BENF 10-K & 10-Q changes, risk factors and insider trading

We have historically had a substantial amount of goodwill and intangible assets, and we have been, and may in the future be, required to write down any remaining value of our intangible assets and goodwill due to impairment, which could have a material adverse effect on our business, financial condition and results of operations.

A significant portion of our total assets historically have been comprised of goodwill and intangible assets that arose from a series of transactions with GWG and relate principally to our Ben Liquidity business. We perform goodwill and intangible asset impairment annually, during the fourth quarter of each year, or when events occur, or circumstances change that would more likely than not indicate impairment has occurred, including a significant substantial decline in the prevailing price of our Class A common stock. Subsequent to our public listing on June 8, 2023, and through the date of this Annual Report on Form 10-K, the Company hashas, at times, experienced a significant sustained decline in the price of its Class A common stock and its related market capitalization. We believe that these factors indicated that the fair value of our reporting units had more likely than not fallen below their carrying values for each quarter during the yearsyear ended March 31, 2025 and 2024.for the quarter ended March 31, 2026. As such, management performed impairment tests of goodwill as of June 30, September 30, December 31 and March 31 of both fiscal 2025 and 2024,as of March 31 of fiscal 2026, which resulted in non-cash goodwill impairment of $3.7 million being recorded at the Ben Custody and Ben Markets reporting units in fiscal 2025. DuringAdditionally, fiscalwe 2024,recognized non-cashintangible goodwillasset impairment related to an insurance license of $2.4$3.1 billion was recordedmillion at the Ben Liquidity, Ben Custody, Ben Insurance and Ben Markets reporting units.unit in fiscal 2026. Because a number of factors may influence determinations of fair value of goodwill and our intangible assets, including the price of our Class A common stock, which has continued to decline since our public listing, there can be no assurance that our future evaluations of goodwill and intangible assets will not result in findings of significant impairment and related write-downs, which may have a material adverse effect on our business, financial condition and results of operations. As of March 31, 2025,2026, remaining goodwill totaled $9.9 million.million, and there are no other remaining intangible assets.

In assessing impairment, the Company computed the fair value of each reporting unit by computing the overall enterprise value of the Company by valuing its various equity instruments, primarily based on the Class A common stock price per share. The overall enterprise value was allocated to each reporting unit using the discounted cash flow method to estimate the relative value of each reporting unit based on their future cash flows using a multi-year forecast, and a terminal value calculated using a long-term growth rate that was informed based on our industry, analyst reports of a public company peer set, current and expected future economic conditions and management expectations. The discount rate used to discount these future cash flows was determined using a capital asset pricing model based on the market value of equity of a public company peer set, adjusted for risk characteristics and expectations specific to the reporting unit, combined with an assessment of the cost of debt. The discount rates used for each reporting unit in each of the Juneassessments 30,during 2023,fiscal September 30, 2023, December 31, 2023,2025 and Marchfiscal 31, 2024 impairment assessments ranged from 24.8% to 29.3%. The discount rates used for the relevant reporting units2026 ranged from 28.0% to 29.3% in the June 30, 2024, September 30, 2024, December 31, 2024, and March 31, 2025 impairment assessments.29.3%. The Company applied a terminal year long-term growth rate of 3.0% for each reporting unit during each of the interim impairment assessments. As of March 31, 2025,2026, remaining goodwill relates to Ben Custody and Ben Markets.Markets and there are no other intangible assets remaining. There was approximately $0.2$4.3 million of reporting unit fair value over carrying value for Ben Custody and approximately $0.6$1.4 million of reporting unit fair value over carrying value for Ben Markets as of March 31, 2025.2026.

Future valuations, to the extent necessary, of the enterprise value may use different valuation methodologies than the methodology employed during the impairment tests conducted in fiscal 20242025 and 2025,2026, including the income approach, which would heavily incorporate management’s estimate of discounted cash flow. With all valuations, our assumptions reflect management’s best estimates of future performance. Further valuations involving estimates, specifically to the extent they may utilize management’s estimates of discounted cash flow, could assume that we capture a significant market share of liquidity transactions leading to a substantial rate of growth of new service offerings and products, revenues and assets. These estimations are uncertain to occur, and to the extent we fall short of achieving our expected growth in revenues and assets, material impairments of our goodwill or intangibles may occur in the near term. Additionally, litigation related to our transactions with GWG has had, and could further have, a material adverse effect on our ability to execute on our business plan, which could have an effect on the value of our goodwill and intangibles. While management can and has implemented its business plans, a failure to further execute our business plans or adverse changes in management’s forecasts, to the extent used in future valuations, could result in a decline in our estimated fair value and could result in an impairment of our goodwill or intangible assets. A significant sustained decrease in the Company’s common stock has in the past been an indicator, and in the future may indicate, that impairment is present and may require a quantitative impairment assessment of the Company’s assets, including goodwill and intangible assets. Any such future impairment charges for goodwill or other intangibles may reduce the overall assets and may result in a change in the perceived value of the Company and ultimately may be reflected as a reduction in the market price of our securities. Any impairment charge would adversely impact the income (loss) allocable to Ben’s equity holders. Additionally, an impairment charge may also adversely influence our ability to raise capital in the future. Further, primarily as a result of the impairment of our goodwill, we have a negative amount of stockholders’ equity as of March 31, 2026 and 2025. To the extent the negative stockholders’ equity balance persists, the ability of the Company to remain listed on the Nasdaq Capital Market may be impacted.

However, all losses attributable to downward adjustments to the carrying value of any assets of BCH and its subsidiaries, such as when equity securities of BCH are issued at a lower price than the prior issuance, are allocated pro rata among all holders of BCH Units other than the BCH Preferred A-0 Unit Accounts, BCH Preferred A-1 Unit Accounts and the BCH FLP Unit Accounts. As a result of these allocations, the capital account balance of the BCH Class A Units indirectly held by the Company, as well as the capital account balances of the BCH Class S Ordinary Units and the BCH Class S Preferred Units, may decrease due to downward adjustments to the carrying value, which may reduce the amount, if any, the Company would receive upon a liquidation of BCH. As part of the proposed transactions to revise BCH’s liquidation priority described elsewhere in this Annual Report on Form 10-K, the adjustments described above would be impacted by the proposed Subclass 4 FLP Unit Accounts of BCH (“FLP-4 Unit Accounts”), if completed. As a result of the resignation of Brad K. Heppner, who controls BHI, from his role as Chief Executive Officer and Chairman of the Board of Directors on June 19, 2025, we do not expect the transaction to be consummated on the terms set forth in the Master Agreement. Accordingly, the Company is exploring available alternative options, including renegotiating terms or not proceeding with the transaction. For more information, see the section titled “Certain Relationships and Related Party Transactions - Proposed Transactions to Revise BCH Liquidation Priority” in this Annual Report on Form 10-K.

The primary source of repayment for the ExAlt Loans and related fees is cash flows from the interests comprising the ExAlt Loan Collateral Portfolio underlying the Collateral. Should the performance of the collateral underlying our loan portfolio generate insufficient returns, including returns impacted by the Asset Sales Initiative described elsewhere, to repay the outstanding principal and interest of a loan, the Customer ExAlt Trusts may default on the loan. Although Ben Liquidity uses a comprehensive approach to price the net value of liquidity transactions before entering into them and elects to finance liquidity transaction that will promote collateral diversity among the pooled interests held in the Collective Trusts, there is no guarantee that the collateral will perform well or that, even if most of the collateral performs well, that the Collective Trusts will generate positive returns over a particular time period. If the collateral does not perform well or if the Collective Trusts as a whole does not perform well, our revenue, income, cash flow and resources available for operations would decline and Ben Liquidity’s ability to enter into new liquidity transactions would be impaired.

As of March 31, 2025,2026, we had approximately $117.9$96.8 million of debt (including unamortized premium thereon), which is principally derived from (i) borrowings under that certain Credit and Guaranty Agreement, dated October 19, 2023 (as amended, the “HH-BDH Credit Agreement”), with HH-BDH LLC (“HH-BDH”), as administrative agent, an entity affiliated with Mr. Thomas O. Hicks, who is a member of our board of directors and was named chairman of the board of directors in June 2025; and (ii) borrowings under the Second Amended and Restated First Lien Credit Agreement (as amended, “First Lien Credit Agreement”) and the Second Amended and Restated Second Lien Credit Agreement (as amended, “Second Lien Credit Agreement,” collectively, the “HCLP Loan Agreement” or the “HCLP Loan”) with our lender, HCLP Nominees, L.L.C (“HCLP”), which is an indirect subsidiary of Highland Consolidated, LP. The majority of HCLP is indirectly owned by The Highland Investment Holdings Trust, of which Mr. Heppner, our former CEO, and his family are the beneficiaries. TheWe levelpreviously also had borrowings outstanding under that certain Credit and Guaranty Agreement, dated October 19, 2023 (as amended, the “HH-BDH Credit Agreement”), with HH-BDH LLC (“HH-BDH”), as administrative agent, an entity affiliated with Mr. Mack Hicks, who is a member of debt outstanding each period could adversely affect our financial flexibility. We also bear risk at the time our debt matures. Our ability to make interest and principal payments, to refinance our debt obligations and to fund our purchaseboard of alternative assets and planned capital expenditures will depend on our ability to generate cash from operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control, such as an environment of rising interest rates.directors.

Furthermore, periodically, we have sought to extend the maturity date of our secured loans with HCLP and have paid fees in connection with this extension. We have also been required to amend the HH-BDH loan and have paid fees in connectionsconnection with these amendments.

The HCLP Loan purportedly matured on April 14, 2025, and on July 30, 2025, HCLP delivered written notice that events of default occurred with respect to the HCLP Loan Agreement and provide that all amounts owed under the HCLP Loan Agreement are immediately due and payable. DueOn May 7, 2026, Mr. Heppner was convicted of securities fraud, wire fraud, conspiracy to thecommit Companysecurities identifyingfraud credibleand evidencewire fraud, and false statements to auditors. At trial, it was established that Mr. Heppner participatedfabricated the HCLP Loan, that HCLP was controlled by Mr. Heppner and that monies paid to HCLP in fabricatingconnection with the HCLP Loan were paid to Mr. Heppner. Due to Mr. Heppner’s conviction and deliveringother fakefacts documentsestablished toin the Companyrelated regarding his and others’ relationships to HCLP, among other items,proceedings, the Company is evaluating the validity of its obligations under the HCLP Loan Agreement and the liens securing the HCLP Loan and is considering all options that it may pursue related to this conduct, including litigation against Mr. Heppner, HCLP and any direct or indirect control parties of HCLP. See the Risk Factor entitled “The HCLP Loan Agreement is collateralized by all of the assets of BCH and the loans, excluding the ExAlt Participation Loans, originated by the Customer ExAlt Trusts and certain of the custody trusts, and the Term Loan under the HH-BDH Credit Agreement is collateralized by pledges of substantially all of the assets of Beneficient Financing, BCH’s equity interests in Beneficient Financing, certain equity interests in the Custody Trust and certain deposit accounts” for additional information. The events of default under the HCLP Loan Agreement triggered a cross default provision in the HH-BDH Credit Agreement. The Company timely notified HH-BDH of the cross default and, as of the date of this Annual Report on Form 10-K, HH-BDH has not notified the Company that it intends to declare an event of default related to the cross default provisions of the HH-BDH Credit Agreement.

We are in process of and may need to amend in the future our HH-BDH Credit Agreement and, depending on the outcome of the evaluation described above, we expect to contest the validity of the HCLP Loan Agreement and the liens securing the HCLP Loan in the future. We may incur additional amendment fees as a result. If the Company incurs additional debt or liabilities, or if we are unable to maintain a level of cash flows from operating activities, the Company’s ability to pay its obligations on its debt could be adversely affected.

WePreviously, we have been notified by Nasdaq that based on the Company’s non-compliance with thecertain BidNasdaq Pricelisting and the Company’s non-compliance with the Periodic Filing Requirement, the Company’s securities were subject to delisting. The Company subsequently requested a hearing before the Panel to appeal such delisting determination, which was held on August 26, 2025. The Panel granted the Company an extension to regain compliance with the Bid Price Requirement and the Periodic Filing Requirement.requirements. Although the Company ishas taking definitive steps to evidenceregained compliance with all applicable criteria for continued listing on The Nasdaq Capital Market, there can be no assurance that the Company will be able to timely regainmaintain compliance with theall Periodicapplicable Filinglisting Requirementrequirements andin the Bid Price Requirement within the extension period granted by the Panel.future.

Our business model is one of innovation, including continuously working to expand our product lines and services to our customers. For example, we have recently expanded into the transfer agent space.space in recent periods. It is unclear whether this service will be successful. Further, we continuously try to offer additional types of services, and we cannot offer any assurance that any of them will be successful. We cannot offer any assurance that these or any other modifications will be successful or will not result in harm to the business. We may not be able to manage growth effectively, which could damage our reputation, limit our growth, and negatively affect our operating results.

We offer broker-dealer services to the Company through a subsidiary of Ben Markets, AltAccess Securities. We expect that operational efficiencies created by having an in-house broker-dealer will allow us to streamline our ExAlt Plan liquidity transactions and reduce certain transaction and other third-party costs, although, there is no assurance that this will occur. The broker-dealer industry is heavily regulated and has regulatory and business barriers to entry. Entering into the broker-dealer business subjects us to additional laws and regulations and involves additional risks, including risks relating to regulatory oversight and examinations and increased risks of enforcement proceedings and litigation. Although certain of our directors and management have experience operating and advising broker-dealer businesses, we have limited experience in operating a subsidiary broker-dealer to help the Company issue its securities, which enhances these risks. To the extent we expand our broker-dealer business, particularly if we expand our broker-dealer business to serve third parties in addition to our subsidiaries and affiliates, it could involve a number of risks, including risk of denial or delay in regulatory approval, the required investment of capital and other resources, increasing demands on our operational and management systems and controls, the diversion of management’s attention from our core business, risks when dealing with third-parties (based on their actions, omissions or disclosures), and our ability to implement an effective marketing strategy to promote awareness of and sell our broker-dealer products, including in conjunction with our ExAlt Plan. There can be no assurance that our entrance into, and ongoing efforts involving, the broker-dealer market will be successful. The regulatory environment in which our broker-dealer business operates is continually evolving, and the level of financial regulation to which we are subject has generally increased in recent years, which generally results in increased costs of compliance and operations. Regulators have adopted, proposed to adopt, and may in the future adopt regulations that could impact the manner in which we will market products and services, conduct compliance and operations, interact with regulators and manage our business.

A failure to meet these conditions may subject us to examination or corrective action by the BMA or result in the failure to obtain the required regulatory approvals or, if obtained, a suspension or revocation of our authority to do business as an insurance company, which would mean that we would not be able to provide the planned insurance products until the approvals are obtained or any suspension or revocation of the required approvals is resolved. If obtained, any suspension or revocation of regulatory approvals would negatively impact our reputation in the marketplace and could have a material adverse effect on our ability to grow our exposure to alternative assets.

The Company’s only cash-generating assets are its indirect interests in BCH and ExAlt Holdings, LLC and the Company’s cash flow is dependent on the ability of BCHthese entities to make distributions. In addition, the Company’s ability to pay periodic distributions to its common and preferred stockholders may be limited by the Company’s holding company structure, applicable provisions of Nevada law and contractual restrictions and obligations, and the Company’s stockholders may be liable to repay dividends.

The Company is Ben’s holding company and has no material assets other than the indirect ownership of the BCH Class A Units.Units and, as of February 24, 2026, membership interests in ExAlt Holdings, LLC (“ExAlt Holdings”). As a holding company, the Company conducts its business through its subsidiaries. The Company has no independent means of generating revenue and therefore its cash flow is completely dependent on BCHthese entities making distributions to itstheir partners,partners includingor members. In the case of BCH, this includes Ben LLC, which is the general partner of BCH and owned by the Company. The Company is the sole member and manager of ExAlt Holdings. Accordingly, the Company intends, to the extent permitted under the terms of the BCHrespective A&Roperating LPA,agreements to cause BCHthese entities to make distributions to its partners,respective partners or members, including Ben LLC, to fund any distributions the Company may declare on the Beneficient common stock or preferred stock. If the Company’s subsidiaries are unable to make dividend payments or distributions to the Company and sufficient cash or liquidity is not otherwise available, the Company may not be able to pay dividends. If BCH makes such distributions, certain limited partners of BCH will have priority with respect to such distributions and will be entitled to receive distributions in accordance with the terms of the BCH A&R LPA. There are no other members in ExAlt Holdings and, as such, there is no priority over the Company’s shareholders on distributions from ExAlt Holdings.

The Company’s ability to pay dividends is also limited by the laws of Nevada. Under Nevada law, a Nevada corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its debts as they become due in the usual course of business, or the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. Accordingly, the Company generally may not make a distribution if, after giving effect to the distribution, the Company would not be able to pay its debts as they become due in the usual course of business or its total assets would be less than the sum of its total liabilities plus, unless the terms of such class or series of stock provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of stock then outstanding, if any. In addition, the terms of any credit facility or other financing arrangements involving the Company, or BCH,subsidiary entities, as a party to or may enter into in the future may include covenants or other restrictions that could constrain the Company’s, or BCH’sthe subsidiary’s ability to make distributions.

As of March 31, 2025,2026, the BCH interests had an aggregate estimated capital account balance determined in accordance with Section 704 of the Internal Revenue Code of $1.1 billion, other than the BCH Class S Ordinary Units, which will share any such distributions with the Class A Units held by the Company on a pro rata basis,basis otherand than thoseany distributions specificallyfrom contemplatedBCH would first accrue to the preferred units that are structurally senior to the Class A Units held indirectly by the CompanyCompany, underwhich thecomprise termsroughly $1 billion of the proposedcapital transactions to revised BCH’s liquidation priority.accounts. In addition, BCH or Ben LLC could issue securities in the future that have a senior preference on payment to the BCH Class A Units indirectly owned by the Company or that are otherwise structurally senior to Class A common stock or any preferred stock we issue.

Therefore, in any bankruptcy, liquidation or similar proceeding, all claims of creditors (including trade creditors) of BCH or ExAlt Holdings will have priority over the Company’s equity interests in BCH (and therefore the claims of the Class A common stock and any preferred stock we issue) or ExAlt Holdings with respect to the assets of BCH.BCH or ExAlt Holdings, respectively. Even if the Company is recognized as a creditor of BCH,BCH or ExAlt Holdings, the Company’s claims would still be effectively subordinated to any security interests in the assets of BCH or ExAlt Holdings, respectively, and to any indebtedness or other liabilities of BCH or ExAlt Holdings, respectively, senior to the Company’s claims. Consequently, Class A common stock, Series A preferred stock and Series B preferred stock are structurally subordinated to all indebtedness and other liabilities (including trade payables) of BCHBCH, ExAlt Holdings and any subsidiaries that we may in the future acquire or establish as financing vehicles or otherwise. In addition, future debt and security agreements entered into by BCH or ExAlt Holdings may contain various restrictions, including restrictions on payments by BCH or ExAlt Holdings to the Company and the transfer by BCH or ExAlt Holdings of assets pledged as collateral.

The estimated capital account balances and estimated hypothetical capital account balances disclosed in this Annual Report on Form 10-K have been prepared and disclosed for informational purposes only to provide an indication of the amounts that will have priority over the BCH Class A Units that are held indirectly by Beneficient. The estimates are based upon a deemed liquidation value of $1.1 billion as of March 31, 20252026 and are subject to adjustment based upon actual results of operations, including the financial performance of BCH’s underlying investments and an adjustment to the carrying value of the assets of BCH in connection with Beneficient’s Business Combination. The holders of these senior limited partner interests in BCH with such capital account and hypothetical capital account balances will have priority over any distributions payable to the Company as the indirect holder of the BCH Class A Units. If the proposed transactions to revise BCH’s liquidation priority are completed, the priority of the Class A Units will be modified. However, with the resignation of Brad Heppner from his position as Chief Executive Officer and Chairman of the Board of Directors on June 19, 2025, we do not expect the transaction to be consummated on the terms set forth in the Master Agreement. Accordingly, the Company is exploring available alternative options, including renegotiating terms or not proceeding with the transaction. Entities related to Mr. Heppner own the majority of the BCH securities.

As a part of its business plan, the Company expects to issue additional equity securities in capital raising transactions or otherwise, resulting in the dilution of the ownership interests of its present stockholders. The Charter, as amended, authorizes the issuance of 5,250,250,000875,031,250 shares of capital stock, consisting of: 5,000,000,000625,000,000 shares of Class A common stock, 250,00031,250 shares of Class B common stock and 250,000,000 shares of preferred stock, with 50,000,000 shares being shares of Series A preferred stock and 4,464,4085,946,627 shares of Series B preferred stock, which consist of 3,542,0633,768,995 shares of Series B-1 preferred stock, 200,000 shares of Series B-2 preferred stock, 20,000 shares of Series B-3 preferred stock, 6,932 shares of Series B-4 preferred stock, and 468,481 shares of Series B-5 preferred stock, 965,576 shares of Series B-6 preferred stock, 23,333 shares of its Series B-7 preferred stock, 191,037 shares of Series B-8 preferred stock, and 302,273 shares of Series B-9 preferred stock as of March 31, 20252026 pursuant to the respective the respective certificates of designation. Subsequent to March 31, 2025,2026, the Company issued 965,576875,214 shares of its Series B-6 preferred stock, 23,333 shares of its Series B-7 preferred stock and 191,037 shares of Series B-8B-10 preferred stock pursuant to the respective certificatescertificate of designation. Additionally, in order to effect the transactions to revise BCH’s liquidation priority, assuming that is pursued, the Company would need to seek stockholder approval to amend its Charter and increase the number of authorized shares of Class B common stock. If additional shares of the Class B common stock are authorized and issued pursuant to the proposed transactions to revise BCH’s liquidation priority, this will result in additional dilution to the Company’s present stockholders. We do not expect the transaction to be consummated on the terms set forth in the Master Agreement. Accordingly, the Company is exploring available alternative options, including renegotiating terms or not proceeding with the transaction.

The Company conducts its operations through operating subsidiaries, and as such its most significant assets are cash and its ownership interests in its subsidiaries, controlled affiliates and equity investees. Accordingly, our ability to meet our obligations, including our debt-related and dividend-payment obligations, materially depends upon the ability of our subsidiaries to distribute cash to us. In this regard, the ability of the Company’s subsidiaries to distribute cash to the Company is, and will continue to be, restricted by certain negative covenants contained in the HCLP Loan Agreement and the HH-BDH Credit Agreement. As described above, the principal balance of the HH-BDH Credit Agreement was repaid in January 2026, and pursuant to the 2026 Letter Agreement, we have agreed to satisfy payment terms of outstanding interest and fees no later than five business days following September 30, 2026.

The HCLP Loan purportedly matured on April 14, 2025, and on July 30, 2025, HCLP delivered written notice that events of default occurred with respect to the HCLP Loan Agreement. Due to the Company identifying credible evidence that Mr. HeppnerHeppner’s participatedconviction and other facts established in fabricatingrelated and delivering fake documents to the Company regarding his and others’ relationships to HCLP, among other items,proceedings, the Company is evaluating the validity of its obligations under the HCLP Loan Agreement and the liens securing the HCLP Loan and is considering all options that it may pursue related to this conduct, including litigation against Mr. Heppner, HCLP and any direct or indirect control parties of HCLP. See the Risk Factor entitled “The HCLP Loan Agreement is collateralized by all of the assets of BCH and the loans, excluding the ExAlt Participation Loans, originated by the Customer ExAlt Trusts and certain of the custody trusts, and the Term Loan under the HH-BDH Credit Agreement is collateralized by pledges of substantially all of the assets of Beneficient Financing, BCH’s equity interests in Beneficient Financing, certain equity interests in the Custody Trust and certain deposit accounts” for additional information.

The primary source of funds for the Customer ExAlt Trusts to repay our ExAlt Loans is distributions from the alternative assets held by the Customer ExAlt Trusts. Any delay in receiving such distributions could adversely impact our liquidity and ability of the Customer ExAlt Trusts to repay the ExAlt Loans. To the extent the Customer ExAlt Trusts do not receive distributions, such as if managers of the professionally managed funds comprising the alternative assets determine to delay distributions or transactions that would result in cash distributions to their limited partners, the Customer ExAlt Trusts’ ability to repay the ExAlt Loans, and therefore, Ben Liquidity’s ability to receive principal and interest payments, may be adversely impacted. For example, during the year ended March 31, 2025,2026, largely as a result of macro-economic conditions, the Customer ExAlt Trusts received fewer distributions from their alternative assetsassets, excluding the proceeds received from the sales described herein, than was originally anticipated, which adversely impacted the Customer ExAlt Trusts’ ability to repay the ExAlt Loans and our liquidity.

Risks Related to OurLitigation Relationshipand withGovernment GWGInvestigations

As discussed above, onOn March 10, 2025, the Company entered into a binding settlement agreement to resolve all claims in the GWG’s Chapter 11 Cases for a sum within applicable insurance policy limits, and the Bankruptcy Court approved the settlement agreement on June 13, 2025. TheAt settlementa agreementhearing remainson subjectJanuary to13, 2026, the approvalUnited of theStates District Court for the Northern District of Texas.Texas Thegranted final approval of the settlement. Following this approval, the settlement resolvesby its terms became effective as of February 13, 2026. Furthermore, on February 13, 2026, all claims filedbrought inby Michael I. Goldberg as the Bankruptcylitigation Courttrustee against the Company, its subsidiaries, and each of their current and former directors and officers withoutwere anydismissed admission,with concessionprejudice, orexcept findingclaims ofagainst anyMr. fault,Heppner liabilityand orhis wrongdoingassociated byentities. To the extent the Company orowes anycertain defendant.indemnification On September 25, 2025, the United States District Court for the Northern District of Texas granted the motion for preliminary approval of the settlement. A hearing on whetherobligations to grantMr. finalHeppner approvaland ofhis theaffiliates, settlementsuch hasobligations beencould setcreate foruncertainty Januaryand 13,could 2026.result in substantial costs to us.

Through Ben Liquidity, we finance liquidity and primary capital transactions for our Customers using a proprietary trust structure we implement for our Customers (we refer to such trusts collectively as the “Customer ExAlt Trusts”). The Customer ExAlt Trusts facilitate the exchange of a Customer’s alternative assets or to fulfill a Customer’s primary capital needs for consideration using a proprietary financing structure (such structure and related process, the “ExAlt PlanTM”). In the ExAlt PlanTM financings, a subsidiary of Ben Liquidity, Beneficient Fiduciary Financial, L.L.C. (“BFF”), a Kansas based trust company that provides fiduciary financing (or “fidfin”) to fidfin trusts, makes loans (each, an “ExAlt Loan”) to certain of the Customer ExAlt Trusts, which in turn employ a portion of the loan proceeds to acquire and deliver agreed upon consideration to the Customer in exchange for their alternative assets or to fulfill their primary capital needs. Since becoming a public company, we have also offered shares of our Class A common stock or convertible preferred stock in financings as consideration for the Customer ExAlt Trusts to meet capital calls or make other capital contributions in alternative asset funds. BFF is chartered as a Kansas Technology Enabled Fiduciary Financial Institution (“TEFFI”) under the Technology-Enabled Fiduciary Financial Institution Act (the “TEFFI Act”) and regulated by the Kansas Office of the State Bank Commissioner (the “OSBC”). Only BFF, our subsidiary, is regulated by the OSBC. The OSBC does not regulate the entirety of Ben. Ben Liquidity generates interest and fee income earned in connection with the ExAlt Loans, which are collateralized by a portion of the cash flows from the exchanged alternative assets (the “Collateral”). While the ExAlt Loans and the related interest and fee income and provision for credit losses are eliminated upon consolidation of the Customer ExAlt Trusts solely for financial reporting purposes, such amounts directly impact the allocation of income (loss) to Ben’s and BCH’s equity holders.

Through Ben Markets, we provide broker-dealer services through our subsidiary, AltAccess Securities Company, L.P. (“AltAccess Securities”), a Financial Industry Regulatory Authority, Inc. (“FINRA”) member and Securities and Exchange Commission (“SEC”) registered broker-dealer, and transfer agent services through our subsidiary, Beneficient Transfer and Clearing Company, L.L.C. (“Beneficient Transfer”), an SEC registered transfer agent, each in connection with offering our liquidity products.

While Ben’s financial products and services are presently primarily offered through Ben Liquidity and Ben Custody, Ben plans to expand its capabilities under Ben Custody and provide additional products and services through Ben Insurance, L.L.C. and its subsidiaries (collectively, “Ben Insurance Services”) and Ben Markets L.L.C., including its subsidiaries (“Ben Markets”) in the future. Ben Insurance Services plans to provide insurance products and services to certain “affiliates” (as defined in the Kansas Captive Insurance Act), including the Customer ExAlt Trusts, custody accounts and other trusts for which BFF serves as trustee or custodian, to cover risks attendant to the ownership, management and transfer of alternative assets and financings related to alternative asset transactions. On August 8, 2025, our subsidiary, Beneficient Insurance Company, L.L.C. (“BIC”), voluntarily withdrew its application for an insurance charter with the Commissioner of Insurance of the State of Kansas but intends to refile such application in the future. Additionally, BIC’s wholly-owned subsidiary, PEN Indemnity Insurance Company, LTD. (“PEN”) hashad been registered and licensed as a Class 3 insurer with the Bermuda Monetary Authority under the Bermuda Insurance Act of 1978, andbut Benthe InsuranceCompany Serviceshas maydecided or mayto not seek approval from the Bermuda authorities for PEN to become operational. PendingThe approvalCompany fromis in the process of dissolving the relevant Bermuda authorities, PEN would advise on, retrocede and re-insure policies consistent with those policies underwritten domestically by BIC.entities.

Each of our liquidity, primary capital, custody, trustee, trust administration, transfer agent and broker-dealer products and services are structured to be deliverable to our Customers through our online digital platform, AltAccess. AltAccess serves as the centralizing hub of our business and is an interactive, secure, end-to-end portal through which Customers select among our products and services and complete transactions in a regulated environment. Our internal technology team developed Ben’s AltAccess enterprise software systems and managed services, which consist of an integrated array of proprietary and third-party software solutions curated together to power the AltAccess platform enabling our Customers to access our products and services, select those that fit their specific needs and close transactions with Ben. The AltAccess platform is designed to ultimately be provided through a software as a service (“SaaS”) model to multiple intermediaries, including commercial lenders, and to be accessed through an application programming interface (“API”) for these intermediaries to deploy in their businesses. Ben AltAccess’s online platform is presently no longer publicly accessible as its being re-engineered to better meet the needs of our Customers. In the interim, we plan to continue to meet the needs of our Customers seeking liquidity, custody, trust and data services for their alternative assets via other methods.

While not presently publicly accessible, AltAccess is designed to operate seamlessly across the Ben Business Units, each of which are subject to regulation by various state and federal regulatory agencies. We believe Ben’s utilization of a centralized portal as a core capability and tool for our Customer’s seamless access to a range of alternative assets products and services is unique in the industry. In conducting its trustee, custodial, fiduciary financing and other authorized operations, BFF is regulated by the OSBC (the OSBC does not regulate the entirety of Beneficient). As a result, our AltAccess platform is periodically examined by the OSBC, and ishas previously been further assessed by a third-party organization, who issuesissued a System and Organizational Controls (“SOC”) 2 type 2 and SOC 3 compliance report for the benefit of our Customer users.users for the year ended March 31, 2025. The Company did not engage this third-party organization in the current fiscal year to complete such SOC compliance reports and may not seek such engagements in future periods either.

•Ben Liquidity is our primary business line and offers Ben’s alternative asset liquidity and fiduciary financing products and primary capital products through Ben AltAccess. As noted above, Ben AltAccess’s online platform is presently no longer publicly accessible as its being re-engineered to better meet the needs of our Customers. In the interim, we plan to continue to meet the needs of our Customers seeking liquidity, custody, trust and data services for their alternative assets via other methods.

We have allocated certain expenses to our operating segments, such as salaries, legal expenses, and other general operating expenses. We have not allocated certain other expenses, including equity compensation and interest expense for certain debt agreements, to our operating segments. We may in the future determine to allocate certain additional expenses to the operating segments, which could have a material impact on the presentation of the results of our operating segments in any future segment presentation.

As further described under “Recent Developments - Asset Sales Initiative,” onat eachvarious ofdates Juneduring 6,the 2025,fiscal andyear Julyended 1,March 2025,31, 2026, entities held by a Customer ExAlt Trust and managed by an indirect subsidiary of the Company completed the sales of beneficial interests or redemption of equity interests with respect to certain limited partner interests held for the benefit of such Customer ExAlt Trust, pursuant to which, the sellers received aggregate gross proceeds of approximately $25.1$51.4 million for the sale of such interests. In April and May of 2026, additional completed sales occurred for gross proceeds of approximately $2.7 million.

As a result of the above along with the existing equity capital structure described below under “Noncontrolling Interests”, the net income (loss) of the Company can vary significantly from the net income (loss) attributable to the Beneficient common shareholders. The following table presents a reconciliation of operating income (loss) of our reportable segments, excluding the Customer ExAlt Trusts, to net income (loss) attributable to Beneficient common shareholders. This reconciliation serves to provide users of our financial statements an understanding and visual aide of the reportable segments that impact net income (loss) attributable to the common shareholder and reiterates that the consolidation of the Customer ExAlt Trusts has no impact on the net income (loss) attributable to Beneficient common shareholders.

As a result, Ben’s primary tangible assets reflected on our consolidated statements of financial condition are investments, mainly comprised of alternative assets held by the Customer ExAlt Trusts and the primary sources of revenue reflected on our consolidated statements of comprehensive income (loss) are investment income (loss), net, which represents changes in the net asset value (“NAV”) of these investments held by the Customer ExAlt Trusts, and gain (loss) on financial instruments, net, which represents changes in fair value of equity securities, debt securities, a derivative liability,derivatives, convertible debt recorded at fair value, warrants and put options, primarily held by the Customer ExAlt Trusts. Such investment income (loss), net, and gain (loss) on financial instrumentsinstruments, net, that are held by the Customer ExAlt Trusts, including interests in the GWG Wind Down Trust (formerly debt and equity securities issued by GWG Holdings), is included in the net income (loss) allocated to noncontrolling interests – Customer ExAlt Trusts in the consolidated statements of comprehensive income (loss). The revenues and expenses recognized in these line items for the activities of the Customer ExAlt Trusts do not directly impact net income (loss) attributable to Ben’s or BCH’s equity holders.

The consolidated financial statements of Ben include the accounts of Ben, its wholly-owned and majority-owned subsidiaries, certain VIEs, in which the Company is the primary beneficiary, and certain noncontrolling interests. The noncontrolling interests reflected in our consolidated financial statements represent the portion of BCH’s limited partnership interests orand interests in the Customer ExAlt Trusts that are held by third parties. Amounts are adjusted by the noncontrolling interest holder’s proportionate share of the subsidiaries’ earnings or losses each period and for any distributions that are paid. The portion of income allocated to owners other than the Company is included in “net income (loss) attributable to noncontrolling interests” in the consolidated statements of comprehensive income (loss). Our primary noncontrolling interests as of and for the year ended March 31, 20252026 are described below. The terms and provisions applicable to the noncontrolling interests described below will be impacted by the proposed transactions to revise BCH’s liquidation priority, if completed. We do not expect the transaction to be consummated on the terms set forth in the Master Agreement. Accordingly, the Company is exploring available alternative options, including renegotiating terms or not proceeding with the transaction.

NewDevelopments Chairman ofRegarding the Board of Directors and the Chief Executive Officer

OnEffective JuneDecember 30,15, 2025, ThomasPeter O.T. HicksCangany, Jr. was elected to be the Chairman of the Board of Directors. Effective on JulyMarch 20,10, 2025,2026, JamesMack G. SilkHicks was namedappointed by the InterimBoard Chiefto Executiveserve Officer.as a director of the Company.

Brad K. Heppner previously served as the CEO and Chairman of the Board of Directors and resigned from both positions on June 19, 2025 following a request from the Company’s counsel, acting at the direction of the Audit Committee of the Board of Directors, for Mr. Heppner to sit for a formal interview regarding, among other things, his knowledge of certain documents and information concerning Mr. Heppner’s relationship to HCLP provided to the Company’s auditors in 2019. The interview request was made after the Company identified credible evidence that Mr. Heppner participated in fabricating and delivering fake documents to the Company regarding his and others’ relationships to HCLP, knowing that these documents would be provided to the Company’s auditors. The Company iscontinues investigatingto consider additional information it has learned about other conduct by Mr. Heppner and other persons that purportedly controlled HCLP to determine the extent to which any of that conduct surrounding HCLP was fraudulent. On November 4, 2025, Mr. Heppner was indicted by the United States Southern District of New York charging Mr. Heppner with various counts comprised of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, false statements to auditors, and falsification of records. At trial, it was established that Mr. Heppner fabricated the HCLP Loan, that HCLP was controlled by Mr. Heppner and that monies paid to HCLP in connection with the HCLP Loan were paid to Mr. Heppner. On May 7, 2026, Mr. Heppner was convicted of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, and false statements to auditors.

As part of the Asset Sales Initiative, on June 6, 2025 and July 1, 2025, entities (“Sellers”) held by a Customer ExAlt Trust and managed by an indirect subsidiary of the Company completed the sale of beneficial interests with respect to certain limited partner interests (the “Interests”) held for the benefit of such Customer ExAlt Trust. The Sellers received aggregate gross proceeds of $25.1 million for the sale of the beneficial interests included in this transaction. The Sellers paid an agreed upon brokerage commission and certain transaction costs out of such gross proceeds. The remainder of the proceeds were distributed to the Customer ExAlt Trust, which then used such proceeds as follows: (i) a portion (2.5%) of the proceeds will be distributed to the beneficiaries of the Customer ExAlt Trust and (ii) the remainder was paid to BFF, a subsidiary of the Company, as payment on outstanding accrued fees (if any) and a loan repayment on the outstanding loan issued by BFF to such Customer ExAlt Trust. The proceeds for the fee payment and the loan repayment received by BFF were then available for use by the Company. The Company was required to pay approximately $11.2 million out of the net proceeds to HH-BDH LLC as a principal and interest payment on the loan previously made by HH-BDH LLC to Beneficient Financing, LLC. HH-BDH LLC is an entity affiliated with Mr. Thomas O.Mack Hicks, who is a member of the Company’s board of directors and was named chairman of the board of directors in June 2025.directors.

Additionally, on August 8, 2025, the Sellers agreed to sell additional beneficial interests with respect to certain limited partner interests held for the benefit of such Customer ExAlt Trust. The Sellers will receivereceived aggregate gross proceeds of approximately $11.6 million for the sale of such interests included in this transaction that will closeclosed and fundfunded on various dates.dates Asduring our second quarter of thefiscal date of this Annual Report on Form 10-K, approximately $8.9 million has been funded with the remaining closing(s) expected to occur on or around September 30, 2025.2026. The Sellers have agreed to paypaid brokerage commissions and certain transaction costs out of such gross proceeds. The remainder of the proceeds were or will be distributed to the Customer ExAlt Trust, which then used or will use such proceeds as follows: (i) a portion (2.5%) of the proceeds will be distributed to the beneficiaries of the Customer ExAlt Trust and (ii) the remainder was paid or will be paid to BFF, a subsidiary of the Company,Company as payment on outstanding accrued fees (if any) and/or a loan repayment on the outstanding loan issued by BFF to such Customer ExAlt Trust. The proceeds for the fee payment and the loan repayment received or to be received by BFF were or will be then available for use by the Company. The Company iswas required to pay approximately $3.8 million out of the net proceeds received to date on this transaction to HH-BDH LLC as a principal payment on the loan previously made by HH-BDH LLC to Beneficient Financing, LLC.

On AprilJanuary 21,5, 2025,2026, Benthe LiquidityCompany enteredfunded intothe agreementsclosing to finance liquidity transactions related toof a primary capital transaction pursuant to definitive agreements entered into on December 31, 2025 with respect to a limited partner interest in an investment fund with a NAV of $0.2$3.0 million. Pursuant to such transaction, the Customer ExAlt Trusts acquired the limited partnership, and in exchange for such interest, the customer received 23,333302,273 shares of the Company’s Series B-7B-9 Resettable Convertible Preferred Stock, par value $0.001 per share (the “Series B-7B-9 preferred stock”), with such Series B-7B-9 preferred stock being convertible into shares of the Company’s Class A common stock. Each share of the Series B-7B-9 preferred stock is convertible at the election of the holder into shares of the Class A common stock initially at a conversion price of $0.2979$7.1332 per share, and is subject to reset from time to time, subject to a floor of $0.2234$5.3499 per share. A maximum of 1,044,450565,007 shares of Class A common stock may be issued upon conversion of the Series B-7B-9 preferred stock.

On JuneApril 17,8, 2025,2026, Benthe LiquidityCompany enteredfunded intothe agreementsclosing to finance liquidity transactions related toof a primary capital transaction pursuant to definitive agreements entered into on April 7, 2026 with respect to a limited partner interest in an investment fund with a NAV of $1.9$8.75 million. Pursuant to such transaction, the Customer ExAlt Trusts acquired the limited partnership,partner interest, and in exchange for such interest, the customer received 191,037875,214 shares of the Company’s Series B-8B-10 Resettable Convertible Preferred Stock, par value $0.001 per share (the “Series B-8B-10 preferred stock”), with such Series B-8B-10 preferred stock being convertible into shares of the Company’s Class A common stock. Each share of the Series B-8B-10 preferred stock is convertible at the election of the holder into shares of the Class A common stock initially at a conversion price of $0.3397$3.5479 per share, and is subject to reset from time to time, subject to a floor price of $0.2548$1.2418 per share. A maximum of 7,497,5287,047,947 shares of Class A common stock may be issued upon conversion of the Series B-8B-10 preferred stock.

On FebruaryJanuary 18,5, 20252026, January 29, 2026, and AugustApril 13,7, 2025,2026, the Companyholder issuedof 13,004the Series B-7 preferred stock elected to convert 11,667; 2,334; and 40,0002,334 shares of Series B-7 preferred stock in to 48,955; 9,794; and 9,794 shares of Class A common stockstock, respectively, at a price per share of approximately $2.38 pursuant to the terms of the Company,Series respectively,B-7 to a consultantcertificate of the Company.designation. The issuance of the Class A common stock pursuantin toexchange thesefor transactionsthe Series B-7 preferred stock was not registered under the Securities Act and each was issuedmade in reliance uponon the exemption provided inby Section 43(a)(29) of the Securities Act and Regulation D promulgated thereunder.Act.

On June 27, 2023, the Company entered into a Standby Equity Purchase Agreement (the “2023 SEPA”) with YA II PN, Ltd. (“Yorkville”).Yorkville. On each of January 6, 2026, January 26, 2026, February 24, 2026, February 27, 2026, March 28,5, 2025,2026 and April 4,15, 2025, April 10, 2025, April 21, 2025, June 5, 2025, and June 11, 2025,2026, Yorkville purchased 50,000,10,000, 4,000, 20,000, 50,000, 37,504, 46,867, 582,17915,040, and 225,00060,000 shares of Class A common stock for $0.33,$6.12, $0.30,$4.87, $0.29,$4.37, $0.29,$4.11, $0.29$4.09, and $0.29$3.88 per share, respectively, pursuant to the terms of the 2023 SEPA. Sales proceeds for these equity sales under the terms of the SEPA were approximately $0.3 million during the period of January 1, 2025 through September 22, 2025. Such issuances were in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.

There have been no material changes in the risk factors previously disclosed in response to Part I, Item 1A. “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended March 31, 20252026 filed with the SEC on SeptemberJune 29,30, 2025, except as set forth below.2026.

The following discussion and analysis should be read in conjunction with “Cautionary Note Regarding Forward-Looking Statements,” and the accompanying consolidated financial statements and notes thereto of Beneficient (f/k/a The Beneficient Company Group, L.P.) set forth in Part I, Item I of this Quarterly Report on Form 10-Q and our March 31, 20252026 audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on SeptemberJune 29,30, 20252026 (“Annual Report”). This discussion and analysis is based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Except as otherwise required by the context, references to the “Company,” “Ben,” “we,” “us,” “our,” and “our operating subsidiaries,” are to Beneficient, a Nevada corporation and its consolidated subsidiaries (but excluding the Customer ExAlt Trusts as defined below). References to “BCG,” “Ben,” “we,” “us,” “our,” and similar terms, prior to the effective time of the Conversion, refer to the registrant when it was a Delaware limited partnership and such references following the effective time of the Conversion, refer to the registrant in its current corporate form as a Nevada corporation called “Beneficient.” All references to “Beneficient” refer solely to Beneficient, a Nevada corporation, “BCG” refer solely to The Beneficient Company Group, L.P., and all references to “BCH” refer solely to Beneficient Company Holdings, L.P., a subsidiary of BCG.

Through Ben Markets, we provide broker-dealer services through our subsidiary, AltAccess Securities Company, L.P. (“AltAccess Securities”), a Financial Industry Regulatory Authority, Inc. (“FINRA”) member and Securities and Exchange Commission (“SEC”) registered broker-dealer, and transfer agent services through our subsidiary, Beneficient Transfer and Clearing Company, L.L.C. (“Beneficient Transfer”), an SEC registered transfer agent, each in connection with offering our liquidity products.

While Ben’s financial products and services are presently primarily offered through Ben Liquidity and Ben Custody, Ben plans to expand its capabilities under Ben Custody and provide additional products and services through Ben Insurance, L.L.C. and its subsidiaries (collectively, “Ben Insurance Services”) and Ben Markets L.L.C., including its subsidiaries (“Ben Markets”) in the future. Ben Insurance Services plans to provide insurance products and services to certain “affiliates” (as defined in the Kansas Captive Insurance Act), including the Customer ExAlt Trusts, custody accounts and other trusts for which BFF serves as trustee or custodian, to cover risks attendant to the ownership, management and transfer of alternative assets and financings related to alternative asset transactions. On August 8, 2025, our subsidiary, Beneficient Insurance Company, L.L.C. (“BIC”), voluntarily withdrew its application for an insurance charter with the Commissioner of Insurance of the State of Kansas but intends to refile such application in the future. Additionally, BIC’s wholly-owned subsidiary, PEN Indemnity Insurance Company, LTD. (“PEN”) hashad been registered and licensed as a Class 3 insurer with the Bermuda Monetary Authority under the Bermuda Insurance Act of 1978, andbut Benthe InsuranceCompany Serviceshas maydecided or mayto not seek approval from the Bermuda authorities for PEN to become operational. PendingThe approvalCompany fromis in the process of dissolving the relevant Bermuda authorities, PEN would advise on, retrocede and re-insure policies consistent with those policies underwritten domestically by BIC.entities.

Each of our liquidity, primary capital, custody, trustee, trust administration, transfer agent and broker-dealer products and services are structured to be deliverable to our Customers through our online digital platform, AltAccess. AltAccess serves as the centralizing hub of our business and is an interactive, secure, end-to-end portal through which Customers select among our products and services and complete transactions in a regulated environment. Our internal technology team developed Ben’s AltAccess enterprise software systems and managed services, which consist of an integrated array of proprietary and third-party software solutions curated together to power the AltAccess platform enabling our Customers to access our products and services, select those that fit their specific needs and close transactions with Ben. The AltAccess platform is designed to ultimately be provided through a software as a service model to multiple intermediaries, including commercial lenders, and to be accessed through an application programming interface for these intermediaries to deploy in their businesses. Ben AltAccess’s online platform is presently no longer publicly accessible as itsit’s being re-engineered to better metmeet the needs of our Customers. In the interim, we plan to continue to meet the needs of our Customers seeking liquidity, custody, trust and data services for their alternative assets via other methods.

While not presently publicly accessible, AltAccess is designed to operate seamlessly across the Ben Business Units, each of which are subject to regulation by various state and federal regulatory agencies. We believe Ben’s utilization of a centralized portal as a core capability and tool for our Customer’s seamless access to a range of alternative assets products and services is unique in the industry. In conducting its trustee, custodial, fiduciary financing and other authorized operations, BFF is regulated by the OSBC (the OSBC does not regulate the entirety of Beneficient). As a result, our AltAccess platform is periodically examined by the OSBC, and ishas previously been further assessed by a third-party organization, who issuesissued a System and Organizational Controls (“SOC”) 2 type 2 and SOC 3 compliance report for the benefit of our Customer users.users for the year ended March 31, 2025. The Company did not engage this third-party organization to complete such SOC compliance reports in our most recently completed fiscal year and may not seek such engagements in future periods either.

•Ben Liquidity is our primary business line and offers Ben’s alternative asset liquidity and fiduciary financing products and primary capital products through Ben AltAccess. As noted above, Ben AltAccess’s online platform is presently no longer publicly accessible as itsit’s being re-engineered to better metmeet the needs of our Customers. In the interim, we plan to continue to meet the needs of our Customers seeking liquidity, custody, trust and data services for their alternative assets via other methods.

As further described under “Recent Developments - Asset Sales Initiative,” at various dates during the quarter ended DecemberJune 31,30, 2025,2026, entities held by a Customer ExAlt Trust and managed by an indirect subsidiary of the Company completed the sales of beneficial interests or redemption of equity interests with respect to certain limited partner interests held for the benefit of such Customer ExAlt Trust, pursuant to which, the sellers received aggregate gross proceeds of approximately $13.5$6.2 million for the sale of such interests. In JanuaryAugust 2026, another completed sale occurred for gross proceeds of approximately $0.2$0.4 million.

Our Ben Liquidity and Ben Custody business segments, which relate to our current operating subsidiaries that are owned by the holders of equity in the Company (including BCH), recognize revenue through (i) interest income on ExAlt Loans made to the Customer ExAlt Trusts in connection with our liquidity transactions for Customers, (ii) fee income billed at closing, but recognized as revenue ratably over the expected life of the alternative asset, for each liquidity transaction with Customers for services including access to and use of the AltAccess platform, transfer of the alternative assets, and delivery of the consideration to the client, and (iii) recurring fee income recognized each period for providing services including trustee, custody, and trust administration of the Customer ExAlt Trusts while they hold investments. Ben Liquidity and Ben Custody revenue recognized for the three and nine months ended DecemberJune 31,30, 20252026 and 20242025 is as follows:

a.Ben Liquidity recognized $8.2 million and $11.3$8.8 million in interest income during the three months ended DecemberJune 31,30, 20252026 and 2024,2025, respectively. For the nine months ended December 31, 2025 and 2024, Ben Liquidity recognized interest income of $25.5 million and $34.1 million, respectively.

b.Ben Custody recognized $2.9$2.5 million and $5.4$4.2 million in trust services and administration revenues during the three months ended DecemberJune 31,30, 20252026 and 2024,2025, respectively. For the nine months ended December 31, 2025 and 2024, Ben Custody recognized trust services and administration revenues of $10.2 million and $16.2 million, respectively. Trust services and administrative revenues arerespectively, comprised of both the fee income billed at the closing of the transactions that is being amortized into revenue and the recurring fee income billed during the periods.

As a result of the above along with the existing equity capital structure described below under “Noncontrolling Interests”, the net income (loss) of the Company can vary significantly from the net income (loss) attributable to the Beneficient common shareholders. The following table presents a reconciliation of operating income (loss) of our reportable segments, excluding the Customer ExAlt Trusts, to net income (loss) attributable to Beneficient common shareholders. This reconciliation serves to provide users of our financial statements an understanding and visual aideaid of the reportable segments that impact net income (loss) attributable to the common shareholder and reiterates that the consolidation of the Customer ExAlt Trusts has no impact on the net income (loss) attributable to Beneficient common shareholders.

Brad K. Heppner previously served as the CEO and Chairman of the Board of Directors (the “Board”) and resigned from both positions on June 19, 2025 following a request from the Company’s counsel, acting at the direction of the Audit Committee of the Board of Directors,Board, for Mr. Heppner to sit for a formal interview regarding, among other things, his knowledge of certain documents and information concerning Mr. Heppner’s relationship to HCLP provided to the Company’s auditors in 2019. The interview request was made after the Company identified credible evidence that Mr. Heppner participated in fabricating and delivering fake documents to the Company regarding his and others’ relationships to HCLP, knowing that these documents would be provided to the Company’s auditors. The Company continues to consider additional information it has learned about other conduct by Mr. Heppner and other persons that purportedly controlled HCLP to determine the extent to which any of that conduct surrounding HCLP was fraudulent. On November 4, 2025, Mr. Heppner was indicted by the United States Southern District of New York charging Mr. Heppner with various counts comprised of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, false statements to auditors, and falsification of records. At trial, it was established that Mr. Heppner fabricated the HCLP Loan, that HCLP was controlled by Mr. Heppner and that monies paid to HCLP in connection with the HCLP Loan were paid to Mr. Heppner. On May 7, 2026, Mr. Heppner was convicted of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, and false statements to auditors.

As part of the Asset Sales Initiative, on various dates starting on June 6, 2025 andthrough JulyMarch 1,31, 2025,2026, entities (“Sellers”) held by a Customer ExAlt Trust and managed by an indirect subsidiary of the Company completed the sale of beneficial interests with respect to certain limited partner interests or equity securities (the “Interests”) held for the benefit of such Customer ExAlt Trust. TheCumulatively, the Sellers received aggregate gross proceeds of $25.1$51.4 million for the sale of the beneficial interests or equity securities included in thisthese transaction.transactions. TheFor each such transaction, the Sellers generally paid an agreed upon brokerage commission and certain transaction costs out of such gross proceeds. The remainder of the net proceeds were distributed to the Customer ExAlt Trust, which then used such proceeds as follows: (i) a portion (2.5%) of the proceeds will be distributed to the beneficiaries of the Customer ExAlt Trust and (ii) the remainder was paid to a subsidiary of the Company as payment on outstanding accrued fees (if any) and/or a loan repayment on the outstanding loan issued by BFF to such Customer ExAlt Trust. The proceeds for the fee payment and the loan repayment were then available for use by the Company. TheFor each transaction, the Company was required to pay approximatelycertain $11.2agreed millionupon amounts out of the net proceeds to HH-BDH LLC as a principal and interest payment on the loan previously made by HH-BDH LLC to Beneficient Financing, LLC. HH-BDH LLC is an entity affiliated with Mr. Thomas O.Mack Hicks, who was a member of the Company’s board of directors and was named chairman of the board of directors in June 2025 until his passing in December 2025.Board.

OnIn Octoberthe three months ended June 30, 2025,2026, theseSellers entitiescompleted alsoadditional sold equity securities they held back to the issuing entitysales for approximatelygross $8.3 millionproceeds of proceeds.approximately $6.2 million. The Sellers paid certain of its accruedtransaction costs out of thesuch gross proceeds. The remainder of the net proceeds were distributed to the Customer ExAlt Trust, which then used such proceeds as follows: (i) a portion (2.5%) of the proceeds will be distributed to the beneficiaries of the Customer ExAlt Trust and (ii) the remainder was paid to a subsidiary of the Company as payment on outstanding accrued fees (if any) and/or a loan repayment on the outstanding loan issued by BFF to such Customer ExAlt Trust. The proceeds for the fee payment and the loan repayment were then available for use by the Company. TheIn CompanyAugust was2026, requiredthese toentities paycompleted an additional sale for gross proceeds of approximately $2.1$0.4 million out of the net proceeds on this transaction to HH-BDH LLC as a principal payment on the loan previously made by HH-BDH LLC to Beneficient Financing, LLC.million.

As part of onetwo of the transactions that was executed intransactions, December 2025, threetwo limited partnership interests remain under contract to be sold for which funding has not yet occurred. Once those threetwo transactions close and fund, gross proceeds are expected to be approximately $4.3$0.4 million, subject to change based on any capital calls funded or distributions received in the intervening time period.

On January 5, 2026, the Company funded the closing of a primary capital transaction pursuant to definitive agreements entered into on December 31, 2025 with respect to a limited partner interest in an investment fund with a NAV of $3.0 million. Pursuant to such transaction, the Customer ExAlt Trusts acquired the limited partnership, and in exchange for such interest, on July 13, 2026, the customer received 302,273 shares of the Company’s Series B-9 Resettable Convertible Preferred Stock, par value $0.001 per share (the “Series B-9 preferred stock”), with such Series B-9 preferred stock being convertible into 226,005 shares of the Company’s Class A common stock. Each share of the Series B-9 preferred stock is convertible at the election of the holder into shares of the Class A common stock initially at a conversion price of $7.1332 per share, and is subject to reset from time to time, subject to a floor of $5.3499 per share. A maximum of 565,007 shares of Class A common stock may be issued upon conversion of the Series B-9 preferred stock.

On Januaryeach 5,April 7, 2026 and JanuaryJuly 29,2, 2026,2026 the holder of the Series B-7 preferred stock elected to convert 11,667 and 2,334 shares of Series B-7 preferred stock in to 48,955 andinto 9,794 shares of Class A common stock, respectively, at a price per share of approximately $2.38 pursuant to the terms of the Series B-7 certificate of designation. The issuance of the Class A common stock in exchange for the Series B-7 preferred stock was made in reliance on the exemption provided by Section 3(a)(9) of the Securities Act.

On JanuaryJuly 6,13, 2026,2026 the Companyholder issuedof 17,008the Series B-6 preferred stock elected to convert 96,558 shares of Series B-6 preferred stock into 383,046 shares of Class A common stockstock, at a price per share of approximately $2.52 pursuant to the terms of the CompanySeries toB-6 a consultantcertificate of the Company.designation. The issuance of the Class A common stock pursuantin toexchange thesefor transactionsthe Series B-6 preferred stock was not registered under the Securities Act and each was issuedmade in reliance uponon the exemption provided inby Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.Act.

On June 27, 2023, the Company entered into a Standby Equity Purchase Agreement (the “2023 SEPA”) with YA II PN, Ltd. (“Yorkville”).Yorkville. On JanuaryApril 6, 2026 and January 26,15, 2026, Yorkville purchased 10,000, and 4,00060,000 shares of Class A common stock for prices of $6.12 and $4.87$3.88 per share, respectively,share pursuant to the terms of the 2023 SEPA. Such issuances were in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and RegulationRule D506(b) promulgated thereunder.

On July 29, 2024, the Texas State District Court, Dallas County 134th Judicial District (the “Texas District Court”) entered an order vacating the Arbitration Award in its entirety. The Texas District Court directed the parties to file motions requesting any further relief that may be available within twenty days of the order. On August 2, 2024, the Claimant filed an appeal to challenge the order vacating the Arbitration Award in the Texas Fifth Court of Appeals. The Claimant filed his opening brief on October 28, 2024, and the Company filed its response brief on January 21, 2025. On February 10, 2025, the Claimant filed his reply brief. The Texas Fifth Court of Appeals heard oral arguments in April 2025. On October 10, 2025, the Texas Fifth Court of Appeals reversed the judgment of the Texas District Court and confirmed the previous Arbitration Award. On November 12, 2025, the Company filed a motion for re-hearing with the Texas Fifth Court of Appeals. On May 13, 2026, the Texas Fifth Court of Appeals denied the Company’s motion for re-hearing. On June 4, 2026, the Company filed a petition for review with the Supreme Court of Texas requesting that it reverse the Texas Fifth Court of Appeals’ ruling and reinstate the trial court’s decision to vacate the arbitration award. In the Texas District Court, on April 20, 2026, the Company was ordered to post a bond of not less than $25 million as security to protect the judgment pending appeal. On April 30, 2026, the Company filed a Motion for Reconsideration and Stay challenging the bond order. On June 18, 2026, the Company filed a Sworn Declaration establishing that the aggregate current net worth of the defendant entities under GAAP as determined under Texas law is negative. On June 22, 2026, consistent with the Sworn Declaration, the Company deposited a $100 cash bond in lieu of a supersedeas bond pursuant to Texas Rule of Appellate Procedure 24.2(a)(1) and Texas Civil Practice & Remedies Code § 52.006. The Company will continue to vigorously defend itself in this matter and we are exploring available options with respect to the Arbitration Award, which may include appealing to the Texas Supreme Court or working with the claimant in the arbitration on settlement terms that could reduce the potential near term cash obligations associated with the arbitration. There can be no assurance that we will be able to reach a settlement on terms that are favorable to us or at all.

As a result of the order issued on July 29, 2024, the Company released the liability associated with the Arbitration Award, which resulted in the release of the previously recognized loss contingency accrual in the amount of $55.0 million being reflected in the ninethree months ended DecemberJune 31,30, 2024 consolidated statement of comprehensive income (loss). As a result of the order issued on October 10, 2025, the Company recorded a loss contingency associated with the Arbitration Award, including post-judgment interest and fees, which resulted in a loss of $62.8 million being reflected in the ninethree months ended DecemberJune 31,30, 2025 consolidated statement of comprehensive income (loss). Additional interest accruing on the Arbitration Award during the three and nine months ended DecemberJune 31,30, 2026 and 2025 totaled $1.7$1.8 million and $3.4nil, millionrespectively, and is reflected in the interest expense line item in the consolidated statements of comprehensive income (loss).

–Volatility in the price of our Class A common stock. The price of our Class A common stock may impact our ability to enter into liquidity transactions with our Customers. If our stock price declines, our potential Customers may be less likely to engage with us and accept our Class A common stock, or securities convertible into our Class A common stock, in exchange for their alternative assets. Furthermore, a significant sustained decrease in our stock price has in the past been an indicator, and in the future may indicate, that impairment is present and may require a quantitative impairment assessment of our assets including goodwill and intangible assets. Any such future impairment charges for goodwill may reduce our overall assets and may result in a change in the perceived value of the Company and ultimately may be reflected as a reduction in the market price of our securities. Additionally, we have begun to enter into financings in which the Customer ExAlt Trusts use our Class A common stock or convertible preferred stock as consideration to meet capital calls or make other capital contributions in alternative asset funds, which in turn hold such securities as an investment. Volatility, either positively or negatively, in the price of our Class A common stock may have a compounding effect on our consolidated investment income and cause further decreases in our stock price in the event our securities comprise a significant portion of such alternative asset funds’ aggregate assets. We werehave previouslyreceived notifieddelisting bynotices from Nasdaq that based onin the Company’spast non-compliancerelated to noncompliance with thecertain BidNasdaq Pricecontinued andlisting therules. Periodic Filing Requirement, the Company’s securities were subject to delisting. Subsequent to that notification,While we alsoare received notification that the Company was notcurrently in compliance with the Minimum Stockholders’ Equity Requirement, which served as an additional basis that subjected the Company’s securities to delisting. As described above, the Company has regained compliance with the Periodic Filing Requirement, the Bid Price Requirement and the MVLS Requirement (as an alternative to the Minimum Stockholders’ Equity Requirement). Although the Company has taken definitive steps to to regain compliance with all applicable criteria for continued listing onrequirements Theand Nasdaqstandards Capitalof Market,Nasdaq, there can be no assurance that the Company will be able to maintain compliance with all the applicable listing requirements.requirements in the future. See the risk factor titled “At times in the past, we have been notified by Nasdaq of our failure to comply with certain continued listing requirements. While we are currently in compliance with all applicable continued listing requirements and standards of Nasdaq, if we are unable to maintain compliance with the applicable listing requirements, our Class A common stock could be delisted from Nasdaq” in our Annual Report for more information.

In February 2026, the U.S. and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. In October 2023, following a series of attacks by Hamas on Israeli civilian and military targets, Israel declared war on Hamas in Gaza. In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine and as a result, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. TheThese ongoing Russia-Ukraine conflict and Israel-Hamas conflictconflicts could have a negative impact on the economy and business activity globally (including in the countries in which the Customer ExAlt Trusts currently holds investments or may hold investments in the future), and therefore, could adversely affect the performance of the Customer ExAlt Trusts’ investments.

The extent and impact of any sanctions imposed in connection with the Russia-Ukraineongoing conflictconflicts between Russia and Ukraine and in the Middle East has caused and may continue to cause financial market volatility and impact the global economy. Volatility and disruption in the equity and credit markets can adversely affect the portfolio companies underlying the investments held by the Customer ExAlt Trusts and adversely affect the investment performance. Our ability to manage exposure to market conditions is limited. Market deterioration could cause the Company to experience reduced liquidity, earnings and cash flow, recognize impairment charges, or face challenges in raising capital and making investments on attractive terms. Adverse market conditions can also affect the ability of investment funds held by the Customer ExAlt Trusts to liquidate positions in a timely and efficient manner. As a result, this presents material uncertainty and risk with respect to the performance of the investments held by the Customer ExAlt Trusts, even though the Customer ExAlt Trusts do not hold any investments with material operations in Russia, Ukraine, Israel, or Israel.Iran. The cash flows from the investments held by the Customer ExAlt Trusts serve as the collateral to the ExAlt Loans and the fees that are paid by the Customer ExAlt Trusts to Ben for administering these trusts, both of which are key determinants in the income allocated to Ben’s and BCH’s equity holders.

We continue to evaluate the impact of the ongoing Russia-Ukraineconflicts conflict,between Israel-HamasRussia conflictand Ukraine and in the Middle East and other items, such as inflation, risingvolatile interest rates, changes in regulatory requirements and tariffs, and assess the impact on financial markets and our business. Our future results may be adversely affected by slowdowns in fundraising activity and the pace of new liquidity transactions with our customers.

–Accrual (Release) of Equity Awards Arbitration Loss Contingency. During the year ended March 31, 2024, the Company accrued a loss contingency based on the findings of the sole arbitrator that in terminating the equity awards of a former member of the Board of Directors of Beneficient Management, LLC, the Company had breached its contractual obligations, and as a result, the sole arbitrator awarded the former board member the Arbitration Award. During the ninethree months ended DecemberJune 31,30, 2024,2025, the Company released the loss contingency accrual based on the Texas State District Court, Dallas County 134th Judicial District entering an order vacating the Arbitration Award in its entirety. On October 10, 2025, the Texas Fifth Court of Appeals reversed the judgment of the Texas District Court and confirmed the previous Arbitration Award. Thus, the Company recorded a loss contingency associated with the Arbitration Award, including post-judgment interest and fees, which resulted in a loss of $62.8 million during the ninethree months ended DecemberJune 31,30, 2025. In addition to the loss contingency, we have recorded interest accruing on the Arbitration AwardAward. duringDuring the three and nine months ended DecemberJune 31,30, 20252026 totalingand $1.72025, interest on the Arbitration Award totaled $1.8 million and $3.4nil, millionrespectively, and is reflected in the interest expense line item in the consolidated statements of comprehensive income (loss). Thus, the fiscal year 20252026 year-to-date amounts reflect the release of the accrual of the Arbitration Award of $55.0$62.8 million while the fiscal year 20262027 year-to-date amounts reflectreflects only the post judgment interest accrual of $1.8 million. The total accrual of the Arbitration Award, plus post-judgment interest and fees, foris a$69.7 totalmillion as of $66.2June million.30, 2026.

–Derivative asset recognized in Limited Conversion. During the three and nine months ended December 31,October 2025, aan embedded derivative related to the appreciation forfeiture provision involving the Class A common stock issued as part of the Limited Conversion was bifurcated and recorded as a derivative asset at fair value on the conversion date, with subsequent changes in fair value recognized in gain (loss) on financial instruments, net. During the three and nine months ended DecemberJune 31,30, 2025,2026, unrealized gainloss on the change in fair value was recognized totaling $44.1$3.8 million. There were not such amounts in the prior year periods since the embedded derivative did not exist.exist prior to October 2025. The derivative asset is remeasured at each reporting date until settlement on January 1, 2028.

Adjusted revenue. 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 in the Collateral Swap (the “Collateral Swap”), which on August 1, 2023, became interests in the GWG Wind Down Trust.Trust and mark-to-market adjustments on derivative asset related to appreciation forfeiture for shares issued in the limited conversion of BCH Preferred A-1 to Class A common stock.

During the three and nine months ended DecemberJune 31,30, 20252026 and 2024,2025, we earned revenues on a consolidated basis from the following primary sources: