📄 What This Document Is

This is a DEFA14A filing, which stands for "Definitive Additional Soliciting Material." It's part of the proxy process. Think of it as a detailed update and announcement sent to shareholders ahead of a vote. It combines a required legal disclosure (an 8-K form) with a press release to explain a major new deal the company just closed.

👉 Why it matters: The company needs shareholder approval for parts of this deal, so this document lays out the facts and the "ask" in one place. It’s both a report and a campaign flyer.

🏢 What The Company Does

Beneficient (ticker: BENF) is a financial technology company. In simple terms, they help people and smaller institutions who own hard-to-sell assets (like private equity or venture capital funds) find liquidity or exit options. They also provide new funding ("primary capital") to the managers (General Partners) of these funds.

They operate under a special Kansas law for "Technology-Enabled Fiduciary Financial Institutions" (TEFFI), which is part of their regulatory structure.

🤝 The Deal: A $8.75M "Primary Capital" Transaction

On April 8, 2026, Beneficient closed a specific transaction with Quartus AI Fund LP, a fund managed by Quartus Capital Partners.

• What Beneficient Got: A limited partner interest in Quartus's AI-focused investment fund, which has a net asset value of $8.75 million. They also get to participate in a future $1.2 million of unrealized gains from the fund's existing portfolio.
• What Quartus Got: 875,214 shares of Beneficient's new Series B-10 Resettable Convertible Preferred Stock.

👉 Why it matters: This is a core part of Beneficient's business model. Instead of just giving cash, they are using their own stock (in a complex preferred form) to buy into an attractive AI/tech fund, which they believe strengthens their overall asset base.

📦 The "Resettable" Preferred Stock: Key Mechanics

The Series B-10 Preferred Stock is the centerpiece. Its terms are designed to protect both parties.

• Conversion: Each share can be turned into shares of Beneficient's common stock (BENF).
• Initial Price: The initial conversion price is $3.5479 per common share.
• The "Reset" Feature: This is critical. The conversion price isn't fixed. On the last day of each month, it resets to match the stock's recent average market price. However, it has a floor price of $1.2418 (it won't go lower) and can't go higher than the initial $3.5479.
• Maximum Shares: If fully converted, this could issue up to 7,047,947 new common shares.
• Automatic Conversion: It must convert into common stock after 5 years, assuming certain reporting conditions are met.
• Limitations: Conversions are blocked if they would cause the holder to own more than 4.99% of the company or exceed Nasdaq's issuance limits without shareholder approval.

👉 Why it matters: The reset feature means the number of shares Quartus gets is dynamic. If BENF's stock price falls, they get more shares. If it rises, they get fewer. This aligns their incentive with Beneficient's stock performance.

💰 Financial Impact & Pro Forma Numbers

The press release attached provides a "pro forma" look at how this deal changes the company's financial snapshot, as if it happened on December 31, 2025.

• Tangible Book Value: The deal is expected to increase the "tangible book value attributable to Ben public company stockholders" by approximately $9.77 million. The pro forma tangible book value improves from -$51.055 million to -$41.285 million.
• Collateral Boost: The collateral backing Beneficient's "ExAlt" loan portfolio is expected to increase by $9.77 million from interests in this alternative asset fund.
• Market Context: As of April 7, 2026, Beneficient's market capitalization was $54.508 million.

👉 Why it matters: Management is highlighting that this transaction immediately adds positive, tangible value to the company's balance sheet, which is a key metric for investors, especially for a company currently showing a deficit.

🔮 What's Next & The "Ask"

This filing is fundamentally about setting up a stockholder vote. Beneficient needs its shareholders to approve the potential issuance of a large number of common shares upon conversion of this Series B-10 Preferred Stock (and potentially other similar series).

The company will be filing a formal proxy statement soon, which will contain the details of the vote. This document is the opening salvo in convincing shareholders to approve.

• Contacts for Investors:
  • Matt Kreps: 214-597-8200, [email protected]
  • Michael Wetherington: 214-284-1199, [email protected]
  • Investor Relations: [email protected]

⚖️ Big Picture: Strengths & Risks

• 👍 Strengths / Strategic Move: The deal showcases their core "GP Primary Commitment Program" in action. Partnering with a top-performing AI fund (Quartus) looks strategically sound and could bring valuable assets onto their platform. The immediate boost to tangible book value and collateral is a clear positive signal.
• ⚠️ Risks / Complexities: The resettable preferred stock is highly dilutive and complex. Its value depends heavily on future stock price movements. The company still has significant negative tangible book value, and the need for shareholder approval adds uncertainty. The sheer number of preferred stock series (B-1 through B-10) indicates a history of similar, potentially dilutive financings.

🧠 The Analogy

Imagine you own a rare baseball card (your fund interest). Beneficient doesn't buy it with cash. Instead, they give you a special, mutable IOU (the Series B-10 Preferred). The IOU's value is pegged to the price of their team's star player's rookie card (BENF common stock). If the rookie's price tanks, you get more IOUs; if it soars, you get fewer. After 5 years, the IOU must be traded in for actual rookie cards. Beneficient gets the baseball card for their collection, hoping its value rises, while you take a bet on the future of the rookie's market.

🧩 Final Takeaway

Beneficient is using its stock as complex, adjustable currency to buy into an AI investment fund, claiming an immediate $9.77 million boost to tangible value. The critical next step is getting shareholders to approve the potentially massive stock issuance that this deal's convertible preferred shares represent.