DALLAS, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Beneficient (NASDAQ: BENF) (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 issued a statement about the United States Attorney for the Southern District of New York’s recent indictment of the Company’s former Chairman and CEO, Brad Heppner. As previously disclosed, Beneficent parted ...

The founder and ex-chairman of the financial-services firm was charged in connection with over $1 billion in investor losses at its defunct former parent company GWG Holdings. ...

Group 1: AMTD Digital Inc. - AMTD Digital Inc. (NYSE:HKD) leads the market with a 93.49% price increase to $3.27, driven by a trading volume of approximately 286.36 million [1][6] - The surge in stock price is supported by a remarkable 1,085.9% revenue increase for the six months ending April 30, 2025, following the consolidation of The Generation Essentials Group as a subsidiary since October 2024 [1][6] Group 2: Beneficient - Beneficient (NASDAQ:BENF) experienced a 57.18% increase in its stock price to $0.87, with a trading volume of over 113.62 million [2][6] - The company has regained compliance with Nasdaq's periodic filing and market value requirements, which may have contributed to heightened investor interest [2] Group 3: Rani Therapeutics Holdings, Inc. - Rani Therapeutics Holdings, Inc. (NASDAQ:RANI) saw a 50.69% increase in its stock price to $2.18, with a trading volume of over 31.48 million [3] - The company is set to present preclinical data on its innovative RaniPill® capsule at ObesityWeek® 2025, potentially fueling investor interest [3] Group 4: YD Bio Limited Warrants - YD Bio Limited Warrants (YDESW) experienced a 47.06% increase in its stock price to $1.5, despite a smaller trading volume of 22,699 [4] - The company's focus on detection and therapeutic technologies has shown promising growth potential, attracting investor attention [4] Group 5: Market Overview - The significant price changes and trading volumes reflect a dynamic market environment, with investors showing keen interest in companies across various sectors [5]

DALLAS, Oct. 30, 2025 (GLOBE NEWSWIRE) -- Beneficient (NASDAQ: BENF) (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 that, by letter dated October 29, 2025, the Company was notified by The Nasdaq Stock Market, LLC (“Nasdaq”) that the Company had regained compliance with (i) the Nasdaq periodic reporting requiremen ...

Company Performance Overview - AiRWA Inc. experienced a dramatic stock price drop of approximately 51.93%, falling to $0.09, potentially due to a 1-for-50 reverse stock split effective October 27, 2025, which may signal financial instability [2][8] - Beneficient (BENF) saw a notable decline of 43.39%, with its stock price decreasing to $0.84, influenced by a strategy involving limited conversion of subsidiary securities into Class A common stock, which may have caused short-term uncertainty among investors [3][8] - Everbright Digital Holding Limited (EDHL) faced a 35.64% decrease in stock price to $0.69 after receiving a notification from Nasdaq regarding a deficiency in meeting the minimum bid price requirement [4][8] - Ambipar Emergency Response (AMBI) experienced a 32.14% decline in stock price to $0.76, as NYSE American announced delisting proceedings against the company, impacting investor confidence [5] - Integer Holdings Corporation (ITGR) saw a 30.52% decrease in stock price, now at $75.81, with its Q3 earnings report providing insights into its financial health [6] Market Dynamics - The significant price movements of these companies reflect a combination of company-specific developments, sectoral shifts, and broader market dynamics, which investors and stakeholders are closely monitoring to gauge future prospects [7]

Beneficient (NASDAQ:BENF) surged 64.25% to $0.80 in after-hours trading on Tuesday following the announcement that Chairman Thomas O. Hicks and Interim CEO James G. Silk converted preferred shares into common stock.Check out the current price of BENF stock here. Executive Conversion TransactionAccording to the company's Tuesday statement, Hicks converted about $48 million of Preferred A-1 Unit Accounts of Beneficient Company Holdings, L.P., into Class A common stock, receiving 92.49 million shares.Silk conv ...

Core Viewpoint - Beneficient has announced a Limited Conversion of Preferred A-1 Unit Accounts into Class A common stock, demonstrating leadership's commitment to the company's long-term success and aligning interests with stockholders [1][4][5] Group 1: Limited Conversion Details - Thomas O. Hicks and James G. Silk converted approximately $48.0 million and $4.6 million of Preferred A-1 Unit Accounts into shares of Common Stock, resulting in the issuance of 92,485,639 and 8,808,649 shares respectively [1][4] - The conversion led to a voting and lock-up agreement, where Hicks and Silk will vote the Conversion Shares in favor of the Board's recommendations and the shares will be locked up until October 1, 2028 [3][4] Group 2: Compliance with Nasdaq Requirements - The company was notified by Nasdaq that it did not meet the minimum stockholders' equity requirement but is seeking to comply with the market value of listed securities requirement, which necessitates a market value of $35 million or greater [2] Group 3: Strategic Implications - The voluntary conversion signifies a commitment to the company's long-term success and aims to simplify its capital structure, while also deferring market dilution due to the lock-up agreement [4][5]

DALLAS, Oct. 21, 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 reported its financial results for the fiscal 2026 first quarter, which ended June 30, 2025. Commenting on the fiscal 2026 first quarter results, interim Chief Executive Officer James Silk said: “Th ...

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) Beneficient strengthened its financial and operational foundation in Q1 Fiscal 2026, improving cost management, completing new primary capital transactions, increasing liquidity, and becoming current on SEC filings [Company Overview](index=1&type=section&id=1.1.%20Company%20Overview) Beneficient (Ben) is a technology-enabled platform providing exit opportunities and primary capital solutions, along with trust and custody services, to alternative asset holders via its proprietary online platform, AltAccess - Beneficient (NASDAQ: BENF) operates a technology-enabled platform, AltAccess, offering exit opportunities, primary capital solutions, and related trust/custody services for alternative asset holders[1](index=1&type=chunk) [First Quarter Fiscal 2026 Highlights](index=1&type=section&id=1.2.%20First%20Quarter%20Fiscal%202026%20Highlights) The first quarter of fiscal 2026 saw Beneficient make significant progress in strengthening its financial and operational foundation, marked by improved cost management, new primary capital transactions, increased liquidity through asset sales, and becoming current on SEC filings - The company made meaningful progress in strengthening its financial and operational foundation, focusing on reducing expenses, completing new primary capital transactions, and generating additional liquidity through asset sales[2](index=2&type=chunk) - Beneficient became current on its SEC filings, demonstrating compliance with Nasdaq's reporting requirements within the granted extension period[5](index=5&type=chunk) - Board Chairman Thomas Hicks and interim CEO James Silk converted an aggregate of **$52.6 million** of personally held BCH Preferred Series A-1 holdings into shares of the Company's Class A common stock on October 15, 2025, as part of plans to regain Nasdaq compliance[5](index=5&type=chunk) [Business Segments and Loan Portfolio](index=1&type=section&id=2.%20Business%20Segments%20and%20Loan%20Portfolio) Beneficient operates through Ben Liquidity, offering financing for alternative asset exits, and Ben Custody, providing trust and custody administration, supported by a highly diversified loan portfolio strategy [Business Segments Description](index=2&type=section&id=2.1.%20Business%20Segments%20Description) Beneficient operates through two primary business segments: Ben Liquidity, which provides financing for alternative asset exits, and Ben Custody, offering full-service trust and custody administration [Ben Liquidity](index=2&type=section&id=2.1.1.%20Ben%20Liquidity) Ben Liquidity provides simple, rapid, and cost-effective liquidity products through proprietary financing and trust structures, facilitating the exchange of customer alternative assets for consideration - Ben Liquidity offers simple, rapid, and cost-effective liquidity products through proprietary financing and trust structures (Customer ExAlt Trusts), facilitating the exchange of customer alternative assets for consideration[10](index=10&type=chunk) Interest Income | Metric | Fiscal 1Q26 (June 30, 2025) | Fiscal 4Q25 (March 31, 2025) | Change % vs. Prior Quarter | | :--------------- | :-------------------------- | :--------------------------- | :------------------------- | | Interest Income | $8.8 million | $9.2 million | -4.5% | - The decrease in interest income was primarily due to a higher percentage of loans being placed on nonaccrual status, partially offset by compounding interest on remaining loans[12](index=12&type=chunk) Operating Loss | Metric | Fiscal 1Q26 (June 30, 2025) | Fiscal 4Q25 (March 31, 2025) | Change % vs. Prior Quarter | | :--------------- | :-------------------------- | :--------------------------- | :------------------------- | | Operating Loss | $(6.0) million | $(12.3) million | 51.3% (Improvement) | - The improvement in operating performance was due to lower intersegment credit losses in the current fiscal period, partly because of the disposition of certain investments that generated earlier loan payments[12](index=12&type=chunk) [Ben Custody](index=2&type=section&id=2.1.2.%20Ben%20Custody) Ben Custody offers full-service trust and custody administration for Customer ExAlt Trusts, earning fees based on assets in custody - Ben Custody provides full-service trust and custody administration services to trustees of Customer ExAlt Trusts, earning fees calculated as a percentage of assets in custody[11](index=11&type=chunk) NAV of Alternative Assets in Custody | Metric | As of June 30, 2025 | As of March 31, 2025 | | :----------------------------------- | :------------------ | :------------------- | | NAV of alternative assets in custody | $298.1 million | $338.2 million | - The decrease in NAV was driven by dispositions of certain alternative assets, distributions, and unrealized losses on existing assets, offset by **$11.8 million** of new originations[11](index=11&type=chunk) [Loan Portfolio Strategy and Diversification](index=1&type=section&id=2.2.%20Loan%20Portfolio%20Strategy%20and%20Diversification) Beneficient's loan portfolio strategy, built on the OptimumAlt endowment model, focuses on diversification across various alternative asset classes, industry sectors, geographies, and investment vintages. As of June 30, 2025, the portfolio was highly diversified, supporting a net loan portfolio of $230.7 million - Ben's balance sheet strategy for ExAlt Loan origination is based on the portfolio endowment model, utilizing patent-pending OptimumAlt technologies to guide diversification across **seven alternative asset classes**, over **11 industry sectors**, and at least **six countrywide exposures**[5](index=5&type=chunk)[6](index=6&type=chunk) - As of June 30, 2025, the loan portfolio was supported by a highly diversified alternative asset collateral portfolio, spanning approximately **200 private market funds** and **590 investments** across various asset classes, industry sectors, and geographies[7](index=7&type=chunk) Fair Value of Investments and Net Loan Portfolio | Metric | As of June 30, 2025 | As of Prior Fiscal Year End | | :----------------------------------- | :------------------ | :-------------------------- | | Fair Value of Investments (Collateral) | $263.8 million | $291.4 million | | Net Loan Portfolio | $230.7 million | $244.1 million | - Reported investments for June 30, 2025, include three additional primary capital transactions with an initial aggregate value of **$11.8 million**[5](index=5&type=chunk) - The collateral for the Company's ExAlt loan portfolio is expected to increase by more than **$11.7 million** of interests in alternative assets due to three new primary capital transactions entered into during the fiscal 2026 first quarter[5](index=5&type=chunk) - Asset sales of certain investments held by Customer ExAlt Trusts generated **$38.1 million** in gross proceeds, used to pay down debt and provide working capital[5](index=5&type=chunk) Loan Balance Breakdown | Metric | As of June 30, 2025 | | :----------------------------------- | :------------------ | | Total Gross Loan Balance | $583.4 million | | Total Allowance for Credit Losses | $352.7 million | | Loan Balance Net of Allowance for Credit Losses | $230.7 million | [Financial Results](index=3&type=section&id=3.%20Financial%20Results) Beneficient reported a consolidated GAAP revenue of $(12.6) million and a net loss of $(65.1) million for Q1 Fiscal 2026, with total assets decreasing and liabilities increasing, while segment performance varied [Consolidated Fiscal First Quarter Results](index=3&type=section&id=3.1.%20Consolidated%20Fiscal%20First%20Quarter%20Results) Beneficient reported a consolidated GAAP revenue of $(12.6) million and a net loss attributable to common shareholders of $(65.1) million for Q1 Fiscal 2026. Total assets decreased by 5.7% to $334.5 million, while total liabilities increased to $364.4 million [Consolidated Income Statement](index=3&type=section&id=3.1.1.%20Consolidated%20Income%20Statement) The consolidated income statement for Q1 Fiscal 2026 shows GAAP revenues of $(12.6) million and a net loss attributable to common shareholders of $(65.1) million Consolidated Income Statement Metrics | Metric | Fiscal 1Q26 (June 30, 2025) (in thousands) | Fiscal 4Q25 (March 31, 2025) (in thousands) | Fiscal 1Q25 (June 30, 2024) (in thousands) | Change % vs. Prior Quarter | | :------------------------------------------ | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------- | | GAAP Revenues | $(12,623) | $(30,969) | $10,046 | 59.2% | | Adjusted Revenues | $(12,622) | $(30,963) | $10,411 | 59.2% | | GAAP Operating Income (Loss) | $(92,648) | $(45,295) | $44,338 | NM | | Adjusted Operating Income (Loss) | $(25,438) | $(42,945) | $(4,725) | 40.8% | | Basic Class A EPS | $(7.19) | $12.11 | NM | NM | | Diluted Class A EPS | $(7.19) | $0.17 | NM | NM | Consolidated Income Statement Summary | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Total revenues | $(12,623) | $10,046 | | Total operating expenses | $80,025 | $(34,292) | | Net income (loss) before income taxes | $(92,648) | $44,338 | | Net income (loss) attributable to Beneficient common shareholders | $(65,076) | $47,667 | | Class A - basic EPS | $(7.19) | $12.11 | | Class A - diluted EPS | $(7.19) | $0.17 | - Operating expenses for Fiscal 1Q26 were **$80.0 million**, including a **$62.8 million** loss contingency accrual, compared to **$(34.3) million** in Fiscal 1Q25, which included a **$(55.0) million** release of loss contingency accrual and a **$3.4 million** goodwill impairment[5](index=5&type=chunk) - Excluding non-cash goodwill impairment and loss contingency accruals/releases, operating expenses declined **1%** to **$17.2 million** in Fiscal 1Q26 from **$17.3 million** in Fiscal 1Q25[5](index=5&type=chunk) [Consolidated Balance Sheet](index=4&type=section&id=3.1.2.%20Consolidated%20Balance%20Sheet) The consolidated balance sheet as of June 30, 2025, indicates total assets of $334.5 million and total liabilities of $364.4 million, with a significant equity deficit Consolidated Balance Sheet Assets | Metric | As of June 30, 2025 (in thousands) | As of March 31, 2025 (in thousands) | Change % | | :--------------------------- | :--------------------------------- | :---------------------------------- | :------- | | Investments, at Fair Value | $263,769 | $291,371 | (9.5)% | | All Other Assets | $57,723 | $50,490 | 14.3% | | Goodwill and Intangible Assets, Net | $13,014 | $13,014 | —% | | Total Assets | $334,506 | $354,875 | (5.7)% | Consolidated Balance Sheet Liabilities and Equity | Metric | As of June 30, 2025 (in thousands) | As of March 31, 2025 (in thousands) | | :--------------------------- | :--------------------------------- | :---------------------------------- | | Cash and cash equivalents | $7,612 | $1,346 | | Total liabilities | $364,377 | $299,274 | | Total equity (deficit) | $(120,397) | $(34,925) | [Business Segment Financial Performance (Attributable to Ben's Equity Holders)](index=4&type=section&id=3.2.%20Business%20Segment%20Financial%20Performance%20(Attributable%20to%20Ben's%20Equity%20Holders)) Segment revenues attributable to Ben's equity holders decreased by 8.4% quarter-over-quarter to $13.1 million. Ben Liquidity saw a revenue increase, while Ben Custody and Corporate & Other experienced declines. Total segment operating loss significantly widened to $(76.4) million [Segment Revenues](index=4&type=section&id=3.2.1.%20Segment%20Revenues) Total segment revenues attributable to Ben's equity holders decreased by 8.4% to $13.1 million, with Ben Liquidity revenues increasing and Ben Custody and Corporate & Other revenues declining Segment Revenues Attributable to Ben's Equity Holders | Segment | Fiscal 1Q26 (June 30, 2025) (in thousands) | Fiscal 4Q25 (March 31, 2025) (in thousands) | Fiscal 1Q25 (June 30, 2024) (in thousands) | Change % vs. Prior Quarter | | :---------------------------- | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------- | | Ben Liquidity | $8,837 | $8,459 | $10,849 | 4.5% | | Ben Custody | $4,183 | $5,396 | $5,382 | (22.5)% | | Corporate & Other | $38 | $398 | $4 | (90.5)% | | Total Segment Revenues Attributable to Ben's Equity Holders | $13,058 | $14,253 | $16,235 | (8.4)% | - Revenues applicable to Ben Custody were **$4.2 million** for Fiscal 1Q26, a decrease from **$5.4 million** in Fiscal 4Q25, primarily due to lower NAV of alternative assets held in custody at the beginning of the period[17](index=17&type=chunk) [Segment Operating Income (Loss)](index=4&type=section&id=3.2.2.%20Segment%20Operating%20Income%20(Loss)) Total segment operating loss attributable to Ben's equity holders significantly widened to $(76.4) million, driven by a substantial loss in Corporate & Other, despite an improved operating loss in Ben Liquidity Segment Operating Income (Loss) Attributable to Ben's Equity Holders | Segment | Fiscal 1Q26 (June 30, 2025) (in thousands) | Fiscal 4Q25 (March 31, 2025) (in thousands) | Fiscal 1Q25 (June 30, 2024) (in thousands) | Change % vs. Prior Quarter | | :---------------------------- | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------- | | Ben Liquidity | $(6,015) | $(12,340) | $(514) | 51.3% | | Ben Custody | $3,128 | $4,165 | $1,287 | (24.9)% | | Corporate & Other | $(73,549) | $(8,487) | $44,091 | NM | | Total Segment Operating Income (Loss) Attributable to Ben's Equity Holders | $(76,436) | $(16,662) | $44,864 | NM | Adjusted Segment Operating Income (Loss) Attributable to Ben's Equity Holders | Segment | Fiscal 1Q26 (June 30, 2025) (in thousands) | Fiscal 4Q25 (March 31, 2025) (in thousands) | Fiscal 1Q25 (June 30, 2024) (in thousands) | Change % vs. Prior Quarter | | :---------------------------- | :----------------------------------------- | :---------------------------------------- | :---------------------------------------- | :------------------------- | | Adjusted Ben Liquidity | $(6,015) | $(12,340) | $(509) | 51.3% | | Adjusted Ben Custody | $3,128 | $4,632 | $4,416 | (32.5)% | | Adjusted Corporate & Other | $(6,340) | $(6,143) | $(8,459) | (3.2)% | | Total Adjusted Segment Operating Income (Loss) Attributable to Ben's Equity Holders | $(9,227) | $(13,851) | $(4,552) | 33.4% | - Ben Custody's operating income decreased to **$3.1 million** from **$4.2 million** in the prior quarter, mainly due to declining revenues and increased employee and professional services expenses, partially offset by intersegment credit losses[17](index=17&type=chunk) [Capital and Liquidity](index=3&type=section&id=3.3.%20Capital%20and%20Liquidity) As of June 30, 2025, Beneficient held $7.6 million in cash and cash equivalents and had total debt of $108.4 million, supported by distributions from alternative assets and proceeds from asset dispositions Cash and Debt | Metric | As of June 30, 2025 | | :--------------------------- | :------------------ | | Cash and cash equivalents | $7.6 million | | Total debt | $108.4 million | Distributions and Proceeds | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Distributions received from alternative assets | $3.7 million | $7.2 million | | Proceeds from disposition of certain investments | $24.1 million | N/A | - Total investments (at fair value) of **$263.8 million** at June 30, 2025, supported Ben Liquidity's loan portfolio[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=9&type=section&id=4.%20Non-GAAP%20Financial%20Measures) Beneficient provides non-GAAP financial measures, including Adjusted Revenues and Adjusted Operating Income (Loss), to offer insights into underlying business trends and recurring core operating results, with detailed reconciliations and definitions [Non-GAAP Reconciliations](index=9&type=section&id=4.1.%20Non-GAAP%20Reconciliations) Beneficient provides detailed reconciliations for its non-GAAP financial measures, including Adjusted Revenues and Adjusted Operating Income (Loss), to their most directly comparable GAAP measures across consolidated and segment levels for the reported periods Consolidated Non-GAAP Reconciliation (Three Months Ended June 30, 2025) | Metric | Consolidated (in thousands) | | :------------------------------------------ | :-------------------------- | | Total revenues (GAAP) | $(12,623) | | Mark to market adjustment on interests in GWG Wind Down Trust | $1 | | Adjusted revenues | $(12,622) | | Operating income (loss) (GAAP) | $(92,648) | | Mark to market adjustment on interests in GWG Wind Down Trust | $1 | | Accrual (release) of loss contingency related to arbitration award | $62,831 | | Share-based compensation expense | $461 | | Legal and professional fees | $3,917 | | Adjusted operating income (loss) | $(25,438) | Consolidated Non-GAAP Reconciliation (Three Months Ended March 31, 2025) | Metric | Consolidated (in thousands) | | :------------------------------------------ | :-------------------------- | | Total revenues (GAAP) | $(30,969) | | Mark to market adjustment on interests in GWG Wind Down Trust | $6 | | Adjusted revenues | $(30,963) | | Operating income (loss) (GAAP) | $(45,295) | | Mark to market adjustment on interests in GWG Wind Down Trust | $6 | | Share-based compensation expense | $487 | | Legal and professional fees | $1,857 | | Adjusted operating income (loss) | $(42,945) | Consolidated Non-GAAP Reconciliation (Three Months Ended June 30, 2024) | Metric | Consolidated (in thousands) | | :------------------------------------------ | :-------------------------- | | Total revenues (GAAP) | $10,046 | | Mark to market adjustment on interests in GWG Wind Down Trust | $365 | | Adjusted revenues | $10,411 | | Operating income (loss) (GAAP) | $44,338 | | Mark to market adjustment on interests in GWG Wind Down Trust | $365 | | Goodwill impairment | $3,394 | | Accrual (release) of loss contingency related to arbitration award | $(54,973) | | Share-based compensation expense | $994 | | Legal and professional fees | $1,157 | | Adjusted operating income (loss) | $(4,725) | [Non-GAAP Definitions and Limitations](index=11&type=section&id=4.2.%20Non-GAAP%20Definitions%20and%20Limitations) Beneficient uses non-GAAP financial measures like Adjusted Revenues and Adjusted Operating Income (Loss) to provide insights into underlying business trends and recurring core business operating results. These measures exclude specific non-recurring or non-cash items but are not substitutes for GAAP measures and have limitations regarding liquidity assessment - Non-GAAP financial measures are presented to help investors understand underlying business trends and facilitate period-to-period comparison of recurring core business operating results[39](index=39&type=chunk) - Adjusted revenue excludes the effect of mark-to-market adjustments on related party equity securities, specifically interests in the GWG Wind Down Trust[40](index=40&type=chunk) - Adjusted operating income (loss) adjusts GAAP operating income (loss) for revenue adjustments, credit losses on related party debt securities, non-cash asset impairment, share-based compensation, and specific legal/professional fees related to bankruptcy, lawsuits, and arbitration[41](index=41&type=chunk) - These non-GAAP measures are not GAAP performance or liquidity measures, are unaudited, and should not be considered alternatives or more meaningful than GAAP revenues or operating income (loss)[42](index=42&type=chunk) - They do not reflect significant cash flow uses like capital expenditures, interest payments, or debt repayments[42](index=42&type=chunk) [Corporate Information](index=6&type=section&id=5.%20Corporate%20Information) This section provides information on Beneficient's investor relations activities and important legal disclaimers regarding forward-looking statements and securities offerings [Investor Relations](index=6&type=section&id=5.1.%20Investor%20Relations) Beneficient plans to host an investor webcast and conference call to update on company performance, strategy, and transactions. Contact information for investor inquiries is provided - Beneficient expects to host a webcast and conference call in the coming weeks to provide investors with an update on the Company's performance, strategy, and transactions[29](index=29&type=chunk) [Legal Disclaimers and Forward-Looking Statements](index=6&type=section&id=5.2.%20Legal%20Disclaimers%20and%20Forward-Looking%20Statements) The communication is for informational purposes only and does not constitute an offer of securities. It contains forward-looking statements subject to risks and uncertainties, including the ability to consummate liquidity transactions, regain Nasdaq compliance, and obtain stockholder approval for a reverse stock split. The company disclaims any obligation to update these statements - The information provided is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities[32](index=32&type=chunk) - The press release contains forward-looking statements regarding demand for solutions, market growth, transaction negotiation, loan portfolio diversification, and shareholder value, identified by words like 'anticipate,' 'expect,' 'plan,' and 'will'[33](index=33&type=chunk) - These forward-looking statements are subject to risks and uncertainties, including the ability to consummate liquidity transactions, timely demonstrate Nasdaq bid price compliance, regain Nasdaq stockholders' equity requirement compliance, cure other Nasdaq Listing Rule deficiencies, and obtain stockholder approval for a reverse stock split[33](index=33&type=chunk) - The company expressly disclaims any obligation to publicly update or review any forward-looking statements, except as required by applicable law[33](index=33&type=chunk)

FORM 10-Q Filing Information [Filing Details](index=1&type=section&id=Filing%20Details) Beneficient, a Nevada corporation, filed its Form 10-Q for Q2 2025, trading on Nasdaq as BENF/BENFW, and is classified as a non-accelerated filer, smaller reporting, and emerging growth company - Beneficient is a Nevada corporation, filing a Quarterly Report on Form 10-Q for the period ended **June 30, 2025**[2](index=2&type=chunk) Trading Information | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :-------------------------------------------------------------------------------------------------------------- | :---------------- | :---------------------------------------- | | 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 | Filer Status | Large accelerated filer | ☐ | Accelerated filer | ☐ | | :---------------------- | :-- | :-------------------- | :-- | | Non-accelerated filer | ☒ | Smaller reporting company | ☒ | | | | Emerging growth company | ☒ | [Explanatory Note](index=3&type=section&id=Explanatory%20Note) The company executed an **80-to-1 reverse stock split** on April 18, 2024, to maintain Nasdaq listing, with all share and per share amounts retroactively adjusted - The Company effected an **80-to-1 reverse stock split** of its Common Stock, effective **April 18, 2024**, to maintain its Nasdaq listing, with all share and per share amounts retroactively adjusted[9](index=9&type=chunk) [Summary of Risk Factors](index=3&type=section&id=Summary%20of%20Risk%20Factors) Beneficient faces significant risks including limited operating history, fair value estimation inaccuracies, Nasdaq non-compliance, HCLP loan defaults, former CEO conflicts, and a material weakness in internal controls, raising substantial doubt about its going concern ability - Key risks include lack of significant operating history, potential inaccuracies in fair value estimates of illiquid assets, and ongoing non-compliance with Nasdaq listing requirements[11](index=11&type=chunk) - The company has been notified of events of default on the HCLP Loan Agreement and is subject to litigation, with attempts by HCLP to secure collateral[11](index=11&type=chunk) - A material weakness in internal control over financial reporting was identified but has been remediated as of **June 30, 2025**, with failure to maintain effective controls potentially impacting financial condition and stock price[11](index=11&type=chunk) - Current inability to raise sufficient capital, recurring losses, negative cash flows, existing debt defaults, and an arbitration award raise substantial doubt about the company's ability to continue as a going concern[12](index=12&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents Beneficient's unaudited consolidated financial statements for Q2 2025, highlighting a decrease in total assets to **$334.5 million**, an increase in total liabilities to **$364.4 million**, a net loss of **$92.6 million**, and an accumulated deficit of **$2.07 billion** Consolidated Statements of Financial Condition (June 30, 2025 vs. March 31, 2025) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | | :--------------------------------- | :------------ | :------------- | | **ASSETS** | | | | Cash and cash equivalents | $7,612 | $1,346 | | Investments, at fair value | 263,769 | 291,371 | | Total assets | $334,506 | $354,875 | | **LIABILITIES, TEMPORARY EQUITY, AND EQUITY (DEFICIT)** | | | | Total liabilities | 364,377 | 299,274 | | Total temporary equity | 90,526 | 90,526 | | Total equity (deficit) | (120,397) | (34,925) | | Total liabilities, temporary equity, and equity (deficit) | $334,506 | $354,875 | Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands, except per share amounts) | 2025 | 2024 | | :----------------------------------------------- | :------------ | :------------ | | Total revenues | $(12,623) | $10,046 | | Total operating expenses | 80,025 | (34,292) | | Net income (loss) before income taxes | $(92,648) | $44,338 | | Net income (loss) | $(92,648) | $44,310 | | Net income (loss) attributable to Beneficient common shareholders | $(65,076) | $47,667 | | Class A - basic EPS | $(7.19) | $12.11 | | Class A - diluted EPS | $(7.19) | $0.17 | Consolidated Statements of Cash Flows (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands) | 2025 | 2024 | | :----------------------------------------- | :------------ | :------------ | | Net cash used in operating activities | $(10,836) | $(10,647) | | Net cash provided by investing activities | 26,455 | 6,392 | | Net cash (used in) provided by financing activities | (9,353) | 991 | | Net increase (decrease) in cash and cash equivalents | 6,266 | (3,264) | | Cash and cash equivalents at end of period | $7,612 | $4,713 | [1. Overview of the Business](index=12&type=section&id=1.%20Overview%20of%20the%20Business) Beneficient is a technology-enabled financial services holding company providing liquidity and trust services for alternative assets, but faces significant going concern doubts due to recurring losses, debt defaults, and an arbitration award - Beneficient provides liquidity solutions and trust products/services to the alternative assets industry through its online platform, Ben AltAccess, targeting MHNW individuals, STMI investors, FAMOs, and GPs[34](index=34&type=chunk)[35](index=35&type=chunk) - Ben Liquidity offers proprietary ExAlt Plan financings, making ExAlt Loans to Customer ExAlt Trusts collateralized by alternative assets, while Ben Custody provides trust and custody administration services[37](index=37&type=chunk)[38](index=38&type=chunk) - The company has historically generated net losses, resulting in an accumulated deficit of **$2.1 billion** as of **June 30, 2025**, and faces substantial doubt about its ability to continue as a going concern due to outstanding obligations, debt defaults, and a confirmed arbitration award[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - A **1-for-80 reverse stock split** was effective **April 18, 2024**, to regain compliance with Nasdaq's minimum bid price requirement[53](index=53&type=chunk)[54](index=54&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Beneficient's U.S. GAAP consolidated financial statements include subsidiaries and Customer ExAlt Trusts (VIEs), with intercompany eliminations impacting income allocation, and rely on significant estimates for fair value, credit losses, and contingencies - Consolidated financial statements include Ben, its subsidiaries, and Customer ExAlt Trusts (VIEs) where Ben is the primary beneficiary, with intercompany transactions eliminated for financial reporting but impacting income allocation to equity holders[61](index=61&type=chunk)[64](index=64&type=chunk) - Key estimates include fair value of alternative asset investments, allowance for credit losses, income/loss allocation to equity holders, legal loss contingencies, and goodwill impairment[66](index=66&type=chunk) - Adopted ASU **2023-07** (Segment Reporting) for the annual period beginning **April 1, 2024**, with no material impact, and is assessing ASU **2024-03** (Expense Disaggregation) and ASU **2023-09** (Income Tax Disclosures) for future periods[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk) [3. Understanding our Financial Statements and the Impact to the Common Shareholder](index=18&type=section&id=3.%20Understanding%20our%20Financial%20Statements%20and%20the%20Impact%20to%20the%20Common%20Shareholder) Consolidated financial statements include Customer ExAlt Trusts as VIEs, where their investment income/losses are allocated to noncontrolling interests, while Ben Liquidity and Ben Custody's intercompany interest and fee income directly impact net income attributable to Beneficient's and BCH's equity holders - Customer ExAlt Trusts are consolidated VIEs, but their investment income/loss and financial instrument gains/losses are allocated to noncontrolling interests and do not directly impact net income attributable to Beneficient's common shareholders[72](index=72&type=chunk)[73](index=73&type=chunk) - Interest and fee income earned by Ben Liquidity and Ben Custody from Customer ExAlt Trusts, though eliminated in consolidation, directly impact net income attributable to Ben's and BCH's equity holders[74](index=74&type=chunk) Ben Liquidity and Ben Custody Revenue (Three Months Ended June 30, 2025 vs. 2024) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------------- | :------------------ | :------------------ | | Ben Liquidity interest income | $8,800 | $10,800 | | Ben Custody trust services & administration | $4,200 | $5,400 | [4. De-SPAC Merger Transaction](index=19&type=section&id=4.%20De-SPAC%20Merger%20Transaction) The de-SPAC merger with Avalon Acquisition, Inc. completed on June 7, 2023, involved a Forward Purchase Agreement, BCG recapitalization, and conversion of Avalon securities into Beneficient's Class A common stock, Series A preferred stock, and Warrants, with Beneficient as the accounting acquirer - The company completed its de-SPAC merger transaction with Avalon Acquisition, Inc. on **June 7, 2023**, with Beneficient treated as the accounting acquirer[32](index=32&type=chunk)[92](index=92&type=chunk) - The transaction involved a Forward Purchase Agreement, BCG Recapitalization, and conversion of Avalon securities into Beneficient Class A common stock, Series A preferred stock, and Warrants[80](index=80&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk) Shares and Warrants Issued Post-Business Combination | Security Type | Shares/Warrants Issued | | :------------------------ | :--------------------- | | Class A common stock | 2,367,244 | | Class B common stock | 239,256 | | Warrants | 23,757,500 | - As of **June 30, 2025**, and **March 31, 2025**, there were **24,699,725 Warrants** outstanding with a fair value of **$0.2 million**, classified as a liability[98](index=98&type=chunk) [5. Investments, at Fair Value](index=22&type=section&id=5.%20Investments,%20at%20Fair%20Value) Investments held by Customer ExAlt Trusts, primarily alternative assets, totaled **$263.8 million** as of June 30, 2025, a decrease from **$291.4 million** due to dispositions and NAV adjustments, with the diversified portfolio concentrated in private equity and venture capital Composition of Investments, at Fair Value (in thousands) | Investment Type | June 30, 2025 | March 31, 2025 | | :-------------------------------- | :------------ | :------------- | | Alternative assets | $231,586 | $259,113 | | Public equity securities | 3,995 | 4,065 | | Debt securities available-for-sale | 1,687 | 1,687 | | Other equity securities and interests | 26,501 | 26,506 | | **Total investments, at fair value** | **$263,769** | **$291,371** | - The decrease in alternative assets by **$27.6 million** since **March 31, 2025**, was due to dispositions, distributions, and downward NAV adjustments, partially offset by **$11.8 million** in new originations[100](index=100&type=chunk) Alternative Investments Portfolio Summary by Asset Class (June 30, 2025 vs. March 31, 2025) | Asset Class | June 30, 2025 Carrying Value (in thousands) | March 31, 2025 Carrying Value (in thousands) | | :---------------- | :---------------------------------------- | :----------------------------------------- | | Private Equity | $114,895 | $120,008 | | Venture Capital | 89,260 | 109,361 | | Natural Resources | 12,201 | 12,691 | | Private Real Estate | 6,978 | 6,454 | | Hedge Funds | 3,572 | 3,931 | | Other | 4,680 | 6,668 | | **Total** | **$231,586** | **$259,113** | - As of **June 30, 2025**, the portfolio had exposure to **204 alternative asset investment funds**, with **91%** in private companies[103](index=103&type=chunk) [6. Fair Value Measurements](index=24&type=section&id=6.%20Fair%20Value%20Measurements) Fair value measurements categorize financial instruments into Level 1, 2, and 3, with **$231.6 million** in NAV-valued investments excluded, resulting in a **$12.8 million** loss for Q2 2025, and a **$3.4 million** goodwill impairment charge recognized in Q1 fiscal 2025 - Fair value measurements are based on a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[112](index=112&type=chunk)[117](index=117&type=chunk) - Investments valued using NAV as a practical expedient totaled **$231.6 million** as of **June 30, 2025**, and resulted in a **$12.8 million** loss for the three months ended **June 30, 2025**[114](index=114&type=chunk) Financial Instruments at Fair Value (June 30, 2025) | (Dollars in thousands) | Level 1 | Level 2 | Level 3 | Total | | :--------------------------------- | :------ | :------ | :------ | :------ | | **Assets:** | | | | | | Public equity securities | $3,995 | $— | $— | $3,995 | | Other equity interests | — | 4 | — | 4 | | Debt securities available-for-sale, other | — | — | 1,687 | 1,687 | | **Liabilities:** | | | | | | Warrants liability | 170 | 27 | — | 197 | - A non-cash goodwill impairment charge of **$3.4 million** was recognized during the three months ended **June 30, 2024**, due to a significant decline in Class A common stock price and market capitalization, with no impairment required for the three months ended **June 30, 2025**[124](index=124&type=chunk) [7. Debt](index=28&type=section&id=7.%20Debt) Beneficient issued up to **$4.0 million** in convertible debentures and warrants to Yorkville in August 2024, with debentures fully repaid by February 2025, while Yorkville Warrants, classified as a liability, have a nominal fair value as of June 30, 2025 - In **August 2024**, Beneficient issued up to **$4.0 million** in convertible debentures and warrants to Yorkville, with the debentures fully repaid by their **February 2025** maturity[129](index=129&type=chunk)[130](index=130&type=chunk) - The Yorkville Warrants, exercisable for Class A common stock at **$2.63 per share**, are classified as a liability and measured at fair value using the Black-Scholes model, with a nominal fair value as of **June 30, 2025**[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [8. Debt Due to Related Parties](index=29&type=section&id=8.%20Debt%20Due%20to%20Related%20Parties) Beneficient's debt due to related parties totaled **$108.4 million** as of June 30, 2025, including HCLP First and Second Lien Credit Agreements in default for **$94.5 million** principal and **$21.2 million** accrued interest, which the company is challenging due to alleged document fabrication Debt Due to Related Parties (in thousands) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | | :---------------------------- | :------------ | :------------- | | First Lien Credit Agreement | $21,260 | $21,260 | | Second Lien Credit Agreement | 72,983 | 72,983 | | Term Loan | 12,376 | 22,000 | | Other borrowings | 2,321 | 2,292 | | Unamortized debt discount, net | (547) | (639) | | **Total debt due to related parties** | **$108,393** | **$117,896** | - HCLP declared events of default on the First and Second Lien Credit Agreements, demanding immediate payment of approximately **$94.5 million** principal and **$21.2 million** accrued interest as of **June 30, 2025**, with the company evaluating the validity of these obligations due to alleged document fabrication by the former CEO[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) - The HH-BDH Credit Agreement (Term Loan) has experienced defaults on payment obligations, financial covenants, and reporting requirements, triggering a cross-default provision due to the HCLP default, with ongoing negotiations for waivers and amendments[159](index=159&type=chunk)[160](index=160&type=chunk) Aggregate Maturities of Principal on Debt Due to Related Parties (in thousands) | Fiscal Year Ending March 31 | Debt Due to Related Parties | | :-------------------------- | :-------------------------- | | 2026 | $108,940 | | 2027 | — | | 2028 | — | | 2029 | — | | 2030 | — | [9. Share-based Compensation](index=33&type=section&id=9.%20Share-based%20Compensation) Beneficient's share-based awards under the BMP Equity Incentive Plan and 2023 Long Term Incentive Plan were retroactively adjusted for the **1-for-80 reverse stock split**, resulting in a **$0.5 million** share-based compensation expense for Q2 2025, with **$2.1 million** in unrecognized expense remaining - Share-based awards under the BMP Equity Incentive Plan and **2023 Incentive Plan** were retroactively adjusted for the **1-for-80 reverse stock split**[163](index=163&type=chunk) - The **2023 Incentive Plan** allows for grants of RSUs, stock options, and other awards, with vesting typically over a multi-year period[172](index=172&type=chunk)[173](index=173&type=chunk) Share-based Compensation Expense (Three Months Ended June 30, 2025 vs. 2024) | (dollars in thousands) | 2025 | 2024 | | :-------------------------- | :--- | :--- | | BMP equity units | $66 | $113 | | Restricted stock units | 373 | 832 | | Other | 22 | 49 | | **Total share-based compensation** | **$461** | **$994** | - Unrecognized share-based compensation expense totaled **$2.1 million** as of **June 30, 2025**, expected to be recognized over the next five fiscal years[178](index=178&type=chunk) [10. Equity](index=35&type=section&id=10.%20Equity) Beneficient's equity structure comprises Class A and B common stock, Series A and B preferred stock, and various noncontrolling interests in BCH and Customer ExAlt Trusts, with Class B common stock carrying **10 votes per share**, and a Standby Equity Purchase Agreement with Yorkville allowing sales of up to **$250 million** of Class A common stock - Class A common stock has **one vote per share**, while Class B common stock has **10 votes per share**, with both classes voting as a single class on most matters[180](index=180&type=chunk) - The company has a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing it to sell up to **$250.0 million** of Class A common stock, with approximately **$240.7 million** remaining available as of **June 30, 2025**[183](index=183&type=chunk)[184](index=184&type=chunk)[46](index=46&type=chunk) - BCH Preferred A-0 receives a quarterly guaranteed payment of **1.50%** of its initial capital balance and has redemption rights, with a portion re-designated as non-redeemable in **September and November 2024**[201](index=201&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) Noncontrolling Interests Rollforward (Three Months Ended June 30, 2025) | (Dollars in thousands) | Trusts | FLP | BCH Preferred Series A-0 Non Redeemable | BCH Preferred Series A-1 | Total Noncontrolling Interests | | :--------------------------------------------------- | :---------- | :-- | :-------------------------------------- | :----------------------- | :----------------------------- | | Balance, March 31, 2025 | $(201,518) | $— | $160,526 | $173,068 | $132,076 | | Net income (loss) | (16,212) | (189) | 2,957 | (15,795) | (29,239) | | Preferred A-0 Unit Accounts guaranteed payment accrual | — | — | (2,957) | — | (2,957) | | Reclass of distributions payable to noncontrolling interest holder | (921) | — | — | — | (921) | | Issuance of equity in connection with recent financings | 295 | — | — | — | 295 | | Miscellaneous adjustment to previously allocated FLP Subclass 3 income | — | 189 | — | — | 189 | | **Balance, June 30, 2025** | **$(218,356)** | **$—** | **$160,526** | **$157,273** | **$99,443** | [11. Net Income (Loss) per Share](index=42&type=section&id=11.%20Net%20Income%20(Loss)%20per%20Share) For Q2 2025, Beneficient reported a net loss attributable to common shareholders of **$(65.1) million**, resulting in basic and diluted EPS of **$(7.19)** for both Class A and Class B common stock, with diluted EPS equal to basic due to the net loss Net Income (Loss) Attributable to Beneficient Common Shareholders (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands, except per share amounts) | 2025 | 2024 | | :----------------------------------------------- | :------------ | :------------ | | Net income (loss) attributable to Beneficient common shareholders | $(65,076) | $47,667 | | Class A - basic | $(7.19) | $12.11 | | Class B - basic | $(7.19) | $12.11 | | Class A - diluted | $(7.19) | $0.17 | | Class B - diluted | $(7.19) | $0.17 | - For **Q2 2025**, diluted EPS for common shareholders was the same as basic EPS due to the net loss position[235](index=235&type=chunk) Anti-Dilutive Shares Not Recognized (Three Months Ended June 30, 2025 vs. 2024) | Shares | 2025 | 2024 | | :-------------------------- | :------------ | :------------ | | Series B Preferred Stock | 34,410,774 | — | | Preferred Series A Subclass 0 | 833,557,399 | — | | Preferred Series A Subclass 1 | 2,682,497,381 | — | | Warrants | 26,025,107 | 30,874,686 | | **Total anti-dilutive shares** | **3,577,945,953** | **31,003,688** | [12. Income Taxes](index=44&type=section&id=12.%20Income%20Taxes) Beneficient reported no income tax expense for Q2 2025, compared to **$28 thousand** in the same period of 2024 Income Tax Expense (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands) | 2025 | 2024 | | :--------------------- | :--- | :--- | | Current expense | $— | $28 | | Deferred expense | — | — | | **Income tax expense** | **$—** | **$28** | [13. Related Parties](index=44&type=section&id=13.%20Related%20Parties) Beneficient has extensive related party transactions with its former CEO, Mr. Heppner, and his controlled entities, including **$0.6 million** in services agreement expenses and **$10.8 million** accrued for an expired aircraft sublease, while evaluating the validity of HCLP loan obligations due to alleged document fabrication - Related parties include employees, directors, and entities directly or indirectly controlled by or benefiting Mr. Heppner, the former CEO and Chairman[239](index=239&type=chunk) - Expenses from the services agreement with Bradley Capital (a Related Entity) were **$0.6 million** for the three months ended **June 30, 2025**, with **$4.5 million** owed as of that date[245](index=245&type=chunk)[542](index=542&type=chunk) - An expired aircraft sublease with Bradley Capital has **$10.8 million** in accrued costs as of **June 30, 2025**, reflected in accounts payable[248](index=248&type=chunk) - The company incurred approximately **$1.9 million** in legal fees on behalf of Mr. Heppner for the three months ended **June 30, 2025**, under indemnification provisions, with most expected to be covered by D&O insurance[246](index=246&type=chunk) - Beneficient is evaluating the validity of its HCLP Loan Agreement obligations and liens due to credible evidence that Mr. Heppner participated in fabricating and delivering fake documents regarding his relationship to HCLP[256](index=256&type=chunk)[257](index=257&type=chunk) [14. Variable Interest Entities](index=49&type=section&id=14.%20Variable%20Interest%20Entities) Beneficient consolidates CT Risk Management, L.L.C. and Customer ExAlt Trusts as VIEs, with their assets restricted to settling their own obligations, and as of June 30, 2025, Customer ExAlt Trusts held **$265.0 million** in total assets and **$3.5 million** in total liabilities - Beneficient consolidates CT Risk Management, L.L.C. (CT) and Customer ExAlt Trusts as Variable Interest Entities (VIEs) because it is deemed the primary beneficiary, having the power to direct significant activities and absorb potential losses[274](index=274&type=chunk)[276](index=276&type=chunk)[278](index=278&type=chunk) - Assets of Customer ExAlt Trusts are restricted to settling their own obligations, and there is no recourse to Beneficient for their liabilities, except for potentially funding capital calls[278](index=278&type=chunk) Consolidated VIEs Financial Condition (Dollars in thousands) | (Dollars in thousands) | June 30, 2025 | March 31, 2025 | | :--------------------------------- | :------------ | :------------- | | **Assets:** | | | | Cash and cash equivalents | $1,165 | $717 | | Investments, at fair value | 263,769 | 291,371 | | Other assets | 50 | 378 | | **Total Assets of VIEs** | **$264,984** | **$292,466** | | **Liabilities:** | | | | Accounts payable and accrued expense | $3,515 | $3,107 | | Other liabilities | — | 95 | | **Total Liabilities of VIEs** | **$3,515** | **$3,202** | Consolidated VIEs Comprehensive Income (Loss) (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands) | 2025 | 2024 | | :-------------------------------------- | :------------ | :------------ | | Total revenues | $(12,851) | $9,853 | | Total operating expenses | 801 | 1,265 | | Net income (loss) | $(13,652) | $8,588 | | Net income (loss) attributable to noncontrolling interests | $(16,212) | $(526) | [15. Segment Reporting](index=51&type=section&id=15.%20Segment%20Reporting) Beneficient operates three reportable segments: Ben Liquidity, Ben Custody, and Customer ExAlt Trusts, with intersegment transactions eliminated in consolidation but impacting income allocation to equity holders, and the CEO assessing performance on an unconsolidated basis - Beneficient has three reportable segments: Ben Liquidity, Ben Custody, and Customer ExAlt Trusts, with the Corporate & Other category including unallocated overhead, equity-based compensation, and operations of Ben Insurance Services and Ben Markets[281](index=281&type=chunk)[283](index=283&type=chunk)[285](index=285&type=chunk) - Intersegment transactions between operating subsidiaries and Customer ExAlt Trusts are eliminated in consolidated financial statements but directly impact income allocation to Ben's and BCH's equity holders[282](index=282&type=chunk) Segment Operating Income (Loss) (Three Months Ended June 30, 2025) | (in thousands) | Ben Liquidity | Ben Custody | Customer ExAlt Trusts | Corporate & Other | Consolidating Eliminations | Consolidated | | :---------------------- | :------------ | :---------- | :-------------------- | :---------------- | :------------------------- | :----------- | | Total revenues | $8,837 | $4,183 | $(12,851) | $38 | $(12,830) | $(12,623) | | Total expenses | 14,852 | 1,055 | 41,125 | 73,587 | (50,594) | 80,025 | | **Operating income (loss)** | **$(6,015)** | **$3,128** | **$(53,976)** | **$(73,549)** | **$37,764** | **$(92,648)** | Segment Total Assets (As of June 30, 2025) | (in thousands) | Ben Liquidity | Ben Custody | Customer ExAlt Trusts | Corporate & Other | Consolidating Eliminations | Total Assets | | :------------------------------ | :------------ | :---------- | :-------------------- | :---------------- | :------------------------- | :----------- | | Loans to Customer ExAlt Trusts, net | $230,669 | $— | $— | $— | $(230,669) | $— | | Investments, at fair value | — | — | 263,769 | — | — | 263,769 | | Other assets | 2,651 | 21,241 | 16,063 | 50,582 | (32,814) | 57,723 | | Goodwill and intangible assets, net | — | 7,469 | — | 5,545 | — | 13,014 | | **Total Assets** | **$233,320** | **$28,710** | **$279,832** | **$56,127** | **$(263,483)** | **$334,506** | [16. Risks and Uncertainties](index=54&type=section&id=16.%20Risks%20and%20Uncertainties) Beneficient's investments, primarily alternative assets held by Customer ExAlt Trusts, are exposed to market, credit, currency, and interest rate risks, with the portfolio concentrated in Food and Staples Retailing (**27.6%**) and North America (**47.7%**) as of June 30, 2025, and further impacted by geopolitical conflicts and macroeconomic conditions - Investments held by Customer ExAlt Trusts are exposed to market, credit, currency, and interest rate risks, affecting fair value, monetization, and income recognition[288](index=288&type=chunk) Alternative Asset Portfolio by Industry Sector (June 30, 2025 vs. March 31, 2025) | Industry Sector | June 30, 2025 Value (in thousands) | June 30, 2025 Percent of Total | March 31, 2025 Value (in thousands) | March 31, 2025 Percent of Total | | :------------------------------------ | :--------------------------------- | :----------------------------- | :-------------------------------- | :------------------------------ | | Food and staples retailing | $63,997 | 27.6% | $63,846 | 24.6% | | Software and services | 25,771 | 11.1% | 41,460 | 16.0% | | Diversified financials | 21,889 | 9.5% | 22,273 | 8.6% | | Utilities | 19,719 | 8.5% | 15,432 | 6.0% | | Semiconductors and semiconductor equipment | 15,216 | 6.6% | 15,426 | 6.0% | | Health care equipment and services | 12,145 | 5.2% | 13,464 | 5.2% | | Capital goods | 5,723 | 2.5% | 20,532 | 7.9% | | Other | 67,126 | 29.0% | 66,680 | 25.7% | | **Total** | **$231,586** | **100.0%** | **$259,113** | **100.0%** | Alternative Asset Portfolio by Geography (June 30, 2025 vs. March 31, 2025) | Geography | June 30, 2025 Value (in thousands) | June 30, 2025 Percent of Total | March 31, 2025 Value (in thousands) | March 31, 2025 Percent of Total | | :------------ | :--------------------------------- | :----------------------------- | :-------------------------------- | :------------------------------ | | North America | $110,453 | 47.7% | $135,066 | 52.1% | | South America | 64,657 | 27.9% | 64,969 | 25.1% | | Asia | 39,638 | 17.1% | 41,948 | 16.2% | | Europe | 16,710 | 7.2% | 17,018 | 6.6% | | Africa | 128 | 0.1% | 112 | — | | **Total** | **$231,586** | **100.0%** | **$259,113** | **100.0%** | - Ongoing geopolitical conflicts (Russia-Ukraine, Israel-Hamas) and macroeconomic conditions (inflation, volatile interest rates) could negatively impact the economy, business activity, and the performance of Customer ExAlt Trusts' investments, affecting revenue and net income[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk) [17. Commitments and Contingencies](index=55&type=section&id=17.%20Commitments%20and%20Contingencies) Beneficient has unfunded capital commitments of **$39.2 million** as of June 30, 2025, for alternative asset funds, and is involved in several legal proceedings, including the Paul Capital Advisors lawsuit (up to **$350 million** exposure), a **$62.8 million** arbitration award loss contingency, and GWG Holdings-related litigations with a **$34.5 million** settlement expected to be covered by insurance - Unfunded capital commitments for Customer ExAlt Trusts totaled **$39.2 million** as of **June 30, 2025**, with Ben obligated to lend funds if trusts cannot meet these commitments[299](index=299&type=chunk) - The Paul Capital Advisors lawsuit alleges breaches of contract and fraud, with a maximum potential exposure of up to **$350 million** plus costs and expenses[302](index=302&type=chunk)[305](index=305&type=chunk) - The Texas Fifth Court of Appeals confirmed an arbitration award, leading to a **$62.8 million** loss contingency (including interest and fees) recorded for the three months ended **June 30, 2025**[308](index=308&type=chunk)[309](index=309&type=chunk) - A settlement agreement for GWG Holdings-related litigation was approved by the Bankruptcy Court, with a **$34.5 million** estimated liability and corresponding insurance recovery recorded, expected to be fully funded by insurance proceeds[314](index=314&type=chunk)[315](index=315&type=chunk)[319](index=319&type=chunk)[322](index=322&type=chunk) - The SEC's investigation related to the company concluded on **July 1, 2024**, with no enforcement actions recommended[326](index=326&type=chunk) [18. Supplemental Cash Flow Information](index=61&type=section&id=18.%20Supplemental%20Cash%20Flow%20Information) For Q2 2025, cash paid for taxes was de minimis, and cash paid for interest was **$0.6 million**, with noncash investing and financing activities including **$11.5 million** in Series B preferred stock issuance and a **$4.6 million** accrual for BCH Preferred A-0 guaranteed payment Cash Paid for Taxes and Interest (Three Months Ended June 30, 2025 vs. 2024) | (Dollars in thousands) | 2025 | 2024 | | :--------------------- | :--- | :--- | | Cash paid for taxes | de minimis | de minimis | | Cash paid for interest | $600 | $1,000 | - Noncash investing and financing activities for **Q2 2025** included **$11.5 million** issuance of Series B preferred stock and **$0.3 million** issuance of noncontrolling interest in connection with recent financings, and a **$4.6 million** accrual for BCH Preferred A-0 guaranteed payment[338](index=338&type=chunk) [19. Subsequent Events](index=61&type=section&id=19.%20Subsequent%20Events) Subsequent events include asset sales by Customer ExAlt Trusts totaling approximately **$14.0 million** through October 7, 2025, leadership changes with Thomas O. Hicks elected Chairman and James G. Silk named Interim CEO, and a limited conversion of BCH Preferred A-1 on October 15, 2025, resulting in the issuance of over **101 million** shares of Class A common stock - Asset sales by Customer ExAlt Trusts through **October 7, 2025**, generated approximately **$14.0 million** in gross proceeds, used for beneficiary distributions and loan repayments, including **$5.0 million** to HH-BDH LLC[336](index=336&type=chunk)[337](index=337&type=chunk)[339](index=339&type=chunk) - Thomas O. Hicks was elected Chairman of the Board on **June 30, 2025**, and James G. Silk was named Interim CEO on **July 20, 2025**, following Brad K. Heppner's resignation on **June 19, 2025**[340](index=340&type=chunk) - On **October 15, 2025**, a limited conversion of **$52.6 million** of BCH Preferred A-1 resulted in the issuance of **101,294,288 shares** of Class A common stock[341](index=341&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Beneficient's financial condition and results for Q2 2025, highlighting a consolidated net loss of **$(92.6) million** due to decreased revenues and a **$62.8 million** arbitration award accrual, with significant liquidity concerns raising substantial doubt about its going concern ability - Beneficient is a technology-enabled financial services company providing liquidity solutions and trust services for alternative assets, primarily through Ben Liquidity and Ben Custody[345](index=345&type=chunk)[346](index=346&type=chunk)[348](index=348&type=chunk) Consolidated Revenues (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Investment income (loss), net | $(12,776) | $11,028 | | Gain (loss) on financial instruments, net | (45) | (1,183) | | Interest and dividend income | 10 | 12 | | Trust services and administration revenues | 188 | 189 | | **Total revenues** | **$(12,623)** | **$10,046** | Consolidated Expenses (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------------ | :------------ | :------------ | | Employee compensation and benefits | $3,331 | $3,850 | | Interest expense | 3,415 | 4,288 | | Professional services | 7,957 | 5,544 | | Provision for credit losses | — | 524 | | Loss on impairment of goodwill | — | 3,394 | | Accrual (release) of loss contingency related to arbitration award | 62,831 | (54,973) | | Other expenses | 2,491 | 3,081 | | **Total expenses** | **$80,025** | **$(34,292)** | - The company's liquidity and capital resources are severely constrained, with substantial doubt about its ability to continue as a going concern due to recurring net losses, negative cash flows, events of default on related party debts, and a confirmed **$62.8 million** arbitration award[495](index=495&type=chunk)[501](index=501&type=chunk)[502](index=502&type=chunk)[509](index=509&type=chunk) [Overview](index=63&type=section&id=Overview) Beneficient is a technology-enabled financial services company providing liquidity solutions and trust services for alternative assets through Ben Liquidity and Ben Custody via its AltAccess platform, with Customer ExAlt Trusts consolidated but their income/loss allocated to noncontrolling interests - Beneficient provides liquidity solutions and trust products/services to the alternative assets industry through its online platform, Ben AltAccess, targeting MHNW individuals, STMI investors, FAMOs, and GPs[345](index=345&type=chunk) - Ben Liquidity finances liquidity transactions via ExAlt Loans to Customer ExAlt Trusts, collateralized by alternative assets, while Ben Custody provides trustee, custody, and administration services[346](index=346&type=chunk)[348](index=348&type=chunk) - The company plans to expand into Ben Insurance Services and Ben Markets, with all products and services designed to be delivered digitally through the AltAccess platform[350](index=350&type=chunk)[351](index=351&type=chunk) - Customer ExAlt Trusts are consolidated VIEs, but their investment income/loss is allocated to noncontrolling interests, while interest and fee income earned by Ben Liquidity and Ben Custody from these trusts directly impact income allocated to Ben's and BCH's equity holders[353](index=353&type=chunk)[359](index=359&type=chunk) [How We Generate Revenue](index=66&type=section&id=How%20We%20Generate%20Revenue) Consolidated revenue primarily stems from changes in fair value of Customer ExAlt Trusts' investments, while Ben Liquidity earns interest income on ExAlt Loans and Ben Custody earns fee income, with recent asset sales generating significant gross proceeds - Consolidated revenue is primarily from changes in fair value of investments held by Customer ExAlt Trusts[365](index=365&type=chunk) - Ben Liquidity earns interest income on ExAlt Loans, and Ben Custody earns fee income (upfront and recurring) for trust services, with these revenues, though eliminated in consolidation, directly impacting income allocated to equity holders[368](index=368&type=chunk) Ben Liquidity and Ben Custody Revenue (Three Months Ended June 30, 2025 vs. 2024) | Revenue Source | 2025 (in thousands) | 2024 (in thousands) | | :------------------------------------------- | :------------------ | :------------------ | | Ben Liquidity interest income | $8,800 | $10,800 | | Ben Custody trust services & administration | $4,200 | $5,400 | - Recent asset sales initiatives generated approximately **$25.1 million** in gross proceeds from **June 6, 2025**, and **July 1, 2025**, and an additional **$11.6 million** on **August 8, 2025**, with further sales of **$1.4 million** in **October 2025**[366](index=366&type=chunk)[367](index=367&type=chunk) [Basis of Presentation](index=67&type=section&id=Basis%20of%20Presentation) Beneficient's consolidated financial statements include subsidiaries and Customer ExAlt Trusts (VIEs), with intercompany eliminations impacting income allocation to equity holders, and primary consolidated assets and revenues allocated to noncontrolling interests - Consolidated financial statements include Ben, its subsidiaries, and Customer ExAlt Trusts (VIEs), with intercompany transactions eliminated but impacting income allocation to equity holders[373](index=373&type=chunk)[375](index=375&type=chunk) - Primary consolidated assets are investments held by Customer ExAlt Trusts, and primary revenues are investment income/loss and financial instrument gains/losses, which are allocated to noncontrolling interests[374](index=374&type=chunk) - Noncontrolling interests represent third-party ownership in BCH and Customer ExAlt Trusts, adjusted for their proportionate share of earnings/losses and distributions[378](index=378&type=chunk) [Recent Developments](index=68&type=section&id=Recent%20Developments) Recent developments include leadership changes with Thomas O. Hicks as Chairman and James G. Silk as Interim CEO following Brad K. Heppner's resignation amidst allegations, an Asset Sales Initiative generating **$38.1 million** in proceeds, recent financings involving Series B preferred stock, ongoing Nasdaq non-compliance issues, a confirmed **$62.8 million** arbitration award, and a proposed transaction to revise BCH liquidation priority unlikely to proceed as planned - Thomas O. Hicks was elected Chairman on **June 30, 2025**, and James G. Silk became Interim CEO on **July 20, 2025**, following Brad K. Heppner's resignation due to alleged document fabrication related to HCLP[379](index=379&type=chunk)[380](index=380&type=chunk) - The Asset Sales Initiative generated approximately **$38.1 million** in gross proceeds from alternative asset sales through **October 2025** to address cash flow constraints and satisfy obligations[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk) - Beneficient issued Series B-6, B-7, and B-8 Resettable Convertible Preferred Stock in exchange for limited partner interests in investment funds, totaling approximately **$11.7 million** in NAV[386](index=386&type=chunk)[387](index=387&type=chunk)[388](index=388&type=chunk) - The company faces Nasdaq non-compliance for bid price, periodic reporting, and stockholders' equity, with an extension granted for compliance, and a reverse stock split is anticipated to address the bid price requirement[392](index=392&type=chunk)[393](index=393&type=chunk)[394](index=394&type=chunk)[396](index=396&type=chunk)[398](index=398&type=chunk) - An arbitration award of **$62.8 million** (including interest and fees) was confirmed against the company on **October 10, 2025**, reversing a prior vacating order[401](index=401&type=chunk)[402](index=402&type=chunk) - A proposed transaction to revise BCH liquidation priority is not expected to be consummated on initial terms due to Mr. Heppner's resignation[406](index=406&type=chunk) [Key Factors Affecting Our Business](index=72&type=section&id=Key%20Factors%20Affecting%20Our%20Business) Beneficient's business is affected by its ability to execute new strategies, attract customers, deploy capital into attractive collateral, manage Class A common stock price volatility, maintain data and regulatory advantages, and navigate global macroeconomic conditions and capital access - Future performance depends on the ability to execute new strategies, attract customers, and successfully deploy financing capital into attractive alternative asset investments[408](index=408&type=chunk)[409](index=409&type=chunk) - Volatility in Class A common stock price impacts the ability to engage customers and accept stock as consideration, and can trigger goodwill impairment assessments[409](index=409&type=chunk) - Maintaining data and regulatory advantages, competitive positioning, and navigating unpredictable global macroeconomic conditions (e.g., geopolitical conflicts, inflation, interest rates) are crucial[409](index=409&type=chunk)[410](index=410&type=chunk) - The ability to access capital at attractive rates is a key factor, as adverse market conditions could limit financing availability and increase costs[410](index=410&type=chunk) [Current Events](index=74&type=section&id=Current%20Events) Ongoing geopolitical conflicts (Israel-Hamas, Russia-Ukraine) and global economic conditions (inflation, volatile interest rates) pose significant risks to Beneficient, potentially impacting Customer ExAlt Trusts' investments, liquidity, earnings, and capital raising ability, though the direct impact remains uncertain - Ongoing geopolitical conflicts (Israel-Hamas, Russia-Ukraine) and macroeconomic conditions (inflation, volatile interest rates) could negatively impact the global economy and the performance of Customer ExAlt Trusts' investments[411](index=411&type=chunk)[412](index=412&type=chunk) - These events may lead to reduced liquidity, earnings, and cash flow, impairment charges, challenges in raising capital, and reduced opportunities for future liquidity solution transactions[412](index=412&type=chunk)[414](index=414&type=chunk) - Management is evaluating the impact but concludes that while a negative effect is reasonably possible, the specific impact is not readily determinable as of the financial statements' date[415](index=415&type=chunk) [Factors Affecting the Comparability of Our Financial Condition and Results of Operations](index=75&type=section&id=Factors%20Affecting%20the%20Comparability%20of%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) Comparability of Beneficient's financial results is affected by GWG Holdings' bankruptcy, vesting of performance-based equity awards, goodwill impairment charges (e.g., **$3.4 million** in Q1 fiscal 2025), and the accrual of a **$62.8 million** arbitration award loss contingency in Q2 2025 versus a **$55.0 million** release in Q2 2024 - GWG Holdings' bankruptcy resulted in conversion of securities to interests in the GWG Wind Down Trust, accounted for at fair value, leading to nominal net losses in **Q2 2025**[416](index=416&type=chunk) - Vesting of performance-based equity awards, particularly after the **June 2023** public listing, impacted compensation expense, with **$0.1 million** recognized in **Q2 2025** versus **$0.5 million** in **Q2 2024**[416](index=416&type=chunk) - A non-cash goodwill impairment charge of **$3.4 million** was recorded in **Q1 fiscal 2025** (Q2 2024 calendar) due to a significant decline in Class A common stock price, with cumulative impairment through **June 30, 2025**, totaling **$2.4 billion**[416](index=416&type=chunk) - A **$62.8 million** loss contingency related to an arbitration award was accrued in **Q2 2025**, contrasting with a **$55.0 million** release in **Q2 2024**, significantly affecting comparability[416](index=416&type=chunk) [Key Performance Indicators](index=76&type=section&id=Key%20Performance%20Indicators) Beneficient uses GAAP and non-GAAP measures, including adjusted revenue and adjusted operating income (loss), to assess performance, monitoring operating metrics like loan payments received for Ben Liquidity and fee payments for Ben Custody, alongside financial condition indicators such as loans to Customer ExAlt Trusts, allowance for credit losses, and investments at fair value - Key performance indicators include non-GAAP adjusted revenue and adjusted operating income (loss), which exclude mark-to-market adjustments on GWG Wind Down Trust interests, credit losses, non-cash asset impairment, share-based compensation, and specific legal/professional costs[417](index=417&type=chunk)[419](index=419&type=chunk)[420](index=420&type=chunk) Key Operating Metrics (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------ | :------------ | :------------ | | **Ben Liquidity** | | | | Loan payments received | $24,609 | $4,246 | | Operating income (loss) | (6,015) | (514) | | Adjusted operating income (loss) | (6,015) | (509) | | **Ben Custody** | | | | Fee payments received | $1,350 | $1,516 | | Operating income (loss) | 3,128 | 1,287 | | Adjusted operating income (loss) | 3,128 | 4,416 | | **Consolidated** | | | | Revenue | $(12,623) | $10,046 | | Adjusted revenue | (12,622) | 10,411 | | Operating income (loss) | (92,648) | 44,338 | | Adjusted operating income (loss) | (25,438) | (4,725) | Key Financial Condition Metrics (June 30, 2025 vs. March 31, 2025) | (dollars in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------------------------- | :------------ | :------------- | | **Ben Liquidity** | | |\ | Loans to Customer ExAlt Trusts, net | $230,669 | $244,070 | | Allowance to total loans | 60.46% | 58.39% | | Nonperforming loans to total loans | 53.74% | 50.53% | | **Ben Custody** | | | | Fees receivable | $18,761 | $16,890 | | Deferred revenue | 16,858 | 17,762 | | **Customer ExAlt Trusts** | | | | Investments, at fair value | $263,769 | $291,371 | | Distributions to Original Loan Balance | 0.77 x | 0.75 x | | Total Value to Original Loan Balance | 1.03 x | 1.04 x | [Principal Revenue and Expense Items](index=77&type=section&id=Principal%20Revenue%20and%20Expense%20Items) Beneficient's consolidated revenues primarily derive from investment income (loss), net, and financial instrument gains/losses, while key expenses include interest expense, employee compensation, professional services, provision for credit losses, and goodwill impairment, with intersegment revenues impacting income allocation to equity holders - Consolidated revenues are primarily from investment income (loss), net (changes in NAV of alternative assets), and gain (loss) on financial instruments, net[427](index=427&type=chunk)[429](index=429&type=chunk) - Principal consolidated expenses include interest expense (on senior debt and HH-BDH loans), employee compensation and benefits (including share-based compensation), professional services, provision for credit losses, and goodwill impairment[427](index=427&type=chunk)[429](index=429&type=chunk) - Intersegment revenues, such as interest income on ExAlt Loans and trust services/administration fees from Customer ExAlt Trusts to Ben Liquidity and Ben Custody, are eliminated in consolidation but impact income allocated to equity holders[428](index=428&type=chunk) [Results of Operations — Three Months Ended June 30, 2025 and 2024 (Unaudited)](index=79&type=section&id=RESULTS%20OF%20OPERATIONS%20%E2%80%94%20THREE%20MONTHS%20ENDED%20JUNE%2030%2C%202025%20AND%202024%20(UNAUDITED)) Beneficient reported a consolidated net loss of **$(92.6) million** for Q2 2025, a significant decline from **$44.3 million** net income in 2024, primarily due to a **$23.8 million** decrease in investment income and a **$62.8 million** arbitration award accrual, with varied segment performance Consolidated Results of Operations (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------------ | :------------ | :------------ | | Total revenues | $(12,623) | $10,046 | | Total expenses | 80,025 | (34,292) | | Operating income (loss) | $(92,648) | $44,338 | | Income tax expense | — | 28 | | **Net income (loss)** | **$(92,648)** | **$44,310** | [CONSOLIDATED](index=81&type=section&id=CONSOLIDATED) Consolidated revenues decreased by **$23.8 million** to **$(12.6) million** for Q2 2025, primarily due to downward NAV adjustments, while total operating expenses increased significantly to **$80.0 million** from **$(34.3) million** due to a **$62.8 million** arbitration award accrual versus a **$55.0 million** release in the prior year Consolidated Revenues (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Investment income (loss), net | $(12,776) | $11,028 | | Gain (loss) on financial instruments, net | (45) | (1,183) | | Interest and dividend income | 10 | 12 | | Trust services and administration revenues | 188 | 189 | | **Total revenues** | **$(12,623)** | **$10,046** | - Investment income (loss), net decreased by **$23.8 million**, driven by **$14.6 million** in downward NAV adjustments and **$0.8 million** in downward quoted market price adjustments, partially offset by foreign currency impacts[433](index=433&type=chunk) Consolidated Expenses (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :------------------------------------------------ | :------------ | :------------ | | Employee compensation and benefits | $3,331 | $3,850 | | Interest expense | 3,415 | 4,288 | | Professional services | 7,957 | 5,544 | | Provision for credit losses | — | 524 | | Loss on impairment of goodwill | — | 3,394 | | Accrual (release) of loss contingency related to arbitration award | 62,831 | (54,973) | | Other expenses | 2,491 | 3,081 | | **Total expenses** | **$80,025** | **$(34,292)** | - A **$62.8 million** accrual for an arbitration award was recognized in **Q2 2025**, contrasting with a **$55.0 million** release in **Q2 2024**, significantly impacting total expenses[441](index=441&type=chunk) [BEN LIQUIDITY](index=84&type=section&id=BEN%20LIQUIDITY) Ben Liquidity's operating loss increased to **$(6.0) million** for Q2 2025, from **$(0.5) million** in the prior year, primarily due to a **$2.0 million** decrease in interest income from nonaccrual loans and a **$3.4 million** increase in provision for credit losses Ben Liquidity Results of Operations (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Interest income | $8,837 | $10,849 | | Employee compensation and benefits | 384 | 430 | | Interest expense | 3,346 | 3,081 | | Professional services | 614 | 474 | | Provision for credit losses | 10,269 | 6,927 | | Other expenses | 239 | 451 | | **Total expenses** | **14,852** | **11,363** | | **Operating income (loss)** | **$(6,015)** | **$(514)** | - Interest income decreased by **$2.0 million** due to a higher percentage of loans being placed on nonaccrual status[444](index=444&type=chunk) - Provision for credit losses increased to **$10.3 million** from **$6.9 million**, primarily due to interest capitalization outpacing loan paydowns[446](index=446&type=chunk) [BEN CUSTODY](index=84&type=section&id=BEN%20CUSTODY) Ben Custody's operating income increased to **$3.1 million** for Q2 2025, from **$1.3 million** in the prior year, despite a **$1.2 million** decrease in revenues, primarily due to the absence of a **$3.1 million** goodwill impairment charge recognized in the prior year Ben Custody Results of Operations (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :---------------------------------------- | :---------- | :---------- | | Trust services and administration revenues | $4,183 | $5,382 | | Employee compensation and benefits | 647 | 356 | | Professional services | 209 | 396 | | Loss on impairment of goodwill | — | 3,129 | | Other expenses | 199 | 214 | | **Total expenses** | **1,055** | **4,095** | | **Operating income (loss)** | **$3,128** | **$1,287** | - Trust services and administration revenues decreased by **$1.2 million** due to a decline in the NAV of alternative assets held by Customer ExAlt Trusts[448](index=448&type=chunk) - Operating income increased primarily because no goodwill impairment test was required in **Q2 2025**, compared to a **$3.1 million** impairment charge in **Q2 2024**[449](index=449&type=chunk) [CUSTOMER EXALT TRUSTS](index=85&type=section&id=CUSTOMER%20EXALT%20TRUSTS) The Customer ExAlt Trusts segment reported an operating loss of **$(54.0) million** for Q2 2025, significantly wider than the **$(29.6) million** loss in the prior year, driven by a **$23.8 million** decrease in investment income and a **$2.3 million** increase in interest expense Customer ExAlt Trusts Results of Operations (Three Months Ended June 30, 2025 vs. 2024) | (in thousands) | 2025 | 2024 | | :---------------------------------- | :------------ | :------------ | | Investment income (loss), net | $(12,776) | $11,028 | | Gain (loss) on financial instruments, net | (75) | (1,175) | | **Total revenues** | **(12,851)** | **9,853** | | Interest expense | 37,145 | 34,799 | | Professional services | 406 | 622