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Beneficient Enters into Transactions to Deliver Tangible Book Value and Other Benefits to Beneficient Public Company Stockholders Provided by Entities Controlled by CEO & Founder, Brad Heppner, and Other Founders
BENFBen(BENF) GlobeNewswire·2024-12-23 14:00

Core Summary - Beneficient has entered into an agreement with entities controlled by its founder and CEO, Brad Heppner, to enhance shareholder value and drive long-term growth by allowing public company stockholders to share in the liquidation priority historically reserved for preferred equity holders [1] - The agreement is expected to increase the tangible book value attributable to public company stockholders from 0toapproximately0 to approximately 10 million as of September 30, 2024, and the company's market capitalization was 5,077,555asofDecember20,2024[2]−Thecompanybelievesthesechangeswillaligntheinterestsofpreferredequityholderswithpubliccompanystockholders,particularlyinliquiditytransactions,andexpectstocloseadditionalExchangeTrusttransactionsstartinginQ12025[2][3]TransactionDetails−Publiccompanystockholderswillreceivepreferentialtreatmentintheeventofaliquidation,including105,077,555 as of December 20, 2024 [2] - The company believes these changes will align the interests of preferred equity holders with public company stockholders, particularly in liquidity transactions, and expects to close additional ExchangeTrust transactions starting in Q1 2025 [2][3] Transaction Details - Public company stockholders will receive preferential treatment in the event of a liquidation, including 10% of the first 100 million distributed and 33.3333% of the net asset value of up to 5billionofalternativeassetsaddedafterDecember22,2024[2]−ThecompanywillissueadditionalClassBcommonstocktocurrentholders,maintainingtheircollectivevotingpowerat42.675 billion of alternative assets added after December 22, 2024 [2] - The company will issue additional Class B common stock to current holders, maintaining their collective voting power at 42.67%, with restrictions on dividends and mandatory redemption at 0.001 per share under certain conditions [6] - The company's compensation policy will be amended to clarify allocations and issuances of Class S Ordinary Units to holders of FLP-1 and FLP-2 accounts, with certain restrictions on conversion rights [9] Financial Impact - The tangible book value attributable to public company stockholders is expected to increase to 9,932,000proforma,comparedto9,932,000 pro forma, compared to 0 previously, based on the company's reconciliation of non-GAAP financial measures [15] - The company's market capitalization of Class A and Class B common stock was 5,078,000asofDecember20,2024[15]CustomerRelationsInitiative−Entitiescontrolledbythecompany′sfounderandCEO,alongwithanaffiliate,willforegoupto5,078,000 as of December 20, 2024 [15] Customer Relations Initiative - Entities controlled by the company's founder and CEO, along with an affiliate, will forego up to 400 million of equity in Beneficient Holdings for the benefit of existing customers, with any unclaimed rights benefiting public company stockholders [4][5] Regulatory and Closing Conditions - The closing of the transactions is subject to approval by the company's stockholders, limited partners of Beneficient Holdings, and regulatory filings, with an expected completion in the first half of 2025 [11]