Beneficient Q3 FY2025 earnings call

• Strengthened team, improved balance sheet, and executed liquidity/primary capital financings.
• Added banking, legal, and compliance veteran Patrick Donegan and Karen Wendel to the Board. Karen brings expertise in digital asset markets, etc.
• Announced acquisition of Mercantile Bank International Corp., a Puerto Rico-based IFE, to expand custody services.
• Revised liquidation priority of Beneficient Company Holdings L.P. to enhance shareholder value.
• Increased permanent equity by $35 million and closed a $1.4 million primary capital commitment.

Ben Liquidity

• In Q3 2025, recognized $11.3 million of interest income, a 5.7% decrease from the prior quarter, primarily due to more loans on nonaccrual status, partially offset by compounding interest. Year-to-date (YTD) ended Dec 31, 2024, interest income was $34.1 million, down 6% due to higher nonaccrual loans and prepayments, partially offset by new loans. Operating loss in Q3 was $2.9 million, improving to $0.5 million YTD.

Ben Custody

• NAV of alternative assets held in custody in Q3 was $385.1 million, up from $381.2 million prior. Revenues in Q3 were $5.4 million, same as prior quarter. YTD revenues were $16.2 million, down 14.7% due to lower NAV. Operating income in Q3 was $3.5 million, down from $4.3 million prior. YTD operating income was $9.1 million.

• Expect uptick in liquidity transactions once BCH transaction is approved and completed.
• Anticipate increase in distributions and realization events in 2025 based on positive U.S. economy outlook and capital markets.

Q: Hi, everyone. Good morning. First, I know you recently closed the primary capital commitment with 8F Asset Management. But just be curious to get your perspectives on how important the recently announced public stockholder enhancement transactions will be just in terms of facilitating reaccelerating exchange trust activity? And then just related to that, would you expect a more meaningful step-up after the transactions have been approved and completed later this year?

A: We have been out of market with the ExchangeTrust product line for the better part of 15 months. We reentered the market just prior to year-end. We introduced capital stack enhancements to deliver tangible book value to common shareholders. We believe this will be attractive to counterparties and help accelerate closings once fully completed.

Q: Hi. I'm here for Brendan. And thank you taking my question. Can you tell me about your timeline around when the liquidity transactions could pick up? And what factors may provide the upside or the downside to your expectations?

A: The timeline expects uptick in transactions once BCH transaction is approved. Proxy votes are being worked on. Upside is positive U.S. economy outlook leading to more realization events; downside could be tariff strategies delaying events.

Q: Right. And can you provide detail on how the underlying alternative asset collateral portfolio is performing more broadly? And that can you comment on the distribution activity and how that impacts your outlook?

A: In Q3, unrealized appreciation was ~7%, similar to distributions. Expect distributions to increase in 2025 and realization events to reflect positive U.S. economy, generating more unrealized appreciation realization.