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September 25, 2023
VIA EDGAR
U.S. Securities and Exchange Commission
100 F Street, N.E.
Division of Corporation Finance
Officer of Finance
Washington, D.C. 20549
Attention: Robert Arzonetti and Tonya Aldave
| Re: | Beneficient |
Amendment No. 1 to Registration Statement on Form S-1 |
Filed August 31, 2023 |
File No. 333-273322 |
Ladies and Gentlemen:
On behalf of Beneficient (the “Company”), below is the response of the Company to the comments of the staff of the Division of Corporation Finance (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set forth in the Staff’s letter, dated September 14, 2023, regarding the Company’s Amendment No. 1 to Registration Statement on Form S-1 (the “Registration Statement”) filed with the Commission on August 31, 2023. In connection with this letter, a second amendment to the Registration Statement (“Amendment No. 2”) has been submitted to the Commission on the date hereof.
For your convenience, the Staff’s comments are set forth in bold, followed by responses on behalf of the Company. Unless otherwise indicated, all page references in the responses set forth below are to the pages of the clean copy of Amendment No. 2. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in Amendment No. 2.
Amendment No. 1 to Registration Statement on Form S-1
Risk Factors
We engage in related party transactions, which may result in conflicts of interest involving our senior management, page 54
| 1. | We note your response to our prior comment 10 and reissue. Please add a separately captioned risk factor to specifically address any payments or other interests held by your CEO, Brad Heppner, directly or as a beneficial owner/beneficiary, whether held through trusts, or other holdings. The disclosure should address both material holdings and aggregate holdings that: |
| • | have an ownership interest in Beneficient; or |
| • | have provided credit or funds that have a priority interest in Beneficient or its component parts, or in the event of bankruptcy, compared to the common shareholders. |
Please further discuss the conflict of interest that could arise from a conflict between Mr. Heppner’s financial interests and those of Beneficient’s shareholders.
Response: The Company acknowledges the Staff’s comment and has included a separately captioned risk factor in accordance with the Staff’s comment on pages 54-57 of Amendment No. 2.
| Haynes and Boone, LLP | 2801 N. Harwood Street | Suite 2300 | Dallas, TX 75201 T: 214.651.5000 | haynesboone.com |
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U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
September 25, 2023
Page 2
Substantial future sales of shares of Class A common stock could cause the market price of our shares of Class A common stock to decline, page 56
| 2. | We note your response to our prior comment 13 and reissue in part. Please disclose the maximum number of your Class A common shares that can be issued under the equity line agreement and describe the dilutive effect of the formula or pricing mechanics on your share price as the result of the equity line purchase agreement. |
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 58-59 of Amendment No. 2 accordingly.
Payments to our Chief Executive Officer, page 213
| 3. | We note your response to our prior comment 5 and reissue in part. We further note the table beginning on page 214. For each item in the table, please include in a separate column the total dollar amount paid to or for the benefit of Mr. Heppner or his affiliates. Consider adding a similar table to the related party transactions section or reorganizing that section to group Mr. Heppner’s related party transactions in a similar way. |
Response: The Company acknowledges the Staff’s comment and has revised the disclosure on pages 216-225 of Amendment No. 2 accordingly. We note for the Staff that the Company has included financial information in respect of related party transactions in the table through June 30, 2023, the Company’s last balance sheet date. Additionally, we respectfully advise the Staff that, other than the amount of additional interest that has accrued to principal pursuant to the terms of the HCLP Loan Agreement since June 30, 2023, the Company has advised us that there are no additional related party transactions in excess of $120,000 for the period beginning June 30, 2023 through the date hereof.
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U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Finance
September 25, 2023
Page 3
If you have any questions or require any additional information in connection with the filing, please do not hesitate to contact the undersigned at (214) 651-5443.
| Very truly yours, |
/s/ Matthew L. Fry |
| Matthew L. Fry |
| Haynes and Boone, LLP |
| cc: | Brad K. Heppner, Chief Executive Officer |
Gregory W. Ezell, Chief Financial Officer
James G. Silk, Esq., Chief Legal Officer
David B. Rost, Esq., General Counsel
Logan Weissler, Esq., Haynes and Boone, LLP
Alexa Cooper, Esq., Haynes and Boone, LLP