Beneficient (NASDAQ: BENF) (“Ben” or the
“Company”), a technology-enabled financial services
holding company that provides liquidity and related trust and
custody services to holders of alternative assets, today reported
its financial results for the fiscal 2024 third quarter ended
December 31, 2023.
Commenting on the fiscal 2024 third quarter,
Ben's Chairman and Chief Executive Officer, Brad K. Heppner said,
“We continue to make important progress on our mission to transform
the alternative asset industry by providing products and services
in a fiduciary capacity to marketplace participants.
“This quarter was highlighted: by growth in our
Preferred Liquidity Provider Program, which now includes 19
participating funds representing approximately $1.5 billion in
committed capital and can serve as a catalyst for a potential
expansion of our suite of GP Solutions offerings that seek to meet
the needs of General Partners and their limited partner investors;
a reduction in our operating expense base by approximately 30%; the
continued development of AltAccess to meet customer needs; the
launch of a new marketing program designed to scale operations; and
other important milestones. We believe we are well positioned for
future growth based on our core areas of differentiation, including
our fiduciary financial trust company subsidiary, which operates as
a regulated fiduciary and our proprietary AltAccess online
platform, which delivers our products and services securely to LPs,
GPs and their funds and other underserved segments of the private
investment marketplace.”
Third Quarter Fiscal 2024 and Recent
Highlights (for the quarter ended December 31, 2023 or as
noted):
- Reported
investments with a fair value of $378.4 million, from $491.9
million at the end of our prior fiscal year, served as collateral
for Ben Liquidity's net loan portfolio of $290.8 million and $376.3
million, respectively.
- Grew the GP
Preferred Liquidity Provider Program to 19 funds and $1.5 billion
in committed capital compared to 7 participating funds with $300
million in committed capital at December 31, 2022
- Operating
expenses increased to $905.7 million in 3Q24 compared with $33.8
million in 3Q23, driven by a goodwill impairment of $883.2
million
- Reduced
operating expenses by 33% in 3Q24 (excluding non-cash loss on
impairment of goodwill), as compared with 3Q23
- Improved
financial position with $25 million 3-year term loan
- GP Solutions
capability evolved and, subsequent to quarter end, closed $2
million of liquidity financings, capping nearly $10 million sourced
from GP Preferred Liquidity Provider Program
“The growing need and demand for our key
capabilities is increasingly apparent as the ownership of
alternative investments continues to proliferate across mid-to-high
net worth individual investors and small-to-midsize institutional
investors. To date, other early exit or liquidity solution
providers haven’t been able to deliver liquidity to our target
market with certainty across three very important dimensions:
price, cost, and time. Ben’s AltAccess platform is designed to
address each of these issues head on through its ability to
seamlessly deliver Ben Liquidity’s products and Ben Custody’s
services through our fiduciary financial trust company chartered
subsidiary that enables a single-point solution to our customers.
Ben Liquidity’s financing of liquidity and capital products and Ben
Custody’s custody, trustee and administration services are
complementary and operate hand-in-hand. I am optimistic about the
role that Ben continues to play in further democratizing the
alternative investment industry and unlocking liquidity in
alternative assets for individual investors.”
“I’m also excited and encouraged by the initial
market reaction to our expanded GP Solutions offering of the GP
Primary Commitment Program, through which Ben offers its financing
products and other trust services to GPs who are currently fund
raising. GPs have increasingly become aware of our GP Solutions
offerings over the last quarter and approximately 45% of all GPs we
would expect to qualify for participation in this new
program responded to our initial marketing outreach related
to our GP Solutions offerings and approximately 20% of those
GPs indicated they would consider participating in the program.
During the upcoming quarters, we will be working to assist these
GPs in understanding the program, the program agreements, and, upon
final qualification and approvals, delivering the applicable
financing and custody and trust administration services to the
participating GPs. Any such financings would be expected to be
backed by collateral across various asset classes, industry sectors
and geographies and, if entered into, would serve to further
diversify Ben’s existing loan collateral portfolio across an even
wider array of managers while adding to our growing roster of
Preferred Liquidity Provider Program partners.
“Today, Ben is able to offer its innovative
suite of liquidity products and custody and trust administration
services through a substantially reduced operating cost model to
bring greater efficiency while maintaining our commitment to
innovation and new product offerings that provide swift and secure
customer transactions that are subject to regulatory oversight. We
believe that our platform and continued execution on our long-term
strategic priorities will drive shareholder value and growth as we
further build our loan portfolio and secure greater operating cost
leverage across our platform,” said Heppner.
Loan Portfolio
As a result of executing on our business plan of
providing financing for liquidity, or early investment exits, for
alternative asset marketplace participants, Ben organically
develops a balance sheet comprised largely of loans collateralized
by a well-diversified alternative asset portfolio that is expected
to grow as Ben successfully executes on its core business.
At December 31, 2023, Ben’s loan portfolio was
supported by a highly diversified alternative asset collateral
portfolio providing diversification across more than 250 private
market funds and approximately 900 investments across various asset
classes, industry sectors and geographies. This portfolio includes
exposure to some of the most exciting, sought after private company
names worldwide, such as the largest private space exploration
company, an innovative software and payment systems provider, a
designer and manufacturer of shaving products, a large online store
for women's clothes and other fashionable accessories that has
announced intentions to go public, a mobile banking services
provider, and others.
Figure 1: Portfolio Diversification
Diversification Using Principal Loan
Balance, Net of Allowance for Credit Losses
As of December 31, 2023, the charts below
present the ExAlt Loan portfolio’s relative exposure by certain
characteristics (percentages determined by aggregate fiduciary
ExAlt Loan portfolio principal balance net of allowance for credit
losses, which includes the exposure to interests in certain of our
former affiliates composing part of the Fiduciary Loan
Portfolio).
As of December 31, 2023. Represents the
characteristics of professionally managed funds and investments in
the Collateral (defined as follows) portfolio. The Collateral for
the ExAlt Loans in the loan portfolio is comprised of a diverse
portfolio of direct and indirect interests (through various
investment vehicles, including, limited partnership interests and
private and public equity and debt securities, which include our
and our affiliates’ or our former affiliates’ securities),
primarily in third-party, professionally managed private funds and
investments. Loan balances used to calculate the percentages
reported in the pie charts are loan balances net of any allowance
for credit losses, and as of December 31, 2023, the total allowance
for credit losses was $269 million, for a total gross loan balance
of $559 million and a loan balance net of allowance for credit
losses of $290 million.
Business Segments:
Third Quarter Fiscal
2024
Ben Liquidity
Ben Liquidity offers simple, rapid and cost-effective liquidity
products through the use of our proprietary financing and trust
structure, or the “Customer ExAlt Trusts”, which facilitate the
exchange of a Customer’s alternative assets for consideration.
-
Ben Liquidity recognized $11.3 million of interest income for the
fiscal third quarter, down 13.4% from the quarter ended
September 30, 2023, primarily due to lower carrying value of
loan receivables, which was driven by higher allowance for credit
losses.
-
Operating loss for the quarter was $606.4 million, compared to an
operating loss of $272.1 million for the quarter ended
September 30, 2023. The current quarter operating loss
included a non-cash goodwill impairment of $604.7 million and
higher interest expense in the current quarter offset partially by
lower credit loss adjustments, principally related to securities of
our former parent company, in the current quarter.
-
Adjusted operating income(1) for the quarter was $2.5 million,
compared to adjusted operating loss(1) of $4.7 million in the
quarter ended September 30, 2023. The increase was primarily
due to lower credit loss adjustments offset partially by additional
interest expense, including non-cash amortization of deferred
financing costs, related to a new debt facility in the current
quarter.
Ben Custody
Ben Custody provides full-service trust and
custody administration services to the trustees of certain of the
Customer ExAlt Trusts, which own the exchanged alternative assets
following liquidity transactions in exchange for fees payable
quarterly.
-
NAV of alternative assets and other securities held in custody by
Ben Custody during the period was $432.5 million, compared to
$491.9 million as of March 31, 2023. The decrease was driven
by unrealized losses on existing assets, principally related to
interests in a wind down trust for a bankrupt entity, and
distributions, which was partially offset by new liquidity
transactions of Ben Liquidity of $44.4 million during the
current fiscal year, representing 9.0% of NAV as of March 31,
2023.
-
Revenues applicable to Ben Custody were $5.9 million for the
current quarter, compared to $6.5 million for the quarter ended
September 30, 2023. The decrease was a result of lower NAV of
alternative assets and other securities held in custody.
-
Operating loss for the current quarter was $268.0 million, compared
to an operating loss of $80.8 million for the quarter ended
September 30, 2023. The increase was primarily due to higher
non-cash goodwill impairment in the current quarter of $272.8
million as compared to non-cash goodwill impairment of $86.5
million for the quarter ended September 30, 2023.
-
Adjusted operating income(1) for the current quarter was $4.8
million, compared to adjusted operating income(1) of $5.6 million
for the quarter ended September 30, 2023. The decrease was
primarily due to a change in revenue due to lower NAV of
alternative assets and other securities held in custody during the
current period.
Business Segments: Through Nine Months
Ended Fiscal 2024
Ben Liquidity
-
Ben Liquidity recognized $36.3 million of interest income for the
nine months ended December 31, 2023, down 4.3% compared to the nine
months ended December 31, 2022, primarily due to lower loans, net
of the allowance for credit losses, resulting from higher levels of
non-accrual loans and loan prepayments, partially offset by new
loans originated.
-
Operating loss was $1.8 billion for the current fiscal year
compared to an operating loss of $27.7 million in the prior period.
The current period loss was driven by non-cash goodwill impairment
totaling $1.7 billion and credit losses largely related to
securities of our former parent company.
-
Adjusted operating loss(1) was $11.8 million for the nine months
ended December 31, 2023 compared to adjusted operating income(1) of
$10.2 million in the prior year period with the decrease in
adjusted operating income (loss)(1) primarily related to higher
credit loss adjustments recognized in the current period and
additional interest expense.
-
New liquidity transactions closed during the nine months ended
December 31, 2023 totaled a NAV of $44.4 million.
Ben Custody
-
Ben Custody revenues were $19.0 million for the nine months ended
December 31, 2023, down 14.9%, as compared to prior year period due
to lower NAV of alternative assets and other securities held in
custody.
-
Operating loss was $538.8 million for the nine months ended
December 31, 2023 compared to operating income of $18.3 million in
the prior year period, with the decrease in operating income
principally related to non-cash goodwill impairment of $554.6
million in the current period.
-
Adjusted operating income(1) for the nine months ended December 31,
2023 was $15.8 million, compared to adjusted operating income(1) of
$18.3 million in the prior year period with the decrease in
adjusted operating income(1) due to lower revenue related to lower
NAV of alternative assets and other securities held in custody and
slightly lower professional service expense during the current
period.
Capital and Liquidity
-
At December 31, 2023, the Company had cash and cash
equivalents of $11.2 million and total debt of $128.2 million.
- Distributions
received from alternative assets and other securities held in
custody totaled $38.4 million for the nine months ended
December 31, 2023 compared to $45.4 million for the same
period of fiscal 2023.
- Total investments
(at fair value) of $378.4 million at December 31, 2023
supported Ben Liquidity's loan portfolio.
(1) Represents a non-GAAP financial measure. For
reconciliations of our non-GAAP measures to the most directly
comparable GAAP financial measures and for the reasons we believe
the non-GAAP measures provide useful information, see Non-GAAP
Reconciliations.
Consolidated Fiscal Third
Quarter Results
Table 1 below presents a
summary of selected unaudited consolidated operating financial
information.
| Consolidated
Fiscal Third Quarter
Results($ in thousands, except share and per share
amounts) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
Change % vs. Prior YTD |
|
GAAP Revenues |
$ |
(10,235 |
) |
$ |
(42,761 |
) |
$ |
(11,444 |
) |
76.1 |
% |
|
$ |
(55,739 |
) |
$ |
(86,435 |
) |
35.5 |
% |
| Adjusted Revenues(1) |
|
8,456 |
|
|
(801 |
) |
|
9,036 |
|
NM |
|
|
|
8,478 |
|
|
(23,391 |
) |
NM |
|
| GAAP Operating Loss |
|
(915,951 |
) |
|
(381,764 |
) |
|
(45,206 |
) |
NM |
|
|
|
(2,453,685 |
) |
|
(204,157 |
) |
NM |
|
| Adjusted Operating
Loss(1) |
|
(11,684 |
) |
|
(21,170 |
) |
|
(19,927 |
) |
44.8 |
% |
|
|
(57,374 |
) |
|
(100,998 |
) |
43.2 |
% |
| Diluted Class A EPS |
$ |
(1.98 |
) |
$ |
(1.45 |
) |
$ |
(0.19 |
) |
(36.6 |
)% |
|
$ |
(8.35 |
) |
$ |
(0.48 |
) |
NM |
|
| Segment Revenues attributable
to Ben's Equity Holders(2) |
|
17,961 |
|
|
18,629 |
|
|
12,048 |
|
(3.6 |
)% |
|
|
53,715 |
|
|
46,687 |
|
15.1 |
% |
| Adjusted Segment Revenues
attributable to Ben's Equity Holders(1)(2) |
|
18,146 |
|
|
19,066 |
|
|
16,198 |
|
(4.8 |
)% |
|
|
55,059 |
|
|
59,463 |
|
(7.4 |
)% |
| Segment Operating Income
(Loss) attributable to Ben's Equity Holders |
|
(894,617 |
) |
|
(378,172 |
) |
|
(43,836 |
) |
NM |
|
|
|
(2,414,893 |
) |
|
(98,544 |
) |
NM |
|
| Adjusted Segment Operating
Loss attributable to Ben's Equity Holders(1)(2) |
$ |
(4,594 |
) |
$ |
(11,960 |
) |
$ |
(13,769 |
) |
61.6 |
% |
|
$ |
(37,583 |
) |
$ |
(20,426 |
) |
(84.0 |
)% |
NM - Not meaningful.(1) Adjusted Revenues,
Adjusted Operating Income (Loss), Adjusted Segment Revenues
attributable to Ben's Equity Holders and Adjusted Segment Operating
Income (Loss) attributable to Ben's Equity Holders are non-GAAP
financial measures. For reconciliations of our non-GAAP measures to
the most directly comparable GAAP financial measures and for the
reasons we believe the non-GAAP measures provide useful
information, see Non-GAAP Reconciliations.(2) Segment financial
information attributable to Ben’s equity holders is presented to
provide users of our financial information an understanding and
visual aide of the segment information (revenues, operating income
(loss), and adjusted operating income (loss)) that impacts Ben’s
Equity Holders. Ben’s Equity Holders refers to the holders of
Beneficient Class A and Class B common stock and Series B-1
Preferred Stock as well as holders of interests in BCH which
represent noncontrolling interests. For a description of
noncontrolling interests, see Item 2 of our Quarterly Report on
Form 10-Q for the nine months ended December 31, 2023, and
Reconciliation of Business Segment Information Attributable to
Ben’s Equity Holders to Net Income Attributable to Ben Common
Holders. Such information is computed as the sum of the Ben
Liquidity, Ben Custody and Corp/Other segments since it is the
operating results of those segments that determine the net income
(loss) attributable to Ben’s Equity Holders. See further
information in table 5 and Non-GAAP Reconciliations.
Table 2 below presents a
summary of selected unaudited consolidated balance sheet
information.
| Consolidated Fiscal
Third Quarter Results($ in thousands) |
Fiscal 3Q24As
ofDecember 31, 2023 |
|
Fiscal 4Q23As ofMarch 31, 2023 |
|
Change % |
|
Investments, at Fair Value |
$ |
378,420 |
|
|
$ |
497,221 |
|
|
(23.9 |
)% |
| All Other Assets |
|
37,329 |
|
|
|
42,448 |
|
|
(12.1 |
)% |
| Goodwill and Intangible Assets,
Net |
|
84,814 |
|
|
|
2,371,026 |
|
|
(96.4 |
)% |
|
Total Assets |
$ |
500,563 |
|
|
$ |
2,910,695 |
|
|
(82.8 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Business Segment Information
Attributable to Ben's Equity
Holders(1)
Table 3 below presents
unaudited segment revenues and segment operating income (loss) for
business segments attributable to Ben's equity holders.
| Segment Revenues
Attributable to Ben's Equity Holders(1)($
in thousands) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
11,275 |
|
$ |
13,022 |
|
$ |
12,716 |
|
(13.4 |
)% |
|
$ |
36,303 |
|
$ |
37,920 |
|
(4.3 |
)% |
| Ben Custody |
|
5,897 |
|
|
6,490 |
|
|
7,216 |
|
(9.1 |
)% |
|
|
18,961 |
|
|
22,280 |
|
(14.9 |
)% |
| Corporate & Other |
|
789 |
|
|
(883 |
) |
|
(7,884 |
) |
NM |
|
|
|
(1,549 |
) |
|
(13,513 |
) |
88.5 |
% |
|
Total Segment Revenues Attributable to Ben's Equity
Holders(1) |
$ |
17,961 |
|
$ |
18,629 |
|
$ |
12,048 |
|
(3.6 |
)% |
|
$ |
53,715 |
|
$ |
46,687 |
|
15.1 |
% |
| Segment Operating
Income (Loss) Attributable to Ben's Equity
Holders(1)($ in thousands) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
(606,405 |
) |
$ |
(272,091 |
) |
$ |
(18,997 |
) |
NM |
|
|
$ |
(1,781,521 |
) |
$ |
(27,651 |
) |
NM |
|
| Ben Custody |
|
(267,995 |
) |
|
(80,847 |
) |
|
5,879 |
|
NM |
|
|
|
(538,840 |
) |
|
18,320 |
|
NM |
|
| Corporate & Other |
|
(20,217 |
) |
|
(25,234 |
) |
|
(30,718 |
) |
19.9 |
% |
|
|
(94,532 |
) |
|
(89,213 |
) |
(6.0 |
)% |
|
Total Segment Operating Income (Loss) Attributable to Ben's
Equity Holders(1) |
$ |
(894,617 |
) |
$ |
(378,172 |
) |
$ |
(43,836 |
) |
NM |
|
|
$ |
(2,414,893 |
) |
$ |
(98,544 |
) |
NM |
|
NM - Not meaningful.(1) Segment financial
information attributable to Ben’s equity holders is presented to
provide users of our financial information an understanding and
visual aide of the segment information (revenues, operating income
(loss), and adjusted operating income (loss)) that impacts Ben’s
Equity Holders. Ben’s Equity Holders refers to the holders of
Beneficient Class A and Class B common stock and Series B-1
Preferred Stock as well as holders of interests in BCH which
represent noncontrolling interests. For a description of
noncontrolling interests, see Item 2 of our Quarterly Report on
Form 10-Q for the nine months ended December 31, 2023, and
Reconciliation of Business Segment Information Attributable to
Ben’s Equity Holders to Net Income Attributable to Ben Common
Holders. Such information is computed as the sum of the Ben
Liquidity, Ben Custody and Corp/Other segments since it is the
operating results of those segments that determine the net income
(loss) attributable to Ben’s Equity Holders. See further
information in table 5 and Non-GAAP Reconciliations.
Adjusted Business Segment Information
Attributable to Ben's Equity
Holders(2)
Table 4 below presents
unaudited adjusted segment revenue and adjusted segment operating
income (loss) for business segments attributable to Ben's equity
holders.
| Adjusted Segment
Revenues Attributable to Ben's Equity Holders(1)(2)($ in
thousands) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
11,275 |
|
$ |
13,022 |
|
$ |
12,716 |
|
(13.4 |
)% |
|
$ |
36,303 |
|
$ |
37,920 |
|
(4.3 |
)% |
| Ben Custody |
|
5,897 |
|
|
6,490 |
|
|
7,216 |
|
(9.1 |
)% |
|
|
18,961 |
|
|
22,280 |
|
(14.9 |
)% |
| Corporate & Other |
|
974 |
|
|
(446 |
) |
|
(3,734 |
) |
NM |
|
|
|
(205 |
) |
|
(737 |
) |
72.2 |
% |
|
Total Adjusted Segment Revenues Attributable to Ben's
Equity Holders(1)(2) |
$ |
18,146 |
|
$ |
19,066 |
|
$ |
16,198 |
|
(4.8 |
)% |
|
$ |
55,059 |
|
$ |
59,463 |
|
(7.4 |
)% |
| Adjusted Segment
Operating Income (Loss) Attributable to Ben's Equity
Holders(1)(2)($ in thousands) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
2,525 |
|
$ |
(4,738 |
) |
$ |
2,121 |
|
NM |
|
|
$ |
(11,769 |
) |
$ |
10,183 |
|
NM |
|
| Ben Custody |
|
4,835 |
|
|
5,625 |
|
|
5,879 |
|
(14.0 |
)% |
|
|
15,767 |
|
|
18,320 |
|
(13.9 |
)% |
| Corporate & Other |
|
(11,954 |
) |
|
(12,847 |
) |
|
(21,769 |
) |
7.0 |
% |
|
|
(41,581 |
) |
|
(48,929 |
) |
15.0 |
% |
|
Total Adjusted Segment Operating Income (Loss) Attributable
to Ben's Equity Holders(1)(2) |
$ |
(4,594 |
) |
$ |
(11,960 |
) |
$ |
(13,769 |
) |
61.6 |
% |
|
$ |
(37,583 |
) |
$ |
(20,426 |
) |
(84.0 |
)% |
NM - Not meaningful.(1) Adjusted Revenues,
Adjusted Operating Income (Loss), Adjusted Segment Revenues
attributable to Ben's Equity Holders and Adjusted Segment Operating
Income (Loss) attributable to Ben's Equity Holders are non-GAAP
financial measures. For reconciliations of our non-GAAP measures to
the most directly comparable GAAP financial measures and for the
reasons we believe the non-GAAP measures provide useful
information, see Non-GAAP Reconciliations.(2) Segment financial
information attributable to Ben’s equity holders is presented to
provide users of our financial information an understanding and
visual aide of the segment information (revenues, operating income
(loss), and adjusted operating income (loss)) that impacts Ben’s
Equity Holders. Ben’s Equity Holders refers to the holders of
Beneficient Class A and Class B common stock and Series B-1
Preferred Stock as well as holders of interests in BCH which
represent noncontrolling interests. For a description of
noncontrolling interests, see Item 2 of our Quarterly Report on
Form 10-Q for the nine months ended December 31, 2023, and
Reconciliation of Business Segment Information Attributable to
Ben’s Equity Holders to Net Income Attributable to Ben Common
Holders. Such information is computed as the sum of the Ben
Liquidity, Ben Custody and Corp/Other segments since it is the
operating results of those segments that determine the net income
(loss) attributable to Ben’s Equity Holders. See further
information in table 5 and Non-GAAP Reconciliations.
Reconciliation of Business Segment
Information Attributable to Ben's Equity Holders to Net Income
Attributable to Ben Common Shareholders
Table 5 below presents
reconciliation of operating income (loss) by business segment
attributable to Ben's Equity Holders to net income (loss)
attributable to Ben common shareholders.
| Reconciliation of
Business Segments to Net Income (Loss) to Ben Common
Shareholders($ in thousands) |
Fiscal 3Q24December 31,
2023 |
Fiscal 2Q24September 30, 2023 |
Fiscal 3Q23December 31,
2022 |
|
YTD Fiscal 2024 |
YTD Fiscal 2023 |
|
Ben Liquidity |
$ |
(606,405 |
) |
$ |
(272,091 |
) |
$ |
(18,997 |
) |
|
$ |
(1,781,521 |
) |
$ |
(27,651 |
) |
|
Ben Custody |
|
(267,995 |
) |
|
(80,847 |
) |
|
5,879 |
|
|
|
(538,840 |
) |
|
18,320 |
|
|
Corporate & Other |
|
(20,217 |
) |
|
(25,234 |
) |
|
(30,718 |
) |
|
|
(94,532 |
) |
|
(89,213 |
) |
| Less: Loss on debt
extinguishment, net (intersegment elimination) |
|
3,940 |
|
|
— |
|
|
— |
|
|
|
3,940 |
|
|
— |
|
| Less: Income tax expense |
|
75 |
|
|
— |
|
|
(2,356 |
) |
|
|
75 |
|
|
(1,072 |
) |
| Less: Net (income) loss
attributable to noncontrolling interests - Ben |
|
360,695 |
|
|
10,604 |
|
|
5,887 |
|
|
|
401,985 |
|
|
13,231 |
|
| Less: Net income attributable
to noncontrolling interests - CT |
|
— |
|
|
— |
|
|
2,688 |
|
|
|
— |
|
|
(1 |
) |
| Less: Noncontrolling interest
guaranteed payment |
|
(4,229 |
) |
|
(4,167 |
) |
|
(3,984 |
) |
|
|
(12,501 |
) |
|
(11,778 |
) |
| Net loss attributable
to Ben's common shareholders |
$ |
(542,166 |
) |
$ |
(371,735 |
) |
$ |
(36,889 |
) |
|
$ |
(2,029,424 |
) |
$ |
(96,020 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Webcast
Beneficient will host a webcast and conference
call to review its third-quarter financial results today,
February 13, 2024, at 5:00 pm Eastern time. The webcast will
be available via live webcast from the Investor Relations section
of the Company’s website at https://shareholders.trustben.com under
Events.
Replay
The webcast will be archived on the Company’s
website in the investor relations section for replay for at least
one year.
About Beneficent
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, financing of anchor
commitments and value-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.
ContactsInvestors:Matt
Kreps/214-597-8200/mkreps@darrowir.comMichael
Wetherington/214-284-1199/mwetherington@darrowir.cominvestors@beneficient.com
Media:Longacre Square PartnersGreg Marose / Dan
Zaccheibeneficient@longacresquare.com
Disclaimer and Cautionary Note Regarding
Forward-Looking Statements
Some of the statements contained in this press
release are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are generally identified by the use of
words such as “anticipate,” “believe,” “could,” “estimate,”
“expect,” “intend,” “may,” “plan,” “potential,” “predict,”
“project,” “should,” “target,” “will,” “would,” and, in each case,
their negative or other various or comparable terminology. These
forward-looking statements reflect our views with respect to future
events as of the date of this document and are based on our
management’s current expectations, estimates, forecasts,
projections, assumptions, beliefs and information. Although
management believes that the expectations reflected in these
forward-looking statements are reasonable, it can give no assurance
that these expectations will prove to have been correct. All such
forward-looking statements are subject to risks and uncertainties,
many of which are outside of our control, and could cause future
events or results to be materially different from those stated or
implied in this document. It is not possible to predict or identify
all such risks. These risks include, but are not limited to, our
ability to consummate liquidity transactions on terms desirable for
the Company, or at all, and the risk factors that are described
under the section titled “Risk Factors” in our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K, and other filings with the Securities and Exchange Commission
(the “SEC”). These factors should not be construed as exhaustive
and should be read in conjunction with the other cautionary
statements that are included in this document and in our SEC
filings. We expressly disclaim any obligation to publicly update or
review any forward-looking statements, whether as a result of new
information, future developments or otherwise, except as required
by applicable law.
Table 6: CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(LOSS) (UNAUDITED)
| |
Three Months EndedDecember
31, |
|
Nine Months Ended December 31, |
| (Dollars in thousands, except
per share amounts) |
2023 |
|
2022 |
|
2023 |
|
2022 |
| Revenues |
|
|
|
|
|
|
|
|
Investment income (loss), net |
$ |
7,448 |
|
|
$ |
11,478 |
|
|
$ |
7,935 |
|
|
$ |
(30,738 |
) |
|
Loss on financial instruments, net (related party of $(18,691),
$(20,480), $(64,217), and $(63,044), respectively) |
|
(18,024 |
) |
|
|
(23,043 |
) |
|
|
(64,260 |
) |
|
|
(56,101 |
) |
|
Interest and dividend income |
|
118 |
|
|
|
113 |
|
|
|
348 |
|
|
|
295 |
|
|
Trust services and administration revenues (related party of $8,
$8, $23, and $23, respectively) |
|
158 |
|
|
|
8 |
|
|
|
173 |
|
|
|
23 |
|
|
Other income |
|
65 |
|
|
|
— |
|
|
|
65 |
|
|
|
86 |
|
|
Total revenues |
|
(10,235 |
) |
|
|
(11,444 |
) |
|
|
(55,739 |
) |
|
|
(86,435 |
) |
| |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
7,340 |
|
|
|
12,670 |
|
|
|
58,561 |
|
|
|
34,752 |
|
|
Interest expense (related party of $3,018, $746, $5,843, and
$2,108, respectively) |
|
4,671 |
|
|
|
4,147 |
|
|
|
13,569 |
|
|
|
11,356 |
|
|
Professional services |
|
4,970 |
|
|
|
8,073 |
|
|
|
22,000 |
|
|
|
29,580 |
|
|
Provision (provision credit) for credit losses |
|
— |
|
|
|
1,799 |
|
|
|
— |
|
|
|
20,580 |
|
|
Loss on impairment of goodwill |
|
883,223 |
|
|
|
— |
|
|
|
2,286,212 |
|
|
|
— |
|
|
Other expenses (related party of $2,096, $2,246, $6,317, and
$6,576, respectively) |
|
5,512 |
|
|
|
7,073 |
|
|
|
17,604 |
|
|
|
21,454 |
|
|
Total operating expenses |
|
905,716 |
|
|
|
33,762 |
|
|
|
2,397,946 |
|
|
|
117,722 |
|
| Operating
loss |
|
(915,951 |
) |
|
|
(45,206 |
) |
|
|
(2,453,685 |
) |
|
|
(204,157 |
) |
|
Loss on extinguishment of debt, net |
|
8,846 |
|
|
|
— |
|
|
|
8,846 |
|
|
|
— |
|
| Loss before income
taxes |
|
(924,797 |
) |
|
|
(45,206 |
) |
|
|
(2,462,531 |
) |
|
|
(204,157 |
) |
|
Income tax expense (benefit) |
|
75 |
|
|
|
(2,356 |
) |
|
|
75 |
|
|
|
(1,072 |
) |
| Net loss |
|
(924,872 |
) |
|
|
(42,850 |
) |
|
|
(2,462,606 |
) |
|
|
(203,085 |
) |
|
Less: Net (income) loss attributable to noncontrolling interests -
Customer ExAlt Trusts |
|
26,240 |
|
|
|
4,058 |
|
|
|
43,698 |
|
|
|
105,612 |
|
|
Less: Net (income) loss attributable to noncontrolling interests -
Ben |
|
360,695 |
|
|
|
5,887 |
|
|
|
401,985 |
|
|
|
13,231 |
|
|
Less: Noncontrolling interest guaranteed payment |
|
(4,229 |
) |
|
|
(3,984 |
) |
|
|
(12,501 |
) |
|
|
(11,778 |
) |
| Net loss attributable
to Beneficient common shareholders |
$ |
(542,166 |
) |
|
$ |
(36,889 |
) |
|
$ |
(2,029,424 |
) |
|
$ |
(96,020 |
) |
| Other comprehensive
income (loss): |
|
|
|
|
|
|
|
|
Unrealized gain (loss) on investments in available-for-sale debt
securities |
|
51 |
|
|
|
(1,307 |
) |
|
|
4,236 |
|
|
|
6,400 |
|
| Total comprehensive
income (loss) |
|
(542,115 |
) |
|
|
(38,196 |
) |
|
|
(2,025,188 |
) |
|
|
(89,620 |
) |
| Less: comprehensive gain
(loss) attributable to noncontrolling interests |
|
51 |
|
|
|
(1,307 |
) |
|
|
4,236 |
|
|
|
6,400 |
|
| Total comprehensive
loss attributable to Beneficient |
$ |
(542,166 |
) |
|
$ |
(36,889 |
) |
|
$ |
(2,029,424 |
) |
|
$ |
(96,020 |
) |
| |
|
|
|
|
|
|
|
| Net loss per common share -
basic and diluted(1) |
|
|
|
|
|
|
|
|
Class A |
$ |
(1.98 |
) |
|
$ |
(0.19 |
) |
|
$ |
(8.35 |
) |
|
$ |
(0.48 |
) |
|
Class B |
$ |
(1.96 |
) |
|
$ |
(0.19 |
) |
|
$ |
(7.34 |
) |
|
$ |
(0.48 |
) |
| |
|
|
|
|
|
|
|
| Weighted average common shares
outstanding - basic and diluted(1) |
|
|
|
|
|
|
|
|
Class A |
|
254,923,039 |
|
|
|
180,178,268 |
|
|
|
226,105,978 |
|
|
|
180,178,268 |
|
|
Class B |
|
19,140,451 |
|
|
|
19,140,451 |
|
|
|
19,140,451 |
|
|
|
19,140,451 |
|
(1) Retroactively adjusted the three and nine months ended
December 31, 2022 for the de-SPAC merger transaction.
Table 7: CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION
| |
December 31, 2023 |
|
March 31, 2023(1) |
| (Dollars and shares in
thousands) |
(unaudited) |
|
|
| ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
11,248 |
|
|
$ |
8,726 |
|
|
Restricted cash |
|
20 |
|
|
|
819 |
|
|
Investments, at fair value: |
|
|
|
|
Investments held by Customer ExAlt Trusts (related party of $3,759
and $76,154) |
|
378,382 |
|
|
|
491,859 |
|
|
Investments held by Ben (related party of $38 and $1,371) |
|
38 |
|
|
|
5,362 |
|
|
Other assets, net (related party of $0 and $2,195) |
|
26,061 |
|
|
|
32,903 |
|
|
Intangible assets |
|
3,100 |
|
|
|
3,100 |
|
|
Goodwill |
|
81,714 |
|
|
|
2,367,926 |
|
| Total
assets |
$ |
500,563 |
|
|
$ |
2,910,695 |
|
| LIABILITIES, TEMPORARY
EQUITY, AND EQUITY |
|
|
|
|
Accounts payable and accrued expenses (related party of $14,032 and
$10,485) |
$ |
96,194 |
|
|
$ |
65,724 |
|
|
Other liabilities (related party of nil and $100) |
|
20,986 |
|
|
|
14,622 |
|
|
Warrant liability |
|
161 |
|
|
|
— |
|
|
Customer ExAlt Trusts loan payable, net |
|
— |
|
|
|
52,129 |
|
|
Debt due to related party, net |
|
128,197 |
|
|
|
99,314 |
|
| Total
liabilities |
|
245,538 |
|
|
|
231,789 |
|
|
Redeemable noncontrolling interests |
|
|
|
|
Preferred Series A Subclass 0 Unit Accounts, nonunitized |
|
251,052 |
|
|
|
251,052 |
|
|
Preferred Series A Subclass 1 Unit Accounts, nonunitized |
|
— |
|
|
|
699,441 |
|
| Total temporary
equity |
|
251,052 |
|
|
|
950,493 |
|
|
Shareholder’s equity: |
|
|
|
|
Preferred stock, par value $0.001 per share, 250,000 shares
authorized |
|
|
|
|
Series A Preferred stock, 0 and 0 shares issued and outstanding as
of December 31, 2023 and March 31, 2023 |
|
— |
|
|
|
— |
|
|
Series B Preferred stock, 0 and 0 shares issued and outstanding as
of December 31, 2023 and March 31, 2023 |
|
— |
|
|
|
— |
|
|
Class A common stock, par value $0.001 per share, 1,500,000 shares
authorized, 257,210 and 180,178 shares issued as of
December 31, 2023 and March 31, 2023, respectively, and
256,666 and 179,634 shares outstanding as of December 31, 2023
and March 31, 2023, respectively |
|
257 |
|
|
|
180 |
|
|
Class B convertible common stock, par value $0.001 per share,
20,000 shares authorized, 19,140 and 19,140 shares issued and
outstanding as of December 31, 2023 and March 31,
2023 |
|
19 |
|
|
|
19 |
|
|
Additional paid-in capital |
|
1,843,493 |
|
|
|
1,579,545 |
|
|
Accumulated deficit |
|
(1,992,992 |
) |
|
|
— |
|
|
Stock receivable |
|
(20,038 |
) |
|
|
— |
|
|
Treasury stock, at cost (544 shares as of December 31, 2023
and March 31, 2023) |
|
(3,444 |
) |
|
|
(3,444 |
) |
|
Accumulated other comprehensive income |
|
442 |
|
|
|
9,900 |
|
|
Noncontrolling interests |
|
176,236 |
|
|
|
142,213 |
|
| Total
equity |
|
3,973 |
|
|
|
1,728,413 |
|
| Total liabilities,
temporary equity, and equity |
$ |
500,563 |
|
|
$ |
2,910,695 |
|
(1) Retroactively adjusted March 31, 2023 for the de-SPAC merger
transaction. Such adjustments are unaudited.
Table 8: Non-GAAP Reconciliation
| (in thousands) |
|
Three Months Ended December 31, 2023 |
| |
|
Ben Liquidity |
Ben Custody |
Customer ExAlt Trusts |
Corporate/Other |
Consolidating Eliminations |
Consolidated |
|
Total revenues |
|
$ |
11,275 |
|
$ |
5,897 |
|
$ |
(11,182 |
) |
$ |
789 |
|
$ |
(17,014 |
) |
$ |
(10,235 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
18,506 |
|
|
185 |
|
|
— |
|
|
18,691 |
|
| Adjusted revenues |
|
$ |
11,275 |
|
$ |
5,897 |
|
$ |
7,324 |
|
$ |
974 |
|
$ |
(17,014 |
) |
$ |
8,456 |
|
| |
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(606,405 |
) |
$ |
(267,995 |
) |
$ |
(49,363 |
) |
$ |
(20,217 |
) |
$ |
28,029 |
|
$ |
(915,951 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
18,506 |
|
|
185 |
|
|
— |
|
|
18,691 |
|
| Intersegment reversal of
provision for credit losses on collateral comprised of interests in
the GWG Wind Down Trust |
|
|
4,262 |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,262 |
) |
|
— |
|
| Goodwill impairment |
|
|
604,668 |
|
|
272,830 |
|
|
— |
|
|
5,725 |
|
|
— |
|
|
883,223 |
|
| Share-based compensation
expense |
|
|
— |
|
|
— |
|
|
— |
|
|
2,026 |
|
|
— |
|
|
2,026 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
327 |
|
|
— |
|
|
327 |
|
| Adjusted operating income
(loss) |
|
$ |
2,525 |
|
$ |
4,835 |
|
$ |
(30,857 |
) |
$ |
(11,954 |
) |
$ |
23,767 |
|
$ |
(11,684 |
) |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
| (in thousands) |
|
Three Months Ended September 30, 2023 |
| |
|
Ben Liquidity |
Ben Custody |
Customer ExAlt Trusts |
Corporate/Other |
Consolidating Eliminations |
Consolidated |
|
Total revenues |
|
$ |
13,022 |
|
$ |
6,490 |
|
$ |
(41,886 |
) |
$ |
(883 |
) |
$ |
(19,504 |
) |
$ |
(42,761 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
41,523 |
|
|
437 |
|
|
— |
|
|
41,960 |
|
| Adjusted revenues |
|
$ |
13,022 |
|
$ |
6,490 |
|
$ |
(363 |
) |
$ |
(446 |
) |
$ |
(19,504 |
) |
$ |
(801 |
) |
| |
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(272,091 |
) |
$ |
(80,847 |
) |
$ |
(78,275 |
) |
$ |
(25,234 |
) |
$ |
74,683 |
|
$ |
(381,764 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
41,523 |
|
|
437 |
|
|
— |
|
|
41,960 |
|
| Intersegment reversal of
provision for credit losses on collateral comprised of interests in
the GWG Wind Down Trust |
|
|
47,141 |
|
|
— |
|
|
— |
|
|
— |
|
|
(47,141 |
) |
|
— |
|
| Goodwill impairment |
|
|
220,212 |
|
|
86,472 |
|
|
— |
|
|
— |
|
|
— |
|
|
306,684 |
|
| Share-based compensation
expense |
|
|
— |
|
|
— |
|
|
— |
|
|
8,503 |
|
|
— |
|
|
8,503 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
3,447 |
|
|
— |
|
|
3,447 |
|
| Adjusted operating income
(loss) |
|
$ |
(4,738 |
) |
$ |
5,625 |
|
$ |
(36,752 |
) |
$ |
(12,847 |
) |
$ |
27,542 |
|
$ |
(21,170 |
) |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
| (in thousands) |
|
Three Months Ended December 31, 2022 |
| |
|
Ben Liquidity |
Ben Custody |
Customer ExAlt Trusts |
Corporate/Other |
Consolidating Eliminations |
Consolidated |
|
Total revenues |
|
$ |
12,716 |
|
$ |
7,216 |
|
$ |
(3,568 |
) |
$ |
(7,884 |
) |
$ |
(19,924 |
) |
$ |
(11,444 |
) |
| Mark to market adjustment on
equity security of related party |
|
|
— |
|
|
— |
|
|
16,330 |
|
|
4,150 |
|
|
— |
|
|
20,480 |
|
| Adjusted revenues |
|
$ |
12,716 |
|
$ |
7,216 |
|
$ |
12,762 |
|
$ |
(3,734 |
) |
$ |
(19,924 |
) |
$ |
9,036 |
|
| |
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(18,997 |
) |
$ |
5,879 |
|
$ |
(41,853 |
) |
$ |
(30,718 |
) |
$ |
40,483 |
|
$ |
(45,206 |
) |
| Mark to market adjustment on
equity security of related party |
|
|
— |
|
|
— |
|
|
16,330 |
|
|
4,150 |
|
|
— |
|
|
20,480 |
|
| Intersegment provision for
loan losses on collateral comprised of related party equity
securities |
|
|
21,118 |
|
|
— |
|
|
— |
|
|
— |
|
|
(21,118 |
) |
|
— |
|
| Provision for credit losses
related to receivables from related party |
|
|
— |
|
|
— |
|
|
— |
|
|
563 |
|
|
— |
|
|
563 |
|
| Share-based compensation
expense |
|
|
— |
|
|
— |
|
|
— |
|
|
1,918 |
|
|
— |
|
|
1,918 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
2,318 |
|
|
— |
|
|
2,318 |
|
| Adjusted operating income
(loss) |
|
$ |
2,121 |
|
$ |
5,879 |
|
$ |
(25,523 |
) |
$ |
(21,769 |
) |
$ |
19,365 |
|
$ |
(19,927 |
) |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations and employee matters.
| (in thousands) |
|
Nine Months Ended December 31, 2023 |
| |
|
Ben Liquidity |
|
Ben Custody |
|
Customer ExAlt Trusts |
|
Corporate/Other |
|
Consolidating Eliminations |
|
Consolidated |
|
Total revenues |
|
$ |
36,303 |
|
|
$ |
18,961 |
|
|
$ |
(54,363 |
) |
|
$ |
(1,549 |
) |
|
$ |
(55,091 |
) |
|
$ |
(55,739 |
) |
| Mark to market adjustment
interests in the GWG Wind Down Trust |
|
|
— |
|
|
|
— |
|
|
|
62,873 |
|
|
|
1,344 |
|
|
|
— |
|
|
|
64,217 |
|
| Adjusted revenues |
|
$ |
36,303 |
|
|
$ |
18,961 |
|
|
$ |
8,510 |
|
|
$ |
(205 |
) |
|
$ |
(55,091 |
) |
|
$ |
8,478 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(1,781,521 |
) |
|
$ |
(538,840 |
) |
|
$ |
(166,051 |
) |
|
$ |
(94,532 |
) |
|
$ |
127,259 |
|
|
$ |
(2,453,685 |
) |
| Mark to market adjustment
interests in the GWG Wind Down Trust |
|
|
— |
|
|
|
— |
|
|
|
62,873 |
|
|
|
1,344 |
|
|
|
— |
|
|
|
64,217 |
|
| Intersegment provision for
credit losses on collateral comprised of interests in the GWG Down
Trust |
|
|
43,872 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(43,872 |
) |
|
|
— |
|
| Goodwill impairment |
|
|
1,725,880 |
|
|
|
554,607 |
|
|
|
— |
|
|
|
5,725 |
|
|
|
— |
|
|
|
2,286,212 |
|
| Share-based compensation
expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
37,530 |
|
|
|
— |
|
|
|
37,530 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,352 |
|
|
|
— |
|
|
|
8,352 |
|
| Defunct product offering
costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Adjusted operating income
(loss) |
|
$ |
(11,769 |
) |
|
$ |
15,767 |
|
|
$ |
(103,178 |
) |
|
$ |
(41,581 |
) |
|
$ |
83,387 |
|
|
$ |
(57,374 |
) |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
| (in thousands) |
|
Nine Months Ended December 31, 2022 |
| |
|
Ben Liquidity |
|
Ben Custody |
|
Customer ExAlt Trusts |
|
Corporate/Other |
|
Consolidating Eliminations |
|
Consolidated |
|
Total revenues |
|
$ |
37,920 |
|
|
$ |
22,280 |
|
|
$ |
(72,945 |
) |
|
$ |
(13,513 |
) |
|
$ |
(60,177 |
) |
|
$ |
(86,435 |
) |
| Mark to market adjustment on
equity security of related party |
|
|
— |
|
|
|
— |
|
|
|
50,268 |
|
|
|
12,776 |
|
|
|
— |
|
|
|
63,044 |
|
| Adjusted revenues |
|
$ |
37,920 |
|
|
$ |
22,280 |
|
|
$ |
(22,677 |
) |
|
$ |
(737 |
) |
|
$ |
(60,177 |
) |
|
$ |
(23,391 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(27,651 |
) |
|
$ |
18,320 |
|
|
$ |
(193,974 |
) |
|
$ |
(89,213 |
) |
|
$ |
88,361 |
|
|
$ |
(204,157 |
) |
| Mark to market adjustment on
equity security of related party |
|
|
— |
|
|
|
— |
|
|
|
50,268 |
|
|
|
12,776 |
|
|
|
— |
|
|
|
63,044 |
|
| Intersegment provision for
loan losses on collateral comprised of related party equity
securities |
|
|
37,834 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(37,834 |
) |
|
|
— |
|
| Provision for credit losses
related to available-for-sale debt securities of related party |
|
|
— |
|
|
|
— |
|
|
|
12,607 |
|
|
|
14 |
|
|
|
— |
|
|
|
12,621 |
|
| Provision for credit losses
related to receivables from related party |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,723 |
|
|
|
— |
|
|
|
6,723 |
|
| Share-based compensation
expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,162 |
|
|
|
— |
|
|
|
8,162 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,795 |
|
|
|
— |
|
|
|
8,795 |
|
| Defunct product offering
costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,814 |
|
|
|
— |
|
|
|
3,814 |
|
| Adjusted operating income
(loss) |
|
$ |
10,183 |
|
|
$ |
18,320 |
|
|
$ |
(131,099 |
) |
|
$ |
(48,929 |
) |
|
$ |
50,527 |
|
|
$ |
(100,998 |
) |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
Adjusted Revenues, Adjusted Operating Income
(Loss), Adjusted Segment Revenues attributable to Ben's Equity
Holders and Adjusted Segment Operating Income (Loss) attributable
to Ben's Equity Holders are non-GAAP financial measures. We present
these non-GAAP financial measures because we believe it helps
investors understand underlying trends in our business and
facilitates an understanding of our operating performance from
period to period because it facilitates a comparison of our
recurring core business operating results. These non-GAAP financial
measures are intended as a supplemental measure of our performance
that is neither required by, nor presented in accordance with, U.S.
GAAP. Our presentation of these measures should not be construed as
an inference that our future results will be unaffected by unusual
or non-recurring items. Our computation of these non-GAAP financial
measures may not be comparable to other similarly titled measures
computed by other companies, because all companies may not
calculate such items in the same way.
We define adjusted revenues as GAAP revenues
adjusted to exclude the effect of mark-to-market adjustments on
certain related party equity securities, interest income on related
party available-for-sale debt securities, and income from the
forfeiture of vested share-based compensation awards. Adjusted
Segment Revenues attributable to Ben's Equity Holders is the same
as "adjusted revenues" related to the aggregate of the Ben
Liquidity, Ben Custody, and Corporate/Other Business Segments,
which are the segments that impact the net income (loss)
attributable to all equity holders of Beneficient, including equity
holders of Beneficient's subsidiary, Beneficient Company Holdings,
L.P.
Adjusted operating income (loss) represents GAAP
operating income (loss), adjusted to exclude the effect of the
adjustments to revenue as described above, credit losses on related
party available-for-sale debt securities, and receivables from a
related party that filed for bankruptcy, non-cash asset impairment,
share-based compensation expense, audit fee normalization, and
legal, professional services, and public relations costs related to
the GWG Holdings bankruptcy, lawsuits, a defunct product offering,
and certain employee matters, including fees incurred in
arbitration with a former director. Adjusted Segment Operating
Income (Loss) attributable to Ben's Equity Holders is the same as
"adjusted operating income (loss)" related to the aggregate of the
Ben Liquidity, Ben Custody, and Corporate/Other Business Segments,
which are the segments that impact the net income (loss)
attributable to all equity holders of Beneficient, including equity
holders of Beneficient's subsidiary, Beneficient Company Holdings,
L.P.
These non-GAAP financial measures are not a
measure of performance or liquidity calculated in accordance with
U.S. GAAP. They are unaudited and should not be considered an
alternative to, or more meaningful than, GAAP revenues or GAAP
operating income (loss) as an indicator of our operating
performance. Uses of cash flows that are not reflected in adjusted
operating income (loss) or adjusted segment operating income (loss)
attributable to Ben's Equity Holders include capital expenditures,
interest payments, debt principal repayments, and other expenses,
which can be significant. As a result, adjusted operating income
(loss) and/or adjusted segment operating income (loss) attributable
to Ben's Equity Holders should not be considered as a measure of
our liquidity.
Because of these limitations, Adjusted Revenues,
Adjusted Operating Income (Loss), Adjusted Segment Revenues
attributable to Ben's Equity Holders and Adjusted Segment Operating
Income (Loss) attributable to Ben's Equity Holders should not be
considered in isolation or as a substitute for performance measures
calculated in accordance with U.S. GAAP. We compensate for these
limitations by relying primarily on our U.S. GAAP results and using
Adjusted Revenues, Adjusted Operating Income (Loss), Adjusted
Segment Revenues attributable to Ben's Equity Holders and Adjusted
Segment Operating Income (Loss) attributable to Ben's Equity
Holders on a supplemental basis. You should review the
reconciliation of these non-GAAP financial measures set forth above
and not rely on any single financial measure to evaluate our
business.
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/84b39125-cd16-443a-8b78-ad91b46c4e7d
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