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Investing.com -- Beneficient (NASDAQ:BENF) stock soared 52% in after-hours trading Tuesday after the company’s Chairman and Interim CEO converted approximately $52.6 million of preferred units into common stock, potentially helping the company meet Nasdaq listing requirements.
Thomas O. Hicks, Chairman of the board, and James G. Silk, Interim CEO, elected to convert their Preferred A-1 Unit Accounts of Beneficient Company Holdings, L.P. (BCH), a subsidiary of the company. The conversion resulted in the issuance of approximately 92.5 million shares to Hicks and 8.8 million shares to Silk.
The move comes after Beneficient was notified on October 3 that it did not comply with Nasdaq’s minimum stockholders’ equity requirement. Through this conversion, the company is seeking to meet the alternative market value of listed securities (MVLS) requirement, which requires a minimum value of $35 million.
As part of the conversion, both executives entered into a voting and lock-up agreement that restricts the sale of these shares until October 1, 2028. They also agreed to vote their new shares in line with board recommendations and will forfeit any appreciation in share value during the lock-up period.
"This conversion reinforces the confidence of our leadership in the Company’s mission and future," said Hicks and Silk in a statement. "We want our stockholders to know that we are working to align our interests and strengthen and simplify the Company’s capital structure."
By converting their preferred units, the executives gave up liquidation preferences and other rights that made these interests structurally and economically senior to common stockholders, demonstrating their commitment to the company’s long-term prospects.
Beneficient operates a technology platform providing exit opportunities and capital solutions for holders of alternative assets through its AltAccess platform.
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