Beneficient (BENF) secures $4M in convertible notes under $100M equity deal
Rhea-AI Filing Summary
Beneficient entered into an amended and restated Standby Equity Purchase Agreement with YA II PN, Ltd. that allows sales of up to $100.0 million of Class A common stock and includes a $4.0 million convertible promissory note facility. Under this facility, the company issued two Promissory Notes of $2.0 million principal each, at a 5% original issue discount, yielding approximately $1.8 million gross proceeds per note, funded on July 1 and August 5, 2026.
The notes bear 5.0% annual interest, maturing on June 30, 2027, with the rate increasing up to 18.0% upon certain defaults. They are convertible into Class A common stock at the lower of $5.6064 or 92.0% of the lowest daily VWAP over five trading days, with a variable component floor of $0.89 per share, subject to an Exchange Cap. Assuming 5% interest to maturity, the maximum number of shares issuable upon conversion is 4,719,101, and no holder may convert to exceed 4.99% beneficial ownership.
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8-K Event Classification
2 items: 2.03, 9.01
2 items
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Equity commitment size: $100.0 million
Promissory Notes principal: $4.0 million
Gross proceeds per note: $1.8 million
+7 more
10 metrics
Equity commitment size
$100.0 million
Maximum Class A common stock sale capacity under amended Standby Equity Purchase Agreement
Promissory Notes principal
$4.0 million
Total principal across two $2.0 million convertible Promissory Notes issued to Yorkville
Gross proceeds per note
$1.8 million
Approximate gross proceeds from each $2.0 million note after 5% original issue discount
Interest rate
5.0% per annum
Standard interest rate on Promissory Notes before any Event of Default
Default interest rate
18.0% per annum
Potential increased rate upon uncured Event of Default, subject to legal maximum
Conversion price fixed leg
$5.6064
150% of VWAP before First Closing; upper bound in Conversion Price formula
Floor Price
$0.89 per share
Floor Price for the variable component of the Conversion Price for Class A common stock
Maximum conversion shares
4,719,101 shares
Maximum Class A shares issuable upon conversion, assuming 5% interest to maturity
Beneficial ownership cap
4.99%
Limit on holder’s beneficial ownership of Class A stock after any conversion
Maturity date
June 30, 2027
Scheduled maturity date of the Promissory Notes
Key Terms
Standby Equity Purchase Agreement, original issue discount, VWAP, Floor Price, +2 more
6 terms
Standby Equity Purchase Agreement financial
"entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd."
A standby equity purchase agreement is a contract in which an investor or group agrees to buy a company’s newly issued shares on demand, giving the company a ready source of cash it can tap when needed. Think of it like a line of credit made with stock instead of a loan: it provides financial backup but can increase the number of shares outstanding, diluting existing owners and affecting per‑share value, so investors watch these deals for their impact on ownership and earnings per share.
original issue discount financial
"aggregate principal amount of $2.0 million, subject to an original issue discount of 5%"
Original issue discount (OID) is the difference between a debt security’s face value and the lower price at which it is first sold, treated as additional interest that accrues over the life of the instrument. For investors it matters because OID raises the effective yield and changes taxable income and the holding’s cost basis over time — think of buying a $100 voucher for $90 and recognizing the $10 gain as earned interest as the voucher approaches maturity.
VWAP financial
"150% of the VWAP reported by Bloomberg on the trading day immediately prior"
VWAP, or Volume-Weighted Average Price, is a way to find the average price of a stock throughout the trading day, giving more importance to times when more shares are traded. It helps traders see the typical price and decide whether a stock is expensive or cheap compared to its average, similar to finding the average speed during a trip by giving more weight to times when you traveled faster or slower.
Floor Price financial
"The “Floor Price” (solely with respect to the variable component of the Conversion Price) is $0.89"
The floor price is the minimum price at which a security, asset, or offering will be sold or accepted, acting like a seller’s “bottom line” or a reserve in an auction. For investors it matters because it sets a visible downside limit and can influence trading, valuation, and expectations of risk—like knowing there’s a safety net that a sale won’t go below a set level.
Exchange Cap financial
"subject to the Exchange Cap (as defined in the A&R SEPA)."
beneficially own financial
"holder together with certain related parties would beneficially own in excess of 4.99%"
Beneficially own means having the economic rights and risks of a security—such as the right to receive dividends, sell the shares, or profit from price changes—whether or not your name appears on the official share register. Think of it like renting a car: you use it and reap the benefits even if the title lists someone else. Investors care because beneficial ownership determines who truly controls value, must be disclosed under securities rules, and can signal potential influence or trading activity that affects a stock’s price.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
What financing arrangement did Beneficient (BENF) disclose on August 5, 2026?
Beneficient disclosed an amended Standby Equity Purchase Agreement with Yorkville, allowing sales of up to $100.0 million of Class A common stock and establishing $4.0 million in convertible Promissory Notes, of which two $2.0 million notes have been issued.
How much cash did Beneficient (BENF) receive from the new Promissory Notes?
Beneficient received approximately $1.8 million in gross proceeds from each $2.0 million Promissory Note, reflecting a 5% original issue discount. One funding occurred on July 1, 2026 and the second on August 5, 2026, totaling about $3.6 million.
What are the interest rate and maturity of Beneficient’s (BENF) Promissory Notes?
The Promissory Notes bear interest at 5.0% per annum and mature on June 30, 2027. Upon an Event of Default that remains uncured, the interest rate can increase to 18.0% per annum, or the maximum permitted by law.
How are Beneficient’s (BENF) Promissory Notes convertible into Class A common stock?
The notes are convertible at the holder’s option into Class A common stock at the lower of $5.6064 or 92.0% of the lowest daily VWAP over five trading days. A variable component floor price of $0.89 per share applies, subject to company adjustment rights.
What ownership limitation applies to conversions of Beneficient’s (BENF) Promissory Notes?
Conversions are limited so that, after any conversion, the holder and certain related parties cannot beneficially own more than 4.99% of the outstanding Class A common stock, subject to certain adjustments specified in the note terms.