{
  "docId": "019dd923-622c-750b-8b9a-6cf89b81fe9e",
  "docSlug": "377026890e4d",
  "documentTitle": "B. Riley Financial, Inc. (RILY)",
  "authorId": "60_Wolfpack_Research",
  "authorName": "Wolfpack Research",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-02-08 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 6,
  "pageCount": 24,
  "prevPage": 5,
  "nextPage": 7,
  "slideType": "problem_statement",
  "function": "diagnose_problem",
  "density": "overcrowded",
  "nDataPoints": 8,
  "notes": "The slide uses a narrative structure to build a case for financial distress, citing specific debt covenants and asset value declines.",
  "elementsJson": [
    "headline_text",
    "subtitle_text",
    "paragraph",
    "numbered_list",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b9a-6cf89b81fe9e/6",
  "deckHref": "/decks/019dd923-622c-750b-8b9a-6cf89b81fe9e",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-6cf89b81fe9e.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-6cf89b81fe9e#slide-6",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "RILY’s NAV is Far Below the $1.1 Billion Minimum NAV Requirement That Is Required for the Nomura Credit Agreement Putting RILY at Risk of Collapse in 2023",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-70f7-7334-b21f-26efef5bacf5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.8,
        "x": 0.1,
        "y": 0.41
      },
      "kind": "list",
      "text": "1. RILY's equity investments fell $107 million in Q4 primarily because of a $95 million collapse in the value of FAZE. 2. RILY also appears to have lost $42 million due to the bankruptcy of CORZQ. 3. RILY's debt grew by nearly $200 million during Q4, from $2.32 billion to $2.5 billion. 4. RILY paid a $28.5 million dividend during Q4 2022.",
      "attrs": null,
      "subkind": "numbered",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "19c1d5b4-1794-4278-ab1e-4eb51cc62ef1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Net Asset Value: $1.1 billion",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-70f7-7334-b21f-2c46b848bf9d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.8,
        "x": 0.1,
        "y": 0.62
      },
      "kind": "paragraph",
      "text": "Because RILY makes the Primary Guarantor a private subsidiary of itself, RILY's it is effectively impossible for the investing public to determine how close RILY is to violating its financial covenants.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "759bab27-873c-474e-b853-8695761c8404",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.8,
        "x": 0.1,
        "y": 0.36
      },
      "kind": "paragraph",
      "text": "Our analysis of RILY indicates that its NAV at the end of Q4 is ~$400 million, after falling nearly $350 million since the end of Q3 2022 due to four main factors:",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8d145d5f-5c81-4d16-aad5-bb9262ea5250",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.8,
        "x": 0.1,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "In RILY's $380 million credit agreement with Nomura, RILY agreed to maintain two specific covenants, a minimum NAV by its Prime Guarantor of $1.1 billion, and a trailing twelve month minimum operating EBITDA of $135 million.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d2db98e4-1ef5-419d-8f90-145f85d2852c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.7,
        "x": 0.15,
        "y": 0.25
      },
      "kind": "quote",
      "text": "Net Asset Value shall mean, as of any date of determination with respect to any Person, (a) the total assets of such Person minus (b) the total liabilities of such Person",
      "attrs": null,
      "subkind": "pull-quote",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "6e3bd34d-834d-48d2-82fe-05f2028c01e9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "“Net Asset Value” shall mean, as of any date of determination with respect to any Person, (a) the total assets of such Person minus (b) the total liabilities of such Person in each case, as such amount would, in conformity with GAAP, be set forth on the balance sheet of such Person.",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-70f7-7334-b21f-2ac15c11578e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.8,
        "x": 0.1,
        "y": 0.12
      },
      "kind": "title",
      "text": "RILY's NAV is Far Below the $1.1 Billion Minimum NAV Requirement That Is Required for the Nomura Credit Agreement Putting RILY at Risk of Collapse in 2023",
      "attrs": null,
      "subkind": "action-title",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5bf5f7fe-63e8-42b9-acb9-b4b28905e8bf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.8,
        "x": 0.1,
        "y": 0.08
      },
      "kind": "title",
      "text": "RILY's Downward Spiral Is Set to Continue in 2023",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "03267834-7f6d-4651-b085-7ab087385133",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "4134dbd3-7411-4746-b955-efb1e277adb6",
      "evidence": "The slide explicitly claims obfuscation of financial data to hide risk of default.",
      "confidence": 0.8
    }
  ],
  "arcBeats": [
    {
      "to": 10,
      "from": 5,
      "beatId": "c73dcf96-2bb7-4839-8a75-d4b379871407",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Agitate",
      "beatSlug": "problem-agitate-solution-agitate-make-it-worse",
      "evidence": "The document agitates these problems, detailing the losses from GREE, XELA, and BRIV, and highlighting the company's opaque loan book.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 9,
      "from": 5,
      "name": "Aha Moment",
      "slug": "03-aha-moment",
      "bestFor": "Data-heavy sections, research findings, analytical arguments",
      "matchId": "eb93bba1-c76c-41c2-8aca-e81f61f5743c",
      "evidence": "The document reveals the losses from GREE, XELA, and BRIV, and highlights the company's opaque loan book.",
      "position": 0,
      "objective": "To reveal the imminent problems facing RILY",
      "structure": "The Problem/Question -> What the Data Shows -> The Insight",
      "confidence": 0.7,
      "description": "Establish a tension, present data, then deliver the insight that changes everything"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}