Beneficient

Good day, and thank you for standing by. Welcome to the Beneficent Second Quarter Fiscal 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Callahan, Director of Communications. Please go ahead.

Good morning, everyone, and thank you for joining us on Beneficent's fiscal second quarter 2026 conference call and webcast. In addition to the call and webcast, we issued a results press release last Friday that was posted to the shareholders section of our website at shareholders.trustben.com. Today's webcast, as the operator indicated, is being recorded and a replay will be available on the company's website. On today's call, management's prepared remarks may contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ from those discussed today. Actual results and future events could materially differ from those discussed in these forward-looking statements because of factors described in our earnings press release and the risk factors section of our Form 10-K, and in subsequent filings we make with the Securities and Exchange Commission. Forward-looking statements represent management's current estimates, and Beneficent assumes no obligation to update any forward-looking statements in the future. Today's call also contains certain non-GAAP financial measures. Please refer to our earnings press release, which is available on our website, for important disclosures regarding such measures, including reconciliation to the most comparable GAAP financial measures. At this time, I'm pleased to introduce James Silk, the interim CEO for Beneficent. He was appointed to that position by the board in July of this year. Mr. Silk previously served as Executive Vice President and Chief Legal Officer for Beneficent from January 2020 until May 2024. During that time, he was integral to the development of the company's corporate structure, the completion of the company's business combination transaction, and the navigation of the complex legal issues associated with running the company's business. Additionally, Mr. Silk oversaw the company's operations, underwriting risk and legal groups. After James completes his remarks, Greg Azell, Chief Financial Officer, will provide some financial highlights. I'll now hand the call over to James.

Thank you, everyone. Well, a lot has happened over the past six months. The profession has faced some meaningful challenges. The foundations of Beneficent's business and the market opportunity remain strong. When I talked to the board about returning, this was back in July, it was clear they were united and committed to Ben, which is important to me. And since my return, management, myself, and others have been focused on stabilizing the company, getting the company to a place we can execute on our mission to provide liquidity, primary capital, customers, and the alternative asset market. It's our core business. And I'm committed to that mission and has been energizing to lead the charge during this transition period. As it relates to recent developments, as we previously disclosed, in June we separated from our former chairman and CEO, Brad Hefner. That occurred just before our annual report was to be filed. That separation occurred after the company identified credible evidence that Mr. Hefner had committed fraud against the company. Also as previously disclosed, Mr. Hefner was recently indicted and now faces multiple criminal charges. The company is considering all available options related to Mr. Hefner's conduct, including counterclaims and litigation against Mr. Hefner. The company also intends to vigorously pursue claims regarding the validity of over $100 million of debt purportedly owed to an entity related to Mr. Hefner. Overall, while unpleasant, we believe this is an opportunity for the company to move past Mr. Hefner, both reputationally and substantively, and ultimately better position the company to execute going forward. Another important recent development concerns a previously disclosed agreement to settle all claims pending in the lawsuits related to GWG against the company, its subsidiaries, and each of their current and former directors and officers. That settlement has been approved by the GWG Barronty Court. The District Court for the Northern District of Texas has granted the motion for preliminary approval of that settlement, and a hearing on final approval of that settlement has been set for January of 2026. So important progress on that front. Importantly, the settlement is within insurance limits and requires no out-of-pocket payments by the company. I would also note that the claims against Mr. Hefner's entities are not included in that settlement. The company has also worked to regain compliance with NASDAQ listing rules. As previously disclosed, the company was not in compliance with the NASDAQ periodic reporting requirement, with their filings being delayed primarily due to the timing of the developments surrounding Mr. Hefner's resignation. And as of the first quarter 10Q filing a few weeks ago, we're now back in line with our periodic reporting. And in fact, thanks to our incredibly dedicated accounting team, we filed a 10K and two 10Qs in just over six weeks. So much credit to that team. We've also gained compliance with the market value of listed securities requirements. That's two. Finally, the company continues to take steps to gain compliance with NASDAQ bid price requirements. More specifically, we anticipate holding a special meeting on December 1st, 2025 to seek shareholder approval of a reverse stock split of its common stock. Bottom line in terms of NASDAQ compliance is that we worked on a plan of compliance, we presented that plan to the NASDAQ panel, and we've been executing on that plan. Importantly, as part of that plan to regain compliance with NASDAQ continued listing requirements, and what I would view as a strong show of confidence in the company's future, Tom Hicks, our board chair, converted approximately 53 million of our preferred units in the company's subsidiary into the company's Class A common shares. In connection with that conversion, we agreed not to sell the shares until October 1st, 2028, so three years. We've also agreed to forego any potential appreciation of the converted shares during that lockup period And we also agreed during that lockup period to vote those shares with the board's recommendation for all matters other than the election of directors. We believe that Transcendent aligns our interests with those of our common shareholders and reinforces leadership's competence in the company's mission in the future. Final note on developments, we also continue to focus on our relationships. related to Kansas. We are committed to Kansas, we appreciate Kansas, and will continue to work to deliver on our obligations to Kansas and its communities. So far, I've focused on recent developments. To that end, we've cut costs and operating expenses, which Greg will discuss further. We've also reduced our legitimate third-party debt. from $27 million in January to under $4 million as of today. We are also streamlining operations and plan to roll out simpler ways to provide liquidity and capital to customers. We're also exploring adjacent markets where our solutions may work at minimal extra cost. For example, we're reviewing our existing tools and tech and are looking for ways to put them to use.