Beneficient DEFA14A, filed Apr 25, 2025
Beneficient (BENF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 21, 2025
Beneficient
(Exact Name of Registrant as Specified in Charter)
| Nevada | 001-41715 | 72-1573705 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
325 North St. Paul Street, Suite 4850
Dallas, Texas 75201
(Address of Principal Executive Offices, and Zip Code)
(214) 445-4700
Registrant’s Telephone Number, Including Area Code
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| ☒ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Shares of Class A common stock, par value $0.001 per share | BENF | Nasdaq Stock Market LLC | ||
| Warrants, each whole warrant exercisable for one share of Class A common stock, par value $0.001 per share, and one share of Series A convertible preferred stock, par value $0.001 per share | BENFW | Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.02 Unregistered Sales of Equity Securities.
Series B-7 Primary Capital Transaction
On April 21, 2025, Beneficient, a Nevada corporation (the “Company”), through one of its subsidiaries, closed a primary capital transaction with a customer with respect to a limited partner interest in an investment fund with a net asset value of $233,333 (the “Transaction”). Pursuant to the Transaction, the Company’s customized trust vehicles acquired a limited partner interest, and in exchange for such, the customer received 23,333 shares of the Company’s Series B-7 Resettable Convertible Preferred Stock, par value $0.001 per share (the “Series B-7 Preferred Stock”), with such Series B-7 Preferred Stock being convertible into shares of the Company’s Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”).
The issuance of the Series B-7 Preferred Stock pursuant to the Transaction was not registered under the Securities Act of 1933, as amended (the “Securities Act”), and was issued in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.
The Series B-7 Preferred Stock is convertible into Class A Common Stock initially at a conversion price of $0.2979 per share (the “B-7 Conversion Price”). The B-7 Conversion Price is subject to reset from time to time and a floor price of $0.2234 per share. A maximum of 1,044,450 shares of Class A Common Stock may be issued upon conversion of the Series B-7 Preferred Stock. The information in Item 5.03 concerning the material terms of the Series B-7 Preferred Stock is incorporated by reference herein.
Item 3.03 Material Modifications to Rights of Security Holders.
The disclosure required by this Item 3.03 is included in Item 5.03 of this Current Report on Form 8-K and is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Series B-7 Preferred Stock
On April 21, 2025, the Company filed a certificate of designation (the “B-7 Certificate of Designation”) with the Secretary of State of Nevada, effective as of the time of filing, designating the rights, preferences, privileges and restrictions of the shares of the Series B-7 Preferred Stock. The material terms of the Series B-7 Preferred Stock are described below. The total number of authorized shares of the Series B-7 Preferred Stock is 23,333 shares.
Optional Conversion
Each share of Series B-7 Preferred Stock is convertible, at the option of the holder thereof upon two business days’ written notice to the Company, into a number of shares of Class A Common Stock that is equal to $10.00 divided by the B-7 Conversion Price in effect as of the date of such notice (the “B-7 Conversion Rate”). The B-7 Conversion Price shall be subject to reset on each date (each such date, a “B-7 Reset Date”) that is the last day of each month following the date of issuance of the Series B-7 Preferred Stock (the “B-7 Original Issue Date”). On each B-7 Reset Date, the B-7 Conversion Price shall be increased or decreased to the five day trailing volume weighted average price of the Class A Common Stock on the Nasdaq Capital Market or such other national securities exchange on which the Class A Common Stock is listed for trading as of the applicable B-7 Reset Date as reported by Bloomberg Financial Markets or an equivalent reporting service as determined by the Company (the “Prevailing Market Price”), provided that in no event shall the reset B-7 Conversion Price be (a) less than 75% of the initial B-7 Conversion Price or (b) higher than the initial B-7 Conversion Price, in each case subject to adjustments for stock dividends, splits or combinations, reorganizations, recapitalizations or similar transactions.
Mandatory Conversion
Each outstanding share of Series B-7 Preferred Stock will automatically convert into a number of shares of Class A Common Stock (the “B-7 Mandatory Conversion”) as is determined by the B-7 Conversion Rate then in effect on the date (the “B-7 Mandatory Conversion Date”) that is the earliest to occur of: (a) the last day of the month in which the fifth anniversary of the B-7 Original Issue Date occurs, if either the Company has filed all annual reports on Form 10-K and quarterly reports on Form 10-Q that are then required to have been filed in the preceding twelve months with the United States Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or a resale registration statement with respect to the shares of Class A Common Stock underlying the Series B-7 Preferred Stock (the “B-7 Resale Registration Statement”) has become effective and is in full force and effect at the time of such B-7 Mandatory Conversion and (b) if the conditions of clause (a) are not met on the date that is the last day of the month in which the fifth anniversary of the B-7 Original Issue Date occurs, the first date thereafter on which any shares of Series B-7 Preferred Stock may be resold pursuant to Rule 144 under the Securities Act, or the B-7 Resale Registration Statement has become effective. Notwithstanding the foregoing, the Series B-7 Preferred Stock shall not convert into Class A Common Stock to the extent such conversion would cause a holder to exceed (i) 4.99% (the “B-7 Beneficial Ownership Limitation”) of the number of shares of the Class A Common Stock outstanding immediately after giving effect to the issuance of shares of Class A Common Stock issuable upon conversion of Series B-7 Preferred Stock held by the applicable holder or (ii) the aggregate number of shares of Class A Common Stock that the Company may issue upon conversion of the Series B-7 Preferred Stock without breaching the Company’s obligations under the rules and regulations of Nasdaq (the number of shares which may be issued without violating such rules and regulations, the “Exchange Cap”). To the extent a conversion would cause a holder to exceed the B-7 Beneficial Ownership Limitation or Exchange Cap, as applicable, the conversion of the portion of such conversion that would exceed the B-7 Beneficial Ownership Limitation or Exchange Cap, as applicable, shall be delayed until the first day the conversion of such portion would not cause the holder to exceed the B-7 Beneficial Ownership Limitation or, with respect to the Exchange Cap, when stockholder approval as required by the applicable rules and regulations of Nasdaq has been obtained. Further, to the extent any such share of Series B-7 Preferred Stock has not otherwise automatically converted into shares of Class A Common Stock, the B-7 Conversion Price for such shares shall be subject to additional resets on the terms described in the B-7 Certificate of Designation on the last date of each month.
Ranking
Series B-7 Preferred Stock will, with respect to dividend rights and rights upon liquidation, dissolution or winding up of the Company, rank: (a) pari passu to the Class A Common Stock; (b) junior with respect to the Company’s Series A Convertible Preferred Stock, par value $0.001 per share, Series B-1 Resettable Convertible Preferred Stock, par value $0.001 per share, Series B-2 Resettable Convertible Preferred Stock, par value $0.001 per share, Series B-3 Resettable Convertible Preferred Stock, par value $0.001 per share, Series B-4 Resettable Convertible Preferred Stock, par value $0.001 per share, Series B-5 Resettable Convertible Preferred Stock, par value $0.001 per share and Series B-6 Resettable Convertible Preferred Stock, par value $0.001 per share; (c) senior, pari passu or junior with respect to any other series of preferred stock, as set forth in the Certificate of Designation with respect to such preferred stock; and (d) junior to all existing and future indebtedness of the Company.
Liquidation Preference
In the event of any liquidation or dissolution of the Company, the holders of Series B-7 Preferred Stock shall be entitled receive, pro rata with the holders of the Company’s Class A Common Stock, and any other shares of preferred stock of the Company identified as “Designated Preferred Stock,” a per share amount equal to such amount per share as would have been payable had all shares of Series B-7 Preferred Stock been converted to Class A Common Stock pursuant to Section 8 of the B-7 Certificate of Designation (without giving effect to any ownership limitations therein) immediately prior to such liquidation or dissolution of the Company (the “Liquidation Preference”). The Series B-7 Preferred Stock shall be a series of Designated Preferred Stock.
Dividends
Dividends will be paid on the Series B-7 Preferred Stock on an as-converted basis when, as, and if paid on the Class A Common Stock.
Voting Rights
Except as required by law, the holders of Series B-7 Preferred Stock shall not be entitled to vote at any meeting of the stockholders for election of members of the Board of Directors of the Company or for any other purpose or otherwise to participate in any action taken by the Company or the stockholders thereof, or to receive notice of any meeting of stockholders.
The foregoing summary of the B-7 Certificate of Designation does not purport to be complete and is subject to, and qualified in its entirety by, such document, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On April 25, 2025, the Company issued a press release announcing the closing of the Transaction.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in this Item 7.01 (including Exhibit 99.1) is being furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, except as expressly set forth in such filing.
Item 9.01 Exhibits and Financial Statements.
(d) Exhibits.
Exhibit No. |
Description of Exhibit | |
| 3.1 | Certificate of Designation of Series B-7 Resettable Convertible Preferred Stock. | |
| 99.1 | Press Release issued by Beneficient on April 25, 2025. | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BENEFICIENT | ||
| By: | /s/ Gregory W. Ezell |
|
| Name: | Gregory W. Ezell | |
| Title: | Chief Financial Officer | |
| Dated: April 25, 2025 | ||
Exhibit 3.1
Exhibit 99.1
Beneficient Enters into New GP Primary Capital Transaction
DALLAS, April 25, 2025 (GLOBE NEWSWIRE) — Beneficient (NASDAQ: BENF) (“Ben” or the “Company”), a technology-enabled platform providing exit opportunities and primary capital solutions and related trust and custody services to holders of alternative assets through its proprietary online platform AltAccess, today announced it has closed on the financing of a $233,333 primary capital commitment for Cork & Vines Fund I, LP (“Fund”), a fund managed by Cork & Vines GP, LP, an asset manager investing in opportunities within the premium experiential, luxury dining segment with a differentiated culinary and strategic wine program focus.
The transaction represents Ben’s second GP Primary transaction of the fiscal year and third since formally launching the program in late 2024. In exchange for an interest in the Fund, the Fund received approximately $233,333 in stated value of shares of the Company’s Resettable Convertible Preferred Stock (the “Preferred Stock”), which is convertible at the election of the holder into shares of the Company’s Class A common stock, subject to the terms and conditions of the transaction documents. As a result of the transaction, the collateral for Company’s ExAlt loan portfolio is expected to increase by approximately $233,333 of interests in alternative assets. Concurrently, the Company also entered into a Preferred Liquidity Provider Program Agreement with the Fund, whereby the Company may facilitate ongoing liquidity solutions for the Fund and its limited partners.
“We are excited to continue the momentum at the outset of this fiscal year by completing another GP primary capital transaction as we work to execute on our core liquidity and primary capital strategy,” said Beneficient management. “We believe this financing reflects our ability to close transactions that drive shareholder value and enhance the value of the collateral backing our ExAlt loan portfolio. We will continue to pursue additional opportunities that align with our strategic vision and growth objectives.”
Upon closing of the previously announced Public Stockholder Enhancement Transactions (the “Transactions”), the Company believes this transaction will result in the addition of approximately $77,777 (and an aggregate of approximately $10.54 million) of tangible book value attributable to the Company’s stockholders.
Beneficient’s GP Primary Commitment Program is focused on providing primary capital solutions and financing anchor commitments to general partners during their fundraising efforts while immediately deploying capital into our equity. Through the program, Beneficient seeks to help satisfy the up to $330 billion of potential demand for primary commitments to meet fundraising needs.
Reconciliation of Non-GAAP Financial Measures
The following tables reconciles these non-GAAP financial measures to the most comparable GAAP financial measures as of December 31, 2024, on an actual basis and pro forma assuming the Transactions occurred on December 31, 2024.
| (dollars in thousands) | Actual | Pro forma – Transactions (1) | Pro forma -Transactions and GP Primary (3) | |||||||||
| Tangible Book Value | ||||||||||||
| Total equity (deficit) | 14,260 | 14,260 | 24,093 | |||||||||
| Less: Goodwill and intangible assets | (13,014 | ) | (13,014 | ) | (13,014 | ) | ||||||
| Plus: Total temporary equity | 90,526 | 90,526 | 90,526 | |||||||||
| Tangible book value | 91, 772 | 91,772 | 101,605 | |||||||||
| Actual | Pro forma – Transactions (1) | Pro forma -Transactions and GP Primary (3) | ||||||||||
| Tangible book value attributable to Ben public company stockholders | ||||||||||||
| Tangible book value | 91,772 | 91,772 | 101,605 | |||||||||
| Less: Tangible book value attributable to Beneficient Holdings noncontrolling interest holders | (91,772 | ) | (82,595 | ) | (91,070 | ) | ||||||
| Tangible book value attributable to Ben’s public company stockholders | - | 9,177 | (2) | 10,535 | (4) | |||||||
Market Capitalization of Ben’s Class A and Class B common stock as of April 24, 2025 (5) | $ | 2,211 | ||||||||||
| (1) | Assumes the Transactions closed on December 31, 2024 including that the Beneficient Holdings limited partnership agreement was amended to provide that Ben, as the indirect holder of the Class A Units and certain Designated Class S Ordinary Units of Beneficient Holdings, would receive in the event of a liquidation of Beneficient Holdings 10% of the first $100 million of distributions of Beneficient Holdings following the satisfaction of the debts and liabilities of Beneficient Holdings on a consolidated basis. | |
| (2) | Pro forma for the Transactions, represents 10% of the first $100 million of distributions of Beneficient Holdings in the event of the liquidation of Beneficient Holdings following the satisfaction of the debts and liabilities Beneficient Holdings on a consolidated basis. |
| (3) | Assumes the Transactions closed on December 31, 2024 including that the Beneficient Holdings limited partnership agreement was amended to provide that Ben, as the indirect holder of the Class A Units and certain Designated Class S Ordinary Units of Beneficient Holdings, would receive in the event of a liquidation of Beneficient Holdings (i) 10% of the first $100 million of distributions of Beneficient Holdings following the satisfaction of the debts and liabilities of Beneficient Holdings on a consolidated basis and (ii) 33.3333% of the net asset value of the added alternative assets of up to $5 billion in connection with ExAlt Plan liquidity and primary capital transactions entered after December 22, 2024. Pro forma for GP Primary includes the primary capital transaction described herein plus the previously disclosed $9.6 million primary capital commitment for Pulse Pioneer Fund, LP. | |
| (4) | Pro forma for the Transactions, represents (i) 10% of the first $100 million of distributions of Beneficient Holdings in the event of the liquidation of Beneficient Holdings following the satisfaction of the debts and liabilities Beneficient Holdings on a consolidated basis and (ii) 33.3333% of the net asset value of the added alternative assets of up to $5 billion in connection with ExAlt Plan liquidity and primary capital transactions entered after December 22, 2024. | |
| (5) | Based upon the closing price of the Class A common stock as reported by Nasdaq as of market close on April 24, 2025. |
About Beneficient
Beneficient (Nasdaq: BENF) – Ben, for short – is on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors − mid-to-high net worth individuals, small-to-midsized institutions and General Partners seeking exit options, anchor commitments and valued-added services for their funds− with solutions that could help them unlock the value in their alternative assets. Ben’s AltQuote® tool provides customers with a range of potential exit options within minutes, while customers can log on to the AltAccess® portal to explore opportunities and receive proposals in a secure online environment.
Its subsidiary, Beneficient Fiduciary Financial, L.L.C., received its charter under the State of Kansas’ Technology-Enabled Fiduciary Financial Institution (TEFFI) Act and is subject to regulatory oversight by the Office of the State Bank Commissioner.
For more information, visit www.trustben.com or follow us on LinkedIn.
Contacts
Matt Kreps: 214-597-8200, mkreps@darrowir.com
Michael Wetherington: 214-284-1199, mwetherington@darrowir.com
Investor Relations: investors@beneficient.com
Important Information and Where You Can Find It
This press release may be deemed to be solicitation material in respect of a vote of stockholders to approve the Transactions. In connection with the requisite stockholder approval, Ben will file with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement and a definitive proxy statement, which will be sent to the stockholders of Ben, seeking such approvals related to the Transactions.
INVESTORS AND SECURITY HOLDERS OF BEN AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, WHEN AVAILABLE, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTIONS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BEN AND THE TRANSACTIONS. Investors and security holders will be able to obtain a free copy of the proxy statement, as well as other relevant documents filed with the SEC containing information about Ben, without charge, at the SEC’s website (http://www.sec.gov). Copies of documents filed with the SEC by Ben can also be obtained, without charge, by directing a request to Investor Relations, Beneficient, 325 North St. Paul Street, Suite 4850, Dallas, Texas 75201, or email investors@beneficient.com.
Participants in the Solicitation of Proxies in Connection with Transactions
Ben and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the requisite stockholder approvals under the rules of the SEC. Information regarding Ben’s directors and executive officers is available in its annual report on Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on July 9, 2024 and certain current reports on Form 8-K filed by Ben. Other information regarding the participants in the solicitation of proxies with respect to the Transactions and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC. Free copies of these documents, when available, may be obtained as described in the preceding paragraph.
Not an Offer of Securities
The information in this communication is for informational purposes only and shall not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities. The securities that are the subject of the Transactions have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Forward Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the Transactions, including receipt of required approvals and satisfaction of other customary closing conditions and excepted timing of closing of the Transactions, and expectations of future plans, strategies, and benefits of the Transactions. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected.
Important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, among others: the ultimate outcome of the Transactions, including obtaining the requisite vote of securityholders; the Company’s ability to meet expectations regarding the timing and completion of the Transactions; and the risks, uncertainties, and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.
Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.