CALCULATION OF REGISTRATION FEE
Title of each class
of securities to be registered
|
|
Maximum
aggregate offering
price
|
|
|
Amount of
registration fee(1)(2)
|
|
5.00% Senior Notes due 2026
|
|
$
|
345,000,000
|
|
|
$
|
31,981.50
|
|
|
(1)
|
Calculated in accordance with Rule
457(r) under the Securities Act of 1933, as amended.
|
|
(2)
|
This “Calculation of Registration
Fee” table shall be deemed to update the “Calculation of Registration Fee” table in Registration Statement No. 333-252513.
|
Filed
pursuant to Rule 424(b)(5)
Registration No. 333-252513
PROSPECTUS
SUPPLEMENT
(To prospectus dated January 28, 2021)
$300,000,000
5.00%
Senior Notes due 2026
B.
Riley Financial, Inc. is offering $300,000,000 principal amount of our 5.00% Senior Notes due 2026 (the “Notes”) as
described in this prospectus supplement and the accompanying prospectus. Interest on the Notes will accrue from December 3, 2021 and
will be paid quarterly in arrears on January 31, April 30, July 31 and October 31 of each year, commencing on January 31, 2022, and at
maturity. The Notes will mature on December 31, 2026.
Prior
to October 2, 2026, we may, at our option, redeem the Notes, for cash in whole or in part at any time, at a redemption price equal to
the sum of (i) 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest to, but excluding, the date
of redemption and (ii) the Make-Whole Amount (as defined in the “Description of Notes – Optional Redemption”), if any.
On or after October 2, 2026 and prior to maturity, we may, at our option, redeem the Notes for cash in whole or in part at any time,
at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption.
See “Description of the Notes — Optional Redemption.” The Notes will be issued in denominations of $25 and in
integral multiples thereof.
The
Notes will be our senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior unsecured
and unsubordinated indebtedness. The Notes will be effectively subordinated in right of payment to all of our existing and future secured
indebtedness, and the Notes will be structurally subordinated to all existing and future indebtedness (including trade payables) of our
subsidiaries.
Investing
in the Notes involves a high degree of risk. You should carefully consider the risks described under “Risk Factors” beginning
on page S-6 of this prospectus supplement and in the documents incorporated by reference in this prospectus supplement and the accompanying
prospectus.
Neither
the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
We have been approved to list the
Notes on the Nasdaq Global Market (“Nasdaq”). Trading on Nasdaq is expected to begin within 30 business days of December
3, 2021, the original issue date.
|
|
Per
Note
|
|
|
Total
|
|
Public
offering price(1)
|
|
$
|
25.00
|
|
|
$
|
300,000,000
|
|
Underwriting
discount(2)
|
|
$
|
0.7875
|
|
|
$
|
9,450,000
|
|
Proceeds,
before expenses, to us(1)
|
|
$
|
24.2125
|
|
|
$
|
290,550,000
|
|
|
(1)
|
Plus
accrued interest from December 3, 2021, if the initial settlement occurs after that date.
|
|
(2)
|
See
“Underwriting” for a description of all underwriting compensation payable in
connection with this offering.
|
We
have granted the underwriters an option to purchase up to an additional $45,000,000 aggregate principal amount of Notes within 30 days
from the date of this prospectus supplement.
The
underwriters expect to deliver the Notes to purchasers in book-entry form through the facilities of The Depository Trust Company for
the accounts of its participants on or about December 3, 2021.
Book-Running
Managers
B.
Riley Securities
|
|
Janney
Montgomery Scott
|
|
Oppenheimer
& Co.
|
|
Ladenburg
Thalmann
|
|
William
Blair
|
|
InspereX
|
Lead
Manager
EF
Hutton, division of Benchmark Investments, LLC
Co-Managers
Aegis
Capital Corp.
|
|
Boenning
& Scattergood
|
|
Brownstone
Investment Group
|
|
Colliers
Securities LLC
|
Huntington
Capital Markets
|
|
Newbridge
Securities Corporation
|
|
Wedbush
Securities
|
The date of this prospectus supplement is December
1, 2021.
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus are part of a registration statement that we filed with the Securities and Exchange
Commission (“SEC”) utilizing a “shelf” registration process. This document is in two parts. The first
part is this prospectus supplement, including the documents incorporated by reference, which describes the specific terms of this offering.
The second part, the accompanying prospectus, including the documents incorporated by reference, provides more general information. Generally,
when we refer to this prospectus, we are referring to both parts of this document combined. We urge you to carefully read this prospectus
supplement and the accompanying prospectus, and the documents incorporated by reference herein and therein, before buying any of the
securities being offered under this prospectus supplement. This prospectus supplement may add or update information contained in the
accompanying prospectus and the documents incorporated by reference therein. To the extent that any statement we make in this prospectus
supplement is inconsistent with statements made in the accompanying prospectus or any documents incorporated by reference therein that
were filed before the date of this prospectus supplement, the statements made in this prospectus supplement will be deemed to modify
or supersede those made in the accompanying prospectus and such documents incorporated by reference therein.
You
should rely only on the information contained in this prospectus supplement and the accompanying prospectus, or incorporated by reference
herein or therein. Neither we nor the underwriters have authorized anyone to provide you with different information. No dealer, salesperson
or other person is authorized to give any information or to represent anything not contained in this prospectus supplement and the accompanying
prospectus. You should not rely on any unauthorized information or representation. This prospectus supplement is an offer to sell only
the securities offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. You should assume that
the information in this prospectus supplement and the accompanying prospectus is accurate only as of the date on the front of the applicable
document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference,
regardless of the date of delivery of this prospectus supplement or the accompanying prospectus, or any sale of a security.
As
used in this prospectus, unless the context indicates or otherwise requires, “the Company,” “B. Riley,” “we,”
“us” or “our” refer to the combined business of B. Riley Financial, Inc. and its consolidated subsidiaries.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying prospectus and the documents incorporated by reference herein and therein contain forward-looking
statements within the meaning of Section 27A of the Securities Act, as amended (the “Securities Act”), and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements involve known and unknown
risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different
from any future results, performances or achievements expressed or implied by the forward-looking statements. Forward-looking statements
may include, but are not limited to, statements relating to our future financial performance, the growth of the market for our services,
expansion plans and opportunities and statements regarding our intended uses of the proceeds of the securities offered hereby. In some
cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “can,”
“continue,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “should,” “will,” “would,”
the negative of such terms or other comparable terminology. The statements we make regarding the following subject matters are forward-looking
by their nature: plans, objectives, expectations and intentions and other factors discussed in “Risk Factors” contained in
this prospectus.
The
forward-looking statements contained in this prospectus supplement reflect our current views about future events, are based on assumptions,
and are subject to known and unknown risks and uncertainties. Many important factors could cause actual results or achievements to differ
materially from any future results or achievements expressed in or implied by our forward-looking statements, including the factors listed
below. Many of the factors that will determine future events or achievements are beyond our ability to control or predict. Certain of
these are important factors that could cause actual results or achievements to differ materially from the results or achievements reflected
in our forward-looking statements, including, but not limited to:
|
●
|
volatility
in our revenues and results of operations;
|
|
●
|
changing
conditions in the financial markets;
|
|
●
|
our
ability to generate sufficient revenues to achieve and maintain profitability;
|
|
●
|
the
unpredictable and ongoing impact of the COVID-19 pandemic;
|
|
●
|
the
short term nature of our engagements;
|
|
●
|
the
accuracy of our estimates and valuations of inventory or assets in “guarantee”
based engagements;
|
|
●
|
competition
in the asset management business;
|
|
●
|
potential
losses related to our auction or liquidation engagements;
|
|
●
|
our
dependence on communications, information and other systems and third parties;
|
|
●
|
potential
losses related to purchase transactions in our Auction and Liquidations business;
|
|
●
|
the
potential loss of financial institution clients;
|
|
●
|
potential
losses from or illiquidity of our proprietary investments;
|
|
●
|
changing
economic and market conditions;
|
|
●
|
potential
liability and harm to our reputation if we were to provide an inaccurate appraisal or valuation;
|
|
●
|
potential
mark-downs in inventory in connection with purchase transactions;
|
|
●
|
failure
to successfully compete in any of our segments;
|
|
●
|
our
ability to borrow under our credit facilities as necessary;
|
|
●
|
failure
to comply with the terms of our credit agreements;
|
|
●
|
our
ability to meet future capital requirements;
|
|
●
|
our
ability to realize the benefits of our completed and proposed acquisitions, including our
ability to achieve anticipated opportunities and operating cost savings, and accretion to
reported earnings estimated to result from completed and proposed acquisitions in the time
frame expected by management or at all; and
|
|
●
|
the
diversion of management time on acquisition-related issues.
|
The
forward-looking statements contained in this prospectus supplement reflect our views and assumptions only as of the date of this prospectus
supplement. You should not place undue reliance on forward-looking statements. Except as required by law, we assume no responsibility
for updating any forward-looking statements nor do we intend to do so. Our actual results, performance or achievements could differ materially
from the results expressed in, or implied by, these forward-looking statements. The risks included in this section are not exhaustive.
Additional factors that could cause actual results to differ materially from those described in the forward-looking statements are set
forth in the section entitled “Risk Factors” beginning on page S-6.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary is not complete and does not contain all of the information that you should consider before investing in the securities offered
by this prospectus supplement and accompanying prospectus. You should read this summary together with the entire prospectus supplement
and the accompanying prospectus, including our financial statements, the notes to those financial statements and the other documents
that are incorporated by reference in this prospectus supplement and the accompanying prospectus, before making an investment decision.
See “Risk Factors” beginning on page S-6 of this prospectus supplement for a discussion of the risks involved in investing
in our securities.
Our
Business
B.
Riley Financial, Inc. (NASDAQ: RILY) and its subsidiaries provide collaborative financial services and solutions through several operating
subsidiaries including:
|
●
|
B.
Riley Securities, Inc. (“B. Riley Securities”) is a leading, full service
investment bank providing financial advisory, corporate finance, research, securities lending
and sales and trading services to corporate, institutional and high net worth individual
clients. B. Riley Securities (fka B. Riley FBR) was formed in November 2017 through
the merger of B. Riley & Co, LLC and FBR Capital Markets & Co., which the
Company acquired in June 2017.
|
|
●
|
B.
Riley Wealth Management, Inc. (“B. Riley Wealth Management”) provides
comprehensive wealth management and brokerage services to individuals and families, corporations
and non-profit organizations, including qualified retirement plans, trusts, foundations and
endowments. B. Riley Wealth Management was formerly Wunderlich Securities, Inc., whose name
was changed in June 2018.
|
|
|
|
|
●
|
National
Holdings Corporation (“National”) provides wealth management, brokerage,
insurance, tax preparation and advisory services. On February 25, 2021, we completed a tender
offer to acquire all of the outstanding shares of National not already owned by us. The merger
expands our investment banking, wealth management and financial planning offerings.
|
|
●
|
B.
Riley Capital Management, LLC, a Securities and Exchange Commission (“SEC”)
registered investment advisor, which includes:
|
|
o
|
B.
Riley Asset Management, an advisor to certain private funds and to institutional and high
net worth investors;
|
|
o
|
Great
American Capital Partners, LLC (“GACP”), the general partner of two private
funds, GACP I, L.P. and GACP II, L.P., both direct lending funds managed by WhiteHawk
Capital Partners, L.P. pursuant to an advisory services agreement, that provide senior secured
loans and second lien secured loan facilities to middle market public and private U.S. companies.
|
|
●
|
B.
Riley Advisory Services provides expert witness, bankruptcy, financial advisory, forensic
accounting, valuation and appraisal, and operations management services.
|
|
●
|
B.
Riley Retail Solutions, LLC (fka Great American Group, LLC), a leading provider of asset
disposition and auction solutions to a wide range of retail and industrial clients.
|
|
●
|
B.
Riley Real Estate works with real estate owners and tenants through all stages of the real
estate life cycle. Our real estate advisors advise companies, financial institutions, investors,
family offices and individuals on real estate projects worldwide. A core focus of B. Riley
Real Estate is the restructuring of lease obligations in both distressed and non-distressed
situations, both inside and outside of the bankruptcy process, on behalf of corporate tenants.
|
|
●
|
B.
Riley Principal Investments identifies attractive investment opportunities and aims to deliver
financial and operational improvement to its portfolio companies. Our team concentrates on
opportunities presented by distressed companies or divisions that exhibit challenging market
dynamics. Representative transactions include recapitalization, direct equity investment,
debt investment, active minority investment and buyouts. B. Riley Principal Investments seeks
to control or influence the operations of our investments to deliver financial and operational
improvements that will maximize free cash flow, and therefore, shareholder returns. As part
of our principal investment strategy, we acquired United Online, Inc. (“UOL”
or “United Online”) on July 1, 2016, magicJack VocalTec Ltd. (“magicJack”)
on November 14, 2018 and on November 30, 2020, we acquired a 40% equity interest in Lingo
Management, LLC (“Lingo”), with the ability to acquire an additional 40%
equity interest therein.
|
|
o
|
UOL
is a communications company that offers consumer subscription services and products, consisting
of Internet access services and devices under the NetZero and Juno brands primarily sold
in the United States.
|
|
o
|
magicJack
is a Voice over IP (“VoIP”) cloud-based technology and services communications
provider.
|
|
o
|
Lingo
is a global cloud/UC and managed service provider.
|
|
●
|
BR
Brand Holding, LLC (“BR Brands”), in which the Company owns a majority
interest, provides licensing of certain brand trademarks. BR Brands owns the assets and intellectual
property related to licenses of six brands: Catherine Malandrino, English Laundry, Joan
Vass, Kensie Girl, Limited Too and Nanette Lepore as well as investments in the Hurley and
Justice brands with Bluestar Alliance LLC (“Bluestar”), a brand management
company.
|
We
are headquartered in Los Angeles with offices in major cities throughout the United States including New York, Chicago, Boston,
Atlanta, Dallas, Memphis, Metro Washington D.C., West Palm Beach and Boca Raton.
During
the fourth quarter of 2020, the Company realigned its segment reporting structure to reflect organizational management changes. Under
the new structure, the valuation and appraisal businesses are reported in the Financial Consulting segment and our bankruptcy, financial
advisory, forensic accounting, and real estate consulting businesses that were previously reported in the Capital Markets segment are
now reported as part of the Financial Consulting segment. In conjunction with the new reporting structure, the Company recast its segment
presentation for all periods presented. During the first quarter of 2021, in connection with the acquisition of National on February
25, 2021, the Company further realigned its segment reporting structure to reflect organizational management changes in the Company’s
wealth management business and created a new Wealth Management segment that was previously reported as part of the Capital Markets segment
in 2020. In conjunction with the new reporting structures, the Company recast its segment presentation for all periods presented.
For
financial reporting purposes we classify our businesses into six operating segments: (i) Capital Markets, (ii) Wealth Management,
(iii) Auction and Liquidation, (iv) Financial Consulting, (v) Principal Investments — United Online and magicJack,
and (vi) Brands.
Capital
Markets Segment. Our Capital Markets segment provides a full array of investment banking, corporate finance, consulting, financial
advisory, research, securities lending, wealth management and sales and trading services to corporate, institutional and individual clients.
Our corporate finance and investment banking services include merger and acquisitions as well as restructuring advisory services to public
and private companies, initial and secondary public offerings, and institutional private placements. In addition, we trade equity securities
as a principal for our account, including investments in funds managed by our subsidiaries. Our Capital Markets segment also includes
our asset management businesses that manage various private and public funds for institutional and individual investors.
Wealth
Management Segment. Our Wealth Management segment provides wealth management and tax services to corporate, and high net worth clients.
We offer comprehensive wealth management services for corporate businesses that include investment strategies, executive services, retirement
plans, lending & liquidity resources, and settlement solutions. Our wealth management services for individual client services provide
investment management, education planning, retirement planning, risk management, trust coordination, lending & liquidity solutions,
legacy planning, and wealth transfer. In addition, we supply market insights to provide unbiased guidance to make important financial
decisions. Wealth management resources include market views from our highly regarded Chief Investment Strategist and Capital Markets
segment’s research.
Auction
and Liquidation Segment. Our Auction and Liquidation segment utilizes our significant industry experience, a scalable network of
independent contractors and industry-specific advisors to tailor our services to the specific needs of a multitude of clients, logistical
challenges and distressed circumstances. Furthermore, our scale and pool of resources allow us to offer our services across North American
as well as parts of Europe, Asia and Australia. Our Auction and Liquidation segment operates through two main divisions, retail store
liquidations and wholesale and industrial assets dispositions. Our wholesale and industrial assets dispositions division operates through
limited liability companies that are controlled by us.
Financial
Consulting Segment. Our Financial Consulting segment provides services to law firms, corporations, financial
institutions, lenders and private equity firms. These services primarily include bankruptcy, financial advisory, forensic accounting,
litigation support, real estate consulting and valuation and appraisal services. Our Financial Consulting segment operates through limited
liability companies that are wholly owned or majority owned by us.
Principal
Investments — United Online and magicJack Segment. Our Principal Investments — United
Online and magicJack segment consists of businesses which have been acquired primarily for attractive investment return characteristics.
Currently, this segment includes UOL, through which we provide consumer Internet access, and magicJack, through which we provide VoIP
communication and related product and subscription services.
Brands
Segment.Our Brands segment consists of our brand investment portfolio that is focused on generating revenue through the licensing
of trademarks and is held by BR Brand.
Recent
Developments
On
October 22, 2021, we redeemed, in full, $115.7 million aggregate principal amount of our
6.875% Senior Notes due 2023 (the “6.875% 2023 Notes”) pursuant to the
fifth supplemental indenture dated September 11, 2018. The redemption price was equal to
101.0% of the aggregate principal amount, plus accrued and unpaid interest, up to, but excluding,
the redemption date. The total redemption payment included approximately $1.8 million
in accrued interest and $1.2 million in premium. In connection with the full redemption,
the 6.875% 2023 Notes under the ticker symbol “RILYI,” were delisted from NASDAQ.
On
January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain
of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic,
based on the rapid increase in exposure globally. During the third quarter of 2021, the full impact of the COVID-19 outbreak continues
to evolve. As the U.S. economy recovers, added by additional stimulus packages and positive momentum in the domestic vaccine rollout,
countries across the world continue to manage repeated waves of the pandemic, including variant strains of COVID-19, amid uneven progress
toward vaccination. The impact of the COVID-19 outbreak on our results of operations, financial position and cash flows will depend on
future developments, including the duration and spread of the outbreak and related advisories and restrictions and the success of vaccines
in slowing or halting the pandemic. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall
economy continue to be highly uncertain and cannot be predicted. If the financial markets and/or the overall economy continue to be impacted,
our results of operations, financial position and cash flows may be materially adversely affected.
Our
Corporate Information
We
are a Delaware corporation. Our executive offices are located at 11100 Santa Monica Blvd.,
Suite 800, Los Angeles, California, 90025, and the telephone number at our principal executive
office is (310) 966-1444. Our website addresses are http://www.brileyfin.com, http://www.unitedonline.net
and http://www.magicjack.com. We have not incorporated by reference into this
prospectus supplement and accompanying prospectus the information on our website, and you
should not consider it to be a part of this document.
THE
OFFERING
The
following is a brief summary of some of the terms of the offering and is qualified in its entirety by reference to the more detailed
information appearing elsewhere in this prospectus supplement and the accompanying prospectus. For a more complete description of the
terms of the Notes, see the “Description of the Notes” section in this prospectus supplement.
Issuer
|
|
B. Riley Financial,
Inc.
|
|
|
|
Notes Offered
|
|
$300,000,000
aggregate principal amount of 5.00% Senior Notes due 2026 (or $345,000,000 aggregate principal
amount of 5.00% Senior Notes due 2026 if the underwriters exercise their option to purchase additional
Notes in full).
|
|
|
|
Offering Price
|
|
100% of the principal amount.
|
|
|
|
Maturity
|
|
The
Notes will mature on December 31, 2026, unless redeemed prior to maturity.
|
|
|
|
Interest Rate and Payment Dates
|
|
5.00%
interest per annum on the principal amount of the Notes, payable quarterly in arrears on January
31, April 30, July 31 and October 31 of each year, commencing on January 31, 2022, and at maturity.
|
|
|
|
Guarantors
|
|
None.
|
|
|
|
Ranking
|
|
The
Notes will be our senior unsecured obligations and will rank equal in right of payment with all of our existing and future senior
unsecured and unsubordinated indebtedness. The Notes will be effectively subordinated to all of our existing and future secured
indebtedness to the extent of the value of the assets securing such indebtedness. The Notes will be structurally subordinated
to all existing and future indebtedness (including trade payables) of our subsidiaries.
The
indenture governing the Notes does not limit the amount of indebtedness that we or our subsidiaries may incur or whether any such
indebtedness can be secured by our assets.
|
|
|
|
Optional Redemption
|
|
Prior
to October 2, 2026, we may, at our option, redeem the Notes, for cash in whole or in part at any
time, at a redemption price equal to the sum of (i) 100% of the principal amount of the Notes being
redeemed plus accrued and unpaid interest to, but excluding, the date of redemption and (ii) the
Make-Whole Amount (as defined in the “Description of the Notes – Optional Redemption”),
if any. On or after October 2, 2026 and prior to maturity, we may, at our option, redeem the Notes,
for cash in whole or in part at any time, at a redemption price equal to 100% of their principal
amount, plus accrued and unpaid interest to, but excluding, the date of redemption. See “Description
of the Notes — Optional Redemption” for additional details.
|
|
|
|
Conflicts of Interest
|
|
B.
Riley Securities, our wholly-owned subsidiary, will participate in the offering of the Notes as a joint book-running manager.
Because
of the foregoing, the representative may be deemed to have a “conflict of interest” within the meaning of Rule 5121
of the Financial Industry Regulatory Authority (“FINRA”), and this offering will be conducted in accordance with
Rule 5121. The representative may not make sales of Notes in this offering to any of its discretionary accounts without the
prior written approval of the account holder. However, in accordance with FINRA Rule 5121, no “qualified independent underwriter”
is required because the Notes are investment grade-rated by one or more nationally recognized statistical rating agencies.
|
Sinking Fund
|
|
The Notes will
not be subject to any sinking fund (i.e., no amounts will be set aside by us to ensure repayment of the Notes at maturity).
|
|
|
|
Use of Proceeds
|
|
We
anticipate using the net proceeds from the sale of the notes for general corporate purposes, including funding future acquisitions
and investments, repaying and/or refinancing indebtedness (which may, at the Company’s option, include redeeming all or a portion
of our existing 6.75% Senior Notes due 2024 (“6.75% 2024 Notes”)), making loans and/or providing guaranty or backstop
commitments to our clients in the ordinary course of our business, making capital expenditures and funding working capital. Pending
such use, we may invest the net proceeds in short-term interest-bearing accounts, securities or similar investments. See “Use
of Proceeds.”
This
prospectus supplement shall not constitute a notice of redemption under the indentures governing the 6.75% 2024 Notes. Any such notice,
if made, will only be made in accordance with the provisions of the applicable indenture.
|
|
|
|
Events of Default
|
|
Events of default generally
will include failure to pay principal, failure to pay interest, failure to observe or perform any other covenant or warranty in the
Notes or in the indenture, and certain events of bankruptcy, insolvency or reorganization. See “Description of the Notes —
Events of Default.”
|
|
|
|
Certain Covenants
|
|
The indenture that governs
the Notes contains certain covenants, including, but not limited to, restrictions on our ability to merge or consolidate with or
into any other entity. See “Description of the Notes — Covenants.”
|
|
|
|
No Financial Covenants
|
|
The indenture relating
to the Notes does not contain financial covenants.
|
|
|
|
Additional Notes
|
|
We may create and issue
additional notes ranking equally and ratably with the Notes in all respects, so that such additional notes will constitute and form
a single series with the Notes and will have the same terms as to status, redemption or otherwise (except the price to public, the
issue date and, if applicable, the initial interest accrual date and the initial interest payment date) as the Notes; provided that
if any such additional notes are not fungible with the Notes initially offered hereby for U.S. federal income tax purposes, such
additional notes will have one or more separate CUSIP numbers.
|
|
|
|
Defeasance
|
|
The Notes are subject to
legal and covenant defeasance by us. See “Description of the Notes — Defeasance” for more information.
|
|
|
|
Listing
|
|
We have been approved to list the Notes on Nasdaq under the symbol “RILYG.”
We expect trading in the Notes to begin within 30 business days of the original issue date.
|
|
|
|
Form and Denomination
|
|
The Notes will be issued
in book-entry form in denominations of $25 and integral multiples thereof. The Notes will be represented by a permanent global certificate
deposited with the trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of
a nominee of DTC. Beneficial interests in any of the Notes will be shown on, and transfers will be effected only through, records
maintained by DTC and its direct and indirect participants and any such interest may not be exchanged for certificated securities,
except in limited circumstances.
|
|
|
|
Trustee
|
|
The Bank of New York
Mellon Trust Company, N.A.
|
|
|
|
Governing Law
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|
The Indenture is, and the
Notes will be, governed by and construed in accordance with the laws of the State of New York.
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Risk Factors
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An investment in the Notes
involves significant risks. Please refer to “Risk Factors” beginning on page S-6 and other information included or incorporated
by reference in this prospectus supplement and the accompanying prospectus for a discussion of factors you should carefully consider
before investing in the Notes.
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RISK
FACTORS
An
investment in the Notes involves significant risks, including the risks described below and discussed under the section captioned “Risk
Factors” contained in our annual report on Form 10-K for the year ended December 31, 2020 and our quarterly reports on Form
10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, as updated by our subsequent filings under the Exchange
Act, which are incorporated by reference in this prospectus supplement and the accompanying prospectus in their entirety. Before purchasing
the Notes, you should carefully consider each of the following risk factors as well as the other information contained in this prospectus
supplement and the accompanying prospectus and the documents incorporated by reference, including our consolidated financial statements
and the related notes. Each of these risk factors, either alone or taken together, could adversely affect our business, operating results
and financial condition, as well as adversely affect the value of an investment in the Notes. The risks described below are not the only
ones we face. Additional risks of which we are not presently aware or that we currently believe are immaterial which may also impair
our business operations and financial position. If any of the events described below were to occur, our financial condition, our results
of operations and/or our future growth prospects could be materially and adversely affected. As a result, you could lose some or all
of any investment you may have made or may make in our Company.
Risks
Related to this Offering
We
may be able to incur substantially more debt, which could have important consequences to you.
We
may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the Notes will not prohibit
us from doing so. If we incur any additional indebtedness that ranks equally with the Notes, the holders of that debt will be entitled
to share ratably with you in any proceeds distributed in connection with any insolvency, liquidation, reorganization or dissolution.
This may have the effect of reducing the amount of proceeds paid to you. Incurrence of additional debt would also further reduce the
cash available to invest in operations, as a result of increased debt service obligations. If new debt is added to our current debt levels,
the related risks that we now face could intensify.
In
May 2019, we completed an initial offering of 6.75% 2024 Notes with an aggregate principal amount of $100.1 million. In September 2019,
we completed an initial offering of 6.50% Senior Notes due 2026 (“6.50% 2026 Notes”) with an aggregate principal amount
of $115.0 million. In February 2020, we completed an initial offering of 6.375% Senior Notes due 2025 (“6.375% 2025 Notes”)
with an aggregate principal amount of $132.3 million. In January 2021, we completed an initial offering of 6.00% Senior Notes due
2028 (“6.00% 2028 Notes”) with an aggregate principal amount of $230.0 million. In March 2021, we completed an initial
offering of 5.50% Senior Notes due 2026 (“5.50% 2026 Notes”) with an aggregate principal amount of $159.5 million.
In August 2021, we completed an initial offering of 5.25% Senior Notes due 2028 (“5.25% 2028 Notes”) with an aggregate
principal amount of $316.25 million.
In
September 2019, December 2019 and February 2020, we entered into At Market Issuance Sales Agreement with B. Riley Securities
to sell, pursuant to one or more of such agreements, additional 6.75% 2024 Notes, 6.375% 2025 Notes, 6.50% 2026 Notes, 5.50% 2026 Notes,
6.00% 2028 Notes and 5.25% 2028 Notes, under which such agreements, an additional $11,120,775 in aggregate principal amount of 6.75%
2024 Notes, $13,579,250 in aggregate principal amount of 6.375% 2025 Notes, $63,059,175 in aggregate principal amount of 6.50% 2026 Notes,
$54,204,550 in aggregate principal amount of 5.50% 2026 Notes, $28,338,050 in aggregate principal amount of 6.00% 2028 Notes and $77,147,875
in aggregate principal amount of 5.25% 2028 Notes was sold and remains outstanding as of the date of this prospectus supplement.
On
March 31, 2021, July 26, 2021, September 4, 2021 and October 22, 2021, we redeemed all of the issued and outstanding 7.50% Senior Notes
due 2027, 7.25% Senior Notes due 2027, 7.375% Senior Notes due 2023 and 6.875% 2023 Notes, respectively, having an aggregate principal
amount of $128,155,700, $122,793,450, $137,453,925 and $115,726,350, respectively.
On
December 19, 2018, BRPI Acquisition Co LLC, United Online, Inc., YMax Corporation and certain other affiliates entered into a Credit
Agreement with lenders thereto and Banc of California, N.A., as administrative agent (the “BOC Facility”). The BOC
Facility was subsequently amended on January 30, 2019 and December 31, 2020. As of September 30, 2021, $58.9 million was outstanding.
On
June 23, 2021, we and our wholly owned subsidiaries, BR Financial Holdings, LLC, a Delaware limited liability company (the “Primary
Guarantor”), and BR Advisory & Investments, LLC, a Delaware limited liability company (the “Borrower”),
entered into a credit agreement (the “Credit Agreement”) by and among us, Primary Guarantor, the Borrower, the lenders
party thereto, Nomura Corporate Funding Americas, LLC, as administrative agent and Wells Fargo Bank, N.A., as collateral agent, providing
for a four-year $200.0 million secured term loan credit facility (the “Term Loan Facility”) and a four-year $80.0
million secured revolving loan credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility,
the “Credit Facilities”). As of September 30, 2021, $280 million was outstanding on the Credit Facilities.
Prior
to giving effect to the issuance of the Notes offered hereby, our total senior note aggregate principal amount outstanding is approximately
$1.3 billion as of the date of this prospectus supplement. In addition, we have $58.9 million outstanding on the BOC Facility and $280
million outstanding on the Credit Facilities.
Our
level of indebtedness could have important consequences to you, because:
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it
could affect our ability to satisfy our financial obligations, including those relating to
the Notes;
|
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a
substantial portion of our cash flows from operations would have to be dedicated to interest
and principal payments and may not be available for operations, capital expenditures, expansion,
acquisitions or general corporate or other purposes;
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it
may impair our ability to obtain additional debt or equity financing in the future;
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it
may limit our ability to refinance all or a portion of our indebtedness on or before maturity;
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it
may limit our flexibility in planning for, or reacting to, changes in our business and industry;
and
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it
may make us more vulnerable to downturns in our business, our industry or the economy in
general.
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Our
operations may not generate sufficient cash to enable us to service our debt. If we fail to make a payment on the Notes, we could be
in default on the Notes, and this default could cause us to be in default on other indebtedness, to the extent outstanding. Conversely,
a default under any other indebtedness, if not waived, could result in acceleration of the debt outstanding under the related agreement
and entitle the holders thereof to bring suit for the enforcement thereof or exercise other remedies provided thereunder. In addition,
such default or acceleration may result in an event of default and acceleration of other indebtedness of the Company, entitling the holders
thereof to bring suit for the enforcement thereof or exercise other remedies provided thereunder. If a judgment is obtained by any such
holders, such holders could seek to collect on such judgment from the assets of the Company. If that should occur, we may not be able
to pay all such debt or to borrow sufficient funds to refinance it. Even if new financing were then available, it may not be on terms
that are acceptable to us.
However,
no event of default under the Notes would result from a default or acceleration of, or suit, other exercise of remedies or collection
proceeding by holders of, our other outstanding debt, if any. As a result, all or substantially all of our assets may be used to satisfy
claims of holders of our other outstanding debt, if any, without the holders of the Notes having any rights to such assets. The indenture
governing the Notes will not restrict our ability to incur additional indebtedness.
The
Notes will be unsecured and therefore will be effectively subordinated to any secured indebtedness that we currently have or that we
may incur in the future.
The
Notes will not be secured by any of our assets or any of the assets of our subsidiaries. As a result, the Notes will be effectively subordinated
to any secured indebtedness that we or our subsidiaries have currently outstanding or may incur in the future (or any indebtedness that
is initially unsecured to which we subsequently grant security) to the extent of the value of the assets securing such indebtedness.
The indenture governing the Notes does not prohibit us or our subsidiaries from incurring additional secured (or unsecured) indebtedness
in the future. In any liquidation, dissolution, bankruptcy or other similar proceeding, the holders of any of our existing or future
secured indebtedness and the secured indebtedness of our subsidiaries may assert rights against the assets pledged to secure that indebtedness
and may consequently receive payment from these assets before they may be used to pay other creditors, including the holders of the Notes.
The
Notes will be structurally subordinated to the indebtedness and other liabilities of our subsidiaries.
The
Notes are obligations exclusively of B. Riley and not of any of our subsidiaries. None of our subsidiaries is a guarantor of the Notes,
and the Notes are not required to be guaranteed by any subsidiaries we may acquire or create in the future. Therefore, in any bankruptcy,
liquidation or similar proceeding, all claims of creditors (including trade creditors) of our subsidiaries will have priority over our
equity interests in such subsidiaries (and therefore the claims of our creditors, including holders of the Notes) with respect to the
assets of such subsidiaries. Even if we are recognized as a creditor of one or more of our subsidiaries, our claims would still be effectively
subordinated to any security interests in the assets of any such subsidiary and to any indebtedness or other liabilities of any such
subsidiary senior to our claims. Consequently, the Notes will be structurally subordinated to all indebtedness and other liabilities
(including trade payables) of any of our subsidiaries and any subsidiaries that we may in the future acquire or establish as financing
vehicles or otherwise. The indenture governing the Notes does not prohibit us or our subsidiaries from incurring additional indebtedness
in the future. In addition, future debt and security agreements entered into by our subsidiaries may contain various restrictions, including
restrictions on payments by our subsidiaries to us and the transfer by our subsidiaries of assets pledged as collateral.
The
indenture under which the Notes will be issued contains limited protection for holders of the Notes.
The
indenture under which the Notes will be issued offers limited protection to holders of the Notes. The terms of the indenture and the
Notes do not restrict our or any of our subsidiaries’ ability to engage in, or otherwise be a party to, a variety of corporate
transactions, circumstances or events that could have an adverse impact on your investment in the Notes. In particular, the terms of
the indenture and the Notes will not place any restrictions on our or our subsidiaries’ ability to:
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issue
debt securities or otherwise incur additional indebtedness or other obligations, including
(1) any indebtedness or other obligations that would be equal in right of payment to
the Notes, (2) any indebtedness or other obligations that would be secured and therefore
rank effectively senior in right of payment to the Notes to the extent of the values of the
assets securing such debt, (3) indebtedness of ours that is guaranteed by one or more
of our subsidiaries and which therefore is structurally senior to the Notes and (4) securities,
indebtedness or obligations issued or incurred by our subsidiaries that would be senior to
our equity interests in our subsidiaries and therefore rank structurally senior to the Notes
with respect to the assets of our subsidiaries;
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pay
dividends on, or purchase or redeem or make any payments in respect of, capital stock or
other securities subordinated in right of payment to the Notes;
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sell
assets (other than certain limited restrictions on our ability to consolidate, merge or sell
all or substantially all of our assets);
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enter
into transactions with affiliates;
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create
liens (including liens on the shares of our subsidiaries) or enter into sale and leaseback
transactions;
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create
restrictions on the payment of dividends or other amounts to us from our subsidiaries.
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In
addition, the indenture does not include any protection against certain events, such as a change of control, a leveraged recapitalization
or “going private” transaction (which may result in a significant increase of our indebtedness levels), restructuring or
similar transactions. Furthermore, the terms of the indenture and the Notes do not protect holders of the Notes in the event that we
experience changes (including significant adverse changes) in our financial condition, results of operations or credit ratings, as they
do not require that we or our subsidiaries adhere to any financial tests or ratios or specified levels of net worth, revenues, income,
cash flow, or liquidity. Also, an event of default or acceleration under our other indebtedness would not necessarily result in an Event
of Default under the Notes.
Our
ability to recapitalize, incur additional debt and take a number of other actions that are not limited by the terms of the Notes may
have important consequences for you as a holder of the Notes, including making it more difficult for us to satisfy our obligations with
respect to the Notes or negatively affecting the trading value of the Notes.
Other
debt we issue or incur in the future could contain more protections for its holders than the indenture and the Notes, including additional
covenants and events of default. The issuance or incurrence of any such debt with incremental protections could affect the market for
and trading levels and prices of the Notes.
An
increase in market interest rates could result in a decrease in the value of the Notes.
In
general, as market interest rates rise, notes bearing interest at a fixed rate decline in value. Consequently, if you purchase the Notes,
and the market interest rates subsequently increase, the market value of your Notes may decline. We cannot predict the future level of
market interest rates.
An
active trading market for the Notes may not develop, which could limit the market price of the Notes or your ability to sell them.
The Notes are a new issue of debt
securities for which there currently is no trading market. We have been approved to list the Notes on Nasdaq under the symbol “RILYG”.
Trading on Nasdaq is expected to begin within 30 business days of December 3, 2021, the original issue date. We cannot provide any assurances
that an active trading market will develop for the Notes or that you will be able to sell your Notes. If the Notes are traded after their
initial issuance, they may trade at a discount from their initial offering price depending on prevailing interest rates, the market for
similar securities, our credit ratings, general economic conditions, our financial condition, performance and prospects and other factors.
The underwriters have advised us that they may make a market in the Notes, but they are not obligated to do so. The underwriters may discontinue
any market-making in the Notes at any time at their sole discretion. Accordingly, we cannot assure you that a liquid trading market will
develop for the Notes, that you will be able to sell your Notes at a particular time or that the price you receive when you sell will
be favorable. To the extent an active trading market does not develop, the liquidity and trading price for the Notes may be harmed. Accordingly,
you may be required to bear the financial risk of an investment in the Notes for an indefinite period of time.
In
addition, there may be a limited number of buyers when you decide to sell your Notes. This may affect the price, if any, offered for
your Notes or your ability to sell your Notes when desired or at all.
We
may issue additional Notes.
Under
the terms of the indenture governing the Notes, we may from time to time without notice to, or the consent of, the holders of the Notes,
create and issue additional notes which will be equal in rank to the Notes. We will not issue any such additional Notes unless such issuance
would constitute a “qualified reopening” for U.S. federal income tax purposes.
The
rating for the Notes could at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency.
We
have obtained a rating for the Notes. Ratings only reflect the views of the issuing rating agency or agencies and such ratings could
at any time be revised downward or withdrawn entirely at the discretion of the issuing rating agency. A rating is not a recommendation
to purchase, sell or hold the Notes. Ratings do not reflect market prices or suitability of a security for a particular investor and
the rating of the Notes may not reflect all risks related to us and our business, or the structure or market value of the Notes. We may
elect to issue other securities for which we may seek to obtain a rating in the future. If we issue other securities with a rating, such
ratings, if they are lower than market expectations or are subsequently lowered or withdrawn, could adversely affect the market for or
the market value of the Notes.
USE
OF PROCEEDS
The net proceeds from the sale
of Notes in this offering, after deducting underwriting commissions and other estimated expenses of this offering payable by us, are estimated
to be approximately $290.1 million (or approximately $333.7 million if the underwriters’ option to purchase up to $45.0 million aggregate
principal amount of additional notes is exercised in full).
We
anticipate using the net proceeds from the sale of the notes for general corporate purposes,
including funding future acquisitions and investments, repaying and/or refinancing indebtedness
(which may, at the Company’s option, include redeeming all or a portion of our existing
6.75% 2024 Notes), making loans and/or providing guaranty or backstop commitments to our
clients in the ordinary course of our business, making capital expenditures and funding working
capital. Pending such use, we may invest the net proceeds in short-term interest-bearing
accounts, securities or similar investments.
This
prospectus supplement shall not constitute a notice of redemption under the indentures governing the 6.75% 2024 Notes. Any such notice,
if made, will only be made in accordance with the provisions of the applicable indenture.
CAPITALIZATION
The
following table shows our cash and cash equivalents and capitalization as of September 30, 2021:
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on
an actual basis; and
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on an as adjusted basis, after giving effect to (i) the redemption
of the 6.875% 2023 Notes on October 22, 2021 having an aggregate principal amount of approximately $115.7 million (excluding any
additional amounts paid for redemption premium and accrued interest) and (ii) the sale of Notes in this offering (assuming no
exercise of the underwriters’ option to purchase additional Notes).
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As
of
September 30,
2021
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Actual
|
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As
Adjusted1
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|
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|
(dollars
in thousands)
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|
Cash
and cash equivalents 2
|
|
$
|
378,205
|
|
|
$
|
552,629
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
4,028
|
|
|
$
|
4,028
|
|
Accrued
expenses and other liabilities
|
|
|
277,586
|
|
|
|
277,586
|
|
Deferred
revenue
|
|
|
68,310
|
|
|
|
68,310
|
|
Deferred
tax liabilities, net
|
|
|
67,023
|
|
|
|
67,023
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|
Due
to related parties and partners
|
|
|
176
|
|
|
|
176
|
|
Securities
sold not yet purchased
|
|
|
419,211
|
|
|
|
419,211
|
|
Securities
loaned
|
|
|
1,345,825
|
|
|
|
1,345,825
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Mandatorily
redeemable noncontrolling interests
|
|
|
4,196
|
|
|
|
4,196
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Operating
lease liabilities
|
|
|
72,158
|
|
|
|
72,158
|
|
Notes
payable
|
|
|
357
|
|
|
|
357
|
|
Revolving
credit facility
|
|
|
80,000
|
|
|
|
80,000
|
|
Term
loans, net
|
|
|
252,927
|
|
|
|
252,927
|
|
Senior notes payable, net
|
|
|
1,362,847
|
|
|
|
1,247,121
|
|
Notes
offered hereby
|
|
|
|
|
|
|
300,000
|
|
Total
Liabilities
|
|
|
3,954,644
|
|
|
|
4,138,918
|
|
Redeemable
noncontrolling interests in equity of subsidiaries 3
|
|
|
345,000
|
|
|
|
345,000
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|
B.
Riley Financial, Inc. stockholders’ equity:
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|
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Preferred
stock, $0.0001 par value, 1,000,000 shares authorized, 4,485 issued and outstanding as of September 30, 2021; liquidation preference
of $112,128 as of September 30, 2021
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—
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|
|
|
—
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|
Common
stock, $0.0001 par value, 100,000,000 shares authorized, 27,554,664 shares issued and outstanding as of September 30, 2021
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3
|
|
|
|
3
|
|
Additional
paid-in capital
|
|
|
399,349
|
|
|
|
399,349
|
|
Retained
earnings
|
|
|
309,550
|
|
|
|
309,550
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Accumulated
other comprehensive loss
|
|
|
(2,207
|
)
|
|
|
(2,207
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)
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Total
B. Riley Financial, Inc. stockholders’ equity
|
|
|
706,695
|
|
|
|
706,695
|
|
Noncontrolling
interests
|
|
|
40,512
|
|
|
|
40,512
|
|
Total
Capitalization
|
|
$
|
5,046,851
|
|
|
$
|
5,231,125
|
|
|
(1)
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As
adjusted excludes impact of $4.00 per common share dividend paid in November 2021.
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(2)
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Cash
and cash equivalents balance includes $1.3 million held and utilized by BRPM 150 and BRPM
250 sponsored Special Purpose Acquisition Corporations (“SPACs”).
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(3)
|
We
record redeemable noncontrolling interests in equity of subsidiaries to reflect the economic
interests of the class A ordinary shareholders in BRPM 150 and BRPM 250 SPACs. These interests
are presented as redeemable noncontrolling interests in equity of subsidiaries within the
condensed balance sheet, outside of the permanent equity section. The class A ordinary shareholders
of the SPACs have redemption rights that are considered to be outside of our control. As
of September 30, 2021, the carrying amount of the redeemable noncontrolling interests in
equity of subsidiaries was recorded at its redemption value of $345,000.
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DESCRIPTION
OF THE NOTES
The
5.00% Senior Notes due 2026 (the “Notes”) are being issued under an Indenture
dated as of May 7, 2019, as supplemented by the First Supplemental Indenture dated as of
May 7, 2019, the Second Supplemental Indenture dated as of September 23, 2019, the Third
Supplemental Indenture dated as of February 12, 2020, the Fourth Supplemental Indenture dated
as of January 25, 2021, the Fifth Supplemental Indenture dated as of March 29, 2021, the
Sixth Supplemental Indenture dated as of August 6, 2021 and the Seventh Supplemental Indenture
dated as of December 3, 2021, which we refer to collectively as the “indenture,”
between the Company and The Bank of New York Mellon Trust Company, N.A., trustee. Set
forth below is a description of the specific terms of the Notes and the indenture. This description
supplements the description of the general terms and provisions of our debt securities set
forth in the accompanying prospectus under the caption “Description of Debt Securities.”
The following description does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the indenture filed as an exhibit to a Current Report on
Form 8-K to be filed by the Company.
General
The
Notes:
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will
be our general unsecured, senior obligations;
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will
be initially limited to an aggregate principal amount of $300,000,000 (assuming no exercise
of the underwriters’ option to purchase additional Notes described herein);
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will
mature on December 31, 2026 unless earlier redeemed or repurchased, and 100% of the aggregate
principal amount will be paid at maturity;
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will
bear cash interest from December 3, 2021 at an annual rate of 5.00%, payable quarterly in
arrears on January 31, April 30, July 31 and October 31 of each year, beginning on January
31, 2022, and at maturity;
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will
be redeemable at our option, in whole or in part, at the prices and on the terms described
under “— Optional Redemption” below;
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will
be issued in denominations of $25 and integral multiples of $25 in excess thereof;
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will
not have a sinking fund;
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have been approved for listing on
Nasdaq under the symbol “RILYG”; and
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will
be represented by one or more registered Notes in global form, but in certain limited circumstances
may be represented by Notes in definitive form.
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The
indenture does not limit the amount of indebtedness that we or our subsidiaries may issue. The indenture does not contain any financial
covenants and does not restrict us from paying dividends or issuing or repurchasing our other securities. Other than restrictions described
under “— Covenants — Merger, Consolidation or Sale of Assets” below, the indenture does not contain any
covenants or other provisions designed to afford holders of the Notes protection in the event of a highly leveraged transaction involving
us or in the event of a decline in our credit rating as the result of a takeover, recapitalization, highly leveraged transaction or similar
restructuring involving us that could adversely affect such holders.
We
may from time to time, without the consent of the existing holders, issue additional Notes having the same terms as to status, redemption
or otherwise (except the price to public, the issue date and, if applicable, the initial interest accrual date and the initial interest
payment date) that may constitute a single fungible series with the Notes offered by this prospectus supplement; provided that if any
such additional Notes are not fungible with the Notes initially offered hereby for U.S. federal income tax purposes, such additional
Notes will have one or more separate CUSIP numbers.
Ranking
The
Notes are senior unsecured obligations of the Company, and, upon our liquidation, dissolution or winding up, will rank (i) senior
to the outstanding shares of our common stock, (ii) senior to any of our future subordinated debt, (iii) pari passu
(or equally) with our future unsecured and unsubordinated indebtedness, (iv) effectively subordinated to any existing or future
secured indebtedness (including indebtedness that is initially unsecured to which we subsequently grant security), to the extent of the
value of the assets securing such indebtedness and (v) structurally subordinated to all existing and future indebtedness of our
subsidiaries, financing vehicles or similar facilities.
Interest
Interest
on the Notes will accrue at an annual rate equal to 5.00% from and including December 3, 2021 to, but excluding, the maturity date or
earlier acceleration or redemption and will be payable quarterly in arrears on January 31, April 30, July 31 and October 31 of each year,
beginning on January 31, 2022 and at maturity, to the record holders at the close of business on the immediately preceding January 15,
April 15, July 15 and October 15 (and December 15 immediately preceding the maturity date), as applicable (whether or not a business
day).
The
initial interest period for the Notes will be the period from and including December 3, 2021, to, but excluding, January 31, 2022, and
subsequent interest periods will be the periods from and including an interest payment date to, but excluding, the next interest payment
date or the stated maturity date, as the case may be. The amount of interest payable for any interest period, including interest payable
for any partial interest period, will be computed on the basis of a 360-day year comprised of twelve 30-day months. If an interest payment
date falls on a non-business day, the applicable interest payment will be made on the next business day and no additional interest will
accrue as a result of such delayed payment.
“Business
day” means, for any place where the principal and interest on the Notes is payable, each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day in which banking institutions in New York are authorized or obligated by law or executive order to close.
Optional
Redemption
Prior
to October 2, 2026 (the “Notes Par Call Date”), we may, at our option, redeem the Notes, for cash in whole or in part
at any time, at a redemption price equal to the sum of (i) 100% of the principal amount of the Notes being redeemed plus accrued and
unpaid interest to, but excluding, the date of redemption and (ii) the Make-Whole Amount, if any. On or after October 2, 2026 and prior
to maturity, we may, at our option, redeem the Notes, for cash in whole or in part at any time, at a redemption price equal to 100% of
their principal amount, plus accrued and unpaid interest to, but excluding, the date of redemption.
In
each case, redemption shall be upon notice not fewer than 30 days and not more than 60 days prior to the date fixed for redemption.
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.
Beneficial interests in any of the Notes or portions thereof called for redemption that are registered in the name of DTC or its nominee
will be selected by DTC in accordance with DTC’s applicable procedures.
The
trustee shall have no obligation to calculate any redemption price, including any Make-Whole Amount, and the trustee shall be entitled
to receive and conclusively rely upon an officer’s certificate delivered by the Company that specifies any redemption price.
Unless
we default 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.
We
may at any time, and from time to time, purchase notes at any price or prices in the open market or otherwise.
As
used herein:
“Make-Whole
Amount” means, in connection with any optional redemption of any Note, the excess, if any, of (i) the sum of the present values,
as of the date of such redemption, of the remaining scheduled payments of principal of, and interest (exclusive of interest accrued to,
but excluding, the date of redemption) on, such Note, assuming such Note matured on, and that accrued and unpaid interest on such Note
was payable through, the Notes Par Call Date, determined by discounting, on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months), such principal and interest at the Reinvestment Rate (as defined below) (determined on the third business day
preceding the date of redemption) over (ii) the aggregate principal amount of such Notes being redeemed.
“Reinvestment
Rate” means, 0.500%, or 50 basis points, plus the arithmetic mean (rounded to the nearest one-hundredth of one percent) of
the yields displayed for each day in the preceding calendar week published in the most recent Statistical Release under the caption “Treasury
constant maturities” for the maturity (rounded to the nearest month) corresponding to the remaining life to maturity of the Notes
(assuming that the Notes matured on the Notes Par Call Date) as of the date of redemption. If no maturity exactly corresponds to such
remaining life to maturity, yields for the two published maturities most closely corresponding to such remaining life to maturity shall
be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purpose of calculating the Reinvestment
Rate, the most recent Statistical Release published prior to the date of determination of the Reinvestment Rate shall be used.
“Statistical
Release” means that statistical release designated “H.15” or any successor publication that is published daily
by the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturities,
or, if such statistical release (or a successor publication) is not published at the time of any determination under the Indenture, as
supplemented by this Seventh Supplemental Indenture, then such other reasonably comparable index that shall be designated by us.
Events
of Default
Holders
of our Notes will have rights if an Event of Default occurs in respect of the Notes and is not cured, as described later in this subsection.
The term “Event of Default” in respect of the Notes means any of the following:
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we
do not pay interest on any Note when due, and such default is not cured within 30 days;
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we
do not pay the principal of the Notes when due and payable;
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we
breach any covenant or warranty in the indenture with respect to the Notes and such breach
continues for 60 days after we receive a written notice of such breach from the trustee
or the holders of at least 25% of the principal amount of the Notes; and
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certain
specified events of bankruptcy, insolvency or reorganization occur and remain undischarged
or unstayed for a period of 90 days.
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The
trustee may withhold notice to the holders of the Notes of any default, except in the payment of principal or interest, if the trustee
in good faith determines the withholding of notice to be in the interest of the holders of the Notes.
Each
year, we will furnish to the trustee a written statement of certain of our officers certifying that to their knowledge we are in compliance
with the indenture and the Notes, or else specifying any default.
Remedies
if an Event of Default Occurs
If
an Event of Default has occurred and is continuing, the trustee or the holders of not less than 25% of the outstanding principal amount
of the Notes may declare the entire principal amount of the Notes, together with accrued and unpaid interest, if any, to be due and payable
immediately by a notice in writing to us and, if notice is given by the holders of the Notes, the trustee. This is called an “acceleration
of maturity.” If the Event of Default occurs in relation to our filing for bankruptcy or certain other events of bankruptcy, insolvency
or reorganization occur, 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, become immediately due and payable.
At
any time after a declaration of acceleration of the Notes has been made by the trustee or the holders of the Notes and before any judgment
or decree for payment of money due has been obtained by the trustee, the holders of a majority of the outstanding principal of the Notes,
by written notice to us and the trustee, may rescind and annul such declaration and its consequences if (i) we have paid or deposited
with the trustee all amounts due and owed with respect to the Notes (other than principal that has become due solely by reason of such
acceleration) and certain other amounts, and (ii) any other Events of Default have been cured or waived.
At
our election, the sole remedy with respect to an Event of Default due to our failure to comply with certain reporting requirements under
the Trust Indenture Act or under “— Covenants — Reporting” 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 we choose to pay such additional interest, we must notify the trustee and
the holders of the Notes by certificate of our election at any time on or before the close of business on the first business day following
the Event of Default.
Before
a holder of the Notes is allowed to bypass the trustee and bring a lawsuit or other formal legal action or take other steps to enforce
such holder’s rights relating to the Notes, the following must occur:
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such
holder must give the trustee written notice that the Event of Default has occurred and remains
uncured;
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the
holders of at least 25% of the outstanding principal of the Notes must have made a written
request to the trustee to institute proceedings in respect of such Event of Default in its
own name as trustee;
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such
holder or holders must have offered to the trustee indemnity satisfactory to the trustee
against the costs, expenses and liabilities to be incurred in compliance with such request;
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the
trustee for 60 days after its receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
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no
direction inconsistent with such written request has been given to the trustee during such
60-day period by holders of a majority of the outstanding principal of the Notes.
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No
delay or omission in exercising any right or remedy will be treated as a waiver of that right, remedy or Event of Default.
Book-entry
and other indirect holders of the Notes should consult their banks or brokers for information on how to give notice or direction to or
make a request of the trustee and how to declare or cancel an acceleration of maturity.
Waiver
of Defaults
The
holders of not less than a majority of the outstanding principal amount of the Notes may on behalf of the holders of all Notes waive
any past default with respect to the Notes other than (i) a default in the payment of principal or interest on the Notes when such
payments are due and payable (other than by acceleration as described above), or (ii) in respect of a covenant that cannot be modified
or amended without the consent of each holder of Notes.
Covenants
In
addition to any other covenants described in the accompanying prospectus, as well as standard covenants relating to payment of principal
and interest, maintaining an office where payments may be made or securities can be surrendered for payment, payment of taxes by us and
related matters, the following covenants will apply to the Notes. To the extent of any conflict or inconsistency between the base indenture
and the following covenants, the following covenants will govern.
Merger,
Consolidation or Sale of Assets
The
indenture provides that we will not merge or consolidate with or into any other person (other than a merger of a wholly owned subsidiary
into us), or sell, transfer, lease, convey or otherwise dispose of all or substantially all our property in any one transaction or series
of related transactions unless:
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we
are the surviving entity or the entity (if other than us) formed by such merger or consolidation
or to which such sale, transfer, lease, conveyance or disposition is made will 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;
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the
surviving entity (if other than us) expressly assumes, by supplemental indenture in form
reasonably satisfactory to the trustee, executed and delivered to the trustee by such surviving
entity, 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 the indenture to be performed by us;
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immediately
before and immediately after giving effect to such transaction or series of related transactions,
no default or Event of Default has occurred and is continuing; and
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in
the case of a merger where the surviving entity is other than us, we or such surviving entity
will deliver, or cause to be delivered, to the trustee, an officers’ certificate and
an opinion of counsel, each stating that such transaction and the supplemental indenture,
if any, in respect thereto, comply with this covenant and that all conditions precedent in
the indenture relating to such transaction have been complied with.
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Reporting
If,
at any time, we are not subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act to file any periodic reports
with the SEC, we agree to furnish to holders of the Notes and the trustee, for the period of time during which the Notes are outstanding,
our audited annual consolidated financial statements, within 75 days of our fiscal year end, and unaudited interim consolidated
financial statements, within 40 days of our fiscal quarter end (other than our fourth fiscal quarter). All such financial statements
will be prepared, in all material respects, in accordance with GAAP, as applicable.
Modification
or Waiver
There
are three types of changes we can make to the indenture and the Notes:
Changes
Not Requiring Approval
First,
there are changes that we can make to the Notes without the specific approval of the holders of the Notes. This type is limited to clarifications
and certain other changes that would not adversely affect holders of the Notes in any material respect and include changes:
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to
evidence the succession of another corporation, and the assumption by the successor corporation
of our covenants, agreements and obligations under the indenture and the Notes;
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to
add to our covenants such new covenants, restrictions, conditions or provisions for the protection
of the holders of the Notes, and to make the occurrence, or the occurrence and continuance,
of a default in any of such additional covenants, restrictions, conditions or provisions
an Event of Default;
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to
modify, eliminate or add to any of the provisions of the indenture to such extent as necessary
to effect the qualification of the indenture under the Trust Indenture Act, and to add to
the indenture such other provisions as may be expressly permitted by the Trust Indenture
Act, excluding however, the provisions referred to in Section 316(a)(2) of the Trust
Indenture Act;
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to
cure any ambiguity or to correct or supplement any provision contained in the indenture or
in any supplemental indenture which may be defective or inconsistent with other provisions;
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to
evidence and provide for the acceptance and appointment of a successor trustee and to add
or change any provisions of the indenture as necessary to provide for or facilitate the administration
of the trust by more than one trustee; and
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to
make provisions in regard to matters or questions arising under the indenture, so long such
other provisions to do not materially affect the interest of any other holder of the Notes.
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Changes
Requiring Approval of Each Holder
We
cannot make certain changes to the Notes without the specific approval of each holder of the Notes. The following is a list of those
types of changes:
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changing
the stated maturity of the principal of, or any installment of interest on, any Note;
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reducing
the principal amount or rate of interest of any Note;
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changing
the place of payment where any Note or any interest is payable;
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impairing
the right to institute suit for the enforcement of any payment on or after the date on which
it is due and payable;
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reducing
the percentage in principal amount of holders of the Notes whose consent is needed to modify
or amend the indenture; and
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reducing
the percentage in principal amount of holders of the Notes whose consent is needed to waive
compliance with certain provisions of the indenture or to waive certain defaults.
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Changes
Requiring Majority Approval
Any
other change to the indenture and the Notes would require the following approval:
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if
the change only affects the Notes, it must be approved by holders of not less than a majority
in aggregate principal amount of the outstanding Notes; and
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if
the change affects more than one series of debt securities issued under the indenture, it
must be approved by the holders of not less than a majority in aggregate principal amount
of each of the series of debt securities affected by the change.
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Consent
from holders to any change to the indenture or the Notes must be given in writing.
Further
Details Concerning Voting
The
amount of Notes deemed to be outstanding for the purpose of voting will include all Notes authenticated and delivered under the indenture
as of the date of determination except:
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Notes
cancelled by the trustee or delivered to the trustee for cancellation;
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Notes
for which we have deposited with the trustee or paying agent or set aside in trust money
for their payment or redemption and, if money has been set aside for the redemption of the
Notes, notice of such redemption has been duly given pursuant to the indenture to the satisfaction
of the trustee;
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Notes
held by the Company, its subsidiaries or any other entity which is an obligor under the Notes,
unless such Notes have been pledged in good faith and the pledgee is not the Company, an
affiliate of the Company or an obligor under the Notes;
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Notes
for which have undergone full defeasance, as described below; and
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Notes
which have been paid or exchanged for other Notes due to such Notes loss, destruction or
mutilation, with the exception of any such Notes held by bona fide purchasers who have presented
proof to the trustee that such Notes are valid obligations of the Company.
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We
will generally be entitled to set any day as a record date for the purpose of determining the holders of the Notes that are entitled
to vote or take other action under the indenture, and the trustee will generally be entitled to set any day as a record date for the
purpose of determining the holders of the Notes that are entitled to join in the giving or making of any Notice of Default, any declaration
of acceleration of maturity of the Notes, any request to institute proceedings or the reversal of such declaration. If we or the trustee
set a record date for a vote or other action to be taken by the holders of the Notes, that vote or action can only be taken by persons
who are holders of the Notes on the record date and, unless otherwise specified, such vote or action must take place on or prior to the
180th day after the record date. We may change the record date at our option, and we will provide written notice to the trustee
and to each holder of the Notes of any such change of record date.
Defeasance
The
following defeasance provisions will be applicable to the Notes. “Defeasance” means that, by irrevocably depositing with
the trustee an amount of cash denominated in U.S. dollars and/or U.S. government obligations sufficient to pay all principal and interest,
if any, on the Notes when due and satisfying any additional conditions noted below, we will be deemed to have been discharged from our
obligations under the Notes. In the event of a “covenant defeasance,” upon depositing such funds and satisfying similar conditions
discussed below we would be released from certain covenants under the indenture relating to the Notes. The consequences to the holders
of the Notes would be that, while they would no longer benefit from certain covenants under the indenture, and while the Notes could
not be accelerated for any reason, the holders of the Notes nonetheless would be guaranteed to receive the principal and interest owed
to them.
Covenant
Defeasance
Under
the indenture, we have the option to take the actions described below and be released from some of the restrictive covenants under the
indenture under which the Notes were issued. This is called “covenant defeasance.” In that event, holders of the Notes would
lose the protection of those restrictive covenants but would gain the protection of having money and government securities set aside
in trust to repay the Notes. In order to achieve covenant defeasance, the following must occur:
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we
must irrevocably deposit or cause to be deposited with the trustee as trust funds for the
benefit of all holders of the Notes cash, U.S. government obligations or a combination of
cash and U.S. government obligations sufficient, without reinvestment, in the opinion of
a nationally recognized firm of independent public accountants, investment bank or appraisal
firm, to generate enough cash to make interest, principal and any other applicable payments
on the Notes on their various due dates;
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we
must deliver to the trustee a legal opinion of our counsel stating that under U.S. federal
income tax law, we may make the above deposit and covenant defeasance without causing holders
to be taxed on the Notes differently than if those actions were not taken;
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we
must deliver to the trustee an officers’ certificate stating that the Notes, if then
listed on any securities exchange, will not be delisted as a result of the deposit;
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no
default or Event of Default with respect to the Notes has occurred and is continuing, and
no defaults or Events of Defaults related to bankruptcy, insolvency or organization occurs
during the 90 days following the deposit;
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the
covenant defeasance must not cause the trustee to have a conflicting interest within the
meaning of the Trust Indenture Act;
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the
covenant defeasance must not result in a breach or violation of, or constitute a default
under, the indenture or any other material agreements or instruments to which we are a party;
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the
covenant defeasance must not result in the trust arising from the deposit constituting an
investment company within the meaning of the Investment Company Act unless such trust will
be registered under the Investment Company Act or exempt from registration thereunder; and
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we
must deliver to the trustee an officers’ certificate and a legal opinion from our counsel
stating that all conditions precedent with respect to the covenant defeasance have been complied
with.
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Full
Defeasance
If
there is a change in U.S. federal income tax law, we can legally release ourselves from all payment and other obligations on the Notes
if we take the following actions below:
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we
must irrevocably deposit or cause to be deposited with the trustee as trust funds for the
benefit of all holders of the Notes cash, U.S. government obligations or a combination of
cash and U.S. government obligations sufficient, without reinvestment, in the opinion of
a nationally recognized firm, of independent public accountants, investment bank or appraisal
firm, to generate enough cash to make interest, principal and any other applicable payments
on the Notes on their various due dates;
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we
must deliver to the trustee a legal opinion confirming that there has been a change to the
current U.S. federal income tax law or an Internal Revenue Service ruling that allows us
to make the above deposit without causing holders to be taxed on the Notes any differently
than if we did not make the deposit;
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we
must deliver to the trustee an officers’ certificate stating that the Notes, if then
listed on any securities exchange, will not be delisted as a result of the deposit;
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no
default or Event of Default with respect to the Notes has occurred and is continuing and
no defaults or Events of Defaults related to bankruptcy, insolvency or organization occurs
during the 90 days following the deposit;
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the
full defeasance must not cause the trustee to have a conflicting interest within the meaning
of the Trust Indenture Act;
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the
full defeasance must not result in a breach or violation of, or constitute a default under,
the indenture or any other material agreements or instruments to which we are a party;
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the
full defeasance must not result in the trust arising from the deposit constituting an investment
company within the meaning of the Investment Company Act unless such trust will be registered
under the Investment Company Act or exempt from registration thereunder; and
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we
must deliver to the trustee an officers’ certificate and a legal opinion from our counsel
stating that all conditions precedent with respect to the full defeasance have been complied
with.
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In
the event that the trustee is unable to apply the funds held in trust to the payment of obligations under the Notes by reason of a court
order or governmental injunction or prohibition, then those of our obligations discharged under the full defeasance or covenant defeasance
will be revived and reinstated as though no deposit of funds had occurred, until such time as the trustee is permitted to apply all funds
held in trust under the procedure described above may be applied to the payment of obligations under the Notes. However, if we make any
payment of principal or interest on the Notes to the holders, we will have the right to receive such payments from the trust in the place
of the holders.
Listing
We have been approved to list the
Notes on Nasdaq under the symbol “RILYG”. Trading on Nasdaq is expected to begin within 30 business days of December 3, 2021,
the original issue date. The Notes are expected to trade “flat,” meaning that purchasers will not pay and sellers will not
receive any accrued and unpaid interest on the Notes that is not included in the trading price.
Governing
Law
The
Indenture is, and the Notes will be, governed by and construed in accordance with the laws of the State of New York.
Global
Notes; Book-Entry Issuance
The
Notes will be issued in the form of one or more global certificates, or “Global Notes,” registered in the name of The Depository
Trust Company, or “DTC”. DTC has informed us that its nominee will be Cede & Co. Accordingly, we expect Cede &
Co. to be the initial registered holder of the Notes. No person that acquires a beneficial interest in the Notes will be entitled to
receive a certificate representing that person’s interest in the Notes except as described herein. Unless and until definitive
securities are issued under the limited circumstances described below, all references to actions by holders of the Notes will refer to
actions taken by DTC upon instructions from its participants, and all references to payments and notices to holders will refer to payments
and notices to DTC or Cede & Co., as the registered holder of these securities.
DTC
has informed us that it is a limited-purpose trust company organized under the New York Banking Law, a “banking organization”
within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity
issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants, or “Direct
Participants,” deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities
transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’
accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly owned
subsidiary of The Depository Trust & Clearing Corporation, or “DTCC.”
DTCC
is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered
clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such
as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain
a custodial relationship with a Direct Participant, either directly or indirectly, or “Indirect Participants.” DTC has an
S&P rating of AA+. The DTC Rules applicable to its participants are on file with the SEC. More information about DTC can be found
at www.dtcc.com.
Purchases
of the Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Notes on DTC’s
records. The ownership interest of each actual purchaser of each Note, or the “Beneficial Owner,” is in turn to be recorded
on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase.
Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements
of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Notes, except
in the event that use of the book-entry system for the Notes is discontinued.
To
facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership
nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of the Notes
with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Notes; DTC’s records reflect only the identity of the Direct Participants
to whose accounts the Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance
of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants
and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Redemption
notices will be sent to DTC. If less than all of the Notes are being redeemed, DTC’s practice is to determine by lot the amount
of the interest of each Direct Participant in the Notes to be redeemed.
Neither
DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Notes unless authorized by a Direct
Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to us as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants
to whose accounts the Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Redemption
proceeds, distributions and interest payments on the Notes will be made to Cede & Co., or such other nominee as may be requested
by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt
of funds and corresponding detail information from us or the applicable trustee or depositary on the payment date in accordance with
their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with the Notes held for the accounts of customers in bearer form or registered in “street
name,” and will be the responsibility of such Participant and not of DTC nor its nominee, the applicable trustee or depositary,
or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions
and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the
responsibility of us or the applicable trustee or depositary. Disbursement of such payments to Direct Participants will be the responsibility
of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
The
information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable,
but we take no responsibility for the accuracy thereof.
None
of the Company, the trustee, any depositary, or any agent of any of them will have any responsibility or liability for any aspect of
DTC’s or any participant’s records relating to, or for payments made on account of, beneficial interests in a Global Note,
or for maintaining, supervising or reviewing any records relating to such beneficial interests.
Termination
of a Global Note
If
a Global Note is terminated for any reason, interest in it will be exchanged for certificates in non-book-entry form as certificated
securities. After such exchange, the choice of whether to hold the certificated Notes directly or in street name will be up to the investor.
Investors must consult their own banks or brokers to find out how to have their interests in a Global Note transferred on termination
to their own names, so that they will be holders of the Notes. See “— Form, Exchange and Transfer of Certificated Registered
Securities.”
Payment
and Paying Agents
We
will pay interest to the person listed in the trustee’s records as the owner of the Notes at the close of business on the record
date for the applicable interest payment date, even if that person no longer owns the Note on the interest payment date. Because we pay
all the interest for an interest period to the holders on the record date, holders buying and selling the Notes must work out between
themselves the appropriate purchase price. The most common manner is to adjust the sales price of the Notes to prorate interest fairly
between buyer and seller based on their respective ownership periods within the particular interest period.
Payments
on Global Notes
We
will make payments on the Notes so long as they are represented by Global Notes in accordance with the applicable policies of the depositary
in effect from time to time. Under those policies, we will make payments directly to the depositary, or its nominee, and not to any indirect
holders who own beneficial interest in the Global Notes. An indirect holder’s right to those payments will be governed by the rules
and practices of the depositary and its participants.
Payments
on Certificated Securities
In
the event the Notes become represented by certificates, we will make payments on the Notes as follows. We will pay interest that is due
on an interest payment date by check mailed on the interest payment date to the holder of the Note at his or her address shown on the
trustee’s records as of the close of business on the record date. We will make all payments of principal by check at the office
of the trustee in the contiguous United States and/or at other offices that may be specified in the indenture or a notice to holders
against surrender of the Note.
Payment
When Offices Are Closed
If
any payment is due on the Notes on a day that is not a business day, we will make the payment on the next day that is a business day.
Payments made on the next business day in this situation will be treated under the indenture as if they were made on the original due
date. Such payment will not result in a default under the Notes or the indenture, and no interest will accrue on the payment amount from
the original due date to the next day that is a business day.
Book-entry
and other indirect holders should consult their banks or brokers for information on how they will receive payments on the Notes.
Form,
Exchange and Transfer of Certificated Registered Securities
Notes
in physical, certificated form will be issued and delivered to each person that DTC identifies as a beneficial owner of the related Notes
only if:
|
●
|
DTC
notified us at any time that it is unwilling or unable to continue as depositary for the
Global Notes;
|
|
●
|
DTC
ceases to be registered as a clearing agency under the Exchange Act; or
|
|
●
|
an
Event of Default with respect to such Global Note has occurred and is continuing.
|
Holders
may exchange their certificated securities for Notes of smaller denominations or combined into fewer Notes of larger denominations, as
long as the total principal amount is not changed and as long as the denomination is equal to or greater than $25.
Holders
may exchange or transfer their certificated securities at the office of the trustee. We have appointed the trustee to act as our agent
for registering the Notes in the name of holders transferring Notes. We may at any time designate additional transfer agents or rescind
the designation of any transfer agent or approve a change in the office through which any transfer agent acts.
Holders
will not be required to pay a service charge for any registration of transfer or exchange of their certificated securities, but they
may be required to pay any tax or other governmental charge associated with the registration of transfer or exchange. The transfer or
exchange will be made only if our transfer agent is satisfied with the holder’s proof of legal ownership.
If
we redeem any of the Notes, we may block the transfer or exchange of those Notes selected for redemption during the period beginning
15 days before the day we mail the notice of redemption and ending on the day of that mailing, in order to determine or fix the
list of holders to prepare the mailing. We may also refuse to register transfer or exchanges of any certificated Notes selected for redemption,
except that we will continue to permit transfers and exchanges of the unredeemed portion of any Note that will be partially redeemed.
About
the Trustee
The
Bank of New York Mellon Trust Company, N.A. will be the trustee under the indenture and will be the principal paying agent and registrar
for the Notes. The trustee may resign or be removed with respect to the Notes provided that a successor trustee is appointed to act with
respect to the Notes.
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The
following is a summary of the material U.S. federal income tax consequences of the acquisition, ownership, and disposition of the Notes
that we are offering. The following discussion is not exhaustive of all possible tax considerations. This summary is based upon the Internal
Revenue Code of 1986, as amended (the “Code”), regulations promulgated under the Code by the U.S. Treasury Department
(including proposed and temporary regulations), rulings, current administrative interpretations and official pronouncements of the Internal
Revenue Service (the “IRS”), and judicial decisions, all as currently in effect and all of which are subject to differing
interpretations or to change, possibly with retroactive effect. Such change could materially and adversely affect the tax consequences
described below. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any
of the tax consequences described below.
This
summary is for general information only, and does not address all aspects of U.S. federal income taxation that may be important to a
particular holder in light of its investment or tax circumstances or to holders subject to special tax rules, such as partnerships (including
entities and arrangements classified as partnerships for U.S. federal income tax purposes), subchapter S corporations or other pass-through
entities, banks, financial institutions, tax-exempt entities, insurance companies, regulated investment companies, real estate investment
trusts, trusts and estates, dealers in stocks, securities or currencies, traders in securities that have elected to use the mark-to-market
method of accounting for their securities, persons holding the Notes as part of an integrated transaction, including a “straddle,”
“hedge,” “constructive sale,” or “conversion transaction,” U.S. Holders (as defined below) whose
functional currency for tax purposes (as defined in Section 985 of the Code) is not the U.S. dollar, holders subject to Section 451(b)
of the Code, and individuals subject to the alternative minimum tax provisions of the Code. This summary does not include any description
of the tax laws of any state or local governments, or of any foreign government, that may be applicable to a particular holder.
This
summary is directed solely to holders that, except as otherwise specifically noted, will purchase the Notes offered in this prospectus
supplement upon original issuance for the “issue price” (i.e., the first price at which a substantial amount of the
Notes is sold for money to persons, other than to bond houses, brokers or similar persons or organizations acting in the capacity of
the underwriters, placement agents or wholesalers) for cash and will hold such securities as capital assets within the meaning of Section 1221
of the Code, which generally means as property held for investment.
This
summary is not a comprehensive description of all of the U.S. federal tax consequences that may be relevant with respect to the acquisition,
ownership and disposition of the Notes. We urge you to consult your own tax advisor regarding your particular circumstances and the U.S.
federal income and estate tax consequences to you of acquiring, owning and disposing of these securities, as well as any tax consequences
arising under the laws of any state, local, foreign, or other tax jurisdiction and the possible effects of changes in U.S. federal or
other tax laws.
As
used in this prospectus supplement, the term “U.S. Holder” means a beneficial owner of Notes that is for U.S. federal income
tax purposes:
|
●
|
an
individual who is a citizen or resident of the United States;
|
|
●
|
a
corporation (including an entity treated as a corporation for U.S. federal income tax purposes)
created or organized in or under the laws of the United States or of any state of the
United States or the District of Columbia;
|
|
●
|
an
estate the income of which is subject to U.S. federal income taxation regardless of its source;
|
|
●
|
a
trust if a court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States persons have the authority
to control all substantial decisions of the trust; or
|
|
●
|
a
trust in existence on August 20, 1996 that has a valid election in effect under applicable
Treasury regulations to be treated as a United States person.
|
As
used in this prospectus supplement, the term “Non-U.S. Holder” is a beneficial owner of the Notes (other than a partnership
or other entity taxable as a partnership) that is not a U.S. Holder.
If
an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds the Notes offered in this prospectus supplement,
the U.S. federal income tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership
and accordingly, this summary does not apply to partnerships. A partner of a partnership holding the Notes should consult its own
tax advisor regarding the U.S. federal income tax consequences to the partner of the acquisition, ownership and disposition of the Notes
by the partnership.
Consequences
to U.S. Holders
The
following is a summary of the material U.S. federal income tax consequences that will apply to U.S. Holders of the Notes.
Payment
of Interest. It is expected, and this discussion assumes, that the Notes will be issued with less than a de
minimis amount of “original issue discount” for U.S. federal income tax purposes. Accordingly, interest on a Note generally
will be included in the income of a U.S. Holder as interest income at the time it is accrued or is received in accordance with the U.S.
Holder’s regular method of accounting for U.S. federal income tax purposes and will be ordinary income.
Sale,
Exchange, or Retirement of Notes. Upon the sale, exchange, retirement, or other disposition of a Note, a U.S.
Holder will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, retirement or other disposition
and the U.S. Holder’s adjusted tax basis in the Note. The amount realized by the U.S. Holder will include the amount of any cash
and the fair market value of any other property received for the Note, but will exclude amounts attributable to accrued but unpaid interest
which will be treated as described above under “Payments of Interest.” A U.S. Holder’s adjusted tax basis in a Note
will generally be the cost of the Note to such U.S. Holder.
Gain
or loss realized on the sale, exchange, retirement, or other disposition of a Note generally will be capital gain or loss, and will be
long-term capital gain or loss if the Note has been held for more than one year. Net long-term capital gain recognized by an individual
U.S. Holder is generally taxed at preferential rates. The ability of U.S. Holders to deduct capital losses is subject to limitations
under the Code.
Additional
Medicare Tax on Unearned Income. Certain U.S. Holders, including individuals, estates and trusts, are subject
to an additional 3.8% Medicare tax on unearned income. For individual U.S. Holders, the additional Medicare tax applies to the lesser
of (i) “net investment income” or (ii) the excess of “modified adjusted gross income” over $200,000 ($250,000
if married and filing jointly or $125,000 if married and filing separately). “Net investment income” generally equals the
taxpayer’s gross investment income reduced by the deductions that are allocable to such income. Investment income generally includes
passive income such as interest and capital gains. U.S. Holders are urged to consult their own tax advisors regarding the implications
of the additional Medicare tax resulting from an investment in the Notes.
Consequences
to Non-U.S. Holders
The
following is a summary of the material U.S. federal income tax consequences that will apply to Non-U.S. Holders of a Note.
Payments
of Interest. Except as discussed below, principal and interest payments that are received from us and that
are not effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States, or a permanent
establishment maintained in the United States if certain tax treaties apply, generally will not be subject to U.S. federal income
or withholding tax, except as provided below. Interest may be subject to a 30% withholding tax (or less under an applicable treaty, if
any) if:
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●
|
a
Non-U.S. Holder actually or constructively owns 10% or more of the total combined voting
power of all classes of our stock entitled to vote;
|
|
●
|
a
Non-U.S. Holder is a “controlled foreign corporation” for U.S. federal income
tax purposes that is related to us (directly or indirectly) through stock ownership;
|
|
●
|
a
Non-U.S. Holder is a bank extending credit pursuant to a loan agreement entered into in the
ordinary course of its trade or business (as described in Section 881(c)(3)(A) of the
Code); or
|
|
●
|
the
Non-U.S. Holder does not satisfy the certification requirements described below.
|
In
the case of the Notes, a Non-U.S. Holder generally will satisfy the certification requirements if either: (A) the Non-U.S. Holder
certifies to us, under penalties of perjury, that it is not a “United States person” (within the meaning of the Code)
and provides its name and address (which certification may generally be made on an IRS Form W-8BEN, IRS Form W-8BEN-E or other
applicable U.S. nonresident withholding tax certification form), or (B) a securities clearing organization, bank, or other financial
institution that holds customer securities in the ordinary course of its trade or business (a “financial institution”)
and holds the Note certifies to us under penalties of perjury that either it or another financial institution has received the required
statement from the Non-U.S. Holder certifying that it is not a United States person and furnishes us with a copy of the statement.
Except
as discussed below, payments not meeting the requirements set forth above and thus subject to withholding of U.S. federal income tax
may nevertheless be exempt from withholding (or subject to withholding at a reduced rate) if the Non-U.S. Holder provides us with a properly
executed IRS Form W-8BEN, Form W-8BEN-E, or other applicable U.S. nonresident withholding tax certification form, claiming
an exemption from, or reduction in, withholding under the benefit of a tax treaty, or IRS Form W-8ECI (or other applicable form)
stating that interest paid on the Notes is not subject to withholding tax because it is effectively connected with the conduct of a trade
or business within the United States as discussed below. These forms may be required to be updated periodically. To claim benefits
under an income tax treaty, a Non-U.S. Holder must obtain a taxpayer identification number and certify as to its eligibility under the
appropriate treaty’s limitations on benefits article. In addition, special rules may apply to claims for treaty benefits made by
Non-U.S. Holders that are entities rather than individuals. A Non-U.S. Holder that is eligible for a reduced rate of U.S. federal withholding
tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund
with the IRS.
Sale,
Exchange, or Retirement of Note. Except as discussed below, a Non-U.S. Holder generally will not be subject
to U.S. federal income or withholding tax on any capital gain or market discount realized on the sale, exchange, retirement or other
disposition of Notes, provided that: (a) the gain is not effectively connected with the conduct of a trade or business within the
United States, or a permanent establishment maintained in the United States if certain tax treaties apply, and (b) in
the case of a Non-U.S. Holder that is an individual, the Non-U.S. Holder is not present in the United States for 183 days or
more in the taxable year of the sale, exchange or other disposition of the Note. An individual Non-U.S. Holder who is present in the
United States for 183 days or more in the taxable year of sale, exchange or other disposition of a Note, and if certain other
conditions are met, will be subject to U.S. federal income tax at a rate of 30% on the gain realized on the sale, exchange or other disposition
of such Note.
Income
Effectively Connected with a Trade or Business within the United States. If a Non-U.S. Holder of a Note
is engaged in the conduct of a trade or business within the United States and if interest on the Note, or gain realized on the sale,
exchange or other disposition of the Note, is effectively connected with the conduct of such trade or business (and, if certain tax treaties
apply, is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States), the Non-U.S. Holder,
although exempt from U.S. federal withholding tax (provided that the certification requirements discussed above are satisfied), will
generally be subject to U.S. federal income tax on such interest or gain on a net income basis in the same manner as if it were a U.S.
Holder. Non-U.S. Holders should read the material under the heading “— Consequences to U.S. Holders,” for a description
of the U.S. federal income tax consequences of acquiring, owning, and disposing of a Note. In addition, if such Non-U.S. Holder is a
foreign corporation, it may also be subject to a branch profits tax equal to 30% (or such lower rate provided by an applicable U.S. income
tax treaty) of all or a portion of its earnings and profits for the taxable year that are effectively connected with its conduct of a
trade or business in the United States, subject to certain adjustments.
Backup
Withholding and Information Reporting
In
general, in the case of a U.S. Holder, other than certain exempt recipients (including a corporation and certain other persons who, when
required, demonstrate their exempt status), we and other payors are required to report to the IRS all payments of principal and interest
on the Notes. In addition, we and other payors generally are required to report to the IRS any payment of proceeds from the sale of a
Note before maturity. Additionally, backup withholding generally will apply to any payments if a U.S. Holder fails to provide an accurate
taxpayer identification number and certify that the taxpayer identification number is correct, the U.S. Holder is notified by the IRS
that it is subject to backup withholding, or the U.S. Holder does not certify that it is not subject to backup withholding. If applicable,
backup withholding will be imposed at a rate of 24%.
In
the case of a Non-U.S. Holder, backup withholding and information reporting will not apply to payments made if the Non-U.S. Holder provides
the required certification to the applicable withholding agent under penalties of perjury that it is not a United States person,
or the Non-U.S. Holder otherwise establishes an exemption, provided that the payor does not have actual knowledge that the holder is
a United States person, or that the conditions of any exemption are not satisfied.
In
addition, payments of the proceeds from the sale of a Note by a Non-U.S. Holder outside of the United States through a foreign office
of a broker or the foreign office of a custodian, nominee, or other dealer acting on behalf of a holder generally will not be subject
to information reporting or backup withholding. However, if the broker, custodian, nominee, or other dealer is a United States person,
the government of the United States or the government of any state or political subdivision of any state, or any agency or instrumentality
of any of these governmental units, a controlled foreign corporation for U.S. federal income tax purposes, a foreign partnership that
is either engaged in a trade or business within the United States or whose United States partners in the aggregate hold more
than 50% of the income or capital interest in the partnership, a foreign person 50% or more of whose gross income for a certain period
is effectively connected with a trade or business within the United States, or a United States branch of a foreign bank or
insurance company, information reporting (but not backup withholding) generally will be required with respect to payments made to a holder
unless the broker, custodian, nominee, or other dealer has documentation of the holder’s foreign status and the broker, custodian,
nominee, or other dealer has no actual knowledge or reason to know to the contrary.
Payment
of the proceeds from a sale of a Note to or through the United States office of a broker is subject to information reporting and
backup withholding, unless the holder certifies as to its non-United States person status or otherwise establishes an exemption
from information reporting and backup withholding.
Any
amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income
tax liability provided the required information is timely furnished to the IRS.
Foreign
Account Tax Compliance Act
Certain
provisions of the Code, known as the Foreign Account Tax Compliance Act (“FATCA”), impose a 30% U.S. withholding tax
on certain U.S. source payments, including interest, dividends, other fixed or determinable annual or periodical gain, profits, and income,
and on the gross proceeds from a disposition of property of a type which can produce U.S. source interest or dividends (“Withholdable
Payments”), if paid to a foreign financial institution (including amounts paid to a foreign financial institution on behalf
of a holder), unless such institution enters into an agreement with the Treasury to collect and provide to the Treasury certain information
(that is in addition to and significantly more onerous than, the requirement to deliver an applicable U.S. nonresident withholding tax
certification form (e.g., IRS Form W-8BEN), as discussed above) regarding U.S. financial account holders, including certain
account holders that are foreign entities with U.S. owners, with such institution or otherwise complies with FATCA. FATCA also generally
imposes a withholding tax of 30% on Withholdable Payments made to a non-financial foreign entity unless such entity provides the withholding
agent with a certification that it does not have any substantial U.S. owners or a certification identifying the direct and indirect substantial
U.S. owners of the entity. Under certain circumstances, a holder may be eligible for refunds or credits of such taxes.
These
withholding and reporting requirements generally apply to U.S. source periodic payments (such as interest payments on the Notes) and,
after December 31, 2018, to payments of gross proceeds from a sale, exchange, redemption, or other disposition of property that can give
rise to U.S. source interest and dividends. If we determine withholding is appropriate with respect to the Notes, we will withhold tax
at the applicable statutory rate, and we will not pay any additional amounts in respect of such withholding. Foreign financial institutions
and non-financial foreign entities located in jurisdictions that have an intergovernmental agreement with the United States governing
FATCA may be subject to different rules. We will not be required to pay any additional amounts in respect of any payments to which FATCA
withholding applies. Holders are urged to consult with their own tax advisors regarding the possible implications of FATCA on their investment
in the Notes.
UNDERWRITING
(Conflicts of Interest)
B.
Riley Securities is acting as joint book-running manager and representative of each of the underwriters named below. Subject to the terms
and conditions set forth in an underwriting agreement among us and the underwriters dated December 31, 2021 (the “Underwriting
Agreement”), we have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly,
to purchase from us, the principal amount of Notes set forth opposite its name below.
Underwriter
|
|
Principal
Amount of
Notes
|
|
B. Riley Securities, Inc.
|
|
$
|
192,750,000
|
|
Janney Montgomery Scott LLC
|
|
|
27,750,000
|
|
Oppenheimer & Co. Inc.
|
|
|
11,250,000
|
|
Ladenburg Thalmann & Co. Inc.
|
|
|
16,500,000
|
|
William Blair & Company, L.L.C.
|
|
|
10,500,000
|
|
InspereX LLC
|
|
|
18,000,000
|
|
EF Hutton, division of Benchmark Investments,
LLC
|
|
|
7,500,000
|
|
Aegis Capital Corp.
|
|
|
2,250,000
|
|
Boenning & Scattergood, Inc.
|
|
|
3,750,000
|
|
Brownstone Investment Group, LLC
|
|
|
4,500,000
|
|
Colliers Securities LLC
|
|
|
1,500,000
|
|
Huntington Securities, Inc.
|
|
|
1,500,000
|
|
Newbridge Securities Corporation
|
|
|
750,000
|
|
Wedbush Securities Inc.
|
|
|
1,500,000
|
|
Total
|
|
$
|
300,000,000
|
|
Subject
to the terms and conditions set forth in the Underwriting Agreement, the underwriters have agreed, severally and not jointly, to purchase
all of the Notes sold under the Underwriting Agreement. These conditions include, among others, the continued accuracy of representations
and warranties made by us in the Underwriting Agreement, delivery of legal opinions and the absence of any material changes in our assets,
business or prospects after the date of this prospectus supplement.
The
several obligations of the underwriters under the Underwriting Agreement are conditional and may be terminated on the occurrence of certain
stated events, including, in the event that at or prior to the closing of the offering: (i) trading in securities generally on the
New York Stock Exchange or the Nasdaq Stock Market or in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been suspended or materially limited, or minimum or maximum prices or maximum
range for prices shall have been established on any such exchange or such market by the SEC, by such exchange or market or by any other
regulatory body or governmental authority having jurisdiction; (ii) a banking moratorium shall have been declared by United States
federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services
in the United States; (iii) the United States shall have become engaged in hostilities, or the subject of an act of terrorism,
or there shall have been an outbreak of or escalation in hostilities involving the United States, or there shall have been a declaration
of a national emergency or war by the United States; or (iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States
shall be such) as to make it, in the reasonable judgment of the underwriters, impracticable or inadvisable to proceed with the sale or
delivery of the Notes on the terms and in the manner contemplated in this prospectus supplement.
We
have granted to the underwriters the option to purchase up to an additional $45,000,000 of Notes at the public offering price, less the
underwriting discounts (the “Option”). If any Notes are purchased pursuant to the Option, the underwriters will, severally
but not jointly, purchase the Notes in approximately the same proportions as set forth in the above table. This prospectus supplement
also qualifies the grant of the Option and the Notes issuable upon the exercise thereof. A purchaser who acquires any Notes forming part
of the underwriters’ Option acquires such Notes under this prospectus supplement, regardless of whether the position is ultimately
filled through the exercise of the Option or secondary market purchases.
We
have agreed to indemnify the underwriters against certain liabilities, including, among other things, liabilities under the Securities
Act or to contribute to payments the underwriters may be required to make in respect of those liabilities.
We
expect to deliver the Note against payment for such notes on or about December 3, 2021, which will be the second business day following
the date of the pricing of the Notes (“T + 2”).
Discounts
and Expenses
The
representative has advised us that the underwriters propose initially to offer the Notes to the public at the public offering price and
to dealers at that price less a concession not in excess of $0.50 per Note. After the underwriters have made a reasonable effort
to sell all of the Notes at the offering price, such offering price may be decreased and may be further changed from time to time to
an amount not greater than the offering price set forth herein, and the compensation realized by the underwriters will effectively be
decreased by the amount that the price paid by purchasers for the Notes is less than the original offering price. Any such reduction
will not affect the net proceeds received by us. The underwriters reserve the right to withdraw, cancel or modify offers to the public
and to reject orders in whole or in part.
The
following table shows the per Note and total underwriting discount that we are to pay to the underwriters in connection with this offering
assuming no exercise of the Option.
|
|
Price
to the
Public
|
|
|
Underwriting
Discount(1)
|
|
|
Net
Proceeds(2)
|
|
Per
Note
|
|
$
|
25.00
|
|
|
$
|
0.7875
|
|
|
$
|
24.2125
|
|
Total(3)
|
|
$
|
300,000,000
|
|
|
$
|
9,450,000
|
|
|
$
|
290,550,000
|
|
|
(1)
|
Pursuant
to the terms of the Underwriting Agreement, the underwriters will receive a discount equal
to $0.7875 per Note.
|
|
|
|
|
(2)
|
After
deducting the underwriting discount but before deducting expenses of the offering, estimated
to be $400,000.
|
|
|
|
|
(3)
|
If
the Option is exercised in full, the total price to the public, underwriting discount and
net proceeds to us (after deducting the underwriting discount but before deducting estimated
offering expenses) will be $345,000,000, $10,867,500 and $334,132,500, respectively.
|
We
estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting
expenses, but excluding underwriting discounts and reimbursements, will be approximately $400,000. We have also agreed to reimburse the
underwriters for their reasonable out-of-pocket expenses, including attorneys’ fees, up to $75,000.
No
Sales of Similar Securities
We
have agreed for a period of 30 days following the date of this offering that, without the prior written consent of the representative,
which may not be unreasonably withheld, on behalf of the underwriters, we will not, sell, offer to sell, contract or agree to sell, hypothecate,
pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any debt securities issued
or guaranteed by the Company or any securities convertible into or exchangeable or exercisable for debt securities issued or guaranteed
by the Company or file or cause to be declared effective a registration statement under the Securities Act with respect to any of the
foregoing.
Stock
Exchange Listing
We have been approved to list
the Notes on Nasdaq. Trading on Nasdaq is expected to begin within 30 business days of December 3, 2021, the original issue date. The
underwriters will have no obligation to make a market in the Notes, however, and may cease market-making activities, if commenced, at
any time. Accordingly, an active trading market on the Nasdaq for the Notes may not develop or, even if one develops, may not last, in
which case the liquidity and market price of the Notes could be adversely affected, the difference between bid and asked prices could
be substantial and your ability to transfer the Notes at the time and price desired will be limited.
Price
Stabilization, Short Positions
Until
the distribution of the Notes is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing
our Notes. However, the representative may engage in transactions that have the effect of stabilizing the price of the Notes, such as
purchases and other activities that peg, fix or maintain that price.
In
connection with this offering, the underwriters may bid for or purchase and sell our Notes in the open market. These transactions may
include short sales and purchases on the open market to cover positions created by short sales. Short sales involve the sale by the underwriters
of a greater number of our Notes than they are required to purchase in this offering. “Covered” short sales are sales made
in an amount not greater than the Underwriters’ option to purchase additional Notes in this offering. The underwriters may close
out any covered short position by either exercising their option to purchase additional notes or purchasing notes in the open market.
In determining the source of notes to close out the covered short position, the underwriters will consider, among other things, the price
of notes available for purchase in the open market as compared to the price at which they may purchase additional notes pursuant to the
option granted to them. “Naked” short sales are sales in excess of the option to purchase additional Notes. The underwriters
must close out any naked short position by purchasing Notes in the open market. A naked short position is more likely to be created if
the underwriters are concerned that there may be downward pressure on the price of our Notes in the open market after pricing that could
adversely affect investors who purchase in this offering.
Similar
to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales and other activities may have the
effect of raising or maintaining the market price of the Notes or preventing or retarding a decline in the market price of the Notes.
As a result, the price of the Notes may be higher than the price that might otherwise exist in the open market. If these activities are
commenced, they may be discontinued at any time. The underwriters may conduct these transactions on Nasdaq, in the over-the-counter market
or otherwise.
The
underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representative has repurchased Notes sold by or for the account of such underwriter in stabilizing
or short covering transactions.
Neither
we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of our Notes. In addition, neither we nor any of the underwriters make any representation that
the representative will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.
Electronic
Offer, Sale and Distribution of Notes
This
prospectus supplement and the accompanying prospectus in electronic format may be made available on websites maintained by one or more
of the underwriters, and the underwriters may distribute the prospectus supplement and accompanying prospectus electronically.
Other
than this prospectus supplement and the accompanying prospectus in electronic format, the information on any underwriter’s or any
selling group member’s website and any information contained in any other website maintained by an underwriter or any selling group
member is not part of this prospectus supplement and the accompanying prospectus or the registration statement of which this prospectus
supplement and the accompanying prospectus forms a part, has not been approved and/or endorsed by us or any underwriter or any selling
group member in its capacity as underwriter or selling group member and should not be relied upon by investors.
Additional
Relationships and Conflicts of Interest
The
underwriters and their affiliates are full service financial institutions engaged in various activities, which may include sales and
trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market
making, brokerage and other financial and non-financial activities and services. The underwriters and their affiliates may provide from
time to time in the future in the ordinary course of their business certain commercial banking, financial advisory, investment banking
and other services to us for which they will be entitled to receive customary fees and expenses. The underwriters have in the past and
may in the future borrow money from or obtain other financial and non-financial services from us for which we will be entitled to receive
customary fees and expenses.
B.
Riley Securities, our wholly-owned subsidiary, will participate in the offering of the Notes as a joint book-running manager.
B.
Riley Securities is also the sales agent under the Sales Agreements.
Because
of the foregoing, the representative may be deemed to have a “conflict of interest” within the meaning of Rule 5121
of the FINRA, and this offering will be conducted in accordance with Rule 5121. The representative may not make sales of Notes in
this offering to any of its discretionary accounts without the prior written approval of the account holder. However, in accordance with
FINRA Rule 5121, no “qualified independent underwriter” is required because the Notes are investment grade-rated by
one or more nationally recognized statistical rating agencies.
EXPERTS
Marcum
LLP, an independent registered public accounting firm, has audited our consolidated financial statements as of December 31, 2020 and
2019 and for each of the three years in the period ended December 31, 2020, as well as the effectiveness of our internal controls over
financial reporting as of December 31, 2020, as stated in its report incorporated by reference into this prospectus supplement, and such
audited consolidated financial statements have been incorporated by reference into this prospectus supplement in reliance upon the report
of such firm given upon its authority as experts in accounting and auditing.
The
combined financial statements of BR Brand as of December 31, 2018 and 2017 and for each of the two years in the period ended December
31, 2018 incorporated by reference in this prospectus have been so incorporated in reliance on the reports of Mayer Hoffman McCann CPAs,
The New York Practice of Mayer Hoffman McCann P.C., independent auditor of BR Brand, incorporated herein by reference, given on
the authority of said firm as experts in auditing and accounting.
LEGAL
MATTERS
Certain
legal matters will be passed upon for us by The NBD Group, Inc., Los Angeles, California, and for the underwriters by Duane Morris LLP,
New York, New York.
INFORMATION
INCORPORATED BY REFERENCE
This
prospectus supplement and the accompanying prospectus are part of a registration statement that we have filed with the SEC. The SEC allows
us to “incorporate by reference” the information that we file with it, which means that we can disclose important information
to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus supplement
and the accompanying prospectus from the date we file that document. Any documents filed by us under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act with the SEC after the date of this prospectus supplement and before the date that the offering of Notes by
means of this prospectus supplement and accompanying prospectus is terminated will automatically update and, where applicable, supersede
any information contained or incorporated by reference in this prospectus supplement and accompanying prospectus. We incorporate by reference
into this prospectus supplement and the accompanying prospectus the following documents or information filed with the SEC (other than,
in each case, documents or information deemed to have been furnished and not filed in accordance with SEC rules):
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Our
annual report on Form 10-K
for the year ended December 31, 2020, filed with the SEC on March 4, 2021 (and as further
updated on Form
8-K filed with the SEC on June 25, 2021 to recast historical segment information and
related disclosures);
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Our
Definitive Proxy Statement on Schedule
14A filed with the SEC on April 20, 2021; and
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Our
current reports on Form 8-K filed with the SEC on December 30, 2020, January
11, 2021, January
15, 2021, January
25, 2021, February
25, 2021 (21676725), March
1, 2021, March
29, 2021, April
6, 2021, May
28, 2021, June
3, 2021, June
25, 2021 (211045107 and 211048050), August
6, 2021 and August
12, 2021 (211165045 and 211167800).
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We
will provide without charge to each person, including any beneficial owner, to whom this prospectus supplement and the accompanying prospectus
are delivered, upon his or her written or oral request, a copy of any or all documents referred to above that have been or may be incorporated
by reference into this prospectus supplement and the accompanying prospectus, excluding exhibits to those documents unless they are specifically
incorporated by reference into those documents. You may request those documents from us by contacting us at: B. Riley Financial,
Inc., 11100 Santa Monica Blvd., Suite 800, Los Angeles, California 90025, Attention: Investor Relations, telephone (310) 966-1444.
PROSPECTUS
B.
RILEY FINANCIAL, INC.
COMMON
STOCK
PREFERRED STOCK
WARRANTS
DEBT SECURITIES
DEPOSITARY
SHARES
UNITS
We
may offer and sell from time to time the above securities in one or more classes, in one or more transactions, separately or together
in any combination and as separate series, and in amounts, at prices and on terms that we will determine at the times of the offerings.
We may also offer any of these securities that may be issuable upon the conversion, exercise or exchange of debt securities, preferred
stock or warrants.
We
will provide specific terms of any offering in supplements to this prospectus, which we will deliver together with the prospectus at
the time of sale. The supplements may add, update or change information contained in this prospectus. You should read this prospectus
and any prospectus supplement carefully before you invest. This prospectus may not be used to offer and sell securities unless accompanied
by a prospectus supplement.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are
involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement
between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement.
See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information.
No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms
of the offering of such securities.
Our
common stock is traded on the Nasdaq Global Market (“NASDAQ”) under the symbol “RILY”. On January 27,
2021, the last reported sales price of our common stock as quoted on NASDAQ was $48.66 per share.
Investing
in our securities involves risks. Risks associated with an investment in our securities will be described in the applicable prospectus
supplement and certain of our filings with the Securities and Exchange Commission, as described under the caption “Risk Factors”
on page 3 of this prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED
IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this prospectus is January 28, 2021.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of an automatic shelf registration statement that we filed with the Securities and Exchange Commission (the “SEC”)
as a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act of 1933, as amended (the “Securities
Act”), using a “shelf” registration process for the delayed offering and sale of securities pursuant to Rule 415
under the Securities Act. Under the shelf registration process, we may from time to time, offer and sell to the public any or all of
the securities in the registration statement in one or more offerings.
For
further information about our business and the securities, you should refer to the registration statement containing this prospectus
and its exhibits. The exhibits to our registration statement contain the full text of certain contracts and other important documents
we have summarized in this prospectus. Since these summaries may not contain all the information that you may find important in deciding
whether to purchase the securities we offer, you should review the full text of these documents. We have filed and plan to continue to
file other documents with the SEC that contain information about us and our business. Also, we will file legal documents that control
the terms of the securities offered by this prospectus as exhibits to the reports we file by the SEC. The registration statement and
other reports can be obtained from the SEC as indicated under the heading “Where You Can Find More Information.”
This
prospectus provides you with a general description of the securities that we may offer. Each time we offer securities pursuant to this
prospectus, we will provide a prospectus supplement and/or other offering material that will contain specific information about the terms
of that offering. When we refer to a “prospectus supplement,” we are also referring to any free writing prospectus or other
offering material authorized by us. The prospectus supplement may also add, update or change information contained in this prospectus.
If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on
the information in the prospectus supplement or incorporated information having a later date. You should read this prospectus and any
prospectus supplement together with additional information described under the heading “Where You Can Find More Information.”
You
should rely only on the information provided in this prospectus, in any prospectus supplement, or any other offering material that we
authorize, including the information incorporated by reference. We have not authorized anyone to provide you with different information.
You should not assume that the information in this prospectus, any supplement to this prospectus, or any other offering material that
we authorize, is accurate at any date other than the date indicated on the cover page of these documents or the date of the statement
contained in any incorporated documents, respectively. This prospectus is not an offer to sell or a solicitation of an offer to buy any
securities other than the securities referred to in the prospectus supplement. This prospectus is not an offer to sell or a solicitation
of an offer to buy such securities in any circumstances in which such offer or solicitation is unlawful. You should not interpret the
delivery of this prospectus, or any sale of securities, as an indication that there has been no change in our affairs since the date
of this prospectus. You should also be aware that information in this prospectus may change after this date. The information contained
in this prospectus or a prospectus supplement or amendment, or incorporated herein or therein by reference, is accurate only as of the
date of this prospectus or prospectus supplement or amendment, as applicable, regardless of the time of delivery of this prospectus or
prospectus supplement or amendment, as applicable, or of any sale of the shares.
As
used in this prospectus, unless the context indicates or otherwise requires, “the Company,” “B. Riley,” “we,”
“us,” or “our” refer to the combined business of B. Riley Financial, Inc. and its consolidated subsidiaries.
ABOUT
B. RILEY FINANCIAL, INC.
This
summary is not complete and does not contain all of the information that you should consider before investing in our securities. You
should read this summary together with the entire prospectus and the applicable prospectus supplement carefully, especially the section
entitled “Risk Factors” contained herein and therein and the documents incorporated by reference herein and therein, as well
as our financial statements and the notes to those financial statements incorporated in this prospectus by reference.
Our
Business
B.
Riley Financial, Inc. (NASDAQ: RILY) and its subsidiaries provide collaborative financial services and solutions through several operating
subsidiaries including:
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B.
Riley Securities, Inc. (“B. Riley Securities”) is a leading, full service
investment bank providing financial advisory, corporate finance, research, securities lending
and sales and trading services to corporate, institutional and high net worth individual
clients. B. Riley Securities (fka B. Riley FBR, Inc.) was formed in November 2017 through
the merger of B. Riley & Co, LLC and FBR Capital Markets & Co., which the
Company acquired in June 2017.
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B.
Riley Wealth Management, Inc. provides comprehensive wealth management and brokerage services
to individuals and families, corporations and non-profit organizations, including qualified
retirement plans, trusts, foundations and endowments.
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B.
Riley Capital Management, LLC, a Securities and Exchange Commission (“SEC”)
registered investment advisor, which includes:
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B.
Riley Asset Management, an advisor to certain private funds and to institutional and high
net worth investors;
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Great
American Capital Partners, LLC (“GACP”), the general partner of two private
funds, GACP I, L.P. and GACP II, L.P., both direct lending funds that provide senior secured
loans and second lien secured loan facilities to middle market public and private U.S. companies.
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Our
subsidiaries doing business as B. Riley Advisory Services:
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GlassRatner
Advisory & Capital Group LLC (“GlassRatner”), a specialty financial
advisory services firm that provides consulting services to shareholders, creditors and companies,
including due diligence, fraud investigations, corporate litigation support, crisis management
and bankruptcy services. We acquired GlassRatner on August 1, 2018. GlassRatner strengthens
B. Riley’s diverse platform and compliments the restructuring services provided by
B. Riley Securities.
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Great
American Group Advisory and Valuation Services, LLC, a leading provider of appraisal and
valuation services for asset based lenders, private equity firms and corporate clients.
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B.
Riley Retail Solutions, LLC (aka Great American Group, LLC), a leading provider of asset
disposition and auction solutions to a wide range of retail and industrial clients.
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We
also pursue a strategy of investing in or acquiring companies which we believe have attractive investment return characteristics. We
acquired United Online, Inc. (“UOL”) on July 1, 2016 and magicJack VocalTec Ltd. (“magicJack”)
on November 14, 2018 as part of our principal investment strategy.
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UOL
is a communications company that offers consumer subscription services and products, consisting
of Internet access services and devices under the NetZero and Juno brands primarily sold
in the United States.
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magicJack
is a Voice over IP (“VoIP”) cloud-based technology and services communications
provider.
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BR
Brand Holding, LLC (“BR Brand”), in which the Company owns a majority interest, provides licensing of a brand investment
portfolio. BR Brand owns the assets and intellectual property related to licenses of six brands: Catherine Malandrino, English Laundry,
Joan Vass, Kensie Girl, Limited Too and Nanette Lepore. We also own an interest in Hurley, bebe and Justice as part of our Brands segment.
We
are headquartered in Los Angeles with offices in major cities throughout the United States including New York, Chicago, Boston,
Dallas, Memphis, Metro Washington D.C. and West Palm Beach.
For
financial reporting purposes we classify our businesses into five operating segments: (i) Capital Markets, (ii) Auction and
Liquidation, (iii) Valuation and Appraisal, (iv) Principal Investments — United Online and magicJack and (v) Brands.
Capital
Markets Segment. Our Capital Markets segment provides a full array of investment banking, corporate finance,
consulting, financial advisory, research, securities lending, wealth management and sales and trading services to corporate, institutional
and high net worth clients. Our corporate finance and investment banking services include merger and acquisitions as well as restructuring
advisory services to public and private companies, initial and secondary public offerings, and institutional private placements. In addition,
we trade equity securities as a principal for our account, including investments in funds managed by our subsidiaries. Our Capital Markets
segment also includes our asset management businesses that manage various private and public funds for institutional and individual investors.
Auction
and Liquidation Segment. Our Auction and Liquidation segment utilizes our significant industry experience,
a scalable network of independent contractors and industry-specific advisors to tailor our services to the specific needs of a multitude
of clients, logistical challenges and distressed circumstances. Furthermore, our scale and pool of resources allow us to offer our services
across North American as well as parts of Europe, Asia and Australia. Our Auction and Liquidation segment operates through two main divisions,
retail store liquidations and wholesale and industrial assets dispositions. Our wholesale and industrial assets dispositions division
operates through limited liability companies that are controlled by us.
Valuation
and Appraisal Segment. Our Valuation and Appraisal segment provides valuation and appraisal services to financial
institutions, lenders, private equity firms and other providers of capital. These services primarily include the valuation of assets
(i) for purposes of determining and monitoring the value of collateral securing financial transactions and loan arrangements and
(ii) in connection with potential business combinations. Our Valuation and Appraisal segment operates through limited liability
companies that are majority owned by us.
Principal
Investments — United Online and magicJack Segment. Our Principal Investments — United Online and magicJack
segment consists of businesses which have been acquired primarily for attractive investment return characteristics. Currently, this segment
includes UOL, through which we provide consumer Internet access, and magicJack, through which we provide VoIP communication and related
product and subscription services.
Brands
Segment. Our Brands segment consists of our brand investment portfolio that is focused on generating revenue
through the licensing of trademarks and is held by BR Brand.
Our
Corporate Information
We
are a Delaware corporation. Our executive offices are located at 11100 Santa Monica Blvd., Suite 800, Los Angeles, California, 90025,
and the telephone number at our principal executive office is (310) 966-1444. Our website addresses are http://www.brileyfin.com,
http://www.greatamerican.com, https://www.glassratner.com, http://www.unitedonline.net, http://www.magicjack.com
and http://www.vocaltec.com. We have not incorporated by reference into this prospectus supplement and accompanying prospectus
the information on our website, and you should not consider it to be a part of this document.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described
under the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing prospectus
and in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, together with all of the other information
appearing in, or incorporated by reference into, this prospectus and any applicable prospectus supplement, as updated by our subsequent
filings under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These risks could materially and
adversely affect our business, results of operations and financial condition and could result in a partial or complete loss of your investment.
Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations
and financial condition. See “Where You Can Find More Information.”
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements
in this prospectus 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. In some
cases, you can identify forward-looking statements by terminology including “anticipates,” “believes,” “can,”
“continue,” “could,” “estimates,” “expects,” “intends,” “may,”
“plans,” “potential,” “predicts,” “should,” “will,” “would” or
the negative of these terms or other comparable terminology. Factors that could cause actual results to differ materially from those
currently anticipated include those set forth in the section titled “Risk Factors.”
We
operate in a very competitive and rapidly changing environment and new risks emerge from time to time. As a result, it is not possible
for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may
make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus
may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events
and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements included in this prospectus
speak only as of the date hereof, and except as required by law, we undertake no obligation to update publicly any forward-looking statements
for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.
DETERMINATION
OF OFFERING PRICE
The
terms of any particular offering by us, the initial offering price and the net proceeds to us will be contained in the applicable prospectus
supplement, information incorporated by reference or free writing prospectus, relating to such offering.
USE
OF PROCEEDS
Unless
we inform you otherwise in the applicable prospectus supplement, we expect to use the net proceeds from the sale of the securities for
general corporate purposes, which may include funding future acquisitions and investments, repaying and/or refinancing indebtedness,
making loans and/or providing guaranties or backstop commitments to our clients in the ordinary course of our business, making capital
expenditures and funding working capital. Pending any specific application, we may initially invest the net proceeds in short-term interest-bearing
accounts, securities or similar investments.
We
have not determined the amounts we plan to spend on the areas listed above or the timing of these expenditures. As a result, our management
will have broad discretion to allocate the net proceeds of any offering.
SECURITIES
WE MAY OFFER
We
may issue from time to time, in one or more offerings the following securities:
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shares
of common stock;
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shares
of preferred stock;
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warrants
exercisable for debt securities, common stock or preferred stock;
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debt
securities;
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depositary
shares; and
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units
of common stock, preferred stock, warrants, debt securities or depositary shares, in any combination.
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This
prospectus contains a summary of the material general terms of the various securities that we may offer. The specific terms of the securities
will be described in a prospectus supplement, information incorporated by reference, or free writing prospectus, which may be in addition
to or different from the general terms summarized in this prospectus. Where applicable, the prospectus supplement, information incorporated
by reference or free writing prospectus will also describe any material United States federal income tax considerations relating to the
securities offered and indicate whether the securities offered are or will be listed on any securities exchange. The summaries contained
in this prospectus and in any prospectus supplements, information incorporated by reference or free writing prospectus may not contain
all of the information that you would find useful. Accordingly, you should read the actual documents relating to any securities sold
pursuant to this prospectus. See “Where You Can Find Additional Information” and “Incorporation of Certain Information
by Reference” for information about how to obtain copies of those documents.
The
terms of any particular offering, the initial offering price and the net proceeds to us will be contained in the prospectus supplement,
information incorporated by reference or free writing prospectus, relating to such offering.
DESCRIPTION
OF CAPITAL STOCK
Our
Amended and Restated Certificate of Incorporation, as amended, provides that we are authorized to issue 101,000,000 shares of capital
stock. Our authorized capital stock is comprised of 100,000,000 shares of common stock, $0.0001 par value per share, and 1,000,000 shares
of preferred stock, par value $0.0001 per share.
The
following description is a summary of the material terms of our capital stock and certain provisions of our Amended and Restated Certificate
of Incorporation, and Amended and Restated Bylaws, each as amended. This description does not purport to be complete. For information
on how you can obtain our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, each as amended, see “Where
You Can Find Additional Information.”
Common
Stock
We
are authorized to issue up to 100,000,000 shares of our common stock, par value $0.0001 per share.
The
holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the stockholders.
Our stockholders do not have cumulative voting rights in the election of directors. Accordingly, holders of a majority of the shares
voting are able to elect all of our directors. Subject to preferences that may apply to any then outstanding shares of preferred stock,
the holders of outstanding shares of our common stock are entitled to receive dividends out of assets legally available for distribution
at the times and in the amounts, if any, that our Board of Directors may determine from time to time. In the event of our liquidation,
dissolution or winding up, subject to the rights of each series of our preferred stock, which may, from time to time come into existence,
holders of our common stock are entitled to share ratably in all of our assets remaining after we pay our liabilities. Holders of our
common stock have no preemptive or other subscription or conversion rights. Our common stock is not redeemable and there are no sinking
fund provisions applicable to our common stock.
Preferred
Stock
Our
Board of Directors is authorized, subject to limitations imposed by Delaware law, to issue up to 1,000,000 shares of preferred stock,
par value $0.0001 per share, in one or more series, without stockholder approval. Our Board of Directors is authorized to fix the number
of shares of preferred stock and to determine or (so long as no shares of such series are then outstanding) alter for each such series,
such voting powers, full or limited, or no voting powers, and such designations, preferences, and relative, participating, optional,
or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by Delaware General Corporation
Law. The rights, privileges, preferences and restrictions of any such additional series may be subordinated to, pari passu with,
or senior to any of those of any present or future class or series of our capital stock. Our Board of Directors is also authorized to
decrease the number of shares of any series, prior or subsequent to the issue of that series, but not below the number of shares of such
series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting any decrease shall
resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.
This
section describes the general terms and provisions of our preferred stock. The applicable prospectus supplement will describe the specific
terms of any shares of preferred stock offered through that prospectus supplement, as well as any general terms described in this section
that will not apply to those shares of preferred stock. We will file a copy of the certificate of designation that contains the terms
of each new series of preferred stock with the SEC each time we issue a new series of preferred stock. Each certificate of designation
will establish the number of shares included in a designated series and fix the designation, powers, privileges, preferences and rights
of the shares of each series as well as any applicable qualifications, limitations or restrictions. You should refer to the applicable
certificate of designation as well as our Amended and Restated Certificate of Incorporation, as amended, before deciding to buy shares
of our preferred stock as described in the applicable prospectus supplement.
Anti-Takeover
Provisions of Delaware Law and Charter Provisions
Interested
Stockholder Transactions
We
are subject to Section 203 of the General Corporation Law of the State of Delaware, which prohibits a Delaware corporation from engaging
in any “business combination” with any “interested stockholder” for a period of three years after the date that
such stockholder became an interested stockholder, with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in
the stockholder becoming an interested holder;
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upon
consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding, for purposes of determining
the number of shares outstanding, those shares owned by persons who are directors and also officers and by employee stock plans in
which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered
in a tender or exchange offer; or
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that
is not owned by the interested stockholder.
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Section
203 defines “business combination” to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder;
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any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation involving
the interested stockholder;
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
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any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series
of the corporation beneficially owned by the interested stockholder; or
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the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or
through the corporation.
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In
general, Section 203 defines “interested stockholder” as an entity or person beneficially owning 15% or more of the outstanding
voting stock of the corporation or any entity or person affiliated with or controlling or controlled by such entity or person.
Amended
and Restated Certificate of Incorporation and Bylaws
Provisions
in our Amended and Restated Certificate of Incorporation, and Amended and Restated Bylaws, each as amended, may have the effect of discouraging
certain transactions that may result in a change in control of our company. Some of these provisions provide that stockholders cannot
act by written consent and impose advance notice requirements and procedures with respect to stockholder proposals and the nomination
of candidates for election as directors. Our Amended and Restated Certificate of Incorporation, as amended, allows us to issue shares
of preferred stock (see “Blank Check Preferred Stock”) or common stock without any action by stockholders. Our directors
and our officers are indemnified by us to the fullest extent permitted by applicable law pursuant to our Amended and Restated Certificate
of Incorporation, as amended. Our Board of Directors is expressly authorized to make, alter or repeal our Amended and Restated Bylaws,
as amended. These provisions may make it more difficult for stockholders to take specific corporate actions and may make it more difficult
or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.
Blank
Check Preferred Stock
Our
Amended and Restated Certificate of Incorporation, as amended, authorizes our Board of Directors to approve the issuance of up to 1,000,000
shares of preferred stock, without further approval of the stockholders, and to determine the rights and preferences of any series of
preferred stock. The Board of Directors could issue one or more series of preferred stock with voting, conversion, dividend, liquidation
or other rights that would adversely affect the voting power and ownership interest of holders of our common stock. This authority may
have the effect of deterring hostile takeovers, delaying or preventing a change in control and discouraging bids for our common stock
at a premium over the market price.
DESCRIPTION
OF WARRANTS
We
may issue warrants to purchase common stock, preferred stock or other securities described in this prospectus. We may issue warrants
independently or as part of a unit with other securities. Warrants sold with other securities as a unit may be attached to or separate
from the other securities. The prospectus supplement relating to any warrants we are offering will describe specific terms relating to
the offering, including a description of any other securities sold together with the warrants. These terms will include some or all of
the following:
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the
title of the warrants;
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the
aggregate number of warrants offered;
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the
price or prices at which the warrants will be issued;
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the
designation, number and terms of any common stock, preferred stock or other securities purchasable upon exercise of the warrants
and procedures by which those numbers may be adjusted;
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the
exercise price of the warrants, including any provisions for changes or adjustments to the exercise price, and terms relating to
the currency in which such price is payable;
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the
dates or periods during which the warrants are exercisable;
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the
designation and terms of any securities with which the warrants are issued as a unit;
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if
the warrants are issued as a unit with another security, the date on or after which the warrants and the other security will be separately
transferable;
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any
minimum or maximum amount of warrants that may be exercised at any one time;
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any
terms relating to the modification of the warrants;
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a
discussion of material federal income tax considerations, if applicable; and
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any
other terms of the warrants and any other securities sold together with the warrants, including, but not limited to, the terms, procedures
and limitations relating to the transferability, exchange, exercise or redemption of the warrants.
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The
applicable prospectus supplement will describe the specific terms of any warrant units.
The
descriptions of the warrants in this prospectus and in any prospectus supplement are summaries of the material provisions of the applicable
warrant agreements. These descriptions do not restate those agreements in their entirety and do not contain all of the information that
you may find useful. We urge you to read the applicable agreements because they, and not the summaries, define many of your rights as
holders of the warrants or any warrant units. For more information, please review the form of the relevant agreements, which will be
filed with the SEC promptly after the offering of warrants or warrant units and will be available as described under the heading “Where
You Can Find Additional Information.”
DESCRIPTION
OF DEBT SECURITIES
We
may issue debt securities, in one or more series, as either senior or subordinated debt or as senior or subordinated convertible debt.
The senior debt securities will rank equally with any other unsubordinated debt that we may have and may be secured or unsecured. The
subordinated debt securities will be subordinate and junior in right of payment, to the extent and in the manner described in the instrument
governing the debt, to all or some portion of our senior indebtedness. Any convertible debt securities that we may issue will be convertible
into or exchangeable for common stock, preferred stock or other securities of ours or of a third party. Conversion may be mandatory or
at your option and would be at prescribed conversion rates.
The
debt securities will be issued either (i) pursuant to our existing indenture, dated as of November 2, 2016, as supplemented, between
us and U.S. Bank National Association, as trustee (as amended, our “2016 Indenture”), (ii) pursuant to our existing
indenture, dated as of May 7, 2019, as supplemented, between us and The Bank of New York Mellon Trust Company, N.A., as trustee (as amended,
our “2019 Indenture” and together with the 2016 Indenture, the “existing indentures”), or (iii)
pursuant to a subordinated debt indenture that we will enter into with The Bank of New York Mellon Trust Company, N.A., as trustee (“new
subordinated debt indenture”). While the terms we have summarized below will apply generally to any debt securities that we
may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in a prospectus
supplement (and any free writing prospectus).
We
have incorporated by reference our existing indentures and filed forms of our new subordinated debt indenture as exhibits to the registration
statement of which this prospectus is a part. We use the term “indentures” to refer collectively to our existing indentures
and our new subordinated debt indenture.
The
indentures, to the extent not already qualified, will be qualified under the Trust Indenture Act of 1939, as amended (the “Trust
Indenture Act”).
The
following summaries of the material provisions of the senior debt securities, the subordinated debt securities and the indentures, together
with the additional information we may include in any applicable prospectus supplements, does not purport to be complete and is subject
to, and qualified in its entirety by reference to, all of the provisions of the form of our new subordinated debt indenture filed as
exhibits to the registration statement of which this prospectus is part, as it may be supplemented, amended or modified from time to
time, as well as our existing indentures that are incorporated by reference as exhibits to the registration statement of which this prospectus
is part. You should read the applicable prospectus supplement (and any free writing prospectus that we may authorize to be provided to
you) related to the series of debt securities being offered, as well as the complete indentures that contain the terms of the debt securities.
The
following are some of the terms relating to our existing indentures and our new subordinated debt indenture of debt securities that could
be described in a prospectus supplement:
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principal
amount being offered, and, if a series, the total amount authorized and the total amount outstanding;
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any
limit on the amount that may be issued;
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whether
we will issue the series of debt securities in global form and, if so, the terms and who the depositary will be;
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principal
amount due at maturity, and whether the debt securities will be issued with any original issue discount;
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whether
and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a United
States person for tax purposes, and whether we can redeem the debt securities if we have to pay such additional amounts;
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annual
interest rate, which may be fixed or variable, or the method for determining the rate, the date interest will begin to accrue, the
dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates;
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whether
the debt securities will be secured or unsecured, and the terms of any secured debt;
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terms
of the subordination of any series of subordinated debt;
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place
where payments will be payable;
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restrictions
on transfer, sale or other assignment, if any;
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our
right, if any, to defer payment of interest and the maximum length of any such deferral period;
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date,
if any, after which, the conditions upon which, and the price at which we may, at our option, redeem the series of debt securities
pursuant to any optional or provisional redemption provisions, and any other applicable terms of those redemption provisions;
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provisions
for a sinking fund, purchase or other analogous fund, if any;
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date,
if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or
otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities;
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whether
the indenture will restrict our ability or the ability of our subsidiaries to:
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incur
additional indebtedness;
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issue
additional securities;
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create
liens;
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pay
dividends or make distributions in respect of our capital stock or the capital stock of our subsidiaries;
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place
restrictions on our subsidiaries’ ability to pay dividends, make distributions or transfer assets;
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make
investments or other restricted payments;
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sell
or otherwise dispose of assets;
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enter
into sale-leaseback transactions;
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engage
in transactions with shareholders or affiliates;
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issue
or sell stock of our subsidiaries; or
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effect
a consolidation or merger;
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whether
the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios;
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a
discussion of any material or special United States federal income tax considerations applicable to the debt securities;
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information
describing any book-entry features;
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procedures
for any auction or remarketing, if any;
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whether
the debt securities are to be offered at a price such that they will be deemed to be offered at an “original issue discount”
as defined in paragraph (a) of Section 1273 of the Internal Revenue Code of 1986, as amended;
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denominations
in which we will issue the series of debt securities, if other than denominations of $2,000 and any integral multiple of $1,000 in
excess thereof;
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if
other than dollars, the currency in which the series of debt securities will be denominated; and
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any
other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any events of default
that are in addition to those described in this prospectus or any covenants provided with respect to the debt securities that are
in addition to those described above, and any terms that may be required by us or advisable under applicable laws or regulations
or advisable in connection with the marketing of the debt securities.
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Conversion
or Exchange Rights
We
will set forth in the applicable prospectus supplement or free writing prospectus the terms on which a series of debt securities may
be convertible into or exchangeable for common stock, preferred stock or other securities of ours, including the conversion or exchange
rate, as applicable, or how it will be calculated, and the applicable conversion or exchange period. We will include provisions as to
whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which
the number of our securities that the holders of the series of debt securities receive upon conversion or exchange would, under the circumstances
described in those provisions, be subject to adjustment, or pursuant to which those holders would, under those circumstances, receive
other property upon conversion or exchange, for example in the event of our merger or consolidation with another entity.
Consolidation,
Merger or Sale
The
terms of any securities that we may offer pursuant to this prospectus may limit our ability to merge or consolidate or otherwise sell,
convey, transfer or otherwise dispose of all or substantially all of our assets, which terms would be set forth in the applicable prospectus
supplement and supplemental indenture. Any successor of ours or acquiror of such assets would have to assume all of our obligations under
the indentures and the debt securities, as appropriate.
If
the debt securities are convertible for our other securities, the person with whom we consolidate or merge or to whom we sell all of
our property would have to make provisions for the conversion of the debt securities into securities that the holders of the debt securities
would have received if they had converted the debt securities before the consolidation, merger or sale.
Events
of Default Under the Indenture
Unless
otherwise indicated in the applicable prospectus supplement, the following are events of default under the indentures with respect to
any series of debt securities that we may issue:
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if
we fail to pay interest when due and payable and our failure continues for 30 days and the time for payment has not been extended
or deferred;
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if
we fail to pay the principal or premium, if any, when due and payable and the time for payment has not been extended or deferred;
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if
we fail to deposit any sinking fund payment, to the extent applicable, when and as due;
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if
we fail to observe or perform any other covenant contained in the debt securities or the indentures, and our failure continues for
60 days after we receive notice from the trustee or holders of at least 25% in aggregate principal amount of the outstanding debt
securities of the applicable series; and
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if
specified events of bankruptcy, insolvency or reorganization occur.
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If
an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified
in the last bullet point above, the trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities
of that series, by notice to us in writing, and to the trustee if notice is given by such holders, may declare the unpaid principal of,
premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point
above occurs with respect to us, the principal amount of and accrued interest, if any, of each issue of debt securities then outstanding
would be due and payable without any notice or other action on the part of the trustee or any holder.
The
holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of
default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium,
if any, or interest, unless we have cured the default or event of default in accordance with the indenture. Any waiver shall cure the
default or event of default.
Subject
to the terms of the indentures, if an event of default under an indenture occurs and continues, the trustee would be under no obligation
to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series
of debt securities, unless such holders have offered the trustee indemnity satisfactory to the trustee. The holders of a majority in
principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to the
debt securities of that series, provided that:
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the
direction so given by the holder is not in conflict with any law or the applicable indenture, nor subject the trustee to a risk of
personal liability in respect of which the trustee has not received indemnification satisfactory to it in its sole discretion against
all losses, liabilities and expenses caused by taking or not taking such action; and
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the
trustee may take any other action deemed proper by the trustee which is not inconsistent with such direction.
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A
holder of the debt securities of any series will have the right to institute a proceeding under the indentures or to appoint a receiver
or trustee, or to seek other remedies only if:
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the
holder has given written notice to the trustee of a continuing event of default with respect to that series;
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the
holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request,
and such holders have offered indemnity satisfactory to the trustee to institute the proceeding as trustee; and
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the
trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the
outstanding debt securities of that series other conflicting directions within 60 days after the notice, request and offer.
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These
limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium,
if any, or interest on, the debt securities.
We
will periodically file statements with the trustee regarding our compliance with specified covenants in the indentures.
Supplemental
Indentures
We
and the trustee may from time to time and at any time enter into an indenture or supplemental indenture without the consent of any holders
for one or more of the following purposes:
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to
evidence the succession of another corporation, and the assumption by the successor corporation of our covenants, agreements and
obligations under the indenture and debt securities;
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to
add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, and to make the
occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions, conditions or provisions
an event of default;
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to
modify, eliminate or add to any of the provisions of the indenture to such extent as necessary to effect the qualification of the
indenture under the Trust Indenture Act, and to add to the indenture such other provisions as may be expressly permitted by the Trust
Indenture Act, excluding however, the provisions referred to in Section 316(a)(2) of the Trust Indenture Act;
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to
cure any ambiguity or to correct or supplement any provision contained in the indenture or in any supplemental indenture which may
be defective or inconsistent with other provisions;
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to
make provisions in regard to matters or questions arising under the indenture, so long such other provisions to do not adversely
affect the interest of any other holder of debt securities in any material respect;
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to
secure any series of security;
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to
evidence and provide for the acceptance and appointment of a successor trustee and to add or change any provisions of the indenture
as necessary to provide for or facilitate the administration of the trust by more than one trustee; and
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to
establish the form or terms of securities of any series as permitted under the indenture, including any subordination provisions.
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In
addition, we and the trustee, with the consent of the holders of not less than a majority in aggregate principal of the outstanding debt
securities of each series that is affected, may from time to time and at any time enter into an indenture or supplemental indenture for
the purpose of adding any provisions to or changing in any manner the rights of the holders of the securities of such series and any
related coupons of the indenture, provided that no such supplemental indenture shall:
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extend
the fixed maturity of any securities, or reduce the principal amount thereof or premium, if any, or reduce the rate or extend the
time of payment of interest, without the extent of the holder so affected;
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reduce
the aforesaid percentage of securities, the consent of the holders of which is required for any such supplemental indenture, without
the consent of all holders of outstanding series of debt securities; or
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modify
any of the above provisions.
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Discharge
Each
indenture will provide that we can elect to be discharged from our obligations with respect to one or more series of debt securities,
except for specified obligations, including obligations to:
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register
the transfer or exchange of debt securities of the series;
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replace
stolen, lost or mutilated debt securities of the series;
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maintain
paying agencies; and
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hold
monies for payment in trust.
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In
order to exercise our rights to be discharged, we must deposit with the trustee money or government obligations, or a combination thereof,
sufficient to pay all the principal of, any premium and interest on, the debt securities of the series on the dates payments are due.
Form,
Exchange and Transfer
We
will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable
prospectus supplement or free writing prospectus, in denominations of $2,000 and any integral multiple of $1,000 in excess thereof. The
indentures will provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities
that will be deposited with, or on behalf of, The Depository Trust Company or another depositary named by us and identified in a prospectus
supplement or free writing prospectus with respect to that series.
At
the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the
applicable prospectus supplement or free writing prospectus, the holder of the debt securities of any series can exchange the debt securities
for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject
to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplement
or free writing prospectus, holders of the debt securities may present the debt securities for exchange or for registration of transfer,
duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office
of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the
debt securities that the holder presents for transfer or exchange, we will make no service charge for any registration of transfer or
exchange, but we may require payment of any taxes or other governmental charges.
We
will name in the applicable prospectus supplement or free writing prospectus the security registrar, and any transfer agent in addition
to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents
or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that
we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If
we elect to redeem the debt securities of any series, we will not be required to:
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issue,
register the transfer of, or exchange any debt securities of any series being redeemed in part during a period beginning at the opening
of business 15 days before the day of sending of a notice of redemption of any debt securities that may be selected for redemption
and ending at the close of business on the day of such transmission; or
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register
the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part.
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Information
Concerning the Trustee
The
trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those
duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the trustee must use the
same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the
trustee is under no obligation to exercise any of the powers given it by an indenture at the request of any holder of debt securities
unless it is offered security and indemnity against the costs, expenses and liabilities that it might incur.
Payment
and Paying Agents
Unless
we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we will make payment of the interest on any
debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities,
are registered at the close of business on the regular record date for the interest.
We
will pay principal of and any premium and interest on the debt securities of a particular series at the office of the paying agents designated
by us, except that, unless we otherwise indicate in the applicable prospectus supplement or free writing prospectus, we may make interest
payments by check which we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in a prospectus
supplement or free writing prospectus, we will designate an office or agency of the trustee in the contiguous United States as our sole
paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement or free
writing prospectus any other paying agents that we initially designate for the debt securities of a particular series. We will maintain
a paying agent in each place of payment for the debt securities of a particular series.
All
money we pay to a paying agent or the trustee for the payment of the principal of or any premium or interest on any debt securities which
remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us,
and the holder of the debt security thereafter may look only to us for payment thereof.
Governing
Law
The
indentures and the debt securities will be governed by and construed in accordance with the laws of the State of New York.
Subordination
of Subordinated Debt Securities
The
subordinated debt securities will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent
described in a prospectus supplement or free writing prospectus. Our new subordinated debt indenture in the form initially filed as exhibits
to the registration statement of which this prospectus is a part, and our existing indentures, do not limit the amount of indebtedness
which we may incur, including senior indebtedness or subordinated indebtedness, and do not limit us from issuing any other debt, including
secured debt or unsecured debt.
DESCRIPTION
OF DEPOSITARY SHARES
General
We
may, at our option, elect to offer fractional interests in shares of preferred stock, which we call depositary shares, rather than full
shares of preferred stock. If we do, we will issue to the public receipts, called depositary receipts, for depositary shares, each of
which will represent a fraction, to be described in the applicable prospectus supplement, of a share of a particular series of preferred
stock. Unless otherwise provided in the prospectus supplement, each owner of a depositary share will be entitled, in proportion to the
applicable fractional interest in a share of preferred stock represented by the depositary share, to all the rights and preferences of
the preferred stock represented by the depositary share. Those rights include dividend, voting, redemption, conversion and liquidation
rights.
The
shares of preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary
under a deposit agreement between us, the depositary and the holders of the depositary receipts. The depositary will be the transfer
agent, registrar and dividend disbursing agent for the depositary shares.
The
depositary shares will be evidenced by depositary receipts issued pursuant to the deposit agreement. Holders of depositary receipts agree
to be bound by the deposit agreement, which requires holders to take certain actions such as filing proof of residence and paying certain
charges.
The
summary of terms of the depositary shares contained in this prospectus is not complete. You should refer to the form of the deposit agreement
and the certificate of designation for the applicable series of preferred stock that are, or will be, filed with the SEC.
Dividends
and Other Distributions
The
depositary will distribute all cash dividends or other cash distributions, if any, received in respect of the preferred stock underlying
the depositary shares to the record holders of depositary shares in proportion to the numbers of depositary shares owned by those holders
on the relevant record date. The relevant record date for depositary shares will be the same date as the record date for, or otherwise
in accordance with the terms of, the underlying preferred stock. The depositary will not distribute amounts less than one cent. The depositary
will distribute any balance with the next sum received for distribution to record holders of depositary shares.
If
there is a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary
shares, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our
approval, adopt another method for the distribution, including selling the property and distributing the net proceeds from the sale to
the holders.
Liquidation
Preference
If
a series of preferred stock underlying the depositary shares has a liquidation preference, in the event of the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, holders of depositary shares will be entitled to receive the fraction of the
liquidation preference accorded each share of the applicable series of preferred stock, as set forth in the applicable prospectus supplement.
Withdrawal
of Stock
Unless
the related depositary shares have been previously called for redemption, upon surrender of the depositary receipts at the office of
the depositary, the holder of the depositary shares will be entitled to delivery, at the office of the depositary to or upon his or her
order, of the number of whole shares of the preferred stock and any money or other property represented
by the depositary shares. If the depositary receipts delivered by the holder evidence a number of depositary shares in excess of the
number of depositary shares representing the number of whole shares of preferred stock to be withdrawn, the depositary will deliver to
the holder at the same time a new depositary receipt evidencing the excess number of depositary shares. In no event will the depositary
deliver fractional shares of preferred stock upon surrender of depositary receipts.
Redemption
of Depositary Shares
Whenever
we redeem shares of preferred stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of
depositary shares representing the preferred stock redeemed, so long as we have set aside all funds necessary for the redemption, including
the redemption price for such shares and all dividends declared but not paid as of the date fixed for redemption. The redemption price
per depositary share will bear the same relationship to the redemption price per share of preferred stock that the depositary share bears
to the underlying preferred stock. If less than all the depositary shares are to be redeemed, the depositary shares to be redeemed will
be selected pro rata, by lot or by any other equitable method.
After
the date fixed for redemption, the depositary shares called for redemption will no longer be outstanding. When the depositary shares
are no longer outstanding, all rights of the holders will cease, except the right to receive money or other property that the holders
of the depositary shares were entitled to receive upon the redemption. Payments will be made when holders surrender their depositary
receipts to the depositary.
Voting
the Preferred Stock
Upon
receipt of notice of any meeting at which the holders of the preferred stock are entitled to vote, the depositary will forward the information
contained in the notice of meeting to the record holders of the depositary receipts relating to that preferred stock. The relevant record
date for depositary shares will be the same date as the record date for, or otherwise in accordance with the terms of, the underlying
preferred stock. Each record holder of the depositary shares on the record date will be entitled to instruct the depositary as to the
exercise of the voting rights pertaining to the number of shares of preferred stock represented by that holder’s depositary shares.
The depositary will endeavor, insofar as reasonably practicable, to vote the number of shares of preferred stock represented by the depositary
shares in accordance with those instructions, and we will agree to take all reasonable action requested by and deemed necessary by the
depositary in order to enable the depositary to do so. In the absence of any specific instructions from a holder of depositary shares,
the depositary will, subject to any applicable restrictions, cast votes pertaining to the number of whole shares of preferred stock represented
by such depositary shares proportionately with instructions actually received.
Charges
of Depositary
We
will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will
pay associated charges of the depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary receipts will pay transfer, income and other taxes and governmental charges and such other charges as are
expressly provided in the deposit agreement to be for their accounts. If these charges have not been paid by the holders of depositary
receipts, the depositary may refuse to transfer depositary shares, withhold dividends and distributions and sell the depositary shares
evidenced by the depositary receipt.
Amendment
and Termination of the Deposit Agreement
The
form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement between
us and the depositary. However, any amendment that materially and adversely alters the rights of the holders of depositary shares will
not be effective unless the amendment has been approved by at least a majority (or, in the case of such amendments relating to or
affecting rights to receive dividends or distributions or voting or redemption rights, holders of at least two-thirds) of the outstanding
depositary shares. The deposit agreement may be terminated by the depositary or us only if:
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all
outstanding depositary shares have been redeemed; or
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there
has been a final distribution of the preferred stock in connection with our liquidation,
dissolution or winding up and such distribution has been made to all the holders of depositary
shares.
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Resignation
and Removal of Depositary
The
depositary may resign at any time by delivering to us notice of its election to do so, and we may remove the depositary at any time.
Any resignation or removal of the depositary will take effect upon our appointment of a successor depositary and its acceptance of such
appointment. The successor depositary must be appointed within 60 days after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the United States and having the requisite combined capital and surplus as
set forth in the applicable agreement.
Notices
The
depositary will forward to holders of depositary receipts all notices, reports and other communications, including proxy solicitation
materials received from us, that are delivered to the depositary and that we are required to furnish to the holders of the preferred
stock. In addition, the depositary will make available for inspection by holders of depositary receipts at the principal office of the
depositary, and at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary
as the holder of preferred stock.
Limitation
of Liability
Neither
we nor the depositary will be liable if either of us is prevented or delayed by law or any circumstance beyond its control in performing
its obligations under the deposit agreement. Our obligations and those of the depositary under the deposit agreement will be limited
to performance in good faith of our and their obligations thereunder. We and the depositary will not be obligated to prosecute or defend
any legal proceeding in respect of any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary
may rely upon advice of counsel or accountants, on information provided by persons presenting preferred stock for deposit, holders of
depositary receipts or other persons believed to be competent to give such information and on documents believed to be genuine and to
have been signed or presented by the proper party or parties.
DESCRIPTION
OF UNITS
As
specified in the applicable prospectus supplement, we may issue units comprised of one or more of the other securities described in this
prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in
the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The prospectus supplement
will describe:
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the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the
securities comprising the units may be held or transferred separately;
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the
terms of any unit agreement governing the units;
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the
provisions for the payment, settlement, transfer or exchange of the units;
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material
federal income tax considerations, if applicable; and
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whether
the units will be issued in fully registered or global form.
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The
descriptions of the units and any applicable underlying security or pledge arrangements in this prospectus and in any prospectus supplement
are summaries of the material provisions of the applicable agreements. These descriptions do not restate those agreements in their entirety
and may not contain all the information that you may find useful. We urge you to read the applicable agreements because they, and not
the summaries, define many of your rights as holders of the units. For more information, please review the form of the relevant agreements,
which will be filed with the SEC promptly after the offering of units and will be available as described under the heading “Where
You Can Find Additional Information.”
PLAN
OF DISTRIBUTION
Securities
Offered by Us
We
may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades, “at
the market offerings” as defined in Rule 415 promulgated under the Securities Act or a combination of these methods. We may sell
the securities to or through underwriters or dealers, through agents, or directly to one or more purchasers, including our affiliates,
or through a combination of any of these methods.
We
may distribute securities from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices; or
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Unless
stated otherwise in the applicable prospectus supplement, the obligations of any underwriter to purchase securities will be subject to
certain conditions, and an underwriter will be obligated to purchase all of the applicable securities if any are purchased. If a dealer
is used in a sale, we may sell the securities to the dealer as principal. The dealer may then resell the securities to the public at
varying prices to be determined by the dealer at the time of resale.
We
or our agents may solicit offers to purchase securities from time to time. Unless stated otherwise in the applicable prospectus supplement,
any agent will be acting on a best efforts basis for the period of its appointment.
In
connection with the sale of securities, underwriters or agents may receive compensation (in the form of discounts, concessions or commissions)
from us or from purchasers of securities for whom they may act as agents. Underwriters may sell securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from
the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of securities may
be deemed to be underwriters, as that term is defined in the Securities Act of 1933, as amended (the “Securities Act”),
and any discounts or commissions received by them from us and any profits on the resale of the securities by them may be deemed to be
underwriting discounts and commissions under the Securities Act. We will identify any such underwriter or agent, and we will describe
any compensation paid to them, in the related prospectus supplement.
Underwriters,
dealers and agents may be entitled under agreements with us to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If
stated in the applicable prospectus supplement, we will authorize agents and underwriters to solicit offers by certain specified institutions
or other persons to purchase securities at the public offering price set forth in the prospectus supplement under delayed delivery contracts
providing for payment and delivery on a specified date in the future. Institutions with which these contracts may be made include commercial
and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions,
but shall in all cases be subject to our approval. These contracts will be subject only to those conditions set forth in the applicable
prospectus supplement and the applicable prospectus supplement will set forth the commission payable for solicitation of these contracts.
The obligations of any purchaser under any such contract will be subject to the condition that the purchase of the securities shall not
be prohibited at the time of delivery under the laws of the jurisdiction to which the purchaser is subject. The underwriters and other
agents will not have any responsibility in respect of the validity or performance of these contracts.
There
is no established trading market for any security other than our common stock, which is listed on the NASDAQ Global Market (“NASDAQ”)
under the symbol “RILY”, our Series A Depositary Shares, listed on NASDAQ under the symbol “RILYP”, our Series
B Depositary Shares, listed on NASDAQ under the symbol “RILYL,” our 7.50% Senior Notes due 2027, listed on NASDAQ under the
symbol “RILYZ”, our 7.375% Senior Notes due 2023, listed on NASDAQ under the symbol “RILYH”, our 7.25% Senior
Notes due 2027, listed on NASDAQ under the symbol “RILYG”, our 6.875% Senior Notes due 2023, listed on NASDAQ under the symbol
“RILYI”, our 6.75% Senior Notes due 2024, listed on NASDAQ under the symbol “RILYO”, our 6.50% Senior Notes due
2026, listed on NASDAQ under the symbol “RILYN”, our 6.375% Senior Notes due 2025, listed on NASDAQ under the symbol “RILYM”
and our 6.00% Senior Notes due 2028, listed on NASDAQ under the symbol “RILYT.” The securities issued under this registration
statement may or may not be listed on a national securities exchange or traded in the over-the-counter market, as set forth in the applicable
prospectus supplement. No assurance can be given as to the liquidity of the trading market for any of our securities. Any underwriter
may make a market in these securities. However, no underwriter will be obligated to do so, and any underwriter may discontinue any market
making at any time, without prior notice.
If
underwriters or dealers are used in the sale, until the distribution of the securities is completed, SEC rules may limit the ability
of any underwriters and selling group members to bid for and purchase the securities. As an exception to these rules, representatives
of any underwriters are permitted to engage in certain transactions that stabilize the price of the securities. These transactions may
consist of bids or purchases for the purpose of pegging, fixing or maintaining the price of the securities. If the underwriters create
a short position in the applicable securities in connection with any offering (in other words, if they sell more securities than are
set forth on the cover page of the applicable prospectus supplement) the representatives of the underwriters may reduce that short position
by purchasing securities in the open market. The representatives of the underwriters may also elect to reduce any short position by exercising
all or part of any over-allotment option we may grant to the underwriters, as described in the prospectus supplement. The representatives
of the underwriters may also impose a penalty bid on certain underwriters and selling group members. This means that if the representatives
purchase securities in the open market to reduce the underwriters’ short position or to stabilize the price of the securities,
they may reclaim the amount of the selling concession from the underwriters and selling group members who sold those shares as part of
the offering.
In
general, purchases of a security for the purpose of stabilization or to reduce a short position could cause the price of the security
to be higher than it might be in the absence of those purchases. The imposition of a penalty bid might also have an effect on the price
of the securities to the extent that it discourages resales of the securities. The transactions described above may have the effect of
causing the price of the securities to be higher than it would otherwise be. If commenced, the representatives of the underwriters may
discontinue any of the transactions at any time. In addition, the representatives of any underwriters may determine not to engage in
those transactions or that those transactions, once commenced, may be discontinued without notice.
Certain
of the underwriters or agents and their associates may engage in transactions with and perform services for us or our affiliates in the
ordinary course of their respective businesses.
In
no event will the commission or discount received by any Financial Industry Regulatory Authority (“FINRA”) member
or independent broker-dealer participating in a distribution of securities exceed eight percent of the aggregate principal amount of
the offering of securities in which that FINRA member or independent broker-dealer participates.
LEGAL
MATTERS
The
NBD Group, Inc., Los Angeles, California, has passed upon the validity of the securities to be offered pursuant to this prospectus.
EXPERTS
Marcum
LLP, an independent registered public accounting firm, has audited our consolidated financial statements as of December 31, 2019 and
2018 and for each of the three years in the period ended December 31, 2019, as well as the effectiveness of our internal controls over
financial reporting as of December 31, 2019, as stated in its report incorporated by reference into this prospectus, and such audited
consolidated financial statements have been incorporated by reference into this prospectus in reliance upon the report of such firm given
upon its authority as experts in accounting and auditing.
The
combined financial statements of BR Brand Group as of December 31, 2018 and 2017 and for each of the two years in the period ended December
31, 2018 incorporated by reference in this prospectus have been so incorporated in reliance on the reports of Mayer Hoffman McCann CPAs,
The New York Practice of Mayer Hoffman McCann P.C., independent auditor of BR Brand Group, incorporated herein by reference, given on
the authority of said firm as experts in auditing and accounting.
WHERE
YOU CAN FIND MORE INFORMATION
We
file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any document that
we file at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the
hours of 10:00 am and 3:00 pm. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. All filings
we make with the SEC are also available on the SEC’s web site at http://www.sec.gov. Our website addresses are http://www.greatamerican.com,
http://www.brileyfin.com, http://www.unitedonline.net, http://www.magicjack.com and http://www.vocaltec.com. We have not incorporated
by reference into this prospectus the information on our websites, and you should not consider it to be a part of this document.
We
have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the securities being offered by
this prospectus. This prospectus is part of that registration statement. This prospectus does not contain all of the information set
forth in the registration statement or the exhibits to the registration statement. For further information with respect to us and the
securities we are offering pursuant to this prospectus, you should refer to the complete registration statement, its exhibits and the
information incorporated by reference in the registration statement. Statements contained in this prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete, and you should refer to the copy of that contract or
other documents filed as an exhibit to the registration statement. You may read or obtain a copy of the registration statement at the
SEC’s public reference room and website referred to above.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
For
purposes of this prospectus, the SEC allows us to “incorporate by reference” certain information we have filed with the SEC,
which means that we are disclosing important information to you by referring you to other information we have filed with the SEC. The
information we incorporate by reference is considered part of this prospectus. We specifically are incorporating by reference the following
documents filed with the SEC (excluding those portions of any Current Report on Form 8-K that are not deemed “filed” pursuant
to the General Instructions of Form 8-K):
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Our quarterly report on
Form 10-Q for the quarterly periods ended March 31, 2020, June 30, 2020, and September 30, filed with the SEC on May
11, 2020, August
3, 2020 and October
30, 2020, respectively;
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Our annual report on Form
10-K for the year December 31, 2019, filed with the SEC on March 10, 2020 and Form 10-K/A
filed with the SEC on April 23, 2020;
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Our current reports on
Form 8-K/A filed with the SEC on November
26, 2019, and our current reports on Form 8-K filed with the SEC on November
1, 2019, January 9,
2020, February 10,
2020, February 12,
2020, February 21,
2020, April 13, 2020,
May 6, 2020, May
15, 2020, June 24,
2020, September
1, 2020, September
4, 2020, September
14, 2020, October
13, 2020, January
6, 2021, January
11, 2021, January
15, 2021 and January
25, 2021;
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Description of our common
stock contained in our Registration Statement on Form
8-A filed on July 15, 2015;
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Certificate of Designation
designating the 6.875% Series A Cumulative Perpetual Preferred Stock filed on October
4, 2019; and
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Certificate of Designation
designating the 7.375% Series B Cumulative Perpetual Preferred Stock filed on September
3, 2020.
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All
documents we file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, except as to any portion of any report
or documents that is not deemed filed under such provisions, (1) on or after the date of filing of the registration statement containing
this prospectus and prior to the effectiveness of the registration statement and (2) on or after the date of this prospectus until the
earlier of the date on which all of the securities registered hereunder have been sold or the registration statement of which this prospectus
is a part has been withdrawn, shall be deemed incorporated by reference in this prospectus and to be a part of this prospectus from the
date of filing of those documents.
These
reports and documents can be accessed free of charge on our website http://www.brileyfin.com by clicking on “Investor Relations”
and then clicking on “SEC Filings.” We will provide without charge to each person, including any beneficial owner, to whom
this prospectus is delivered, upon written or oral request, a copy of any or all documents that are incorporated by reference into this
prospectus, but not delivered with the prospectus, other than exhibits to such documents unless such exhibits are specifically incorporated
by reference into the documents that this prospectus incorporates. Please send written requests to:
11100
Santa Monica Boulevard, Suite 800
Los
Angeles, California 90025
Attn.:
Chief Financial Officer
You
should rely only on the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the front page of those documents.
$300,000,000
5.00%
Senior Notes due 2026
________________________________
PROSPECTUS
SUPPLEMENT
________________________________
Book-Running
Managers
B.
Riley Securities
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Janney
Montgomery Scott
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Oppenheimer
& Co.
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Ladenburg
Thalmann
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William
Blair
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InspereX
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Lead
Manager
EF
Hutton, division of Benchmark Investments, LLC
Co-Managers
Aegis
Capital Corp.
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Boenning
& Scattergood
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Brownstone
Investment Group
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Colliers
Securities LLC
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Huntington
Capital Markets
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Newbridge
Securities Corporation
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Wedbush
Securities
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December 1, 2021
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