B. Riley Financial, Inc. (NASDAQ:RILY) Files An 8-K Completion of Acquisition or Disposition of Assets

B. Riley Financial, Inc. (NASDAQ:RILY) Files An 8-K Completion of Acquisition or Disposition of Assets

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Item2.01.

Completion of Acquisition or Disposition of
Assets.

On June1, 2017, to the Amended and Restated Agreement and Plan of
Merger, dated as of March15, 2017, and effective as of
February17, 2017 (as amended, modified or otherwise supplemented,
the Merger Agreement), by and among FBR Co., a Virginia
corporation (FBR), B. Riley Financial, Inc., a Delaware
corporation (the Company), and BRC Merger Sub, LLC, a
Delaware limited liability company and a direct wholly-owned
subsidiary of the Company (Merger Sub), FBR merged with
and into Merger Sub, with Merger Sub continuing as the surviving
company (the Merger).

to the terms and conditions set forth in the Merger Agreement, at
the effective time of the Merger, each outstanding share of FBR
common stock, par value $0.001 per share (FBR Common
Stock
), excluding certain specified shares as described in
the Merger Agreement, was converted into the right to receive
0.671 (the Exchange Ratio) of a share of the Companys
common stock, par value $0.0001 per share (Company Common
Stock
). For each fractional share that would have otherwise
been issued, the Company will pay cash in an amount equal to such
fraction (rounded to the nearest thousandth when expressed in
decimal form) multiplied by $14.41, which was the average of the
per share closing prices of Company Common Stock as quoted on
NASDAQ over the 20 full trading days ending on May24, 2017.

In addition, on May19, 2017 the board of directors of FBR (the
FBR Board) declared a special cash dividend (the
Pre-Closing Dividend) to FBR shareholders of record at the
close of business on May30, 2017. The Pre-Closing Dividend on a
per share basis was equal to $7.61 (the Per Share Pre-Closing
Dividend
). FBR will pay the Pre-Closing Dividend on or about
June1, 2017.

Furthermore, to the terms and conditions set forth in the Merger
Agreement at the effective time of the Merger:

each outstanding option to purchase shares of FBR Common
Stock (an FBR Option) under FBRs 2006 Long-Term
Incentive Plan, as amended and restated, including each
subplan thereof (including FBRs 2013 Performance Share Unit
Program and FBRs 2016 Retention and Incentive Plan)
(collectively, the Stock Plan) vested and ceased to
represent an option to purchase shares of FBR Common Stock
and was converted into a number of shares of Company Common
Stock determined in accordance with the terms of the Merger
Agreement;
each outstanding share of restricted stock (an FBR
Restricted Share
) granted under the Stock Plan, ceased to
represent a restricted share of FBR Common Stock and was
converted into (i)a number of restricted shares of Company
Common Stock equal to the Exchange Ratio (rounded to the
nearest whole number) and (ii)the right to receive a cash
payment equal to the Per Share Pre-Closing Dividend;
each outstanding restricted stock unit (an FBR RSU)
granted under the Stock Plan, whether vested or unvested,
ceased to represent a restricted stock unit denominated in
shares of FBR Common Stock and was converted into (i)a
restricted stock unit denominated in shares of Company Common
Stock (a Company Stock-Based RSU) covering a number of
shares of Company Common Stock equal to the product (rounded
to the nearest whole number) of the Exchange Ratio and the
number of shares of FBR Common Stock subject to such FBR RSU
immediately prior to the effective time of the Merger and
(ii)the right to receive a cash payment equal to the Per
Share Pre-Closing Dividend
(multiplied by the number of shares of FBR Common Stock
subject to such FBR RSU, determined in accordance with the
terms of the Merger Agreement);
each outstanding performance stock unit (an FBR PSU)
under the Stock Plan, whether vested or unvested, ceased to
represent a performance stock unit denominated in shares of
FBR Common Stock and was converted into (i)a Company
Stock-Based RSU covering a number of shares of Company Common
Stock equal to the product (rounded to the nearest whole
number) of the Exchange Ratio and the number of shares of FBR
Common Stock subject to such FBR PSU based on the greater of
(x)the number of shares of FBR Common Stock that would be
earned based on actual performance for the most recently
completed fiscal quarter prior to the effective time of the
Merger, as reasonably determined by the compensation
committee of the FBR board of directors and (y)the level of
achievement resulting in 50% of the number of shares of FBR
Common Stock being earned and (ii)the right to receive a cash
payment equal to the Per Share Pre-Closing Dividend
(multiplied by the number of shares of FBR Common Stock
subject to such FBR PSU, determined in accordance with the
terms of the Merger Agreement); and
each outstanding option to purchase a share of FBR Common
Stock held by a certain investor, whether vested or unvested,
ceased to represent an option to purchase shares of FBR
Common Stock and was converted into an option to purchase
shares of Company Common Stock, with the number of shares and
exercise price equitably adjusted to reflect the Pre-Closing
Dividend and the shares of Company Common Stock issued in the
Merger.

-2-

The foregoing description of the Merger and the Merger Agreement
does not purport to be complete and is qualified in its entirety
by reference to the Merger Agreement, which was filed as
Exhibit2.1 to the Companys Registration Statement on Form S-4/A
(File No.333-216763) filed with the Securities and Exchange
Commission (the SEC) on May1, 2017, which is incorporated
by reference as Exhibit 2.1 hereto and is incorporated by
reference into this Item2.01.

Item5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.

Effective June1, 2017, to the Merger Agreement, the Board of
Directors of the Company (the Board) increased the number
of directors that comprised the full Board to eight (8), an
increase of one, and appointed Richard J. Hendrix to fill the new
seat on the Board. Mr.Hendrix served as a Chairman, President and
Chief Executive Officer of FBR prior to the Merger. Concurrently
with the appointment of Mr.Hendrix, the Board increased the
number of directors that comprised the full Board to nine (9)and
appointed Robert L. Antin as an independent director to fill the
new seat.

Mr.Hendrix

In connection with FBRs entry into the Merger Agreement,
Mr.Hendrix entered into an employment agreement with B.Riley Co.,
LLC and, solely with respect to its obligations under such
employment agreement, the Company, (the Hendrix Employment
Agreement), effective contingent on the closing of the Merger and
Mr.Hendrix remaining employed by FBR as of immediately prior to
the closing of the Merger. A description of the terms of the
Hendrix Employment Agreement are set forth in the section titled
The MergerInterests of FBRs Directors and Executive Officers in
the Merger of the Companys Registration Statement on Form S-4/A
(File No.333-216763) filed with the SEC on May1, 2017 and such
description is incorporated herein by reference. The description
of the Hendrix Employment Agreement is not complete and is
subject to and qualified in its entirety by reference to the
Hendrix Employment Agreement, a copy of which is attached as
Exhibit 10.1 hereto and is incorporated herein by reference.

Prior to the Merger, Mr.Hendrix served as President of FBR since
June 2006 and Chief Executive Officer of FBR since January1,
2009. He also served as a director of FBR since June 2006 and the
Chairman of the Board of Directors of FBR since FBRs 2012 annual
meeting of shareholders. From February 2007 through February
2008, Mr.Hendrix served as a Member of the Office of the Chief
Executive of Arlington Asset Investment Corp. (Arlington
Asset
), FBRs previous parent company. From April 2004 to
February 2007, Mr.Hendrix served as President and Chief Operating
Officer of Arlington Asset. Between April 2003 and April 2004,
Mr.Hendrix served as Chief Investment Officer of Arlington Asset.
Prior to March 2003, Mr.Hendrix served as the President and Chief
Operating Officer of FBR Asset Investment Corporation in addition
to heading the Real Estate and Diversified Industrials Investment
Banking Groups at FBR. Prior to joining FBR in 1999, Mr.Hendrix
was a Managing Director of PNC Capital Markets (PNC)
investment banking group. Mr.Hendrix previously also headed PNCs
asset-backed securities business. Mr.Hendrix joined PNC in 1987
and was appointed by PNC to work with FBR in 1997 in connection
with a strategic alliance between the two companies. Mr.Hendrix
is a member of the Board of Trustees of Flint Hill School.
Mr.Hendrix has a Bachelor of Science in finance from Miami
University. Mr.Hendrixs 30 years of experience in the financial
services industry as well as his executive leadership experience
provides an important resource to the B. Riley board of
directors.

In connection with Mr.Hendrixs appointment to serve on the Board,
the Company will enter into a indemnification agreement with
Mr.Hendrix in the form in which the Company has entered into with
its other directors, which form is filed as Exhibit 10.11 to the
Companys Current Report on Form 8-K filed with the SEC on
August6, 2009 and is incorporated herein by reference.

Mr. Antin

Mr.Antin, was a co-founder of VCA Inc. and served as the Chief
Executive Officer, President and Chairman of VCA Inc. since its
inception in 1986. From September 1983 to 1985, Mr.Antin was
President, Chief Executive Officer, a director and co-founder of
AlternaCare Corp., a publicly held company that owned, operated
and developed freestanding out-patient surgical centers. From
July 1978 until September 1983, Mr.Antin was an officer of
American Medical International, Inc., an owner and operator of
health care facilities. Mr.Antin received his MBA with a
certification in hospital and health administration from Cornell
University. Mr.Antins executive leadership experience provides an
important resource to the B. Riley board of directors.

In connection with Mr.Antins appointment to serve on the Board,
the Company will enter into a indemnification agreement with
Mr.Antin in the form in which the Company has entered into with
its other directors, which form is filed as Exhibit 10.11 to the
Companys Current Report on Form 8-K filed with the SEC on
August6, 2009 and is incorporated herein by reference.

-3-

Item5.07. Submission of Matters to a Vote of Security
Holders.

The 2017 annual meeting of stockholders (the Annual
Meeting
) of the Company was held on June1, 2017. Set forth
below are the final voting results for each of the proposals
submitted to a vote of the stockholders of the Company at the
Annual Meeting.

1. Approval of the issuance of Common Stock to the Merger
Agreement:

Votes For

Votes Against

Abstentions

Broker Non-Votes

15,324,811 53,064 1,300 811,539

2. Approval of one or more adjournments to the Annual Meeting, if
necessary or appropriate, including adjournments to solicit
additional proxies in favor of the approval of the issuance of
Common Stock to the Merger Agreement:

Votes For

Votes Against

Abstentions

Broker Non-Votes

15,767,490 360,515 62,708

Adjournment of the Annual Meeting was not necessary or
appropriate because there was a quorum present and there were
sufficient votes at the time of the Annual Meeting to approve the
issuance of Common Stock to the Merger Agreement.

3. Election of seven directors to hold office for a one-year term
to expire at the Companys 2018 Annual Meeting or until their
successors are elected and duly qualified:

Nominee for Director VotesFor VotesWithheld BrokerNon-Votes

(01) Bryant R. Riley

15,353,666 25,509 811,539

(02) Robert DAgostino

15,352,503 26,672 811,539

(03) Andrew Gumaer

15,258,119 121,056 811,539

(04) Todd D. Sims

15,358,616 20,559 811,539

(05) Thomas J. Kelleher

15,259,642 119,533 811,539

(06) Richard L. Todaro

15,250,172 129,003 811,539

(07) Mikel H. Williams

15,358,553 20,622 811,539

4. Ratification of the selection of Marcum LLP as the Companys
independent registered public accounting firm for the fiscal year
ended December31, 2017:

Votes For

Votes Against

Abstentions

16,108,661 19,332 62,721
Item8.01 Other Events

On June1, 2017, the Company issued a press release announcing the
completion of the Merger. A copy of the press release is filed as
Exhibit 99.5 hereto and is incorporated herein by reference.

Item9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited consolidated balance sheets of FBR as of December31,
2016 and December31, 2015 and the related consolidated statements
of operations, comprehensive income, changes in shareholders
equity and cash flows for each of the three years in the period
ended December31, 2016, and the notes related thereto, are
incorporated by reference as Exhibit 99.1 hereto and are
incorporated by reference into this Item 9.01(a).

The Report of Independent Registered Public Accounting Firm,
issued by BDO USA, LLP, dated March13, 2017, relating to the
audited financial statements described above is incorporated by
reference as Exhibit 99.2 hereto and is incorporated by reference
into this Item 9.01(a).

-4-

The unaudited consolidated balance sheets of FBR as of March31,
2017 and the related consolidated statements of operations,
changes in shareholders equity, and cash flows for the period
ended March31, 2017, and the notes related thereto, are
incorporated by reference as Exhibit 99.3 hereto and are
incorporated by reference into this Item 9.01(a).

(b) Pro Forma Financial Information.

The unaudited pro forma consolidated financial statements and
explanatory notes as of March31, 2017, for the three month period
ended March31, 2017 and for the year ended December31, 2016
relating to the Merger, are incorporated by reference as Exhibit
99.4 hereto and are incorporated by reference into this Item
9.01(b).

(d) Exhibits

Exhibit No.

Description

2.1 Amended and Restated Agreement and Plan of Merger, dated as
of March15, 2017, and effective as of February17, 2017, by
and among FBR Co., B. Riley Financial, Inc. and BRC Merger
Sub, LLC (filed as Exhibit 2.1 to the Companys Registration
Statement on Form S-4/A (File No.333-216763) filed on May1,
2017 and incorporated herein by reference).*
10.1 Employment Agreement, dated as of February17, 2017, by and
among B. Riley Co., LLC, Richard J. Hendrix and B. Riley
Financial, Inc.
23.1 Consent of BDO USA, LLP, FBR Co.s independent registered
public accounting firm.
99.1 The audited consolidated balance sheets of FBR Co. as of
December31, 2016 and December31, 2015 and the related
consolidated statements of operations, comprehensive income,
changes in shareholders equity and cash flows for each of the
three years in the period ended December31, 2016, and the
notes related thereto (incorporated by reference to Item 8 of
FBR Co.s Annual Report on Form 10-K filed March13, 2017 (SEC
File No.001-33518)).
99.2 The Report of Independent Registered Public Accounting Firm,
issued by BDO USA, LLP, dated March13, 2017, relating to the
FBR Co. financial statements (incorporated by reference to
Item 8 of FBR Co.s Annual Report on Form 10-K filed March13,
2017 (SEC File No.001-33518)).
99.3 The unaudited consolidated balance sheets of FBR Co. as of
March31, 2017 and the related consolidated statements of
operations, changes in shareholders equity, and cash flows
for the period ended March31, 2017, and the notes related
thereto (incorporated by reference to Item 1 of FBR Co.s
Quarterly Report on Form 10-Q filed May8, 2017 (SEC File
No.001-33518).
99.4 Unaudited pro forma consolidated financial statements and
explanatory notes relating to the Merger and related
transactions as of and for the three month period ended
March31, 2017 and for the year ended December31, 2016
(incorporated by reference to Exhibit 99.1 to the Companys
Current Report on Form 8-K dated May22, 2017).
99.5 Press Release, dated June1, 2017.
* Schedules and exhibits omitted to Item 601(b)(2) of
Regulation S-K. The Company agrees to furnish supplementally
a copy of any omitted schedule or exhibit to the SEC upon
request.

-5-

to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

Date: June1, 2017

B. RILEY FINANCIAL, INC.
By:

/s/ Phillip J. Ahn

Name: Phillip J. Ahn
Title: ChiefFinancialOfficerandChiefOperatingOfficer

EXHIBIT INDEX

Exhibit No.

Description

2.1 Amended and Restated Agreement and Plan of Merger, dated as
of March15, 2017, and effective as of February17, 2017, by
and among FBR Co., B. Riley Financial, Inc. and BRC Merger
Sub, LLC (filed as Exhibit 2.1 to the Companys Registration
Statement on Form S-4/A (File No.333-216763) filed on May1,
2017 and incorporated herein by reference).*
10.1 Employment Agreement, dated as of February17, 2017, by and
among B. Riley Co., LLC, Richard J. Hendrix and B. Riley
Financial, Inc.
23.1 Consent of BDO USA, LLP, FBR Co.s independent registered
public accounting firm.
99.1 The audited consolidated balance sheets of FBR Co. as of
December31, 2016 and December31, 2015 and the related
consolidated statements of operations, comprehensive income,
changes in shareholders equity and cash flows for each of the
three years in the period ended December31, 2016, and the
notes related thereto (incorporated by reference to Item 8 of
FBR Co.s Annual Report on Form 10-K filed March13, 2017 (SEC
File No.001-33518)).
99.2 The Report of Independent Registered Public Accounting Firm,
issued by BDO USA, LLP, dated March13, 2017, relating to the
FBR Co. financial statements (incorporated by reference to
Item 8 of FBR Co.s Annual Report on Form 10-K filed March13,
2017 (SEC File No.001-33518)).
99.3 The unaudited consolidated balance sheets of FBR Co. as of
March31, 2017 and the related consolidated statements of
operations, changes in shareholders equity, and cash flows
for the period ended March31, 2017, and the notes related
thereto (incorporated by reference to Item 1 of FBR Co.s
Quarterly Report on Form 10-Q filed May8, 2017 (SEC File
No.001-33518).
99.4 Unaudited pro forma consolidated financial statements and
explanatory notes relating to the Merger and related
transactions as of and for the three month period ended
March31, 2017 and for the year ended December31, 2016
(incorporated by reference to Exhibit 99.1 to the Companys
Current Report on Form 8-K dated May22, 2017).
99.5 Press Release, dated June1, 2017.
* Schedules and exhibits omitted


About B. Riley Financial, Inc. (NASDAQ:RILY)

B. Riley Financial, Inc. provides collaborative financial services and solutions through several subsidiaries, including: B. Riley & Co. LLC, a investment bank which provides corporate finance, research, and sales and trading to corporate, institutional and high net worth individual clients; Great American Group, LLC, a provider of advisory and valuation services, asset disposition and auction solutions, and commercial lending services; B. Riley Capital Management, LLC, an Investment Advisor, which includes B. Riley Asset Management, a provider of investment products to institutional and high net worth investors, and B. Riley Wealth Management (formerly MK Capital Advisors), a multi-family office practice and wealth management firm focused on the needs of ultra-high net worth individuals and families; and Great American Capital Partners, LLC, a provider of senior secured loans and second lien secured loan facilities to middle market public and private United States companies.

B. Riley Financial, Inc. (NASDAQ:RILY) Recent Trading Information

B. Riley Financial, Inc. (NASDAQ:RILY) closed its last trading session down -0.35 at 14.70 with 53,277 shares trading hands.

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