Hello, and thank you for standing by. Welcome to Beneficient's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to Dan Callahan. You may begin.

Thank you, operator. Good afternoon, and thank you all for joining us for Beneficient's Fiscal Third Quarter 2026 Conference Call and Webcast. In addition to the call and webcast, we issued a results press release today 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 in 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 estimate 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 adjusted operating expense. Please refer to our earnings press release, which again is available on our website for important disclosures regarding such measures, including reconciliation to the most comparable GAAP financial measures. Hosting the call today will be Beneficient's Interim CEO, James Silk. Following his remarks, Greg Ezell, Chief Financial Officer, will provide some financial highlights. I'll turn the call over to James. Take it away, James.

Thank you, Dan. Good afternoon, everyone, and thank you for joining us. Before I get into the third quarter, I'd like to address the passing in December of Tom Hicks, who has been a member of the Board since 2017. Tom was a legendary figure in American business, a pioneer in private equity and a dedicated leader who brought extraordinary vision, discipline and experience to Beneficient. We appreciate his many contributions to the company and his guidance and friendship will be missed. Pete Cangany, a Board member since 2019, was appointed Chairman of the Board effective December 15, 2025. In addition to his experience with Ben as a long-standing Board member, Pete brings deep experience from a more than 30-year career at Ernst & Young, including as a partner from 1993 until his retirement in 2017. We are fortunate to have his leadership along with all members of the Board, and they are closely engaged in setting Ben's go-forward strategy as we seek to unlock value in private assets. For the past several quarters, the Beneficient management team has been working through a number of challenges related to the separation from our former CEO. These challenges have required significant resources and management attention. But we believe executing on our plan to address these challenges is a necessary step to better position the company to realize and execute on its business strategy. The company continues to see strong market opportunity. And during our fiscal third quarter, we were able to accomplish numerous critical items to stabilize and strengthen our core business that we believe better positions the company to close additional liquidity and GP primary commitment financings in the future. In December, we closed our first new GP primary commitment financing since June of last year, signaling our dedication to our…

Thank you, James. Let's now turn to our quarterly results and financial position as of December 31, 2025. As James stated earlier, due to circumstances surrounding the resignation of our former CEO, we were unable to grow our investment portfolio through new financings other than one transaction that closed in December for approximately $3.0 million in NAV. We reported investments with a fair value of $206 million compared to $291 million at the end of the prior fiscal year. These investments serve as collateral for Ben Liquidity's net loan portfolio of $188 million and $244 million, respectively. Asset sales or equity redemptions of certain investments held by the Customer ExAlt Trusts resulted in an aggregate of $50 million in gross proceeds on a year-to-date basis, which have been used to pay down certain debt and provide working capital. As of December 31, 2025, Ben's loan portfolio was supported by a highly diversified alternative asset collateral portfolio, providing diversification across approximately 150 private market funds and approximately 430 investments across various asset classes, industry sectors and geographies, a breakdown of which is available in the accompanying earnings release as well as on our shareholder website. GAAP revenues were $18.7 million for the current quarter and $3.3 million for fiscal 2026 on a year-to-date basis. The positive GAAP revenues were driven by a $44.1 million increase in fair value of a derivative asset related to the appreciation forfeiture provision included in the conversion of preferred stock to Class A common stock by Mr. Hicks and Mr. Silk. Adjusted revenues, which excludes the derivative asset fair value adjustment, were a negative $25.4 million for the current quarter and $40.8 million negative on a year-to-date basis. This derivative asset settles in January 2028 and will be fair valued each period until then. Upon settlement,…

[Operator Instructions] Our first question comes from the line of Michael Kim with Zacks.

That's better. Sorry, can you hear me okay?

We've got you Michael.

It's actually Giles Hock. I'm the Managing Director at Zacks Investment Research. Michael is on an airplane. I had a chat with them this morning. I wanted to ask about the core liquidity platform, particularly with the sort of high net worth and smaller institutional clients. Could you give us a quick update on how you're approaching channels like advisers, family offices, private banks and how you're thinking about marketing and awareness building there?

Well, I think the -- as we mentioned on the call, the focus has been on really stabilizing and develop that platform for sort of rollout as we move forward. I do think the -- going forward, it will be a focus on the really the family office and the adviser network as well as continuing to provide follow-up through our AltQuote product, which is on our website, which provides a sort of quick and easy access into a preliminary indication of interest on the assets. So we'll have more to, I think, announce on that as we move forward, but it's -- that's really where we're going directionally.

And then on the legal side, you mentioned the litigation briefly. Was there sort of any forward momentum or anything investors should keep in mind from a sort of balance sheet or debt perspective with regards to the litigation?

We're not going to comment too much about litigation. As mentioned before on the call, the former CEO's criminal trial is set to commence on April 6. We would anticipate, again, not within our control. It's obviously the U.S. government, that to take a few weeks, 3, 4 weeks to run its course. And we will be closely monitoring that situation, and we've preparing a variety of different options as that outcome is determined. And certainly, one thing that we've mentioned before and we'll focus on as part of that is to attack the validity of the debt that is purportedly held by a party related to our former CEO of approximately $120 million or so. But we would expect to likely expand our litigation approach beyond just the debt as well.

Our next question comes from the line of Brendan McCarthy with Sidoti.

Just wanted to start off looking at the results and liquidity. Obviously, the revenue line item looks pretty stable, just considering where loans receivable came in at. But can you walk us through the operating loss there? Is that just mostly driven to the asset sales? Or is that really more so from updated NAV values?

Brendan, it's Greg. Yes, a lot of it, I would attribute it to the asset sales activity that were happening during the quarter. But equally, there were some updated financial information marks that kind of a couple of larger negative ones that are attributing to it as well, right? So mainly asset sale related, but also has a flavor coming from GP reported NAV updates.

Got it. I appreciate that. And it's probably safe to assume those are probably more just kind of one-off instances just considering you run a pretty diversified portfolio.

Yes, I believe that is correct.

Okay. And then just looking at operating expenses overall, I'm sorry, I actually think within liquidity, OpEx continues to come down. I think you're at like $13 million for the quarter. Is that a fair quarterly run rate at this point? Or do you think you have much more room to continue cutting there?

Yes. I think it's getting close to fair. There's still a little bit that we're going to try to take advantage of in reducing expenses in that operating segment and not just in that operating segment, but across the board. But in particular, for Ben Liquidity, there still is a little bit of room in there. We think that we can reduce those costs a little bit further in the future.

Got it. And then just wondering -- just curious about the pipeline for liquidity transactions. It seems like you've had good momentum in the primary capital space with GPs. Can you talk about the pipeline a little bit?

Yes. We have continued to have discussions and inquiries coming in over the last few months being out of the market with the financials as we were for a significant period of time, as we discussed, put a hold on that. And really, where we are now is sort of following up on the opportunities that we have, both potentially, let's call it, larger scale transaction or 2, but also really trying to for the next quarter as we go forward, beginning to sort of act on what we have in front of us, which is a fair amount of contacts and potential opportunities. And we've had some positive experiences with some of our counterparties over the last quarter plus that have participated in these previously. So I think we do have some very solid momentum that we'll be looking forward to providing more information on, particularly as we get through that April period, I think that's going to be an important period of time for the company given the clarity that it will likely provide or potentially provide to the company on some of these other obligations.

Just last question for me on the balance sheet. I think it said you had cash of right around $8 million, total debt of $100 million. Does that $100 million debt include the amount owed to entities related to the previous CEO?

Yes. Of that $100.3 million, I believe, of debt, all of the balance relates to an entity associated with our former CEO, except $3.7 million.

Okay. Okay. Maybe one last question here. So I know you've done a great job, obviously, navigating the management transition, regaining NASDAQ compliance, cleaning up the balance sheet a little bit. What can investors really take away? What's the near-term priorities for you guys going forward?

The market opportunity is still very strong. I think the near-term priorities for the company in addition to sort of continuing to resolve some of these outstanding matters is to begin to demonstrate the validity of the business model by executing on some of the transactions that we have in front of us, perhaps not in volume, but in terms of how we are structuring them from the standpoint of potentially approaching them from a more efficient and simplified way and, let's just say, a clearer description to the market in terms of how those deals attach to the bottom line. As I said, that will still take, I think, some time to do that in volume, in particular, as you get -- but I think as you get through the spring period, I think that's where I think the opportunity really lies. But near term, it's going to be executing on a handful of deals that demonstrate that the market is still there and that the product is still viable and that the way we're thinking about doing these newer deals is a better way to do it, I guess, is the way I'd characterize it.

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to Dan for closing remarks.

I want to thank everybody for tuning in today. Again, you can read the press release about the third fiscal quarter and listen to the replay of this webcast on the Shareholder website at shareholders.trustben.com. Thanks again, and have a great evening.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.