Good day, and thank you for standing by. Welcome to the Beneficient Third Quarter Fiscal 2025 Earnings Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Dan Callahan. Please go ahead.

Good morning, everyone, and thank you for joining us for Beneficient's fiscal third quarter 2025 conference call and webcast. In addition to the call and webcast, we issued an earnings press release 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 Beneficient assumes no obligation to update any forward-looking statements in the future. Today's call also contains certain non-GAAP financial measures, including tangible book value attributable to Ben's public company stockholders. 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. On the call today are Brad Heppner, the CEO and Chairman; and Greg Ezell, Chief Financial Officer. I'll hand the meeting over to Brad Heppner. Go ahead, Brad.

Thank you, Dan. Good morning, everyone, and thank you for joining us. I'm here this morning to share with you the accomplishments that the Beneficient team has achieved over the last quarter as we work to build on our previous successive two quarters of positive GAAP earnings per share. For our fiscal year-to-date, as of December 31, 2024, Ben has earned $10.30 of basic earnings per share and $0.12 of fully diluted earnings per common share. I will lead off with key platform developments designed to accelerate our capabilities for delivering both liquidity and primary capital to investors in and managers of alternative assets while preparing for the future emergence of digital alternative asset markets. Over the past quarter, we have strengthened our team, improved our balance sheet and continued to execute our liquidity and primary capital financings in the private asset marketplace. We continued to educate the market regarding Ben's unique business model, our technology platform and our growing service offerings that we believe have the potential to drive shareholder value. Ben was created to provide fiduciary products and services that deliver liquidity and primary capital for holders and managers of all types of alternative assets. In addition to serving general partners who manage and sponsor alternative assets, we are developing our business to focus on the target markets of high-net-worth individuals and small to midsized institutions. These markets have been underserved when it comes to exiting alternative assets prior to their maturity. We believe this market includes an unmet demand for liquidity of over $60 billion annually for smaller investors and institutions plus another more than $150 billion annually in general partners seeking liquidity for their limited partners through restructurings and continuation vehicles in the secondary markets. Unfortunately, the traditional process, especially for our targeted market of smaller…

Thank you, Brad. Let's now turn to our quarterly results and financial position as of December 31, 2024. First, I'll start with a few highlights from the quarter. We reported investments with a fair value of $334.3 million, up sequentially from $329.1 million at the end of our prior fiscal year. These investments serve as collateral for Ben liquidity's net loan portfolio of $260.6 million and $256.2 million, respectively. Revenues were a positive $4.4 million and $23.0 million for the third quarter and year-to-date periods in fiscal 2025 as compared to negative $10.2 million and negative $55.7 million in the prior year. GAAP revenues principally reflect mark-to-market adjustments on the investments that serve as collateral to Ben's loan portfolio. Excluding the noncash goodwill impairment in the prior comparable period, operating expenses declined 38% to $13.9 million in the third quarter of fiscal 2025 as compared to $22.5 million in the same period for fiscal 2024. On a year-to-date basis, excluding the noncash goodwill impairment and the loss contingency release in each period, as applicable, operating expenses were $53.2 million in fiscal 2025 as compared to $111.7 million in fiscal 2024. Permanent equity improved from a deficit of $148.3 million as of June 30, 2024, to a positive $14.3 million as of December 31, 2024, through a combination of transactions redesignating approximately $160.5 million of temporary equity to permanent equity and additional capital from equity sales and liquidity transactions, offset by net loss allocable to permanent equity classified securities of $6.9 million during the applicable period. Reported GAAP net loss attributable to BEN's common shareholders for the current year of $8.6 million and GAAP net income of $51.9 million for the year-to-date period, which led to a basic loss per share of $1.32 for the current quarter and basic earnings per…

[Operator Instructions] Our first question today will come from the line of Michael Kim of Zacks. Your line is open.

Hi, everyone. Good morning. First, I know you recently closed the primary capital commitment with 8F Asset Management. But just be curious to get your perspectives on how important the recently announced public stockholder enhancement transactions will be just in terms of facilitating reaccelerating exchange trust activity? And then just related to that, would you expect a more meaningful step-up after the transactions have been approved and completed later this year? Thanks.

Hi Michael. It's Brad Heppner. I'll answer your question here. We have been -- as you may be aware, we have been out of market with the ExchangeTrust product line for the better part of 15 months and so we introduced back into the market the ExchangeTrust product line as far as closings go. We have kept people informed about it during that period of time. But as far as closing that product line with potential parties, we reentered the market here just a few weeks ago and -- last month and -- just prior to year-end rather. And as part of that, we wanted to be able to introduce the capital stack enhancements, delivering additional tangible book value to our common shareholders for the purpose of being able to point to the parties -- our counterparties in it that there is a meaningful tangible -- current tangible book value and how that grows over time. We do believe, as you suggest, we do believe that, that is going to be an attractive economic element for our -- one attractive economics for our counterparties in the transaction. And so we are pointing them to that transaction, to that announcement. And I believe that once it is -- the formal completed process is done and that transaction is in place, it will lead to additional transactions being done and the ability to -- for us to accelerate closings in the near term. So I think it is a very positive development and is being very well received in the market and should help us accelerate closings once we have it fully completed.

Got it. That's helpful. And then just second, I know in aggregate, the loan portfolio was essentially flat on a sequential quarter basis. So just any color on maybe some of the underlying moving parts during the quarter as it relates to unrealized marks or deal flow and/or distributions?

Greg, would you like to provide the first answer and then I'll follow up with a little more color as well. Your microphone may be on mute here.

Sorry, yes, we were on mute. Yes, as you noted, Michael, sequentially, the investments that collateralized the loan portfolio was basically flat period-over-period. As a percent, I think the unrealized gains came in at about 6%, 7% of our -- as the unrealized gain for the quarter on an annual basis. Distributions for the fourth quarter were about where we, I think, expected it, maybe a little less with about, I think, $4 million or so, $5 million of distributions for the quarter that really offset those unrealized gains on the portfolio.

And I'll add a little more color as well. As we move into the December 31 marks and so forth and get a little more understanding of how valuations may change as of the end of the calendar year, that's typically a time in which there's a driver, we will start to see the valuation movements here coming up really in the next month or two as it relates to year-end private company marks. The election results have a positive impact on what our expectations are. So we are particularly enthusiastic about what we're seeing under the new administration for opening up the capital markets for more M&A and putting a positive direction and momentum for IPOs, which will lead to additional, both, we expect, gains and realization events. And then you have the offsetting impact of watching what the economics related to the tariff strategies may have on either delaying those realization events or having -- suppressing the expected gains out of the transaction. So we're moving into that period of time with some positive -- very positive momentum behind us given the direction that the markets have taken, the expectations of the underlying general partners who manage these investments, in particular. We have a very large portfolio of over 800 different portfolio companies and many of them are primed for realization events, which we expect to have some unrealized appreciation to be recognized upon those realization events.

Great. That’s helpful. Thank you for taking my questions.

Thank you. One moment for the next question. And the next question will come from the line of Aashi Shah of Sidoti. Please go ahead.

Hi. I'm here for Brendan. And thank you taking my question. Can you tell me about your timeline around when the liquidity transactions could pick up? And what factors may provide the upside or the downside to your expectations?

Sure. The timeline that we expect here is the approval of the BCH transaction that I discussed in my remarks will be coming. And when that is done, we expect an uptick in the transactions that are being worked on right now with counterparties and also additional interested parties coming in. We, as I said, have just really reengaged with all the counterparties since completing the BCH transaction. So it's really in the -- we need to go ahead and move forward with getting that transaction all completed. That does require proxy votes and that's all being worked on right now. And then we would expect to see an uptick, as you put it, of more frequent and greater volume of transactions closing here in the near term.

Right. And can you provide detail on how the underlying alternative asset collateral portfolio is performing more broadly? And that can you comment on the distribution activity and how that impacts your outlook?

Yes. I'll pick up where Greg provided some of this insight here in his last remarks. In the third -- in our fiscal third quarter ending December 31, we saw unrealized appreciation in the neighborhood of 7%. We saw a similar percentage in distributions. That's why you see the portfolio remaining fairly unchanged on the balance sheet. And that comes on two previous quarters of similar type results, very similar type results. With the expectation of the U.S. economy, we would expect the distribution rates through 2025, we would expect those to increase and we would expect realization events to be the driver behind that. And that we would expect those realization events to reflect a more positive outlook on the U.S. economy that we would hope will generate a greater level of unrealized appreciation being realized. So seeing some additional pent-up value in the portfolio finally being realized and realizing that in the distributions. So our expectations for 2025 based on the outlook of the U.S. capital markets is much more or is greater than what we experienced in the calendar year 2024. And again, that's based on the overall outlook of the U.S. economy and the U.S. capital markets.

Okay. Thank you so much for taking my questions.

Thank you. And that does conclude today's Q&A session. I would like to go ahead and turn the call back over to Dan Callahan for closing remarks. Please go ahead.

Yes. Thanks to everyone for participating on the call and webcast today. Again, a replay will be available on our website at shareholders.trustben.com. Have a great rest of your day, and thanks again.

Thank you for joining today's conference call. The call has concluded, and you may disconnect.