B. Riley Financial Announces Notification of Delinquency with Nasdaq

Rhea-AI Summary

B. Riley Financial (Nasdaq: RILY) received a delinquency notification from Nasdaq on August 21, 2024, due to the delayed filing of its Q2 2024 10-Q report. This non-compliance with Nasdaq Listing Rule 5250(c)(1) doesn't immediately affect the company's listing status. RILY has 60 days to submit a compliance plan to Nasdaq, which may grant up to 180 days (until February 10, 2025) to regain compliance.

The company released preliminary Q2 2024 financial results on August 12 and is working to file the Quarterly Report promptly. This situation highlights potential risks for investors, including possible regulatory issues and financial reporting delays.

Positive

• No immediate effect on Nasdaq listing
• Preliminary Q2 2024 financial results already released
• Company working to file the Quarterly Report promptly

Negative

• Delayed filing of Q2 2024 10-Q report
• Non-compliance with Nasdaq Listing Rule 5250(c)(1)
• Risk of potential delisting if compliance not regained within 180 days
• Potential investor concerns about financial reporting transparency

Financial Analyst

The notification of delinquency from Nasdaq is a significant concern for B. Riley Financial. This stems from the company's failure to file its Q2 2024 10-Q report on time, violating Nasdaq's listing rules. While there's no immediate threat of delisting, it raises red flags about the company's financial reporting processes and internal controls.

The 60-day window to submit a compliance plan and potential 180-day extension provide some breathing room, but investors should be wary. Delayed filings often indicate underlying issues, which could range from accounting discrepancies to more serious problems. The fact that B. Riley has only released preliminary Q2 results adds to the uncertainty.

This situation could impact investor confidence and potentially lead to increased volatility in RILY's stock price. It's important for the company to swiftly address this issue to maintain market trust and comply with regulatory requirements.

Legal Expert

From a legal standpoint, B. Riley's failure to file its 10-Q on time is a serious compliance issue. While Nasdaq's notification procedure offers a path to rectify the situation, it also initiates a period of heightened scrutiny. The company now faces potential legal risks, including:

• Increased likelihood of SEC investigation into the reasons for the delay
• Potential shareholder lawsuits if the delay is found to have materially affected stock price
• Risk of covenant breaches in credit agreements that require timely SEC filings

B. Riley must navigate this situation carefully, ensuring transparent communication with regulators and shareholders while swiftly addressing the underlying cause of the delay. The company's ability to file the report 'as promptly as practical' will be important in mitigating these legal and regulatory risks.

Market Research Analyst

This delinquency notification could have ripple effects beyond B. Riley's immediate stock performance. As a financial services firm, B. Riley's reputation and credibility are important assets. The delay in filing raises questions about the company's internal processes and could impact client confidence.

Competitors may seize this opportunity to highlight their own reliability and timely reporting. We might see a shift in market share if clients and partners become wary of B. Riley's stability. The financial services sector is built on trust and even temporary doubts can have lasting impacts.

Investors should monitor for any changes in institutional holdings or analyst ratings, as these could signal broader market sentiment shifts. The resolution of this issue and the content of the eventual 10-Q filing will be critical in determining the long-term market implications for B. Riley Financial.

LOS ANGELES, Aug. 23, 2024 /PRNewswire/ -- B. Riley Financial, Inc. (Nasdaq: RILY) (the "Company") announced it received an expected delinquency notification letter from Nasdaq on August 21, 2024, which indicated that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) as a result of the delayed filing of the Company's Quarterly Report on Form 10-Q for the period ended June 30, 2024. The Nasdaq Listing Rule requires listed companies to timely file all required periodic financial reports with the Securities and Exchange Commission (the "SEC"). This notification has no immediate effect on the listing of the Company's securities on Nasdaq.

Nasdaq has informed the Company that it must submit a plan within 60 calendar days to address how it intends to regain compliance with Nasdaq's listing rules. If accepted, Nasdaq can grant an exception of up to 180 calendar days from the filing's due date, or until February 10, 2025, to regain compliance.

B. Riley announced preliminary financial results for the three-month period ending June 30, 2024 on August 12. The Company is working diligently to file the Quarterly Report as promptly as practical.

About B. Riley Financial
B. Riley Financial is a diversified financial services platform that delivers tailored solutions to meet the strategic, operational, and capital needs of its clients and partners. B. Riley leverages cross-platform expertise to provide clients with full service, collaborative solutions at every stage of the business life cycle. Through its affiliated subsidiaries, B. Riley provides end-to-end financial services across investment banking, institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction, and liquidation services. B. Riley opportunistically invests to benefit its shareholders, and certain affiliates originate and underwrite senior secured loans for asset-rich companies. B. Riley refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries or affiliates. For more information, please visit www.brileyfin.com.

Forward-Looking Statements
Statements made 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 today's date. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's performance or achievements to be materially different from any expected future results, performance, or achievements. Forward-looking statements speak only as of the date they are made and the Company assumes no duty to update forward-looking statements, except as required by law. Actual future results, performance or achievements may differ materially from historical results or those anticipated depending on a variety of factors, some of which are beyond the control of the Company, including, but not limited to, the risks described from time to time in the Company's periodic filings with the SEC, including, without limitation, the risks described in the Company's 2023 Annual Report on Form 10-K and in B. Riley Financial's Quarterly Reports on Form 10-Q for the period ended March 31, 2024 under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). 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 the Company undertakes no duty to update this information.

Contacts

Investors
ir@brileyfin.com 

Media
press@briley.com 

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SOURCE B. Riley Financial

FAQ

Why did B. Riley Financial (RILY) receive a delinquency notification from Nasdaq?

B. Riley Financial (RILY) received a delinquency notification from Nasdaq on August 21, 2024, due to the delayed filing of its Quarterly Report on Form 10-Q for the period ended June 30, 2024, violating Nasdaq Listing Rule 5250(c)(1).

What is the deadline for B. Riley Financial (RILY) to submit a compliance plan to Nasdaq?

B. Riley Financial (RILY) has 60 calendar days from the notification date (August 21, 2024) to submit a plan to Nasdaq addressing how it intends to regain compliance with the listing rules.

How long does B. Riley Financial (RILY) have to regain compliance with Nasdaq listing rules?

If Nasdaq accepts B. Riley Financial's (RILY) compliance plan, the company may be granted up to 180 calendar days from the filing's due date, or until February 10, 2025, to regain compliance.

Has B. Riley Financial (RILY) released any financial results for Q2 2024?

Yes, B. Riley Financial (RILY) announced preliminary financial results for the three-month period ending June 30, 2024, on August 12, 2024.