Beneficient

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At times in the past, we have been notified by Nasdaq of our failure to comply with certain continued listing requirements. While we are currently in compliance with all applicable continued listing requirements and standards of Nasdaq, if we are unable to maintain compliance with the applicable listing requirements, our Class A common stock could be delisted from Nasdaq.

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Our Class A common stock is listed on the Nasdaq Capital Market. To maintain our listing, we are required to satisfy continued listing requirements. There can be no assurance we will continue satisfying such continued listing requirements, which include that the closing bid price of our common stock be at least $1.00 per share, that we have at least 300 round lot holders and at least 500,000 publicly held shares, that the market value of our publicly held securities be at least $1 million, and that we meet one of these standards: stockholders’ equity of at least $2.5 million; market value of listed securities of at least $35 million; or net income from continuing operations of $500,000 in the latest fiscal year or in two of the last fiscal years.

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On November 28, 2023, we received a letter from the Staff of Nasdaq (the “Nasdaq Staff”) notifying the Company that, for the previous 30 consecutive business days, the closing bid price for the Company’s Class A common stock had been below the minimum $1.00 per share required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided an initial period of 180 calendar days, or until May 28, 2024, to regain compliance with the Bid Price Requirement.

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Effective February 26, 2024, the Company transferred from the Nasdaq Global Market to the Nasdaq Capital Market. On March 22, 2024, the Company received a letter from Nasdaq advising that the Nasdaq Staff had determined that, as of March 21, 2024, the Company’s Class A common stock had a closing bid price of $0.10 or less for at least ten consecutive trading days. Accordingly, the Company was subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii). As a result, the Nasdaq Staff determined to delist the Company’s securities from The Nasdaq Capital Market, unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”) pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. The Company requested a hearing, and such hearing was scheduled for May 21, 2024.

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In order to regain compliance with the Bid Price Requirement, on April 18, 2024, the Company effected a reverse stock split of its Class A common stock and Class B common stock at a ratio of eighty (80) to one (1) and a simultaneous proportionate reduction in the authorized shares of each class of its Class A common stock and Class B common stock as required by NRS Section 78.207. On May 2, 2024, the Company received notice from the Nasdaq Staff that the Company had regained compliance with the Bid Price Requirement, and that therefore, the Company was therefore in compliance with the listing requirements of the Nasdaq Capital Market. As a result, the Company’s hearing before the Panel was cancelled.

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On July 16, 2024, the Company received a notice from the Nasdaq staff indicating that it is no longer in compliance with the minimum stockholders’ equity requirement (the “Minimum Stockholders’ Equity Requirement”) for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Notice”). Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000 or meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations, which the Company does not currently meet.

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Pursuant to the Stockholders’ Equity Notice and the Listing Rules of Nasdaq, Nasdaq provided the Company with 45 calendar days, or until August 30, 2024, to submit a plan to regain compliance with the Minimum Stockholders’ Equity Requirement. On August 30, 2024, the Company timely submitted a plan to regain compliance with the Minimum Stockholders’ Equity Requirement. On November 25, 2024, Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC confirming that the Company had regained compliance with the Minimum Stockholders’ Equity Requirement, after giving pro forma effect to the (i) redesignation of approximately $35 million of BCH Preferred Series A Subclass 0 Unit Accounts into non-redeemable BCH Preferred Series A Subclass 0 Unit Accounts and (ii) the Company’s sale of 3,274,000 shares of its Class A common stock to Yorkville on November 15, 2024, for aggregate consideration of approximately $5.1 million, pursuant to the SEPA, which resulted in pro forma stockholders’ equity of $26.9 million as of September 30, 2024. In the Quarterly Report on Form 10-Q for December 31, 2024, we reported permanent equity amounts greater than the Minimum Stockholders’ Equity Requirement, however, in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, we reported stockholders’ equity below the Minimum Stockholders’ Equity Requirement, which resulted in the Additional Determination Letter (as defined below).

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Additionally, on July 23, 2024, the Company notified Nasdaq that, following the resignations of Emily B. Hill and Dennis P. Lockhart from the Company’s Board and Audit Committee of the Board (the “Audit Committee”), the Company currently has a vacancy on the Audit Committee and intends to rely on the cure period set forth in the Nasdaq Listing Rules while it recruits a new Audit Committee member.

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On July 25, 2024, the Company received a notice from Nasdaq (the “Audit Committee Notice”) confirming that the Company was no longer in compliance with Nasdaq’s audit committee composition requirements as set forth in Nasdaq Listing Rule 5605, which requires that the audit committee of a listed company be comprised of at least three “independent directors” (as defined in Nasdaq Listing Rule 5605(a)(2)). Pursuant to Nasdaq Listing Rule 5605(c)(4), the Company relied on the cure period to reestablish compliance with Nasdaq Listing Rule 5605. The cure period is generally defined as until the earlier of the Company’s next annual meeting of stockholders or July 21, 2025. If the Company’s next annual meeting of stockholders was held before January 15, 2025, then the Company was required to evidence compliance no later than January 15, 2025. The Company did not hold its next annual meeting of stockholders prior to January 15, 2025.

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On September 30, 2024, Patrick J. Donegan was appointed to the Board as an independent director and a member of the Audit, Products and Related Party Transactions, Credit and Enterprise Risk committees of the Board. On November 21, 2024, Karen J. Wendel was appointed to the Board as an independent director and member of the Audit committee of the Board. On November 25, 2024, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC confirming that, following the appointment of Ms. Wendel to the Board and the Audit committee, the Company had regained compliance with the audit committee composition requirements set forth in the Nasdaq Listing Rule 5605. The Audit Committee Notice had no immediate impact on the listing of the Class A common stock, which continued to be listed and traded on Nasdaq under the symbol “BENF,” during the period from the receipt of the Audit Committee Notice on July 25, 2024 until the receipt of the letter on November 25, 2024 confirming that compliance with audit committee composition requirements had been regained.

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On January 13, 2025, we received a letter from the Nasdaq Staff notifying the Company that, for the previous 30 consecutive business days, the closing bid price for the Company’s Class A common stock had been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market under the Bid Price Requirement. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided an initial period of 180 calendar days, or until July 14, 2025 (the

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“Compliance Date”), to regain compliance with the Bid Price Requirement. On July 16, 2025, we were notified by Nasdaq that, based upon the Company’s continued non-compliance with the Bid Price Requirement as of July 14, 2025, the Company’s securities were subject to delisting from Nasdaq unless the Company timely requested a hearing before the Nasdaq Hearings Panel, which the Company made such timely request.

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Additionally, the July 16, 2025 letter from Nasdaq also notified the Company that it was not in compliance with the periodic reporting requirement set forth in Nasdaq Listing Rule 5250(c)(1) since the Company had not yet filed its Annual Report on Form 10-K and this could serve as a separate and additional basis for delisting. On August 18, 2025, an additional letter from Nasdaq notified the Company that it was not in compliance with the periodic reporting requirement set forth in Nasdaq Listing Rule 5250(c)(1) since the Company had not yet filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

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The Company’s hearing before the Panel occurred on August 26, 2025.

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On September 9, 2025, the Company was notified that the Panel had determined to grant the Company an extension to regain compliance with the Bid Price Requirement and the Periodic Filing Requirement for its Annual Report on Form 10-K for the year ended March 31, 2025 and for its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

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The filing of the Annual Report on Form 10-K on September 29, 2025 and the Quarterly Report on Form 10-Q for June 30, 2025 on October 20, 2025 was within the extension period allowed for by the Panel, demonstrating compliance with the Periodic Filing Requirement. On October 29, 2025, the Company received notification from the Panel that the Company had regained compliance with the Periodic Filing Requirement. There can be no assurance that we will be able to maintain compliance with the Periodic Filing Requirement.

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Additionally, in order to again regain compliance with the Bid Price Requirement, on December 15, 2025, the Company effected a reverse stock split of its Class A common stock and Class B common stock at a ratio of eight (8) to one (1) and a simultaneous proportionate reduction in the authorized shares of each class of its Class A common stock and Class B common stock as required by NRS Section 78.207. On January 2, 2026, the Company received notice from the Nasdaq Staff that the Company had regained compliance with the Bid Price Requirement, and that therefore, the Company was in compliance with the listing requirements of the Nasdaq Capital Market.

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On October 3, 2025, the Company was notified by staff of Nasdaq that because the Company’s Form 10-K for the fiscal year ended March 31, 2025 reported a stockholders’ equity of $(34.9) million, the Company was in non-compliance with the Minimum Stockholders’ Equity Requirement, which could also serve as a separate and additional basis for delisting in addition to the matters described above (such letter, the “Additional Determination Letter”). The Additional Determination Letter also provided that the Panel will consider the Additional Determination Letter in their decision regarding the Company’s continued listing on Nasdaq. As a result of the Limited Conversion of Preferred Series A Subclass 1 Unit Accounts described above, the Company was able to demonstrate compliance with an alternative to the Stockholders’ Equity Requirement by meeting the Nasdaq minimum of $35 million market value of listed securities requirement (the “MVLS Requirement”). On October 29, 2025, the Company received notification from the Panel that the Company had regained compliance with the MVLS Requirement. There can be no assurance that we will be able to maintain compliance with the MVLS Requirement.

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The notices described above have no effect at this time on the Class A Common Stock, which continues to trade on The Nasdaq Capital Market under the symbol “BENF.”

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If we are delisted from Nasdaq, our securities may be eligible for trading on an over-the-counter market. If we are not able to obtain a listing on another stock exchange or quotation service for our securities, it may be extremely difficult or impossible for stockholders to sell their shares. If we are delisted from Nasdaq, but obtain a substitute listing for our securities, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their securities on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if our securities are delisted from Nasdaq, the value and liquidity of our securities would likely be significantly adversely affected. A delisting of our securities from Nasdaq could also adversely affect our ability to obtain financing for our operations and/or result in a loss of confidence by investors, employees and/or business partners.

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Although, the Company has regained compliance with all applicable criteria for continued listing on The Nasdaq Capital Market, there can be no assurance that the Company will be able to maintain compliance with all the applicable listing requirements in the future.

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In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our securities to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our securities from dropping below the Minimum Bid Price requirement or prevent future non-compliance with the listing requirements of Nasdaq.

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The Company is currently involved in legal proceedings and may be a party to additional claims and litigation in the future.

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On December 16, 2022, the Claimant initiated a private arbitration in the International Court of Arbitration of the International Chamber of Commerce, challenging the termination of certain equity awards under two incentive plans by the administrator of the incentive plans. The Claimant sought total damages of $36.3 million plus attorney’s fees and punitive damages. On April 23, 2024, the sole arbitrator held that in terminating the Claimant’s equity awards, the Company had breached its contractual obligations, and as a result, awarded the claimant $55.3 million in compensatory damages, including pre-judgment interest. Post-judgment interest was also awarded to Claimant. Neither attorneys’ fees nor punitive damages were awarded to the Claimant. The Company was also asked to pay arbitration-related costs in the amount of approximately $0.1 million. On July 29, 2024, the Texas District Court entered an order vacating the previous Arbitration Award against the Company in the aggregate amount of approximately $55.3 million in compensatory damages, including pre-judgment and post-judgement interest. The Texas District Court directed the parties to file motions requesting any further relief that may be available within twenty days of the order. On August 2, 2024, the Claimant filed an appeal to challenge the order vacating the Arbitration Award in the Texas Fifth Court of Appeals. The Claimant filed his opening brief on October 28, 2024, and the Company filed its response brief on January 21, 2025. On February 10, 2025, the Claimant filed his reply brief. The Texas Fifth Court of Appeals heard oral arguments in April 2025. On October 10, 2025, the Texas Fifth Court of Appeals reversed the judgment of the Texas District Court and confirmed the previous Arbitration Award. On November 12, 2025, the Company filed a motion for re-hearing with the Texas Fifth Court of Appeals. The Company will continue to vigorously defend itself in this matter and we are exploring available options with respect to the Arbitration Award, which may include appealing to the Texas Supreme Court or working with the Claimant in the arbitration on settlement terms that could reduce the potential near term cash obligations associated with the arbitration.

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Brad K. Heppner and HCLP have made repeated attempts to control the Company’s subsidiaries and assets, and if they are successful, such attempts could cause irreparable harm to the Company.

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Brad K. Heppner, the Company’s former Chief Executive Officer, and HCLP have made attempts to control the subsidiaries and assets of the Company. As discussed above, on October 10, 2025, HCLP brought an action in the Delaware Court of Chancery against DTC individually and as trustee for Custody Trusts, purporting to be lender to BCH and its affiliates and, among other things, seeks to enforce the guarantees and certain pledge agreements and prevent any future distributions to Beneficient from those particular Custody Trusts. Although the Company is evaluating its obligations under the HCLP Loan Agreement and intends to bring claims against Mr. Heppner, HCLP and any direct or indirect control parties of HCLP and their agents, there is no guarantee that the Company’s efforts against these parties will be successful.

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Furthermore, HCLP has attempted to utilize remedies it believes it has available under the HCLP Loan Agreement and certain pledge agreements to take control over certain of the Company’s subsidiaries. On October 14, 2025, the Company received correspondence from HCLP which purported to designate Beneficient Management Group, LLC as its nominee to exercise all voting and consensual powers with respect to certain collateral and many of the Company’s subsidiaries under the HCLP Loan Agreement. If Mr. Heppner utilizes such purported powers in an attempt to act on behalf of the Company or its subsidiaries, it could irreparably damage the Company’s reputation and interfere with the Company’s contractual relationships with third parties. Although the Company is challenging these actions, if successful, Mr. Heppner and HCLP’s efforts could have a material adverse effect on our financial condition and the trading price of our Class A common stock.

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Our former CEO and Chairman of the Board has been indicted for securities fraud.

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On November 4, 2025, our former Chairman of the Board of Directors and CEO, Brad K. Heppner was indicted by the United States Southern District of New York charging Mr. Heppner with various counts comprised of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, false statements to auditors, and falsification of records. As previously disclosed, Beneficient parted ways with Mr. Heppner earlier this year promptly after the Company learned of credible evidence of his fraud on the Company and others. The Company will continue to vigorously pursue its own potential claims against Mr. Heppner and entities associated with him on behalf of its shareholders. The Company has and will continue to cooperate with the government’s investigation of Mr. Heppner.

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Although the Company is not a party to this case, the ongoing matter has resulted in negative publicity and may impact the willingness of our customers and other parties to transact business with us, which could adversely affect our reputation, operations and financial condition. In addition, if the case is decided against Mr. Heppner, Mr. Heppner could be considered a “bad actor” under federal securities laws, and as a result, the Company may be unable to utilize certain exemptions for private securities sales, which could negatively impact the ability of the Company to raise capital and conduct its ordinary course liquidity transactions.

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We identified a material weakness in our internal control over financial reporting, and our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective as of March 31, 2025. While we have implemented remedial actions and concluded the material weakness has been remediated as of June 30, 2025, if we fail to maintain effective disclosure controls and procedures and internal control over financial reporting, it could result in a material misstatement in our financial statements or a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our Class A common stock.

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Pursuant to the Sarbanes-Oxley Act of 2002 and related rules and regulations, our management is required to report annually on the effectiveness of our internal control over financial reporting and assess the effectiveness of our disclosure controls on a quarterly basis. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to consistently produce reliable financial statements and financial reports and effectively prevent fraud. If we cannot provide reliable financial reports or prevent fraud, our reputation and operating results would be harmed. The Company disclosed a material weakness in internal control over financial reporting in its Annual Report on Form 10-K for the year ending March 31, 2025. The material weakness related to a deficiency in the control environment specifically because certain actions by a former member of senior management failed to demonstrate commitment to integrity and ethical behavior and senior management did not set an appropriate tone at the top. Although these actions did not have a quantitative impact on our financial statements, because of the circumvention of controls orchestrated by the now former member of senior management, we concluded that the potential for material misstatement of the financial statements was more than remote. Accordingly, management determined that this control deficiency constituted a material weakness as of March 31, 2025.

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A “material weakness” is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

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During the quarter ended June 30, 2025, we implemented various remedial actions and concluded as of June 30, 2025 that the material weakness described above has been remediated. Although we have implemented remedial actions to improve the design and operational effectiveness of the elements of the internal control environment that contributed to this material weakness, including through management changes and the separation of the role of chairperson of the Board of Directors and CEO, there can be no assurance that we will be successful in maintaining our internal controls over financial reporting, or that we will not identify additional control deficiencies or material weaknesses in the future. If we are not successful in maintaining our internal controls over financial reporting and our disclosure controls, or if we have additional control deficiencies, we may not be able to accurately report our financial results, prevent fraud or file our periodic reports with the SEC in a timely manner, which may expose us to legal and regulatory liabilities and our Class A common stock to be delisted from Nasdaq, and may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our Class A common stock. In addition, implementing any appropriate changes to our internal controls may distract our officers and employees and/or entail substantial costs.

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See Item 4 - “Controls and Procedures.”

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The resulting market price of our Class A common stock following the 2025 Reverse Stock Split may not attract new investors, and it is not certain that the 2025 Reverse Stock Split will result in a sustained proportionate increase in the market price of our Class A common stock.

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As discussed above, effective December 15, 2025, the Company effected the 2025 Reverse Stock Split at a ratio of eight (8) to one (1) and a simultaneous proportionate reduction in the authorized shares of each class of its Class A common stock and Class B common stock as required by NRS Section 78.207. Although we believe that a higher market price of our Class A common stock resulting from the Reverse Stock Split may help generate greater or broader investor interest, there can be no assurance that such higher market price will attract new investors, including institutional investors. Additionally, it cannot be assured that the 2025 Reverse Stock Split will result in any sustained proportionate increase in the market price of our Class A common stock, which is dependent upon many factors, including our business and financial performance, general market conditions and prospects for future success, which are unrelated to the number of shares of our Class A common stock outstanding. It is not uncommon for the market price of a company’s common stock to decline in the period following a reverse stock split. If the market price of our Class A common stock falls below $1.00 per share for a period of at least 30 trading days, our Class A common stock may be delisted from the Nasdaq Capital Market.