Beneficient Chairman and Interim CEO Participate in Limited Conversion of Subsidiary Securities into Class A Common Stock

Rhea-AI Summary

Beneficient (NASDAQ: BENF) announced a Limited Conversion where Chairman Thomas O. Hicks and Interim CEO James G. Silk converted approximately $48.0M and $4.6M of Preferred A-1 units of subsidiary BCH into 92,485,639 and 8,808,649 shares of Class A common stock, respectively.

The conversion follows a Nasdaq notice on October 3, 2025 regarding noncompliance with the minimum stockholders’ equity requirement and is intended to support compliance with the MVLS $35M alternative. The Conversion Shares are subject to a voting and lock-up until October 1, 2028, and Messrs. Hicks and Silk agreed to forfeit any appreciation in value of the Conversion Shares at lock-up expiration.

Positive

• Leadership converted a total of $52.6M of Preferred A-1
• Issued a total of 101,294,288 Conversion Shares
• Conversion aims to support MVLS $35M Nasdaq compliance
• Lock-up until Oct 1, 2028 defers immediate market dilution

Negative

• Large issuance of 101.3M shares increases potential long-term dilution
• Preferred holders surrendered liquidation preference and senior rights

Insights

Capital Structure Analyst

Leadership converted subordinated interests into 101.3M Class A shares to simplify capital structure and pursue Nasdaq MVLS compliance.

Beneficient effectively exchanged $48.0 million and $4.6 million of Preferred A-1 units held by Thomas O. Hicks and James G. Silk for 92,485,639 and 8,808,649 shares of Class A common stock, respectively. The converts surrendered preferred liquidation and senior economic rights and accepted a lock-up through Oct. 1, 2028, plus a forfeiture mechanism that removes any appreciation in value during the lock-up.

The move directly addresses a Nasdaq compliance pathway: management seeks to satisfy the market value of listed securities requirement of $35 million after a notice for failure to meet the minimum stockholders’ equity rule. This action reduces structural complexity by removing a layer of senior preferred economics but simultaneously increases outstanding common shares, creating future dilution risk once the lock-up expires.

Watch the MVLS measurement and any subsequent filings or shareholder approvals over the next reporting cycle; the Lock-Up Period until Oct. 1, 2028 defers immediate market dilution. Key near-term items to monitor are any Nasdaq correspondence confirming MVLS compliance and 10-Q/8-K disclosures updating total shares outstanding and any additional capital actions within the next few quarters.

DALLAS, Oct. 21, 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, in order to better position the Company for long term success, Thomas O. Hicks, Chairman of the board of directors (“Board”) of the Company, and James G. Silk, Interim CEO of the Company, elected to convert and exchange approximately $48.0 million and $4.6 million, respectively, of Preferred A-1 Unit Accounts (“Preferred A-1”) of Beneficient Company Holdings, L.P. (“BCH”), a subsidiary of the Company, for shares of the Company’s Class A common stock, par value $0.001 per share (“Common Stock”) (the “Limited Conversion”). The Limited Conversion resulted in the issuance of 92,485,639 shares of Common Stock to Mr. Hicks and 8,808,649 shares of Common Stock to Mr. Silk (the “Conversion Shares”).

As previously disclosed, on October 3, 2025, the Company was notified by the staff of The Nasdaq Stock Market, LLC (“Nasdaq”) that the Company did not comply with the minimum stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Requirement”). As an alternative to the Stockholders’ Equity Requirement, the Company seeks to comply with the market value of listed securities requirement (the “MVLS”) set forth in Nasdaq Listing Rule 5550(b)(2), which requires the Company’s MVLS to be $35 million or greater.

As a result of the Limited Conversion, Messrs. Hicks and Silk entered into a voting and lock-up agreement which provides that (i) Messrs. Hicks and Silk will vote the Conversion Shares in favor of the recommendation of the Company’s Board (except for the election of members of the Board) and (ii) the Conversion Shares will be subject to lock up until October 1, 2028 (the “Lock-Up Period”). Messrs. Hicks and Silk also agreed to forego any potential appreciation in the value of the Conversion Shares between the date of the Limited Conversion and the expiration of the Lock-Up Period by agreeing to forfeit the number of Conversion Shares equal in value to any such appreciation at the expiration of the Lock-Up Period.

Messrs. Hicks and Silk each voluntarily converted 100% of their Preferred A-1 capital account holdings, and in doing so, gave up the Preferred A-1 liquidation preference, preferred return, and other rights that made these interests structurally and economically senior to Company stockholders. The Company believes this action demonstrates Messrs. Hicks and Silk’s commitment to the Company’s long-term success and further aligns the interests of the Company’s leadership with those of all Company stockholders. Additionally, the Company believes the Limited Conversion represents an important initial step toward simplifying its capital structure. Because Mr. Hicks and Mr. Silk have also voluntarily agreed to the Lock-Up Period, the resulting dilution of the Limited Conversion in the market will be deferred.

“This conversion reinforces the confidence of our leadership in the Company’s mission and future,” said Messrs. Hicks and Silk. “We want our stockholders to know that we are working to align our interests and strengthen and simplify the Company’s capital structure.”

About Beneficient

Beneficient (Nasdaq: BENF) – Ben, for short – is on a mission to democratize the global alternative asset investment market by providing traditionally underserved investors − mid-to-high net worth individuals, small-to-midsized institutions and General Partners seeking exit options, anchor commitments and valued-added services for their funds− with solutions that could help them unlock the value in their alternative assets. Ben’s AltQuote^® tool provides customers with a range of potential exit options within minutes, while customers can log on to the AltAccess^® portal to explore opportunities and receive proposals in a secure online environment.

Its subsidiary, Beneficient Fiduciary Financial, L.L.C., received its charter under the State of Kansas’ Technology-Enabled Fiduciary Financial Institution (TEFFI) Act and is subject to regulatory oversight by the Office of the State Bank Commissioner.

For more information, visit www.trustben.com or follow us on LinkedIn.

Contacts

Matt Kreps: 214-597-8200, mkreps@darrowir.com
Michael Wetherington: 214-284-1199, mwetherington@darrowir.com
Investor Relations: investors@beneficient.com

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding the listing and trading of the Company’s securities on Nasdaq, the Company’s intention to request a hearing from the Nasdaq hearing panel and the Company’s intention to regain compliance with the Nasdaq Listing Rules. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are based on our management’s beliefs, as well as assumptions made by, and information currently available to, them. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected.

Important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, among others, our ability to cure any deficiencies in compliance with the Nasdaq Listing Rules; risks related to the substantial costs and diversion of management’s attention and resources due to these matters and the risks, uncertainties, and factors set forth under “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q and the risks and uncertainties contained in the Company’s Current Reports on Form 8-K. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

FAQ

How many Preferred A-1 units did Beneficient Chairman convert on Oct 21, 2025 (BENF)?

Thomas O. Hicks converted approximately $48.0M of Preferred A-1 units into 92,485,639 Class A shares.

How many shares did Interim CEO James G. Silk receive in the Limited Conversion (BENF)?

James G. Silk received 8,808,649 shares after converting approximately $4.6M of Preferred A-1 units.

Why did Beneficient execute the Limited Conversion related to Nasdaq listing rules (BENF)?

Following an October 3, 2025 Nasdaq notice on equity deficiency, the conversion was made to pursue compliance with the MVLS $35M alternative listing requirement.

What voting and transfer restrictions apply to the Conversion Shares for BENF shareholders?

Messrs. Hicks and Silk agreed to vote the Conversion Shares with the Board recommendation and the shares are locked up until October 1, 2028.

Will Messrs. Hicks and Silk benefit from share price appreciation during the lock-up for BENF?

No; they agreed to forfeit any appreciation in value of the Conversion Shares that occurs before the lock-up expiration.

What rights did the converted Preferred A-1 interests carry that were given up in the BENF conversion?

The converted Preferred A-1 interests included a liquidation preference, preferred return, and other senior rights that were relinquished upon conversion.