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DALLAS - Beneficient (NASDAQ:BENF), whose stock has seen a remarkable 113% surge over the past six months despite significant volatility, announced Tuesday that Chairman Thomas O. Hicks and Interim CEO James G. Silk have converted approximately $52.6 million of preferred units into common stock. According to InvestingPro data, the company’s shares currently trade at $0.49, significantly below their 52-week high of $2.36.
The conversion resulted in the issuance of 92.5 million shares to Hicks and 8.8 million shares to Silk. Both executives agreed to a lock-up period until October 1, 2028, during which they will vote their shares in accordance with board recommendations and forfeit any appreciation in share value. This move comes as InvestingPro analysis shows the company faces challenges with its current ratio of 0.29, indicating short-term obligations exceed liquid assets.
The move comes after Nasdaq notified Beneficient on October 3 that it did not comply with the minimum stockholders’ equity requirement. Through this conversion, the company is seeking to meet an alternative compliance pathway by achieving a market value of listed securities of at least $35 million.
By converting their Preferred A-1 Unit Accounts of Beneficient Company Holdings, a subsidiary of Beneficient, both executives relinquished liquidation preference, preferred return, and other rights that made these interests senior to common stockholders.
"This conversion reinforces the confidence of our leadership in the Company’s mission and future," Hicks and Silk stated in the press release. "We want our stockholders to know that we are working to align our interests and strengthen and simplify the Company’s capital structure."
Beneficient describes itself as a technology-enabled platform providing exit opportunities and capital solutions for alternative asset holders through its AltAccess online platform. The company’s subsidiary, Beneficient Fiduciary Financial, operates under Kansas’ Technology-Enabled Fiduciary Financial Institution Act with regulatory oversight from the Office of the State Bank Commissioner. For a deeper understanding of BENF’s financial health and growth prospects, including 12 additional key ProTips and comprehensive valuation metrics, visit InvestingPro for exclusive insights and detailed analysis.
In other recent news, Beneficient has been navigating a series of challenges and changes. The company received a notice from Nasdaq regarding non-compliance with minimum stockholders’ equity requirements, reporting a negative equity of $34.9 million as of March 31, 2025. Additionally, Beneficient faces potential delisting due to a delayed quarterly report filing for the period ended June 30, 2025. This follows a prior notice related to non-compliance with Nasdaq’s minimum bid price and delayed annual report filing for the fiscal year ended March 31, 2025.
Furthermore, Beneficient is dealing with loan defaults as it received a notice from HCLP Nominees, L.L.C. concerning defaults under two credit agreements. These defaults are linked to missed payments on outstanding obligations, which are now accruing interest at 11.5% per annum. In terms of leadership changes, the company appointed Thomas O. Hicks as Chairman of the Board and James G. Silk as interim CEO. Hicks, a seasoned private equity professional, has been part of Beneficient’s board since 2018.
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