the Pricing Committee thereof, approved on October 2, 2019, as certified by the Secretary of the Company. 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 our examination, we have assumed the genuineness of all signatures and the authenticity of all items submitted to us as originals and the conformity with originals of all items submitted to us as copies. In making our examination of documents executed by parties other than the Company, we have assumed that each other party has the power and authority to execute and deliver, and to perform and observe the provisions of, such documents, and the due authorization thereof by each such other party of all requisite action and the due execution and delivery of such documents by each such other party, and that such documents constitute the legal, valid and binding obligations of each such other party enforceable against such party in accordance with their terms.
In addition, we have assumed that the issuance and sale of the Securities and that the execution and delivery by the Company of, and the performance of its obligations under, the Deposit Agreement and the Securities do not violate, conflict with or constitute a default under (i) any agreement or instrument to which the Company or any of its properties is subject, (ii) any law, rule, or regulation to which the Company or any of its properties is subject, (iii) any judicial or regulatory order or decree of any governmental authority or (iv) any consent, approval, license, authorization or validation of, or filing, recordation or registration with, any governmental authority.
Our opinions set forth herein are limited to (i) the General Corporation Law of the State of Delaware and (ii) the laws of the State of New York that, in our experience, are normally applicable to the Securities and, to the extent that judicial or regulatory orders or decrees or consents, approvals, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as “Opined on Law”). We do not express any opinion as to any non-Opined on Law on the opinions herein stated.
2
Based upon and subject to the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that:
| 1. | The Preferred Shares and the Depositary Shares have been duly authorized by the Company and, upon issuance and delivery of and payment for the Depositary Shares pursuant to the terms of the Underwriting Agreement, will be validly issued, fully paid and nonassessable. |
| 2. | The Receipt, when issued against the deposit of underlying Preferred Shares by the Company in respect thereof in accordance with the terms of the Deposit Agreement, will be legally issued and will entitle the holder thereof to the rights specified in such Receipt and in the Deposit Agreement. |
We hereby consent to the filing of this opinion as exhibit 5.1 to the Company’s Current Report on Form 8-K, being filed on the date hereof, and incorporated by reference into the Registration Statement. We also hereby consent to the use of our name under the heading “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. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable laws.
Very truly yours,
/s/ The NBD Group, Inc.
3
Exhibit 99.1
B. Riley Financial Announces Closing of Full Exercise of Over-Allotment Option for Depositary Shares Offering
Depositary Shares Represent an Interest in 6.875% Series A Cumulative Perpetual Preferred Stock
LOS ANGELES—October 11, 2019 — B. Riley Financial, Inc. (NASDAQ: RILY) (“B. Riley” or the “Company”) today announced that it has completed the closing of the issuance of an additional 300,000 depositary shares pursuant to the full exercise of the underwriters’ over-allotment option in connection with the Company’s previously closed public offering of its depositary shares, each representing a 1/1000th fractional interest in a share of the Company’s 6.875% Series A Cumulative Perpetual Preferred Stock, with a liquidation preference of $25.00 per depositary share.
Total net proceeds to the Company were approximately $55.7 million, after deducting underwriting discounts and commissions, but before expenses from the 2,000,000 depositary shares sold in the initial closing on October 7, 2019 and the 300,000 depositary shares sold pursuant to full exercise of the over-allotment option. The Company expects to use the net proceeds of this offering for general corporate purposes, including funding future acquisitions and investments, repaying indebtedness, making capital expenditures and funding working capital.
Trading of the depositary shares commenced on October 8, 2019 on NASDAQ under the symbol “RILYP.”
Book-running managers for this offering were B. Riley FBR, Incapital, Janney Montgomery Scott and Ladenburg Thalmann. Co-managers were Wedbush Securities, William Blair and Boenning & Scattergood.
The NBD Group acted as legal counsel to the Company. Duane Morris acted as legal counsel to the underwriters.
The depositary shares were offered under the Company’s shelf registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission (“SEC”). The offering of these depositary shares was made only by means of a prospectus supplement and accompanying base prospectus, which were filed with the SEC.
Copies of the prospectus supplement and the accompanying base prospectus may be obtained on the SEC's website at www.sec.gov, or from the offices of B. Riley FBR at 1300 North 17th Street, Suite 1400, Arlington, VA 22209 or by calling (703) 312-9580 or by emailing prospectuses@brileyfbr.com.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the depositary shares, nor shall there be any sale of the depositary shares in any jurisdiction in which such offer, solicitation or sale would not be permitted.
About B. Riley Financial, Inc. (NASDAQ:RILY)
B. Riley Financial provides collaborative financial services tailored to fit the capital raising and business advisory needs of public and private companies and high-net-worth individuals. B. Riley operates through several wholly-owned subsidiaries which offer complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, corporate advisory, restructuring, due diligence, forensic accounting and litigation support, appraisal and valuation, and auction and liquidation services. Certain registered affiliates of B. Riley originate and underwrite senior secured loans for asset-rich companies. The Company also makes proprietary investments in companies and assets with attractive return profiles.
Forward-Looking Statements
Statements in this press release that are not descriptions of historical facts are forward-looking statements that are based on management’s current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition and stock price could be materially negatively affected. You should not place undue reliance on such forward-looking statements, which are based on the information currently available to us and speak only as of the date of this press release. Such forward looking statements include, but are not limited to, statements regarding the terms and conditions and timing of the preferred stock offering and the intended use of proceeds. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Factors that could cause actual results to differ include (without limitation) the Company’s financial performance; and those risks described from time to time in B. Riley Financial’s periodic filings with the SEC, including, without limitation, the risks described in B. Riley Financial’s Annual Report on Form 10-K for the year ended December 31, 2018 under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional information is also set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019. These factors should be considered carefully, and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and B. Riley Financial undertakes no duty to update this information.
Investor Contact
Investor Relations
ir@brileyfin.com
(310) 966-1444
Media Contact
Jo Anne McCusker
jmccusker@brileyfin.com
(646) 885-5425