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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2017

NOTE 10— EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Basic common shares outstanding exclude 453,365 common shares that are held in escrow and subject to forfeiture. The common shares held in escrow includes 66,000 common shares issued to the former members of Great American Group, LLC that are subject to forfeiture upon the final settlement of claims for goods held for sale in connection with the transaction with Alternative Asset Management Acquisition Corp. in 2009 and 387,365 common shares that are subject to forfeiture to indemnify the Company for certain representations and warranties in connection with the acquisition of Wunderlich. These shares are subject to forfeiture upon the final settlement of claims as more fully described in the related escrow instructions. Dilutive common shares outstanding includes contingently issuable shares that are currently in escrow and subject to release if the conditions for the final settlement of claims in accordance with the escrow instructions were satisfied at the end of the respective periods.

Basic and diluted earnings per share was calculated as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Net income attributable to B. Riley Financial, Inc.	$	368	$	8,939	$	17,669	$	9,086

Weighted average shares outstanding:
Basic		26,059,490		18,977,072		22,180,808		17,805,127
Effect of dilutive potential common shares:
Restricted stock units and non-vested shares		1,193,007		169,311		816,841		159,376
Contingently issuable shares		387,365		44,652		387,365		44,655
Diluted		27,639,862		19,191,035		23,385,014		18,009,158

Basic income per share	$	0.01	$	0.47	$	0.80	$	0.51
Diluted income per share	$	0.01	$	0.47	$	0.76	$	0.50