Beneficient

Except as set forth below, there have beenno material changes in the legal proceedings previously disclosed in response to Part I, Item 3. “Legal Proceedings” set forth in our Annual Report on Form 10-K for the year ended March 31, 2026 filed with the SEC on June 30, 2026.

On December 16, 2022, a former member of the Board of Directors of Beneficient Management, LLC (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, plus post-judgment interest (the “Arbitration Award”). 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 State District Court, Dallas County 134th Judicial District (the “Texas District Court”) entered an order vacating the Arbitration Award in its entirety. 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. On May 13, 2026, the Texas Fifth Court of Appeals denied the Company’s motion for re-hearing. On June 4, 2026, the Company filed a petition for review with the Supreme Court of Texas requesting that it reverse the Texas Fifth Court of Appeals’ ruling and reinstate the trial court’s decision to vacate the arbitration award. In the Texas District Court, on April 20, 2026, the Company was ordered to post a bond of not less than $25 million as security to protect the judgment pending appeal. On April 30, 2026, the Company filed a Motion for Reconsideration and Stay challenging the bond order. On June 18, 2026, the Company filed a Sworn Declaration establishing that the aggregate current net worth under U.S. GAAP of the defendant entities as determined under Texas law is negative. On June 22, 2026, consistent with the Sworn Declaration, the Company deposited a $100 cash bond in lieu of a supersedeas bond pursuant to Texas Rule of Appellate Procedure 24.2(a)(1) and Texas Civil Practice & Remedies Code § 52.006. 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 working with the Claimant on settlement terms that could reduce the potential near-term cash obligations associated with the arbitration. There can be no assurance that we will be able to reach a settlement on terms that are favorable to us or at all.

Other

On May 7, 2026, Brad K. Heppner, the Company’s founder and former CEO, was convicted of securities fraud, wire fraud, conspiracy to commit securities fraud and wire fraud, and false statements to auditors by a jury of his peers. Prior to his conviction, on May 5, 2026, Mr. Heppner submitted a demand to the Company seeking advancement of approximately $3.8 million in incurred criminal defense costs, plus additional amounts for anticipated future appellate proceedings, under certain indemnification provisions in the Bylaws, the Services Agreement, the Second Amended and Restated Limited Liability Company Agreement of BCG, and the Ninth A&R BCH LPA.

On May 28, 2026, the Company, together with its subsidiaries BCG and BCH, filed a complaint in the Eighth Judicial District Court of Clark County, Nevada against Mr. Heppner and Bradley Capital Company, LLC. The complaint seeks a declaratory judgment that Mr. Heppner is not entitled to advancement or indemnification under the Bylaws or the Services Agreement, and that BCG and BCH have no obligation to advance Mr. Heppner’s legal fees and expenses incurred in connection with his criminal prosecution in the United States District Court for the Southern District of New York.

On June 5, 2026, Mr. Heppner filed a competing lawsuit in Delaware Chancery Court against the Company, BCG, and BCH seeking advancement of Mr. Heppner’s legal fees and expenses incurred in connection with his criminal prosecution, attorney’s fees incurred in pursuing his advancement claim, and additional relief. The Company intends to vigorously pursue its claims for declaratory relief in the Nevada lawsuit, and to vigorously defend against Mr. Heppner’s claims in the Delaware lawsuit.