Beneficient Q1 FY2025 earnings call

Advancements

• Created a unique primary capital fiduciary financing product for general partners and launched a NASDAQ co-branded advertising campaign targeting them.
• Announced a significant upgrade to the AltAccess Fintech platform called Machine Automated Pricing System (MAPS), which automates pricing of ExAlt loans, aiming to complete transactions in as few as 15 days.
• Launched new GP Solutions group product and updated AltAccess platform with MAPS for better efficiency.

Legal Update

• Texas State District Court vacated a previously disclosed arbitration award against the company. The SEC terminated its investigation and a federal judge ruled against a motion to dismiss in the defamation lawsuit against the Wall Street Journal's reporter.

Strategic Advantages

• Custom-built fintech platform, statutory and regulatory oversight, public company status, and thousands of industry relationships.

Custody Business

• Custody business returned to profitability in the quarter. NAV of alternative assets held in custody was $380.7 million at period end.

The company has two primary business segments: Ben Liquidity and Ben Custody. In the first quarter of fiscal 2025, Ben Liquidity recognized $10.8 million in base interest revenue, up 1.9% from the prior quarter, with an operating loss of $0.5 million. Ben Custody had revenues of $5.4 million, down slightly from the prior quarter, and operating income of $1.3 million. Ben Liquidity contributes through interest revenue from supplying liquidity, while Ben Custody generates fee revenue from platform and trust services.

Forward-Looking

• Board approved an exchange trust product plan to complete up to $5 billion of fiduciary financing to customer exalt trusts through exchange trust transactions.
• Plan to grow and scale capital commensurate with demand for liquidity and primary capital products, aiming for optimized risk-adjusted return and diversification.

Risks

• Legal proceedings could still have potential for additional relief or appeal. Market uncertainties related to alternative asset transactions and general partner fundraising challenges.