Beneficient · NASDAQ:BENF
Beneficient — Avalon Acquisition — SPAC Merger (September 2022)
59 slides from Beneficient's SPAC merger presentation, Sep 21, 2022
Slide 1: Investor Presentation September 2022
Investor Presentation September 2022 © AVALON Acquisition Inc.
Slide 2: Important Risks and Disclaimers
Important Risks and Disclaimers Disclosures ‘This presentation has been prepared for use by The Beneficient Company Group, LP. (“Ben”) and Avalon Acquisition Inc. (“Avalon”) in connection with their proposed business combination. This presentations for information purposes only and may not be reprod
Slide 3: Today's Speakers
Today’s Speakers Donald H. Putnam Brad K. Heppner Chairman, Avalon Acquisition Inc Founder, CEO and Chairman of Ben Onion ~)Ben
Slide 4: Avalon's Search Focused on Companies that Met Specific Criteria
Avalon’s Search Focused on Companies that Met Specific Criteria Financial Services with Financial Results Sectors in which we can leverage our expertise, including asset management, financial exchanges, financial technology, insurance Actual financial results — no pre-revenue or sub-scale companies
Slide 5: Transaction Overview
Transaction Overview The Beneficient Company Group, L.P. (“Ben”) Transaction Parties Avalon Acquisition Inc. (“AVAC") AVAC has $207 million in trust 100% existing Ben equity holders rollover Prior Ben AltAccess Customer consideration converted into public shares Ben expected to apply for listing on
Slide 6: Implied Sources, Uses & Ownership
Implied Sources, Uses & Ownership? Sources $MMs Ben Rollover Common Equity ($) 1,812 Ben Rollover Deferred Preferred ($) 1,108 Completed Asset PIPE ($) 383 SPAC Cash in Trust ($) 207 TOTAL SOURCES 3,510 Uses $MMs Ben Rollover Common Equity ($) 1,812 Ben Rollover Deferred Preferred ($) 1108 Assets fr
Slide 7: Ben
~) Ben (Oy AVALON \ Acquisition Inc.
Slide 8: Beneficient Investment Highlights
Beneficient Investment Highlights + Financing simple, rapid alternative investment liquidity solutions for a large, growing addressable market Unique, Disruptive + Innovative fintech platform delivering consistent product and service fee revenue and loan interest revenue' to our Business Model busin
Slide 9: Company Value Proposition Overview
Company Value Proposition Overview Unique in the industry as FIRST MOVER to act as principal and fiduciary using our own balance sheet to finance the delivery of LIQUIDITY OPTIONS to alternative asset investors in our target market. SIMPLE, RAPID and COST-EFFECTIVE process built to operate SECURELY
Slide 10: Platform Specializes In Financing the Delivery of Liquidity to Investors in Alternative Assets
Ny Platform Specializes In Financing the Delivery of Liquidity to Investors in Alternative Assets Provides a modernized digital method of delivering liquidity to investors in most alternative assets, including: Other Professi i} =~ Venture Sorte Eligible Asset Capital Credit IAnetiative Investments
Slide 11: Blackstone, Ares, Apollo, KKR, and their Peers Get Investors Into Alternatives; Ben Gets Them Out
Ny Blackstone, Ares, Apollo, KKR, and their Peers Get Investors Into Alternatives; Ben Gets Them Out Ben has built the platform and is trailblazing the path to industry democratization Investment growth has been fueled by tech A fae as “It became abundantly clear to me that there innovators in fund
Slide 12: Liquidity Demand Grows as Alternatives Flourish
Global Alternatives AUM and Secondary Transactions Liquidity Demand Grows as Alternatives Flourish Exciting recent period of rapid growth in alternative investments has resulted in corresponding growth in the demand for early liquidity, currently mostly provided through the secondaries market, which
Slide 13: Projected Target Market Growth
Projected Target Market Growth Focus on MHNW investors and STMI investors who represent a growing, but traditionally underserved liquidity market One of the highest + One of the fastest * One of the fastest = growing asset classes growing wealth segments growing allocations $ Increased Strong histor
Slide 14: Survey Results Reflect the Target Market Opportunity
Survey Results Reflect the Target Market Opportunity A comprehensive survey commissioned by Ben of 600 alternative asset investors shows that interest in alternatives is accelerating, along with the need for liquidity 100% of respondents are interested ina simple, rapid and cost-effective approach t
Slide 15: Leveraging Digital Technology to Provide a Simple & Rapid Exit
Leveraging Digital Technology to Provide a Simple & Rapid Exit Faster liquidity timelines are made possible by Ben AltAccess™, the industry's first online secure AT&T(R) NetBond certified tech platform designed to deliver liquidity and related custody and trust services to owners of alternative inve
Slide 16: Enhancing Client Experience & Speed of Liquidity
Enhancing Client Experience & Speed of Liquidity Platform allows the secure online delivery of documents and seeks a rapid approach to providing liquidity completed entirely through Ben AltAccess™ ~) Ben Customer Customer establishes a “no fee” custody account with Ben's trust company which appoints
Slide 17: Developing an End-to-End Digital Platform Structured to Ultimately Create Flywheel Effect
Developing an End-to-End Digital Platform Structured to Ultimately Create Flywheel Effect Across Ecosystem Groundbreaking AltAccess™ digital liquidity platform designed to drive complementary lines of business AltQuote® ‘AltQuote is under development and is being designed to: + Provide potential Cus
Slide 18: Platform Would Drive Numerous Revenue Streams Across Ben's Operating Business
Platform Would Drive Numerous Revenue Streams Across Ben’s Operating Business Diversified mix of revenue types delivered through end-to-end Ben AltAccess platform subject to regulatory oversight TARGET REVENUE BEN BUSINESS UNIT CUSTOMER NEED BEN ENTITY APPLICABLE REGULATORS Ben AltAccess ‘Online Pla
Slide 19: Ben's Current and Planned Operating Businesses - Revenue Sources
Ben’s Current and Planned Operating Businesses - Revenue Sources iquidity Transaction Participants Liquidity Transaction Overview @ “Customer”: a third-party owner of Alternative Assets, which is seeking liquidity @ The Customer selects an available liquidity product and agrees to its consideration
Slide 20: Ben Operational Overview
Ben Operational Overview Upon simultaneous execution of the transaction documents, Ben’s trust company makes a fiduciary loan to the ExAlt Trusts, the Customer receives its consideration, and the ExAlt Trusts receive the Alternative Asset 2.5% to Beneficial Owner — Kansas Charity Fiduciary Loan, Buy
Slide 21: Liquidity Transaction Planned Economics
Liquidity Transaction Planned Economics All transaction related fees embedded into the determination of the Advance Rate, allowing customer to avoid out-of-pocket payment of fees Ben ExchangeTrust® Hypothetical Liquidity Transaction’ Revenue Summary Based on hypothetical assumptions, (JUN | $130,350
Slide 22: Four Distinct and Complementary Channels of Originations
Four Distinct and Complementary Channels of Originations Approximately $7.5B! of NAV sourced by Ben for Fiduciary Loan Collateral Underwriting directly through these 4 channels since 2020! $4.3B National, dedicated coverage model supporting: + MHNW individual investors + Family offices + Institution
Slide 23: Experienced Board of Directors
Experienced Board of Directors Emily Bowersock Hill 20+ years retall financial services experience. Founding Partner, Bowersock Capital Partners (DBA Sanctuary Wealth Management) Prior: Executive Director, Senior Portfolio Manager and Family Wealth Director - Morgan Stanley; Engagement Manager ~ McK
Slide 24: Strong Management Team
Strong Management Team Brad K. Heppner CHIEF EXECUTIVE OFFICER 30+ years industry experience in finance andthe alternative asset space TheCmmakGrep Goldman BAIN &coMPANY® MacArthur i] Sachs Foundation cspicalanatytics James G. Silk EXECUTIVE VICE PRESIDENT & CHIEF LEGAL OFFICER 20+ year -y experienc
Slide 25: Fiduciary Loan Portfolio Characteristics
Fiduciary Loan Portfolio Characteristics As of June 30, 2022, the charts below present the Loan Portfolio’s relative exposure by certain characteristics (percentages determined by aggregate Fiduciary Loan Portfolio principal balance, which includes the exposure to interests in certain of our former
Slide 26: Fiduciary Loan Collateral Characteristics
Fiduciary Loan Collateral Characteristics As of June 30, 2022, the charts below present certain characteristics of the professionally-managed private funds composing part of the ExAlt Loan Collateral Portfolio (percentages determined by net asset value and excludes interests in certain of our former
Slide 27: Multiple Competitive Advantages
Multiple Competitive Advantages Anticipated Public Intellectual Listing Statutory Property Regulatory Company Technology ws ] 9 Fy) N) Structure qe 9
Slide 28: Beneficient Investment Highlights
Beneficient Investment Highlights + Financing simple, rapid alternative investment liquidity solutions for a large, growing addressable market Unique, Disru ptive + Innovative fintech platform delivering consistent product and service fee revenue and loan interest revenue! to our Business Model busi
Slide 29: Thank You
4 Thank You COs nan oe - eCooce Questions? askben@beneficient.com
Slide 30: Certain Financial Information
CERTAIN FINANCIAL INFORMATION Appendix
Slide 31: Historical Business Unit Financial Information - March 31, 2022
Historical Business Unit Financial Information - March 31, 2022 External revenues Investment income (loss), net Loss on investment in public equity securities and option Interest income Trust services and administration revenues Other income Intersegment revenues. Interest income, net of allowance T
Slide 32: Historical Business Unit Financial Information - December 31, 2021
Historical Business Unit Financial Information - December 31, 2021 FOR THE YEAR E! External revenues Investment income (loss), net Loss on investment in public equity securities and option Interest income Trust and administration revenues Other income Intersegment revenues Interest income, net of al
Slide 33: Historical Business Unit Financial Information - December 31, 2020
Historical Business Unit Financial Information - December 31, 2020 Ben Ben | Ben Ben Total Ben Customer Corporate Consolidating Liquidity | Custody Admin | Insurance Services Markets | Business Units Exalt Trusts other Eliminations. Total External revenues | | Investment income (loss), net $ “1s -|$
Slide 34: Beneficient Historical Financial Information
Beneficient Historical Financial Information — 1 of 2 For the three months For the year ended For the year ended ended March 31, 2022 December 31, 2021 December 31, 2020 Ben Business Unit Revenues, excluding GWG and Non Recurring Items" (unaudited) (unaudited) (unaudited) Ben Liquidity $ i.g1i7s | $
Slide 35: Beneficient Historical Financial Information
Beneficient Historical Financial Information — 2 of 2 Ben Business Unit Assets Ben Liquidity Ben Custody & Data Ben Insurance Services Ben Markets Total Ben Business Unit Assets | Other Key Financial Information Loans to Customer ExAlt Trusts, net? Fees receivable from Customer ExAlt Trusts? Investm
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation: 1 of 3 Revenue to Revenue, excluding GWG and Non Recurring Items Revenue Less: Investment income (loss) from GWG? Revenue, excluding GWG and Non Recurring Items Operating Income (loss) to Operating Income (loss), excluding GWG and Non Recurring Items, Operating Income (loss)
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation: 2 of 3 Revenue to Revenue, excluding GWG and Non Recurring Items Revenue Less: Investment income (loss) from GWG! Less: Interest income on GWG bonds? Revenue, excluding GWG and Non Recurring Items Operating Income (loss) to Operating Income (loss), excluding GWG and Non Recu
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation: 3 of 3 Ben Ben Ben Ben Total Ben Customer Corporate Consolidating Liguiity Custody Admin | Insurance Services Markets Business Units EA Trusts ‘Other Eliminations Total Revenue to Revenue, excluding GWG and Non Recurring Items | Revenue $ 52101196 | $ 19,409,530 § = - : $ 71
Slide 39: Supplemental Information
SUPPLEMENTAL INFORMATION Appendix
Slide 40: Multiple Competitive Advantages
Multiple Competitive Advantages Anticipated Public Intellectual Listing Statutory Property Regulatory Company Technology ws] 9 Fy) N) Structure qe 8
Slide 41: Developed Ben AltAccess, the industry's first-of-its-kind, secure, online client liquidity portal
Developed Ben AltAccess, the industry's first-of-its-kind, secure, online client liquidity portal with AT&T NetBond® Certification and FDIC audit review Technology Building end-to-end, tech-enabled, Customer-facing applications and products that deliver liquidity, custody, and data solutions for alt
Slide 42: Intellectual Property
Intellectual Property Submission of eight provisional patent applications with the U.S. Patent Office covering proprietary technology systems A ® and methodologies that drive our core business, and maximize AltAccess scalability and efficiency across our platform AltQuote AlphaAlt OptimumAlt AltC Al
Slide 43: Anticipated Public Listing
Accelerated Growth Asa publicly traded entity, we would expect to benefit from increased demand for our liquidity products using our balance sheet to fuel our product line and growth Anticipated Public Listing Unique Products Full suite of liquidity products we expect to include attractive options s
Slide 44: Statutory
Customers + Ability to hold and access to liquidity on alternative assets through a regulated financial institution that operates with permanent capital + Confidence created by regulatory oversight and application of safety, soundness and stability standards Confidentiality of terms and assets affor
Slide 45: Regulatory
Regulatory Operating as the industry's only regulated trust company that serves as fiduciary to our customers for the provision of liquidity Operating as a principal without the need for intermediaries and providing liquidity directly from our balance sheet Asa state chartered trust company, we expe
Slide 46: Company Structure
Company Structure Ben is developing an end-to-end digital Groundbreaking AltAccess™ digital platform structured to ultimately create liquidity platform designed to drive flywheel effect across ecosystem complementary lines of business Ben Custody V)
Slide 47: Robust Risk Management Features
Robust Risk Management Features Proficient risk management approach helps to anchor Originations and Underwriting strategies Risk Management + Fiduciary Loan portfolio construction and top-down market forecasts + Quantitative strategies, research and data analytics * Centralized financial risk overs
Slide 48: Innovative Underwriting Process
Innovative Underwriting Process Our unique process allows us to serve a large unmet demand and provide meaningful, differentiated value for customers ‘ =» \ Vv Leverage prior collateral underwriting of Vv International capabilities: non-U.S. Lower execution costs same funds, even same underlying bas
Slide 49: Risk Department Functional Areas
Risk Department Functional Areas Multifaceted approach to risk management strengthens our liquidity process Fiduciary Loan Analytics & Engineering Risk Analysis & Reporting Portfolio Construction Vv Collateral private fund Sv Proprietary data-driven SC Risk reporting and analytics, valuations, new d
Slide 50: Ben's Fiduciary Loan Portfolio Construction
Ben’s Fiduciary Loan Portfolio Construction System seeks to deliver optimal risk-adjusted allocation across alternative assets, helping to create a diversified fiduciary loan portfolio across asset classes, regions and sectors OptimumAIt % of Total Fiduciary Loan Portfolio Collateral Outputs Asset C
Slide 51: ValueAlt Pricing
ValueAlt Pricing Combines modern quantitative investment techniques with best-in-class fundamental analysis, and helps Ben provide fast and efficient secondary liquidity Liquidity Proposals for Client Delivered in AltAccess Alternative Asset Data & Characteristics Fundamental Analysis Technical Stat
Slide 52: Proprietary FinTech Platform Positions Company to Execute Growth Strategy
Proprietary FinTech Platform Positions Company to Execute Growth Strategy ARTIFICIAL INTELLIGENCE BLOCKCHAIN Could serve as a pathway for more efficient and effective use of technology by enabling greater transparency, increased security and simplified transactional capabilities. Can be used in busi
Slide 53: Artificial Intelligence and Machine Learning
Artificial Intelligence and Machine Learning UNDERWRITING To shorten cycle times, we are working to incorporate Al/machine learning into our underwriting process by using proprietary applications to extract GP-reported financials for use in our fund database and identify key provisions in limited pa
Slide 54: Potential Future Use of Blockchain Technology
Potential Future Use of Blockchain Technology Tokenization is a capability that leverages blockchain technology to securitize assets, both traded and non-traded. Increased liquidity, faster settlement, lower costs, and bolstered risk management. Ben administers $10 million of Fund Investor A wants $
Slide 55: Cloud Data
Cloud Data + Ben systems are designed with a cloud-first approach + Minimal support and maintenance for cloud-based systems * Greater data security by utilizing encryption and external security certifications * Systems are scalable, automatically increasing available resources when load requirements
Slide 56: Data Analytics
Data Analytics Detailed data analytics support informed business decisions that create positive outcomes. Through Ben's AltData, clients will be provided access to: * Market risk and return forecasts + Research reports + Portfolio concentrations and risk scenarios + Fund analytics, historical and ex
Slide 57: AltQuote
AltQuote® Fast, reliable indications of a range of potential liquidity options for holders of alternative assets, driven by powerful statistical algorithms. Expected to launch Q4 2022 Aaitaccess’ AltQuote® ‘Select Fonds Sep 104 & AltQuote® A powerful lead generation tool, AltQuote is expected to int
Slide 58: Ben AltAccess
Ben AltAccess™ AltAccess is the first-of-its-kind technology platform that securely facilitates end-to-end liquidity solutions for investors in alternative assets. Separate dashboards for investors who prefer to submit their own liquidity application and advisors who are submitting applications for
Slide 59: Proposal Delivery
Proposal Delivery Our proposals provide customers with a menu of liquidity options and the flexibility to contemplate different security types as consideration ~) Ben ® Ben Liquidity Proposal PROPOSED LIQUIDITY TRANSACTION TERMS 0p Fund (NAVas of date Fund A Apri'2,2021 (02/31/2020 NAV) Initial Cash