Ben(US:BENF)2025-09-29 21:27Business Operations - Ben Liquidity's primary business unit focuses on providing liquidity products and services, with a significant emphasis on alternative asset liquidity and fiduciary financing[53]. - The AltAccess platform automates approximately 77% of transaction processes, aiming to enhance internal controls compliance and accelerate closing timelines[60]. - The ExAlt Plan facilitates liquidity and primary capital transactions, allowing customers to receive financing in as little as 15 days, or within 2-3 days for qualifying assets[62]. - Ben Liquidity generates revenue through monthly interest income and transaction fees, while Ben Custody earns fees based on a percentage of net asset value and unfunded capital commitments[78]. - The ExAlt Plan offers three core products: The Ben ExchangeTrust™, The Ben InterchangeTrust™, and The Ben LiquidTrust, designed to provide flexible financing solutions[67]. - Ben Custody provides full-service custody and trust administration services, addressing the regulatory burdens of holding alternative assets[54]. - The AltAccess platform is the first online portal specifically designed for customers to access a range of liquidity and capital solutions[58]. - The company aims to streamline operations by having an in-house broker-dealer, which is expected to reduce transaction costs and enhance service delivery[55]. - The automation and digital technologies employed in the AltAccess platform are intended to support increased transaction growth and improve efficiency[61]. Financial Performance - As of March 31, 2025, Ben Liquidity's loan portfolio has an aggregate original loan balance of approximately $906.8 million, backed by alternative assets with a net asset value of approximately $1.2 billion[90]. - Ben Liquidity has earned stated interest income of approximately $427.7 million from ExAlt Loans issued in connection with liquidity financings[90]. - The total allowance for credit losses on ExAlt Loans was $342.5 million, with a total gross loan balance of $586.5 million as of March 31, 2025[94]. - ExAlt Loans have a maturity date of 12 years, with variable interest rates established off a base rate of 10% or 14% depending on the loan origination date[101]. - The primary source of repayment for ExAlt Loans is the collateral, which includes cash flows from alternative assets, with expected annual revenue of approximately 7% to 14% of each loan balance[102]. - As of March 31, 2025, the ExAlt Loan Collateral Portfolio consists of interests in professionally managed funds and other investments valued at $291.4 million[90]. - Ben Liquidity successfully sold its first Participation ExAlt Loan for $72.5 million in the first calendar quarter of 2022[103]. Market Analysis - The global alternative investment market is estimated to consist of more than $19 trillion in assets under management, with approximately $8.3 trillion held by U.S.-based investors[112]. - The current focus markets of MHNW investors comprise approximately $1.7 trillion, while U.S.-based STMI investors account for approximately $1.8 trillion[112]. - The transaction volume in the U.S. secondary liquidity market was approximately $153 billion in 2024, growing from approximately $49 billion in 2013, representing a compound annual growth rate of 12.0%[112]. - The estimated annual market demand for liquidity by MHNW individual investors and STMI could exceed $60 billion, representing 1.5% to 2.2% of their aggregate outstanding alternative investment holdings[114]. - The total market for liquidity in the alternative asset class is estimated at $200 billion, with $64 billion of current estimated liquidity demand going underserved[115]. Regulatory Environment - The company plans to resubmit its application for an insurance charter to provide insurance products to affiliates, which will generate premium income upon approval[56]. - The company received a charter from the State of Kansas under the TEFFI Act, allowing it to operate as a regulated trust company, enhancing its competitive advantage[127]. - The TEFFI Act positions Kansas as a preferred low-tax jurisdiction for specialized trust companies offering alternative asset financial products and services[128]. - The company is the first to provide liquidity to alternative asset investors through a regulated trust company, using its own balance sheet to facilitate liquidity solutions[129]. - The company is subject to extensive regulation, including oversight from the SEC, FINRA, and the OSBC, which could impact its operations and financial condition[147][148]. - The cumulative effect of current laws and regulations could significantly increase operational costs and negatively impact profitability[153]. - Future legislation and regulatory reforms may significantly influence the company's operations and financial condition[154]. - The Kansas Legislature adopted the TEFFI Act in April 2021, allowing for the chartering of Kansas TEFFIs with fiduciary powers[155]. - The TEFFI Act mandates that the board of directors of a TEFFI must consist of 5 to 25 members, with at least one director being a Kansas resident[160]. Technology and Innovation - The company plans to leverage technological innovation to enhance underwriting, risk management, and compliance functions[134]. - The company estimates that its proprietary technology can provide customers with liquidity in as little as 30 days, and within two to three days for certain qualifying assets[118]. - The company completed the acquisition of MHT Securities, now known as AltAccess Securities Company, enhancing its broker-dealer capabilities[149]. - There are 8 pending non-provisional U.S. utility patent applications covering systems and processes related to the company's liquidity products and trust services[192]. Human Resources and Corporate Culture - The company employed approximately 55 employees as of September 22, 2025[195]. - The company offers a full complement of health and welfare benefits, including health, dental, vision, life insurance, and a 401(k) retirement plan[193]. - The company promotes equity ownership for employees through various incentive plans, including the 2023 Long Term Incentive Plan[193]. - The company focuses on building a workforce that is responsive to customer needs and innovative in creating new products and services[194]. - The company actively supports equal opportunity employment and provides an equitable and inclusive working environment[194]. Competitive Landscape - The company faces significant competition from other firms in the alternative assets industry, which may have greater resources and lower costs of funds[140]. - The expansion into complementary lines of business is a strategic focus, with plans to explore additional products critical to the alternative investment market[135]. Intellectual Property - As of September 22, 2025, the company owns 21 trademark registrations in the United States for its BEN house mark and related sub-brands[190]. - The company has three active trademark applications in the United States currently being prosecuted towards registration[190]. - The company holds three copyright registrations in the United States for its proprietary software platforms as of September 22, 2025[191].