Core Insights - The company has demonstrated stabilization and strengthening of its business through effective cost management and operational efficiency, highlighted by a court-approved settlement related to GWG Holdings litigation and regained compliance with Nasdaq listing requirements [2][4][6] Financial Performance - The company reported a gross revenue of $18.67 million for the third quarter of fiscal 2026, a significant increase from $4.42 million in the same quarter of the previous year [20] - Operating expenses rose by 5.7% to $14.7 million in the third quarter of fiscal 2026, compared to $13.9 million in the same period of fiscal 2025 [5] - The company generated $50 million in gross proceeds from asset sales and equity redemptions, which were used to reduce debt, including the full payoff of the HH-BDH Credit Agreement principal balance [3][4] Asset Management - As of December 31, 2025, the company reported investments with a fair value of $205.8 million, down from $291.4 million at the end of the previous fiscal year [5][26] - The loan portfolio was supported by a diversified alternative asset collateral portfolio, which includes approximately 150 private market funds and around 430 investments across various asset classes and geographies [9][12] Business Segments - The Ben Liquidity segment recognized $8.19 million in interest income for the fiscal third quarter, a decrease of 3.6% from the previous quarter, primarily due to higher non-accrual loans [16][33] - The Ben Custody segment reported revenues of $2.94 million for the fiscal third quarter, down from $3.08 million in the previous quarter, attributed to lower NAV of alternative assets held in custody [21][33] Corporate Developments - The company appointed Peter T. Cangany, Jr. as Chairman of the Board effective December 15, 2025, marking a significant leadership change [4][6] - The company has entered into a primary capital transaction that will increase collateral for its ExAlt loan portfolio by over $3 million [4]

Financial Data and Key Metrics Changes - The company reported investments with a fair value of $244 million, serving as collateral for a net loan portfolio of $223 million [14] - Revenues were negative $2.8 million for the second quarter and $15.4 million year-to-date, compared to positive revenues of $8.6 million and $18.6 million in the prior year [14] - Operating expenses decreased to $15.1 million in the second quarter from $22.3 million in the same period last year [15] - The reported GAAP net loss attributable to common shareholders was $3.6 million for the current quarter and $68.7 million year-to-date [16] Business Line Data and Key Metrics Changes - Ben Liquidity recognized $8.5 million of interest income, a decrease of 3.8% from the previous quarter, and $17.3 million for the six months, down 24.1% year-over-year [17][18] - Ben Custody's net asset value (NAB) of alternative assets was $271.4 million, down from $338.2 million as of March 31, 2025, with revenues of $3.1 million for the second quarter, down from $4.2 million [19][20] Market Data and Key Metrics Changes - The market for early liquidity services is large and growing, with global transaction volumes reaching $103 billion, a 51% increase from the previous year [28] Company Strategy and Development Direction - The company is focused on stabilizing operations and executing its mission to provide liquidity and capital to customers in the alternative asset market [5][10] - Plans include cutting costs, reducing third-party debt from $27 million to under $4 million, and exploring adjacent markets with minimal extra costs [10][27] - The company aims to simplify its operating model to enhance transparency and efficiency, which is expected to provide more value to common shareholders [42] Management's Comments on Operating Environment and Future Outlook - Management believes the foundations of the business and market opportunities remain strong despite recent challenges [5] - The focus is on stabilizing the company and optimizing the business model, with a commitment to the Kansas community [10][28] - The interim CEO indicated that the need for liquidity remains strong, and the company is positioned to move forward after stabilizing [33] Other Important Information - The company has regained compliance with NASDAQ listing rules and plans to hold a special meeting to seek shareholder approval for a reverse stock split [8][9] - A settlement related to lawsuits against the company has been approved, requiring no out-of-pocket payments [7] Q&A Session Summary Question: How might the strategic vision differ going forward? - The focus will be on high net worth transactions in the $5 million-$25 million range, moving away from larger foundational transactions [31][32] Question: Are prospective customers pausing allocation decisions due to market volatility? - The need for liquidity is present, and the market wants to see stabilization before moving forward [33] Question: Any updates on the timing for naming a permanent CEO? - The board is evaluating the transition period and will communicate its approach soon [34] Question: Further opportunities to rationalize the cost base? - There are modest opportunities for additional reductions, but significant changes have already been made [36] Question: Breakdown of the $104 million debt on the balance sheet? - About $8 million is related to the Hicks credit facility, with the remainder primarily from loans associated with Brad Heppner-related entities [40][41] Question: What does simplifying the operating model mean for investors? - The goal is to reduce internal complexities and enhance transparency, allowing for clearer revenue and cash flow streams [42] Question: Is the pipeline still focused on the PCP channel? - The deal flow is currently leaning towards the PCP channel, but the company is reopening the process as it stabilizes [46]