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 2025 second quarter, which
ended September 30, 2024.
Commenting on the fiscal 2025 second quarter
results, Beneficient management said: “We are pleased to report our
second consecutive profitable quarter as a public company, which we
believe positions Ben as a leading solution for liquidity and
primary capital in large and growing private investment markets.
With our Board of Directors having authorized up to $5 billion of
fiduciary financings to Customer ExAlt Trusts through ExchangeTrust
transactions, our platform is designed for substantial growth as
new opportunities are identified and negotiated. We believe that
our comprehensive model will enable stockholders to benefit from
the range of trust, custody and other services we provide as well
as the underlying performance of the private equity assets held in
trust.
“Additionally, we are pleased to have
strengthened our balance sheet through a previously announced
transaction whereby our subsidiary Beneficient Company Holdings,
L.P. redesignated approximately $125.5 million of its preferred
equity as non-redeemable. As a result of the transaction, which was
approved by the Company’s founders holding the majority of the
preferred equity, Beneficient reclassified approximately $125.5
million of temporary equity to permanent equity as of September 30,
2024.”
Second Quarter
Fiscal 2025 and Recent Highlights
(for the quarter ended September 30,
2024 or as noted):
- Reported
investments with a fair value of $335.0 million, increased from
$329.1 million at the end of our prior fiscal year, served as
collateral for Ben Liquidity's net loan portfolio of $260.7 million
and $256.2 million, respectively.
- Revenues
increased to $8.6 million in the second quarter of fiscal 2025 as
compared to $(42.8) million in the same quarter of fiscal 2024. On
a year-to-date basis, revenues for fiscal 2025 were $18.6 million
as compared to $(45.5) million for fiscal 2024.
-
Operating expenses declined to $22.3 million in the second quarter
of fiscal 2025, which included a non-cash goodwill impairment of
$0.3 million, as compared to $339.0 million in the second quarter
of fiscal 2024, which included a non-cash goodwill impairment of
$306.7 million. On a year-to-date basis, operating expenses for
fiscal 2025 were $(12.0) million, which included the release of a
loss contingency accrual of $55.0 million and non-cash goodwill
impairment of $3.7 million, as compared to $1.5 billion in fiscal
2024, which included non-cash goodwill impairment of $1.4
billion.
-
Excluding the non-cash goodwill impairment in each period,
operating expenses declined 31.9% to $22.0 million in the second
quarter of fiscal 2025 as compared to $32.3 million in the same
period of fiscal 2024. On a year-to-date basis, excluding the
non-cash goodwill impairment and the loss contingency release in
each period, as applicable, operating expenses were $39.3 million
for the first half of fiscal 2025 as compared to $89.2 million for
the first half of fiscal 2024.
- Improved
permanent equity from a deficit of $148.3 million as of June 30,
2024 to a deficit of $13.2 million as of September 30, 2024 through
a combination of redesignating approximately $125.5 million of
temporary equity to permanent equity and net income allocable to
permanent equity classified securities of $5.3 million during the
current fiscal period.
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.
Ben’s balance sheet strategy for ExAlt Loan
origination is built on the theory of the portfolio endowment model
for the fiduciary financings we make by utilizing our
patent-pending computer implemented technologies branded as
OptimumAlt. Our OptimumAlt endowment model balance sheet approach
guides diversification of our fiduciary financings across seven
asset classes of alternative assets, over 11 industry sectors in
which alternative asset managers invest, and at least six
countrywide exposures and multiple vintages of dates of investment
into the private funds and companies.
As of September 30, 2024, Ben’s loan
portfolio was supported by a highly diversified alternative asset
collateral portfolio providing diversification across approximately
240 private market funds and approximately 800 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 venture capital firm investing in
waste-to-energy and clean energy technologies, a technology company
providing Net Zero solutions in the production of advanced
biofuels, 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 September 30, 2024, 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 September 30, 2024. 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 September 30, 2024, the total
allowance for credit losses was $315 million, for a total gross
loan balance of $576 million and a loan balance net of allowance
for credit losses of $261 million.
Business Segments: Second Quarter Fiscal
2025
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 $12.0 million of interest income for the
fiscal second quarter, an increase of 10.4% from the quarter ended
June 30, 2024, primarily due to a slightly higher carrying
value of loan receivables, which was driven by compounding
interest, offset by an increase in the allowance for credit
losses.
-
Operating income for the fiscal second quarter was $2.9 million,
improved from an operating loss of $0.5 million for the quarter
ended June 30, 2024.
- Adjusted operating
income(1) for the fiscal second quarter was $2.9 million, improved
from adjusted operating loss(1) of $0.5 million in the quarter
ended June 30, 2024. The increase in adjusted operating
income(1) was primarily due to lower credit loss adjustments along
with the higher revenues noted above.
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 calculated as a percentage of assets in custody.
- NAV of
alternative assets and other securities held in custody by Ben
Custody during the fiscal second quarter increased to $385.1
million as of September 30, 2024, compared to $381.2 million
as of March 31, 2024. The increase was driven by unrealized
gains on existing assets, principally related adjustments to the
relative share held in custody of the respective fund’s NAV based
on updated financial information received from the funds’
investment manager or sponsor during the period, offset by
distributions during the period.
-
Revenues applicable to Ben Custody were $5.4 million for the fiscal
second quarter, compared to $5.4 million for the quarter ended
June 30, 2024. The similar amount of revenues for these
periods was a result of stable NAV of alternative assets and other
securities held in custody at the beginning of each applicable
period, when such fees are calculated.
-
Operating income for the fiscal second quarter increased to $4.3
million, from $1.3 million for the quarter ended June 30,
2024. The increase was primarily due to lower non-cash goodwill
impairment in the fiscal second quarter of $0.3 million as compared
to non-cash goodwill impairment of $3.1 million for the quarter
ended June 30, 2024.
-
Adjusted operating income(1) for the fiscal second quarter was $4.6
million, compared to adjusted operating income(1) of $4.4 million
for the quarter ended June 30, 2024. The increase was
primarily due to slightly higher revenues and slightly lower
operating expenses.
Business Segments: Through Six Months
Ended Fiscal 2025
Ben Liquidity
-
Ben Liquidity recognized $22.8 million of interest income for the
six months ended September 30, 2024, down 8.8% compared to the
prior year period, 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 income was $2.4 million for the six months ended
September 30, 2024, increased from an operating loss of $1.2
billion in the prior year period. The prior period loss was driven
by non-cash goodwill impairment totaling $1.1 billion and credit
losses largely related to securities of our former parent
company.
-
Adjusted operating income(1) was $2.4 million for the six months
ended September 30, 2024 compared to adjusted operating
loss(1) of $14.3 million in the prior year period with the increase
in adjusted operating income(1) primarily related to lower credit
loss adjustments recognized in the current period and lower
interest expense.
Ben Custody
-
Ben Custody revenues were $10.8 million for the six months ended
September 30, 2024, down 17.6%, compared to the prior year
period, primarily due to lower NAV of alternative assets and other
securities held in custody.
-
Operating income was $5.6 million for the six months ended
September 30, 2024 compared to operating loss of $270.8
million in the prior year period, with the increase in operating
income principally related to a significantly larger non-cash
goodwill impairment in the prior year period of $281.8 million as
compared to $3.4 million in the current year period.
-
Adjusted operating income(1) for the six months ended
September 30, 2024 was $9.0 million, compared to adjusted
operating income(1) of $10.9 million in the prior year period with
the decrease in adjusted operating income(1) primarily due to lower
revenue related to lower NAV of alternative assets and other
securities held in custody and slightly lower operating expenses
during the current fiscal year period.
Capital and Liquidity
-
As of September 30, 2024, the Company had cash and cash
equivalents of $4.5 million and total debt of $124.1 million.
- Distributions
received from alternative assets and other securities held in
custody totaled $12.5 million for the six months ended
September 30, 2024, compared to $26.3 million for the same
period of fiscal 2024.
- Total investments
(at fair value) of $335.0 million at September 30, 2024
supported Ben Liquidity's loan portfolio.
(1) Represents a non-GAAP financial measure. For
reconciliations of our non-GAAP measures to the most directly
comparable GAAP financial measures and for the reasons we believe
the non-GAAP measures provide useful information, see Non-GAAP
Reconciliations.
Board Update
On September 30, 2024, Patrick J. Donegan was
appointed to the Board as an independent director and a member of
various committees including the Audit committee of the Board. Mr.
Donegan brings almost thirty years of compliance, legal, banking
and capital markets experience to Ben, having held various senior
compliance positions, including as Chief Compliance Officer, for
bank holding companies and broker dealers and as Assistant General
Counsel for a securities company. Over the course of his career,
Mr. Donegan has attained eleven FINRA licenses and two
certifications from the American Bankers Association, including the
Certified Regulatory Compliance Mangers designation, and currently
holds a Certified Anti-Money Laundering Specialist
certification.
Consolidated Fiscal Second Quarter
Results
Table 1 below presents a
summary of selected unaudited consolidated operating financial
information.
| Consolidated
FiscalSecondQuarter
Results($ in thousands, except share and per share
amounts) |
Fiscal2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal2Q24September 30,
2023 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
Change % vs. Prior YTD |
| GAAP Revenues |
$ |
8,561 |
|
$ |
10,046 |
|
$ |
(42,761 |
) |
(14.8 |
)% |
|
$ |
18,607 |
|
$ |
(45,504 |
) |
NM |
| Adjusted Revenues(1) |
|
8,734 |
|
|
10,411 |
|
|
(801 |
) |
(16.1 |
)% |
|
|
19,145 |
|
|
22 |
|
NM |
| GAAP Operating Income
(Loss) |
|
(13,715 |
) |
|
44,338 |
|
|
(381,764 |
) |
NM |
|
|
30,623 |
|
|
(1,537,734 |
) |
NM |
| Adjusted Operating
Loss(1) |
|
(6,611 |
) |
|
(4,725 |
) |
|
(21,170 |
) |
(39.9 |
)% |
|
|
(11,337 |
) |
|
(45,690 |
) |
75.2 |
% |
| Basic Class A EPS |
$ |
2.98 |
|
$ |
12.11 |
|
$ |
(115.95 |
) |
(75.4 |
)% |
|
$ |
14.58 |
|
$ |
(521.17 |
) |
NM |
| Diluted Class A EPS |
$ |
0.03 |
|
$ |
0.17 |
|
$ |
(115.95 |
) |
(82.4 |
)% |
|
$ |
0.18 |
|
$ |
(521.17 |
) |
NM |
| Segment Revenues attributable
to Ben's Equity Holders(2) |
|
16,626 |
|
|
16,235 |
|
|
18,629 |
|
2.4 |
% |
|
|
32,861 |
|
|
35,756 |
|
(8.1 |
)% |
| Adjusted Segment Revenues
attributable to Ben's Equity Holders(1)(2) |
|
16,626 |
|
|
16,242 |
|
|
19,066 |
|
2.4 |
% |
|
|
32,868 |
|
|
36,915 |
|
(11.0 |
)% |
| Segment Operating Income
(Loss) attributable to Ben's Equity Holders |
|
(9,192 |
) |
|
44,864 |
|
|
(378,172 |
) |
NM |
|
|
35,672 |
|
|
(1,520,276 |
) |
NM |
|
Adjusted Segment Operating Loss attributable to Ben's Equity
Holders(1)(2) |
$ |
(2,261 |
) |
$ |
(4,552 |
) |
$ |
(11,960 |
) |
50.3 |
% |
|
$ |
(6,814 |
) |
$ |
(32,989 |
) |
79.3 |
% |
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 six months ended
September 30, 2024, 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
First Quarter Results($ in thousands) |
Fiscal 2Q25As
ofSeptember 30, 2024 |
|
Fiscal 4Q24As ofMarch 31,
2024 |
|
Change % |
|
Investments, at Fair Value |
$ |
334,987 |
|
$ |
329,119 |
|
1.8 |
% |
| All Other Assets |
|
20,787 |
|
|
22,676 |
|
(8.3 |
)% |
| Goodwill and Intangible
Assets, Net |
|
13,014 |
|
|
16,706 |
|
(22.1 |
)% |
|
Total Assets |
$ |
368,788 |
|
$ |
368,501 |
|
0.1 |
% |
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 2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal 2Q24September 30,
2023 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
11,978 |
|
$ |
10,849 |
$ |
13,022 |
|
10.4 |
% |
|
$ |
22,827 |
|
$ |
25,028 |
|
(8.8 |
)% |
| Ben Custody |
|
5,386 |
|
|
5,382 |
|
6,490 |
|
0.1 |
% |
|
|
10,768 |
|
|
13,065 |
|
(17.6 |
)% |
| Corporate & Other |
|
(738 |
) |
|
4 |
|
(883 |
) |
NM |
|
|
(734 |
) |
|
(2,337 |
) |
68.6 |
% |
|
Total Segment Revenues Attributable to Ben's Equity
Holders(1) |
$ |
16,626 |
|
$ |
16,235 |
$ |
18,629 |
|
2.4 |
% |
|
$ |
32,861 |
|
$ |
35,756 |
|
(8.1 |
)% |
| Segment Operating
Income (Loss) Attributable to Ben's Equity
Holders(1)($ in thousands) |
Fiscal 2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal 2Q24September 30,
2023 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
2,905 |
|
$ |
(514 |
) |
$ |
(272,091 |
) |
NM |
|
$ |
2,391 |
$ |
(1,175,119 |
) |
NM |
| Ben Custody |
|
4,329 |
|
|
1,287 |
|
|
(80,847 |
) |
NM |
|
|
5,616 |
|
(270,844 |
) |
NM |
| Corporate & Other |
|
(16,426 |
) |
|
44,091 |
|
|
(25,234 |
) |
NM |
|
|
27,665 |
|
(74,313 |
) |
NM |
|
Total Segment Operating Income (Loss) Attributable to Ben's
Equity Holders(1) |
$ |
(9,192 |
) |
$ |
44,864 |
|
$ |
(378,172 |
) |
NM |
|
$ |
35,672 |
$ |
(1,520,276 |
) |
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 six months ended
September 30, 2024, 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 2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal 2Q24September 30,
2023 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
Change % vs. Prior YTD |
|
Ben Liquidity |
$ |
11,978 |
|
$ |
10,849 |
$ |
13,022 |
|
10.4 |
% |
|
$ |
22,827 |
|
$ |
25,028 |
|
(8.8 |
)% |
| Ben Custody |
|
5,386 |
|
|
5,382 |
|
6,490 |
|
0.1 |
% |
|
|
10,768 |
|
|
13,065 |
|
(17.6 |
)% |
| Corporate & Other |
|
(738 |
) |
|
11 |
|
(446 |
) |
NM |
|
|
(727 |
) |
|
(1,178 |
) |
38.3 |
% |
|
Total Adjusted Segment Revenues Attributable to Ben's
Equity Holders(1)(2) |
$ |
16,626 |
|
$ |
16,242 |
$ |
19,066 |
|
2.4 |
% |
|
$ |
32,868 |
|
$ |
36,915 |
|
(11.0)% |
| Adjusted Segment
Operating Income (Loss) Attributable to Ben's Equity
Holders(1)(2)($ in thousands) |
Fiscal 2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal 2Q24September 30,
2023 |
Change % vs. Prior Quarter |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
Change % vs. Prior YTD |
| Ben Liquidity |
$ |
2,905 |
|
$ |
(509 |
) |
$ |
(4,738 |
) |
NM |
|
$ |
2,396 |
|
$ |
(14,297 |
) |
NM |
|
Ben Custody |
|
4,627 |
|
|
4,416 |
|
|
5,625 |
|
4.8 |
% |
|
|
9,043 |
|
|
10,933 |
|
(17.3 |
)% |
| Corporate & Other |
|
(9,793 |
) |
|
(8,459 |
) |
|
(12,847 |
) |
(15.8 |
)% |
|
|
(18,253 |
) |
|
(29,625 |
) |
38.4 |
% |
|
Total Adjusted Segment Operating Income (Loss) Attributable
to Ben's Equity Holders(1)(2) |
$ |
(2,261 |
) |
$ |
(4,552 |
) |
$ |
(11,960 |
) |
50.3 |
% |
|
$ |
(6,814 |
) |
$ |
(32,989 |
) |
79.3 |
% |
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 six months ended
September 30, 2024, 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
(Loss) 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 2Q25September 30,
2024 |
Fiscal 1Q25June 30,
2024 |
Fiscal 2Q24September 30,
2023 |
|
YTD Fiscal 2025 |
YTD Fiscal 2024 |
|
Ben Liquidity |
$ |
2,905 |
|
$ |
(514 |
) |
$ |
(272,091 |
) |
|
$ |
2,391 |
|
$ |
(1,175,119 |
) |
|
Ben Custody |
|
4,329 |
|
|
1,287 |
|
|
(80,847 |
) |
|
|
5,616 |
|
|
(270,844 |
) |
|
Corporate & Other |
|
(16,426 |
) |
|
44,091 |
|
|
(25,234 |
) |
|
|
27,665 |
|
|
(74,313 |
) |
| Plus: Gain on liability
resolution |
|
23,462 |
|
|
— |
|
|
— |
|
|
|
23,462 |
|
|
— |
|
| Less: Income tax expense
(allocable to Ben and BCH equity holders) |
|
— |
|
|
(28 |
) |
|
— |
|
|
|
(28 |
) |
|
— |
|
| Plus: Net loss attributable to
noncontrolling interests - Ben |
|
3,067 |
|
|
7,187 |
|
|
10,604 |
|
|
|
10,254 |
|
|
41,290 |
|
| Less: Noncontrolling interest
guaranteed payment |
|
(4,423 |
) |
|
(4,356 |
) |
|
(4,167 |
) |
|
|
(8,779 |
) |
|
(8,272 |
) |
| Net income (loss)
attributable to Ben's common shareholders |
$ |
12,914 |
|
$ |
47,667 |
|
$ |
(371,735 |
) |
|
$ |
60,581 |
|
$ |
(1,487,258 |
) |
Earnings Webcast
Beneficient will host a webcast and conference
call to review its second quarter financial results on November 15,
2024, at 8:00 am Eastern Standard 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, 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.
ContactsInvestors:Matt
Kreps/214-597-8200/mkreps@darrowir.comMichael
Wetherington/214-284-1199/mwetherington@darrowir.cominvestors@beneficient.com
Disclaimer and Cautionary Note Regarding
Forward-Looking Statements
This press release contains 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, with respect to, among other things, demand
for our solutions in the alternative asset industry, opportunities
for market growth, expansion of our Preferred Liquidity Provider
Program, the ability of machine automated pricing (MAPS) to
facilitate transactions, our ability to identify and negotiate
transactions, diversification and size of our loan portfolio and
our ability to scale operations and provide shareholder value.
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 GP Primary and other liquidity transactions
on terms desirable for the Company, or at all, we may not prevail
in ongoing litigation, 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 EndedSeptember
30, |
|
Six Months Ended September 30, |
|
(Dollars in thousands, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenues |
|
|
|
|
|
|
|
|
Investment income (loss), net |
$ |
8,541 |
|
|
$ |
(13 |
) |
|
$ |
19,569 |
|
|
$ |
487 |
|
|
Loss on financial instruments, net (related party of $(173),
$(41,960), $(538) and $(45,526), respectively) |
|
(179 |
) |
|
|
(42,775 |
) |
|
|
(1,362 |
) |
|
|
(46,236 |
) |
|
Interest and dividend income |
|
12 |
|
|
|
114 |
|
|
|
24 |
|
|
|
230 |
|
|
Trust services and administration revenues (related party of $8,
$8, $15 and $15, respectively) |
|
187 |
|
|
|
(87 |
) |
|
|
376 |
|
|
|
15 |
|
|
Total revenues |
|
8,561 |
|
|
|
(42,761 |
) |
|
|
18,607 |
|
|
|
(45,504 |
) |
| |
|
|
|
|
|
|
|
| Operating
expenses |
|
|
|
|
|
|
|
|
Employee compensation and benefits |
|
7,135 |
|
|
|
15,398 |
|
|
|
10,985 |
|
|
|
51,221 |
|
|
Interest expense (related party of $3,135, $2,093, $6,189 and
$2,825, respectively) |
|
4,320 |
|
|
|
5,114 |
|
|
|
8,608 |
|
|
|
8,898 |
|
|
Professional services |
|
7,257 |
|
|
|
6,657 |
|
|
|
12,801 |
|
|
|
17,030 |
|
|
Provision for credit losses |
|
476 |
|
|
|
— |
|
|
|
1,000 |
|
|
|
— |
|
|
Loss on impairment of goodwill |
|
298 |
|
|
|
306,684 |
|
|
|
3,692 |
|
|
|
1,402,989 |
|
|
Release of loss contingency related to arbitration award |
|
— |
|
|
|
— |
|
|
|
(54,973 |
) |
|
|
— |
|
|
Other expenses (related party of $694, $2,105, $1,388 and $4,221,
respectively) |
|
2,790 |
|
|
|
5,150 |
|
|
|
5,871 |
|
|
|
12,092 |
|
|
Total operating expenses |
|
22,276 |
|
|
|
339,003 |
|
|
|
(12,016 |
) |
|
|
1,492,230 |
|
| Operating income
(loss) |
|
(13,715 |
) |
|
|
(381,764 |
) |
|
|
30,623 |
|
|
|
(1,537,734 |
) |
|
(Gain) loss on liability resolution |
|
(23,462 |
) |
|
|
— |
|
|
|
(23,462 |
) |
|
|
— |
|
| Net income (loss)
before income taxes |
|
9,747 |
|
|
|
(381,764 |
) |
|
|
54,085 |
|
|
|
(1,537,734 |
) |
|
Income tax expense (benefit) |
|
— |
|
|
|
— |
|
|
|
28 |
|
|
|
— |
|
| Net income
(loss) |
|
9,747 |
|
|
|
(381,764 |
) |
|
|
54,057 |
|
|
|
(1,537,734 |
) |
|
Plus: Net loss attributable to noncontrolling interests - Customer
ExAlt Trusts |
|
4,523 |
|
|
|
3,592 |
|
|
|
5,049 |
|
|
|
17,458 |
|
|
Plus: Net loss attributable to noncontrolling interests - Ben |
|
3,067 |
|
|
|
10,604 |
|
|
|
10,254 |
|
|
|
41,290 |
|
|
Less: Noncontrolling interest guaranteed payment |
|
(4,423 |
) |
|
|
(4,167 |
) |
|
|
(8,779 |
) |
|
|
(8,272 |
) |
| Net income (loss)
attributable to Beneficient common shareholders |
$ |
12,914 |
|
|
$ |
(371,735 |
) |
|
$ |
60,581 |
|
|
$ |
(1,487,258 |
) |
| Other comprehensive
income (loss): |
|
|
|
|
|
|
|
|
Unrealized gain (loss) on investments in available-for-sale debt
securities |
|
26 |
|
|
|
(105 |
) |
|
|
5 |
|
|
|
4,185 |
|
| Total comprehensive
income (loss) |
|
12,940 |
|
|
|
(371,840 |
) |
|
|
60,586 |
|
|
|
(1,483,073 |
) |
| Less: comprehensive gain
(loss) attributable to noncontrolling interests |
|
26 |
|
|
|
(105 |
) |
|
|
5 |
|
|
|
4,185 |
|
| Total comprehensive
income (loss) attributable to Beneficient |
$ |
12,914 |
|
|
$ |
(371,735 |
) |
|
$ |
60,581 |
|
|
$ |
(1,487,258 |
) |
| |
|
|
|
|
|
|
|
| Net income (loss) per common
share |
|
|
|
|
|
|
|
|
Class A - basic |
$ |
2.98 |
|
|
$ |
(115.95 |
) |
|
$ |
14.58 |
|
|
$ |
(521.17 |
) |
|
Class B - basic |
$ |
2.69 |
|
|
$ |
(113.50 |
) |
|
$ |
14.80 |
|
|
$ |
(454.08 |
) |
| |
|
|
|
|
|
|
|
| Net income (loss) per common
share |
|
|
|
|
|
|
|
|
Class A - diluted |
$ |
0.03 |
|
|
$ |
(115.95 |
) |
|
$ |
0.18 |
|
|
$ |
(521.17 |
) |
|
Class B - diluted |
$ |
0.03 |
|
|
$ |
(113.50 |
) |
|
$ |
0.18 |
|
|
$ |
(454.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 7: CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION
| |
September 30, 2024 |
|
March 31, 2024 |
| (Dollars and shares in
thousands) |
(unaudited) |
|
|
| ASSETS |
|
|
|
|
Cash and cash equivalents |
$ |
4,482 |
|
|
$ |
7,913 |
|
|
Restricted cash |
|
314 |
|
|
|
64 |
|
|
Investments, at fair value: |
|
|
|
|
Investments held by Customer ExAlt Trusts (related party of $20 and
$552) |
|
334,987 |
|
|
|
329,113 |
|
|
Investments held by Ben (related party of nil and $6) |
|
— |
|
|
|
6 |
|
|
Other assets, net |
|
15,991 |
|
|
|
14,699 |
|
|
Intangible assets |
|
3,100 |
|
|
|
3,100 |
|
|
Goodwill |
|
9,914 |
|
|
|
13,606 |
|
| Total
assets |
$ |
368,788 |
|
|
$ |
368,501 |
|
| LIABILITIES, TEMPORARY
EQUITY, AND EQUITY (DEFICIT) |
|
|
|
|
Accounts payable and accrued expenses (related party of $13,921 and
$14,143) |
$ |
112,494 |
|
|
$ |
157,157 |
|
|
Other liabilities (related party of $14,306 and $9,740) |
|
19,123 |
|
|
|
31,727 |
|
|
Warrants liability |
|
784 |
|
|
|
178 |
|
|
Convertible debt |
|
1,936 |
|
|
|
— |
|
|
Debt due to related party, net |
|
122,117 |
|
|
|
120,505 |
|
| Total
liabilities |
|
256,454 |
|
|
|
309,567 |
|
|
Redeemable noncontrolling interests |
|
|
|
|
Preferred Series A Subclass 0 Redeemable Unit Accounts,
non-unitized |
|
125,526 |
|
|
|
251,052 |
|
| Total temporary
equity |
|
125,526 |
|
|
|
251,052 |
|
|
Shareholder’s equity (deficit): |
|
|
|
|
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 September 30, 2024 and March 31, 2024 |
|
— |
|
|
|
— |
|
|
Series B Preferred stock, 227 and 227 shares issued and outstanding
as of September 30, 2024 and March 31, 2024 |
|
— |
|
|
|
— |
|
|
Class A common stock, par value $0.001 per share, 18,750 shares
authorized, 4,580 and 3,348 shares issued as of September 30,
2024 and March 31, 2024, respectively, and 4,573 and 3,339
shares outstanding as of September 30, 2024 and March 31,
2024, respectively |
|
5 |
|
|
|
3 |
|
|
Class B convertible common stock, par value $0.001 per share, 250
shares authorized, 239 and 239 shares issued and outstanding as of
September 30, 2024 and March 31, 2024 |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
1,836,492 |
|
|
|
1,848,068 |
|
|
Accumulated deficit |
|
(1,998,633 |
) |
|
|
(2,059,214 |
) |
|
Stock receivable |
|
— |
|
|
|
(20,038 |
) |
|
Treasury stock, at cost (9 shares as of September 30, 2024 and
March 31, 2024) |
|
(3,444 |
) |
|
|
(3,444 |
) |
|
Accumulated other comprehensive income |
|
281 |
|
|
|
276 |
|
|
Noncontrolling interests |
|
152,107 |
|
|
|
42,231 |
|
| Total equity
(deficit) |
|
(13,192 |
) |
|
|
(192,118 |
) |
| Total liabilities,
temporary equity, and equity (deficit) |
$ |
368,788 |
|
|
$ |
368,501 |
|
| |
Table 8: Non-GAAP Reconciliations
| (in thousands) |
|
Three Months Ended September 30, 2024 |
| |
|
Ben Liquidity |
Ben Custody |
Customer ExAlt Trusts |
Corporate/Other |
Consolidating Eliminations |
Consolidated |
|
Total revenues |
|
$ |
11,978 |
$ |
5,386 |
$ |
9,112 |
|
$ |
(738 |
) |
$ |
(17,177 |
) |
$ |
8,561 |
|
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
— |
|
173 |
|
|
— |
|
|
— |
|
|
173 |
|
| Adjusted revenues |
|
$ |
11,978 |
$ |
5,386 |
$ |
9,285 |
|
$ |
(738 |
) |
$ |
(17,177 |
) |
$ |
8,734 |
|
| |
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
2,905 |
$ |
4,329 |
$ |
(31,549 |
) |
$ |
(16,426 |
) |
$ |
27,026 |
|
$ |
(13,715 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
— |
|
173 |
|
|
— |
|
|
— |
|
|
173 |
|
| Intersegment provision for
credit losses on collateral comprised of interests in the GWG Wind
Down Trust |
|
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Goodwill impairment |
|
|
— |
|
298 |
|
— |
|
|
— |
|
|
— |
|
|
298 |
|
| Release of loss contingency
related to arbitration award |
|
|
— |
|
— |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Share-based compensation
expense |
|
|
— |
|
— |
|
— |
|
|
3,364 |
|
|
— |
|
|
3,364 |
|
| Legal and professional
fees(1) |
|
|
— |
|
— |
|
— |
|
|
3,269 |
|
|
— |
|
|
3,269 |
|
| Adjusted operating income
(loss) |
|
$ |
2,905 |
$ |
4,627 |
$ |
(31,376 |
) |
$ |
(9,793 |
) |
$ |
27,026 |
|
$ |
(6,611 |
) |
| |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
| (in thousands) |
Three Months Ended June 30, 2024 |
| |
Ben Liquidity |
Ben Custody |
Customer ExAlt Trusts |
Corporate/Other |
Consolidating Eliminations |
Consolidated |
|
Total revenues |
$ |
10,849 |
|
$ |
5,382 |
$ |
9,853 |
|
$ |
4 |
|
$ |
(16,042 |
) |
$ |
10,046 |
|
| Mark to market adjustment on
interests in GWG Wind Down Trust |
|
— |
|
|
— |
|
358 |
|
|
7 |
|
|
— |
|
|
365 |
|
| Adjusted revenues |
$ |
10,849 |
|
$ |
5,382 |
$ |
10,211 |
|
$ |
11 |
|
$ |
(16,042 |
) |
$ |
10,411 |
|
| |
|
|
|
|
|
|
| Operating income (loss) |
$ |
(514 |
) |
$ |
1,287 |
$ |
(29,629 |
) |
$ |
44,091 |
|
$ |
29,103 |
|
$ |
44,338 |
|
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
— |
|
|
— |
|
358 |
|
|
7 |
|
|
— |
|
|
365 |
|
| Intersegment provision for
credit losses on collateral comprised of interests in the GWG Wind
Down Trust |
|
5 |
|
|
— |
|
— |
|
|
— |
|
|
(5 |
) |
|
— |
|
| Goodwill impairment |
|
— |
|
|
3,129 |
|
— |
|
|
265 |
|
|
— |
|
|
3,394 |
|
| Release of loss contingency
related to arbitration award |
|
— |
|
|
— |
|
— |
|
|
(54,973 |
) |
|
— |
|
|
(54,973 |
) |
| Share-based compensation
expense |
|
— |
|
|
— |
|
— |
|
|
994 |
|
|
— |
|
|
994 |
|
| Legal and professional
fees(1) |
|
— |
|
|
— |
|
— |
|
|
1,157 |
|
|
— |
|
|
1,157 |
|
| Adjusted operating income
(loss) |
$ |
(509 |
) |
$ |
4,416 |
$ |
(29,271 |
) |
$ |
(8,459 |
) |
$ |
29,098 |
|
$ |
(4,725 |
) |
| |
(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 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 |
|
| Loss on arbitration |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
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) |
|
Six Months Ended September 30, 2024 |
| |
|
Ben Liquidity |
|
Ben Custody |
|
Customer ExAlt Trusts |
|
Corporate/Other |
|
Consolidating Eliminations |
|
Consolidated |
|
Total revenues |
|
$ |
22,827 |
|
$ |
10,768 |
|
$ |
18,965 |
|
|
$ |
(734 |
) |
|
$ |
(33,219 |
) |
|
$ |
18,607 |
|
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
531 |
|
|
|
7 |
|
|
|
— |
|
|
|
538 |
|
| Adjusted revenues |
|
$ |
22,827 |
|
$ |
10,768 |
|
$ |
19,496 |
|
|
$ |
(727 |
) |
|
$ |
(33,219 |
) |
|
$ |
19,145 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
2,391 |
|
$ |
5,616 |
|
$ |
(61,178 |
) |
|
$ |
27,665 |
|
|
$ |
56,129 |
|
|
$ |
30,623 |
|
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
— |
|
|
531 |
|
|
|
7 |
|
|
|
— |
|
|
|
538 |
|
| Intersegment provision for
credit losses on collateral comprised of interests in the GWG Down
Trust |
|
|
5 |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
| Goodwill impairment |
|
|
— |
|
|
3,427 |
|
|
— |
|
|
|
265 |
|
|
|
— |
|
|
|
3,692 |
|
| Release of loss contingency
related to arbitration award |
|
|
— |
|
|
— |
|
|
— |
|
|
|
(54,973 |
) |
|
|
— |
|
|
|
(54,973 |
) |
| Share-based compensation
expense |
|
|
— |
|
|
— |
|
|
— |
|
|
|
4,358 |
|
|
|
— |
|
|
|
4,358 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
— |
|
|
— |
|
|
|
4,425 |
|
|
|
— |
|
|
|
4,425 |
|
| Adjusted operating income
(loss) |
|
$ |
2,396 |
|
$ |
9,043 |
|
$ |
(60,647 |
) |
|
$ |
(18,253 |
) |
|
$ |
56,124 |
|
|
$ |
(11,337 |
) |
| |
(1) Includes legal and professional fees related to
lawsuits.
| (in thousands) |
|
Six Months Ended September 30, 2023 |
| |
|
Ben Liquidity |
|
Ben Custody |
|
Customer ExAlt Trusts |
|
Corporate/Other |
|
Consolidating Eliminations |
|
Consolidated |
|
Total revenues |
|
$ |
25,028 |
|
|
$ |
13,065 |
|
|
$ |
(43,182 |
) |
|
$ |
(2,337 |
) |
|
$ |
(38,078 |
) |
|
$ |
(45,504 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
|
— |
|
|
|
44,367 |
|
|
|
1,159 |
|
|
|
— |
|
|
|
45,526 |
|
| Adjusted revenues |
|
$ |
25,028 |
|
|
$ |
13,065 |
|
|
$ |
1,185 |
|
|
$ |
(1,178 |
) |
|
$ |
(38,078 |
) |
|
$ |
22 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating income (loss) |
|
$ |
(1,175,119 |
) |
|
$ |
(270,844 |
) |
|
$ |
(116,687 |
) |
|
$ |
(74,313 |
) |
|
$ |
99,229 |
|
|
$ |
(1,537,734 |
) |
| Mark to market adjustment on
interests in the GWG Wind Down Trust |
|
|
— |
|
|
|
— |
|
|
|
44,367 |
|
|
|
1,159 |
|
|
|
— |
|
|
|
45,526 |
|
| Intersegment provision for
loan losses on collateral comprised of interests in the GWG Wind
Down Trust |
|
|
39,610 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(39,610 |
) |
|
|
— |
|
| Goodwill impairment |
|
|
1,121,212 |
|
|
|
281,777 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,402,989 |
|
| Loss on arbitration |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Share-based compensation
expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
35,504 |
|
|
|
— |
|
|
|
35,504 |
|
| Legal and professional
fees(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,025 |
|
|
|
— |
|
|
|
8,025 |
|
| Adjusted operating income
(loss) |
|
$ |
(14,297 |
) |
|
$ |
10,933 |
|
|
$ |
(72,320 |
) |
|
$ |
(29,625 |
) |
|
$ |
59,619 |
|
|
$ |
(45,690 |
) |
| |
(1) Includes legal and professional fees related to GWG Holdings
bankruptcy, lawsuits, public relations, and employee matters.
| Operating Expenses Non
GAAP Reconciliation |
Three Months Ended September 30,
2024 |
|
Three Months Ended September 30,
2023 |
|
Six Months Ended September 30,
2024 |
|
Six Months Ended September 30,
2023 |
|
Operating expenses |
$ |
22,276 |
|
|
$ |
339,003 |
|
|
$ |
(12,016 |
) |
|
$ |
1,492,230 |
|
| Plus: Release of loss
contingency related to arbitration award |
|
— |
|
|
|
— |
|
|
|
54,973 |
|
|
|
— |
|
| Less: Goodwill impairment |
|
(298 |
) |
|
|
(306,684 |
) |
|
|
(3,692 |
) |
|
|
(1,402,989 |
) |
| Operating expenses, excluding
goodwill impairment and release of loss contingency related to
arbitration award |
$ |
21,978 |
|
|
$ |
32,319 |
|
|
$ |
39,265 |
|
|
$ |
89,241 |
|
| |
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 revenue as revenue adjusted
to exclude the effect of mark-to-market adjustments on related
party equity securities that were acquired both prior to and during
the Collateral Swap, which on August 1, 2023, became interests in
the GWG Wind Down Trust. 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 that were acquired in the
Collateral Swap which on August 1, 2023, became interests in the
GWG Wind Down Trust, and receivables from a related party that
filed for bankruptcy and certain notes receivables originated
during our formative transactions, non-cash asset impairment,
share-based compensation expense, 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 & loss contingency accruals (releases) 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/ace529a8-96c4-48d8-a799-87ab85642048
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