BENF · Beneficient

Beneficient executed a strategic primary capital transaction through its GP Primary Commitment Program, providing $8.75 million to fund a limited partner interest in Quartus AI Fund LP, a top-quartile performing AI investment vehicle managed by Quartus Capital Partners LLC. In exchange, the customer received 875,214 shares of newly designated Series B-10 Resettable Convertible Preferred Stock, convertible into Class A Common Stock at an initial rate yielding up to 7,047,947 shares, with monthly reset mechanisms tied to 5-day VWAP (capped at initial price, floored at 35% thereof). This unregistered issuance relied on Section 4(a)(2) and Regulation D exemptions. The filing of the B-10 Certificate of Designation on April 8, 2026, establishes detailed terms including optional conversion upon 2 days' notice, mandatory conversion after five years (subject to SEC filings or Rule 144), 4.99% beneficial ownership cap, Nasdaq Exchange Cap limitations (requiring future stockholder approval for excess issuances), pari passu dividend and liquidation rights with other Series B preferred and Class A Common (junior to Series A and debt), and no voting rights. Post-transaction, Beneficient recognizes a $1.2 million pro rata unrealized gain from the fund's appreciated portfolio, boosting ExAlt loan collateral by $9.77 million. Pro forma as of December 31, 2025, tangible book value attributable to public stockholders shifts from zero to $9.77 million, signaling dilution-managed equity enhancement. Management, via Interim CEO James Silk, emphasized alignment with shareholder value and collateral strengthening. A proxy solicitation for conversion approvals is forthcoming, highlighting governance implications amid Nasdaq rules.