SecProbe.io

CORRESP
1
filename1.htm

November
6, 2024

VIA
EDGAR

U.S.
Securities and Exchange Commission

100
F Street, N.E.

Division
of Corporation Finance

Office
of Finance

Washington,
D.C. 20549

Attention:
Robert Arzonetti and Tonya Aldave

    Re:
    Beneficient

    Amendment
    No. 2 to the Registration Statement on Form S-3

    Filed
    October 24, 2024

    File
    No. 333-281694

Ladies
and Gentlemen:

On
behalf of Beneficient (the “Company”), below is the response of the Company to the comments of the staff of the Division
of Corporation Finance (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”)
set forth in the Staff’s letter, dated November 4, 2024, regarding Amendment No. 2 to the Company’s Registration Statement
on Form S-3 on Form S-1 (the “Registration Statement”) filed with the Commission on October 24, 2024. Attached as Appendix
A to this letter, the Company has provided for the Staff’s consideration amended disclosures from the Registration Statement
that the Company anticipates including in Amendment No. 3 to the Company’s Registration Statement on Form S-3 on Form S-1 (“Amendment
No. 3”).

For
your convenience, the Staff’s comments are set forth in bold, followed by responses on behalf of the Company. Capitalized terms
used but not otherwise defined herein shall have the meanings assigned to such terms in the Registration Statement.

Amendment
No. 2 to Form S-3 on Form S-1

Selling
Stockholders, page 280

    1.
    We
                                            note your response to prior comment 2. Please revise your disclosure in the selling stockholders
                                            table to increase Yorkville’s ownership to 9.99% and include the number of shares corresponding
                                            to that percentage in the table. In addition, list Yorkville as a beneficial owner in the
                                            beneficial ownership table on page 238 with the same 9.99% ownership. In the alternative,
                                            if you continue to believe that the 4.99% is a meaningful limitation of Yorkville’s
                                            ability to purchase and hold your securities, please provide us

    with
    detailed analysis addressing each of the following:

  ●
  please explain the reason for the 4.99% limitation
  and point us to the respective section of an agreement between you and Yorkville that establishes this ownership limitation;

  ●
  tell us if you plan to issue shares to Yorkville under
  both SEPA and pursuant to the debentures conversion during the same period of time;

  ●
  explain why the limitation for the conversion of debentures is also binding on you (for example, in a situation where you issue
  securities pursuant to SEPA as opposed to the agreement under which you can issue convertible debentures); and

  ●
  tell us if there is any ranking or priority between
  the 4.99% limitation and the 9.99% limitation in the SEPA and the respective agreements where these limitations are included.

    In
    addition, as it relates to the 4.99% limitation, we note from your response that you have “excluded from the number of shares
    beneficially owned prior to the offering all of the shares that Yorkville may be required to purchase under the SEPA, because the
    issuance of such shares is at [your] discretion and is subject to conditions contained in the SEPA.” In this regard, we also
    note that it appears that you have sold at least 503,827 shares pursuant to the SEPA under a previously effective registration statement
    and you can issue additional shares to Yorkville as soon as this registration statement becomes effective. Please note that we may
    have further comments after we review your response.

Response:
As discussed with the Staff, the Company has revised its selling stockholders table and beneficial ownership table to update Yorkville’s
ownership to 9.99% and is providing such revised disclosures supplementally in Appendix A attached hereto. The Company intends
to include such revised disclosures in Amendment No. 3.

*
* * * * *

  Haynes and Boone, LLP

  2801 N. Harwood Street | Suite 2300 | Dallas, TX 75201

  T: 214.651.5000 | haynesboone.com

U.S.
Securities and Exchange Commission

Division of Corporation Finance

Office of Finance

November 6, 2024

Page 2

If
you have any questions or require any additional information in connection with the filing, please do not hesitate to contact the undersigned
at (214) 651-5443.

    Very
truly yours,

    /s/
    Matthew L. Fry

    Matthew
    L. Fry, Esq.

    Haynes
    and Boone, LLP

    cc:
    Brad
    K. Heppner, Chief Executive Officer

    Gregory
    W. Ezell, Chief Financial Officer

    David
    B. Rost, Esq., General Counsel

    Logan
    Weissler, Esq., Haynes and Boone, LLP

    Alexa
    Cooper, Esq., Haynes and Boone, LLP

APPENDIX
A

Selling
Stockholder Table

    Number of Shares of Class A Common Stock Beneficially Owned(3)
    Maximum Number of Shares of Class A Common Stock Offered
    Shares of Class A Common Stock Beneficially Owned After the Offered Shares are Sold(1)(2)
    Total Voting Power of Class A and Class B Common Stock

    Name of Selling Holders

    Number
    Percent (1)
    Offered
    Number
    Percent
    Percent

    YA II PN, Ltd.
    (4)
      537,330 (5)(6)
      9.9 %
      202,732,065
      -
      -
      - %

    Mendoza Ventures Pre-Seed Fund II LP
    (6)
      125,000
      2.5 %
      125,000
      -
      -
      - %

    Interest Solutions, LLC
    (7)
      14,286
      * %
      14,286
      -
      -
      - %

    Convergency Partners, LLC
    (8)
      25,751
      * %
      25,751
      -
      -
      - %

    Maxim Partners, LLC
    (9)
      114,343
      2.4 %
      114,343
      -
      -
      - %

    Mendota Financial Company, LLC
    (10)
      201,482
      4.2 %
      201,482
      -
      -
      - %

    *
    Indicates
    less than one percent.

    (1)
    The
    percent of beneficial ownership for the Selling Holders is based on (i) 4,841,350 shares of Class A common stock and (ii)
    239,257 shares of Class B common stock outstanding.

    (2)
    Assumes
    that each Selling Holder (i) will sell all of the shares of Class A common stock and Warrants beneficially owned by it that are covered
    by this prospectus and (ii) does not acquire beneficial ownership of any additional shares of our Class A common stock.

    (3)
    Represents
    shares of Class A common stock, including the shares of Class A common stock that may be issued upon the exercise of the Warrants
    or other securities convertible into Class A common stock held by the Selling Holder.

    (4)
    Yorkville
    is a fund managed by Yorkville Advisors Global, LP (“Yorkville LP”). Yorkville Advisors Global II, LLC (“Yorkville
    LLC”) is the General Partner of Yorkville LP. Investment decisions for YA II PN, Ltd. are made by Mark Angelo, and Mr. Angelo
    may therefore be deemed to hold voting and dispositive power with respect to such shares. The business address of YA II PN, Ltd.
    is 1012 Springfield Avenue, Mountainside, NJ 07092.

    (5)
    Includes
    zero shares of Class A common stock directly held by Yorkville as of the date of this prospectus and shares of Class A common stock
    that are issuable upon exercise or conversion of the Yorkville Warrants and the Convertible Debentures subject to the 4.99% Beneficial
    Ownership Limitation (as defined below). Under the terms of the Purchase Agreement, following effectiveness of the registration statement
    of which this prospectus forms a part, Yorkville will have received Yorkville Warrants to purchase an aggregate of up to 1,325,382
    shares of Class A common and Convertible Debentures that are convertible into an aggregate of 1,325,382 shares of Class A common
    stock. As set forth in the preamble to the Yorkville Warrants and Section 4(c)(i) of the Convertible Debentures, as applicable, Yorkville
    will not have the right to exercise such Yorkville Warrants or convert such Convertible Debentures to the extent that the Warrant
    Shares or Conversion Shares, when aggregated with all other shares of Class A common stock then beneficially owned by Yorkville and
    its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result
    in Yorkville and its affiliates beneficially owning more than 4.99% of the outstanding shares of Class A common stock (the “4.99%
    Beneficial Ownership Limitation”).

    (6)
    Calculated
    based upon the maximum percentage of shares of Class A common stock that may be beneficially owned by Yorkville assuming the Company
    elects to issue an advance notice for the maximum number of shares of Class A common stock permissible under the SEPA. The 9.99%
    Beneficial Ownership Limitation in Section 2.01(c) of the SEPA prohibits the Company from issuing and selling any shares of Class
    A common stock to Yorkville to the extent such shares, when aggregated with all other shares of Class A common stock then beneficially
    owned by Yorkville, would cause Yorkville’s beneficial ownership of our Class A common stock to exceed 9.99%.

    (7)
    The
    principal address of Mendoza is 207 Newbury Street, 3rd Floor, Boston, MA 02116. Adrian Mendoza is the managing partner of Mendoza
    Ventures Pre-Seed Fund II GP, LLC, the General Partner of Mendoza, and may therefore be deemed to hold voting and dispositive power
    with respect to such shares. Mr. Mendoza disclaims beneficial ownership over any securities owned by Mendoza except to the extent
    of his pecuniary interest therein.

    (8)
    The
    principal address of Interest Solutions is 701 Main Avenue, Norwalk, CT 06851. John Sorensen is the Chief Operating Officer of Interest
    Solutions and may therefore be deemed to hold voting and dispositive power with respect to such shares. Mr. Sorensen disclaims beneficial
    ownership over any securities owned by Interest Solutions except to the extent of his pecuniary interest therein.

    (9)
    The
    principal address of Convergency Partners is 265 Franklin Street, Suite 1702, Boston, MA 02110. Jeffrey M. Miller is the Managing
    Partner of Convergency Partners and may therefore be deemed to hold voting and dispositive power with respect to such shares. Mr.
    Miller disclaims beneficial ownership over any securities owned by Convergency Partners except to the extent of his pecuniary interest
    therein.

    (10)
    The
    principal address of Maxim Partners is 300 Park Avenue, 16th Floor, New York, NY 10022. Maxim Partners is the record and beneficial
    owner of the securities set forth in the table. MJR Holdings LLC is the managing member of Maxim Partners LLC. Cliff Teller is the
    Chief Executive Officer of MJR Holdings LLC and, has dispositive power over the securities held by Maxim Partners. Mr. Teller disclaims
    beneficial ownership over any securities owned by Maxim Partners and MJR Holdings LLC except to the extent of his pecuniary interest
    therein. The Maxim Shares were issued as transaction-based compensation for the performance of investment banking services rendered
    to Avalon Acquisition, Inc. in connection with the initial public offering of Avalon Acquisition, Inc.

    (11)
    The
    principal address of the Vendor is 2004 Vermillion Drive, Plano, TX 75093. Daniel Adashek is the manager of the Vendor and may therefore
    be deemed to hold voting and dispositive power with respect to such shares. Mr. Adashek disclaims beneficial ownership over any securities
    owned by the Vendor except to the extent of his pecuniary interest therein.

Beneficial
Ownership Table

    Class B Common Stock
    Class A Common Stock

    Name of Beneficial Owner(1)
    Number of

 Shares of

 Class B

 Common

 Stock

 Beneficially

 Owned(2)

    Percentage

 of

 Outstanding

 Class B

 Common

 Stock

    Number of

 Shares of

 Class A

 Common Stock

 Beneficially

 Owned(2)

    Percentage

 of

 Outstanding

 Class A

 Common

 Stock

    Percentage

 of

 Total

 Voting

 Power of

 Class A

 and

 Class B

 Common

 Stock(3)

    Named Executive Officers and Directors

    Brad K. Heppner
      221,494 (4)
      92.6 %
      15,011 (6)
      *
      30.8 %

    Derek L. Fletcher
      —
      —
      3,124 (7)
      *
      *

    Peter T. Cangany, Jr.
      —
      —
      175,817 (8)
      6.7 %
      4.5 %

    Patrick J. Donegan
      —
      —
      —
      —
      —

    Thomas O. Hicks
      16,528 (5)
      6.9 %
      101,450 (9)
      2.1 %
      3.7 %

    James G. Silk(10)
      —
      —
      1,139 (11)
      *
      *

    Bruce W. Schnitzer
      1,235
      *
      11,745 (12)
      *
      *

    All current directors and executive officers of Beneficient as a group (10 individuals)
      239,257
      100 %
      522,203
      10.8 %
      40.3 %

    Other 5% Holders

    Hatteras Investment Partners, LP(14)
      —
      —
      583,904
      12.1 %
      8.1 %

    GWG Wind Down Trust(15)
      —
      —
      348,183
      7.2 %
      4.8 %

    YA II PN, Ltd.(16)(17)
      —
      —
      537,330  (18)
      9.9 %
      7.4 %

    *
    Indicates,
    as applicable, (i) less than one percent of total voting power of Class A Common Stock and Class B Common Stock outstanding and (ii)
    less than one percent ownership of Class A Common Stock and Class B Common Stock.

    1)
    For
    purposes of this table, a person or group of persons is deemed to have beneficial ownership of any shares of Common Stock that such
    person has the right to acquire within 60 days of the Record Date. For purposes of computing the percentage of outstanding shares
    of Common Stock held by each person or group of persons named above, any shares of Common Stock that such person or persons have
    the right to acquire within 60 days of the date of the Record Date is deemed to be outstanding but is not deemed to be outstanding
    for the purpose of computing the percentage ownership of any other person.

    2)
    Class
    B Common Stock will be convertible at any time by the holder into shares of Class A Common Stock on a one-for-one basis, such that
    each holder of Class B Common Stock beneficially owns an equivalent number of shares of Class A Common Stock. The number of shares
    of Class A Common Stock beneficially owned does not give effect to any such conversion of Class B Common Stock.

    3)
    Percentage
    of total voting power represents voting power with respect to all shares of our Class A Common Stock and Class B Common Stock, as
    a single class. Each holder of Class B Common Stock is entitled to 10 votes per share of Class B Common Stock and each holder of
    Class A Common Stock is entitled to one vote per share of Class A Common Stock on all matters submitted to our stockholders for a
    vote. The Class A Common Stock and Class B Common Stock vote together as a single class on all matters submitted to a vote of our
    stockholders, except as may otherwise be required by law and the election of directors by holders of the Class B Common Stock.

    4)
    Represents
    shares of Class B Common Stock held by Beneficient Holdings, Inc. Beneficient Holdings, Inc. is an entity held by The Highland Business
    Holdings Trust of which Mr. Heppner is a beneficiary and a trustee and, in such capacity, has the sole power to vote and direct the
    disposition of such shares. Therefore, such shares are deemed to be beneficially owned by Mr. Heppner and The Highland Business Holdings
    Trust.

    5)
    Represents
    shares of Class B Common Stock held by Hicks Holdings Operating, LLC. Mr. Hicks is the sole member of Hicks Holdings Operating, LLC,