| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed, at the special meeting of stockholders of Beneficient (the “Company”) held on March 21, 2024, the Company obtained stockholder approval for a reverse stock split of the Company’s Class A common stock, par value $0.001 per share (the “Class A Common Stock”), and Class B common stock, par value $0.001 per share (the “Class B Common Stock” and together with the Class A Common Stock, the “Common Stock”) at a ratio in the range of 1-for-10 to 1-for-100 (the “Reverse Stock Split”) and a simultaneous proportionate reduction in the authorized shares of each class of Common Stock as required by Nevada Revised Statues Section 78.207. The Board of Directors of the Company (the “Board”) subsequently approved a Reverse Stock Split ratio of 1-for-80 to be effective April 18, 2024.
In connection with the Reverse Stock Split, on April 11, 2024, the Company, in its capacity as the sole managing member and the sole non-managing member of Beneficient Company Group, L.L.C. (“Ben LLC”), entered into and adopted the Second Amended and Restated Limited Liability Company Agreement of Beneficient Company Group, L.L.C. (the “Ben LLC A&R LLCA”), which will become effective on April 18, 2024, simultaneously with the effectiveness of the Reverse Stock Split. The Ben LLC A&R LLCA provides that, among other things, in the event that the Company at any time (i) subdivides (by any stock split, dividend, recapitalization or otherwise), the outstanding shares of the Class A Common Stock (and Class B Common Stock, as applicable) of the Company into a greater number of shares, Ben LLC shall (A) cause the issuance of additional Class A Units of Ben LLC (the “Ben LLC Class A Units”) and (B) cause Beneficient Company Holdings, L.P. (“BCH”) to issue additional Class A Units of BCH (the “BCH Class A Units”) (and such other limited partner interests, if any, as determined by Ben LLC in its capacity as general partner of BCH to be appropriate), in both cases to reflect the increase in the number of shares of Common Stock of the Company outstanding, and (ii) combines (by combination, reverse split or otherwise) the outstanding shares of Class A Common Stock (and Class B Common Stock, as applicable) of the Company into a smaller number of shares, Ben LLC shall (A) cause a reduction in the number of Ben LLC Class A Units outstanding and (B) cause BCH to reduce the number of BCH Class A Units (and such other limited partner interests, if any, as determined by Ben LLC in its capacity as the general partner of BCH to be appropriate), in both cases to reflect the decrease in the number of shares of Common Stock of the Company outstanding.
Also in connection with the Reverse Stock Split, on April 11, 2024, Ben LLC, in its capacity as the sole general partner of BCH, entered into and adopted the Ninth Amended and Restated Limited Partnership Agreement of BCH (the “BCH LPA”), which will become effective on April 18, 2024, simultaneously with the effectiveness of the Reverse Stock Split. The BCH LPA provides for, among other things, (i) the combination of certain units of BCH in connection with the Reverse Stock Split and the corresponding reverse unit split of the Ben LLC Class A Units as well as amendments to the definition of the Preferred Series A Subclass 0 Unit Conversion Price and Preferred Series A Subclass 1 Unit Conversion Price (each as defined in the BCH LPA) and (ii) remove references to the previously authorized Preferred Series C Subclass 1 Unit Accounts (as defined in the BCH LPA), which are no longer outstanding.
The foregoing descriptions of the Ben LLC A&R LLCA and the BCH LPA do not purport to be complete and are qualified in their entirety by reference to the Ben LLC A&R LLCA and the BCH LPA, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
| Item 3.03 | Material Modification to Rights of Security Holders. |
On April 15, 2024, the Company filed a Certificate of Change with the Secretary of State of the State of Nevada to effect the Reverse Stock Split at a ratio of 1-for-80 and a simultaneous proportionate reduction in the authorized shares of each class of Common Stock. The Reverse Stock Split is expected to become effective at 12:01 a.m. Eastern Time on April 18, 2024 (the “Effective Time”). At the Effective Time, every 80 shares of the Company’s issued and outstanding Common Stock will automatically convert into one share of Common Stock, without any change in the par value per share. Also as a result of the Reverse Stock Split, the number of the Company’s authorized shares of Class A Common Stock and Class B Common Stock will be proportionally reduced from 1,500,000,000 and 20,000,000, respectively, to 18,750,000 and 250,000, respectively. The Reverse Stock Split will also effect a reduction in the number of shares issuable pursuant to the Company’s equity awards, warrants and convertible preferred stock outstanding as of the effective time of the Reverse Stock Split with a corresponding increase in the exercise or conversion price per share.
