Beneficient, a Nevada corporation, has filed a prospectus supplement to update information regarding its Class A common stock and warrants. The supplement is based on the Current Report on Form 8-K filed on April 25, 2025, and supersedes the prospectus dated November 12, 2024. The company's Class A common stock (symbol: BENF) and warrants (symbol: BENFW) are listed on the Nasdaq Capital Market, with the last reported sales price of Class A common stock at $0.2566 per share and warrants at $0.0062 per warrant. Beneficient is classified as an "emerging growth company" and a "smaller reporting company," allowing it to comply with reduced public company reporting requirements. The company is also a "controlled company" due to stockholders' agreement on director election, affecting its corporate governance standards.
Key Events and Financial Transactions:
- On April 21, 2025, Beneficient closed a primary capital transaction with a customer, acquiring a limited partner interest in an investment fund with a net asset value of $233,333. In return, the customer received 23,333 shares of Series B-7 Resettable Convertible Preferred Stock (par value $0.001 per share), convertible into Class A common stock.
- The issuance of the Series B-7 Preferred Stock was not registered under the Securities Act but was issued under Section 4(a)(2) exemption.
Series B-7 Preferred Stock Terms:
- Conversion Price: Initially set at $0.2979 per share, subject to monthly resets based on the five-day trailing volume-weighted average price of Class A common stock, with a floor price of $0.2234 per share.
- Optional Conversion: Holders can convert shares upon two business days' written notice using the B-7 Conversion Rate.
- Mandatory Conversion: Shares will automatically convert five years after the original issue date, provided certain SEC filing or resale registration conditions are met. Conversion is delayed if it would cause a holder to exceed 4.99% of Class A common stock or breach Nasdaq regulations.
- Ranking: The Series B-7 Preferred Stock ranks pari passu with Class A common stock but junior to other preferred stocks and senior to all company debt.
- Liquidation Preference: Holders will receive a pro-rata share equal to the conversion value of all shares immediately before liquidation or dissolution.
- Dividends: Paid on an as-converted basis when paid on Class A common stock.
- Voting Rights: Holders have no voting rights except as required by law.
Regulation FD Disclosure:
- On April 25, 2025, Beneficient issued a press release announcing the closing of the transaction, which is attached as Exhibit 99.1 and incorporated by reference.
Exhibits and Financial Statements:
- The B-7 Certificate of Designation is filed as Exhibit 3.1 and incorporated by reference.
The prospectus supplement ensures that investors have the most current information regarding Beneficient's capital structure and recent transactions, emphasizing the terms and implications of the Series B-7 Preferred Stock issuance.
