Beneficient Amends SEPA, Issues $4M in Convertible Promissory Notes

What Happened

• Beneficient (BENF) announced on Form 8-K (filed Aug 11, 2026) that it entered into an amended and restated Standby Equity Purchase Agreement (A&R SEPA) with YA II PN, Ltd. (Yorkville) on June 26, 2026. Under the A&R SEPA the company can sell up to $100.0 million of Class A common stock to Yorkville during the commitment period.
• As part of the arrangement, Yorkville advanced $4.0 million by two promissory notes (each $2.0 million, with a 5% original issue discount). The first note was issued June 30, 2026 (proceeds received July 1, 2026) and the second issued and funded August 5, 2026. The notes mature June 30, 2027 and are convertible into Class A common stock at Yorkville’s option.

Key Details

• Principal advanced: $4.0 million in two Promissory Notes ($2.0M each), each subject to a 5% original issue discount (company received approximately $1.8M per closing).
• Maturity & interest: Notes mature June 30, 2027; bear 5.0% annual interest, which can increase to 18.0% per annum (or legal maximum) if an Event of Default occurs and remains uncured.
• Conversion mechanics: Notes are convertible at holder’s option. Conversion Price = the lower of (a) $5.6064 (a fixed reference from the first closing) or (b) 92% of the lowest daily VWAP during the five trading days before conversion; a Floor Price of $0.89 applies to the variable component (company may reduce this Floor Price with notice).
• Dilution limits: Conversion is subject to an Exchange Cap and a beneficial ownership cap (Yorkville and related parties cannot exceed 4.99% of Class A shares after conversion). Assuming 5% interest through maturity, the maximum shares issuable on conversion are 4,719,101.

Why It Matters

• This creates a short-term debt obligation (convertible promissory notes) and a potential source of equity financing: the A&R SEPA gives Beneficient access to up to $100M of capital from Yorkville, but the company has only drawn $4M so far.
• For investors, the notes can lead to dilution if converted (up to ~4.7 million shares under stated assumptions) and the conversion price provisions (including a low Floor Price and a variable VWAP-based component) determine how dilutive conversions could be. The interest and potential default rate increase (to 18%) affect the company’s near-term cash obligations if defaults occur.
• These are material financing terms that affect capital structure and dilution risk; shareholders should watch for further draws under the A&R SEPA, any conversions, and any changes to the Floor Price or related limits.