[424B3] Brand Engagement Network Inc. Prospectus Filed Pursuant to Rule 424(b)(3)
Rhea-AI Filing Summary
Brand Engagement Network Inc. is registering 6,393,333 shares of common stock, including 4,200,000 shares issuable upon exercise of warrants, through a prospectus supplement to its existing S-1 registration statement.
The company is a pre-revenue generative AI provider focused on human-like conversational agents for healthcare, automotive, advertising, and financial services. It reported a net loss of approximately $33.7 million in 2024 and $11.7 million in 2023, with an accumulated deficit of about $47.0 million as of December 31, 2024. As of March 27, 2025, 42,274,461 common shares and 16,440,962 public warrants were outstanding.
Management highlights a pending $19.5 million cash-and-stock acquisition of Cataneo GmbH to expand into media and advertising technology, alongside new partnerships in automotive and healthcare. The company emphasizes its patent portfolio, security-focused AI architecture, and status as an emerging growth and smaller reporting company listed on Nasdaq under “BNAI” and “BNAIW.”
Positive
- None.
Negative
- None.
Insights
Share registration is administrative; business remains early-stage and loss-making.
Brand Engagement Network updates its S-1 with a supplement covering 6,393,333 registered common shares, including 4,200,000 underlying warrants. This primarily refreshes disclosure by incorporating numerous 8-K, 10-Q, and 10-K filings rather than launching a new financing structure.
Operationally, the company is still in an early commercialization phase. It describes itself as pre-revenue with minimal 2023–2024 revenue and reports a net loss of about
Strategically, BEN is pursuing a
Prospectus Supplement No. 14 (to Prospectus dated August 13, 2024) |
Filed Pursuant to Rule 424(b)(3) Registration No. 333-280366 |
BRAND ENGAGEMENT NETWORK INC.
6,393,333 Shares of Common Stock (Inclusive of 4,200,000 Shares of Common Stock Underlying Warrants)
This prospectus supplement updates and supplements the prospectus of Brand Engagement Network Inc., a Delaware corporation (the “Company,” “we,” “us” or “our”), dated August 13, 2024, which forms a part of our Registration Statement on Form S-1, as amended (Registration No. 333-280366) (the “Prospectus”). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in certain of our filings filed with the Securities and Exchange Commission (the “SEC”), including our (i) Current Report on Form 8-K filed on March 28, 2025, (ii) Annual Report on Form 10-K filed on March 31, 2025, (iii) Current Report on Form 8-K filed on May 23, 2025, (iv) Current Report on Form 8-K filed on May 30, 2025, (v) Quarterly Report on Form 10-Q filed on June 5, 2025, (vi) Current Report on Form 8-K filed on June 10, 2025, (vii) Current Report on Form 8-K filed on June 24, 2025, (viii) Current Report on Form 8-K filed on July 2, 2025, (ix) Current Report on Form 8-K filed on July 15, 2025, (x) Current Report on Form 8-K filed on July 21, 2025, (xi) Current Report on Form 8-K filed on August 18, 2025, (xii) Current Report on Form 8-K filed on August 27, 2025, (xiii) Current Report on Form 8-K filed on September 12, 2025, (xiv) Current Report on Form 8-K filed on September 19, 2025, (xv) Quarterly Report on Form 10-Q/A filed on October 14, 2025, (xvi) Current Report on Form 8-K filed on October 14, 2025, (xvii) Current Report on Form 8-K filed on November 10, 2025, (xviii) Quarterly Report on Form 10-Q filed on November 25, 2025, (xix) Current Report on Form 8-K filed on November 28, 2025, (xx) Current Report on Form 8-K filed on December 1, 2025, (xxi) Current Report on Form 8-K filed on December 11, 2025, (xxii) Current Report on Form 8-K filed on December 18, 2025, (xxiii) Current Report on Form 8-K filed on December 22, 2025, (xxiv) Current Report on Form 8-K filed on December 29, 2025, (xxv) Current Report on Form 8-K filed on December 31, 2025, and (xxvi) Current Report on Form 8-K filed on January 21, 2026 (together, the “Additional Information”). Accordingly, we have attached the Additional Information to this prospectus supplement.
This prospectus supplement should be read in conjunction with the Prospectus. This prospectus supplement updates and supplements the information in the Prospectus. If there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
Our common stock, par value $0.0001 per share (the “Common Stock”) and the public warrants representing the right to acquire one share of Common Stock for $115.00 (the “Public Warrants”), are listed on Nasdaq under the symbols “BNAI,” and “BNAIW,” respectively. On January 27, 2026, the last reported sales price of the Common Stock was $52.00 per share, and the last reported sales price of our Public Warrants was $0.40 per Public Warrant. We are an “emerging growth company” and a “smaller reporting company” as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for this and future filings.
Investing in our securities involves risk. See “Risk Factors” beginning on page 9 of the Prospectus and read about factors you should consider before investing in shares of our Common Stock and Public Warrants.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is January 28, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2025
BRAND ENGAGEMENT NETWORK INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
145 E. Snow King Ave
PO Box 1045
Jackson, WY 83001
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (312) 810-7422
(Former name or former address, if changed since last report)
Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On March 27, 2025, Brand Engagement Network Inc., a Delaware corporation (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2024. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report on Form 8-K, including Exhibits 99.1 furnished hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 99.1 | Press Release of Brand Engagement Network Inc. issued March 27, 2025 (furnished pursuant to Item 2.02). | |
| 99.2 | Prepared Remarks for the Fourth Quarter and Full Year 2024 Earnings Call, dated March 27, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | March 27, 2025 | ||
| BRAND ENGAGEMENT NETWORK INC. | |||
| By: | /s/ Paul Chang | ||
| Name: | Paul Chang | ||
| Title: | Chief Executive Officer | ||
Exhibit 99.1
BEN Reports Fourth Quarter and Full Year 2024 Financial Results
WILMINGTON, Del., March 27, 2025 – Brand Engagement Network Inc. (BEN) (NASDAQ: BNAI), an innovator in AI-driven customer engagement solutions, today announced its financial results and key business highlights for the fourth quarter and full year ended December 31, 2024.
“2024 was a defining year for BEN, as we accelerated our expansion in key sectors like automotive, media, and healthcare. In Q4, we successfully integrated our AI-powered solutions with Cox Automotive’s Dealer.com and formed strategic partnerships in Mexico and Europe, further strengthening our global presence,” said Paul Chang, CEO of Brand Engagement Network. “BEN’s innovation enables businesses to adopt safe, secure, turn-key AI solutions to drive efficiency in many aspects of operations in a scalable, cost-effective manner. As we look forward to 2025, we’re excited to build on our recent momentum, refine our solutions in high-growth sectors, and further expand our AI capabilities to meet market demands.”
Q4 2024 Key Business Highlights:
| ● | Walid Khiari Appointed CFO and COO: Walid Khiari, with over 20 years of experience in finance and 15 years as a technology investment banker advising software companies, will lead BEN’s next phase of innovation and global expansion. | |
| ● | Cataneo Acquisition: BEN has agreed to acquire 100% of Cataneo GmbH for $19.5 million in cash and stock to expand its global media reach and strengthen its AI-driven advertising capabilities. The transaction is subject to securing financing and obtaining customary regulatory approvals and guarantees by certain BEN shareholders. Closing is currently targeted for Q2 2025. | |
| ● | AI-Driven Radio Advertising with Vybroo & Grupo Siete: BEN and Cataneo GmbH partnered with Vybroo and Grupo Siete on a pilot program to modernize radio advertising in Mexico by streamlining ad placement and optimizing campaign performance. | |
| ● | Cox Automotive Partnership: BEN successfully integrated its Digital AI Assistant with Cox Automotive’s Dealer.com, enhancing customer engagement and dealership operations through personalized, multimodal experiences. | |
| ● | CareHub: BEN signed an agreement with CareHub to deploy GenAI Agents to assist nurse care managers with Remote Patient Monitoring to deliver improved patient outcomes specifically for Chronic Care Management. |
Conference Call and Webcast Information
The Company will host a conference call and webcast today, Thursday, March 27, 2025, at 5:00 p.m. ET. CEO Paul Chang and CFO and COO Walid Khiari will lead the call and provide an overview of the company’s financial performance, key business highlights, and strategic outlook.
Participants can register here to access the live webcast of the conference call. Those who prefer to join the call via phone can register using this link to receive a dial-in number and unique PIN.
The webcast will be archived for one year following the conference call and can be accessed on BEN’s investor relations website at https://investors.beninc.ai/.
About Brand Engagement Network (BEN)
Brand Engagement Network Inc. (NASDAQ: BNAI) innovates in AI-powered customer engagement, delivering safe, intelligent, and scalable solutions. Its proprietary Engagement Language Model (ELM™) and Retrieval-Augmented Generation (RAG) architecture enable highly personalized interactions supported by customers’ curated data in closed-loop environments. BEN develops AI-driven engagement solutions for the life sciences, automotive, and retail industries, featuring AI-powered avatars for outbound campaigns, inbound customer service, and real-time recommendations. With a global AI research and development team, BEN provides secure cloud-based or on-premises deployments, granting complete control of the technology stack and ensuring compliance with GDPR, CCPA, HIPAA, and SOC 2 Type 1 standards. The company holds 21 patents, with 28 pending, demonstrating its commitment to advancing AI-driven consumer engagement. For more information, visit www.beninc.ai.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, and involve risks and uncertainties that could cause actual results of BEN to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” or “would,” or, in each case, their negative or other variations or comparable terminology.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside BEN’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: uncertainties as to the timing of the acquisition with Cataneo Gmbh (the “Acquisition”); the risk that the Acquisition may not be completed on the anticipated terms in a timely manner or at all; (the failure to satisfy any of the conditions to the consummation of the Acquisition, including the ability to obtain financing to fund the Acquisition on terms that are acceptable or at all; the possibility that any or all of the various conditions to the consummation of the Acquisition may not be satisfied or waived; the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement; the effect of the announcement or pendency of the transactions contemplated by the purchase agreement on the Company’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; risks related to diverting management’s attention from the Company’s ongoing business operations; uncertainty as to the timing of completion of the Acquisition; risks that the benefits of the Acquisition are not realized when and as expected; risks relating to the uncertainty of the projected financial information with respect to BEN; uncertainty regarding and the failure to realize the anticipated benefits from future production-ready deployments; the attraction and retention of qualified directors, officers, employees and key personnel; our ability to grow our customer base; BEN’s history of operating losses; BEN’s need for additional capital to support its present business plan and anticipated growth; technological changes in BEN’s market; the value and enforceability of BEN’s intellectual property protections; BEN’s ability to protect its intellectual property; BEN’s material weaknesses in financial reporting; BEN’s ability to navigate complex regulatory requirements; the ability to maintain the listing of BEN’s securities on a national securities exchange; the ability to implement business plans, forecasts, and other expectations; the effects of competition on BEN’s business; and the risks of operating and effectively managing growth in evolving and uncertain macroeconomic conditions, such as high inflation and recessionary environments. The foregoing list of factors is not exhaustive.
BEN cautions that the foregoing list of factors is not exclusive. BEN cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. BEN does not undertake nor does it accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, and it does not intend to do so unless required by applicable law. Further information about factors that could materially affect BEN, including its results of operations and financial condition, is set forth under “Risk Factors” in BEN’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q subsequently filed with the Securities and Exchange Commission.
Media Contact
Amy Rouyer
P: 503-367-7596
E: amy@beninc.ai
Investor Relations
Susan Xu
P: 778-323-0959
E: sxu@allianceadvisors.com
Exhibit 99.2
Brand Engagement Network, Inc.
Q4 2024 Earnings Call Script
Thursday, March 27, 2025 at 2 PM PT / 5 PM ET
Participants:
| ● | Paul Chang – CEO | |
| ● | Walid Khiari – CFO & COO | |
| ● | Susan Xu – Alliance Advisors IR |
Operator Intro:
Welcome to the Brand Engagement Network fourth quarter and full-year 2024 results conference call and webcast. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be an analyst question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to Brand Engagement Network Investor Relations, Susan Xu (pronounced “Zoo”). Please go ahead.
Susan Xu:
Thank you operator, and good afternoon everyone. Welcome, and thank you for joining BEN’s Q4 and full-year 2024 earnings conference call. Joining me on the call today are CEO Paul Chang and CFO & COO Walid Khiari.
The company’s Q4 financial results were disseminated prior to this call and are available on the Investors Relations website at www.investors.beninc.ai.
During this call, we’ll make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on management’s plans, predictions and expectations as of today, which may change overtime.
The company’s actual results could differ materially due to a number of risks and uncertainties. For more information about the risks and uncertainties involving forward-looking statements and factors that could cause actual results to differ materially from those projected or implied by forward-looking statements, please see the risk factors set forth in BEN’s most recent annual report on Form 10-K, as supplemented by the Risk Factors in its most recent quarterly report on Form 10-Q. Forward-looking statements represent management’s current estimates, and the company assumes no obligation to update any forward-looking statements in the future.
As a reminder, this call is being webcast from the Investor Relations website. An audio replay will be available on the website in a few hours.
With that, I’ll now turn it over to Paul to share our Q4 update. Over to you, Paul.
| BNAI Q4 2024 Earnings Call Script | 1 |
Paul Chang:
Thank you Susan. Good afternoon, and thank you all for joining us today.
Before we delve into our quarterly updates, I want to address the broader AI landscape and the recent turbulence sparked by DeepSeek. Their rapid rise has raised awareness on AI training and run costs, scalability, and market dominance, triggering both excitement and volatility in the market. While DeepSeek’s open-source model is making headlines, it reinforces what BEN has long championed since the beginning — AI doesn’t have to rely on massive, expensive, GPU-heavy infrastructure to be effective.
Last July, we demonstrated how Small Language Models, RAG, and industry-specific training can create a scalable and secure AI platform at a fraction of the cost. Unlike many large-scale AI systems that rely on costly, difficult to procure, energy-intensive GPUs, BEN’s platform can run efficiently on CPUs. This smaller computational footprint makes our AI more accessible, affordable, and scalable, enabling businesses of all sizes to leverage it without expensive infrastructure. BEN’s approach and architecture also gives businesses the full control of the customers’ AI experience while integration with legacy applications enables the automated processes that truly drive efficiency and enhanced customer engagement.
This brings me to another critical issue shaping the AI industry—data privacy and security. The concerns surrounding DeepSeek are not just about AI dominance but also about where and how user data is stored and used. Lawmakers and consumer advocates have raised alarms about foreign access to personal information, and the U.S. government is now considering banning DeepSeek AI on government devices due to national security risks.
At BEN, we’ve prioritized data security from day one. Our AI platform operates within a closed-loop system, ensuring user data remains protected and never enters public training sets. This security-first approach has led us to provide key insights to CA Assemblymember Carl DeMaio on his proposed bill AB 364 to strengthen consumer data protections. The bill would require AI and social media platforms to disclose where user data is stored, mandate explicit user consent, and prohibit foreign-controlled entities from handling sensitive healthcare, financial, and geolocation data.
This commitment to security and efficiency has guided our work at BEN, and we continue to see strong traction across key verticals.
In Q4, we reached two major milestones that position BEN for further growth in the automotive sector. First, we signed an agreement with Michiana Chrysler, Dodge, Jeep & Ram making them our first pilot dealer in the automotive sector. Since they already use Dealer.com software — which is fully integrated with our AI platform—this partnership allows us to seamlessly deploy our AI-powered agent, enhancing customer engagement and streamlining dealership operations. This integration allows dealerships using Dealer.com to leverage BEN’s human-like AI agents across their websites, apps, web browsers, and life-size kiosks. We anticipate the AI agents will go live in Q2, marking a significant step forward in our expansion into the automotive sector and demonstrating the value of our scalable AI-powered solutions in high-volume, customer-facing environments.
| BNAI Q4 2024 Earnings Call Script | 2 |
Beyond our progress in automotive, we continue to execute on our broader strategic vision. Last October, we announced our agreement to acquire Cataneo, a leading media technology company based in Germany. This acquisition is a key part of our strategy to expand BEN’s AI capabilities into global media and advertising, integrating our secure, scalable AI with Cataneo’s Mydas platform to enhance customer engagement and streamline ad sales and inventory management. We’ve made steady progress, and Walid will provide further details on the current status.
Looking ahead to 2025, we believe BEN is well-positioned for continued growth in our target Healthcare/Life Sciences industry as well as new markets we are entering. Our potential national-chain clients appear interested to deploy BEN’s AI Agents for mission critical tasks such as educating the public on the benefits and safety of vaccines as part of an outreach campaign. The key advantages are that the consumers will only be provided information from trusted, validated sources and the campaign can scale effortlessly reaching consumers at every corner of the country. Such campaign is designed to increase our customers’ revenues while significantly reducing the costs to run and manage the campaign.
We’d like to thank our shareholders and partners for their ongoing support, and we look forward to keeping you updated on our progress this year.
Now, let’s turn it over to our CFO and COO, Walid Khiari, who will walk us through our financial results for the fourth quarter.
Walid:
Thank you, Paul.
I appreciate this opportunity to introduce myself to our audience and shareholders, provide a brief financial update, and share my perspectives on our M&A strategy and the announced acquisition of Cataneo.
****************
I joined the Company in November after a 20-year career in financial markets, including 15 years as a technology investment banker working with software companies in Silicon Valley and across the world.
| BNAI Q4 2024 Earnings Call Script | 3 |
What drew me to the Company is its highly specialized IP portfolio focused on conversational AI: 20+ patents issued (with another 20 or so pending) all focused on advancing AI-human interaction. This includes innovations in user identification, personalization, image and video processing, human-like interaction and gesture generation.
From this IP portfolio, BEN has built B2B2C solutions in the form of AI agents that can interact with their audiences in a human-like fashion.
These AI agents can help transform consumer engagement and elevate customer experience.
Each AI agent is uniquely designed for its specific business environment and use case, ensuring that elements such as voice, tone, cadence, and language, and even visual appearance in multimodal applications align seamlessly with a business’s identity and goals.
Ultimately, our AI agents serve as digital extensions of the brands they represent, aiming to provide businesses with the adaptability and scale to enhance engagement with their audiences.
****************
For BEN, 2024 was about investing in product development and refining our go-to-market strategy.
Q4 saw the Company continue to streamline its operations and rationalize its investments.
We’ve continued to invest in our team in Seoul, Korea, which we see as a competitive advantage for BEN.
Indeed, BEN has historical roots in Korea since our AI IP originally came from Korea University, which gives us access to strong local AI talent.
A significant financial update at year-end was the write-off of $13.475m related to our exclusive reseller agreement in the automotive space, pursuant to our termination of that agreement.
Let me explain: BEN previously issued shares of common stock to an automotive reseller pursuant to the Reseller Agreement.
The fair value of those shares at the date of issuance was $13.475m and was deferred on the balance sheet as a customer acquisition cost.
That asset was to be accounted for as a reduction in transaction price as the Company transfers services to the reseller over the term of the Agreement.
In anticipation of terminating the Reseller Agreement, the Company performed an impairment analysis and concluded that the entire asset was impaired given there would be no future revenue associated with the Reseller Agreement upon termination.
| BNAI Q4 2024 Earnings Call Script | 4 |
2025 is and will continue to be about execution.
****************
As it relates to our M&A strategy, we are in the process of acquiring Cataneo, a transaction that was announced at the end of Q3.
It can take time to do things well. To that end, we agreed to an extension with the shareholders of Cataneo at the end of January, and have already made two installment payments.
We aim to close the acquisition in Q2.
I would like to take this opportunity to share some perspectives on our M&A strategy and explain how Cataneo fits into it.
Starting with what BEN is.
BEN is an acronym. It stands for Brand Engagement Network.
The most important letter of that acronym is E, for Engagement.
Our goal is to become the Engagement AI platform, helping companies truly engage with audiences and go beyond simply advertising to them.
Cataneo is a core building block of this strategy.
Based in Munich, Germany with a global footprint, the Company’s flagship product is a software platform which provides a single plain of glass for advertisers and advertising agencies to schedule, operationalize, invoice ads and manage ad inventory.
Simply put, we at BEN view Cataneo as the “ERP software of the Ad industry”.
We believe that Cataneo’s 20-year+ tenure and reputation in the Advertising industry matched with BEN’s dedicated Engagement AI capabilities can become a strong combination for advertisers and ad agencies worldwide to create an engaged connection with their audiences.
With this first combination, BEN aims to lay the first digital brick of the new “AI Advertising Tech Stack” – a stack which we intend to continue building on through both organic product development work and thoughtful acquisitions.
In the field, we’ve expanded our partnership with Vybroo (a Mexican technology firm specialized in audio messaging strategies) and Grupo Siete (a large Mexican media company) to extend our AI-powered engagement solutions to Latin America and Europe. These initiatives highlight AI’s transformative role in media and advertising, aligning with our long-term vision.
We look forward to expanding our efforts globally, forging new partnerships, and continuing to innovate at the intersection of AI and advertising. We’ll share more updates on our progress during our Q1 call.
Thank you. Now, I’d like to turn it back over to the operator for Q&A.
**Q&A Begins**
| BNAI Q4 2024 Earnings Call Script | 5 |
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| Delaware | 98-1574798 | |||||||
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |||||||
|
145
E. Snow King Ave
PO
Box 1045
Jackson,
WY |
83001 | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
|
Common
Stock, par value $0.0001 per share |
BNAI |
The
Nasdaq Stock Market LLC | ||||||
|
Redeemable
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share |
BNAIW |
The
Nasdaq Stock Market LLC | ||||||
| Large accelerated filer |
o |
Accelerated filer | o | |||||||||||
| Non-accelerated filer |
x |
Smaller reporting company |
x | |||||||||||
| Emerging growth company |
x | |||||||||||||
| Page | ||||||||
|
Cautionary
Note Regarding Forward-Looking Statements |
4 | |||||||
| PART I. |
5 | |||||||
| Item 1. |
Business |
5 | ||||||
| Item 1A. |
Risk
Factors |
15 | ||||||
| Item 1B. |
Unresolved
Staff Comments |
43 | ||||||
| Item 1C. |
Cybersecurity |
43 | ||||||
| Item 2. |
Properties |
44 | ||||||
| Item 3. |
Legal
Proceedings |
44 | ||||||
| Item 4. |
Mine
Safety Disclosures |
44 | ||||||
| PART II. |
45 | |||||||
| Item 5. |
Market
for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities |
45 | ||||||
| Item 6. |
[Reserved] |
45 | ||||||
| Item 7. |
Management's
Discussion and Analysis of Financial Condition and Results of Operations |
46 | ||||||
| Item 7A. |
Quantitative
and Qualitative Disclosures About Market Risk |
62 | ||||||
| Item 8. |
Financial
Statements and Supplementary Data |
63 | ||||||
| Item 9. |
Changes
in and Disagreements with Accountants on Accounting and Financial Disclosure |
89 | ||||||
| Item 9A. |
Controls
and Procedures |
89 | ||||||
| Item 9B. |
Other
Information |
91 | ||||||
| Item 9C. |
Disclosure
Regarding Foreign Jurisdictions that Prevent Inspections |
91 | ||||||
| PART III. |
92 | |||||||
| Item 10. |
Directors,
Executive Officers and Corporate Governance |
92 | ||||||
| Item 11. |
Executive
Compensation |
97 | ||||||
| Item 12. |
Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
112 | ||||||
| Item 13. |
Certain
Relationships and Related Transactions, and Director Independence |
115 | ||||||
| Item 14. |
Principal
Accounting Fees and Services |
118 | ||||||
| PART IV. |
118 | |||||||
| Item 15. |
Exhibits
and Financial Statement Schedules |
118 | ||||||
| Item 16. |
Form
10-K Summary |
123 | ||||||
| ● | our ability to develop and attain market acceptance for our products and services; | |||||||
| ● | our ability to maintain the listing of our securities on Nasdaq and to regain compliance with Nasdaq listing standards; | |||||||
| ● | the attraction and retention of qualified directors, officers, employees and key personnel; | |||||||
| ● | our need for additional capital and whether additional financing will be available on favorable terms, or at all; | |||||||
| ● | the lack of a market for our Common Stock and Public Warrants and the volatility of the market price and trading price for our Common Stock and Public Warrants; | |||||||
| ● | our ability to meet the conditions to close, including the raising of sufficient financing to fund our pending acquisition (the "Cataneo Acquisition") of Cataneo Gmbh ("Cataneo"), our ability to pay down payments in accordance with the Purchase Agreement and our ability to integrate and realize the anticipated benefits of the Cataneo Acquisition; | |||||||
| ● | the impact of lawsuits and other litigation matters on our business, including the AFG Lawsuit (as defined below). | |||||||
| ● | our limited operating history; | |||||||
| ● | the length of our sales cycle and the time and expense associated with it; | |||||||
| ● | our ability to grow our customer base; | |||||||
| ● | our dependency upon third-party service providers for certain technologies; | |||||||
| ● | competition from other companies offering artificial intelligence products that have greater resources, technology, relationships and/or expertise; | |||||||
| ● | our ability to compete effectively in a highly competitive market; | |||||||
| ● | our ability to protect and enhance our corporate reputation and brand; | |||||||
| ● | our ability to hire, retain, train and motivate qualified personnel and senior management and our ability to deploy our personnel and resources to meet customer demand; | |||||||
| ● | our ability to grow through acquisitions and successfully integrate any such acquisitions; | |||||||
| ● | our ability to grow through acquisitions and successfully integrate any such acquisitions, including our pending acquisition of Cataneo; | |||||||
| ● | the impact from future regulatory, judicial, and legislative changes in our industry; | |||||||
| ● | increases in costs, disruption of supply or shortage of materials, which could harm our business; | |||||||
| ● | our ability to successfully maintain, protect, enforce and grow our intellectual property rights; | |||||||
| ● | our future financial performance, including the ability of future revenues to meet projected annual bookings; | |||||||
| ● | our ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses; | |||||||
| ● | our ability to generate sufficient revenue from each of our revenue streams; or | |||||||
| ● | other risks, uncertainties and factors set forth in this Annual Report on Form 10-K, including those set forth under the section titled “- Risk Factors.” | |||||||
| ● | High-Quality Knowledge Base: We maintain a carefully vetted and regularly updated knowledge base to provide accurate, current information. The information is generally provided to us by our clients who utilize their own experts in their corresponding fields. | |||||||
| ● | Sophisticated Retrieval Mechanisms: Our retrieval system is designed to find the most relevant and reliable information for each query. | |||||||
| ● | Careful Curation of Retrieved Information: We prompt the foundation model to base its responses primarily on the retrieved information, reducing the likelihood of generating unfounded statements. | |||||||
| ● | Uncertainty Communication: We implement prompting strategies that encourage the model to express uncertainty when retrieved information is insufficient or ambiguous. Our prompting strategies are triggered whenever our systems detect that the safety threshold is too low. | |||||||
| ● | Web AI Agent: A solution for transforming the online experience for dealership customers. By understanding customer needs and preferences, our AI Agent works in tandem with the sales team to provide enhanced customer experiences online that carry through to the dealership. | |||||||
| ● | In-Vehicle Experience: Connecting directly with vehicle data, mobile application, and contextual information to provide drivers with engaging experiences, providing relevant and meaningful engagement opportunities from automotive vertical participants. | |||||||
| ● | Sales AI Agent: Available on life-size kiosks, and offers uniformity and personalization to each customer through an intuitive interface. This integration ensures a smooth transition from online browsing to in-person dealership experience. | |||||||
| ● | Service AI Agent: Designed to enhance the way customers interact with automotive service departments by combining proprietary cutting-edge AI and an intuitive interface to deliver enhanced customer service experiences for consumers requiring vehicle maintenance, booking appointments and those who want to learn more about service options and service programs. | |||||||
| ● | Technician AI Agent: Offering real-time guidance, know-how and information to automotive technicians, safeguarding original equipment manufacturer (“OEM”) compliance and serving as a vital partner in the garage. | |||||||
| ● | Drug Adherence AI Agent: Providing educational assistance to patients concerning newly prescribed or existing medications, including administration methods, with the goal of driving drug adherence and improving disease management. | |||||||
| ● | Vaccine AI Agent: Providing vaccine education and scheduling assistance for seasonal vaccines like the flu and COVID-19, as well as age-related vaccines such as human papillomavirus, herpes simplex virus and shingles and other potential vaccines. | |||||||
| ● | Health Insurance AI Agent: Supporting healthcare insurance, Medicare Advantage, information, and decision support. | |||||||
| ● | Chronic Disease Management AI Agent: Designed to support chronic disease management, with a current focus on type 2 diabetes, rheumatology, and behavioral health. | |||||||
| ● | Companies with AI capabilities focused on solutions in the conversational interface, language understanding and processing; | |||||||
| ● | Organizations offering products within our current target verticals; and | |||||||
| ● | Legacy providers, including large technology companies with existing and fast-growing AI offerings. | |||||||
| ● | Accuracy and precision of NLP and natural language understanding; | |||||||
| ● | Degree of available and seamless multimodality; | |||||||
| ● | Flexible deployment model and cross-platform support; | |||||||
| ● | Ease and speed of adoption and use; | |||||||
| ● | Customization and flexibility to customer needs; | |||||||
| ● | Individualized personalization and contextualization; | |||||||
| ● | Data security, privacy, and regulatory compliance; | |||||||
| ● | Extensibility of product innovation, research, and pipeline; | |||||||
| ● | Depth of vertical expertise and specialization; | |||||||
| ● | Scope of channel and distribution partner network; | |||||||
| ● | Pricing, cost structures, and returns on investment; | |||||||
| ● | Strength of sales and marketing efforts; | |||||||
| ● | Financial and other resources and name recognition; | |||||||
| ● | Existing customer relationships; | |||||||
| ● | Brand salience, reputation, and level of adoption; and | |||||||
| ● | Track records of success in complex environments. | |||||||
|
● |
Future
resales of our Common Stock may cause the market price of our Common Stock to drop significantly, even if the Company’s business
is doing well. | |||||||
|
● |
Certain
existing securityholders acquired their securities in the Company at prices below the current trading price of such securities, and may
experience a positive rate of return based on the current trading price. Future investors in our Company may not experience a similar
rate of return. | |||||||
|
● |
We
have a limited operating history, which makes it difficult to evaluate our prospects and future results of operations. | |||||||
|
● |
We
have a history of losses and may not be able to achieve profitability on a consistent basis or at all. | |||||||
|
● |
We
expect to be dependent on a limited number of customers and end markets. A decline in revenue from, or the loss of, any significant customer,
could have a material adverse effect on our financial condition and operating results. | |||||||
|
● |
The
total addressable market opportunity for our current and future products may be much smaller than we estimate. | |||||||
|
● |
We
may need additional capital, and we cannot be certain that additional financing will be available on favorable terms, or at all. | |||||||
|
● |
Our
results of operations and key financial and operational metrics are likely to fluctuate significantly on a quarterly basis in future periods
and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict and could cause
our results of operations to fall below expectations. | |||||||
|
● |
Our
sales cycles may be long and unpredictable, particularly with respect to large subscriptions, and our sales efforts require considerable
time and expense. | |||||||
|
● |
Our
business depends on customers purchasing additional subscriptions and products from us and renewing their subscriptions. If customers
do not renew or expand their subscriptions with us, our revenue may decline and our business, financial condition and results of operations
may be harmed. | |||||||
|
● |
Our
revenue growth depends in part on the success of our strategic relationships with third parties, including channel partners, and if we
are unable to establish and maintain successful relationships with them, our business, operating results, and financial condition could
be adversely affected. | |||||||
|
● |
Our
ability to sell our software and services to customers is dependent on the quality of our offerings, and our failure to maintain the quality
of our offerings could have a material adverse effect on our sales and results of operations. | |||||||
|
● |
We
may not be able to effectively develop and expand our sales, marketing and customer support capabilities. | |||||||
|
● |
We
may generate a significant portion of our revenues primarily from a few major customers, and loss of business from such customers could
reduce our revenues and significantly harm our business. | |||||||
|
● |
If
we are not able to grow, maintain and enhance our brand and reputation, our relationships with our customers, partners, investors and
employees may be harmed, and our business and results of operations may be adversely affected. | |||||||
|
● |
If
we are unable to achieve and sustain a level of liquidity sufficient to support our operations and fulfill our obligations, our business,
operating results and financial position could be adversely affected. | |||||||
|
● |
Changes
in our subscription or pricing models could adversely affect our operating results. | |||||||
|
● |
The
benefits of our products to customers and projected return on investment have not been substantiated through long-term trials or use. | |||||||
|
● |
We
may acquire or invest in companies and technologies, which may divert our management’s attention, and result in additional dilution
to our stockholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits
of such acquisitions or investments. | |||||||
|
● |
Our
ability to complete the Acquisition is dependent on our ability to obtain financing on favorable terms, or at all. | |||||||
|
● |
We
may be unable to successfully integrate our business with Cataneo or realize the expected benefits of the Acquisition on our expected
timeframe or at all. In addition, if we choose to acquire or invest in other new businesses, products or technologies, we may be unable
to complete these acquisitions or successfully integrate them in a cost-effective and/or non-disruptive manner. | |||||||
|
● |
AI
is a nascent and rapidly changing technology. The slowing or stopping of the development or acceptance of AI technologies may adversely
affect our business. | |||||||
|
● |
Issues
in the use of AI or machine learning in our software may result in reputational harm or liability. | |||||||
|
● |
Nasdaq
may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities
and subject us to additional trading restrictions. | |||||||
|
● |
Failure
to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”)
could have a material adverse effect on our business and stock price. | |||||||
|
● |
Future
sales of shares by existing shareholders could cause our stock price to decline. | |||||||
|
● |
The
Company may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making the
Public Warrants worthless. | |||||||
|
● |
We
have the ability to require holders of the Public Warrants to exercise such warrants on a cashless basis, which will cause holders to
receive fewer shares of Common Stock upon their exercise of the Public Warrants than they would have received had they been able to exercise
their Public Warrants for cash. | |||||||
|
● |
Our
management does not have prior experience in operating a public company. | |||||||
|
● |
A
substantial number of the Company’s Common Stock are restricted securities and as a result, there may be limited liquidity for our
Common Stock. | |||||||
| ● | the success of our sales and marketing efforts; | |||||||
| ● | our ability to increase our margins; | |||||||
| ● | the timing of expenses and revenue recognition; | |||||||
| ● | the timing and amount of payments received from our customers; | |||||||
| ● | termination of one or more large contracts by customers or channel providers; | |||||||
| ● | the time- and cost-intensive nature of our sales efforts and the length and variability of sales cycles; | |||||||
| ● | the amount and timing of operating expenses related to the maintenance and expansion of our business and operations; | |||||||
| ● | the timing and effectiveness of new sales and marketing initiatives; | |||||||
| ● | changes in our pricing policies or those of our competitors; | |||||||
| ● | the timing and success of new products, features, and functionality introduced by us or our competitors; | |||||||
| ● | cyberattacks and other actual or perceived data or security breaches; | |||||||
| ● | our ability to hire and retain employees, in particular, those responsible for the development, operations and maintenance, and selling or marketing of our software; and our ability to develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts; | |||||||
| ● | changes in the competitive dynamics of our industry; | |||||||
| ● | the cost of and potential outcomes of future claims or litigation, which could have a material adverse effect on our business; | |||||||
| ● | indemnification payments to our customers or other third parties; | |||||||
| ● | ability to scale our business with increasing demands; | |||||||
| ● | the timing of expenses related to any future acquisitions; and | |||||||
| ● | general economic, regulatory, and market conditions, including the impact of public health crises such as the COVID-19 pandemic and international affairs such as the conflict between Russia and Ukraine and in the Middle East which may cause financial market volatility. | |||||||
| 1 | The Company has not invested the resources to properly document its risks affecting the financial statements and controls in place to mitigate those risks in accordance with the requirements for a functioning internal control system. | |||||||
| 2 | The Company, has not yet invested the necessary resources into the accounting and reporting functions in order to properly account for and prepare its US GAAP compliant financial statements on a timely basis. | |||||||
| 3 | The Company has failed to properly account for its merger with Datum Point Labs ("DPL"), specifically to obtain a historical value of the patent portfolio acquired by DPL in May 2019, since the merger was between entities under common control. | |||||||
| 4 | The Company has failed to timely obtain valuation reports for its underlying common shares or to value its equity grants in accordance with US GAAP. | |||||||
| 5 | The Company has failed to properly account for the extinguishment of certain liabilities through the issuance of common shares or through the exercise of warrants. | |||||||
| 6 | The Company has failed to properly classify the acquired developed technology from DM Lab Co., LTD ("DM Lab") as an in-process research and development asset. | |||||||
| 1 | The Company has failed to impute interest on non-interest bearing related party advances. | |||||||
| 2 | The Company incorrectly recorded certain selling, general and administrative expenses. | |||||||
| 3 | The Company has incorrectly included certain 2023 liabilities in accounts payable at December 31, 2022. | |||||||
| ● | AI companies focused on solutions in the conversational interface, language understanding and processing; | |||||||
| ● | organizations offering products within our current target verticals; and | |||||||
| ● | legacy providers, including large technology providers seeking to add or scale AI capabilities. | |||||||
| ● | an acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition; | |||||||
| ● | costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business; | |||||||
| ● | we may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise; | |||||||
| ● | we may not realize the expected benefits of the acquisition; | |||||||
| ● | an acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management; | |||||||
| ● | an acquisition may result in a delay or reduction of customer subscriptions for our offerings for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company; | |||||||
| ● | the potential impact on relationships with existing customers, vendors, and channel providers as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships; | |||||||
| ● | the potential that our due diligence of the acquired company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities; | |||||||
| ● | exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces; | |||||||
| ● | potential goodwill impairment charges related to acquisitions; | |||||||
| ● | we may encounter difficulties in, or may be unable to, successfully sell any acquired offerings; | |||||||
| ● | an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions; | |||||||
| ● | an acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company's failure to comply with applicable laws or regulations; | |||||||
| ● | our use of cash to pay for an acquisition would limit other potential uses for our cash; | |||||||
| ● | if we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and | |||||||
| ● | to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease. | |||||||
| ● | continued worldwide growth in the adoption and use of AI technology; | |||||||
| ● | changes in consumer demographics; | |||||||
| ● | changes in public tastes and preferences; | |||||||
| ● | the popularity or acceptance of AI technology; and | |||||||
| ● | government and quasi-government regulation of AI technology, including any restrictions on access, operation and the use of AI. | |||||||
| ● | cease selling or using products that incorporate the intellectual property rights that we allegedly infringe, misappropriate or violate; | |||||||
| ● | make substantial payments for legal fees, settlement payments or other costs or damages; | |||||||
| ● | obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or | |||||||
| ● | redesign the allegedly infringing products to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible. | |||||||
| ● | a limited availability of market quotations for our securities; | |||||||
| ● | reduced liquidity for our securities; | |||||||
| ● | a determination that our Common Stock is a "penny stock" which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the Company's securities; | |||||||
| ● | a limited amount of news and analyst coverage; and | |||||||
| ● | a decreased ability to issue additional securities or obtain additional financing in the future. | |||||||
| ● | a classified board of directors so that not all members of the board of directors are elected at one time; | |||||||
| ● | the right of the board of directors to establish the number of directors and fill any vacancies and newly created directorship; | |||||||
| ● | director removal solely for cause; | |||||||
| ● | super-majority voting to amend certain provisions of our Charter and any provision of our Bylaws; | |||||||
| ● | "blank check" preferred stock that our board of directors could use to implement a shareholder rights plan; | |||||||
| ● | the right of our board of directors to issue our authorized but unissued Common Stock and Preferred Stock without stockholder approval; | |||||||
| ● | no ability of our stockholders to call special meetings of stockholders; | |||||||
| ● | no right of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders; | |||||||
| ● | limitations on the liability of, and the provision of indemnification to, our director and officers; | |||||||
| ● | the right of the board of directors to make, alter, or repeal our Bylaws; and | |||||||
| ● | advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. | |||||||
| Years
Ended December 31, |
Increase (Decrease) | ||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Revenues | $ | 99,790 | $ | 35,210 | $ | 64,580 | |||||||||||
| Operating expenses: | |||||||||||||||||
| General and administrative | 19,242,571 | 10,841,024 | 8,401,547 | ||||||||||||||
| Depreciation and amortization | 2,728,411 | 637,990 | 2,090,421 | ||||||||||||||
| Research and development | 1,127,779 | 236,710 | 891,069 | ||||||||||||||
| Impairment of deferred customer acquisition costs | 13,475,000 | — | 13,475,000 | ||||||||||||||
| Total operating expenses | 36,573,761 | 11,715,724 | 24,858,037 | ||||||||||||||
| Loss from operations | (36,473,971) | (11,680,514) | (24,793,457) | ||||||||||||||
| Other income (expenses): | |||||||||||||||||
| Interest expense | (202,945) | (56,515) | (146,430) | ||||||||||||||
| Interest income | 3,328 | 15,520 | (12,192) | ||||||||||||||
| Gain on debt extinguishment | 1,946,310 | — | 1,946,310 | ||||||||||||||
| Change in fair value of warrant liabilities | 994,687 | — | 994,687 | ||||||||||||||
| Other | 17,162 | (9,757) | 26,919 | ||||||||||||||
| Other income (expenses), net | 2,758,542 | (50,752) | 2,809,294 | ||||||||||||||
| Net loss | $ | (33,715,429) | $ | (11,731,266) | $ | (21,984,163) | |||||||||||
| Years Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
|
Cash used in
operating activities |
$ | (14,039,704) | $ | (5,054,749) | ||||||||||
|
Cash used in
investing activities |
(281,390) | (1,139,035) | ||||||||||||
|
Cash provided
by financing activities |
12,785,354 | 7,876,787 | ||||||||||||
|
Net (decrease)
increase in cash and cash equivalents |
$ | (1,535,740) | $ | 1,683,003 | ||||||||||
| Page | |||||
|
Report
of Independent Registered Public Accounting Firm |
64 | ||||
|
Consolidated
Balance Sheets |
65 | ||||
|
Consolidated
Statements of Operations |
66 | ||||
|
Consolidated
Statements of Stockholders’
(Deficit) Equity |
67 | ||||
|
Consolidated
Statements of Cash Flows |
68 | ||||
|
Notes
to Consolidated Financial Statements |
70 | ||||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 149,273 | $ | 1,685,013 | |||||||
| Accounts receivable, net of allowance | 30,888 | 10,000 | |||||||||
| Due from Sponsor | 3,000 | — | |||||||||
| Prepaid expenses and other current assets | 1,042,398 | 201,293 | |||||||||
| Total current assets | 1,225,559 | 1,896,306 | |||||||||
| Property and equipment, net | 292,757 | 802,557 | |||||||||
| Intangible assets, net | 16,124,370 | 17,882,147 | |||||||||
| Right of use asset - operating lease | 507,182 | — | |||||||||
| Other assets | — | 1,427,729 | |||||||||
| TOTAL ASSETS | $ | 18,149,868 | $ | 22,008,739 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 5,995,235 | $ | 1,282,974 | |||||||
| Accrued expenses | 4,593,712 | 1,637,048 | |||||||||
| Due to related parties | 693,036 | — | |||||||||
| Deferred revenue | — | 2,290 | |||||||||
| Convertible note | 1,140,000 | — | |||||||||
| Short-term debt | 1,655,080 | 223,300 | |||||||||
| Operating lease liability | 173,497 | — | |||||||||
| Total current liabilities | 14,250,560 | 3,145,612 | |||||||||
| Warrant liabilities | 919,050 | — | |||||||||
| Operating lease liability | 335,766 | — | |||||||||
| Note payable - related party | — | 500,000 | |||||||||
| Long-term debt | — | 668,674 | |||||||||
| Total liabilities | 15,505,376 | 4,314,286 | |||||||||
| Commitments and Contingencies (Note N) | |||||||||||
| Stockholders’ equity: | |||||||||||
|
Preferred
stock par value $0.0001
per share, 10,000,000
shares authorized, none
designated. There are no
shares issued or outstanding as of December 31, 2024 or December 31, 2023 |
— | — | |||||||||
|
Common
stock par value of $0.0001
per share, 750,000,000
shares authorized. As of December 31, 2024 and 2023, respectively, 39,573,988
and 23,270,404
shares issued and outstanding |
3,957 | 2,327 | |||||||||
| Additional paid-in capital | 49,657,684 | 30,993,846 | |||||||||
| Accumulated deficit | (47,017,149) | (13,301,720) | |||||||||
| Total stockholders’ equity | 2,644,492 | 17,694,453 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 18,149,868 | $ | 22,008,739 | |||||||
| Years
Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| Revenues | $ | 99,790 | $ | 35,210 | ||||||||||
| Cost of revenues | — | — | ||||||||||||
| Gross profit | 99,790 | 35,210 | ||||||||||||
| Operating expenses: | ||||||||||||||
| General and administrative | 19,242,571 | 10,841,024 | ||||||||||||
| Depreciation and amortization | 2,728,411 | 637,990 | ||||||||||||
| Research and development | 1,127,779 | 236,710 | ||||||||||||
| Impairment of deferred customer acquisition costs | 13,475,000 | — | ||||||||||||
| Total operating expenses | 36,573,761 | 11,715,724 | ||||||||||||
| Loss from operations | (36,473,971) | (11,680,514) | ||||||||||||
| Other income (expenses): | ||||||||||||||
| Interest expense | (202,945) | (56,515) | ||||||||||||
| Interest income | 3,328 | 15,520 | ||||||||||||
| Gain on debt extinguishment | 1,946,310 | — | ||||||||||||
| Change in fair value of warrant liabilities | 994,687 | — | ||||||||||||
| Other | 17,162 | (9,757) | ||||||||||||
| Other income (expenses), net | 2,758,542 | (50,752) | ||||||||||||
| Loss before income taxes | (33,715,429) | (11,731,266) | ||||||||||||
| Income taxes | — | — | ||||||||||||
| Net loss | $ | (33,715,429) | $ | (11,731,266) | ||||||||||
| Net loss per common share- basic and diluted | $ | (1.02) | $ | (0.57) | ||||||||||
| Weighted-average common shares - basic and diluted | 32,908,326 | 20,635,508 | ||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ (Deficit) Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | — | $ | — | 17,057,085 | $ | 1,705 | $ | 1,528,642 | $ | (1,570,454) | $ | (40,107) | |||||||||||||||||||||||||||||
| Stock issued for DM Lab APA | — | — | 4,325,043 | 433 | 16,012,317 | — | 16,012,750 | ||||||||||||||||||||||||||||||||||
| Options and warrant exercises | — | — | 202,575 | 20 | 60,918 | — | 60,938 | ||||||||||||||||||||||||||||||||||
| Vesting of early exercised options | — | — | — | — | 14,062 | — | 14,062 | ||||||||||||||||||||||||||||||||||
| Stock issued in conversion of convertible notes | — | — | 830,547 | 83 | 3,074,917 | — | 3,075,000 | ||||||||||||||||||||||||||||||||||
| Stock issued in settlement of accounts payable and loans payable | — | — | 238,488 | 24 | 432,939 | — | 432,963 | ||||||||||||||||||||||||||||||||||
| Sale of common stock, net of issuance costs | — | — | 616,666 | 62 | 4,929,938 | — | 4,930,000 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 4,940,113 | — | 4,940,113 | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (11,731,266) | (11,731,266) | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | — | $ | — | 23,270,404 | $ | 2,327 | $ | 30,993,846 | $ | (13,301,720) | $ | 17,694,453 | |||||||||||||||||||||||||||||
| Stock issued to DHC shareholders in reverse recapitalization | — | — | 7,885,220 | 789 | (10,722,277) | — | (10,721,488) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to Reseller Agreement | — | — | 1,750,000 | 175 | 13,474,825 | — | 13,475,000 | ||||||||||||||||||||||||||||||||||
| Sale of common stock, net of issuance costs | — | — | 2,525,917 | 394 | 11,099,936 | — | 11,100,330 | ||||||||||||||||||||||||||||||||||
| Stock issued in settlement of liabilities | — | — | 244,594 | 24 | 583,666 | — | 583,690 | ||||||||||||||||||||||||||||||||||
| Stock issued in conversion of convertible notes | — | — | 633,333 | 63 | 759,937 | — | 760,000 | ||||||||||||||||||||||||||||||||||
| Stock issued for Standby Equity Purchase Agreement liability and commitment fee | — | — | 1,242,922 | 124 | 1,317,394 | — | 1,317,518 | ||||||||||||||||||||||||||||||||||
| Option and warrant exercises | — | — | 152,354 | 15 | 100,009 | — | 100,024 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | 464,244 | 46 | 2,050,348 | — | 2,050,394 | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (33,715,429) | (33,715,429) | ||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | — | $ | — | 38,168,988 | $ | 3,957 | $ | 49,657,684 | $ | (47,017,149) | $ | 2,644,492 | |||||||||||||||||||||||||||||
| Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (33,715,429) | $ | (11,731,266) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization expense | 2,728,411 | 637,990 | |||||||||
| Allowance for uncollected receivables | 30,000 | 20,000 | |||||||||
| Write off of deferred financing fees | 1,427,729 | — | |||||||||
| Impairment of deferred customer acquisition costs | 13,475,000 | — | |||||||||
| Change in fair value of warrant liabilities | (994,687) | — | |||||||||
|
Gain
on debt extinguishment |
(1,946,310) | — | |||||||||
| SEPA financing costs | 525,000 | — | |||||||||
| Stock based compensation, including the issuance of restricted shares | 1,814,048 | 4,878,655 | |||||||||
| Non-cash interest expense | 90,624 | — | |||||||||
| Reduction in right of use asset | 60,005 | — | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Prepaid expense and other current assets | (824,281) | (201,043) | |||||||||
| Accounts receivable | (50,888) | (29,500) | |||||||||
| Accounts payable | 6,012,259 | 101,396 | |||||||||
| Accrued expenses | (2,610,971) | 1,257,879 | |||||||||
| Other assets | — | 8,850 | |||||||||
| Operating lease liability | (57,924) | — | |||||||||
| Deferred revenue | (2,290) | 2,290 | |||||||||
| Net cash used in operating activities | (14,039,704) | (5,054,749) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | (53,023) | (48,349) | |||||||||
| Purchase of patents | — | (379,864) | |||||||||
| Capitalized internal-use software costs | (228,367) | (453,709) | |||||||||
| Asset acquisition (Note D) | — | (257,113) | |||||||||
| Net cash used in investing activities | (281,390) | (1,139,035) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Cash and cash equivalents acquired in connection with the reverse recapitalization | 858,292 | — | |||||||||
| Proceeds from the sale of common stock | 11,300,330 | 5,000,000 | |||||||||
| Proceeds from Standby Equity Purchase Agreement liability | 1,490,000 | — | |||||||||
| Proceeds from convertible notes | — | 3,075,000 | |||||||||
| Proceeds from related party note | — | 620,000 | |||||||||
| Proceeds received from option and warrant exercises | 100,024 | 35,000 | |||||||||
| Payment of financing costs | (883,292) | (711,859) | |||||||||
| Payment of related party note | (80,000) | (120,000) | |||||||||
| Advances to related parties | — | (159,464) | |||||||||
| Proceeds received from related party advance repayments | — | 138,110 | |||||||||
| Net cash provided by financing activities | 12,785,354 | 7,876,787 | |||||||||
| Net (decrease) increase in cash and cash equivalents | (1,535,740) | 1,683,003 | |||||||||
| Cash and cash equivalents at the beginning of the period | 1,685,013 | 2,010 | |||||||||
| Cash and cash equivalents at the end of the period | $ | 149,273 | $ | 1,685,013 | |||||||
| Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Supplemental Cash Flow Information | |||||||||||
| Cash paid for interest | $ | — | $ | — | |||||||
| Cash paid for income taxes | $ | — | $ | — | |||||||
| Supplemental Non-Cash Information | |||||||||||
| Capitalized internal-use software costs in accrued expenses | $ | — | $ | 54,756 | |||||||
| Issuance of common stock pursuant to Reseller Agreement | $ | 13,475,000 | $ | — | |||||||
| Issuance of common stock for Standby Equity Purchase Agreement liability and commitment fee | $ | 1,317,518 | $ | — | |||||||
| Stock-based compensation capitalized as part of capitalized software costs | $ | 236,346 | $ | 61,458 | |||||||
| Settlement of liabilities into common shares | $ | 583,690 | $ | 432,963 | |||||||
| Settlement of accounts payable into convertible note | $ | 1,900,000 | $ | — | |||||||
| Right of use asset obtained in exchange of operating new lease liabilities | $ | 567,187 | $ | — | |||||||
| Conversion of convertible notes into common shares | $ | 760,000 | $ | 3,075,000 | |||||||
| Warrants exercise through settlement of accounts payable | $ | — | $ | 40,000 | |||||||
| Property and equipment in accounts payable | $ | — | $ | 2,326 | |||||||
| Financing costs in accounts payable and accrued expenses | $ | 200,000 | $ | 785,870 | |||||||
| Issuance of common stock in connection with asset acquisition | $ | — | $ | 16,012,750 | |||||||
| Fair value measurement at reporting date using | |||||||||||||||||
| December 31, 2024 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
| Liabilities: | |||||||||||||||||
| Warrant liabilities - Public Warrants | $ | — | $ | 576,606 | $ | — | |||||||||||
| Warrant liabilities - Private Placement Warrants | $ | — | $ | 342,444 | $ | — | |||||||||||
| Total Warrant liabilities | $ | — | $ | 919,050 | $ | — | |||||||||||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Options | 1,386,400 | 2,430,900 | |||||||||
| Warrants | 24,559,962 | 1,039,885 | |||||||||
| Convertible note (as converted) | 950,000 | — | |||||||||
| Total | 26,896,362 | 3,470,785 | |||||||||
| March 14, 2024 | |||||
| Cash and cash equivalents | $ | 858,292 | |||
| Due from Sponsor | 3,000 | ||||
| Prepaid and other current assets | 16,824 | ||||
| Accounts payable | (2,352,328) | ||||
| Accrued expenses | (5,782,211) | ||||
| Due to related parties | (693,036) | ||||
| Warrant liability | (1,913,737) | ||||
| Net liabilities assumed | $ | (9,863,196) | |||
| Assets Acquired | Amount Recognized | ||||
| In-process research and development intangible asset | $ | 17,000,000 | |||
| Property and equipment | 721,916 | ||||
| Liabilities assumed | |||||
| Accounts payable | (57,700) | ||||
| Accrued expenses | (249,779) | ||||
| Short-term debt | (1,144,575) | ||||
| Total assets acquired and liabilities assumed | 16,269,862 | ||||
| Total consideration | $ | 16,269,862 | |||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Security deposits | $ | 108,441 | $ | 71,300 | |||||||
| Prepaid VAT | 32,468 | 7,821 | |||||||||
| Prepaid professional fees | 284,081 | 43,712 | |||||||||
| Prepaid insurance | 567,977 | — | |||||||||
| Prepaid other | 49,431 | 78,460 | |||||||||
| Prepaid expenses and other current assets | $ | 1,042,398 | $ | 201,293 | |||||||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Equipment | $ | 337,856 | $ | 426,000 | |||||||
| Furniture | 348,754 | 346,591 | |||||||||
| Capitalized software | 216,751 | 569,923 | |||||||||
| Total | 903,361 | 1,342,514 | |||||||||
| Accumulated depreciation and amortization | (610,604) | (539,957) | |||||||||
| Property and equipment, net of accumulated depreciation and amortization | $ | 292,757 | $ | 802,557 | |||||||
| December 31, 2024 | |||||||||||||||||
| Gross | Accumulated Amortization |
Net | |||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||
| Patent portfolio | $ | 1,259,864 | $ | (517,960) | $ | 741,904 | |||||||||||
|
Developed
technology |
17,755,347 | (2,372,881) | 15,382,466 | ||||||||||||||
| Total | $ | 19,015,211 | $ | (2,890,841) | $ | 16,124,370 | |||||||||||
| December 31, 2023 | |||||||||||||||||
| Gross | Accumulated Amortization |
Net | |||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||
| Patent portfolio | $ | 1,259,863 | $ | (377,716) | $ | 882,147 | |||||||||||
| Indefinite-lived intangible assets: | |||||||||||||||||
| In-process research and development | 17,000,000 | — | 17,000,000 | ||||||||||||||
| Total | $ | 18,259,863 | $ | (377,716) | $ | 17,882,147 | |||||||||||
| Years Ending December 31: | |||||
| 2025 | $ | 3,715,166 | |||
| 2026 | 3,715,166 | ||||
| 2027 | 3,679,245 | ||||
| 2028 | 3,661,285 | ||||
| 2029 | 1,292,820 | ||||
| Thereafter | 60,688 | ||||
| $ | 16,124,370 | ||||
|
December
31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Accrued professional fees | $ | 2,747,211 | $ | 245,751 | |||||||
| Accrued compensation and related expenses | 1,730,043 | 1,146,435 | |||||||||
| Due to related party | — | 178,723 | |||||||||
| Accrued other | 116,458 | 66,139 | |||||||||
| Accrued expenses | $ | 4,593,712 | $ | 1,637,048 | |||||||
| Years Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Expected term | 5.0 years | 5.4 years | |||||||||
| Risk-free interest rate | 4.08 | % | 3.81 | % | |||||||
| Dividend yield | 0.00 | % | 0.00 | % | |||||||
| Volatility | 54.79 | % | 50.42 | % | |||||||
| Number of Shares |
Weighted Average Exercise Price |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term (in years) | ||||||||||||||||||||
| Outstanding as of December 31, 2023 | 2,430,900 | $ | 4.19 | $ | — | — | |||||||||||||||||
| Granted | 108,040 | $ | 8.10 | $ | 4.18 | — | |||||||||||||||||
| Forfeited | (1,104,710) | $ | 3.75 | $ | — | — | |||||||||||||||||
| Exercised | (47,830) | $ | 0.38 | $ | — | — | |||||||||||||||||
| Outstanding as of December 31, 2024 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.59 | |||||||||||||||||
| Vested and expected to vest as of December 31, 2024 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.59 | |||||||||||||||||
| Exercisable as of December 31, 2024 | 951,877 | $ | 4.40 | $ | 2.23 | 8.42 | |||||||||||||||||
|
Years
Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Expected term | 3 years | 10 years | |||||||||
| Risk-free interest rate | 4.46 | % | 3.53 | % | |||||||
| Dividend yield | 0.00 | % | 0.00 | % | |||||||
| Volatility | 55.14 | % | 47.44 | % | |||||||
|
Years
Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| General and administrative | $ | 862,614 | $ | 4,846,867 | |||||||
| Research and development | 263,510 | 31,788 | |||||||||
| $ | 1,126,124 | $ | 4,878,655 | ||||||||
|
Number of
Shares |
Weighted
Average Grant
Date Fair Value | ||||||||||
| Nonvested at January 1, 2024 | — | $ | — | ||||||||
| Granted | 464,244 | $ | 1.44 | ||||||||
| Vested | (464,244) | $ | 1.44 | ||||||||
| Nonvested at December 31, 2024 | — | $ | — | ||||||||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Deferred Tax Assets: | |||||||||||
| Intangible assets | $ | 1,020,000 | $ | 280,000 | |||||||
| Section 174 | 70,000 | 70,000 | |||||||||
| Accrued expenses | 860,000 | 300,000 | |||||||||
| Federal net operating losses | 4,450,000 | 1,200,000 | |||||||||
| Research and development credit | 40,000 | 50,000 | |||||||||
| Total deferred tax assets | 6,440,000 | 1,900,000 | |||||||||
| Less: Valuation allowance | (6,320,000) | (1,880,000) | |||||||||
| Net Deferred Tax Assets: | $ | 120,000 | $ | 20,000 | |||||||
| Deferred Tax Liabilities: | |||||||||||
| Fixed assets | $ | (120,000) | $ | (20,000) | |||||||
| Net Deferred Tax Liability | $ | — | $ | — | |||||||
| For the years ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. federal | |||||||||||
| Current | $ | — | $ | — | |||||||
| Deferred | — | (1,624,000) | |||||||||
| State and local | |||||||||||
| Current | — | — | |||||||||
| Deferred | — | — | |||||||||
| Valuation allowance | — | 1,624,000 | |||||||||
| Income Tax Provision (Benefit) | — | — | |||||||||
| December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Federal rate | $ | (7,080,000) | $ | (2,460,000) | |||||||
| Stock compensation | 289,000 | 1,020,000 | |||||||||
| Impairment loss | 2,830,000 | — | |||||||||
| Change in fair value of warrant liability | (209,000) | — | |||||||||
| Federal RTP | (25,000) | (30,000) | |||||||||
| Deferred tax adjustment | (347,000) | (150,000) | |||||||||
| Other | 102,000 | (4,000) | |||||||||
| Change in valuation allowance | 4,440,000 | 1,624,000 | |||||||||
| Income Tax Provision (Benefit) | — | — | |||||||||
| Years Ending December 31: | |||||
| 2025 | $ | 208,022 | |||
| 2026 | 214,263 | ||||
| 2027 | 145,671 | ||||
| Total future minimum payments | 567,956 | ||||
| Less imputed interest | (58,693) | ||||
| Present value of lease liabilities | $ | 509,263 | |||
| Name | Age | Position | ||||||||||||
| Executive Officers | ||||||||||||||
| Paul Chang | 58 | Chief Executive Officer | ||||||||||||
| Walid Khiari | 49 | Chief Financial Officer and Chief Operating Officer | ||||||||||||
| Ruy Carrasco | 52 | Chief Informatics Medical Officer | ||||||||||||
| James D. Henderson, Jr. | 56 | Corporate Secretary and General Counsel | ||||||||||||
| James Richard Howard | 63 | Chief Information and Data Officer | ||||||||||||
| Tyler J. Luck | 32 | Chief Product Officer | ||||||||||||
| Patrick O. Nunally | 62 | Chief Scientist and Co-Chief Technology Officer | ||||||||||||
| Venkata Ramana Pinnam | 56 | Senior Vice President of Engineering | ||||||||||||
| Directors | ||||||||||||||
| Paul Chang | 58 | Director | ||||||||||||
| Tyler J. Luck | 32 | Director | ||||||||||||
| Bernard Puckett | 79 | Director | ||||||||||||
| Christopher Gaertner | 61 | Director | ||||||||||||
| Thomas Morgan Jr. | 62 | Director | ||||||||||||
| Jon Leibowitz | 66 | Director | ||||||||||||
| Janine Grasso | 48 | Director | ||||||||||||
| Dr. Richard Isaacs | 62 | Director | ||||||||||||
| ● | our Class I directors are Paul Chang and Thomas Morgan Jr., with one director seat remaining vacant; | |||||||
| ● | our Class II directors are Jon Leibowitz, Janine Grasso and Richard Isaacs; and | |||||||
| ● | our Class III directors are Tyler Luck, Bernard Puckett and Chris Gaertner. | |||||||
| ● | overseeing management’s establishment and maintenance of adequate systems of internal accounting and financial controls; | |||||||
| ● | the effectiveness of our legal and regulatory compliance programs; | |||||||
| ● | overseeing our financial reporting process, including the filing of financial reports; and | |||||||
| ● | selecting independent auditors, evaluating their independence and performance and approving audit fees and services performed by them. | |||||||
| ● | ensuring that our executive compensation programs are appropriately competitive, supporting organizational objectives and stockholder interests and emphasizing pay-for-performance linkage; | |||||||
| ● | evaluating and approving compensation and setting performance criteria for compensation programs for our chief executive officer and other executive officers; and | |||||||
| ● | overseeing the implementation and administration of our compensation plans. | |||||||
| ● | recommending director nominees for our board of directors and its committees; | |||||||
| ● | recommending the size and composition of our board of directors and its committees; | |||||||
| ● | reviewing our corporate governance guidelines and proposed amendments to our Charter and Bylaws; and | |||||||
| ● | reviewing and making recommendations to address stockholder proposals. | |||||||
| ● | Paul Chang, Chief Executive Officer | |||||||
| ● | Michael Zacharski, former Chief Executive Officer | |||||||
| ● | Bill Williams, former Chief Financial Officer | |||||||
| ● | James Richard Howard, Chief Information and Data Officer | |||||||
| ● | Tyler Luck, Chief Product Officer | |||||||
| Name and Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Paul Chang, Chief Executive Officer (3) | 2024 | $ | 420,000 | $ | 250,250 | (4) | $ | 750,000 | (5) | - | - | $ | 1,420,250 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 275,817 | - | - | - | - |
$ |
275,817 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Michael Zacharski, former Chief Executive Officer (6) | 2024 | $ | 437,532 | $ | 250,000 | (7) | $ | 250,000 | (8) | - | $ | 91,667 | (9) | $ | 1,029,199 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 206,250 | - | - | $ | 2,376,322 | (10) | $ | 176,000 | (11) | $ | 2,758,572 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Bill Williams, former Chief Financial Officer (12) | 2024 | $ | 458,334 | $ | 150,000 | (13) | - | - | - | $ | 608,334 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 125,000 | $ | 250,000 | (14) | - | $ | 1,217,169 | (15) | - | $ | 1,592,169 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| James Richard Howard, Chief Information and Data Officer | 2024 | $ | 350,000 | - | - | - | - | $ | 350,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | - | - | - | - | - |
$ |
- | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tyler Luck, Chief Product Officer and former principal executive officer (16) | 2024 | $ | 167,160 | $ | 100,000 | (17) | $ | 12,840 | (18) | - | $ | 24,786 | (19) | $ | 304,786 | |||||||||||||||||||||||||||||||||||||||||||||||
| 2023 | $ | 117,774 | - | - | - | - | $ | 117,774 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | The amounts reported in this column do not reflect the actual economic value realized by our named executive officers. In accordance with SEC rules, this column represents the aggregate grant date fair value of shares underlying stock awards, calculated based on the closing price of our common stock on the date of grant in accordance with ASC 718, with the exception that the amounts shown assume no forfeitures. | ||||
| (2) |
The
amounts reported under "Option Awards" are the estimated grant date fair value of stock options granted during the fiscal years ended
December 31, 2023 and 2024, with such amount as determined under the ASC 718, Compensation
- Stock Compensation
("ASC 718"), with respect to accounting for stock-based compensation expense. Such estimated fair value amounts do not necessarily correspond
to the potential actual value realized of such awards. The assumptions made in computing the estimated fair value of such awards are disclosed
in Note B of the Company's audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. | ||||
| (3) | Effective May 7, 2023, Mr. Chang was hired as Global President of the Company, and on May 28, 2024, Mr. Chang was appointed Co-Chief Executive Officer. On August 22, 2024, Mr. Chang was appointed as Chief Executive Officer of the Company. | ||||
| (4) | Includes a $250,000 cash bonus earned in connection with the closing of the Business Combination. | ||||
| (5) | Consists of shares of Common Stock granted to Mr. Chang pursuant to the conversion of a portion of his cash bonus earned in connection with the closing of the Business Combination to Common Stock on May 13, 2024 at a price per share of $1.41. | ||||
| (6) | On August 16, 2023, Mr. Zacharski was hired as Chief Executive Officer of the Company, and on May 28, 2024, Mr. Zacharski became Co-Chief Executive Officer. Mr. Zacharski resigned from his role, effective August 16, 2024. | ||||
| (7) | Consists of a $250,000 cash bonus earned in connection with the closing of the Business Combination. | ||||
| (8) | Consists of shares of Common Stock granted to Mr. Zacharski pursuant to the conversion of his cash bonus earned in connection with the closing of the Business Combination to Common Stock on at a price per share of $1.83. | ||||
| (9) | Consists of $91,667 paid to Mr. Zacharski pursuant to the Separation Agreement | ||||
| (10) | Reflects fully vested stock options issued to Mr. Zacharski pursuant to the 2021 Equity Incentive Plan (as defined below) for the acquisition of 5,000,000 shares of Common Stock. | ||||
| (11) | Consists of $176,000 in consulting payments paid to M2M5 Consulting LLC, of which Mr. Zacharski is the sole owner, for services performed to advise and design a strategy for the Company. | ||||
| (12) | On October 1, 2023, Mr. Williams was hired as Chief Financial Officer of the Company. Mr. Williams resigned from his role, effective December 1, 2024. | ||||
| (13) | Consists of a $150,000 cash bonus earned in connection with the closing of the Business Combination. | ||||
| (14) | Consists of a $250,000 annual cash bonus. | ||||
| (15) | Reflects stock options issued to Mr. Williams pursuant to the 2021 Equity Incentive Plan for the acquisition of 1,000,000 shares of Common Stock vesting in 36 equal monthly increments beginning on November 26, 2024 through October 26, 2027. | ||||
| (16) | In August 2023, Mr. Luck's position as a principal executive officer of the Company ceased upon the hiring of Mr. Zacharski, as Chief Executive Officer. As a result, Mr. Luck is no longer a principal executive officer of the Company. On March 14, 2024, Mr. Luck was appointed as Chief Product Officer. | ||||
| (17) | Consists of a $100,000 cash bonus earned in connection with the closing of the Business Combination. | ||||
| (18) | Consists of shares of restricted stock granted to Mr. Luck in connection with his election to convert a portion of earned salary to shares of Common Stock. | ||||
| (19) | Consists of $24,786 received as a housing allowance. | ||||
| OPTION AWARDS | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Number
of securities underlying unexercised options exercisable |
Number
of securities underlying unexercised options unexercisable |
Option exercise price |
Option expiration date |
||||||||||||||||||||||||||||||||||||||||||||||
| Michael Zacharski | 337,625 | (1) | 337,625 | $ | 3.7 | August 16, 2027 | ||||||||||||||||||||||||||||||||||||||||||||
| Bill Williams | 7,502 | (2) | 7,502 | $ | 8.11 | March 1, 2025 | (3) | |||||||||||||||||||||||||||||||||||||||||||
| (1) | Consists of fully vested stock options issued to Mr. Zacharski pursuant to the 2021 Equity Incentive Plan. | ||||
| (2) | Consists of options that vested on November 26, 2024. | ||||
| (3) | Mr. Williams resigned from his role as Chief Financial Officer, effective December 1, 2024. Mr. Williams stock option award agreement provides that his options expire three months after the termination of his continuous service with the Company. | ||||
| Name | Fees
earned or paid in cash ($) |
Stock
awards ($)(1)(2)(3) |
Total ($) |
|||||||||||||||||||||||||||||||||||
| Janine Grasso | - | $ | 113,967 | $ | 113,967 | |||||||||||||||||||||||||||||||||
| Richard Isaacs | - | $ | 92,269 | $ | 92,269 | |||||||||||||||||||||||||||||||||
| Jon Leibowitz | - | $ | 116,278 | $ | 116,278 | |||||||||||||||||||||||||||||||||
| Christopher Gaertner | - | $ | 120,899 | $ | 120,899 | |||||||||||||||||||||||||||||||||
| Thomas Morgan, Jr. | - | $ | 107,036 | $ | 107,036 | |||||||||||||||||||||||||||||||||
| Bernard Puckett | - | $ | 97,794 | $ | 97,794 | |||||||||||||||||||||||||||||||||
| (1) | In accordance with SEC rules, this column represents the aggregate grant date fair value of shares underlying stock awards, calculated based on the closing price of our common stock on the date of grant in accordance with ASC 718, with the exception that the amounts shown assumes no forfeitures. The assumptions made in computing the estimated fair value of such awards are disclosed in Note B of the Company's audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. | ||||
| (2) | Includes an initial grant of 10,000 shares of restricted stock in connection with the Closing of the Business Combination, based on a closing price of the Company's Common Stock of $7.70. | ||||
| (3) | Includes restricted stock granted pursuant to the 2024 Director Compensation Policy on January 2, 2025, based on a closing price of the Company's Common Stock of $1.07, for service on the Board in fiscal year 2024. | ||||
| ● |
each
person or "group" (as such term is used in Section 13(d)(3) of the Exchange Act) known by the Company to be the beneficial owner of more
than 5% of our Common Stock as of March 27, 2025; | |||||||
| ● | each of the Company's named executive officers and directors; and | |||||||
| ● | all of our current executive officers and directors as a group. | |||||||
| Number of shares beneficially owned | Beneficial ownership percentage | ||||||||||||||||||||||||||||
| Five Percent Holders | |||||||||||||||||||||||||||||
|
October 3rd
Holdings, LLC(1) |
8,765,568 | 20.7 | % | ||||||||||||||||||||||||||
|
DMLab Co. LTD(2) |
4,325,043 | 10.2 | % | ||||||||||||||||||||||||||
|
AFG Companies,
Inc.(3) |
2,423,336 | 5.7 | % | ||||||||||||||||||||||||||
| Directors & Named Executive Officers | |||||||||||||||||||||||||||||
| Paul Chang | 601,952 | 1.4 | % | ||||||||||||||||||||||||||
|
Michael Zacharski(4) |
384,311 | * | % | ||||||||||||||||||||||||||
| Bill Williams | 7,502 | * | % | ||||||||||||||||||||||||||
|
Walid Khiari(6) |
600,000 | 1.4 | % | ||||||||||||||||||||||||||
| James Richard Howard | - | * | % | ||||||||||||||||||||||||||
|
Tyler J. Luck(1) |
8,779,753 | 20.8 | % | ||||||||||||||||||||||||||
| Bernard Puckett | 54,895 | * | % | ||||||||||||||||||||||||||
| Christopher Gaertner | 732,210 | 1.7 | % | ||||||||||||||||||||||||||
| Jon Leibowitz | 76,708 | * | % | ||||||||||||||||||||||||||
| Janine Grasso | 34,549 | * | % | ||||||||||||||||||||||||||
| Thomas Morgan Jr. | 28,071 | * | % | ||||||||||||||||||||||||||
|
Dr. Richard
Isaacs(5) |
135,815 | * | % | ||||||||||||||||||||||||||
| All Directors and Executive Officers as a Group (16 persons) | 10,835,766 | 25.6 | % | ||||||||||||||||||||||||||
| (1) |
Tyler
Luck is the managing member of October 3rd
Holdings, LLC and has sole voting and dispositive power over the securities held thereby. The business address of October 3rd
Holdings, LLC is 1821 Logan Avenue C/O CSC Cheyenne, WY 83001. | ||||
| (2) | DMLab Co. LTD is governed by a board of directors consisting of five directors, Messrs. Yanghyung Lee, Seokho Lee, Youngkyu Huh, Junhyuk Lee, Snugsu Kim and Kibong Lee. The five members of the board of directors will have limited voting and dispositive power over the securities held of record by DMLab Co. LTD. Each director of DMLab Co. LTD has one vote, and the approval of a majority of the directors is required to approve any action of DMLab Co. LTD. However, under the so-called "rule of three," if voting and dispositive decisions regarding an entity's securities are made by three or more individuals, and a voting or dispositive decision requires the approval of at least a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity's securities. Therefore, none of the individual members of the board of directors of DMLab Co. LTD exercises voting or dispositive control over any of the securities held directly by DMLab Co. LTD, even those in which he directly holds a pecuniary interest. Oriental DMLab Co. LTD is approximately 62% held by Junhyuk Lee. The business address of DMLab Co. LTD is 45, Anam-ro, Seongbuk-gu, Korea University, Science & Business Building RM 301, Seoul, Republic of Korea 02841. | ||||
| (3) | Mr. Wright Brewer has sole and voting dispositive power over the securities held by AFG Companies, Inc. The business address of AFG Companies Inc. is 1900 Champagne Blvd, Grapevine, TX 76051. Excludes 3,750,000 shares of Common Stock issuable upon exercise of the Reseller Warrant, which contains certain conditions to the vesting of shares of Common Stock underlying the Reseller Warrant that are outside of the exclusive control of the holder. | ||||
| (4) | Consists of 337,625 options to purchase shares of Common Stock and 46,686 shares of Common Stock received in connection with Mr. Zacharski's resignation from the Company. | ||||
| (5) | Consists of 121,545 options to purchase shares of Common Stock. | ||||
| (6) | Consists of 600,000 options to purchase shares of Common Stock. | ||||
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column | |||||||||||||||||||||||||||||||||||||||||
| Equity compensation plans approved by security holders | 464,244 | — | 3,555,701 | (1) | ||||||||||||||||||||||||||||||||||||||||
| Equity compensation plans not approved by security holders | 2,341,759 | (2) | 2.09 | — | (3) | |||||||||||||||||||||||||||||||||||||||
| Total | 2,806,003 | 2.09 | 3,555,701 | |||||||||||||||||||||||||||||||||||||||||
| (1) | Represents shares of Common Stock available for issuance under the 2023 LTIP, which permits the issuance of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, performance awards, performance goals, tandem awards, prior plan awards, and other awards. As described below, no additional awards may be issued under the 2023 LTIP. See the description of the 2021 LTIP below for a description of the formula for calculating the number of securities available for issuance under the 2023 LTIP | ||||||||||||||||
| (2) |
Represents
shares of Common Stock issuable upon settlement of outstanding restricted equity units awarded under the 2021
Equity Incentive Plan. | ||||||||||||||||
| (3) |
As
described below, no additional awards may be issued under the 2021
Equity Incentive Plan.
The 2021 Equity
Incentive Plan and all outstanding awards under the 2021 Equity Incentive Plan were assumed by the Company, and the 2021 Equity Incentive
Plan was terminated with respect to future awards. Forfeitures of awards under the 2021 Equity Incentive Plan are automatically added
to the pool of shares available for issuance under the 2023 LTIP. | ||||||||||||||||
| ● | The Company has been or is to be a participant; | |||||||
| ● | the amount involved exceeded or exceeds the lesser of (a) $120,000 or (b) one percent of the average of the Company's total assets at year-end for the fiscal years ended December 31, 2024, December 31, 2023 and 2022; and | |||||||
| ● | any of the Company's directors, executive officers or holders of more than 5% of its capital stock, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest. | |||||||
| ● | any person who is, or at any time during the applicable period was, one of the Company's officers or one of the Company's directors; | |||||||
| ● | any person who is known by the Company to be the beneficial owner of more than five percent (5%) of its voting stock; | |||||||
| ● | any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than five percent (5%) of its voting stock, and any person (other than a tenant or employee) sharing the household of such director, officer or beneficial owner of more than five percent (5%) of its voting stock; and | |||||||
| ● | any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest. | |||||||
| ● | the risks, costs and benefits to the Company; | |||||||
| ● | the impact on a director's independence in the event that the Related Person is a director, immediate family member of a director or an entity with which a director is affiliated; | |||||||
| ● | the availability of other sources for comparable services or products; and | |||||||
| ● | the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. | |||||||
|
2024 Fees |
2023 Fees | ||||||||||||||||
|
Audit Fees |
$ |
405,000 |
$ |
276,000 | |||||||||||||
|
Audit-Related
Fees |
- |
- | |||||||||||||||
|
Tax Fees |
16,000 |
- | |||||||||||||||
|
Total Fees |
$ |
421,000 |
$ |
276,000 | |||||||||||||
|
Exhibit |
Description | |||||||
|
2.1# |
Business
Combination Agreement and Plan of Reorganization, dated as of September 7, 2023, by and among Brand Engagement Network Inc., BEN Merger
Subsidiary Corp., DHC Acquisition Corp and, solely with respect to Section 7.21 and 9.03 thereto, DHC Sponsor, LLC (incorporated by reference
to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities
and Exchange Commission
on September 8, 2023). | |||||||
|
2.2.1# |
Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on October 30, 2024). | |||||||
|
2.2.2 |
Addendum
to Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV
GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed
with the Securities and Exchange Commission on February 12, 2025). | |||||||
|
3.1 |
Certificate
of Incorporation of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form
8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024) | |||||||
|
3.2 |
Bylaws
of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No.
001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
4.1 |
Warrant
Agreement between Continental Stock Transfer & Trust Company and DHC Acquisition Corp. (incorporated by reference to Exhibit 4.1 to
the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 5, 2021). | |||||||
|
4.2 |
Registration
and Shareholder Rights Agreement, dated March 4, 2021, by and between DHC Acquisition Corp, DHC Sponsor, LLC and certain other equityholders
named therein (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed
with the Securities and Exchange Commission on March 5, 2021). | |||||||
|
4.2.1 |
Amended
and Restated Registration Rights Agreement, dated March 14, 2024 by and among Brand Engagement Network Inc. and the holders party thereto
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities
and Exchange Commission on March 20, 2024). | |||||||
|
10.1 |
Form
of Brand Engagement Network Inc. Indemnification Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.2 |
Form
of Shareholder Subscription Agreement (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File
No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.3.1† |
Brand
Engagement Network 2023 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form
8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.3.2† |
Brand
Engagement Network 2023 Long-Term Incentive Plan – Form of Restricted Stock Unit Agreement (incorporated by reference to Exhibit
10.5 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March
20, 2024). | |||||||
|
10.3.3† |
Brand
Engagement Network 2023 Long-Term Incentive Plan – Form of Nonqualified Stock Option Agreement (incorporated by reference to Exhibit
10.6 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March
20, 2024). | |||||||
|
10.3.4† |
Brand
Engagement Network 2023 Long-Term Incentive Plan – Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit
10.7 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March
20, 2024). | |||||||
|
10.3.5† |
Brand
Engagement Network 2023 Long-Term Incentive Plan – Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit
10.8 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March
20, 2024). | |||||||
|
10.4.1† |
Blockchain
Exchange Network, Inc. 2021 Incentive Stock Option Plan (incorporated by reference to Exhibit 10.8 to the Company’s Registration
Statement on Form S-1/A (Registration No. 333-278673) filed with the Securities and Exchange Commission on April 22, 2024). | |||||||
|
10.4.2† |
Form
of Stock Option Agreement Under the Blockchain Exchange Network, Inc. 2021 Incentive Stock Option Plan (incorporated by reference to Exhibit
10.9 to the Company’s Registration Statement on Form S-1 (Registration No. 333-278673) filed with the Securities and Exchange Commission
on April 12, 2024). | |||||||
|
10.4.3† |
Form
of Compensatory Warrant (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (Registration
No. 333-278673) filed with the Securities and Exchange Commission on April 12, 2024). | |||||||
|
10.5.1† |
Employment
Agreement by and between Brand Engagement Network Inc. and Michael Zacharski (incorporated by reference to Exhibit 10.10 to the Company’s
Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.5.2† |
First
Amendment to Employment Agreement, by and between Brand Engagement Network Inc. and Michael Zacharski, dated April 22, 2024 (incorporated
by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1/A (Registration No. 333-278673) filed with the
Securities and Exchange Commission on April 22, 2024). | |||||||
|
10.5.3† |
Second
Amendment to Employment Agreement, by and between Brand Engagement Network Inc. and Michael Zacharski, dated June 28, 2024 (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange
Commission on July 11, 2024). | |||||||
|
10.6† |
First
Amendment to Option Agreement, by and between Brand Engagement Network Inc. and Michael Zacharski, dated June 28, 2024 (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange
Commission on July 5, 2024). | |||||||
|
10.7† |
Separation
and Release Agreement, dated August 22, 2024, by and between Brand Engagement Network Inc. and Michael Zacharski (incorporated by reference
to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission
on August 22, 2024). | |||||||
|
10.8.1† |
Employment
Agreement by and between Brand Engagement Network Inc. and Bill Williams (incorporated by reference to Exhibit 10.12 to the Company’s
Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.8.2† |
First
Amendment to Employment Agreement, by and between Brand Engagement Network Inc. and Bill Williams, dated March 14, 2024 (incorporated
by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1/A (Registration No. 333-278673) filed with the
Securities and Exchange Commission on April 22, 2024). | |||||||
|
10.9.1† |
Employment
Agreement by and between Brand Engagement Network Inc. and Paul Chang (incorporated by reference to Exhibit 10.11 to the Company’s
Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.9.2† |
First
Amendment to Employment Agreement, by and between Brand Engagement Network Inc. and Paul Chang, dated April 22, 2024 (incorporated by
reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1/A (Registration No. 333-278673) filed with the Securities
and Exchange Commission on April 22, 2024). | |||||||
|
10.10† |
Employment
Agreement by and between Brand Engagement Network Inc. and Tyler J. Luck (incorporated by reference to Exhibit 10.13 to the Company’s
Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
10.11 |
Letter
Agreement, dated March 4, 2021, by and among DHC Sponsor, LLC, DHC Acquisition Corp and its officers and directors (incorporated by reference
to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission
on March 5, 2021). | |||||||
|
10.12.1 |
Reseller
Agreement, dated August 19, 2023, by Brand Engagement Network Inc. and AFG Companies, Inc (incorporated by reference to Exhibit 10.15
to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20,
2024). | |||||||
|
10.12.2 |
First
Amendment to the Exclusive Reseller Agreement, dated February 9, 2024, by Brand Engagement Network Inc. and AFG Companies, Inc (incorporated
by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1/A (File No. 001-40130) filed with the Securities
Exchange Commission on April 22, 2024). | |||||||
|
10.13 |
Form
of Reseller Warrant (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No. 001-40130)
filed with the Securities and Exchange Commission on April 12, 2024). | |||||||
|
10.14 |
Subscription
Agreement, dated September 29, 2023, by and between Brand Engagement Network Inc. and the subscribers listed therein (incorporated by
reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange
Commission on March 20, 2024). | |||||||
|
10.15 |
Subscription
Agreement, dated September 7, 2023, by and between Brand Engagement Network Inc. and the subscribers listed therein (incorporated by reference
to Exhibit 10.17 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission
on March 20, 2024). | |||||||
|
10.16 |
Brand
Engagement Network Inc. Convertible Promissory Note, dated April 12, 2024, by and between Brand Engagement Network Inc. and J.V.B. Financial
Group, LLC (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No. 001-40130)
filed with the Securities and Exchange Commission on April 12, 2024). | |||||||
|
10.17^ |
Securities
Purchase Agreement, dated May 28, 2024, by and between the Company and certain purchasers identified on the signature pages thereto (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange
Commission on May 29, 2024). | |||||||
|
10.18 |
Letter
Agreement to Exercise Warrants, dated May 28, 2024, by and between the Company and certain purchasers identified on the signature pages
thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the
Securities and Exchange Commission on May 29, 2024). | |||||||
|
10.19^ |
Securities
Purchase Agreement, dated July 1, 2024, by and between the Company and that certain purchaser identified on the signature page thereto
(incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities
and Exchange Commission on July 5, 2024). | |||||||
|
10.20^ |
Securities
Purchase Agreement, dated August 26, 2024, by and among Brand Engagement Network Inc. and certain purchasers identified on the signature
pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed
with the Securities and Exchange Commission on August 26, 2024). | |||||||
|
10.21 |
Amendment
No. 1 to Securities Purchase Agreement, dated October 5, 2024, by and among Brand Engagement Network Inc. and certain purchasers identified
on the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No.
001-40130) filed with the Securities and Exchange Commission on October 7, 2024). | |||||||
|
10.22^ |
Share
Assignment and Lockup Release Agreement, dated August 26, 2024, by and among Brand Engagement Network Inc., certain members of DHC Sponsor,
LLC, certain other existing stockholders and affiliates of the Company signatory thereto and certain purchasers identified on the exhibits
thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the
Securities and Exchange Commission on August 26, 2024). | |||||||
|
10.23^ |
Warrant
Purchase Agreement, dated August 26, 2024, by and among Brand Engagement Network Inc. and each of the warrantholders signatory thereto
(incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities
and Exchange Commission on August 26, 2024). | |||||||
|
10.24 |
Form
of Letter Agreement, dated August 26, 2024, by and among Brand Engagement Network Inc. and certain members of DHC Sponsor, LLC and certain
other existing stockholders and affiliates of the Company signatory thereto (incorporated by reference to Exhibit 10.4 to the Company’s
Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on August 26, 2024). | |||||||
|
10.25^ |
Standby
Equity Purchase Agreement, dated August 26, 2024, by and between Brand Engagement Network Inc. and YA II PN, Ltd. (incorporated by reference
to Exhibit 10.5 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission
on August 26, 2024). | |||||||
|
10.26 |
Promissory
Note, dated November 11, 2024, by and between Brand Engagement Network Inc. and YA II PN, Ltd. (incorporated by reference to Exhibit 10.8
to the Company’s Quarterly Report on Form 10-Q (File No. 001-40130) filed with the Securities and Exchange Commission on November
14, 2024). | |||||||
|
10.27^ |
Warrant
Exercise and Release Agreement, dated January 13, 2025, by and among Brand Engagement Network Inc. and certain purchasers identified on
the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130)
filed with the Securities and Exchange Commission on January 14, 2025). | |||||||
|
19.1* |
Insider Trading Policy. | |||||||
|
21.1 |
List
of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed
with the Securities and Exchange Commission on March 20, 2024). | |||||||
|
23.1* |
Consent of L.J. Soldinger and Associates, independent registered accounting firm for the Company. | |||||||
|
31.1* |
Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
|
31.2* |
Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
|
32.1** |
Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
|
32.2** |
Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
|
97.1* |
Compensation Recovery Policy. | |||||||
|
101.INS |
Inline XBRL Instance Document. | |||||||
|
101.SCH |
Inline XBRL
Taxonomy Extension Schema Document. | |||||||
|
101.CAL |
Inline XBRL
Taxonomy Extension Calculation Linkbase Document | |||||||
|
101.DEF |
Inline XBRL
Taxonomy Extension Definition Linkbase Document. | |||||||
|
101.LAB |
Inline XBRL
Taxonomy Extension Labels Linkbase Document. | |||||||
|
101.PRE |
Inline XBRL
Taxonomy Extension Presentation Linkbase Document. | |||||||
|
104 |
Cover Page Interactive
Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
|
Brand Engagement
Network Inc. | ||||||||
|
Date: March 31,
2025 |
By: |
/s/ Paul Chang | ||||||
| Name: |
Paul Chang | |||||||
| Title: |
Chief Executive Officer | |||||||
|
(Principal Executive
Officer) | ||||||||
|
Date: March 31,
2025 |
By: | /s/ Walid Khiari | ||||||
| Name: | Walid Khiari | |||||||
| Title: |
Chief Financial
Officer | |||||||
|
(Principal Accounting
Officer and Principal Financial Officer) | ||||||||
|
Signature |
Title |
Date | ||||||||||||
|
/s/
Paul Chang |
Chief
Executive Officer and Director |
March
31, 2025 | ||||||||||||
|
Paul
Chang |
(Principal
Executive Officer) |
|||||||||||||
|
/s/
Walid Khiari |
Chief
Financial Officer |
March
31, 2025 | ||||||||||||
|
Walid
Khiari |
(Principal
Financial and Accounting Officer) |
|||||||||||||
|
/s/
Jon Leibowitz |
Director |
March
31, 2025 | ||||||||||||
|
Jon
Leibowitz |
||||||||||||||
|
/s/
Janine Grasso |
Director |
March
31, 2025 | ||||||||||||
|
Janine
Grasso |
||||||||||||||
|
/s/
Tyler J. Luck |
Director |
March
31, 2025 | ||||||||||||
|
Tyler
J. Luck |
||||||||||||||
|
/s/
Christopher Gaertner |
Director |
March
31, 2025 | ||||||||||||
|
Christopher
Gaertner |
||||||||||||||
|
/s/
Bernard Puckett |
Director |
March
31, 2025 | ||||||||||||
|
Bernard
Puckett |
||||||||||||||
|
/s/
Thomas Morgan Jr. |
Director |
March
31, 2025 | ||||||||||||
|
Thomas
Morgan Jr. |
||||||||||||||
|
/s/
Dr. Richard Isaacs |
Director |
March
31, 2025 | ||||||||||||
|
Dr.
Richard Isaacs |
||||||||||||||
| Delaware | 001-40130 | 98-1574798 | ||||||||||||
| (State
or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S.
Employer Identification No.) | ||||||||||||
|
300
Delaware Ave
Suite
210
Wilmington,
DE |
19801 | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
| Title of each class |
Trading
Symbol(s) |
Name
of each exchange
on
which registered | ||||||||||||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||||||||||||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC | ||||||||||||
| Exhibit No. | Description | |||||||
| 99.1 |
Press Release, dated May 23, 2025. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
| Brand Engagement Network Inc. | ||||||||
| Dated: May 23, 2025 | By: | /s/ Walid Khiari | ||||||
| Name: | Walid Khiari | |||||||
| Title: | Chief Financial Officer | |||||||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 26, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”), entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Mr. Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Mr. Unterseer and CUTV, “Sellers”) (the “Purchase Agreement”) pursuant to which the Sellers have agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price of $19.5 million, consisting of (i) $9 million in cash (“Cash Consideration”) and (ii) 4.2 million shares of the Company’s common stock, par value $0.0001 per share at an agreed upon value of $2.50 per share (the transactions governed by the Purchase Agreement, the “Acquisition”), subject to customary adjustments and offsets as further described therein. Also as previously disclosed, on February 6, 2025, the Company and the Sellers entered into that certain Addendum to Share Purchase and Transfer Agreement, pursuant to which the parties amended certain provisions of the Purchase Agreement to provide the parties additional time to prepare for and close the Acquisition (the “Addendum I,” together with the Purchase Agreement, the “Agreement”).
On May 26, 2025, the Company and the Sellers entered into that certain Addendum II to Share Purchase and Transfer Agreement (the “Addendum II”), pursuant to which the parties further amended certain provisions of the Agreement to provide the parties additional time to prepare for and close the Acquisition. More specifically, the Addendum II amends the Agreement to, among other things, provide for additional temporary suspensions of Sellers’ right to withdraw until June 30, 2025. As of May 30, 2025, the Company has paid an aggregate of $550,000 towards the Cash Consideration to be owed by the Company.
The foregoing description of the Addendum II and the transactions contemplated thereby is only a summary of the material terms thereof, does not purport to be complete and is qualified in its entirety by reference to the full text of the Addendum II, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Forward-Looking Statements
Certain disclosures in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, the Company’s current expectations, assumptions, plans, strategies, and anticipated results. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this report. Forward-looking statements reflect the Company’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, (i) uncertainties as to the timing of the Acquisition; (ii) the risk that the Acquisition may not be completed on the anticipated terms in a timely manner or at all; (iii) the failure to satisfy any of the conditions to the consummation of the Acquisition, including the ability to obtain financing to fund the Acquisition; (iv) the possibility that any or all of the various conditions to the consummation of the Acquisition may not be satisfied or waived, including the failure to receive major shareholder guarantees, or that any required regulatory approvals from any applicable governmental entities may not be obtained (or any conditions, limitations or restrictions placed on such approvals); (v) the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement; (vi) the effect of the pendency of the transactions contemplated by the Agreement or the Addendum II on the Company’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; (vii) risks related to diverting management’s attention from the Company’s ongoing business operations; (viii) uncertainty as to the timing of completion of the Acquisition; and (ix) risks that the benefits of the Acquisition are not realized when and as expected. Additional information concerning these and other factors can be found under the risk factors described in Part I, Item 1A of Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the other risk factors identified from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Many of these circumstances are beyond the Company’s ability to control or predict. These forward-looking statements necessarily involve assumptions on the Company’s part. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to the Company and speak only as of the date they are made. The Company disclaims any intention or obligation to update or revise publicly any forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 2.1 | Addendum II to Share Purchase and Transfer Agreement, dated May 26, 2025, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: May 30, 2025 | By: | /s/ Walid Khiari |
| Name: | Walid Khiari | |
| Title: | Chief Financial Officer | |
Exhibit 2.1
ADDENDUM II to
Share Purchase and Transfer Agreement
Between
CHRISTIAN UNTERSEER (Seller 1)
CUTV GmbH (Seller 2)
CUNEO AG (Seller 3)
And
BRAND ENGAGEMENT NETWORK, INC. (Buyer)
Whereas, the Parties have entered into a Share Purchase and Transfer Agreement dated 29 October 2024 (“SPA”) which provides in Section 12.4.2 for the Parties’ right to withdraw from the SPA if certain conditions have not been met or certain actions have not been taken.
Whereas, according to Section 10 SPA, in the period until the Scheduled Closing Date, Sellers shall take all actions reasonably required to achieve that on the Scheduled Closing Date Cataneo and its Affiliates will have available, as owners, if applicable, or based on valid and enforceable lease, license or similar agreements, all assets, rights, employees, systems, contracts and services required by them in order to continue after the Closing to conduct their business in the ordinary course as currently conducted. As set forth in Exhibit 10.1 lit. a) SPA the Sellers agree that, between the date of the SPA and the Effective Date or the earlier termination of the SPA (“Interim Period”) (i) the Seller shall conduct their respective businesses in the ordinary course of business and (ii) the Company shall use its commercially reasonable efforts to preserve substantially intact the business organization. The Sellers shall not and shall not cause Cataneo during the Interim Period to do various actions as set forth in Exhibit 10.1 lit. b) SPA without the prior written consent of Buyer.
Whereas, the Parties have entered into an Addendum to the SPA dated 06. February 2025 (“Addendum”) in which the Parties have agreed on a temporary suspension of Sellers’ Right to withdraw for a certain period of time in case Buyer pays to Sellers a Down Payment 1 and Additional Down Payments. The first of such Additional Down Payment had to be made by 28. February 2025, covering the period until 31. March 2025. The second of such Additional Down Payment had to be made by 31. March 2025, covering the period until 30. April 2025. Sellers’ right to withdraw should re-enter into force upon either (a) failure of Buyer to pay Down Payment 1 or any Additional Down Payment when due, or (b) on 30. April 2025. Buyer paid the Down Payment 1 and the first Additional Down Payment in full when due. As Buyer did not pay the second Additional Down Payment (covering the period between 01. April 2025 until 30. April 2025) in full when due, the period for the temporary suspension of the Sellers’ right to withdraw has lapsed. In any case, the temporary suspension of the Sellers’ right to withdraw has lapsed on 30. April 2025. Therefore, Sellers’ right to withdraw from the SPA pursuant to Section 12.4.2 SPA has re-entered into force.
| 1 |
Now therefore, the Parties agree to the following Addendum II to the SPA (“Addendum II”):
| 1. | Waiver of Buyer’s Right to consent in business of Cataneo and its Affiliates |
Buyer hereby waives its right to prior consent to the actions as set forth in Exhibit 10.1 lit. b) i) through xi) SPA. Therefore, Sellers may and may cause Cataneo during the Interim Period to do those various actions as set forth in Exhibit 10.1 lit. b) i) through xi) SPA without the prior written consent of Buyer.
| 2. | Temporary Suspension of Sellers’ Right to Withdraw |
Sellers hereby temporarily suspend their right to withdraw from the SPA pursuant to Section 12.4.2 SPA until 30 June 2025. Sellers’ right to withdraw from the SPA pursuant to Section 12.4.2 SPA shall re-enter into force on 30 June 2025.
| 3. | Governing Law |
This Addendum II shall be construed in accordance with, and governed by, German Law, excluding the German conflict of Law rules and excluding the United Nations Convention on Contracts for the International Sale of Goods (CISG).
| 4. | Continued Validity of the SPA |
Unless expressly otherwise provided in this Addendum II, (a) all provisions of the SPA and its Exhibits shall continue in full force and effect, (b) any reference to a Section is a reference to a Section in the SPA, (c) all definitions set forth in the SPA, and (d) all provisions of the Addendum shall also apply to this Addendum II.
[Signature Page Follows]
| 2 |
Signatures
| Munich, 26/5/25 | Munich, 26/5/25 | |
| (Place, date) | (Place, date) | |
| /s/ Christian Unterseer | /s/ Christian Unterseer | |
| Christian Unterseer | CUTV GmbH | |
| Christian Unterseer, MD | ||
| (Name in block capitals, function) | ||
| Munich, 26/5/25 | Santa Monica, CA 25/5/25 | |
| (Place, date) | (Place, date) | |
| /s/ Michael Wolfle | /s/ James D. Henderson, Jr. | |
| CUNEO AG | Brand Engagement Network, Inc. | |
| Michael Wolfle, CEO | JAMES D, HENDERSON, JR., CORPORATE COUNSEL | |
| (Name in block capitals, function) | (Name in block capitals, function) |
| 3 |
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
| Delaware | 98-1574798 | |||||||
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |||||||
|
300
Delaware Ave
Suite
210
Wilmington,
DE |
19801 | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
|
Common
Stock, par value $0.0001 per share |
BNAI |
The
Nasdaq Stock Market LLC | ||||||
|
Redeemable
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share |
BNAIW |
The
Nasdaq Stock Market LLC | ||||||
| Large accelerated filer |
o |
Accelerated filer | o | |||||||||||
| Non-accelerated filer |
x |
Smaller reporting company |
x | |||||||||||
| Emerging growth company |
x | |||||||||||||
| Page | |||||
|
Part
I. Financial Information |
5 | ||||
|
Item
1. Financial Statements |
5 | ||||
|
Unaudited
Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 |
5 | ||||
|
Unaudited
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 and 2024 |
6 | ||||
|
Unaudited
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 |
7 | ||||
|
Unaudited
Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2025 and 2024 |
8 | ||||
|
Notes
to Unaudited Condensed Consolidated Financial Statements
|
10 | ||||
|
Item
2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
27 | ||||
|
Item
3. Quantitative and Qualitative Disclosures About Market Risk |
38 | ||||
|
Item
4. Controls and Procedures |
38 | ||||
|
Part
II. Other Information |
41 | ||||
|
Item
1. Legal Proceedings |
41 | ||||
|
Item
1A. Risk Factors |
41 | ||||
|
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds |
41 | ||||
|
Item
3. Defaults Upon Senior Securities |
41 | ||||
|
Item
4. Mine Safety Disclosures |
41 | ||||
|
Item
5. Other Information |
41 | ||||
|
Item
6. Exhibits |
43 | ||||
|
Signatures |
45 | ||||
| March
31, 2025 |
December 31, 2024* | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 236,229 | $ | 149,273 | |||||||
| Accounts receivable, net of allowance | 40,888 | 30,888 | |||||||||
| Due from Sponsor | 3,000 | 3,000 | |||||||||
| Prepaid expenses and other current assets | 1,600,800 | 1,042,398 | |||||||||
| Total current assets | 1,880,917 | 1,225,559 | |||||||||
| Property and equipment, net | 295,215 | 292,757 | |||||||||
| Right of use asset - operating lease | 464,041 | 507,182 | |||||||||
| Intangible assets, net | 15,298,305 | 16,124,370 | |||||||||
| TOTAL ASSETS | $ | 17,938,478 | $ | 18,149,868 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 6,899,196 | $ | 5,995,235 | |||||||
| Accrued expenses | 4,239,290 | 4,593,712 | |||||||||
| Due to related parties | 693,036 | 693,036 | |||||||||
| Short-term debt | 1,308,641 | 1,655,080 | |||||||||
| Convertible note | 760,000 | 1,140,000 | |||||||||
| Operating lease liability | 189,053 | 173,497 | |||||||||
| Total current liabilities | 14,089,216 | 14,250,560 | |||||||||
| Operating lease liability | 232,848 | 335,766 | |||||||||
| Warrant liabilities | 304,158 | 919,050 | |||||||||
| Total liabilities | 14,626,222 | 15,505,376 | |||||||||
| Commitments and contingencies (Note L) | |||||||||||
| Stockholders’ equity: | |||||||||||
|
Preferred
stock par value $0.0001
per share, 10,000,000
shares authorized, none
designated. There are no
shares issued or outstanding as of March 31, 2025 or December 31, 2024 |
— | — | |||||||||
|
Common
stock par value of $0.0001
per share, 750,000,000
shares authorized. As of March 31, 2025 and December 31, 2024, respectively, 42,989,398
and 39,573,988
shares issued and outstanding |
4,299 | 3,957 | |||||||||
| Additional paid-in capital | 53,935,336 | 49,657,684 | |||||||||
| Accumulated deficit | (50,627,379) | (47,017,149) | |||||||||
| Total stockholders’ equity | 3,312,256 | 2,644,492 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 17,938,478 | $ | 18,149,868 | |||||||
|
* Derived from
audited information |
|||||||||||
| Three
Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenues | $ | 10,000 | $ | 49,790 | |||||||
| Cost of revenues | — | — | |||||||||
| Gross profit | 10,000 | 49,790 | |||||||||
| Operating expenses: | |||||||||||
| General and administrative | 3,214,189 | 6,480,535 | |||||||||
| Depreciation and amortization | 939,206 | 117,347 | |||||||||
| Research and development | 10,697 | 250,671 | |||||||||
| Total operating expenses | 4,164,092 | 6,848,553 | |||||||||
| Loss from operations | (4,154,092) | (6,798,763) | |||||||||
| Other income (expenses): | |||||||||||
| Interest expense | (125,044) | (25,050) | |||||||||
| Interest income | 2 | 3,118 | |||||||||
| Change in fair value of warrant liabilities | 614,892 | (60,823) | |||||||||
| Other | 54,012 | (2,891) | |||||||||
| Other income (expenses), net | 543,862 | (85,646) | |||||||||
| Loss before income taxes | (3,610,230) | (6,884,409) | |||||||||
| Income taxes | — | — | |||||||||
| Net loss | $ | (3,610,230) | $ | (6,884,409) | |||||||
| Net loss per common share- basic and diluted | $ | (0.09) | $ | (0.27) | |||||||
| Weighted-average common shares - basic and diluted | 40,140,364 | 25,233,890 | |||||||||
| Preferred Stock | Common Stock | Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | — | $ | — | 38,168,988 | $ | 3,957 | $ | 49,657,684 | $ | (47,017,149) | $ | 2,644,492 | |||||||||||||||||||||||||||||
| Sale of common stock | — | — | 1,186,426 | 86 | 1,325,456 | — | 1,325,542 | ||||||||||||||||||||||||||||||||||
| Stock issued in conversion of convertible notes | — | — | 316,666 | 32 | 379,968 | — | 380,000 | ||||||||||||||||||||||||||||||||||
| Stock issued for Standby Equity Purchase Agreement liability | — | — | 643,574 | 64 | 432,418 | — | 432,482 | ||||||||||||||||||||||||||||||||||
| Warrant exercises | — | — | 787,132 | 79 | 1,499,471 | — | 1,499,550 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | — | — | 223,586 | 22 | 374,904 | — | 374,926 | ||||||||||||||||||||||||||||||||||
| Stock issued in settlement of liabilities | — | — | 588,026 | 59 | 265,435 | — | 265,494 | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (3,610,230) | (3,610,230) | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | — | $ | — | 41,914,398 | $ | 4,299 | $ | 53,935,336 | $ | (50,627,379) | $ | 3,312,256 | |||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | — | $ | — | 23,270,404 | $ | 2,327 | $ | 30,993,846 | $ | (13,301,720) | $ | 17,694,453 | |||||||||||||||||||||||||||||
| Stock issued to DHC shareholders in reverse recapitalization | — | — | 7,885,220 | 789 | (10,722,277) | — | (10,721,488) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock pursuant to Reseller Agreement | — | — | 1,750,000 | 175 | 13,474,825 | — | 13,475,000 | ||||||||||||||||||||||||||||||||||
| Sale of common stock | — | — | 645,917 | 65 | 6,324,935 | — | 6,325,000 | ||||||||||||||||||||||||||||||||||
| Warrant exercises | — | — | 40,514 | 4 | 15,260 | — | 15,264 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 698,705 | — | 698,705 | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (6,884,409) | (6,884,409) | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | — | $ | — | 33,592,055 | $ | 3,360 | $ | 40,785,294 | $ | (20,186,129) | $ | 20,602,525 | |||||||||||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (3,610,230) | $ | (6,884,409) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization expense | 939,206 | 117,347 | |||||||||
| Allowance for uncollected receivables | — | 30,000 | |||||||||
| Write off of deferred financing fees | — | 1,427,729 | |||||||||
| Change in fair value of warrant liabilities | (614,892) | 60,823 | |||||||||
| Stock based compensation, including the issuance of restricted shares | 369,601 | 406,980 | |||||||||
| Non-cash interest expense | 86,042 | — | |||||||||
| Reduction in right of use asset | 43,141 | — | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Prepaid expense and other current assets | (558,402) | (820,876) | |||||||||
| Accounts receivable | (10,000) | (27,500) | |||||||||
| Accounts payable | 903,961 | 783,637 | |||||||||
| Accrued expenses | (88,927) | 358,630 | |||||||||
| Deferred revenue | — | (2,290) | |||||||||
| Operating lease liability | (87,362) | — | |||||||||
| Net cash used in operating activities | (2,627,862) | (4,549,929) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | — | (13,037) | |||||||||
| Capitalized internal-use software costs | (110,274) | (158,028) | |||||||||
| Net cash used in investing activities | (110,274) | (171,065) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Cash and cash equivalents acquired in connection with the reverse recapitalization | — | 858,292 | |||||||||
| Proceeds from the sale of common stock | 1,325,542 | 6,325,000 | |||||||||
| Proceeds received from option and warrant exercises | 1,499,550 | 15,264 | |||||||||
| Payment of financing costs | — | (858,292) | |||||||||
| Net cash provided by financing activities | 2,825,092 | 6,340,264 | |||||||||
| Net (decrease) increase in cash and cash equivalents | 86,956 | 1,619,270 | |||||||||
| Cash and cash equivalents at the beginning of the period | 149,273 | 1,685,013 | |||||||||
| Cash and cash equivalents at the end of the period | $ | 236,229 | $ | 3,304,283 | |||||||
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Supplemental Non-Cash Information | |||||||||||
| Capitalized internal-use software costs in accrued expenses | $ | — | $ | 50,075 | |||||||
| Issuance of common stock pursuant to Reseller Agreement | $ | — | $ | 13,475,000 | |||||||
| Issuance of common stock for Standby Equity Purchase Agreement liability | $ | 432,482 | $ | — | |||||||
| Stock-based compensation capitalized as part of capitalized software costs | $ | 5,325 | $ | 291,725 | |||||||
| Settlement of liabilities into common shares | $ | 265,494 | $ | — | |||||||
| Conversion of convertible notes into common shares | $ | 380,000 | $ | — | |||||||
|
Fair
value measurement at reporting date using | |||||||||||||||||
| March 31, 2025 |
(Level
1) |
(Level
2) |
(Level
3) | ||||||||||||||
|
Liabilities: |
|||||||||||||||||
| Warrant liabilities - Public Warrants | $ | — | $ | 113,331 | $ | — | |||||||||||
| Warrant liabilities - Private Placement Warrants | $ | — | $ | 190,827 | $ | — | |||||||||||
| Total Warrant Liabilities | $ | — | $ | 304,158 | $ | — | |||||||||||
|
Fair
value measurement at reporting date using | |||||||||||||||||
| December 31, 2024 |
(Level
1) |
(Level
2) |
(Level
3) | ||||||||||||||
|
Liabilities: |
|||||||||||||||||
| Warrant liabilities - Public Warrants | $ | — | $ | 576,606 | $ | — | |||||||||||
| Warrant liabilities - Private Placement Warrants | $ | — | $ | 342,444 | $ | — | |||||||||||
| Total Warrant Liabilities | $ | — | $ | 919,050 | $ | — | |||||||||||
| March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Options | 1,386,400 | 2,538,940 | |||||||||
| Warrants | 21,749,189 | 21,190,332 | |||||||||
| Convertible note (as converted) | 633,334 | — | |||||||||
| Total | 23,768,923 | 23,729,272 | |||||||||
| March 14, 2024 | |||||
| Cash and cash equivalents | $ | 858,292 | |||
| Due from Sponsor | 3,000 | ||||
| Prepaid and other current assets | 16,824 | ||||
| Accounts payable | (2,352,328) | ||||
| Accrued expenses | (5,782,211) | ||||
| Due to related parties | (693,036) | ||||
| Warrant liability | (1,913,737) | ||||
| Net liabilities assumed | $ | (9,863,196) | |||
| March
31, 2025 |
December
31, 2024 | ||||||||||
| Security deposits | $ | 109,054 | $ | 108,441 | |||||||
| Cataneo GmbH deposit | 450,000 | — | |||||||||
| Prepaid VAT | 10,698 | 32,468 | |||||||||
| Prepaid professional fees | 431,446 | 284,081 | |||||||||
| Prepaid insurance | 564,080 | 567,977 | |||||||||
| Prepaid other | 35,522 | 49,431 | |||||||||
| Prepaid expenses and other current assets | $ | 1,600,800 | $ | 1,042,398 | |||||||
| March
31, 2025 |
December
31, 2024 | ||||||||||
| Equipment | $ | 337,836 | $ | 337,856 | |||||||
| Furniture | 348,774 | 348,754 | |||||||||
| Capitalized software | 227,504 | 216,751 | |||||||||
| Total | 914,114 | 903,361 | |||||||||
| Accumulated depreciation and amortization | (618,899) | (610,604) | |||||||||
| Property and equipment, net of accumulated depreciation and amortization | $ | 295,215 | $ | 292,757 | |||||||
| March 31, 2025 | |||||||||||||||||
| Gross | Accumulated Amortization |
Net | |||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||
| Patent portfolio | $ | 1,259,863 | $ | (553,021) | $ | 706,842 | |||||||||||
|
Developed
technology |
17,860,194 | (3,268,731) | 14,591,463 | ||||||||||||||
| Total | $ | 19,120,057 | $ | (3,821,752) | $ | 15,298,305 | |||||||||||
| December 31, 2024 | |||||||||||||||||
| Gross | Accumulated Amortization |
Net | |||||||||||||||
| Amortizing intangible assets: | |||||||||||||||||
| Patent portfolio | $ | 1,259,864 | $ | (517,960) | $ | 741,904 | |||||||||||
| In-process research and development | 17,755,347 | (2,372,881) | 15,382,466 | ||||||||||||||
| Total | $ | 19,015,211 | $ | (2,890,841) | $ | 16,124,370 | |||||||||||
| Years Ending December 31: | |||||
| 2025 (remaining 9 months) | $ | 2,801,784 | |||
| 2026 | 3,735,711 | ||||
| 2027 | 3,699,790 | ||||
| 2028 | 3,681,830 | ||||
| 2029 | 1,313,365 | ||||
| Thereafter | 65,825 | ||||
| $ | 15,298,305 | ||||
| March
31, 2025 |
December
31, 2024 | ||||||||||
| Accrued professional fees | $ | 2,943,337 | $ | 2,747,211 | |||||||
| Accrued compensation and related expenses | 1,143,005 | 1,730,043 | |||||||||
| Due to related party | — | — | |||||||||
| Accrued other | 102,358 | 116,458 | |||||||||
| Accrued interest | 50,590 | — | |||||||||
| Accrued expenses | $ | 4,239,290 | $ | 4,593,712 | |||||||
Under the January Warrant Exercise Agreement, the exercise price of the Committed Warrants was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on the Exercise Schedule. Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue the Reload Warrants. Upon a Purchaser's completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term. If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue the Optional Reload Warrants. In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
During the quarter ending March 31, 2025, Purchasers exercised 787,132 Committed Warrants to purchase 787,132 shares
| Three Months Ended March 31, | ||||||||
| 2024 | ||||||||
| Expected term | 5.0 years | |||||||
| Risk-free interest rate | 4.13 | % | ||||||
| Dividend yield | 0.00 | % | ||||||
| Volatility | 54.79 | % | ||||||
| Number of Shares |
Weighted Average Exercise Price |
Weighted Average Grant Date Fair Value |
Weighted Average Remaining Contractual Term (in years) | ||||||||||||||||||||
| Outstanding as of December 31, 2024 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.59 | |||||||||||||||||
| Outstanding as of March 31, 2025 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.09 | |||||||||||||||||
| Vested and expected to vest as of March 31, 2025 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.09 | |||||||||||||||||
| Exercisable as of March 31, 2025 | 1,019,121 | $ | 4.42 | $ | 2.27 | 8.01 | |||||||||||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | ||||||||
| Expected term | 3 years | |||||||
| Risk-free interest rate | 4.46 | % | ||||||
| Dividend yield | 0.00 | % | ||||||
| Volatility | 55.14 | % | ||||||
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| General and administrative | $ | 335,402 | $ | 334,049 | |||||||
| Research and development | 10,110 | 72,931 | |||||||||
| $ | 345,512 | $ | 406,980 | ||||||||
|
Number of
Shares |
Weighted
Average Grant
Date Fair Value | ||||||||||
| Nonvested at January 1, 2025 | — | $ | — | ||||||||
| Granted | 223,586 | $ | 1.02 | ||||||||
| Vested | (223,586) | $ | 1.02 | ||||||||
| Nonvested at March 31, 2025 | — | $ | — | ||||||||
| Years Ending December 31: | |||||
| 2025 (remaining nine months) | $ | 141,209 | |||
| 2026 | 193,289 | ||||
| 2027 | 131,411 | ||||
| Total future minimum payments | 465,909 | ||||
| Less imputed interest | (44,008) | ||||
| Present value of lease liabilities | $ | 421,901 | |||
| Three
Months Ended March 31, |
Increase (Decrease) | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| Revenues | $ | 10,000 | $ | 49,790 | $ | (39,790) | |||||||||||
| Operating expenses: | |||||||||||||||||
| General and administrative | 3,214,189 | 6,480,535 | (3,266,346) | ||||||||||||||
| Depreciation and amortization | 939,206 | 117,347 | 821,859 | ||||||||||||||
| Research and development | 10,697 | 250,671 | (239,974) | ||||||||||||||
| Total operating expenses | 4,164,092 | 6,848,553 | (2,684,461) | ||||||||||||||
| Loss from operations | (4,154,092) | (6,798,763) | 2,644,671 | ||||||||||||||
| Other income (expenses): | |||||||||||||||||
| Interest expense | (125,044) | (25,050) | (99,994) | ||||||||||||||
| Interest income | 2 | 3,118 | (3,116) | ||||||||||||||
| Change in fair value of warrant liabilities | 614,892 | (60,823) | 675,715 | ||||||||||||||
| Other | 54,012 | (2,891) | 56,903 | ||||||||||||||
| Other income (expenses), net | 543,862 | (85,646) | 629,508 | ||||||||||||||
| Net loss | $ | (3,610,230) | $ | (6,884,409) | $ | 3,274,179 | |||||||||||
| Three Months Ended March 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
|
Cash used in
operating activities |
$ | (2,627,862) | $ | (4,549,929) | ||||||||||
|
Cash used in
investing activities |
(110,274) | (171,065) | ||||||||||||
|
Cash provided
by financing activities |
2,825,092 | 6,340,264 | ||||||||||||
|
Net increase
in cash and cash equivalents |
$ | 86,956 | $ | 1,619,270 | ||||||||||
| Exhibit | Description | ||||||||||
|
2.1#^ |
Business
Combination Agreement and Plan of Reorganization, dated as of September 7, 2023, by and among Brand Engagement Network Inc., BEN Merger
Subsidiary Corp., DHC Acquisition Corp and, solely with respect to Section 7.21 and 9.03 thereto, DHC Sponsor, LLC (incorporated by reference
to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities
and Exchange Commission
on September 8, 2023). |
||||||||||
| 2.2# |
Share
Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and
CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the
Securities and Exchange Commission on October 30, 2024). |
||||||||||
| 2.3 |
Addendum
to Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV
GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed
with the Securities and Exchange Commission on February 12, 2025). |
||||||||||
| 2.4 |
Addendum
II to Share Purchase and Transfer Agreement, dated May 26, 2025, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV
GmbH and CUNEO AG
(incorporated
by reference to Exhibit 2.1 to the Company’s
Current
Report on Form 8-K (File
No. 001-40130)
filed with the Securities and Exchange Commission
on May 30,
2025). |
||||||||||
| 3.1 |
Certificate
of Incorporation of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form
8-K (File No. 001-40130) filed with the Securities
and Exchange Commission
on
March 20, 2024). |
||||||||||
| 3.2 |
Bylaws
of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No.
001-40130) filed with the Securities
and Exchange Commission
on March 20, 2024). |
||||||||||
|
10.1^ |
Warrant
Exercise and Release Agreement, dated January 13, 2025, by and among Brand Engagement Network Inc. and certain purchasers identified on
the signature pages thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130)
filed with the Securities and Exchange Commission on January 14, 2025). |
||||||||||
|
31.1* |
Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. |
||||||||||
|
31.2* |
Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. |
||||||||||
|
32.1** |
Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. |
||||||||||
|
32.2** |
Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. |
||||||||||
|
101* |
The following financial information from Brand Engagement Network Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Stockholders' Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements. | ||||||||||
|
101.INS* |
Inline XBRL Instance Document. | ||||||||||
|
101.SCH* |
Inline XBRL Taxonomy Extension Schema Document. | ||||||||||
|
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||||||
|
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||||||
|
101.LAB* |
Inline XBRL Taxonomy Extension Labels Linkbase Document. | ||||||||||
|
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||||||
|
104* |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||||||||
|
Brand Engagement
Network Inc. (Registrant) | ||||||||
|
Date: June 4,
2025 |
By: |
/s/ Paul Chang | ||||||
| Name: |
Paul Chang | |||||||
| Title: |
Chief Executive Officer | |||||||
|
(Duly Authorized
Officer and Principal Executive Officer) | ||||||||
|
Date: June 4,
2025 |
By: | /s/ Walid Khiari | ||||||
| Name: | Walid Khiari | |||||||
| Title: |
Chief Financial
Officer | |||||||
|
(Principal Financial
Officer) | ||||||||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 5, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
The disclosures set forth in Item 2.03 are incorporated by reference into this Item 1.01.
Item 2.02 Results of Operations and Financial Condition
On June 9, 2025, Brand Engagement Network Inc., a Delaware corporation (the “Company”) issued a press release announcing its results and key business highlights for the quarter ended March 31, 2025. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report on Form 8-K, including Exhibits 99.1 furnished hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
On June 5, 2025, the Company entered into a Line Of Credit Agreement (“Line of Credit”) with Corps Capital Advisors, LLC, a Texas Limited Liability Company (the “Lender”) whereby the Lender is extending to the Company a line of credit facility of up to $3,500,000, representing the maximum aggregate amount of the advances of funds from the Line of Credit (each an “Advance”) that may be outstanding and any time under the Line of Credit. Advances may be requested and repaid from time to time until maturity on December 5, 2025 (the “Maturity Date”), but may not exceed a total of $3,500,000. All Advances outstanding under the Line of Credit accrue interest at a fixed rate per annum equal to 10.0%. The outstanding Advances and accrued and unpaid interest under the Line of Credit are due and payable on the Maturity Date. The outstanding Advances may be prepaid at any time without penalty. Events of default under the Line of Credit include the following: a payment default, dissolution or insolvency of the Company and other monetary and nonmonetary defaults. Upon the occurrence of an event of default, the Lender may accelerate the repayment of the Advances and any interest accrued and unpaid thereon, refuse additional advances and pursue any other remedies available to the Lender. As of the date of this filing, the Company has not drawn down on the Line of Credit.
The above is a summary of the material terms of the Line of Credit and is qualified in its entirety by reference to the full text of the Line of Credit, which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1 | Line of Credit Agreement, dated June 5, 2025, by and between Brand Engagement Network Inc. and Corps Capital Advisors, LLC | |
| 99.1 | Press Release of Brand Engagement Network Inc. issued June 9, 2025 (furnished pursuant to Item 2.02). | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: June 10, 2025 | By: | /s/ Walid Khiari |
| Name: | Walid Khiari | |
| Title: | Chief Financial Officer | |
Exhibit 10.1
LINE OF CREDIT AGREEMENT
THIS LINE OF CREDIT AGREEMENT (“Agreement”) is made and entered into effective as of the 5th day of June, 2025 (the “Effective Date”) by and among Corps Capital Advisors, LLC, a Texas Limited Liability Company (the “Lender”) and Brand Engagement Network, Inc., a Delaware Corporation. (“Borrower”). Lender and Borrower may be referred to herein as a Party, or, collectively, as the Parties.
| A. | The Borrower wishes to obtain from the Lender, a line of credit facility of up to $3,500,000.00 (the “Line of Credit”); and |
| B. | In full reliance on the representations made by Borrower in this Agreement and the Line of Credit Documents, Lender is willing to extend such financing to Borrower upon the terms, covenants and conditions contained in this Agreement and in the Line of Credit Documents. |
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained in this Agreement, Borrower and Lender mutually agree as follows:
ARTICLE I
DEFINITIONS
Unless the context clearly indicates otherwise, certain terms used in this Agreement shall have the meanings set forth below:
“Business Day” shall mean any day of the week other than Saturday, Sunday or other day that is recognized as a holiday in the United States of America.
“Default” shall mean the occurrence and continuance of any of the events listed in Sections 6.1 or 6.2 of this Agreement.
“Governmental Authority” shall mean the government of the United States, any state, province or political subdivision thereof, any other foreign country, any multi-national organization or body and any entity exercising executive, judicial, legislative, police, taxing, regulatory or administrative authority or power of any nature.
“Line of Credit” shall mean the financing provided by Lender to Borrower under the terms of this Agreement in the maximum principal amount of $3,500,000.00.
“Line of Credit Documents” shall refer to this Agreement and any other documents necessary ot fulfill the terms of this Agreement. All of the Line of Credit Documents are incorporated herein by reference.
“Material Adverse Event” means any circumstance or event that, individually or collectively with other circumstances or events, may reasonably be expected to have a material adverse effect on the financial condition or Business of the Borrower, as now conducted or as proposed to be conducted.
“Maturity Date” shall mean six months from the Effective Date, being the date that all sums advanced to Borrower shall be due and payable;
“Person” shall mean and includes an individual, a partnership, a corporation, a limited liability company, a trust, an unincorporated association, a joint venture or any other entity or a government or any agency or political subdivision thereof.
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ARTICLE II
AMOUNT AND TERMS OF LINE OF CREDIT
2.1 Line of Credit. On the Effective Date, the Lender shall provide the Borrower with a Line of Credit up to the maximum amount of $3,5000,000.00, representing the maximum aggregate amount of the advances of funds from the Line of Credit (each an “Advance”) that may be outstanding and any time under the Line of Credit (the “Principal Indebtedness”), from which Borrower may draw down, at any time and from time to time during the period from and including the date of this Line of Credit through the day immediately preceding the Maturity Date, a principal amount not to exceed at any one time outstanding, as to all such Advances in the aggregate, the Principal Indebtedness. The entire Principal Indebtedness of the Line of Credit shall be due and payable on the earlier to occur of (a) the occurrence and continuation of a Default hereunder, or (b) the Maturity Date (as the same may be extended as herein provided).
2.2 Interest and Structuring Fee. Interest shall be payable on any outstanding Advances at the rate of ten percent (10%) per annum (the “Interest Rate”), payable on the Maturity Date. Interest at the Interest Rate on all outstanding Advances, as well as a $10,000.00 Structuring Fee related to Agreement, shall be payable on the Maturity Date.
2.3 Approval by Special Line of Credit Committee. All Advances made by Lender shall be contingent upon unanimous approval by Borrower’s Special Line of Credit Committee, which Committee is specifically authorized by Borrower’s Board of Directors and which Committee is comprised of Borrower’s Board Member, Thomas Morgan, and Borrower’s CFO, Walid Khiari.
2.4 Borrowing Notice. All Advances shall be made by Lender on a date which shall be not later than five (5) days following written request, and notice of approval by the Special Line Credit Committee, from Borrower.
2.5 Prepayment. Borrower may prepay, in whole or in part, the Principal Indebtedness of the Line of Credit, and all Interest accrued on any outstanding Advances at any time prior to the Maturity Date, without the prior written consent of each of the Lender and without payment of any premium or penalty.
2.6 Extension of Maturity Date. At any time prior to the Maturity Date upon mutual written consent of the Borrower and the Lender, the Maturity Date may be extended for up to an additional six month period, in which case the “Maturity Date” shall mean such later date as is agreed upon by the parties.
ARTICLE III
ADDITIONAL AGREEMENTS OF THE BORROWER
3.1 Conditions Precedent to Disbursement at Closing. Prior to the disbursement of any of the proceeds of the Line of Credit to or for the account of Borrower at closing of the Line of Credit, and as a condition precedent to such disbursement, all of the conditions set forth below must be satisfied as determined by Lender, in Lender’s sole discretion.
(a) Line of Credit Documents. On the Effective Date, the Borrower shall execute and deliver to the Lender, a counterpart of all Line of Credit Documents in favor of the Lender.
(b) Miscellaneous Items. Borrower shall deliver to Lender such other items, documents and evidences pertaining to the Line of Credit as may reasonably be requested by Lender.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 The Borrower does hereby represent and warrant to Lender, as of the date hereof (except as to any representation or warranty which specifically relates to another date), as follows (provided that any fact or item disclosed with respect to one representation or warranty shall be deemed to be disclosed with respect to each other representations or warranty, but only to the extent that the applicability of such fact or item with respect to such other representation or warranty can reasonably be inferred from the disclosure with respect to such fact or item contained in the disclosure schedules of Borrower):
a) Authority to Execute and Perform Agreements. The Borrower has the full legal right and power and all authority and approval required to enter into, execute and deliver this Agreement and the other Line of Credit Documents and to perform fully its obligations hereunder and thereunder. The execution and delivery of this Agreement and the other Line of Credit Documents by the Borrower and the consummation of the transactions contemplated hereby and thereby have been or will be duly and validly authorized by all necessary individual and corporate action, and no other proceedings on the part of Borrower are necessary to authorize this Agreement and the other Line of Credit Documents or to consummate the transactions so contemplated. This Agreement and the other Line of Credit Documents have all been or will be duly executed and delivered and are the valid and binding obligations of Borrower enforceable against Borrower in accordance with their terms, except as may be limited by bankruptcy, moratorium, insolvency or other similar laws generally affecting the enforcement of creditors’ rights.
b) No Breach. The Borrower’s execution, delivery and performance of this Agreement and the other Line of Credit Documents and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with or otherwise result in the breach or violation of any of the terms and conditions of, result in a modification of the effect of or constitute (or with notice or lapse of time or both would constitute) a default under (a) the Borrower’s Memorandum and Articles of Association; (b) any Contract to which the Borrower is a party or by or to which it or any of their assets are bound or subject; or (c) any governmental law or judicial Order against, or binding upon or applicable to Borrower or their assets.
c) No Broker. No broker, finder, agent or similar intermediary has acted for or on behalf of Borrower in connection with this Agreement or the transactions contemplated hereby, and no broker, finder, agent or similar intermediary is entitled to any broker’s, finder’s or similar fee or other commission in connection therewith based on any agreement, arrangement or understanding with Borrower or any action taken by Borrower.
d) No Legal Proceedings. As of the date hereof, there is no action, suit or proceeding pending, or to the knowledge of the Borrower threatened, against or involving the Borrower in any court, or before any arbitrator of any kind, or before or by any governmental body, which have not been disclosed to Lender, or which purports to affect the legality, validity, binding effect or enforceability of this Agreement.
ARTICLE V
COVENANTS
For so long as any principal amount and accrued interest in respect of the Line of Credit remains outstanding, the Borrower covenants and agrees with the Lender as follows:
5.1 Information. Borrower shall furnish to Lender with reasonable promptness such data and information, financial and otherwise, concerning Borrower as from time to time may reasonably be requested by Lender for purposes of administering compliance with the Line of Credit Documents.
5.2 Notice. Borrower shall promptly notify Lender in writing of any of the following:
(a) The existence or occurrence of any event, which with the passage of time, the giving of notice, or both, would constitute a Default under this Agreement or a default under any of the Line of Credit Documents; and,
(b) Any events or changes in the financial condition of Borrower occurring since the date of the last financial statement of Borrower filed with the Securities and Exchange Commission prior to the date of this Agreement, which individually or cumulatively when viewed in light of prior financial statements, may result in a Material Adverse Event in the financial condition of Borrower.
5.3 Compliance with Laws. Borrower shall comply with all local, state and federal laws, except where non-compliance could not reasonably be expected to constitute a Material Adverse Event.
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5.4 Additional Negative Covenants. Borrower shall not, without the prior written consent of Lender, (i) liquidate, dissolve or wind-up the Business and affairs of any of Borrower; (ii) effect any merger or consolidation transaction (other than those previously disclosed to Lender); (iii) sell, lease, transfer, license or otherwise dispose, in a single transaction or series of related transactions, by Borrower of all or substantially all the assets of Borrower; or (iv) consent to any of the foregoing.
ARTICLE VI
DEFAULT; REMEDIES
6.1 Events of Default Not Requiring Notice. The occurrence and continuation of any of the following events shall constitute an Event of Default under this Agreement and the Line of Credit Documents without the requirement of notice from Lender to Borrower:
(a) Nonpayment. The failure of the Borrower to pay when due any principal or interest at the Interest Rate on the Line of Credit or other charge with respect to the Principal Indebtedness, or the amount of any fee or payment required of Borrower under this Agreement or any of the Line of Credit Documents; provided, that Borrower shall have a thirty (30) business day period after which such payment is due in order to cure such breach.
(b) Voluntary Bankruptcy or Insolvency. The occurrence and continuance of any of the following with respect to either Borrower: (1) the filing by it of a petition in bankruptcy or for reorganization or for an arrangement under any bankruptcy or insolvency law or for a receiver or trustee for any of their respective properties; (2) an assignment by it for the benefit of creditors or an admission by any of them, in writing, of an inability to pay their respective debts as they become due; or (3) the entry of a judgment of insolvency against it by any state, provincial or federal court of competent jurisdiction, and any such petition is not dismissed within 60 days after the filing thereof.
6.2 Notice. If any Event of Default shall occur (whether or not any required notice has been given or an applicable grace period has elapsed), Lender shall not be obligated to make any further advances or disbursements until such Event of Default is remedied. Unless otherwise expressly provided by the terms of this Agreement, or the Line of Credit Documents, if an Event of Default shall occur and be continuing, Lender shall give written notice of such occurrence to Borrower as follows:
(a) Monetary Default. In the event of a monetary default for which Borrower is given a cure period, Lender shall give Borrower written notice of the Event of Default and Borrower shall be given an opportunity to cure the default within the applicable cure period.
(b) Nonmonetary Default. In the event of a nonmonetary default for which Borrower is given a cure period, Lender shall give Borrower written notice of the Event of Default and Borrower shall be given an opportunity to cure the default within the applicable cure period. However, if the nonmonetary default cannot reasonably be corrected within the applicable cure period, Borrower shall have an additional thirty (30) days to remedy such nonmonetary default if Borrower notifies Lender of the manner in which the nonmonetary default shall be cured, and if appropriate corrective action is instituted within the initial specified cure period and is diligently pursued thereafter. In the event that correction of the default requires action by a Governmental Authority which cannot reasonably be obtained within an additional twenty (20) days, and Borrower has complied with the conditions of the previous sentence, such twenty (20) day cure period shall be extended to some other reasonable amount of time, so long as the Borrower’ Business is not impaired and continues in the ordinary course until the default is cured.
6.3 Election of Remedies. If an Event of Default shall occur and continue after any required notice and lapse of any applicable grace period, all obligations of Lender under this Agreement and under the Line of Credit Documents shall cease and terminate, and at the election of Lender, the Lender may: (i) declare the outstanding Principal Indebtedness immediately due and payable; (ii) exercise any remedy provided for in the Line of Credit Documents; or (iii) (iv) exercise any other right or remedy available to Lender pursuant to any Line of Credit Document, or as provided at law or in equity.
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6.4 No Remedy Exclusive. No remedy conferred upon or reserved to Lender under this Agreement shall be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement, the Line of Credit Documents, or now or hereafter existing at law or in equity or by statute. No delay or failure to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.
6.5 Expenses during Default. Borrower shall pay all of Lender’s reasonable fees and costs incurred in the preparation of this Agreement and any related documents. If this Agreement is placed in the hands of an attorney for collection, by suit or otherwise, or to enforce its collection, the Borrower shall pay all reasonable costs of collection including reasonable attorneys’ fees.
ARTICLE VII
MISCELLANEOUS
7.1 Non-Waiver. No disbursement of the proceeds of the Line of Credit shall constitute a waiver of any covenant or condition to be performed by Borrower. In the event Borrower are unable to satisfy any such covenant or condition, Lender shall not be precluded from thereafter declaring such failure to be an Event of Default.
7.2 Amendments. Neither this Agreement nor any provisions hereof may be changed, waived, discharged or terminated orally and may only be modified or amended by an instrument in writing, signed by each of the Lender and the Borrower.
7.3 Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of Borrower, Lender and their respective successors and assigns.
7.4 Waivers. The failure by Lender or Borrower at any time or times hereafter to require strict performance by the other of any of the undertakings, agreements or covenants contained in this Agreement shall not waive, affect or diminish any right of Borrower or Lender hereunder to demand strict compliance and performance therewith. Any waiver by Lender of any Event of Default under this Agreement shall not waive or affect any other Event of Default hereunder, whether such Event of Default is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements or covenants of Borrower and Lender under this Agreement shall be deemed to have been waived unless such waiver is evidenced by an instrument in writing signed by the party to be charged specifying such waiver.
7.5 Survival. This Agreement shall survive the disbursement of the proceeds of the Line of Credit, and each and every one of the obligations and undertakings of Borrower and Lender contained herein shall be continuing obligations and undertakings and shall not cease and terminate until all amounts which may accrue pursuant to this Agreement or any of the Line of Credit Documents shall have been fully paid and all obligations and undertakings of Borrower shall have been fully discharged.
7.6 Assignment and Notices.
(a) Neither Borrower nor Lender may assign, in whole or in part, any of their rights or obligations under this Agreement, the Line of Credit Documents or any other agreement or commitment (in addition to this Agreement and the Line of Credit Documents) in existence between Lender on one hand, and Borrower, on the other hand, without the prior written consent of the other Party, which consent shall not be unreasonably withheld.
(b) Except as otherwise provided in this Agreement or in any Line of Credit Document, whenever Lender or Borrower desire to give or serve any notice, demand, request or other communication with respect to this Agreement or any other Line of Credit Document, each such notice shall be in writing and shall be effective only if the notice is delivered by personal service, by nationally-recognized overnight courier or by email, addressed in the same manner as provided in this Agreement. Any notice delivered personally or by courier shall be deemed to have been given when delivered. Any notice sent by email (confirmed orally by telephone, with a copy sent by overnight courier) shall be presumed to have been received on the date transmitted. Any party may change its address by giving notice to the other party of its new address in the manner provided above.
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7.7 Severability. If any term or provision of this Agreement shall, to any extent, be determined by a court of competent jurisdiction to be void, voidable or unenforceable, such void, voidable or unenforceable term or provision shall not affect any other term or provision of this Agreement.
7.8 No Partnership. Nothing contained in this Agreement, or in any Line of Credit Document shall be construed as creating a joint venture or partnership between Borrower and Lender. There shall be no sharing of losses, costs and expenses between Borrower and Lender, and Lender shall have no right of control or supervision except as Lender may exercise Lender’s rights and remedies provided hereunder and in the Line of Credit Documents.
7.9 Interpretation. Whenever the context shall require, the plural shall include the singular, the whole shall include any part thereof, and any gender shall include both other genders. The article and section headings contained in this Agreement are for purposes of reference only and shall not limit, expand or otherwise affect the construction of any provisions hereof.
7.10 Governing Law. This Agreement and all matters relating hereto shall be governed by, construed and interpreted in accordance with the laws of the state of Delaware without giving effect to principles of conflicts of laws.
7.11 Conflicts. The provisions of this Agreement are not intended to be superseded by the provisions of the Line of Credit Documents executed in conjunction with this Agreement but shall be construed as supplemental thereto. In the event of any inconsistency between the provisions hereof and the Line of Credit Documents, it is intended that this Agreement shall control.
7.12 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute only one instrument.
7.13 Attorney Fees. Borrower and Lender agree that should either of them default in any of the covenants or agreements contained in this Agreement or any of the Line of Credit Documents, the defaulting party shall pay all costs and expenses, including reasonable attorney fees and costs, incurred by the non-defaulting party to protect its rights hereunder, regardless of whether an action is commenced or prosecuted to judgment.
7.14 Jury Waiver. EACH BORROWER AND LENDER HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS INSTRUMENT AND TO ANY OF THE LINE OF CREDIT DOCUMENTS, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. EACH BORROWER AND LENDER EACH REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
7.15 Final Expression. THIS AGREEMENT AND THE LINE OF CREDIT DOCUMENTS ARE THE FINAL EXPRESSION OF THE AGREEMENT AND UNDERSTANDING OF LENDER WITH RESPECT TO THE LINE OF CREDIT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY ALLEGED ORAL AGREEMENT.
7.16 Digital Signatures. This Agreement and all Line of Credit Documents may be executed by digital signatures and delivered electronically in pdf format, each of which shall be given the same legal weight as though they were ribbon original signatures.
[SIGNATURE PAGE TO FOLLOW]
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| Brand Engagement Network, Inc. | Corps Capital Advisors, LLC | |||
| Name: | Name: | |||
| Title: | Title: | |||
| Date: | Date: | |||
| Name: | ||
| Title: | ||
| Date: | ||
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Exhibit 99.1
BEN Reports First Quarter 2025 Results and Business Highlights
WILMINGTON, Del., June 9, 2025 – Brand Engagement Network Inc. (BEN) (NASDAQ: BNAI), an innovator in AI-driven customer engagement solutions, today announced its results and key business highlights for the first quarter ended March 31, 2025.
“Q1 marked a strong start to 2025, as we launched our iSKYE platform and deepened strategic partnerships that demonstrate the growing demand for secure, scalable AI solutions,” said Paul Chang, CEO of Brand Engagement Network. “We’ve enhanced our platform with features that deliver greater accuracy and relevance for users, while providing the control and engagement enterprise clients want. Looking ahead, iSKYE’s modular architecture positions us to easily support new industries and applications. This flexibility opens doors to larger opportunities and broader AI-powered engagement across diverse sectors.”
Q1 2025 Key Business Highlights:
| ● | iSKYE AI Platform Launch: BEN has officially launched the iSKYE platform, offering businesses a customizable, scalable solution to integrate AI with existing business processes, inject a rules engine to manage the interactions, and provide full control of the user experience. Key capabilities include customizable 3D avatars, low-cost deployment, enterprise-grade security, and the ability to mitigate AI hallucinations while integrating seamlessly into existing systems. | |
| ● | Global AI Insurance Partnership with Swiss Life: BEN partnered with Swiss Life Global Solutions to deliver secure, scalable generative AI solutions that enhance digital health, mental health, and financial wellbeing services. The collaboration aims to streamline insurance sales, reduce call center volume, and improve member services with AI-powered tools. | |
| ● | Expanded Partnership with Vybroo and Grupo Siete: BEN expanded its partnership with Vybroo and Grupo Siete to deploy AI-powered brand ambassadors and voice agents across Latin America and Southern Europe, enhancing its digital media presence and unlocking new revenue opportunities in high-growth markets. | |
| ● | Advocating for Responsible AI Privacy Standards: BEN supported and advised on California Assembly Member Carl DeMaio’s proposed AI data privacy legislation bill, which aims to prevent the offshore storage of sensitive user data and underscores the Company’s commitment to secure, closed-loop AI systems focused on trust and compliance. |
Conference Call and Webcast Information
The Company will host a conference call and webcast tomorrow, Tuesday, June 10, 2025, at 6:00 p.m. ET. CEO Paul Chang and CFO and
COO Walid Khiari will lead the call and provide an overview of the company’s financial performance, key business highlights, and
strategic outlook.
Participants can register here to access the live webcast of the conference call. Those who prefer to join the call via phone can register using this link to receive a dial-in number and unique PIN.
The webcast will be archived for one year following the conference call and can be accessed on BEN’s investor relations website at https://investors.beninc.ai/.
About Brand Engagement Network (BEN)
Brand Engagement Network Inc. (NASDAQ: BNAI) innovates in AI-powered customer engagement, delivering safe, intelligent, and scalable solutions. Its proprietary Engagement Language Model (ELM™) and Retrieval-Augmented Generation (RAG) architecture enable highly personalized interactions supported by customers’ curated data in closed-loop environments. BEN develops AI-driven engagement solutions for the life sciences, automotive, and retail industries, featuring AI-powered avatars for outbound campaigns, inbound customer service, and real-time recommendations. With a global AI research and development team, BEN provides secure cloud-based or on-premises deployments, granting complete control of the technology stack and ensuring compliance with GDPR, CCPA, HIPAA, and SOC 2 Type 1 standards. The company holds 21 patents, with 28 pending, demonstrating its commitment to advancing AI-driven consumer engagement. For more information, visit www.beninc.ai.
Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are not historical facts, and involve risks and uncertainties that could cause actual results of BEN to differ materially from those expected and projected. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” or “would,” or, in each case, their negative or other variations or comparable terminology.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside BEN’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: uncertainties as to the timing of the acquisition with Cataneo Gmbh (the “Acquisition”); the risk that the Acquisition may not be completed on the anticipated terms in a timely manner or at all; (the failure to satisfy any of the conditions to the consummation of the Acquisition, including the ability to obtain financing to fund the Acquisition on terms that are acceptable or at all; the possibility that any or all of the various conditions to the consummation of the Acquisition may not be satisfied or waived; the occurrence of any event, change or other circumstance that could give rise to the termination of the purchase agreement; the effect of the announcement or pendency of the transactions contemplated by the purchase agreement on the Company’s ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers and others with whom it does business, or its operating results and business generally; risks related to diverting management’s attention from the Company’s ongoing business operations; uncertainty as to the timing of completion of the Acquisition; risks that the benefits of the Acquisition are not realized when and as expected; risks relating to the uncertainty of the projected financial information with respect to BEN; uncertainty regarding and the failure to realize the anticipated benefits from future production-ready deployments; the attraction and retention of qualified directors, officers, employees and key personnel; our ability to grow our customer base; BEN’s history of operating losses; BEN’s need for additional capital to support its present business plan and anticipated growth; technological changes in BEN’s market; the value and enforceability of BEN’s intellectual property protections; BEN’s ability to protect its intellectual property; BEN’s material weaknesses in financial reporting; BEN’s ability to navigate complex regulatory requirements; the ability to maintain the listing of BEN’s securities on a national securities exchange; the ability to implement business plans, forecasts, and other expectations; the effects of competition on BEN’s business; and the risks of operating and effectively managing growth in evolving and uncertain macroeconomic conditions, such as high inflation and recessionary environments. The foregoing list of factors is not exhaustive.
BEN cautions that the foregoing list of factors is not exclusive. BEN cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. BEN does not undertake nor does it accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, and it does not intend to do so unless required by applicable law. Further information about factors that could materially affect BEN, including its results of operations and financial condition, is set forth under “Risk Factors” in BEN’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q subsequently filed with the Securities and Exchange Commission.
Media Contact
Amy Rouyer
P: 503-367-7596
E: amy@beninc.ai
Investor Relations
Susan Xu
P: 778-323-0959
E: sxu@allianceadvisors.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 23, 2025
BRAND ENGAGEMENT NETWORK INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
(Former name or former address, if changed since last report)
Not Applicable
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Events
Brand Engagement Network, Inc. (the “Company”) has scheduled its Annual Meeting of Shareholders (the “2025 Annual Meeting”) on July 22, 2025, with a June 24, 2025, record date for the determination of shareholders entitled to receive notice and vote at such meeting.
The 2025 Annual Meeting will be held virtually via Zoom Webinar. Shareholders wishing to attend must register in advance at https://us06web.zoom.us/webinar/register/WN_pAj4LS-5RKShUakoP5jCbA#/registration. Upon registering, shareholders will receive a confirmation email containing a unique link and instructions to access the meeting.
The 2025 Annual Meeting will include consideration of the election of directors, ratification of the appointment of the Company’s independent registered public accounting firm, and such other business as may properly come before the meeting.
This Current Report on Form 8-K is being filed solely to announce the date, time, and virtual location of the 2025 Annual Meeting of Stockholders and related registration details. This report shall not be deemed to constitute a solicitation of proxies or an offer to sell or buy securities.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 23, 2025 | ||
| BRAND ENGAGEMENT NETWORK INC. | ||
| By: | /s/ Paul Chang | |
| Name: Paul Chang | ||
| Title: Chief Executive Officer | ||
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 1, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
As previously reported, on December 30, 2024, Brand Engagement Network Inc. (the “Company”), received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, because the closing bid price for its common stock had been below $1.00 per share (the “Minimum Bid Price Requirement”) for 30 consecutive business days, it was no longer in compliance with the Minimum Bid Price Requirement for continued listing on The Nasdaq Capital Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided 180 days, or until June 30, 2025, to regain compliance with the Minimum Bid Price Requirement.
On July 1, 2025, the Company received a letter (the “Extension Notice”) from Nasdaq notifying the Company that it has been granted an extension of 180 calendar days (the “Extension”), or until December 29, 2025, to regain compliance with the Minimum Bid Price Requirement under Nasdaq Listing Rule 5550(a). If, at any time before December 29, 2025, the bid price for the Company’s common stock closes at $1.00 or more for a minimum of 10 consecutive business days, Nasdaq will provide written notification to the Company that it has regained compliance with the Minimum Bid Price Requirement (unless Nasdaq exercises its discretion to extend the 10-day period).
As outlined by Nasdaq, and as part of its terms for granting the Extension, if the Company fails to maintain a stockholders’ equity value above $5,000,000 in its financials included in its Quarterly Report on Form 10-Q for the period ending June 30, 2025, Nasdaq will withdraw the Extension and issue a delisting determination. In that event, the Company would have the right to request a hearing before an independent Nasdaq Hearings Panel.
The Company will continue to monitor the closing bid price of its common stock and consider implementing available options to regain compliance with the Minimum Bid Price Requirement. Specifically, the Company has confirmed to Nasdaq that, if necessary, it intends to implement a reverse stock split of its outstanding common stock (if approved by the Company’s stockholders) to regain compliance. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement during this 180-day Extension. If the Company does not regain compliance within the allotted extension period, Nasdaq will provide notice that the Company’s common stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq Hearings Panel, although it would not be entitled to a stay of the suspension of trading of its common stock. The Company is committed to maintaining its listing on The Nasdaq Capital Market.
Forward-Looking Statements
Certain disclosures in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding the Company’s intent or ability to regain compliance with Nasdaq’s Minimum Bid Price Requirement, the Company’s ability to remain listed on The Nasdaq Capital Market during the pendency of the compliance period and other statements that are not statements of historical fact. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this report. Forward-looking statements reflect the Company’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors, including those listed under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC and in the Company’s Quarterly Reports on Form 10-Q. The Company’s forward-looking statements are not guarantees of future performance, and you should not place undue reliance on them. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: July 2, 2025 | By: | /s/ Paul Chang |
| Name: | Paul Chang | |
| Title: | Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 14, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 14, 2025, the Board of Directors of Brand Engagement Network Inc. (the “Company”) appointed Janine Grasso as Interim Chief Executive Officer of the Company, replacing Paul Chang in this role effective immediately. Ms. Grasso will continue to serve on the Board of Directors, where she has served since February 2024 and most recently chaired the Compensation Committee.
Ms. Grasso brings over two decades of experience leading high-growth, technology-driven organizations. Ms. Grasso has served as the Head of the Global Partner Ecosystem at DocuSign since 2023. Previously, Ms. Grasso was Vice President of Business Development at Verizon from 2019 to 2023, where she led a newly created business development organization. Prior to joining Verizon, Ms. Grasso spent 20 years at IBM, most recently as Vice President of Blockchain Ecosystem leading the IBM Blockchain Strategy and Ecosystem Organization. Ms. Grasso received her B.B.A from the Pace University Lubin School of Business. She has deep expertise in mergers and acquisitions, business development, and operations, with a strong track record of scaling emerging technologies and go-to-market platforms. Ms. Grasso is also accomplished in building high-performing teams and fostering a culture of innovation and accountability. Her leadership in enterprise AI strategy and digital transformation makes her uniquely positioned to guide the Company’s next phase of growth.
There are no arrangements or understandings between Ms. Grasso and any other persons pursuant to which she was selected as Interim Chief Executive Officer. There are no family relationships between Ms. Grasso and any director or executive officer of the Company. There are no related party transactions involving Ms. Grasso that are reportable under Item 404(a) of Regulation S-K.
Ms. Grasso has agreed to compensation terms in connection with her appointment as Interim Chief Executive Officer, and the Company expects to file an amendment to this Current Report on Form 8-K disclosing the material terms of that agreement once it is fully executed.
Item 8.01. Other Events.
The Company has reduced its total liabilities by $4.25 million in the second quarter.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: July 15, 2025 | By: | /s/ Janine Grasso |
| Name: | Janine Grasso | |
| Title: | Interim Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01. Other Events.
The Company has determined to postpone the 2025 Annual Meeting of Shareholders, previously scheduled for July 22, 2025. The Board of Directors intends to reschedule the meeting to a later date in order to ensure alignment with current strategic priorities. Shareholders will be notified in accordance with applicable requirements once a new meeting date has been determined.
The Board of Directors will set a new record date for determining shareholders entitled to receive notice of, and vote at, the 2025 Annual Meeting of Shareholders. This new record date will be disclosed at a later time. In addition, the Company will establish a due date for receipt of shareholder proposals in accordance with the Company’s bylaws and applicable regulations.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: July 21, 2025 | By: | /s/ Janine Grasso |
| Name: | Janine Grasso | |
| Title: | Interim Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 15, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave, Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (307) 757-3650
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 14, 2025, the Board of Directors of Brand Engagement Network Inc. (the “Company”) appointed Bernard Puckett as Interim Chairman of the Board, effective immediately, replacing Chris Gaertner in that role. At the Board’s request, Mr. Gaertner will remain a member of the Company’s Board of Directors.
Mr. Puckett is an experienced executive with a strong background in corporate governance, operational leadership, and strategic growth. He has held senior leadership and advisory positions across various industries, helping organizations innovate and transform to create long-term value.
The appointment of Mr. Puckett was made in accordance with the Company’s Bylaws and corporate governance procedures. There are no arrangements or understandings between Mr. Puckett and any other person regarding his appointment as Interim Chairman, and there are no related-party transactions between Mr. Puckett and the Company that need to be disclosed under Item 404(a) of Regulation S-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: August 15, 2025 | By: | /s/ Janine Grasso |
| Name: | Janine Grasso | |
| Title: | Interim Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 21, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (650) 714-2747
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard;
Transfer of Listing
As previously disclosed in a Form 12b-25 Notification of Late Filing filed by Brand Engagement Network Inc. (the “Company”) on August 15, 2025, the Company is delayed in filing its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Quarterly Report”) with the U.S. Securities and Exchange Commission (the “SEC”). The Company received a notice from the staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) dated August 21, 2025 (the “Notice”). The Notice indicated that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”) as a result of its failure to file the Quarterly Report timely. The Company has 60 calendar days from August 21, 2025, or until October 20, 2025, to regain compliance by filing the Quarterly Report or to submit a plan to Nasdaq to regain compliance with the Nasdaq Listing Rules.
The Company intends to file the Quarterly Report as soon as possible. If the Company is unable to file the Quarterly Report by October 20, 2025, it intends to submit a plan to Nasdaq to regain compliance. If Nasdaq accepts the Company’s plan, then Nasdaq may, in its discretion, grant the Company up to 180 days from the prescribed due date for filing the Quarterly Report, or until February 17, 2026, to regain compliance. If Nasdaq does not accept the Company’s plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearings Panel. The Notice has no immediate effect on the listing of the Company’s common stock on Nasdaq.
Item 7.01. Regulation FD Disclosure
On August 27, 2025, the Company issued a press release disclosing the receipt of the Notice. A copy of the press release is being furnished herewith as Exhibit 99.1. The information furnished in this Item 7.01 and Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Forward-Looking Statements
Certain disclosures in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, the Company’s current expectations, assumptions, plans, strategies, and anticipated results. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this report. Forward-looking statements reflect the Company’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors. There are a number of risks, uncertainties and conditions that may cause the Company’s actual results to differ materially from those expressed or implied by these forward-looking statements, including the risk factors described in Part I, Item 1A of Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the other risk factors identified from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Many of these circumstances are beyond the Company’s ability to control or predict. These forward-looking statements necessarily involve assumptions on the Company’s part. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to the Company and speak only as of the date they are made. The Company disclaims any intention or obligation to update or revise publicly any forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 99.1 | Press Release dated August 27, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: August 27, 2025 | By: | /s/ Walid Khiari |
| Name: | Walid Khiari | |
| Title: | Chief Financial Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 12, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (650) 714-2747
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors; Appointment of Certain Officers
On September 10, 2025, the Board of Directors of Brand Engagement Network Inc. (the “Company”) appointed Tyler J. Luck, Co-Founder and Chief Product Officer, to serve as Acting Chief Executive Officer while the Company continues its search for a permanent Chief Executive Officer. Mr. Luck will continue to serve as a member of the Board of Directors. Mr. Luck commented, “I am honored to step into this role and continue building on the progress our team has made. I want to thank Janine for her leadership and steady hand during this important time. We remain focused on delivering for our customers, advancing our technology, and creating long-term value for our shareholders.”
Biographical Information and Compensation Arrangements
Tyler J. Luck is Co-Founder, Chief Product Officer, and Board Member at the Company. Since 2018, he has led the vision, development, and execution of the Company’s proprietary AI platform, powering conversational innovation across chat, voice, and avatars. He also oversees the Company’s engineering and R&D operations in South Korea. With expertise in product design, user experience, and scalable AI systems, Mr. Luck has been central to building the Company’s multimodal AI platform.
The Company previously entered into an employment agreement with Mr. Luck, which became effective upon the closing of the Company’s previous business combination, and provides for a three-year term of employment. Pursuant to its terms, Mr. Luck’s base salary is $180,000. Mr. Luck is eligible to receive a discretionary cash bonus in an amount to be determined by the Board or the Compensation Committee. His employment agreement entitles him to participate in any bonus compensation plans that the Company may from time to time adopt for the benefit of management, along with any standard benefit plans available to similarly situated employees. Mr. Luck is also entitled to awards of fully vested options to purchase 100,000 shares of common stock on an annual basis during the three-year term of his employment agreement. There are no material changes to Mr. Luck’s employment upon his appointment as Acting Chief Executive Officer.
Related Party Transactions
Mr. Luck is married to Michael Lucas, who may be deemed a “promoter” for the Company as that term is defined in the rules and regulations promulgated under the Securities Act of 1933, as amended. October 3rd Holdings, LLC owns approximately a 58.225% interest in Genuine Lifetime, LLC, of which Mr. Lucas and Mr. James D. Henderson, Jr. own respective 13.025% and 10% interests. October 3rd Holdings, LLC is co-owned in equal 50% shares by Mr. Luck and Mr. Lucas. Mr. Luck served as Managing Member of Genuine Lifetime, LLC until June 1, 2023.
In connection with the Company’s entry into a Reseller Agreement with AFG Companies, Inc. (“AFG”), Genuine Lifetime, LLC issued 500,000 shares of the Company’s predecessor’s common stock to AFG pursuant to a separate agreement between Genuine Lifetime, LLC and AFG. In connection with the GL Interim Financing, Genuine Lifetime, LLC entered into a promissory note with AFG pursuant to which AFG agreed to lend, and Genuine Lifetime, LLC agreed to borrow, $4.0 million in order to fund the GL Interim Financing (the “GL Loan”). In connection with the GL Loan, Mr. Luck entered into a personal guaranty with respect to Genuine Lifetime, LLC’s obligations under the GL Loan. Additionally, Mr. Luck agreed not to sell, transfer or assign his shares of common stock, or permit October 3rd Holdings, LLC, as its managing member, to sell, transfer or assign its shares of common stock, prior to the repayment of the GL Loan, subject to certain exceptions.
Effective June 30, 2024, the Company entered into a Debt Conversion Agreement with October 3rd Holdings, LLC, pursuant to which the Company agreed to issue 93,333 shares of common stock at a price of $4.50 per share to October 3rd Holdings, LLC in exchange for the conversion of certain outstanding indebtedness owed by a subsidiary of the Company to October 3rd Holdings, LLC in the amount of $0.4 million.
On September 12, 2025, Janine Grasso concluded her service as Interim Chief Executive Officer and resigned from the Board of Directors, effective immediately. The Board thanks Ms. Grasso for her leadership during a period of transition and appreciates her many contributions to the Company.
On September 8, 2025, Christopher Gaertner resigned from the Board of Directors, effective immediately. At the time of his resignation, Mr. Gaertner was serving solely as a member of the Board. Mr. Gaertner provided the Company with an email dated September 8, 2025, which is filed as Exhibit 17.1 to this Current Report on Form 8-K. The Company believes Mr. Gaertner’s correspondence contains significant inaccuracies and mischaracterizations. The Company respectfully disagrees with his description of events and affirms that its governance, operations, and practices have been and remain appropriate and in compliance with applicable requirements.
Item 8.01 Other Events
The Company continues to work diligently toward completing its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, and intends to file the report as soon as practicable. The Company remains committed to transparency, timely reporting, and compliance with all applicable requirements.
Exhibit Index
| Exhibit No. | Description | |
| 17.1 | Email from Christopher Gaertner to the Board of Directors, dated September 8, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | ||
Date: September 12, 2025 |
By: | /s/ Tyler J. Luck |
| Name: | Tyler J. Luck | |
| Title: | Acting Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 14, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
|
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (650) 714-2747
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.02. Termination of a Material Definitive Agreement
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Unterseer and CUTV, the “Sellers”) (the “Purchase Agreement”), pursuant to which, among other things, the Sellers agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price, in the form of cash and Company common stock, of $19.5 million, subject to certain adjustments. In addition, after signing, the parties executed amendments on February 6, 2025, May 26, 2025 and July 3, 2025 that, among other things, (i) provided for certain down-payments by BEN that would be non-refundable and applied as set-off against any Sellers’ claims in a pre-closing termination scenario (including reasonable professional fees/costs and a $350,000 penalty referenced in Section 12.4.2), and (ii) temporarily suspended and then re-instated the Sellers’ contractual withdrawal rights on the dates specified therein. On September 14, 2025, the parties terminated the Purchase Agreement. The termination was effected through a written notice from the Seller, which the Company acknowledged and accepted, in accordance with the terms of the Purchase Agreement.
Circumstances of termination. On September 14, 2025, the Company received a notice from the Sellers purporting to withdraw from the SPA pursuant to Section 12.4.2. The notice states that prior addenda temporarily suspending the Sellers’ withdrawal right expired on August 31, 2025, after which the Sellers exercised their withdrawal right with immediate effect.
Termination economics. In connection with the termination of the Purchase Agreement, the Company will make a final payment to the Seller of $100,000 (the “Final Payment”). The Final Payment and all previously paid down-payments, which, including the Final Payment, total to approximately $650,000, are not refundable and are applied as a set-off against any of Sellers’ claims permitted by Section 12.4.2. The Company otherwise bears its own expenses.
Surviving obligations. The parties’ confidentiality and similar obligations that expressly survive under the Purchase Agreement continue in effect. Any interim exclusivity, no-shop, or similar undertakings expired by their terms in connection with the withdrawal and are no longer in effect.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On September 17, 2025, the Board of Directors of Brand Engagement Network, Inc. (the “Company”) appointed Ruy Carrasco, M.D. to the Board, effective immediately.
Biography. Dr. Carrasco has served as the Company’s Chief Medical Informatics Officer since May 2021. Since August 2018, he has been Managing Partner at Child Neurology Consultants Austin. He previously served as Chief Medical Information Officer at Presbyterian Healthcare Services (2018–2019) and Seton Family of Hospitals (2014–2018). He holds an M.D. from the University of New Mexico and a B.A. from Baylor University.
Compensation and other disclosures. Dr. Carrasco will not receive additional compensation for Board service while employed by the Company and has no committee assignments at this time. There are no arrangements or understandings with any person pursuant to which he was selected as a director, no family relationships with any director or executive officer, and no transactions requiring disclosure under Item 404(a) of Regulation S-K. The Board has determined that Dr. Carrasco is not independent under Nasdaq listing standards due to his employment with the Company.
Item 7.01. Regulation FD Disclosure
The Company intends to issue a press release with a corporate update on or about September 19, 2025, relating to the termination of the Purchase Agreement.
The information furnished in this Item 7.01, including any press release to be issued, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
Cataneo is a Munich-based provider of advertising-sales, traffic, rights-management and related media technology solutions. While the acquisition will not proceed, the Company believes the outcome streamlines focus and capital allocation on core growth programs and active customer deployments, and the Company continues to evaluate strategic partnerships, integrations and selective acquisitions aligned with its platform strategy. There can be no assurance that any such opportunities will be identified or consummated.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s business strategy, liquidity and future initiatives. Forward-looking statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are discussed in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update forward-looking statements except as required by law.
Exhibit Index
| Exhibit No. | Description | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Date: September 18, 2025 | By: | /s/ Tyler J. Luck |
| Name: | Tyler J. Luck | |
| Title: | Acting Chief Executive Officer | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2025
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission File Number: 001-40130
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 98-1574798 | |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of principal executive offices) | (Zip Code) |
650-714-2747
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of September 30, 2025, 44,880,795 shares of the Issuer’s common stock, $0.0001 par value per share, and 10,315,024 public warrants representing the right to acquire one share of the Issuer’s common stock for $11.50, were outstanding.
EXPLANATORY NOTE
This Amendment No. 1 to the Quarterly Report on Form 10-Q/A (the “Amendment”) amends the Quarterly Report on Form 10-Q of Brand Engagement Network Inc., (the “Company”) for the quarter ended June 30, 2025 (the “Original Filing”), that was originally filed with the U.S. Securities and Exchange Commission on October 10, 2025. The Amendment is being filed to submit Exhibit 101. The Amendment corrects a minor typographical error, revises the exhibit index included in Part II, Item 6 of the Original Filing and includes Exhibit 101 (XBRL interactive data) as an exhibit.
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), new certifications by the Company’s principal executive officer and principal financial officers are filed as exhibits hereto.
Except as described above, the Amendment does not modify or update the disclosures presented in, or exhibits to, the Original Filing in any way. Those sections of the Original Filing that are unaffected by the Amendment are not included herein. The Amendment continues to speak as of the date of the Original Filing. Furthermore, the Amendment does not reflect events occurring after the filing of the Original Filing. Accordingly, the Amendment should be read in conjunction with the Original Filing, as well as the Company’s other filings made with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act subsequent to the filing of the Original Filing.
Table of Contents
| Page | ||
| Part I. Financial Information | 4 | |
| Item 1. Financial Statements | 4 | |
| Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 | 4 | |
| Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 | 5 | |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2025 and 2024 | 6 | |
| Unaudited Condensed Consolidated Statement of Cash Flows For the Six Months Ended June 30, 2025 and 2024 | 7 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 8 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 33 | |
| Item 4. Controls and Procedures | 33 | |
| Part II. Other Information | 35 | |
| Item 1. Legal Proceedings | 35 | |
| Item 1A. Risk Factors | 35 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 35 | |
| Item 3. Defaults Upon Senior Securities | 35 | |
| Item 4. Mine Safety Disclosures | 35 | |
| Item 5. Other Information | 35 | |
| Item 6. Exhibits | 36 | |
| Signatures | 37 |
Brand Engagement Network, BEN, our logo and our other trademarks or service marks appearing in this report are the property of Brand Engagement Network Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names included in this report are without the ®, ™ or other applicable symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
Unless otherwise indicated, “Brand Engagement Network,” “BEN,” “the Company,” “our,” “us,” or “we,” refer to Brand Engagement Network Inc. and its consolidated subsidiaries.
| 2 |
| Table of Contents |
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, (the “Securities Act”) and the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may” and “assumes,” variations of such words and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to supply chain constraints, our strategy, competition, future operations and production capacity, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the markets in which we operate, prospects and plans, objectives of management, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including industry trends, inflation and interest rate trends and impacts and other macro-economic impacts on our business, results of operations and financial condition and governmental and our responses to such events, including those identified in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, in Part II, Item 1A, “Risk Factors” of the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025, and that are otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
| 3 |
| Table of Contents |
Part I. Financial Information
Item 1. Financial Statements
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2025 | December 31, 2024* | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 20,356 | $ | 149,273 | ||||
| Accounts receivable, net of allowance | 9,000 | 30,888 | ||||||
| Due from Sponsor | - | 3,000 | ||||||
| Prepaid expenses and other current assets | 1,922,645 | 1,042,398 | ||||||
| Total current assets | 1,952,001 | 1,225,559 | ||||||
| Property and equipment, net | 280,152 | 292,757 | ||||||
| Right of use asset - operating lease | 420,062 | 507,182 | ||||||
| Intangible assets, net | 14,369,717 | 16,124,370 | ||||||
| TOTAL ASSETS | $ | 17,021,932 | $ | 18,149,868 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,611,776 | $ | 5,995,235 | ||||
| Accrued expenses | 2,709,576 | 4,593,712 | ||||||
| Due to related parties | - | 693,036 | ||||||
| Short-term debt | 2,354,306 | 1,655,080 | ||||||
| Convertible note | 760,000 | 1,140,000 | ||||||
| Operating lease liability | - | 173,497 | ||||||
| Total current liabilities | 10,435,658 | 14,250,560 | ||||||
| Operating lease liability | 366,255 | 335,766 | ||||||
| Warrant liabilities | 494,873 | 919,050 | ||||||
| Total liabilities | 11,296,786 | 15,505,376 | ||||||
| Commitments and contingencies (Note L) | - | - | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock par value $0.0001 per share, 10,000,000 shares authorized, none designated. There are no shares issued or outstanding as of June 30, 2025 or December 31, 2024 | — | — | ||||||
| Common stock par value of $0.0001 per share, 750,000,000 shares authorized. As of June 30, 2025 and December 31, 2024, respectively, 43,801,488 and 39,573,988 shares issued and outstanding | 4,381 | 3,957 | ||||||
| Additional paid-in capital | 55,443,064 | 49,657,684 | ||||||
| Accumulated deficit | (49,722,299 | ) | (47,017,149 | ) | ||||
| Total stockholders’ equity | 5,725,146 | 2,644,492 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 17,021,932 | $ | 18,149,868 | |||||
| * | Derived from audited information |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
| Table of Contents |
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | 5,000 | $ | — | $ | 15,000 | $ | 49,790 | ||||||||
| Cost of revenues | — | — | — | — | ||||||||||||
| Gross profit | 5,000 | — | 15,000 | 49,790 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| General and administrative | 1,848,021 | 5,255,136 | 5,062,210 | 11,765,671 | ||||||||||||
| Depreciation and amortization | 974,889 | 682,244 | 1,914,095 | 799,591 | ||||||||||||
| Research and development | 7,398 | 355,565 | 18,095 | 606,236 | ||||||||||||
| Total operating expenses | 2,830,308 | 6,292,945 | 6,994,400 | 13,171,498 | ||||||||||||
| Loss from operations | (2,825,308 | ) | (6,292,945 | ) | (6,979,400 | ) | (13,121,708 | ) | ||||||||
| Other income (expenses): | ||||||||||||||||
| Interest expense | (21,609 | ) | (19,403 | ) | (146,651 | ) | (44,453 | ) | ||||||||
| Interest income | — | 114 | — | 3,232 | ||||||||||||
| Gain on debt extinguishment | 3,959,054 | 1,847,992 | 3,959,054 | 1,847,992 | ||||||||||||
| Change in fair value of warrant liabilities | (190,715 | ) | 1,456,661 | 424,177 | 1,395,838 | |||||||||||
| Other | (16,342 | ) | (42,123 | ) | 37,670 | (15,014 | ) | |||||||||
| Other income (expenses), net | 3,730,388 | 3,243,241 | 4,274,250 | 3,187,595 | ||||||||||||
| Income (loss) before income taxes | 905,080 | (3,049,704 | ) | (2,705,150 | ) | (9,934,113 | ) | |||||||||
| Income taxes | — | — | — | — | ||||||||||||
| Net income (loss) | $ | 905,080 | $ | (3,049,704 | ) | $ | (2,705,150 | ) | $ | (9,934,113 | ) | |||||
| Net income (loss) per common share- basic and diluted | $ | 0.02 | $ | (0.09 | ) | $ | (0.07 | ) | $ | (0.34 | ) | |||||
| Weighted-average common shares - basic and diluted | 42,166,121 | 33,993,867 | 41,240,177 | 29,635,857 | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
| Table of Contents |
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance at December 31, 2024 | — | $ | — | 38,168,988 | $ | 3,957 | $ | 49,657,684 | $ | (47,017,149 | ) | $ | 2,644,492 | |||||||||||||||
| Sale of common stock | — | — | 1,186,426 | 86 | 1,325,456 | — | 1,325,542 | |||||||||||||||||||||
| Stock issued in conversion of convertible notes | — | — | 316,666 | 32 | 379,968 | — | 380,000 | |||||||||||||||||||||
| Stock issued for Standby Equity Purchase Agreement liability | — | — | 643,574 | 64 | 432,418 | — | 432,482 | |||||||||||||||||||||
| Warrant exercises | — | — | 787,132 | 79 | 1,499,471 | — | 1,499,550 | |||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | — | — | 223,586 | 22 | 374,904 | — | 374,926 | |||||||||||||||||||||
| Stock issued in settlement of liabilities | — | — | 588,026 | 59 | 265,435 | — | 265,494 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (3,610,230 | ) | (3,610,230 | ) | |||||||||||||||||||
| Balance at March 31, 2025 | — | — | 41,914,398 | 4,299 | 53,935,336 | (50,627,379 | ) | 3,312,256 | ||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | — | — | — | — | 128,839 | — | 128,839 | |||||||||||||||||||||
| Warrant exercises | — | — | 25,510 | 3 | 49,997 | — | 50,000 | |||||||||||||||||||||
| Issuance of common shares | — | — | 786,580 | 79 | 1,328,892 | — | 1,328,971 | |||||||||||||||||||||
| Net income | — | — | — | — | — | 905,080 | 905,080 | |||||||||||||||||||||
| Balance at June 30, 2025 | — | $ | — | 42,726,488 | $ | 4,381 | $ | 55,443,064 | $ | (49,722,299 | ) | $ | 5,725,146 | |||||||||||||||
| Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Par Value | Shares | Par Value | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance at December 31, 2023 | — | $ | — | 23,270,404 | $ | 2,327 | $ | 30,993,846 | $ | (13,301,720 | ) | $ | 17,694,453 | |||||||||||||||
| Stock issued to DHC shareholders in reverse recapitalization | — | — | 7,885,220 | 789 | (10,722,277 | ) | — | (10,721,488 | ) | |||||||||||||||||||
| Issuance of common stock pursuant to Reseller Agreement | — | — | 1,750,000 | 175 | 13,474,825 | — | 13,475,000 | |||||||||||||||||||||
| Sale of common stock | — | — | 645,917 | 65 | 6,324,935 | — | 6,325,000 | |||||||||||||||||||||
| Warrant exercises | — | — | 40,514 | 4 | 15,260 | — | 15,264 | |||||||||||||||||||||
| Stock-based compensation | — | — | — | — | 698,705 | — | 698,705 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (6,884,409 | ) | (6,884,409 | ) | |||||||||||||||||||
| Balance at March 31, 2024 | — | $ | — | 33,592,055 | $ | 3,360 | $ | 40,785,294 | $ | (20,186,129 | ) | $ | 20,602,525 | |||||||||||||||
| Stock issued in settlement of accounts payable and loans payable | — | — | 93,333 | 9 | 321,999 | — | 322,008 | |||||||||||||||||||||
| Sale of common stock | — | — | 877,500 | 198 | 1,993,552 | — | 1,993,750 | |||||||||||||||||||||
| Warrant exercises | — | — | 13,505 | 1 | 4,999 | — | 5,000 | |||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | — | — | 381,915 | 42 | 768,497 | — | 768,539 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (3,049,704 | ) | (3,049,704 | ) | |||||||||||||||||||
| Balance at June 30, 2024 | — | — | 34,958,308 | 3,610 | 43,874,341 | (23,235,833 | ) | 20,642,118 | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (2,705,150 | ) | $ | (9,934,113 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization expense | 1,914,095 | 799,591 | ||||||
| Allowance for uncollected receivables | 30,000 | 30,000 | ||||||
| Write off of deferred financing fees | — | 1,427,729 | ||||||
| Change in fair value of warrant liabilities | (424,177 | ) | (1,395,838 | ) | ||||
| Gain on debt extinguishment | (3,959,054 | ) | (1,847,992 | ) | ||||
| Stock based compensation, including the issuance of restricted shares | 498,440 | 1,262,090 | ||||||
| Non-cash interest expense | 86,042 | — | ||||||
| Reduction in right of use asset | 87,120 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expense and other current assets | (877,247 | ) | (793,008 | ) | ||||
| Accounts receivable | (8,112 | ) | (20,000 | ) | ||||
| Accounts payable | 600,842 | 3,591,279 | ||||||
| Accrued expenses | (336,925 | ) | (1,730,320 | ) | ||||
| Deferred revenue | — | (2,290 | ) | |||||
| Operating lease liability | (143,008 | ) | — | |||||
| Net cash used in operating activities | (5,237,134 | ) | (8,612,872 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | — | (26,316 | ) | |||||
| Capitalized internal-use software costs | (141,512 | ) | (73,414 | ) | ||||
| Net cash used in investing activities | (141,512 | ) | (99,730 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Cash and cash equivalents acquired in connection with the reverse recapitalization | — | 858,292 | ||||||
| Proceeds from the sale of common stock | 2,654,513 | 8,518,750 | ||||||
| Proceeds received from option and warrant exercises | 1,549,550 | 20,264 | ||||||
| Payment of financing costs | — | (858,292 | ) | |||||
| Proceeds from short term loans | 1,102,866 | — | ||||||
| Repayment of short term loans | (57,200 | ) | — | |||||
| Payment of related party note | — | (80,000 | ) | |||||
| Net cash provided by financing activities | 5,249,729 | 8,459,014 | ||||||
| Net decrease in cash and cash equivalents | (128,917 | ) | (253,588 | ) | ||||
| Cash and cash equivalents at the beginning of the period | 149,273 | 1,685,013 | ||||||
| Cash and cash equivalents at the end of the period | $ | 20,356 | $ | 1,431,425 | ||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Supplemental Non-Cash Information | ||||||||
| Settlement of accounts payable and debt into common shares | $ | — | $ | 322,008 | ||||
| Issuance of common stock pursuant to Reseller Agreement | $ | — | $ | 13,475,000 | ||||
| Settlement of accounts payable into convertible note | — | 1,900,000 | ||||||
| Financing costs in accrued expenses | — | 200,000 | ||||||
| Issuance of common stock for Standby Equity Purchase Agreement liability | $ | 432,482 | $ | — | ||||
| Stock-based compensation capitalized as part of capitalized software costs | $ | 5,325 | $ | 205,154 | ||||
| Settlement of liabilities into common shares | $ | 265,494 | $ | — | ||||
| Conversion of convertible notes into common shares | $ | 380,000 | $ | — | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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BRAND ENGAGEMENT NETWORK INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A — NATURE OF OPERATIONS AND GOING CONCERN
Nature of Operations
Brand Engagement Network Inc. (formerly Blockchain Exchange Network Inc.) (together with its subsidiaries, “BEN” or “the Company”) was formed in Jackson, Wyoming on April 17, 2018, and was named in honor of the renowned Founding Father and inventor, Benjamin Franklin. In 2019, the Company became a wholly-owned subsidiary of Datum Point Labs (“DPL”), and then was spun out of DPL in May 2021. BEN acquired DPL in December 2021.
The Company is an innovative artificial intelligence (“AI”) platform provider, designed to interface with emerging technologies, including blockchain, internet of things, and cloud computing, that drives digital transformation across various industries and provides businesses with unparalleled competitive edge. BEN offers a suite of configured and customizable applications, including natural language processing, anomaly detection, encryption, recommendation engines, sentiment analysis, image recognition, personalization, and real-time decision-making. These applications help companies improve customer experiences, optimize cost drivers, mitigate risks, and enhance operational efficiency.
Liquidity and Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of June 30, 2025, the Company had an accumulated deficit of $49,722,299, a net income of $905,080 and a net loss of $2,705,150 for the three and six months ended June 30, 2025, respectively, and net cash used in operating activities of $5,237,134 during the six months ended June 30, 2025. Management expects to continue to incur operating losses and negative cash flows from operations for at least the next 12 months. The Company has financed its operations to date from proceeds from the sale of Common Stock, exercises of warrants, the issuance of promissory notes and convertible debt, and its transactions with AFG Companies Inc. (“AFG”). On August 26, 2024, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), whereby the Company has the right, but not the obligation, to sell up to $50,000,000 of its shares of Common Stock at the Company’s request any time during the 36 months following the execution of the SEPA, subject to certain conditions. However, the Company’s ability to access the proceeds from the SEPA is subject to market conditions, such as trading volume, the price of the Company’s Common Stock and other factors beyond the Company’s control. The Company’s current liquidity position raises substantial doubt about the Company’s ability to continue as a going concern.
The Company believes that its existing cash and cash equivalents and proceeds from the May SPA, August SPA, SEPA (Note I), and Yorkville Promissory Note (Note H) will be insufficient to meet its anticipated cash requirements for at least the next 12 months from the date the unaudited condensed consolidated financial statements are issued. The Company will need to raise additional capital to continue to fund operations and product research and development. The Company believes that it will be able to obtain additional working capital through equity financings, additional debt, or other arrangements to fund future operations, and it intends to raise capital through equity or debt investments in the Company by third parties, including through the SEPA, however, the Company’s cannot conclude these are probable of being implemented or, if probable of being implemented, being in sufficient enough amounts to satisfy the Company’s contractual amounts as they presently exist that are coming due over the next 12 months as of the date of such filing.
The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary depending upon several factors including but not limited to the design, timing, and the progress of the Company’s research and development programs, and the level of financial resources available. The Company can adjust its operating plan spending based on available financial resources.
The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s unaudited condensed consolidated
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financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC.
Unaudited interim results
These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual audited financial statements and the notes thereto as of and for the year ended December 31, 2024 found in the Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 are unaudited but have been prepared on the same basis as the annual audited financial statements and include all normal, recurring adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year.
Use of Estimates
The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments, and assumptions. Significant estimates in the Company’s consolidated financial statements include, but are not limited to, assumptions used to measure stock-based compensation, useful lives of intangible assets, warrant liabilities, and derivative liabilities.
These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.
Segment and geographic information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM manages the Company’s operations on a consolidated basis for the purpose of allocating resources. The Company views its operations as, and manages its business in, one operating segment.
The accounting policies of its segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for its segment based on net loss, which is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total assets. The CODM uses cash forecast models in deciding how to invest into the segment. The CODM analyzes the Company’s net loss and monitors budget versus actual results to assess the performance of the Company. Significant expenses are not regularly available or reviewed by the CODM. Other segment expenses include other income (expenses), net, which were $3,730,388 and $3,243,241 during the three months ended June 30, 2025 and 2024 and $4,274,250 and $3,187,959 during the six months ended June 30, 2025 and 2024.
The Company has an office in the Republic of Korea dedicated to research and development activities.
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Significant Risks and Uncertainties
There can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing goods and services require significant time and capital and is subject to regulatory review and approval as well as competition from other AI technology companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.
Revenue Recognition and Accounts Receivable
The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented. The core principle of ASC 606 is to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach:
1)Identification of the Contract, or Contracts, with a Customer.
2)Identification of the Performance Obligations in the Contract.
3)Determination of the Transaction Price.
4)Allocation of the Transaction Price to the Performance Obligations in the Contract.
5)Recognition of Revenue when, or as, Performance Obligations are Satisfied.
Trade receivables represent amounts due from customers and are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts, the aging of the accounts receivable, historical experience, and other currently available evidence. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than the historical experience, management’s estimates of the recoverability of amounts due the Company could be adversely affected. Trade receivables of the Company as of June 30, 2025 and December 31, 2024 are net of an allowance for expected credit losses amounting to $0 and $20,000, respectively.
Impairment of Definite Lived Intangible Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds its estimated undiscounted net cash flows, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in an estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the asset. No impairment losses were recorded for the three and six months ended June 30, 2025 or 2024.
In-Process Research and Development
The fair value of in-process research and development (“IPR&D”) acquired in an asset acquisition, that has been determined to have alternative future uses in accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), is capitalized as an indefinite-lived intangible asset until the completion of the related research and development activities in accordance with ASC 350 or the determination that impairment is necessary. If the related research and development is completed, the asset is reclassified as a definite-lived asset at the time of completion and is amortized over its estimated useful life as research and development costs in accordance with ASC 730-10-25-2(c) and ASC 350. During the second quarter of 2024, the Company’s IPR&D was completed and reclassified as a definite-lived asset and began amortizing over its estimated useful life of 5 years.
During the three and six months ended June 30, 2025 and 2024, the Company did not recognize an impairment charge related to its indefinite-lived IPR&D.
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Research and Development Costs
Costs incurred in connection with research and development activities are expensed as incurred. These costs include rent for facilities, hardware and software equipment costs, employee related costs, consulting fees for technical expertise, prototyping, and testing.
Stock-Based Compensation
The Company recognizes stock-based compensation for stock-based awards (including stock options, restricted stock units, and restricted stock awards) in accordance with ASC Topic 718, Compensation — Stock Compensation. Determining the appropriate fair value of stock-based awards requires numerous assumptions, some of which are highly complex and subjective. The Company estimates the fair value of its stock option and warrant awards on the grant date using the Black-Scholes option-pricing model. The fair value of each restricted stock award is measured as the fair value per share of the Company’s Common Stock at the date of grant.
Stock-based awards generally vest subject to the satisfaction of service requirements, or the satisfaction of both service requirements and achievement of certain performance conditions or market and service conditions. For stock-based awards that vest subject to the satisfaction of service requirements or market and service conditions, stock-based compensation is measured based on the fair value of the award on the date of grant and is recognized as stock-based compensation on a straight-line basis over the requisite service period. For stock-based awards that have a performance component, stock-based compensation is measured based on the fair value on the grant date and is recognized over the requisite service period as achievement of the performance objective becomes probable.
The Black-Scholes option-pricing model requires the use of judgments and assumptions, including fair value of its Common Stock, the option’s expected term, the expected price volatility of the underlying stock, risk free interest rates and the expected dividend yield.
The Black-Scholes model assumptions are further described below:
| ● | Common stock — the fair value of the Company’s Common Stock. | |
| ● | Expected Term — The expected term of employee options with service-based vesting is determined using the “simplified” method, as prescribed in the SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term. | |
| ● | Expected Volatility — The Company lacks its own historical stock data. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly traded set of peer companies. | |
| ● | Risk-Free Interest Rate — The Company bases the risk-free interest rate on the U.S. Treasury yield curve commensurate with the expected term of each option. | |
| ● | Expected Dividend —The Company has never declared or paid any cash dividends on its Common Stock and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. |
Cash and Cash Equivalents
The Company considers all highly-liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and are held for the purpose of meeting short-term liquidity requirements, rather than for investment purposes. The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts, the balances of which, at times, may exceed federally insured limits.
Capitalized Internal-Use Software Costs
Pursuant to ASC 350-40, Internal-Use Software, the Company capitalizes development costs for internal use software projects once the preliminary project stage is completed, management commits to funding the project, and it is probable that the project will be completed, and the software will be used to perform the function intended. The Company ceases capitalization at such time as the computer software project is substantially complete and ready for its intended use. The determination that a software project is eligible for capitalization and the ongoing assessment of recoverability of capitalized software development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, estimated economic life and changes in software and hardware technologies.
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The Company capitalizes costs for internal-use software once project approval, funding, and feasibility are confirmed. These costs primarily consist of external consulting fees and direct labor costs. When the internal-use software is ready for its intended use, the Company reclassifies the internal-use software to developed software intangible assets and amortizes the asset over an estimated useful life ranging from 3 to 5 years. No impairment losses were recorded for the three and six months ended June 30, 2025.
Leases
The Company determines whether an arrangement is or contains a lease, its classification, and its term at the lease commencement date. Leases with a term greater than one year will be recognized on the balance sheet as right-of-use (“ROU”) assets, current lease liabilities, and if applicable, long-term lease liabilities. The Company includes renewal options to extend the lease term where it is reasonably certain that it will exercise these options. Lease liabilities and the corresponding ROU assets are recorded based on the present values of lease payments over the lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rates, which are the rates that would be incurred to borrow on a collateralized basis, over similar terms, amounts equal to the lease payments in a similar economic environment. Payments for non-lease components or that are variable in nature that do not depend on a rate or index are not included in the lease liability and are typically expensed as incurred. If significant events, changes in circumstances, or other events indicate that the lease term or other inputs have changed, the Company would reassess lease classification, remeasure the lease liability using revised inputs as of the reassessment date, and adjust the ROU assets. Lease expense is recognized on a straight-line basis over the expected lease term for operating classified leases.
Foreign Currency Transactions
Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Gains and losses arising from foreign currency transactions and the effects of remeasurements are captured within the net loss within statement of operations. Foreign currency transaction gains and losses were not material for the three and six months ended June 30, 2025 and 2024.
Warrant Liabilities
The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, ASC Topic 505, Equity, and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company accounts for the public warrants, each representing the right to acquire one share of Common Stock for $11.50 (the “Public Warrants”) and the private placement warrants, each representing the right to acquire one share of Common Stock for $11.50 (the “Private Placement Warrants”), in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Public Warrants and Private Placement Warrants as liabilities at their fair value and adjust the Public Warrants and Private Placement Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statements of operations.
Fair Value of Financial Instruments
The Company accounts for financial instruments under ASC 820, Fair Value Measurements (“ASC 820”). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 — assets and liabilities whose significant value drivers are unobservable.
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The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:
SCHEDULE OF COMPANY’S ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS
| Fair value measurement at reporting date using | ||||||||||||
| June 30, 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Liabilities: | ||||||||||||
| Warrant liabilities - Public Warrants | $ | — | $ | 310,480 | $ | — | ||||||
| Warrant liabilities - Private Placement Warrants | $ | — | $ | 184,393 | $ | — | ||||||
| Total Warrant Liabilities | $ | — | $ | 494,873 | $ | — | ||||||
| Fair value measurement at reporting date using | ||||||||||||
| December 31, 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Liabilities: | ||||||||||||
| Warrant liabilities - Public Warrants | $ | — | $ | 576,606 | $ | — | ||||||
| Warrant liabilities - Private Placement Warrants | $ | — | $ | 342,444 | $ | — | ||||||
| Total Warrant Liabilities | $ | — | $ | 919,050 | $ | — | ||||||
The Public Warrants and Private Placement Warrants assumed in connection with the Business Combination were accounted for as liabilities in accordance with ASC 815 and are presented within warrant liabilities on the accompanying unaudited condensed consolidated balance sheets. The warrant liabilities are initially measured at fair value at the day of the Business Combination and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations.
The fair value of the Public Warrants and Private Placement Warrants is estimated based on the closing price of the Public Warrants, an observable market quote but is classified as a Level 2 fair value measurement due to the lack of an active market.
Gain on debt extinguishment
Gain on extinguishment of debt for the six months ended June 30, 2025 was approximately $4.0 million, related to settlement of due to related parties (see note K), accounts payable and accrued expenses. through negotiated cash settlement. Gain on extinguishment of debt for the three and six months ended June 30, 2024 was approximately $1.8 million, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement.
Net Loss per Share
Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding instruments are exercised/converted, and the proceeds are used to purchase Common Stock at the average market price during the period. Instruments may have a dilutive effect under the treasury stock method only when the average market price of the Common Stock during the period exceeds the exercise price/conversion rate of the instruments. The Company accounts for stock issued in spin-out transactions and consummations of mergers of entities under common control retrospectively. For diluted net loss per share, the weighted-average number of shares of Common Stock is the same for basic net loss per share due to the fact that when a net loss exists, potentially dilutive securities are not included in the calculation when the impact is anti-dilutive.
The following potentially dilutive securities are excluded from the calculation of weighted average shares of Common Stock outstanding because their inclusion would have been anti-dilutive:
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
| June 30, | ||||||||
| 2025 | 2024 | |||||||
| Unvested restricted shares | 687,830 | 35,461 | ||||||
| Options | 1,386,400 | 2,508,553 | ||||||
| Warrants | 16,440,962 | 22,931,826 | ||||||
| Convertible note (as converted) | 633,334 | 1,583,334 | ||||||
| Total | 19,148,526 | 27,059,174 | ||||||
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Recently Issued but Not Yet Adopted Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. This ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the effect of this pronouncement on its disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
NOTE C — MERGER WITH DHC
On March 14, 2024, the Company consummated its previously announced business combination (the “Closing”) pursuant to the Business Combination Agreement, dated September 7, 2023 (as amended, the “Business Combination Agreement”), by and among DHC Acquisition Corp., a Cayman Islands exempted company (“DHC”), Brand Engagement Network Inc., a Wyoming corporation (“Prior BEN”), BEN Merger Subsidiary Corp., a Delaware corporation and a direct, wholly-owned subsidiary of DHC (“Merger Sub”) and DHC Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The transactions contemplated by the Business Combination Agreement, including the Domestication and the Merger (each as defined below) are collectively referred to herein as the “Business Combination.”
Prior to the Closing, as contemplated by the Business Combination Agreement, DHC became a Delaware corporation named “Brand Engagement Network Inc.” (the “Domestication”). Following the Domestication, on March 14, 2024, pursuant to the Business Combination Agreement, Merger Sub merged with and into Prior BEN (the “Merger”).
Except as otherwise indicated, references herein to “BEN,” the “Company,” or the “Combined Company,” refer to Brand Engagement Network Inc. Inc. on a post-Merger basis, and references to “Prior BEN” refer to the business of privately-held Brand Engagement Network Inc. prior to the completion of the Merger. References to “DHC” refer to DHC Acquisition Corp. prior to the completion of the Merger.
The Merger was accounted for as a reverse recapitalization under U.S. GAAP because the primary assets of DHC were cash and cash equivalents. For financial reporting purposes Prior BEN was determined to be the accounting acquirer based upon the terms of the Merger and other factors, including: (i) Prior BEN stockholders owned approximately 76% of the Combined Company and (ii) Prior BEN management held all key positions of management. Accordingly, the Merger was treated as the equivalent of Prior BEN issuing stock to assume the net liabilities of DHC. As a result of the Merger, the net liabilities of DHC were recorded at their historical cost in the unaudited condensed consolidated financial statements and the reported operating results prior to the Merger are those of Prior BEN. The following table summarizes the assets acquired and liabilities assumed as part of the reverse recapitalization:
SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED
| March 14, 2024 | ||||
| Cash and cash equivalents | $ | 858,292 | ||
| Due from Sponsor | 3,000 | |||
| Prepaid and other current assets | 16,824 | |||
| Accounts payable | (2,352,328 | ) | ||
| Accrued expenses | (5,782,211 | ) | ||
| Due to related parties | (693,036 | ) | ||
| Warrant liability | (1,913,737 | ) | ||
| Net liabilities assumed | $ | (9,863,196 | ) | |
Total transaction costs were $4,121,000, of which $858,292 were charged directly to additional paid-in capital to the extent of cash received.
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NOTE D — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
SCHEDULE OF OTHER CURRENT ASSETS
| June 30, 2025 | December 31, 2024 | |||||||
| Security deposits | $ | 107,226 | $ | 108,441 | ||||
| Cataneo GmbH deposit | 550,000 | — | ||||||
| Prepaid VAT | 15,175 | 32,468 | ||||||
| Prepaid professional fees | 514,707 | 284,081 | ||||||
| Prepaid insurance | 648,064 | 567,977 | ||||||
| Prepaid other | 87,473 | 49,431 | ||||||
| Prepaid expenses and other current assets | $ | 1,922,645 | $ | 1,042,398 | ||||
NOTE E — PROPERTY AND EQUIPMENT, NET
Property and equipment include equipment, furniture, and capitalized software. Furniture and equipment are depreciated using the straight-line method over estimated useful lives of three years. Capitalized software costs are amortized straight-line over an estimated useful life ranging from 5 to 10 years.
Property and equipment consists of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
| June 30, 2025 | December 31, 2024 | |||||||
| Equipment | $ | 339,090 | $ | 337,856 | ||||
| Furniture | 351,286 | 348,754 | ||||||
| Capitalized software | 217,003 | 216,751 | ||||||
| Total | 907,379 | 903,361 | ||||||
| Accumulated depreciation and amortization | (627,227 | ) | (610,604 | ) | ||||
| Property and equipment, net of accumulated depreciation and amortization | $ | 280,152 | $ | 292,757 | ||||
For the three months ended June 30, 2025 and 2024 depreciation and amortization of property and equipment totaled $8,328 and $55,792, respectively. For the six months ended June 30, 2025 and 2024 depreciation and amortization of property and equipment totaled $16,623 and $138,078, respectively.
NOTE F — INTANGIBLE ASSETS
The following table summarizes intangible assets included on the consolidated balance sheet:
SCHEDULE OF INDEFINITE - LIVED INTANGIBLE ASSETS
| June 30, 2025 | ||||||||||||
| Gross | Accumulated Amortization | Net | ||||||||||
| Amortizing intangible assets: | ||||||||||||
| Patent portfolio | $ | 1,259,864 | $ | (588,097 | ) | $ | 671,767 | |||||
| Developed technology | 17,941,538 | (4,243,588 | ) | 13,697,950 | ||||||||
| Total | $ | 19,201,402 | $ | (4,831,685 | ) | $ | 14,369,717 | |||||
| December 31, 2024 | ||||||||||||
| Gross | Accumulated Amortization | Net | ||||||||||
| Amortizing intangible assets: | ||||||||||||
| Patent portfolio | $ | 1,259,864 | $ | (517,960 | ) | $ | 741,904 | |||||
| In-process research and development | 17,755,347 | (2,372,881 | ) | 15,382,466 | ||||||||
| Total | $ | 19,015,211 | $ | (2,890,841 | ) | $ | 16,124,370 | |||||
Total amortization expense including amortization related to developed software was $966,561 and $626,452 for the three months ended June 30, 2025 and 2024, respectively. Total amortization expense including amortization related to developed software was $1,897,472 and $661,513 for the six months ended June 30, 2025 and 2024, respectively.
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Future amortization of intangible assets are estimated to be as follows:
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE
| Years Ending December 31: | ||||
| 2025 (remaining 6 months) | $ | 1,742,683 | ||
| 2026 | 3,824,905 | |||
| 2027 | 3,739,302 | |||
| 2028 | 3,696,501 | |||
| 2029 | 1,304,560 | |||
| Thereafter | 61,766 | |||
| Total | $ | 14,369,717 | ||
NOTE G — ACCRUED EXPENSES
Accrued expenses consist of the following:
SCHEDULE OF ACCRUED EXPENSES
| June 30, 2025 | December 31, 2024 | |||||||
| Accrued professional fees | $ | — | $ | 2,747,211 | ||||
| Accrued compensation and related expenses | 1,396,126 | 1,730,043 | ||||||
| Due to related party | 1,147,472 | — | ||||||
| Accrued other | 65,500 | 116,458 | ||||||
| Accrued interest | 100,478 | — | ||||||
| Accrued expenses | $ | 2,709,576 | $ | 4,593,712 | ||||
NOTE H — DEBT
Promissory Note
On November 11, 2024, the Company issued a promissory note in the aggregate original principal amount of approximately $1,700,000 to Yorkville (the “Promissory Note”). The Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Promissory Note. The Company was required to make monthly cash payments beginning on December 15, 2024, and continuing on the same day of each successive calendar month of principal in the amount of the sum of (i) $0.4 million of principal (or the outstanding principal amount if less than such amount), plus (ii) a payment premium in an amount equal to 5% of the principal amount being paid, if applicable, and (iii) any accrued and unpaid interest as of each Installment Date. The Company shall, at its own option, repay each Installment Amount either (i) in cash on or before each Installment Date, or (ii) by submitting one or more advance notice(s) under the SEPA (as defined below), on or before the applicable Installment Date, or any combination of (i) or (ii) as determined by the Company. If the Company repays the Installment Amount in cash, the cash payment shall include the Payment Premium. If the Company elects an Advance Repayment for all or a portion of an Installment Amount, then no Payment Premium will apply. In addition, for so long as the Promissory Note is outstanding, with respect to any advance notice submitted by the Company under the SEPA, the Company shall select an Option 2 Pricing Period (as defined in the SEPA), unless otherwise agreed by Yorkville. The Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of June 30, 2025, the Company is in default with the Promissory Note and recognized incremental default interest during the period ended June 30, 2025.
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During the six months ended June 30, 2025, 643,574 shares of Common Stock were issued to Yorkville resulting in the reduction of the Promissory Note of $432,482. During the three and six months ended June 30, 2025, the Company recognized $35,404 and $125,556 in interest expense related to the Promissory Note, respectively. As of June 30, 2025, the remaining balance of $416,667 was included within short-term debt in the accompanying consolidated balance sheets. On May 28, 2025, the Company received a written notice of default from Yorkville. As of the date of this filing, Company management is in the process of negotiating with Yorkville and Yorkville has not initiated any further actions against the Company.
Convertible Notes
On April 12, 2024, the Company issued a convertible promissory note to J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“CCM”) in the principal amount of $1,900,000 (the “Cohen Convertible Note”), to settle outstanding invoices totaling $1,900,000 related to investment banking services rendered to the Company in connection with the Business Combination. Beginning on October 14, 2024, interest will accrue at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. The maturity date of the Cohen Convertible Note was March 14, 2025. During the three and six months ended June 30, 2025, the Company recognized $16,193 and $33,075 in interest expense related to the Cohen Convertible Note. As of June 30, 2025, the Company was in default of the Cohen Convertible Note. As of the date of this filing, Company management is in the process of negotiating with Cohen and Cohen has not initiated any actions against the Company.
On December 14, 2024 (the “First Conversion Date”), $760,000 of the Cohen Convertible Note converted into 633,333 shares of Common Stock at $1.20 per share (the “Floor Price”). On the 14th day of each successive month commencing with January 14, 2025 (each such day, an “Additional Conversion Date” and together with the First Conversion Date, the “Conversion Dates”), CCM may convert a portion of Cohen Convertible Note to a number of shares equal to (i) up to 20% of the outstanding principal balance of the Cohen Convertible Note plus accrued interest due under the Cohen Convertible Note divided by (ii) a price per share (the “Conversion Purchase Price”) equal to 92.75% of the arithmetic average of the Daily Volume-Weighted Average Price (“VWAP”) for the five VWAP Trading Days (as defined therein) ending on the VWAP Trading Day immediately preceding the applicable Conversion Date (subject to the Floor Price). During the three and six months ended June 30, 2025, $0 and $380,000 of the Cohen Convertible Note converted into 316,666 shares of Common Stock at $1.20 per share, respectively. As of June 30, 2025, the remaining balance of $760,000 was included within the convertible note in the accompanying consolidated balance sheets.
Short-term Debt Related to Acquisition of DM Lab
As of June 30, 2025, the Company had four loans outstanding that were assumed in the DM Lab transaction, totaling $891,974, a decrease of $252,601 from the acquisition date due to the amount converted to equity on May 25, 2023. The loans carry varying interest rates ranging from 4.667% to 6.69%. During the three months ended June 30, 2025 and 2024 the Company incurred interest expense of $6,651 and $11,404, respectively, which is included in interest expense in the unaudited condensed consolidated statement of operations. During the six months ended June 30, 2025 and 2024 the Company incurred interest expense of $21,243 and $27,020, respectively, which is included in interest expense in the unaudited condensed consolidated statement of operations. All loans are due within 12 months from the balance sheet date and have no optional or mandatory redemption or conversion features. These obligations have been classified as current liabilities on the balance sheet and the fair value of the loans approximates the carrying amount due to their short-term nature. Additionally, there are no associated restrictive covenants, third-party guarantees, or pledged collateral. As of the reporting date, there have been no defaults on these loans. In January 2025, the Company obtained a waiver to extend the due dates of $668,674 of its short-term debt to January 2026.
NOTE I — STOCKHOLDERS’ EQUITY
In August 2023, the Company entered into the Reseller Agreement with AFG whereby AFG agreed to operate as the exclusive channel partner and reseller of the Company’s software as a service in the motor vehicle marketing and manufacturing industry for a term of five years. The Company issued a non-transferable warrant (“Reseller Warrant”) that entitles AFG to purchase up to 3,750,000 shares of Common Stock at an exercise price of $10.00 and a fair value of $2.52 per warrant. The 3,750,000 warrants were cancelled in January 2025, upon the termination of the Reseller Agreement.
On May 28, 2024, the Company entered into a Securities Purchase Agreement (the “May SPA”) with certain investors (the “May Purchasers”), pursuant to which the Company agreed to issue and sell to the May Purchasers an aggregate of 191,980,000 shares of Common Stock of the Company at a price per share of $2.50 and an aggregate of 3,960,000 warrants to purchase 3,960,000 shares of Common Stock, which was divided into two tranches consisting of (i) 1,980,000 warrants immediately exercisable for a term of one year from (the “May One-Year Warrants”) and (ii) 1,980,000 warrants immediately exercisable for a term of five years (the “May Five-Year Warrants,” together with the May One-Year Warrants, the “May Warrants”), each with an exercise price of $2.50 per share, subject to customary adjustments, for an aggregate purchase price of $4,950,000.
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On May 30, 2024, the Company issued to the May Purchasers an aggregate of 200,000 Shares and 400,000 Warrants (consisting of 200,000 One-Year Warrants and 200,000 Five-Year Warrants) for an aggregate gross proceeds of $500,000. Upon the issuances of such shares of Common Stock, an aggregate of 1,260,000 May One-Year Warrants and 1,260,000 May Five-Year Warrants were issued to the May Purchasers and were immediately exercisable. The remaining shares were issued to an escrow account and such shares along with the May Warrants remain in escrow until the conditions in the May SPA are satisfied. The May Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the May SPA ending on October 29, 2024. For every $2.50 paid to the Company, the Company will release one share of Common Stock and two May Warrants from escrow to the May Purchasers. If a May Purchaser fails to pay its required funding by the respective deadline, the May Purchaser’s entire commitment under the May SPA will become immediately due and payable. During the three months ended March 31, 2025, the Company issued 330,000 shares of Common Stock to the May Purchasers for proceeds of approximately $750,000. As of June 30, 2025, 1,901,281 May One-Year Warrants and 1,251,587 May Five-Year Warrants are outstanding.
On July 1, 2024, the Company entered into a separate Securities Purchase Agreement (the “July SPA”) with The Williams Family Trust for the issuance and sale of 120,000 shares of Common Stock at a price per share of $2.50 and an aggregate of 240,000 warrants, consisting of (i) 120,000 warrants with a term of one year and (ii) 120,000 warrants with a term of five years for an aggregate purchase price of $300,000. The warrants are immediately exercisable for Common Stock at a price of $2.50 per share. As of June 30, 2025, all 240,000 warrants remain outstanding.
On August 26, 2024, the Company entered into a Securities Purchase Agreement (the “August SPA”) with certain investors (the “August Purchasers”), pursuant to which the Company will issue and sell an aggregate of 1,185,000 shares of the Company’s Common Stock at a price per share of $5.00, for an aggregate purchase price of $5,925,000.
In connection with the August SPA, on August 26, 2024 (the “Assignment Effective Date”), the Company entered into that certain share assignment and lockup release agreement (the “Assignment Agreement”) with certain members of Sponsor and certain other existing stockholders and affiliates of the Company (collectively, the “Sponsor Members” and each a “Sponsor Member”) and the August Purchasers, pursuant to which, as an inducement to enter into the August SPA, the August Purchasers assumed, all of the Sponsor Members’ rights, title and interest in an aggregate of 1,185,000 shares of Common Stock (the “Sponsor Securities”) held by Sponsor on their behalf as of the Assignment Effective Date (the “Assignment”). In exchange for the Assignment by the Sponsor Members of the Sponsor Securities to the August Purchasers, the Company agreed to release 1,252,500 shares of Common Stock from certain restrictions on transfer contained in either a (i) prior letter agreement by and among the Company’s predecessor, DHC, Sponsor and the other signatories thereto or (ii) in certain lock-up agreements executed by certain of the Sponsor Members in connection with the consummation of the Company’s prior business combination. The Sponsor Members transferred an aggregate of 1,185,000 Sponsor Securities into an escrow account. The Sponsor Securities are released from the escrow account on a pro rata basis upon the making of the required fundings on the terms and conditions described in the August SPA. In the event an August Purchaser fails to make required funding contemplated by the August SPA, a pro rata portion of the Sponsor Securities shall be released from the escrow account to the Company and the Company will cancel such Sponsor Securities.
On August 30, 2024, in connection with the August SPA and the Assignment Agreement, the Company issued to the August Purchasers an aggregate of 100,000 shares for an aggregate gross proceeds of $500,000. The remaining shares were issued to an escrow account and such shares remain in escrow until the conditions in the August SPA are satisfied. The August Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the August SPA ending on April 5, 2025.
For every $5.00 paid to the Company, the Company will release one share of Common Stock under the August SPA and one share of Common Stock under the Assignment Agreement to the August Purchasers. If an August Purchaser fails to pay its required funding by the respective deadline, the investor’s entire commitment under the August SPA will become immediately due and payable. As of June 30, 2025, the Company has experienced delays in funding, from one of the investors under the August SPA. in the aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such amounts or any future required fundings by investors will be made.
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On August 26, 2024, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $50,000,000 of the Company’s shares of Common Stock, at the Company’s request any time during the commitment period commencing on August 26, 2024 (the “SEPA Effective Date”) and terminating on the 36-month anniversary of the SEPA Effective Date. Each issuance and sale by the Company to Yorkville under the SEPA (an “Advance”) is subject to a maximum limit equal to an amount equal to 100% of the aggregate volume traded of the Company’s Common Stock on Nasdaq for the five trading days immediately preceding an Advance notice. The shares will be issued and sold to Yorkville at a per share price equal to, at the election of the Company as specified in the relevant Advance notice: (i) 96% of the Market Price (as defined below) for any period commencing on the receipt of the Advance notice by Yorkville and ending on 4:00 p.m. New York City time on the applicable Advance notice date (the “Option 1 Pricing Period”), and (ii) 97% of the Market Price for any three consecutive trading days commencing on the Advance notice date (the “Option 2 Pricing Period,” and each of the Option 1 Pricing Period and the Option 2 Pricing Period, a “Pricing Period”). “Market Price” is defined as, for any Option 1 Pricing Period, the daily VWAP of the Common Stock on Nasdaq, and for any Option 2 Pricing Period, the lowest VWAP of the Common Stock on Nasdaq during the Option 2 Pricing Period. The Advances are subject to certain limitations, including that Yorkville cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding Common Stock at the time of an Advance or acquiring since the SEPA Effective Date under the SEPA more than 19.99% of the Company’s issued and outstanding Common Stock, as of the SEPA Effective Date (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including, where the Company has obtained stockholder approval to issue in excess of the Exchange Cap in accordance with the rules of Nasdaq or such issuances do not require stockholder approval under Nasdaq’s “minimum price rule.” Additionally, if the total number of shares of Common Stock traded on Nasdaq during the applicable Pricing Period is less than the Volume Threshold (as defined below), then the number of shares of Common Stock issued and sold pursuant to such Advance notice will be reduced to the greater of (i) 30% of the trading volume of the Common Stock on Nasdaq during the relevant Pricing Period as reported by Bloomberg L.P., or (ii) the number of shares of Common Stock sold by Yorkville during such Pricing Period, but in each case not to exceed the amount requested in the Advance notice. “Volume Threshold” is defined as a number of shares of Common Stock equal to the quotient of (a) the number of shares in the Advance notice requested by the Company divided by (b) 0.30. As consideration for Yorkville’s commitment to purchase the shares of Common Stock pursuant to the SEPA, the Company paid Yorkville, (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee (the “Commitment Fee”) of $500,000 by the issuance to Yorkville of an aggregate of 280,899 shares of Common Stock (“Commitment Shares”). During the six months ended June 30, 2025, the Company issued an aggregate of 1,500,000 shares of Common Stock to Yorkville.
The Company accounts for the SEPA as a derivative that grants the Company the right, but not the obligation, to issue additional shares of Common Stock. Due to certain settlement provisions, the SEPA is precluded from equity classification. The SEPA derivative is recognized at inception and accounted for on a fair value basis. The Company determined the fair value of the SEPA derivative at inception and as of June 30, 2025 to be de minimis.
On
January 13, 2025, the Company entered into the January Warrant Exercise Agreement with certain Purchasers. Pursuant to the August
SPA, the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the Contribution Warrant to purchase
up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock
contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which
1,075,000 shares of Common Stock remain in such escrow account as of June 30, 2025.
Under the January Warrant Exercise
Agreement, the exercise price of the Committed Warrants was reduced to $1.96 per share, until May 30, 2025, after which point the
exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January
Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on the Exercise Schedule. Upon each
Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue the Reload Warrants. Upon a
Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued
under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become
exercisable for $1.96 per share for the remainder of their term. If a Purchaser exercises an Optional Warrant by June 30, 2025, the
Company shall issue the Optional Reload Warrants. In addition, under the January Warrant Exercise Agreement, for each share of
Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to
such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share.
Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
During the three and six
months ending June 30, 2025, Purchasers exercised 25,510 and 812,642 Committed Warrants to purchase 25,510 and 812,642 shares of
Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1.5 million, and such Purchasers
were or shall be issued 787,132 shares of Common Stock, 787,132 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has
been terminated with respect to such Purchasers. As of June 30, 2025, the Company has experienced delays in the exercise of warrants
of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2
million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to
exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any
investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA
will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January
Warrant Exercise Agreement.
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Common Stock Warrants
In connection with the Business Combination, the Company assumed 10,314,952 Public Warrants and 6,126,010 Private Placement Warrants, which are all outstanding as of June 30, 2025. Each whole Public Warrant and Private Placement Warrant entitles the holder to purchase one share of the Company’s Common Stock at an exercise price of $11.50 per share. The Public Warrants and Private Placement Warrants were exercisable beginning on April 13, 2024 and expire on April 14, 2029.
The Private Placement Warrants are identical to the Public Warrants, except that (x) the Private Placement Warrants and the Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of a business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable as described above so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
In connection with the May SPA, the Company also entered into a Letter Agreement to Exercise Warrants (“May Warrant Exercise Agreement”) with certain of the May Purchasers (the “Required Warrant Parties”). Under the May Warrant Exercise Agreement, if the Company uses commercially reasonable efforts to raise an additional $3,250,000 in capital (excluding amounts raised under the May SPA) but is unable to do so by October 31, 2024, the Required Warrant Parties will be required to exercise for cash certain of their May Warrants on a monthly basis in the amounts and on the dates as determined in the May Warrant Exercise Agreement. For each May Warrant so exercised, the Company will issue one new May one-Year Warrant and one new May five-Year Warrant (collectively, “May Reload Warrants”) each with an exercise price of $2.50 to the Required Warrant Party. A maximum of 2,600,000 May Reload Warrants may be issued pursuant to the May Warrant Exercise Agreement. Upon receipt of an aggregate of $3,250,000 of actual cash proceeds from the August SPA, the May Warrant Exercise Agreement will terminate automatically.
On August 26, 2024, in connection with the August SPA and the Assignment Agreement, the Company entered into a warrant purchase agreement (the “August Warrant Agreement”) with each of the warrantholders signatory thereto (the “Warrantholders”), pursuant to which the Company issued to the Warrantholders an aggregate of 960,000 warrants to purchase Common Stock (the “August Warrants”), with an exercise price of $5.00 per share with an expiration period of five years from the date of issuance.
Equity Compensation Plans
2021 Incentive Stock Option Plan
In May 2021, the Company adopted the 2021 Incentive Stock Option Plan (“2021 Option Plan”) that provides for the grant of the following types of stock awards: (i) incentive stock Options, (ii) non-statutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. The 2021 Option Plan was administered by the Company’s Board of Directors (the “Board of Directors”). In connection with the Closing, all outstanding awards were assumed by BEN pursuant to the terms of the Business Combination Agreement and the Board of Directors declared that there will be no further issuances under the 2021 Option Plan. Forfeitures under the 2021 Option Plan are automatically added to shares available for issuance under the 2023 Plan.
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2023 Long-Term Incentive Plan
In connection with the Closing, the 2023 Long-Term Incentive Plan (the “2023 Plan”) became effective. The 2023 Plan provides for the grant of the following types of stock awards: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) restricted stock, (v) restricted stock units, (vi) performance awards, (vii) dividend equivalent rights, (viii) performance awards, (ix) performance goals, (x) tandem awards, (xi) prior plan awards, and (xii) other awards. The 2023 Plan is administered by the Board of Directors. The 2023 Plan awards are available to employees, officers and contractors. The option grants authorized for issuance under the 2023 Plan may total up to 2,942,245 shares of Common Stock. As of June 30, 2025, 3,332,115 shares remained available for grant under the 2023 Plan.
NOTE J — EQUITY-BASED COMPENSATION
Option Awards
2025 Activity
Generally, options have a service vesting condition of 25% cliff after 1 year and then monthly thereafter for 36 months (2.067% per month).
The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the options granted:
SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS
| Three Months Ended March 31, | ||||
| 2024 | ||||
| Expected term | 5.0 years | |||
| Risk-free interest rate | 4.13 | % | ||
| Dividend yield | 0.00 | % | ||
| Volatility | 54.79 | % | ||
There were no stock options granted for the period ended June 30, 2025.
A summary of option activity for the six months ended June 30, 2025 is as follows:
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (in years) | |||||||||||||
| Outstanding as of December 31, 2024 | 1,386,400 | $ | 4.90 | $ | 2.58 | 8.59 | ||||||||||
| Outstanding as of June 30, 2025 | 1,386,400 | $ | 4.90 | $ | 2.58 | 7.84 | ||||||||||
| Vested and expected to vest as of June 30, 2025 | 1,386,400 | $ | 4.90 | $ | 2.58 | 7.84 | ||||||||||
| Exercisable as of June 30, 2025 | 1,081,300 | $ | 4.44 | $ | 1.31 | 7.76 | ||||||||||
The aggregate intrinsic value of options outstanding and options exercisable as of June 30, 2025 was $9,285 and $302,645, respectively. At June 30, 2025, future stock-based compensation for options granted and outstanding of $1,016,182 will be recognized over a remaining weighted-average requisite service period of 0.86.
The Company recorded stock-based compensation expense related to options of $128,839 and $291,610 in the three months ended June 30, 2025 and 2024, respectively, to the accompanying unaudited condensed consolidated statements of operations. The Company recorded stock-based compensation expense related to options of $413,346 and $698,590 in the six months ended June 30, 2025 and 2024, respectively, to the accompanying unaudited condensed consolidated statements of operations.
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Common Stock Warrants
Compensatory Warrants
As of June 30, 2025, there were 955,359 warrants outstanding at a weighted average exercise price of $3.20 per share, with expiration dates ranging from 2028 to 2033. No compensatory warrants were issued during the period ended June 30, 2025.
The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the AFG and compensatory warrants granted:
SCHEDULE OF FAIR VALUE MEASUREMENT INPUTS AND VALUATION TECHNIQUES
| Three Months Ended March 31, | ||||
| 2024 | ||||
| Expected term | 3 years | |||
| Risk-free interest rate | 4.46 | % | ||
| Dividend yield | 0.00 | % | ||
| Volatility | 55.14 | % | ||
The Company has recorded stock-based compensation related to its options, restricted share awards, and warrants in the accompanying unaudited condensed consolidated statements of operations as follows:
SCHEDULE OF STOCK BASED COMPENSATION
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative | $ | 71,221 | $ | 159,387 | $ | 406,623 | $ | 493,436 | ||||||||
| Research and development | 2,268 | $ | 132,223 | 6,723 | 205,154 | |||||||||||
| Total | $ | 73,489 | $ | 291,610 | $ | 413,346 | $ | 698,590 | ||||||||
Stock-based compensation capitalized as part of capitalized software costs for the six months ended June 30, 2025 and 2024 was $5,731 and $205,154, respectively, which is in addition to amounts included in the table above.
Restricted share awards
During the six months ended June 30, 2025, the Company issued 223,586 restricted share awards to certain of its directors and officers. All of the restricted share awards granted vested immediately upon grant. The fair value of a restricted share award is equal to the fair market value price of the Company’s Common Stock on the date of grant. The Company recorded stock-based compensation expense of $228,987 for the six months ended June 30, 2025 related to these restricted share awards.
The following table summarizes activity related to restricted share awards:
SCHEDULE OF ACTIVITY RELATED TO RESTRICTED SHARE AWARDS
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Nonvested at January 1, 2025 | — | $— | ||||||
| Granted | 223,586 | $ | 1.02 | |||||
| Vested | (223,586 | ) | $ | 1.02 | ||||
| Nonvested at June 30, 2025 | — | $ | — | |||||
NOTE K — RELATED PARTY TRANSACTIONS
AFG Reseller Agreement
On August 19, 2023, the Company entered into the Reseller Agreement, providing for, among other things, AFG to act as the Company’s exclusive reseller of certain products on terms and conditions set forth therein and, as partial consideration to AFG for such services, the Company issued 1,750,000 shares of Common Stock with an aggregate fair value of $13,475,000 based on the closing stock price on the date of the Merger. Additionally, the Company issued AFG a warrant to purchase up to 3,750,000 shares of Common Stock, with each warrant exercisable for one share of Common Stock at an exercise price of $10.00 and a fair value of $2.52 per warrant (Note H). The Company terminated the Reseller Agreement in January 2025, resulting in the forfeiture of the 3,750,000 warrants.
Advances to Officers and Directors
Certain officers and directors advanced funds to or were advanced from the Company on an undocumented, non-interested bearing, due on demand basis. As of June 30, 2025, $0 and $56,682 of amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet. As of December 31, 2024, $0 and $185,029 of amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying consolidated balance sheet. During the six months ended June 30, 2025 and 2024, the Company recorded professional and other fees and cost related to consulting services from related parties of $77,299 and $58,785, respectively, within general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
Related Party Advance
The Company received non-interest bearing and payable upon demand related party advances from DHC’s Sponsor in connection with the Merger. During the three and six months ended June 30, 2025, the Company wrote off the balance owed, which resulted in a gain on debt extinguishment of $693,036 in the accompanying unaudited condensed consolidated statement of operations. As of June 30, 2025 and December 31, 2024, the Company had $0 and $693,036 in related party advances in the accompanying unaudited consolidated balance sheets.
AFG Claims Assignment
In January 2025, the Company entered into a Claims Assignment Agreement with a related party that is also party to the May SPA. Pursuant to the Claims Assignment Agreement, the Company purchased the related party’s rights to damages related to the AFG litigation (Note L) for $525,000 which satisfied the related party’s obligations under the May SPA. The Company expensed the $525,000 within general and administrative expenses during the three months ended June 30, 2025.
NOTE L — COMMITMENTS AND CONTINGENCIES
The Company is subject to various legal and regulatory proceedings, claims, and assessments, as well as other contingencies, that arise in the ordinary course of business. The Company accrues for these contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company regularly reviews and updates its accruals for contingencies and makes adjustments as necessary based on changes in circumstances and the emergence of new information.
Leases
In September 2024, the Company entered into an operating lease for its office space in South Korea which expires in 2027. The Company’s operating lease right-of-use (“ROU”) asset and related lease liability was initially measured at the present value of future lease payments over the lease term. The Company is responsible for payment of certain real estate taxes and other expenses on its lease. These amounts are generally considered to be variable and are not included in its measurement of the ROU asset and lease liability. The Company accounts for non-lease components, such as maintenance, separately from lease components.
During the three and six months ended June 30, 2025, the Company’s operating lease costs were $53,051 and 106,102, respectively. As of June 30, 2025, the remaining term of the Company’s operating lease was 2.1 years and the discount rate was 8%.
Operating cash used in operating leases was $51,491 during the three months ended June 30, 2025. Operating cash used in operating leases was $102,981 during the six months ended June 30, 2025.
Future maturities of the operating lease liability was as follows as of June 30, 2025:
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SCHEDULE OF FUTURE MATURITIES OF THE OPERATING LEASE LIABILITY
| Years Ending December 31: | ||||
| 2025 (remaining six months) | $ | 105,041 | ||
| 2026 | 214,263 | |||
| 2027 | 145,671 | |||
| Total future minimum payments | 464,975 | |||
| Less imputed interest | (98,720 | ) | ||
| Present value of lease liabilities | $ | 366,255 | ||
Litigation
AFG Litigation
On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
Recoverables and liabilities for contingencies, arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a recoverable or liability has been earned or incurred and the amount of the assessment and/or remediation can be reasonably estimated.
Related Party Investigation
The Company’s management team assigned an advisor to the Board to conduct an internal investigation of potential related party transactions with certain members of DHC Sponsor, LLC, prior to the merger with Brand Engagement Network, Inc. These matters are still under investigation.
Employment contracts
The Company has entered into employment contracts with its officers and certain employees that provide for severance and continuation benefits in the event of termination of employment either by the Company without cause or by the employee for good reason, both as defined in the agreements, along with any unpaid vested options, equity or earned bonuses. In addition, in the event of termination of employment following a change in control, as defined in each agreement the employee shall receive a prorated bonus payment and severance payments (as defined in each agreement).
NOTE M — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the financial statements are issued. The Company did not identify any subsequent events, other than the below, that would have required adjustment or disclosure in these unaudited financial statements.
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Unterseer and CUTV, the “Sellers”) (the “Purchase Agreement”), pursuant to which, among other things, the Sellers agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price, in the form of cash and Company common stock, of $19.5 million, subject to certain adjustments. In addition, after signing, the parties executed amendments on February 6, 2025, May 26, 2025 and July 3, 2025 that, among other things, (i) provided for certain down-payments by BEN that would be non-refundable and applied as set-off against any Sellers’ claims in a pre-closing termination scenario (including reasonable professional fees/costs and a $350,000 penalty referenced in Section 12.4.2), and (ii) temporarily suspended and then re-instated the Sellers’ contractual withdrawal rights on the dates specified therein. On September 14, 2025, the parties terminated the Purchase Agreement. The termination was effected through a written notice from the Seller, which the Company acknowledged and accepted, in accordance with the terms of the Purchase Agreement.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included elsewhere in this Quarterly Report on Form 10-Q (this “Report”). Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company” or “BEN” refer to Brand Engagement Network Inc., a Delaware corporation. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report”) and with the unaudited consolidated financial statements and related notes thereto presented in this Report.
Overview
We are an emerging provider of conversational artificial intelligence (“AI”) assistants, with the purpose of transforming engagement and analytics for businesses through our security-focused, multimodal communication and human-like AI assistants. Our AI assistants are built on proprietary natural language processing, anomaly detection, multisensory awareness, sentiment and environmental analysis, as well as real-time individuation and personalization capabilities. We believe these powerful tools will empower businesses to elevate customer experiences, optimize cost management and supercharge operational efficiency. Our platform is designed to configure, train and operate AI assistants that engage with professionals and consumers through multiple channels, boosting customer experience and providing instant personalized assistance for consumers in the automotive and healthcare markets.
We still hold significant intellectual property in the form of a patent portfolio that we believe will be a cornerstone of our artificial intelligence solutions for certain industries that we expect to target, including the automotive, healthcare, and financial services industries.
Recent Events
The Cataneo Purchase Agreement
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Unterseer and CUTV, the “Sellers”) (the “Cataneo Purchase Agreement”), pursuant to which, among other things, the Sellers agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price, in the form of cash and Company common stock, of $19.5 million, subject to certain adjustments. In addition, after signing, the parties executed amendments on February 6, 2025, May 26, 2025 and July 3, 2025 that, among other things, (i) provided for certain down-payments by BEN that would be non-refundable and applied as set-off against any Sellers’ claims in a pre-closing termination scenario (including reasonable professional fees/costs and a $350,000 penalty referenced in Section 12.4.2), and (ii) temporarily suspended and then re-instated the Sellers’ contractual withdrawal rights on the dates specified therein. On September 14, 2025, the Company received a notice from the Sellers purporting to withdraw from the SPA pursuant to Section 12.4.2. The notice states that prior addenda temporarily suspending the Sellers’ withdrawal right expired on August 31, 2025, after which the Sellers exercised their withdrawal right with immediate effect. On September 14, 2025, the parties terminated the Cataneo Purchase Agreement. The termination was effected through a written notice from the Seller, which the Company acknowledged and accepted, in accordance with the terms of the Cataneo Purchase Agreement. In connection with the termination of the Cataneo Purchase Agreement, the Company will make a final payment to the Seller of $100,000 (the “Final Payment”). The Final Payment and all previously paid down-payments, which, including the Final Payment, total to approximately $650,000, are not refundable and are applied as a set-off against any of Sellers’ claims permitted by Section 12.4.2. The Company otherwise bears its own expenses. The parties’ confidentiality and similar obligations that expressly survive under the Cataneo Purchase Agreement continue in effect. Any interim exclusivity, no-shop, or similar undertakings expired by their terms in connection with the withdrawal and are no longer in effect.
Financing Registration Statements
The Company has primarily financed its operations through a series of securities purchase agreements, promissory notes, and other equity and debt financings with affiliates and non-affiliates (“Financing Arrangements”). Pursuant to the respective transaction documents, the Company filed multiple resale registration statements on Form S-1 (“Financing Registration Statements”) with respect to the Common Stock, warrants, and Common Stock underlying warrants sold or to be sold under certain of these Financing Arrangements. However, these Financing Registration Statements became stale on March 31, 2025, the date of the filing of our 2024 Annual Report, because the financial statements included in the Financing Registration Statements did not meet the SEC’s currency requirements as of March 31, 2025. Subsequent to March 31, 2025, and until we file post-effective amendments to the Financing Registration Statements with the SEC, in the event (i) the Company issues any warrants or Common Stock and (ii) any of the Company’s outstanding warrants are exercised, each under the applicable Financing Arrangement, the issuance and resale, respectively, of these securities would not be considered registered under the Securities Act of 1933, as amended, and instead any resale would be saleable under the provisions of Rule 144 of the Securities Act of 1933, as amended. See “Liquidity and Capital Resources—Capital Resources and Available Liquidity” for additional details on our Financing Arrangements.
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Yorkville Promissory Note
On November 11, 2024, the Company issued a non-convertible unsecured promissory note (the “Yorkville Promissory Note”) in the aggregate original principal amount of approximately $1.7 million to YA II PN, Ltd. (“Yorkville”). The Yorkville Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Promissory Note. The Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of June 30, 2025, the Company is in default on the Yorkville Promissory Note and there remains an unpaid and outstanding balance of $416,667. On May 28, 2025, the Company received a written notice of default from Yorkville. As of the date of this filing, Company management is in the process of negotiating with Yorkville and Yorkville has not initiated any further actions against the Company.
Cohen Convertible Note
On April 12, 2024, the Company issued a convertible promissory note to J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division in the principal amount of $1.9 million (the “Cohen Convertible Note”), to settle outstanding invoices totaling $1.9 million related to investment banking services rendered to the Company in connection with its merger with Prior BEN and DHC (as defined in Note C to our Notes to Unaudited Condensed Consolidated Financial Statements) (the merger, the “Business Combination”). Beginning on October 14, 2024, interest began accruing at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. During the six months ended June 30, 2025, $380,000 of the Cohen Convertible Note converted into, and the Company issued, 316,666 shares of Common Stock at $1.20 per share. The Cohen Convertible Note matured on March 14, 2025. As of June 30, 2025, the Company is in default on the Cohen Convertible Note and there remains an unpaid and outstanding balance of $760,000. As of the date of this filing, Company management is in the process of negotiating with Cohen and Cohen has not initiated any actions against the Company.
Warrant Exercise and Reload Agreement
On January 13, 2025, the Company entered into that certain Warrant Exercise and Reload Agreement (the “January Warrant Exercise Agreement”) with certain investors (the “Purchasers”). Pursuant to the August SPA (as defined below), the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the contribution warrant (the “Contribution Warrant”) to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account (the “Escrow Shares”).
Under the January Warrant Exercise Agreement, the exercise price of 1,074,999 May Warrants (as defined below) (the “Committed Warrants”) was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on a schedule set forth in the January Warrant Exercise Agreement (the “Exercise Schedule”). Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue (i) one new warrant to purchase one share of Common Stock exercisable for a term of two years and (ii) one new warrant to purchase one share of Common Stock exercisable for a term of five years, each with an exercise price of $1.71 per share (together, the “Reload Warrants”). Upon a Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term (the “Optional Warrants”). If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue to such Purchaser (i) one new warrant to purchase one share of Common Stock with an exercise price of $1.71 per share with a term of two years and (ii) one new warrant to purchase one share of Common Stock with an exercise price of $1.71 with a term of five years (the “Optional Reload Warrants”). In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
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During the six months ended June 30, 2025, Purchasers exercised 812,642 Committed Warrants to purchase 812,642 shares of Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1.5 million, and such Purchasers were or shall be issued 812,642 shares of Common Stock, 812,642 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has been terminated with respect to such Purchasers. As of June 30 2025, the Company has experienced delays in the exercise of warrants of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement.
AFG Subscription Agreement; Termination of Reseller Agreement
On August 19, 2023, the Company and AFG Companies Inc. (“AFG”) entered into a Reseller Agreement (the “Reseller Agreement”) providing for, among other things, AFG to act as BEN’s exclusive reseller of certain products in a designated territory on certain terms and conditions. As partial consideration to AFG for such services to BEN, (i) Prior BEN issued to AFG a number of shares of Prior BEN common stock which converted into 1,750,000 shares of Common Stock and (ii) a non-transferable warrant to purchase up to 3,750,000 shares of Common Stock at a price of $10.00 per share, with AFG’s right to exercise such warrant vesting based upon revenues earned from the sales of BEN products paid by AFG to BEN pursuant to the Reseller Agreement (the “Reseller Warrant”).
On September 7, 2023, the Company and AFG entered into a Subscription Agreement (the “AFG Subscription Agreement”) providing for (i) the purchase of shares of Prior BEN Common Stock in a private placement by the AFG and certain of its affiliates (the “AFG Investors”) as of immediately prior to the Closing Date, which converted into the right to receive 650,000 shares of Common Stock with an aggregate initial value of $6.5 million and (ii) the purchase of shares Common Stock in four installments commencing on March 14, 2025, with an aggregate purchase price of $26.0 million, at a purchase price per share prior to the installment purchase date that is the lesser of $10.00 and the average of the last reported sales prices of Common Stock for the twenty (20) trading days immediately preceding the applicable installment purchase date, subject to a floor price of $2.11 (the “AFG Installment Shares”).
On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed (the “AFG Lawsuit”).
On January 17, 2025, the Company delivered a notice of termination (“Notice”) to AFG Companies, Inc. (“AFG”) terminating the Reseller Agreement. The Notice only applies to the Reseller Agreement and does not affect AFG’s obligations under the Subscription Agreement; however, in light of the Notice and the AFG Lawsuit, the Company is uncertain whether AFG will fulfill its obligations under the Subscription Agreement. Accordingly, none of the information presented in this Report assumes that either the Reseller Warrant will become exercisable or that any AFG Installment Shares will be issued.
The Company remains committed to, and intends to continue developing, its automotive vertical. The Company intends to utilize additional channel partners and grow its sales team to further expand its customer base and drive revenues. The Company is finalizing preparations to launch its Automotive AI Agent, a solution that integrates with major automotive data and service platform providers and supports over 13,000 dealerships nationwide. Additionally, the Company plans to expand its efforts through pilot programs in the Midwest, stronger reseller partnerships in Mexico, and collaborations with Canadian dealership groups. Recently, the Company has secured automotive pilots using its AI agent, which the Company believes will improve lead conversions, automates scheduling tools, enhances service efficiency, and enables advanced analytics to streamline operations.
Key Factors and Trends Affecting our Business
Productions and Operations
We expect to continue to incur significant operating costs that will impact our future profitability, including research and development expenses as we introduce new products and improves existing offerings; capital expenditures for the expansion of our development and sales capacities and driving brand awareness; additional operating costs and expenses for production ramp-up; general and administrative expenses as we scale our operations; interest expense from debt financing activities; and selling and distribution expenses as we build our brand and market our products. To date, we have not yet sold any of our products beyond their pilot stage. As a result, we will require substantial additional capital to develop products and fund operations for the foreseeable future.
Revenues
We are a development stage company and have not generated any significant revenue to date.
Public Company Costs
We expect to hire additional staff and implement new processes and procedures to address public company requirements, particularly with respect to internal controls compliance and public company reporting obligations. We also expect to incur substantial additional expenses for, among other things, directors’ and officers’ liability insurance, director compensation and fees, listing fees, SEC registration fees, and additional costs for investor relations, accounting, audit, legal and other functions.
If we cease to become an emerging growth company, we will become subject to the provisions and requirements under Section 404(b) of the Sarbanes-Oxley Act of 2002, which will require us to undergo audits of our internal controls over financial reporting as part of our yearly financial statement audits, resulting in a significant increase in consultant and audit costs over previous levels going forward.
Components of Results of Operations
Operating expenses
General and administrative expenses
General and administrative expenses consist of employee-related expenses including salaries, benefits, and stock-based compensation as well as fees paid for legal, accounting and tax services, consulting fees and facilities costs not otherwise included in research and development expense. We have and expect to further incur significant expenses as a result of becoming a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance, investor relations and other administrative expenses and professional services.
Depreciation and amortization
Depreciation expense relates to property and equipment which consists of equipment, furniture and capitalized software. Amortization expense relates to intangible assets.
Research and development cost
Costs incurred in connection with research and development activities are expensed as incurred. These costs include rent for facilities, hardware and software equipment costs, consulting fees for technical expertise, prototyping, and testing.
Interest expense
Interest expense consists of interest on our related party note payable and short-term debt.
Interest income
Interest income consists of interest earned on our excess cash.
Change in fair value of warrant liabilities
Change in fair value of warrant liabilities reflected the non-cash charge for changes in the fair value of the warrant liability that is subject to re-measurement at each balance sheet date.
Other expenses
Other expenses primarily consists of foreign currency gains or losses as a result of exchange rate fluctuations on transactions denominated in Korean won.
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Results of Operations
Comparison of the Three Months Ended June 30, 2025 and 2024
| Three Months Ended June 30, | Increase | |||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Revenues | $ | 5,000 | $ | - | $ | 5,000 | ||||||
| Operating expenses: | ||||||||||||
| General and administrative | 1,848,021 | 5,255,136 | (3,407,115 | ) | ||||||||
| Depreciation and amortization | 974,889 | 682,244 | 292,645 | |||||||||
| Research and development | 7,398 | 355,565 | (348,167 | ) | ||||||||
| Total operating expenses | 2,830,308 | 6,292,945 | (3,462,637 | ) | ||||||||
| Loss from operations | (2,825,308 | ) | (6,292,945 | ) | 3,467,637 | |||||||
| Other income (expenses): | ||||||||||||
| Interest expense | (21,609 | ) | (19,289 | ) | (2,320 | ) | ||||||
| Interest income | - | |||||||||||
| Change in fair value of warrant liabilities | (190,715 | ) | 1,456,661 | (1,647,376 | ) | |||||||
| Gain (loss) on debt extinguishment | 3,959,054 | 1,847,992 | 2,111,062 | |||||||||
| Other | (16,342 | ) | (42,123 | ) | 25,781 | |||||||
| Other income (expenses), net | 3,730,388 | 3,243,241 | 487,147 | |||||||||
| Net loss | $ | 905,080 | $ | (3,049,704 | ) | $ | 3,954,784 | |||||
Revenues
During the three months ended June 30, 2025 and 2024, revenue was immaterial.
General and administrative expenses
General and administrative expenses for the three months ended June 30, 2025 were approximately $1.8 million, decrease of approximately $3.4 million, compared to the three months ended June 30, 2024. The decrease was primarily due transaction costs of $3.1 million incurred in connection with the Business Combination in the prior period, decreases in employee related costs of $0.8 million, partially offset by a increase in insurance of $0.2 million and $0.5 million associated with the AFG claims assignment. We have only recently begun to raise proceeds through the offering of our Common Stock and convertible notes to investors and therefore expect, in the near term at a minimum, to continue to utilize the issuance of equity based instruments as compensation to reduce our cash outlays.
Depreciation and amortization expenses
Depreciation and amortization expenses for the three months ended June 30, 2025 were approximately $1.0 million, an increase of approximately $0.3 million, compared to the three months ended June 30, 2024. The increase was primarily due to the amortization expense associated with the developed technology placed into service in the second quarter of 2024.
Research and development expenses
Research and development expenses for the three months ended June 30, 2025 were approximately $7,000, a decrease of approximately $0.3 million, compared to the three months ended June 30, 2024. The decrease in research and development expenses was primarily due to the sponsorship agreement with Korea University no longer being active and a decrease in stock compensation expense.
Gain on debt extinguishment
Gain on extinguishment of debt for the three months ended June 30, 2025 was approximately $4.0 million, related to settlement of accounts payable through the negotiated cash settlement. Gain on extinguishment of debt for the three months ended June 30, 2024 was approximately $1.8 million, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement.
Change in fair value of warrant liabilities
Change in fair value of the warrant liabilities for the three months ended June 30, 2025 was approximately $0.2 million loss associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date. The change in the fair value of the warrant liabilities during the three months ended June 30, 2024 was $1.5 million associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date.
Comparison of the Six Months Ended June 30, 2025 and 2024
| Six Months Ended June 30, | Increase | |||||||||||
| 2025 | 2024 | (Decrease) | ||||||||||
| Revenues | $ | 15,000 | $ | 49,790 | $ | (34,790 | ) | |||||
| Operating expenses: | ||||||||||||
| General and administrative | 5,062,210 | 11,765,671 | (6,703,461 | ) | ||||||||
| Depreciation and amortization | 1,914,095 | 799,591 | 1,114,504 | |||||||||
| Research and development | 18,095 | 606,236 | (588,141 | ) | ||||||||
| Total operating expenses | 6,994,400 | 13,171,498 | (6,177,098 | ) | ||||||||
| Loss from operations | (6,979,400 | ) | (13,121,708 | ) | 6,142,308 | |||||||
| Other income (expenses): | ||||||||||||
| Interest expense | (146,651 | ) | (41,221 | ) | (105,430 | ) | ||||||
| Change in fair value of warrant liabilities | 424,177 | 1,395,838 | (971,661 | ) | ||||||||
| Gain (loss) on debt extinguishment | 3,959,054 | 1,847,992 | 2,111,062 | |||||||||
| Other | 37,670 | (15,014 | ) | 52,684 | ||||||||
| Other income (expenses), net | 4,274,250 | 3,187,595 | 1,086,655 | |||||||||
| Net loss | $ | (2,705,150 | ) | $ | (9,934,113 | ) | $ | 7,228,963 | ||||
Revenues
During the six months ended June 30, 2025, revenue was immaterial. During the six months ended June 30, 2024, we earned $0.05 million in revenue through proof of concept and revenue sharing.
General and administrative expenses
General and administrative expenses for the six months ended June 30, 2025 were approximately $5.0 million, decrease of approximately $6.7 million, compared to the six months ended June 30, 2024. The decrease was primarily due transaction costs of $3.1 million incurred in connection with the Business Combination in the prior period, decreases in employee related costs of $0.8 million, partially offset by a increase in insurance of $0.2 million and $0.5 million associated with the AFG claims assignment. We have only recently begun to raise proceeds through the offering of our Common Stock and convertible notes to investors and therefore expect, in the near term at a minimum, to continue to utilize the issuance of equity based instruments as compensation to reduce our cash outlays.
Depreciation and amortization expenses
Depreciation and amortization expenses for the six months ended June 30, 2025 were approximately $1.9 million, an increase of approximately $1.1 million, compared to the six months ended June 30, 2024. The increase was primarily due to the amortization expense associated with the developed technology placed into service in the second quarter of 2024.
Research and development expenses
Research and development expenses for the six months ended June 30, 2025 were approximately $18,000, a decrease of approximately $0.6 million, compared to the six months ended June 30, 2024. The decrease in research and development expenses was primarily due to the sponsorship agreement with Korea University no longer being active and a decrease in stock compensation expense.
Gain on debt extinguishment
Gain on extinguishment of debt for the six months ended June 30, 2025 was approximately $4.0 million, related to settlement of accounts payable through the negotiated cash settlement. Gain on extinguishment of debt for the six months ended June 30, 2024 was approximately $1.8 million, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement.
Change in fair value of warrant liabilities
Change in fair value of the warrant liabilities for the six months ended June 30, 2025 was approximately $0.4 million associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date. Change in fair value of the warrant liabilities for the six months ended June 30, 2024 was approximately $1.4 million associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date.
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Liquidity and Capital Resources
Capital Resources and Available Liquidity
As of June 30, 2025, our principal source of liquidity was cash of approximately $20,000. We have financed operations to date with proceeds from the Yorkville Promissory Note, transactions with AFG, sales of our Common Stock, the SEPA (as defined below), warrant exercises and debt issuances to related and non-related parties. As described in Note A of our unaudited condensed consolidated financial statements, we have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $49.7 million at June 30, 2025. We expect losses and negative cash flows to continue for the foreseeable future, primarily as a result of increased general and administrative expenses, continued product research and development and marketing efforts. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, including through stock and asset acquisitions, before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. Current available funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing. Our history of losses, our negative cash flow from operations, our limited cash resources on hand and our dependence on our ability to obtain additional financing to fund our operations after the current cash resources are exhausted raises substantial doubt about our ability to continue as a going concern. Our management concluded that our recurring losses from operations, and the fact that we have not generated significant revenue or positive cash flows from operations, raised substantial doubt about our ability to continue as a going concern for the next 12 months after issuance of our financial statements. Our auditors also included an explanatory paragraph in their report to our consolidated financial statements as of and for the year ended December 31, 2024 with respect to this uncertainty.
The Company will need to raise additional capital to continue to fund operations and product research and development. The Company believes that it will be able to obtain additional working capital through equity financings, additional debt, or other arrangements to fund future operations, and it intends to raise capital through equity or debt investments in the Company by third parties, including through the SEPA or other public offerings or private placements. However, the Company’s cannot conclude these are probable of being implemented or, if probable of being implemented, being in sufficient enough amounts to satisfy our contractual amounts as they presently exist that are coming due over the next 12 months as of the date of such filing.
Cohen Convertible Note
On April 12, 2024, we issued the Cohen Convertible Note, to settle outstanding invoices totaling $1.9 million related to investment banking services rendered to the Company in connection the Business Combination. Beginning on October 14, 2024, interest began accruing at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. On the 14th day of each successive month commencing with January 14, 2025, the holder may convert a portion of Cohen Convertible Note to a number of shares equal to (i) up to 20% of the outstanding principal balance of the Cohen Convertible Note plus accrued interest due under the Cohen Convertible Note divided by (ii) a price per share equal to 92.75% of the arithmetic average of the Daily Volume-Weighted Average Price (“VWAP”) for the five VWAP Trading Days (as defined therein) ending on the VWAP Trading Day immediately preceding the applicable conversion date (subject to the Floor Price, as defined therein). The Cohen Convertible Note matured on March 14, 2025. As of June 30, 2025, the Company is in default on the Cohen Convertible Note and there remains an unpaid and outstanding balance of $0.8 million. As of the date of this filing, Company management is in the process of negotiating with Cohen and Cohen has not initiated any actions against the Company.
May Private Placement
On May 28, 2024, the Company entered into a Securities Purchase Agreement (the “May SPA”) with certain investors (the “May Purchasers”), pursuant to which the Company sold to the May Purchasers an aggregate of 1,980,000 shares of Common Stock and 3,960,000 warrants, consisting of 1,980,000 warrants with a term of one year (the “May One-Year Warrants”) and 1,980,000 warrants with a term of five years (the “May Five-Year Warrants” together with the May One-Year Warrants, the “May Warrants”), for aggregate proceeds consisting of $4.4 million in cash and $0.5 million through the offset of an obligation of the Company to the May Purchasers. All May Warrants were originally exercisable for shares of Common Stock at an exercise price of $2.50 per share, which was later amended under the January Warrant Exercise Agreement (described below.) Pursuant to the May SPA, 1,780,000 shares of Common Stock and May Warrants to purchase 3,560,000 shares of Common Stock were put in escrow until each May Purchaser deposited certain amounts on a monthly basis with the Company. Upon payment of each required funding, a pro rata portion of the shares of Common Stock and May Warrants in escrow are to be issued and released to the May Purchasers. During the quarter ending March 31, 2025, a total of 330,000 shares of Common Stock were issued to the May Purchasers for an aggregate gross proceeds of $750,000, As of June 30, 2025, 1,901,281 May One-Year Warrants and 1,251,587 May Five-Year Warrants are outstanding.
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July Private Placement
On July 1, 2024, the Company entered into a July Securities Purchase Agreement with The Williams Family Trust (the “July SPA”) for the issuance and sale of 120,000 shares of Common Stock and 240,000 warrants, consisting of 120,000 warrants with a term of one year (the “July One-Year Warrants”) and 120,000 warrants with a term of five years (the ‘July Five-Year Warrants,” together with the July One-Year Warrants, the “July Warrants”) to The Williams Family Trust for an aggregate purchase price of $0.3 million. The July Warrants are exercisable for Common Stock at a price of $2.50 per share and were immediately issued upon the closing date of July 1, 2024. As of June 30, 2025, all 240,000 warrants remain outstanding.
August Private Placement
On August 26, 2024, we consummated a series of transactions (the “August Financing”) whereby we (i) agreed to issue 1,185,000 shares of our Common Stock at a price per share of $5.00 pursuant to that certain Securities Purchase Agreement, dated August 26, 2024 (the “August SPA”) by and among the Company and certain investors signatory thereto (the “August Purchasers”), (ii) issued 960,000 warrants to purchase our Common Stock at an exercise price of $5.00 (the “August Warrants”) pursuant to that certain Warrant Purchase Agreement, dated August 26, 2024 (the “Warrant Purchase Agreement”) by and among the Company and certain purchasers signatory thereto, and (iii) facilitated the transfer of 1,185,000 shares held by DHC Sponsor, LLC (“Sponsor”) issued in connection with the Company’s predecessor, DHC Acquisition Corp.’s (“DHC”) initial public offering to the August Purchasers, pursuant to that certain share assignment and lockup release agreement (the “Assignment Agreement”) with certain members of Sponsor and certain other existing stockholders and affiliates of the Company and the August Purchasers in exchange for releases from certain restrictions on transfer.
On August 30, 2024, the Company issued to the August Purchasers an aggregate of 100,000 shares of Common Stock and 960,000 August Warrants, and the August Purchasers paid an aggregate of $0.5 million in connection with the closing of the August Financing.
The remaining shares were issued to an escrow account and such shares remain in escrow until the conditions in the August SPA are satisfied. The August Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the August SPA ending on April 5, 2025. Upon payment of each required funding, a pro rata portion of the shares of Common Stock and August Warrants in escrow are to be issued and released to the August Purchasers. If an investor fails to pay its required funding by the respective deadline, the investor’s entire commitment under the August SPA will become immediately due and payable. As of June 30, 2025, the August SPA has been terminated with respect to certain August Purchasers who have exercised their portion of the Committed Warrants under the January Warrant Exercise Agreement. As of June 30, 2025, the Company has experienced delays in the exercise of warrants of one August Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent an August Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such August Purchaser under the August SPA and such obligations of any investor under the August SPA who is not an August Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the August Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement. For additional information, please see “Warrant Exercise and Reload Agreement” below.
Standby Equity Purchase Agreement
On August 26, 2024 (the “SEPA Effective Date”), the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with Yorkville. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $50.0 million of the Company’s shares of Common Stock, at the Company’s request any time during the commitment period commencing on the SEPA Effective Date and terminating on the 36-month anniversary of the SEPA Effective Date. The shares will be issued and sold to Yorkville at a per share price equal to, at the election of the Company as specified in the relevant notice: (i) 96% of the Market Price (as defined therein) for any period commencing on the receipt of the notice by Yorkville and ending on 4:00 p.m. New York City time on the applicable notice date, and (ii) 97% of the Market Price for any three consecutive trading days commencing on the notice date. Issuances are subject to certain limitations, including that Yorkville cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding Common Stock at the time of an issuance or acquiring since the SEPA Effective Date under the SEPA more than 19.99% of the Company’s issued and outstanding Common Stock, as of the SEPA Effective Date. Additionally, if the total number of shares of Common Stock traded on Nasdaq during the applicable period is less than the Volume Threshold (as defined therein), then the number of shares of Common Stock issued and sold pursuant to such notice will be reduced as prescribed in the SEPA. As consideration for Yorkville’s commitment to purchase the shares of Common Stock pursuant to the SEPA, the Company paid Yorkville, (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee of $0.5 million by the issuance to Yorkville of an aggregate of 280,899 shares of Common Stock. During the six months ended June 30, 2025, the Company issued an aggregate of 1,500,000 shares of Common Stock to Yorkville pursuant to the SEPA.
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Yorkville Promissory Note
On November 11, 2024, the Company issued the Yorkville Promissory Note in the aggregate original principal amount of approximately $1.7 million to Yorkville. The Yorkville Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Yorkville Promissory Note. The Yorkville Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of June 30, 2025, the Company is in default on the Yorkville Promissory Note and there remains an unpaid and outstanding balance of $0.4 million. On May 28, 2025, the Company received a written notice of default from Yorkville. As of the date of this filing, Company management is in the process of negotiating with Yorkville and Yorkville has not initiated any further actions against the Company.
Warrant Exercise and Reload Agreement
On January 13, 2025, the Company entered into the January Warrant Exercise Agreement with certain Purchasers. Pursuant to the August SPA, the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the Contribution Warrant to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account as of June 30, 2025.
Under the January Warrant Exercise Agreement, the exercise price of the Committed Warrants was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on the Exercise Schedule. Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue the Reload Warrants. Upon a Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term. If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue the Optional Reload Warrants. In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
During the six months ended June 30, 2025, Purchasers exercised 812,642 Committed Warrants to purchase 812,642 shares of Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1.5 million, and such Purchasers were or shall be issued 812,642 shares of Common Stock, 812,642 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has been terminated with respect to such Purchasers. As of June 30, 2025, the Company has experienced delays in the exercise of warrants of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement.
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AFG Subscription Agreement; Termination of Reseller Agreement
On August 19, 2023, the Company and AFG entered into the Reseller Agreement providing for, among other things, AFG to act as BEN’s exclusive reseller of certain products in a designated territory on certain terms and conditions. As partial consideration to AFG for such services to BEN, (i) Prior BEN issued to AFG a number of shares of Prior BEN common stock which converted into 1,750,000 shares of Common Stock and (ii) the Reseller Warrant.
On September 7, 2023, the Company and AFG entered into the AFG Subscription Agreement providing for (i) the purchase of shares of Prior BEN Common Stock in a private placement by the AFG Investors as of immediately prior to the Closing Date, which converted into the right to receive 650,000 shares of Common Stock with an aggregate initial value of $6.5 million and (ii) the purchase of shares Common Stock in four installments commencing on March 14, 2025, with an aggregate purchase price of $26.0 million, at a purchase price per share prior to the installment purchase date that is the lesser of $10.00 and the average of the last reported sales prices of Common Stock for the twenty (20) trading days immediately preceding the applicable installment purchase date, subject to a floor price of $2.11 (the “AFG Installment Shares”).
On January 17, 2025, the Company delivered the Notice to AFG terminating the Reseller Agreement. The Notice only applies to the Reseller Agreement and does not affect AFG’s obligations under the Subscription Agreement; however, in light of the Notice and the AFG Lawsuit, the Company is uncertain whether AFG will fulfill its obligations under the Subscription Agreement. Accordingly, none of the information presented in this Report assumes that either the Reseller Warrant will become exercisable or that any AFG Installment Shares will be issued.
Cash Exercise of Warrants
There is no assurance that the holders of our warrants described under this section will elect to exercise for cash any or all of such warrants, especially when the trading price of our Common Stock is less than the exercise price per share of such warrants. We believe the likelihood that warrantholders will exercise their respective warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price for our Common Stock is less than the exercise price per share of a warrant, we expect that a warrantholder would not exercise their warrants. To the extent that any warrants are exercised on a “cashless basis” under certain conditions, we would not receive any proceeds from the exercise of such warrants.
As of the date of this filing, we have neither included nor intend to include any potential cash proceeds from the exercise of our warrants in our short-term or long-term liquidity sources or capital resource planning. Instead, we intend to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business, including through the business development activities discussed above to continue to support our operations. Therefore, the availability or unavailability of any proceeds from the exercise of our warrants is not expected to affect our ability to fund our operations. We will continue to evaluate the probability of warrant exercise over the life of our warrants and the merit of including potential cash proceeds from the exercise thereof in our liquidity sources and capital resources planning.
To the extent such warrants are exercised, additional Common Stock will be issued, which will result in dilution to the holders of our Common Stock and increase the number of shares of Common Stock eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Common Stock, which increases the likelihood of periods when our Warrants will not be in the money prior to their expiration.
Material Cash Requirements
Our material cash requirements include the following potential and expected obligations:
Bank Loans
As of June 30, 2025, we had four loans outstanding, all of which were assumed in the acquisition of DM Lab in May 2023, totaling approximately $0.9 million. The loans carry varying interest rates ranging from 4.667% to 6.69% and have varying maturity dates ranging from January to March 2025. The loans do not have optional or mandatory redemption or conversion features. In January 2025, we obtained a waiver to extend the due dates of the short-term debt to January 2026.
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We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.
The Cataneo Purchase Agreement
In connection with the termination of the Cataneo Purchase Agreement, the Company will make a final payment to the Seller of $100,000 (the “Final Payment”). The Final Payment and all previously paid down-payments, which, including the Final Payment, total to approximately $650,000, are not refundable and are applied as a set-off against any of Sellers’ claims permitted by Section 12.4.2. The Company otherwise bears its own expenses.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash used in operating activities | $ | (5,237,134 | ) | $ | (8,612,872 | ) | ||
| Cash used in investing activities | (141,512 | ) | (99,730 | ) | ||||
| Cash provided by financing activities | 5,249,729 | 8,459,014 | ||||||
| Net decrease in cash and cash equivalents | $ | (128,917 | ) | $ | (253,588 | ) | ||
Operating activities
Cash used in operating activities was approximately $526 million during the six months ended June 30, 2025 primarily due to our net loss of approximately $2.7 million. The net loss included non-cash charges of approximately $1.8 million, which consisted of approximately $1.9 million of depreciation and amortization expense, $0.5 million in equity-based compensation expense, including the issuance of restricted shares, and non-cash interest expense, offset by $0.4 million gain due to the change in fair value of warrant liabilities and a gain on forgiveness of debt of $4.0 million. The net cash outflow of approximately $2.8 million from changes in our operating assets and liabilities was primarily due to an decrease in accrued expenses of $0.8 million, an increase in prepaid expense and other current assets of $0.8 million and a decrease in operating lease liability of $0.1 million.
Cash used in operating activities was approximately $8.6 million during the six months ended June 30, 2024 primarily due to our net loss of approximately $9.9 million. The net loss included non-cash charges of approximately $0.3 million, which consisted of approximately $1.4 million of write offs of deferred financing fees, $1.3 million in equity-based compensation expense, including the issuance of restricted shares, $0.8 million of depreciation and amortization expense, partially offset by $1.8 million in gains on debt extinguishment and $1.4 million in changes in fair value of the warrant liabilities. The net cash inflow of approximately $1.0 million from changes in our operating assets and liabilities was primarily due to an increase in accounts payable of $3.6 million, partially offset by a decrease of accrued expenses of $1.7 million, an increase in prepaid expense and other current assets of $0.8 million.
Investing activities
Cash used in investing activities during the six months ended June 30, 2025 was approximately $0.1 million, which consisted primarily of capitalized internal-use software costs.
Cash used in investing activities during the six months ended June 30, 2024 was approximately $0.1 million, which consisted primarily of capitalized internal-use software costs.
Financing activities
Cash provided financing activities during the six months ended June 30, 2025 was approximately $5.2 million, which consisted of proceeds received from the sale of Common Stock and proceeds from warrant exercises and short term loans.
Cash provided by financing activities during the six months ended June 30, 2024 was approximately $8.5 million, consisted primarily of proceeds received from the sale of Common Stock of $8.5 million.
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Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reported period. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.
During the six months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations of BEN”, found in our 2024 Annual Report.
Recent Accounting Pronouncements
See Note B to our consolidated financial statements, found in our 2024 Annual Report for a description of recent accounting pronouncements applicable to our unaudited condensed consolidated financial statements.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of June 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
We expect to elect to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and pursuant to Item 305 of Regulation S-K, we are not required to disclose information under this section.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2025, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
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Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls were not effective as of June 30, 2025, based on the material weaknesses identified below.
Material Weakness in Internal Control over Financial Reporting
As discussed elsewhere in this Report, the Company completed the Merger on March 14, 2024. Prior to the Merger, DHC disclosed in the Risk Factors of its Form S-4/A filed on February 12, 2024, a material weakness in internal controls over financial reporting. Management has concluded this material weakness has not been remediated as an internal control deficiency was identified relating to the lack in investment of resources into accounting and reporting functions to properly account for and prepare U.S. GAAP compliant financial statements on a timely basis and to properly document risks affecting financial statements and controls in place to mitigate those risks in accordance with the requirements for a functioning internal control system, the accounting for the merger with DPL, the accounting for the extinguishment of certain liabilities through the issuance of common stock or through the exercise of warrants, the improper classification of the acquired developed technology from DM Lab as an in-process research and development asset, and the delay in obtaining valuation reports as it relates to valuing equity grants. Notwithstanding this material weakness, management has concluded that our unaudited condensed consolidated financial statements included in this Report are fairly stated in all material respects in accordance with U.S. GAAP for each of the periods presented herein.
This material weakness could result in a misstatement of account balances or disclosures that would result in a material misstatement of our annual or interim consolidated financial statements that may not be detected.
Plan for Remediation of the Material Weakness in Internal Control over Financial Reporting
In response, the Company’s management has continued implementation of a plan to remediate this material weakness. These remediation measures are ongoing and include the following; hiring a Chief Financial Officer, which was completed in the fourth quarter of 2024, and adding additional review procedures by qualified personnel over complex accounting matters, which include engaging third-party professionals with whom to consult regarding complex accounting applications.
The material weaknesses will be considered remediated once management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective. We believe we are making progress toward achieving the effectiveness of our internal controls and disclosure controls; however, we cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.
Changes in Internal Control over Financial Reporting
Other than the changes made to the material weakness described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three and six months ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
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Part II. Other Information
Item 1. Legal Proceedings
AFG Litigation
On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
On March 26, 2025, the Company filed a First Amended Complaint against AFG in the Southern District of New York alleging breach of contract against AFG with respect to the AFG Subscription Agreement. Specifically, the Company alleges that AFG failed to fund its required March 13, 2025 payment in the amount of $6,500,000. In the lawsuit, the Company seeks actual damages in the amount of the missed payment, pre- and post-judgment interest, consequential damages and attorneys’ fees and costs. It also seeks a declaration from the court that AFG was and is obligated to purchase an aggregate of $6.5 million of additional shares of the Company’s Common Stock on each of the first four anniversaries of the Initial Offering Closing Date and Business Combination Closing (as defined in the AFG Subscription Agreement) pursuant to the AFG Subscription Agreement. On May 12, 2025, AFG filed an Answer and Counterclaims in which it denies the allegations of the lawsuit and asserts counterclaims for an unspecified amount of damages against the Company. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
Related Party Investigation
The Company’s management team assigned an advisor to the Board to conduct an internal investigation of potential related party transactions with certain members of DHC Sponsor, LLC, prior to the merger with Brand Engagement Network, Inc. These matters are still under investigation.
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Apart from the foregoing, we are not presently a party to any other legal proceedings that we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
As of the date of this Report, there have been no material changes from the risk factors disclosed in our 2024 Annual Report. Any of these factors could result in a significant or material adverse effect on our result of operations or financial conditions. Additional risk factors not presently known to us may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
2025 Annual Meeting of Shareholders
The Board has designated November 26, 2025 as the date of the Company’s 2025 annual meeting of shareholders (the “2025 Annual Meeting”). The Company intends to set the record date for determining the shareholders of record who will be entitled to vote at the 2025 Annual Meeting as the close of business on November 3, 2025. The time and location of the 2025 Annual Meeting will be as set forth in the Company’s definitive proxy statement for the 2025 Annual Meeting to be filed with the Securities and Exchange Commission.
A shareholder who, in accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), intends to present a proposal to be included in the proxy statement for the 2025 Annual Meeting must submit the proposal to the Company, 300 Delaware Avenue, Suite 210, Wilmington, DE 19801, Attention: Legal Department - Shareholder Mail, with a copy sent by e-mail to legal@beninc.ai, and we must receive the proposal by no later than a reasonable time before we begin to print and mail the proxy materials for the 2025 Annual Meeting. Accordingly, the Board has fixed the new deadline for the submission of proposals to be included in the proxy statement for the 2025 Annual Meeting as October 20, 2025. In addition, we may omit any proposal from our proxy materials that does not comply with Securities and Exchange Commission rules.
Pursuant to the Company’s bylaws, if a shareholder intends to present certain matters, including nominations for the election of directors, at the 2025 Annual Meeting without inclusion in our proxy materials, the notice must also be delivered to our principal executive offices, at the address and email set forth above, no later than October 20, 2025. The proposal or nomination must also contain the information and follow the procedures required by our bylaws.
Director and Officer Trading Arrangements
None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Items 408(a) and 408(c) of Regulation S-K, respectively) during the quarterly period covered by this Report.
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| Table of Contents |
PART II – OTHER INFORMATION
Item 6. Exhibits
The exhibits listed below are filed as part of this Report or incorporated herein by reference.
| Exhibit | Description | |
| 2.1#^ | Business Combination Agreement and Plan of Reorganization, dated as of September 7, 2023, by and among Brand Engagement Network Inc., BEN Merger Subsidiary Corp., DHC Acquisition Corp and, solely with respect to Section 7.21 and 9.03 thereto, DHC Sponsor, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 8, 2023). | |
| 2.2# | Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on October 30, 2024). | |
| 2.3 | Addendum to Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on February 12, 2025). | |
| 2.4 | Addendum II to Share Purchase and Transfer Agreement, dated May 26, 2025, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on May 30, 2025). | |
| 3.1 | Certificate of Incorporation of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |
| 3.2 | Bylaws of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |
| 10.1 | Line of Credit Agreement, dated June 5, 2025, by and among Brand Engagement Network Inc. and Corps Capital Advisors LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on June 10, 2025). | |
| 31.1* | Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101* | The following financial information from Brand Engagement Network Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements. | |
| 101.INS* | Inline XBRL Instance Document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
________________
* Filed herewith
** The certifications as Exhibit 32.1 and Exhibit 32.2 are not deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by the reference into any filing of Brand Engagement Network Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Report, irrespective of any general incorporation language contained in such filing.
# Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request.
^ Certain information has been redacted from this exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and is the type of information that the registrant customarily and actually treats as private or confidential. The registrant hereby undertakes to furnish supplemental copies of the unredacted exhibit upon request by the SEC.
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| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Brand Engagement Network Inc. (Registrant) | ||
| By: | /s/ Tyler J. Luck | |
| Tyler J. Luck | ||
| Acting Chief Executive Officer | ||
| (Duly Authorized Officer and Principal Executive Officer) | ||
| Date: October 14, 2025 | ||
| By: | /s/ Walid Khiari | |
| Walid Khiari | ||
| Chief Financial Officer | ||
| (Duly Authorized Officer and Principal Executive Officer) | ||
| 37 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 14, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (650) 714-2747
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
On October 14, 2025, Brand Engagement Network Inc., a Delaware corporation (the “Company”) issued a press release announcing its financial results for the quarter and year ended June 30, 2025. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein.
The information in this Current Report on Form 8-K, including exhibit 99.1 furnished hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit No. | Description of Exhibit | |
| 99.1 | Press Release of Brand Engagement Network Inc., issued October 14, 2025 (furnished pursuant to Item 2.02). | |
| 99.2 | Prepared Remarks for the Second Quarter ending June 30, 2025 Earnings Call, dated October 14, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Dated: October 14, 2025 | By: | /s/ Walid Khiari |
| Name: | Walid Khiari | |
| Title: | Chief Financial Officer | |
Forward-Looking Statements
Certain disclosures in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, the Company’s current expectations, assumptions, plans, strategies, and anticipated results. When used in this discussion, the words “anticipate,” “assume,” “believe,” “budget,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this report. Forward-looking statements reflect the Company’s current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although the Company believes the expectations reflected in the forward-looking statements are reasonable, the Company can give you no assurance these expectations will prove to have been correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors. There are a number of risks, uncertainties and conditions that may cause the Company’s actual results to differ materially from those expressed or implied by these forward-looking statements, including the risk factors described in Part I, Item 1A of Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and the other risk factors identified from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Many of these circumstances are beyond the Company’s ability to control or predict. These forward-looking statements necessarily involve assumptions on the Company’s part. Furthermore, undue reliance should not be placed on forward-looking statements, which are based on the information currently available to the Company and speak only as of the date they are made. The Company disclaims any intention or obligation to update or revise publicly any forward-looking statements.
Exhibit 99.1
FOR IMMEDIATE RELEASE
Brand Engagement Network Reports Second Quarter 2025 Results
WILMINGTON, Del., October 14, 2025 (PRNewswire)— Brand Engagement Network Inc. (Nasdaq: BNAI) (“BEN” or the “Company”) recorded the financial results for the second quarter ended June 30, 2025.
Strategic Achievements
“We believe this quarter underscored the discipline and focus we’ve applied to strengthen our foundation,” said Tyler Luck, Acting CEO and Co-Founder of BEN. “Through cost reductions and decisive management actions, we are positioning the company for sustainable, long-term growth. Our Innovation Lab in Seoul, Korea, continues to drive advanced product innovation, playing a critical role in shaping our global success in conversational AI.”
“Our Q2 results demonstrate significant progress in stabilizing operations and strengthening our financial position,” said Walid Khiari, Chief Financial Officer and Chief Operating Officer. “By reducing expenses by over 55%, we’ve gained greater flexibility to execute our strategy and accelerate growth initiatives in regulated industries.”
Financial Highlights
| ● | Revenue: $5,000 in Q2 2025, compared to none in Q2 2024, reflecting early traction in our conversation AI solutions. |
| ● | Operating expenses: Decreased by 55.6% to $2.8 million, down from $6.3 million in Q2 2024, driven by streamlined operations and strategic cost optimization. |
| ● | Other income: $3.7 million, primarily from a $4.0 million gain on debt extinguishment, partially offset by changes in warrant fair value. |
| ● | Net income: Net income of $0.9 million in Q2 2025, compared to a net loss of $3.0 million in Q2 2024. |
| ● | Stockholders’ equity: Increased 126% to $5.9 million from $2.6 million at year-end 2024, reflecting improved financial health. |
A detailed summary of BEN’s recorded financial results is included in the Company’s Form 10-Q for the quarter ended June 30, 2025, filed with the SEC.
Webcast and Conference Call Information
BEN will host a conference call to discuss its results at 1:30 p.m. PT / 4:30 p.m. ET on Tuesday, October 14, 2025.
Dial-in details:
| ● | North America Toll-Free: 1-888-880-3330 | |
| ● | Local/International: 1-646-357-8766 | |
| ● | Conference ID: 8048832 | |
| ● | Webcast (public): https://app.webinar.net/pNeyl4BQPw2 |
Following the call, transcripts of the conference call will be posted to BEN’s investor relations website.
2025 Annual Meeting of Shareholders
BEN’s 2025 Annual Meeting is scheduled for November 26, 2025, with a record date for determining shareholders of record, at the close of business on November 3, 2025. Shareholder proposals for inclusion in the proxy statement must be received by October 20, 2025, at 300 Delaware Avenue, Suite 210, Wilmington, DE 19801, Attention: Legal Department – Shareholder Mail, with a copy to legal @beninc.ai. Proposals must comply with SEC Rule 14a-8 and Ben’s bylaws. For nominations or other matters not included in the proxy statement, notice must also be received by October 20, 2025, per the Company’s bylaws. See our investor relations website for details. The time and location of the 2025 Annual Meeting will be as set forth in the Company’s definitive proxy statement for the 2025 Annual Meeting to be filed with the Securities and Exchange Commission. In addition, we may omit any proposal from our proxy materials that does not comply with Securities and Exchange Commission rules.
About Brand Engagement Network, Inc. (BEN)
Brand Engagement Network, Inc. (BEN) (Nasdaq: BNAI) develops conversational AI agents built for regulated and customer-centric industries. Its proprietary Engagement Language Model (ELM™) with retrieval-augmented generation enables enterprises to deploy multimodal, compliance-first AI across chat, voice, avatar, and digital channels. With 21 issued patents, a growing IP portfolio, and early adoption across life sciences, healthcare, insurance, financial services, hospitality, retail, and automotive, BEN is positioned at the intersection of enterprise AI adoption and rising regulatory demand.
For more information, visit www.beninc.ai
Forward-Looking Statements
This press release contains forward-looking statements regarding our future business plans and expectations which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: the impact of macroeconomic conditions on our business and financial results, including as a result of geopolitical events; our ability to retain or increase customers, users and engagement levels; our dependency on data signals and mobile operating systems, networks, and standards that we do not control; changes to the content or application of third-party policies that impact our practices; risks associated with new products and changes to existing products as well as other new business initiatives, including our artificial intelligence initiatives and pilot efforts; our emphasis on growth and engagement and the user experience over short-term financial results; maintaining and enhancing our brand and reputation; our ongoing privacy, safety, security, and content; competition; risks associated with government actions that could restrict access to our products or impair our ability to license our products in certain countries; litigation and government inquiries; privacy, legislative, and regulatory concerns or developments; risks associated with acquisitions; security breaches; our ability to manage our scale and geographically-dispersed operations; and market conditions or other factors affecting our operations.
These and other potential risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in BEN’s Securities and Exchange Commission (“SEC”) filings, including its most recent annual report on Form 10-K and quarterly report on Form 10-Q under the caption “Risk Factors”, which are available on our Investor Relations website (investor.beninc.ai) and the SEC website (www.sec.gov). Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. In addition, please note that the date of this press release is October 14, 2025, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.
Investors Contact
Brand Engagement Network Inc.
Email: investors@beninc.ai
Media Contact
Amy Rouyer
Brand Engagement Network, Inc.
Email: amy@beninc.ai
Exhibit 99.2
Brand Engagement Network, Inc. (BEN) Q2 2025 Earnings Call Transcript for Tuesday, October 14, 2025
Participants · Operator · Tyler Luck — Acting CEO & Co-Founder of BEN · Walid Khiari — Chief Financial Officer and Chief Operating Officer of BEN
1. Opening Script
Operator: Good afternoon, and welcome to the Brand Engagement Network’s second-quarter 2025 earnings conference call. Today’s call is being recorded.
At this time, all participants are in a listen-only mode. After management’s prepared remarks, we will open the call for a question-and-answer session.
Before we begin, please note that during this call, our speakers may make forward-looking statements regarding future results and performance. Please refer to the cautionary language included in BEN’s filings with the Securities and Exchange Commission, included in their Form 10-K and 10-Q, for additional information concerning factors that could cause actual results to differ materially from these forward-looking statements.
I would now like to turn the call over to Tyler Luck, Acting CEO and Co-Founder of Brand Engagement Network. Tyler, please go ahead.
Tyler Luck — Acting CEO & Co-Founder:
Thank you, operator, and thank you all for joining us today.
I want to begin by addressing the timing of this report. While our Q2 10-Q filing was delayed, I want to be clear — this was not the result of negative financial performance. Instead, the delay reflected deliberate decisions to strengthen the company’s foundation. · First, we focused on reducing ongoing expenses by negotiating with prior and existing vendors to ensure we operate with greater financial discipline. · Second, we made positive management changes — including re-engagement with our trusted outside accounting firm that supported us from 2021 to 2024, while continuing with our independent audit firm.
These steps required time but were taken to build confidence in our financial processes.
I’ve been with this company since day one. I know our technology, our customers, and our mission. And I can tell you that the entrepreneurial spirit at BEN is alive and strong. Capital has always been a precious commodity, and we are treating it with the discipline and creativity that investors expect.
I also want to highlight our team in Seoul, Korea. Today, our Korean Innovation Lab is home to more than 30 employees, and I am incredibly proud of the work they are doing to drive product innovation and client success. This team embodies the energy, expertise, and commitment that define BEN globally.
In addition to these foundational efforts, I’m pleased to share some key milestones that underscore our progress in building partnerships and expanding our AI solutions. For instance, we entered a global partnership with Swiss Life, a process that began before our merger in March 2024. The announcement in April 2025 marked an important milestone, and as Acting CEO, I had the opportunity to attend their global conference in London a few weeks ago. It was encouraging to see firsthand the positive feedback from attendees around the world, and we are focused on supporting their partners globally to benefit from the efficiencies of our conversational AI.
We’ve also made strategic inroads in emerging markets, such as our entry into Mexico with a partner just over a year ago. This decision aligns well with markets that prioritize data sovereignty, allowing us to test and refine our products while positioning us for potential expansion and execution on our current pipeline.
In the pharmacy sector, our launch at a conference in Boston a year ago provided valuable market feedback on our AI solutions. We are pleased with the results so far, though as with any innovation in regulated industries, reviews take time as Corporations are rightfully cautious of this new era. These steps are setting a solid foundation for future developments.
Looking at verticals like automotive, we see opportunities where AI can help build trusted consumer engagement—a longstanding challenge in the industry. The integrations we’ve completed to date position us well for initiatives we’re planning in the coming quarters.
Finally, with AI top of mind for many enterprises, it’s important to note that brands in regulated sectors approach new technologies with caution to avoid risks from inaccurate engagements. This is where BEN’s emphasis on trusted data shines: by focusing on brand-specific data sovereignty rather than broad web data, we enable authentic and reliable consumer interactions. These efforts reflect our commitment to delivering solutions that meet enterprise needs.
Looking ahead, we’ve already scheduled our next earnings call on November 4, 2025, and our annual shareholder meeting on November 26, 2025. We see this as the start of a new chapter for BEN — one built on transparency, accountability, and growth.
With that, let me turn the call over to our CFO and COO, Walid Khiari, who will walk you through our financial performance.
Walid Khiari — Chief Financial Officer & Chief Operating Officer:
Thank you, Tyler, and good afternoon, everyone.
Our Q2 results demonstrate significant progress in stabilizing operations and strengthening our financial position. By reducing expenses by over 55%, we’ve gained greater flexibility to execute our strategy and accelerate growth initiatives in regulated industries. Looking ahead, we are shifting our focus toward driving revenue growth, supported by a stronger foundation and the operational capacity to launch new customers more rapidly across our target verticals.
Financial Highlights · Revenue: $5,000 in Q2 2025, compared to none in Q2 2024, reflecting early traction in our conversation AI solutions. · Operating expenses: Decreased by 55.6% to $2.8 million, down from $6.3 million in Q2 2024, driven by streamlined operations and strategic cost optimization. · Other income: $3.7 million, primarily from a $4.0 million gain on debt extinguishment, partially offset by changes in warrant fair value. · Net income: Net income of $0.9 million in Q2 2025, compared to a net loss of $3.0 million in Q2 2024. · Stockholders’ equity: Increased 126% to $5.9 million from $2.6 million at year-end 2024, reflecting improved financial health.
A detailed summary of BEN’s recorded financial results is included in the Company’s Form 10-Q for the quarter ended June 30, 2025, filed with the SEC.
With that, I’ll hand it back to the operator to begin our Q&A session.
Operator: Thank you, Walid. We will now begin the question-and-answer session. [Operator to give instructions.]
[After Q&A conclusion]
Operator: That concludes the Q&A session. I will now turn the call back over to Tyler Luck for closing remarks.
Tyler Luck — Acting CEO & Co-Founder (Closing): Thank you, operator.
To close, I want to emphasize once again that BEN is regaining its entrepreneurial momentum. We are disciplined, focused, and committed to creating value for our shareholders through strategic partnerships, market expansions, and innovative AI solutions.
We look forward to updating you again on our upcoming November 4th earnings call for Q3 results, and we invite you to join us at our annual shareholders meeting scheduled for November 26, 2025.
Thank you for your time and continued support.
Operator: Thank you. That wraps up today’s call. Transcripts of this conference call will be posted on BEN’s Investor Relations website. We appreciate your interest in the Brand Engagement Network.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (302) 482-8999
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On October 30, 2025, Brand Engagement Network, Inc. (the “Company” or “BEN”) entered into a Reseller Agreement and Shareholder Agreement, with SKYE Inteligencia LATAM, S.A.P.I. de C.V. (“SKYE LATAM”), to commercialize BEN’s AI technology across Latin America and Spain. The agreements were fully executed by all the parties on or before November 6, 2025. [1]
Under the Shareholder Agreement:
| ● | SKYE LATAM issued to BEN a $5,000,000 preferred capital contribution, recognized as a intellectual property licensing revenue under U.S. GAAP. | |
| ● | BEN received 25% of SKYE LATAM’s common stock. | |
| ● | BEN was granted one seat on SKYE LATAM’s five-member board of directors. | |
| ● | BEN has pre-emptive rights, tag-along rights, drag-along rights, and information inspection rights. | |
| ● | Dividends, capital increases, and share issuances are restricted until the $5,000,000 preferred contribution is fully paid or capitalized. | |
| ● | Any breach triggers nullity, joint liability, share forfeiture, or damages at BEN’s discretion. |
Under the Reseller Agreement:
| ● | SKYE LATAM was appointed as the exclusive reseller of BEN’s AI solutions (including ELM™ and RAG) in the government sector across Latin America and Spain. | |
| ● | SKYE LATAM has non-exclusive rights in all other industry verticals. | |
| ● | BEN is entitled to 35% of gross revenues from software, Saas, Services, and subscription, across all industries in the territory. | |
| ● | Includes standard non-compete provisions and a right of first refusal on any sale of SKYE LATAM’s controlling interest or substantial assets. | |
| ● | The prior reseller agreement with Vybroo (disclosed March 19, 2025) will be assigned to SKY LATAM as part of the consideration. |
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the redacted agreements, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and incorporated herein by reference. Certain portions of the agreements have been omitted pursuant to Item 601(b)(10) of Regulation S-K.
Exhibit 10.1 (Reseller Agreement) is filed with full signatures.
Exhibit 10.2 (Shareholders Agreement) is filed with signature lines blanked for privacy. The fully executed version, including all signatures, is retained by the Company and available upon request.
[1] Certain signature pages reflect dates in DD-MM-YY format as used in Mexico (e.g., “5-11-25” = November 5, 2025; “6-11-25” = November 6, 2025). All signatures were received on or before November 6, 2025.
Item 8.01 Other Events.
On November 10, 2025, the Company issued a press release announcing the transactions described in Item 1.01 above. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |
| 10.1† | Redacted Shareholder Agreement, effective October 30, 2025 | |
| 10.2† | Redacted Reseller Agreement, effective October 30, 2025 | |
| 99.1 | Press Release, dated November 10, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
† Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit have been omitted by means of marking such portions with asterisks as the identified confidential portions are both not material and are the type of information that the registrant treats as private or confidential. The registrant agrees to supplementally furnish an unredacted copy of this exhibit to the SEC upon its request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Brand Engagement Network, Inc.
Date: November 10, 2025
| By: | /s/ Tyler Luck | |
| Tyler Luck | ||
| Acting Chief Executive Officer |
EXHIBIT 10.1
PURSUANT TO ITEM 601(b)(10) OF REGULATION S-K, CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BY MEANS OF MARKING SUCH PORTIONS WITH ASTERISKS [**] AS THE IDENTIFIED CONFIDENTIAL PORTIONS ARE BOTH NOT MATERIAL AND ARE THE TYPE OF INFORMATION THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REGISTRANT AGREES TO SUPPLEMENTALLY FURNISH AN UNREDACTED COPY OF THIS EXHIBIT TO THE SEC UPON ITS REQUEST.
SHAREHOLDERS AGREEMENT OF SKYE INTELIGENCIA LATAM, S.A. DE C.V., THIS SHAREHOLDERS’ AGREEMENT IS ENTERED INTO BY AND AMONG BRAND ENGAGEMENT NETWORKS, INC., REPRESENTED BY MICHAEL TODD LUCAS; GASTÓN IVÁN GAXIOLA ROMERO, ACTING ON HIS OWN BEHALF; MAXIMILIANO LEONARDO CASTAÑÓN, ACTING ON HIS OWN BEHALF; KAREN SÁNCHEZ ABBOTT, ACTING ON HER OWN BEHALF; GREGORIO ESPERÓN GÓMEZ, ACTING ON HIS OWN BEHALF; AND SKYE INTELIGENCIA LATAM, S.A. DE C.V., REPRESENTED BY GASTÓN IVÁN GAXIOLA ROMERO; COLLECTIVELY REFERRED TO AS THE “SHAREHOLDERS”, SUBJECT TO THE FOLLOWING DECLARATIONS AND CLAUSES:
D E C L A R A T I O N S
| 1. | All parties have formed, as shareholders, the company SKYE INTELIGENCIA LATAM, S.A. DE C.V. (the “Company”), whose purpose is to license and develop artificial intelligence applications for Mexico and Latin America. | |
| 2. | All parties are shareholders of the Company and together represent 100% (one hundred percent) of the subscribed share capital; therefore, they may jointly make the necessary decisions for the fulfillment of this Agreement. | |
| 3. | Brand Engagement Networks, Inc. (“BEN”) has agreed to grant the Company an exclusive license for the territory of Mexico and Latin America for the use of BEN’s software and artificial intelligence applications. | |
| 4. | As part of the consideration for the granted license, the Company has issued in favor of BEN a Preferred Capital Contribution in the amount of USD $5,000,000.00 (Five Million U.S. Dollars 00/100). | |
| 5. | In light of the above, all shareholders of the Company agree as follows: |
C L A U S E S
First. The Shareholders hereby ratify in full the License Agreement and the Preferred Capital Contribution in favor of BEN, in the amount of USD $5,000,000.00 (Five Million U.S. Dollars 00/100) (hereinafter, the “Contribution”).
Second. The Shareholders agree that the Contribution shall be recorded in the Company’s corporate books and accounting as a Pending Capital Contribution, for all legal purposes, in favor of BEN.
Third. As long as the Contribution has not been fully paid or capitalized in favor of BEN, the Company shall not distribute dividends, profits, gains, share premiums, capital increases or reductions, or any other similar benefits.
Likewise, the Shareholders shall not receive any economic benefit from the Company while the Preferred Debt remains unpaid.
Excluded from this restriction are the salaries or compensation that the Company must pay to the Shareholders for services rendered or positions held, provided that such payments are previously approved by the Board of Directors or the Shareholders’ Meeting.
Fourth. The Shareholders agree that any profit or net income not allocated to operating expenses shall be primarily applied to the payment of the Contribution.
Fifth. Any decision involving a capital increase, issuance of shares of any kind, or contributions for future capital increases or debt capitalization shall require prior written authorization from BEN, otherwise such actions shall be null and void.
Sixth. Any amount received by the Company from capital increases, share issuances, share subscription premiums, or any other similar payments or contributions shall be primarily used to pay the Preferred Contribution in favor of BEN, until full payment has been made.
Seventh. Any breach of the prohibitions established herein shall result, at BEN’s discretion, in:
| (1) | The nullity of any actions taken in violation of this Agreement. | |
| (2) | The Shareholders who permitted or voted for such actions becoming jointly liable with the Company for the Preferred Contribution. | |
| (3) | The forfeiture of the shares held by any Shareholders who permitted, voted for, or authorized such violating actions. | |
| (4) | The payment of damages, jointly and severally, by the Company and the Shareholders responsible for the violation. |
BEN may enforce any or all of these penalties at its sole discretion and exercising one shall not preclude the others.
Eighth. The Shareholders agree that any new shareholder joining the Company, under the terms of the Company’s bylaws and after exercising any preemptive or preferential rights, must expressly, previously and in writing, consent to this Agreement and its prohibitions, penalties, and full application prior to subscribing to any shares.
Ninth. The Shareholders shall be solely responsible for any action or omission related to the obligations established in this Agreement, and therefore shall be jointly liable to third parties for any payments arising from such acts, within a maximum of [**] calendar days from the date on which such payment is demanded.
Tenth. This Agreement shall be governed by Mexican commercial law, and the competent courts of Mexico City shall have jurisdiction. However, by mutual agreement, the Shareholders may submit disputes to commercial arbitration.
THE SHAREHOLDERS, FULLY AWARE OF THE CONTENT OF THIS AGREEMENT AND ACTING OF THEIR OWN FREE WILL, SIGN THIS DOCUMENT ON THE 30TH DAY OF OCTOBER, 2025, EXECUTING IT ELECTRONICALLY FOR ALL LEGAL PURPOSES.
SIGNATORIES
| SIGNATORY | SIGNATURE | |
BRAND ENGAGEMENT NETWORKS, INC. By MICHAEL TODD LUCAS |
|
|
GASTÓN IVÁN GAXIOLA ROMERO IN HIS OWN RIGHT |
||
MAXIMILIANO LEONARDO CASTAÑÓN IN HIS OWN RIGHT |
||
KAREN SÁNCHEZ ABBOTT IN HER OWN RIGHT |
||
GREGORIO ESPERÓN GÓMEZ IN HIS OWN RIGHT |
||
SKYE INTELIGENCIA LATAM, S.A. DE C.V. GASTÓN IVÁN GAXIOLA ROMERO |
Exhibit 10.2
PURSUANT TO ITEM 601(b)(10) OF REGULATION S-K, CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BY MEANS OF MARKING SUCH PORTIONS WITH ASTERISKS [**] AS THE IDENTIFIED CONFIDENTIAL PORTIONS ARE BOTH NOT MATERIAL AND ARE THE TYPE OF INFORMATION THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. THE REGISTRANT AGREES TO SUPPLEMENTALLY FURNISH AN UNREDACTED COPY OF THIS EXHIBIT TO THE SEC UPON ITS REQUEST.
RESELLER AGREEMENT (SAAS)
Effective Date: October 30, 2025
This RESELLER AGREEMENT (this “Agreement”) is entered into as of October 30, 2025 (the “Effective Date”) by and between SKYE INTELIGENCIA LATAM, a company organized and existing under the laws of Mexico, with its principal place of business at Montes Urales 425, 4th floor, Lomas de Chapultepec, in Mexico City, Mexico (“Reseller”) and Brand Engagement Network Inc, a Delaware corporation, having a place of business at 300 Delaware Avenue, Suite 210, Wilmington, DE 19801 (“BEN”).
1. DEFINITIONS
For the purposes of this Agreement, in addition to the capitalized terms defined elsewhere in this Agreement, the following terms shall have the meanings ascribed to them as follows:
1.1 “Affiliate” of a party means any corporation or other entity that such party directly or indirectly controls, is controlled by, or is under common control with. “Control,” for purposes of this definition, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise.
1.2 “Customer(s)” means individuals or entities to which Reseller has re-sold Services.
1.3 “Customer Data” means all electronic data or information submitted by Customers in connection with such Customers’ use of the Services, including data provided by Customers’ Users.
1.4 “Deliverable” means any software, equipment consultations, documentation and/or other materials prepared by BEN for Reseller as described in an SOW.
1.5 “Fees” means the fees payable by Reseller to BEN in connection with the re-sale of the Services to Customers and any products and services sold/leased/licensed to Customers in connection with or related to the Services.
1.6 “Government Sector” means any federal, state, provincial, municipal, or local government entity, agency, ministry, public institution, or state-owned or state-controlled enterprise within the Territory.
1.7 “Term” has the meaning ascribed to that term in Section 8.1.
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1.8 “Level 1 Support” means the service provided in response to a Customer’s initial contact requesting assistance with the Services.
1.9 “Level 2/3 Support” means the service required to resolve a Customer’s issues with the Services after Level 1 Support has been exhausted.
1.10 “Malicious Code” means viruses, worms, time bombs, Trojan horses and other harmful or malicious code, files, scripts, agents or programs.
1.11 “Non-BEN Applications” means online applications and offline software products provided by entities or individuals other than BEN and are clearly identified as such, and that interoperate with the Services.
1.12 “Order Form” means the documents for placing orders pursuant to this Agreement that are entered into between BEN and Reseller (or Affiliates of BEN and Reseller) from time to time, including addenda and supplements thereto. By entering into an Order Form pursuant to this Agreement, an Affiliate agrees to be bound by the terms of this Agreement as if it were an original party to this Agreement. Order Forms shall be deemed incorporated into this Agreement by reference.
1.13 “Professional Services” means the services to be provided by BEN to Reseller as described in an SOW which may include, without limitation, engineering, maintenance, installation, design consulting, business planning, support, network planning and analysis.
1.14 “Renewal Term” has the meaning ascribed to that term in Section 8.1.
1.15 “Reseller Agent” means a person or entity that Reseller appoints to market, promote or re-sell Services on behalf of Reseller.
1.16 “Reseller Data” means all electronic data or information submitted by Reseller to BEN in connection with the Services.
1.17 “Service(s)” means the products and services that are ordered by Reseller pursuant to an Order Form and made available by BEN online as designated by BEN, including associated offline components. “Services” exclude Non-BEN Applications.
1.18 “Statement of Work” or “SOW” means a statement of work for Professional Services and/or Deliverables that is executed by the parties.
1.19 “Term” has the meaning ascribed to that term in Section 8.1.
1.20 “Territory” means Mexico and all Latin American countries worldwide, including but not limited to: [**].
1.21 “Users” means individuals who are authorized by Customers to use the Services. Users may include but are not limited to Customer’s employees, consultants, contractors and agents, and third parties with which Customers transact business.
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2. SERVICES
2.1 Provision of Services. Conditioned on the provisions in this Section 2 and the other terms and conditions of this Agreement and payment of the applicable Fees, BEN hereby appoints Reseller, and Reseller hereby accepts, for the Term (unless terminated as provided in this Agreement), an exclusive appointment for the Government Sector and a non-exclusive appointment for all other industry verticals in the Territory to act as a BEN approved reseller of the Services. Reseller shall market, promote and re-sell the Services to Customers and potential Customers, at its own expense and using its own efforts with its own sales force (including Reseller Agents). Reseller shall pay BEN the Fees set forth in this Agreement. BEN shall make the Services available to Reseller for re-sale to Customers pursuant to this Agreement.
2.2 Exclusivity Consideration. In consideration for the exclusive rights in the Government Sector, Reseller shall pay to BEN Five Million U.S. Dollars ($5,000,000 USD) in the form of preferred equity in Reseller (the “Exclusivity Fee”), issued within 30 days of the Effective Date, subject to customary documentation.
2.3 Revenue Share. Reseller shall pay BEN 35% of all Gross Revenue derived from software, SaaS, services, and subscriptions [**] across all industries in the Territory.
2.4 Equity Grant. BEN shall receive 25% equity in SKYE INTELIGENCIA LATAM (the “Main Company”), with full shareholder rights, including: right to appoint one (1) board member; [**]; standard information and inspection rights.
2.5 Order Forms. Reseller and BEN shall enter into Order Forms with respect to each Customer in order to document the Services that are to be provided for such Customer and to allow BEN to plan its delivery of Services.
2.6 Non-Exclusive Customer Licenses. Reseller may only resell non-exclusive rights to the Services and shall not grant any party any exclusive rights with respect to the Services.
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2.7 BEN Responsibilities for the Services. BEN shall provide Reseller with the Services within the Territory for the purpose of the resale to Customers. The Services shall be made available by BEN subject to any unavailability caused by circumstances beyond BEN’s reasonable control, including any force majeure events as contemplated in Section 10.11 and any computer, communications, Internet service or hosting facility failures or delays involving hardware, software, power or other systems not within BEN’s possession or reasonable control, and denial of service attacks. The Services may be temporarily limited, interrupted or curtailed due to maintenance, repair, modifications, upgrades or relocation. BEN shall notify Reseller of scheduled and unscheduled network outages that are expected to last more than four (4) hours and that may affect the Services. BEN shall be entitled to change the Services during the Term provided that BEN will not materially reduce the capabilities provided by the Services.
2.8 Reseller Responsibilities. Reseller shall maintain marketing and customer service standards that are appropriate in order to maintain high-quality Services and to reflect favorably on Reseller’s and BEN’s reputation. Reseller shall provide Customers with prompt, courteous, and efficient service, shall take every reasonable precaution not to disclose any Customer information, other than as permitted by any applicable privacy or personal health information legislation, and shall deal with Customers honestly and fairly. Reseller shall be responsible for all activities of its Customers and Reseller shall (i) use commercially reasonable efforts to prevent unauthorized access to or use of the Services and shall notify BEN promptly of any such unauthorized access or use; and (ii) comply with all applicable local, state, provincial, federal and foreign laws in respect to the promotion and re-sale of the Services.
2.9 Mutual Obligations. Neither party shall by way of statement, act or omission, discredit or reflect adversely upon the reputation of or the quality of the other party or the products or services provided by the other party.
2.10 Customer Contracts. The Services shall be provided to Customers on terms and conditions that are mutually agreed to between BEN and Reseller, in accordance with any applicable regulations. Reseller acknowledges that the Customer agreements will require commercially reasonable flow-down obligations that will apply to Users’ use of the Services, including the right for BEN to use data submitted and generated through the use of the Services. Reseller shall not make any representations or warranties on behalf of BEN, or in any way bind or attempt to bind BEN contractually or otherwise with any Customer(s) beyond BEN’s delivery of the Services.
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2.11 Restrictions. Reseller shall not (and shall not authorize any third party to): (a) modify, translate, reverse engineer, decompile, disassemble, or create derivative works based on the Services except to the extent that enforcement of the foregoing restriction is prohibited by applicable law; (b) circumvent any user limits or other timing, use or functionality restrictions built into the Services; (c) remove any proprietary notices, labels, or marks from the Services (except to the extent Reseller is so permitted to for the purposes of re-branding the Services); or (d) access the Services in order to (i) build a competitive product or service, or (ii) copy any ideas, features, functions or graphics of the Services for use outside of the Services.
2.12 Training and Real Time Data. The parties acknowledge that the Services require ingestion of industry jargon/master data, initial training, as well as training updates from time to time, using data relevant to the Territory as well access to real time data provided via application programming interface or similar method. In addition, conversation and dialogue management shall be developed to address the specific use cases and solutions pursued by both parties. This entails crafting conversational patterns and responses that align with industry norms and ensuring that the AI is capable of addressing specific challenges and questions within the Territory context. Accordingly, throughout the Term of this Agreement, Reseller shall collaborate closely with BEN providing BEN with access to essential information real time data provided via application programming interface or similar method, guidance, and expertise needed to train and improve the Services (the “Training and Real Time Data”) in the Territory. It is expected that the Reseller’s contributions will encompass, but not be limited to:
A. [**];
B. [**];
C. [**];
D. [**]; and
E. [**]
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2.13 Ownership and Proprietary Rights. BEN and its suppliers and/or licensors own and shall retain all right, title and interest (including without limitation all patent rights, copyrights, trademark rights, trade secret rights and other intellectual property rights), in and to the Services. All Artificial Intelligence, algorithms, source code, models, training data, patents, trade secrets, and intellectual property related to the Services shall remain the sole and exclusive property of BEN. Reseller agrees that only BEN shall have the right to maintain, enhance or otherwise modify the Services. Except as expressly set forth in this Section 2, BEN reserves all rights and grants Reseller no licenses of any kind, whether by implication, estoppel, or otherwise.
2.14 Improvements. BEN shall own all right, title and interest in and to any enhancements and improvements to the Services made by Reseller or its Affiliates, jointly or independently, or resulting from use of the Training and Real Time Data, including, but not limited to, all patent, copyright, trade secret and other proprietary rights therein (collectively, “Improvements”). Reseller hereby assigns, and upon creation shall be deemed to have assigned, to BEN all right title and interest in and to the Improvements. Reseller shall execute and deliver, and shall cause its personnel, contractors, sub-contractors and advisors to execute and deliver, without additional compensation (provided that BEN prepares the applicable documents at its cost and expense), (i) such documents and instruments as BEN may reasonably request to transfer and assign to BEN all right, title and interest in the Improvements; and (ii) any and all applications or registrations for patents, copyrights and other intellectual property rights and any other instruments deemed necessary or appropriate for BEN to secure and enforce such rights.
2.15 Suggestions. From time-to-time Reseller may provide BEN with suggestions, enhancement requests, recommendations or other feedback relating to the Services (“Suggestions”). BEN shall own all right, title and interest in and to any Suggestions, including, but not limited to, all patent, copyright, trade secret and other proprietary rights therein. Reseller hereby assigns, and upon creation shall be deemed to have assigned, to BEN all right title and interest in and to the Suggestions. Reseller shall execute and deliver, and shall cause its personnel to execute and deliver, without additional compensation (provided that BEN prepares the applicable documents at its cost and expense), (i) such documents and instruments as BEN may reasonably request to transfer and assign to BEN all right, title and interest in the Suggestions; and (ii) any and all applications or registrations for patents, copyrights and other intellectual property rights and any other instruments deemed necessary or appropriate for BEN to secure and enforce such rights.
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2.16 Non-Competition. During the Term, Reseller shall not: (a) directly or indirectly or by Affiliate entities or persons market, promote, or solicit customers or subscriptions for, supply, sell or re-sell any product or service in competition with the Services; (b) have any controlling interest in any entity that markets, promotes, sells or provides any product or service in competition with the Services; (c) enter into any agreements with any provider to resell, redistribute, sub-license or otherwise commercialize any product or service that competes with the Services; or (d) display on its website or elsewhere any advertising or marketing materials of any provider of any product or service that competes with the Services. [**].
2.17 Reseller’s Use of Agents and Subcontractors. Reseller may, without the prior written consent of BEN, appoint Reseller Agents to market, promote and/or re-sell the Services within the Territory, provided that Reseller shall continue to be responsible for all of its duties and obligations under this Agreement and for any acts or omissions of any of its Reseller Agents, and any acts or omissions of any of its Reseller Agents shall be attributed to Reseller. Reseller shall: (a) be liable to BEN for all losses, costs, damages and expenses of whatsoever nature, that BEN may sustain or incur as a result or in connection with any act or omission of any Reseller Agent, and (b) indemnify BEN, its officers, directors, employees, agents and Affiliates (including their officers, directors, employees, and agents) from and against any and all actions, causes of action, claims and demands of whatsoever nature caused by, arising directly or indirectly out of, or in connection with any acts or omissions of any Reseller Agent.
2.18 Professional Services. Upon execution of an SOW by the parties and subject to the terms and conditions set forth in Schedule A, Reseller may retain BEN to provide Professional Services (including the development of Deliverables) for Reseller, all as described in such SOW. If Reseller submits a purchase order for Professional Services, such order shall not be binding upon BEN until accepted by BEN. BEN shall respond to each such order submitted by Reseller within five (5) business days following receipt thereof. Once an order has been accepted, it shall be subject to the terms and conditions of this Agreement (such terms superseding any and all pre-printed terms and/or conditions within such order).
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2.19 Customer and Reseller Data. BEN shall have the non-exclusive, irrevocable, perpetual, royalty-free, sublicensable and transferable right to use the Customer Data and Reseller Data to provide the Services in accordance with this Agreement, to improve the Services and to train and improve the software and artificial intelligence models used by BEN in its business, and Reseller shall obtain such rights from its Customers for the benefit of BEN. Subject to the rights granted to BEN pursuant to this Agreement, [**]. Notwithstanding the foregoing, the Parties will work together to expand the rights for BEN to use the Customer Data to the extent permitted by applicable law. Moreover, to the extent Reseller obtains broader rights in the Customer Data than are granted to BEN in this Agreement, such broader rights shall be deemed to have been automatically granted to BEN hereunder. Notwithstanding anything to the contrary in this Section 2.19, the Parties agree to comply with Mexican Federal Law on Protection of Personal Data Held by Private Parties (LFPDPPP) and any applicable state data protection laws in the Territory. BEN shall implement technical and organizational measures to protect Customer Data; notify Reseller [**]; and allow Reseller to [**] (at Reseller’s expense).
2.20 Marketing Alignment. Reseller shall provide BEN with a monthly report on its sales pipeline, including, without limitation, a list of its then-current targeted potential Customers, details regarding the engagement and status with potential Customers, and any other information typically generated regarding sales pipeline efforts.
2.21 Trademarks. BEN hereby grants Reseller during the Term of this Agreement a nonexclusive, nontransferable non-sublicensable, royalty-free license to use BEN’s trademarks and associated logos, including the name “BEN Auto” (or similar name agreed between the parties) (collectively, “Marks”) solely in connection with the marketing and sale of the Services. Any use of Marks shall be in accordance with BEN’s trademark usage policies, with proper markings and legends, and subject to BEN’s prior written approval in each case. Accordingly, Reseller shall provide BEN with copies of all marketing materials regarding the Services before they are distributed, and shall not use or distribute any such materials without BEN’s approval. BEN may withdraw any approval of any use of its Marks at any time in its sole discretion, although no such withdrawal shall require the recall of any previously published or distributed materials that was approved by BEN. Reseller shall reasonably cooperate with BEN in facilitating BEN’s monitoring and control of the nature and quality of products and services bearing the Marks, and shall supply BEN with specimens of Reseller’s use of the Marks upon request. If BEN notifies Reseller that Reseller’s use of the Marks is not in compliance with BEN’s trademark policies or is otherwise deficient, then Reseller shall promptly comply with such policies or otherwise as reasonably directed by BEN. Reseller shall not make any express or implied statement or suggestion, or use the Marks in any manner, that dilutes, tarnishes, degrades, disparages or otherwise reflects adversely on BEN or its business, products or services. Reseller acknowledges that the Marks are and shall remain owned by BEN. Reseller shall not gain any right, title or interest with respect to the Marks by use thereof, and all rights and goodwill associated with the Marks shall inure to the benefit of BEN.
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3. SERVICES SETUP AND OPERATION
3.1 Launch of the Services with Reseller. Upon execution of this Agreement, the parties will co-operate and use commercially reasonable efforts to integrate the Services with any Reseller software or infrastructure with which the Services need to interact in order to allow the Services to be marketed by Reseller to Customers in the Territory. Once the Services have been integrated with Reseller’s software or infrastructure and the parties agree that the integrated Services are of a reasonable quality (having regard to similar commercial offerings), the Reseller shall be entitled to begin reselling the Services to Customers in the Territory.
3.2 Support. BEN shall provide basic support for the Services to Reseller at no additional charge, and shall provide upgraded support for the Services to Reseller if purchased separately by Reseller. Reseller shall be responsible for providing First Line Support to Customers and Users of the Services. For the purposes of this Agreement, “First Line Support” means (i) [**]; (ii) [**]; (iii) [**]; (iv) [**]; (v) [**]; (vi) [**]; and (vii) [**]. [**].
3.3 White Labelling. If mutually agreed by the parties in writing, BEN shall brand the Services with Reseller-specific branding prior to making the Services available for re-sale by Reseller. The Services shall also be branded with “powered by BEN” (or a similar phrase) marks and logos as specified by BEN. The Services shall in all cases retain any relevant patent, copyright and/or other intellectual property notices as may be determined to be appropriate by BEN. Reseller shall provide, in softcopy/electronic format as reasonably specified by BEN, the Reseller-specific branding to be used to white-label the Services. BEN shall provide Reseller with access to the white-labelled Services to review prior to making any production versions of the white-labelled Services commercially available for re-sale by Reseller. Reseller shall use commercially reasonable efforts to promptly review the white-labelled Services. The Reseller-specific branding will be applied to the Services by BEN for the fees specified in the applicable SOW for such Professional Services. BEN shall only use any Reseller-specific branding materials provided to BEN for the purposes of re-branding the Services as contemplated in this Section 3.3 and for the operation of the white-labelled Services. Except for the foregoing limited rights, Reseller shall retain all right, title and interest in the Reseller-specific branding provided to BEN.
3.4 Acquisition of Non-BEN Products and Services. BEN or third parties may from time to time make available to Reseller third-party products or services, including but not limited to Non-BEN Applications and implementation, customization and other consulting services. Any acquisition by Reseller of such non-BEN products or services, and any exchange of data between Reseller or its Customers and any non-BEN provider, is solely between Reseller or the applicable Customer, as the case may be, and the applicable non-BEN provider. BEN does not warrant or support non-BEN products or services, whether or not they are designated by BEN as “certified” or otherwise, except as specified in an Order Form.
3.5 Non-BEN Applications and Customer and Reseller Data. If Reseller or any of its Customers installs or enables Non-BEN Applications for use with the Services, Reseller acknowledges that BEN may allow providers of those Non-BEN Applications to access Customer Data and Reseller Data as required for the interoperation of such Non-BEN Applications with the Services. BEN shall not be responsible for any disclosure, modification or deletion of any Customer Data and Reseller Data resulting from any such access by Non-BEN application providers. The Services shall allow Customers to restrict such access by restricting Customer users from installing or enabling such Non-BEN applications for use with the Services.
3.6 Integration with Non-BEN Services. The Services may contain features designed to interoperate with Non-BEN Applications. To use such features, Reseller and Customers may be required to obtain access to such Non-BEN Applications from their providers. If the provider of any such Non-BEN application ceases to make the Non-BEN application available for interoperation with the corresponding Service features on reasonable terms, BEN may cease providing such Service features without entitling Reseller or any Customers to any refund, credit, or other compensation.
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3.7 BEN Protection of Customer Data. BEN shall maintain commercially reasonable administrative, physical, and technical safeguards for protection of the security, confidentiality and integrity of Customer Data. BEN will abide by all applicable State and Federal laws including, to the extent applicable, the Gramm Leach Bliley Act and the Federal Trade Commission “Safeguards Rule.” As the Federal Personal Data Protection in Posesión of Private Entites Act (Ley Federal de Protección de Datos en Posesión de Particulares) BEN will work with Reseller in countries where the Services could be deployed to abide by that particular country’s laws regarding consumer information. BEN is be SOC2 Type I compliant as of the date of this Agreement.
3.8 Reseller Responsibilities. Reseller shall (i) be responsible for Customers’ and Users’ compliance with BEN’s policies and procedures applicable to the Services; (ii) be responsible for the accuracy, quality and legality of the Customer Data and of the means by which it was acquired. Reseller shall not: (a) make the Services available to anyone other than Customer and Users; (b) sell, resell, rent or lease the Services outside the Territory; (c) use the Services to store or transmit infringing, libelous, or otherwise unlawful or tortious material, or to store or transmit material in violation of third-party privacy rights; (d) use the Services to store or transmit Malicious Code; (e) interfere with or disrupt the integrity or performance of the Services or third-party data contained therein; or (f) attempt to gain unauthorized access to the Services or their related systems or networks. Reseller shall, solely at its own cost, employ experienced salespeople who are knowledgeable concerning the functions and advantages of the Services and experienced technical personnel who are knowledgeable concerning the functions, specifications and advantages of the Services.
3.9 Usage Limitations. If BEN opts to impose Services limitations on all customers, such as but not limited to disk storage space and application programming interface calls, [**].
4. PAYMENT TERMS AND TAXES
4.1 Fees. Reseller shall pay BEN 35% of all amounts collected from Customers for the Services [**] and any products and services sold/leased/licensed to Customers in connection with or related to the Services.
4.2 Payment Terms. Reseller will pay BEN the Fees within [**]. All amounts are payable in United States dollars unless otherwise specified in an Order Form. Overdue amounts shall accrue interest at the lesser of [**].
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4.3 Taxes. The Fees do not include any taxes, levies, duties or similar governmental assessments of any nature, including but not limited to value-added, goods and services, harmonized, sales, use or withholding taxes, assessable by any local, state, provincial, federal or foreign jurisdiction (collectively, “Taxes”). Reseller is responsible for paying all Taxes associated with its sales of the Services. For clarity, BEN is solely responsible for taxes assessable against BEN based on its income, property and employees.
5. CONFIDENTIALITY
5.1 Definition of Confidential Information. “Confidential Information” means any and all information disclosed by either party to the other which is marked “confidential” or “proprietary” or which the recipient knows or has reason to know is regarded by the disclosing party as such, including oral information. “Confidential Information” does not include any information that the receiving party can demonstrate was or is: (a) at the time of disclosure to it, in the public domain; (b) after disclosure to it, published or otherwise becomes part of the public domain through no fault of the receiving party; (c) in the possession of the receiving party at the time of disclosure to it; (d) received after disclosure to it from a third party who had a lawful right to disclose such information to it without any obligation of confidentiality; or (e) independently developed by the receiving party without reference to Confidential Information of the disclosing party. In addition, the receiving party shall not be considered liable or in breach for disclosing Confidential Information which is required to be disclosed by judicial or governmental action; provided that prompt notice is given to the disclosing party wherever possible in order to enable it to seek a protective order or otherwise prevent such disclosure.
5.2 Securities Compliance. Reseller (i) is aware that BEN may become a reporting company under the Securities Exchange Act of 1934, as amended (the “Act”), and that the United States Securities and Exchange Commission (the “SEC”) has promulgated laws, rules and regulations relating to the purchase or sale of securities by persons who have material, non-public information about a public company from purchasing or selling securities of that company, or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell those securities, (ii) is familiar with the Act, and (iii) shall not use, nor cause any third party to use, any Confidential Information in contravention of the Act or any such laws, rules or regulations, and shall take all reasonable measures to avoid disclosure of Confidential Information except as permitted by this Agreement.
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6. WARRANTIES AND DISCLAIMERS
6.1 Warranties. Each party warrants to the other party that the other party warrants that (i) it has the corporate power and authority to enter into this Agreement and to perform its obligations hereunder; (ii) this Agreement does not and will not conflict with any other agreement to which it is a party; (iii) it will comply with all applicable laws in its performance hereunder; and (iv) it owns or has the right to use all intellectual property rights it is providing hereunder.
6.2 Reseller Indemnity. Reseller shall defend and/or settle at its expense, any claims, actions or proceedings against BEN and its Affiliates and its and their officers, directors, employees, agents, licensors and suppliers (“Indemnitees”) to the extent arising out of or relating to (i) product liability or death, bodily injury or damage to tangible property, real or tangible, caused by or arising out of any act or omission of Reseller or any of its Affiliates; (ii) Reseller’s or any of its Affiliates’ negligence or willful misconduct; (iii) any act or omission of Reseller or any of its Affiliates in connection with the Services; or (iv) any misrepresentation or unauthorized warranty made by Reseller or any of its Affiliates relating to the Services, and Reseller shall pay any settlements entered into by, or judgments against, the Indemnitees arising out of such claims, actions or proceedings.
6.3 Disclaimer. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 6, THE SERVICES ARE PROVIDED “AS IS” AND WITHOUT ANY WARRANTY OF ANY KIND. BEN DOES NOT WARRANT THAT THE SERVICES WILL BE ERROR-FREE OR THAT THEY WILL WORK WITHOUT INTERRUPTIONS. TO THE FULL EXTENT PERMITTED BY LAW, THE WARRANTIES STATED IN THIS SECTION 6 ARE EXCLUSIVE AND BEN DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDED BUT NOT LIMITED TO ANY WARRANTIES OF MERCHANTABILITY, QUALITY, NON-INFRINGEMENT, TITLE, OR FITNESS FOR A PARTICULAR PURPOSE.
7. INDEMNIFICATION UNDER THIS AGREEMENT AND EACH PARTY’S CONFIDENTIALITY OBLIGATIONS
7.1 BEN Indemnity. BEN shall defend and/or settle at its expense, any claims, actions or proceedings against Reseller to the extent arising out of or relating to third party claims that the Services infringe such third party’s U.S. patent issued as of the Effective Date, or U.S. copyright, and BEN shall pay any settlements entered into by, or judgments against, Reseller arising out of such claims, actions or proceedings. BEN shall have no liability for any infringement or misappropriation action or claim to the extent arising from: (i) any modification of the Services by or at the request of Reseller; (ii) the combination of the Services with any non-BEN product or service, where but for such combination, no infringement would exist; or (iii) continued allegedly infringing activity by Reseller after having been notified of modifications that would have avoided the alleged infringement. In the event the Services are held or are believed by BEN to infringe any third party rights, BEN shall have the option, at its expense, to (a) replace or modify the Services to be non-infringing; (b) obtain for Reseller a license to continue using the Services; or (c) if neither (a) nor (b) are practical in BEN’s sole opinion, terminate the Services and refund any prepaid but unused Fees. This Section 7.1 states BEN’s entire liability and Reseller’s exclusive remedy for any claim of infringement or misappropriation of any third-party rights.
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7.2 Reseller Indemnity. Reseller shall defend and/or settle at its expense, any claims, actions or proceedings against BEN and its Affiliates and its and their officers, directors, employees, agents, licensors and suppliers to the extent arising out of or relating to (i) product liability or death, bodily injury or damage to tangible property, real or tangible, caused by or arising out of any act or omission of Reseller or any of its Affiliates; (ii) Reseller’s or any of its Affiliates’ negligence or willful misconduct; (iii) any act or omission of Reseller or any of its Affiliates in connection with the Services; or (iv) any misrepresentation or unauthorized warranty made by Reseller or any of its Affiliates relating to the Services, and Reseller shall pay any settlements entered into by, or judgments against, BEN arising out of such claims, actions or proceedings.
8. TERM AND TERMINATION
8.1 Term. This Agreement shall commence on the Effective Date and shall continue in perpetuity (the “Term”). The Initial Term and any Renewal Terms are collectively referred to as the “Term.”
8.2 Termination. This Agreement may be terminated: (a) by either party if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receiving written notice of the breach; (b) by BEN if Reseller fails to make any payment due hereunder within thirty (30) days after receiving written notice of the breach, the non-breaching party may terminate this Agreement on written notice at any time following the end of such thirty (30) day period; (c) if Reseller does not pay or issue stock at the request of BEN after five years from the date of this agreement; and (d) if either party becomes insolvent (i.e., becomes unable to pay its debts in the ordinary course of business as they come due) or makes an assignment for the benefit of creditors, then the other party may terminate this Agreement immediately upon notice.
8.3 Survival. The following sections shall survive the termination or expiration of this Agreement for any reason: 1, 2.13, 2.14, 2.15, 2.19, 4, 5, 7, 8.3, 8.4, 8.5, 9, 10 and any payment obligations incurred prior to the expiration or termination of this Agreement.
8.4 Effect of Termination. Upon expiration or termination of this Agreement, Reseller shall cease all use of the Services, and shall promptly return all copies of the documentation for the Services to BEN or else destroy those copies and provide assurances (signed by an officer of Reseller) to BEN that it has done so.
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8.5 Rights upon Termination. Termination is not an exclusive remedy and is in addition to other rights or remedies that may be available. Upon any termination for cause by Reseller, BEN shall refund Reseller any prepaid Fees covering the remainder of the term of all subscriptions after the effective date of termination. Upon any termination for cause by BEN, Reseller shall pay any unpaid Fees. In no event shall any expiration or termination relieve Reseller of the obligation to pay any Fees payable to BEN. Following termination, and for any Customers to whom Reseller has sold subscriptions for the Services during the Term, BEN will continue to provide Services for such Customers for the remainder of their then-current subscription period (as of the effective date of termination or expiration of this Agreement) subject to payment of the applicable Fees for such Customers and subject to Reseller’s continued compliance with the terms and conditions of this Agreement, which shall continue in respect to such Customers. It is agreed between both the parties that once the Reseller has sold a subscription for the Services to a Customer during the Term with a duration longer than the Term (which shall require the written approval of BEN) and this Agreement terminates in accordance with its terms, the Services for any such Customer shall continue with both parties continuing to provide services to such Customer in the manner prescribed in this Agreement.
9. LIMITATION OF LIABILITY
9.1 WITH THE EXCEPTION OF A PARTY’S OBLIGATION TO PROVIDE INDEMNIFICATION UNDER THIS AGREEMENT AND EACH PARTY’S CONFIDENTIALITY OBLIGATIONS, IN NO EVENT SHALL EITHER PARTY, OR ITS LICENSORS OR SUPPLIERS BY VIRTUE OF THIS AGREEMENT, HAVE ANY LIABILITY TO ANY OTHER PARTY FOR ANY LOST PROFITS OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, OR FOR ANY INCIDENTAL, PUNITIVE, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE) AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THE LIMITATIONS SET FORTH IN THIS SECTION 9 DO NOT APPLY TO ANY INFRINGEMENT OR MISAPPROPRIATION BY EITHER PARTY OR ITS CONTRACTORS OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS. IN NO EVENT SHALL BEN, ITS AFFILIATES OR ITS OR THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, LICENSORS OR SUPPLIERS BE LIABLE TO RESELLER FOR MORE THAN THE AMOUNT OF ANY ACTUAL DIRECT DAMAGES UP TO [**], REGARDLESS OF THE CAUSE AND WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE. THE PARTIES AGREE THAT THIS SECTION 9 REPRESENTS A REASONABLE ALLOCATION OF RISK.
10. GENERAL
10.1 Invoices. The terms, provisions or conditions of any purchase order or other business form or written authorization used by either party will have no effect on the rights, duties or obligations of the parties under, or otherwise modify, this Agreement, regardless of any failure of the receiving party to object to those terms, provisions or conditions.
10.2 Marketing Activities. Following the execution of this Agreement, the parties may issue a joint press release highlighting the relationship contemplated by this Agreement. Notwithstanding the foregoing, neither party will publish a press announcement related to this Agreement without prior written consent of the other party.
10.3 Assignment. Neither party may assign any of its rights or delegate any of its obligations under this Agreement, whether by operation of law or otherwise, without the prior express written consent of the other party, which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, BEN may assign this Agreement in connection with any merger or acquisition or sale of all or substantially all of BEN’s or any of its Affiliates’ assets or stock. Such assignment will not in any event relieve the assignor of any obligations that accrue under this Agreement prior to any such assignment. Subject to the foregoing, this Agreement will bind and inure to the benefit of the parties, their respective successors and permitted assigns. Any attempted assignment in violation of this Section 10.3 shall be null and void.
Reseller can assign this license in part or total to a subsidiary company, with previous notice to BEN and if BEN does not oppose such assignment in five business days.
10.4 Right of First Refusal. For the Term of this Agreement in the event Reseller or a party directly or indirectly controlling Reseller, proposes to enter into a sale or other transfer of a controlling interest in such entity, or a sale of all or substantially all of its assets (a “Proposed Sale”) to a Qualified Purchaser (as defined below), in each case, pursuant to a transaction or series of related transactions, BEN shall have the right, but not the obligation, to purchase such controlling interest or such assets, as applicable, at the same purchase price and on substantially similar terms and conditions as the Proposed Sale (the “Right of First Refusal”). [**]. Any consummation of a Proposed Sale in contravention of this Agreement shall be void ab initio. For purposes of this Agreement, a [**].
10.5 Waiver and Amendment. No modification, amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by the party to be charged. No failure or delay by either party in exercising any right, power, or remedy under this Agreement, except as specifically provided herein, shall operate as a waiver of any such right, power or remedy.
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10.6 Choice of Law; Jurisdiction; Venue. This Agreement shall be governed by the laws of the State of Texas without regard to its conflict of law principles. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE EXCLUSIVELY RESOLVED IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF TEXAS, SHERMAN DIVISION. Each Party irrevocably waives any objection to such jurisdiction or venue on the grounds of forum non conveniens, lack of personal jurisdiction, or otherwise. The application of the United Nations Convention on Contracts for the International Sale of Goods to this Agreement is expressly excluded. The parties confirm that it is their wish that this Agreement as well as all other documents relating to this Agreement, including notices, be drawn up in English only.
10.7 Compliance with Laws. Each party shall comply with all applicable laws and regulations regarding the general conduct of business including without limitation all relevant anti-corruption and anti-bribery laws, including the United States Foreign Corrupt Practices Act. Reseller agrees to fully comply with all export, re-export and import restrictions and regulations of all agencies and/or authorities of any applicable countries.
10.8 Notices. All notices, demands or consents required or permitted under this Agreement shall be in writing and delivered to the addresses set forth above. Notice shall be considered delivered and effective on the earlier of actual receipt or one day following dispatch registered overnight carrier (such as FedEx or UPS). Notice shall be sent to the parties at the addresses set forth on the first page of this Agreement or at such other address as shall be specified by either party to the other in a notice in accordance with this Section 10.8.
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10.9 Independent Contractors. The parties are independent contractors. This Agreement does not create a legal partnership (notwithstanding any use of the term “partner” by the parties, which if used is meant only to convey a spirit of cooperation between the parties), or a joint venture, agency, employee/employer relationship, or franchisee/franchisor relationship between the parties. Neither party shall have any right, power or authority to create any obligation or responsibility on behalf of the other.
10.10 Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, such provision shall be changed and interpreted so as to best accomplish the objectives of the original provision to the fullest extent allowed by law and the remaining provisions of this Agreement shall remain in full force and effect.
10.11 Force Majeure. Except for each party’s obligations to pay money, neither party shall be deemed to be in breach of this Agreement for any failure or delay in performance caused by reasons beyond its reasonable control, including but not limited to acts of God, earthquakes, wars, pandemics, terrorism, communication failures, strikes or shortages of materials.
10.12 Headings and References. The headings and captions used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.
10.13 Counterparts. This Agreement may be executed in counterparts, both of which, when taken together, shall constitute a signed agreement binding upon the parties. Delivery of a signed counterpart of this Agreement by facsimile transmission, in paper copy by courier or regular mail or as an email attachment in PDF format shall constitute valid and sufficient delivery thereof.
10.14 BEN Affiliates. BEN may use one or more Affiliates to perform its obligations under this Agreement, provided that such use will not affect BEN’s obligations hereunder.
10.15 Complete Understanding. This Agreement, including all Order Forms, Statements of Work and Schedules, constitutes the final, complete and exclusive agreement between the parties with respect to the subject matter hereof, and supersedes any prior or contemporaneous agreement.
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IN WITNESS WHEREOF, the authorized representatives of the parties hereby bind the parties by signing below:
| SKYE INTELIGENCIA LATAM | ||
| Name: | Gaston Iván Gaxiola Romero | |
| Title: | Chairman and Chief Executive Officer | |
| Signature: | /s/ Gaston Iván Gaxiola Romero | |
| Date: | 06/11/2025 | |
| Brand Engagement Network Inc. | ||
| Name: | James D. Henderson, Jr. | |
| Title: | Corporate Counsel | |
| Signature: | /s/ James D. Henderson, Jr. | |
| Date: | 05/11/2025 | |
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SCHEDULE A
PROFESSIONAL SERVICES TERMS AND CONDITIONS
The following terms and conditions are incorporated into the Agreement. Capitalized words not defined in this Schedule shall have the meaning ascribed to such words in the Agreement.
BEN is willing to provide Professional Services (including the development of Deliverables) on a time and materials or fixed price basis according to the terms and conditions set forth in this Schedule A or such other form as the parties may agree in writing. The [**] parties. Such Professional Services may include: instruction and training on the use of BEN products and services; installation, configuration, maintenance and testing of BEN products and services; evaluation, design and implementation of system architectures; business and network planning; and custom software development.
1. General. All Professional Services to be performed and Deliverables to be developed by BEN at Reseller’s request shall be described in a Statement of Work, in the form attached as Appendix A to this Schedule A. Upon execution by authorized representatives of each party, each Statement of Work shall become a part of the Agreement. Each Statement of Work will incorporate the terms and conditions of this Schedule A. In the event of a conflict between (a) the Statement of Work and (b) this Schedule A or the Agreement, this Schedule A or the Agreement, as the case may be, shall prevail.
2. BEN’s Obligations. BEN shall perform Professional Services and develop Deliverables for Reseller as described in any Statements of Work agreed to by the parties. BEN shall perform such Professional Services and develop Deliverables in a reasonable, professional and workmanlike manner in keeping with industry standards and practices. BEN shall be entitled, in its sole discretion, to determine the method and means for performing the Professional Services and developing the Deliverables. Reseller acknowledges and agrees that BEN may retain the services of independent consultants (“Subcontractors”) from time to time to perform, or to assist BEN in performing the Professional Services and developing the Deliverables under this Schedule A or a Statement of Work. BEN personnel or Subcontractors shall remain under the direction and control of BEN. BEN shall in the performance of any Professional Services and development of any Deliverables use reasonable efforts to comply with all Reseller procedures and rules which have been communicated to BEN in writing. BEN shall be responsible for developing the BEN core products that are used to provide the Services at no additional expense to Reseller. Any customizations to the BEN core products after the Parties have agreed to the core products shall be considered Professional Services.
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3. Reseller Obligations. Reseller acknowledges and agrees that performance of Professional Services is heavily dependent upon information and responses to be provided by Reseller. Accordingly, in addition to any specific responsibilities set out in the SOW, Reseller shall: (i) provide the appropriate and necessary resources, and timely and accurate information and documentation, as reasonably required by BEN, to allow BEN to perform the Professional Services and develop the Deliverables; (ii) carry out reviews and respond to requests for approval and information on a timely basis; (iii) ensure that BEN has available to it the personnel familiar with Reseller’s requirements and with the expertise necessary to permit BEN to undertake and complete the Professional Services; and (iv) make available to BEN all equipment, material, information, data, network access and/or facilities that BEN may reasonably require to carry out its obligations. Reseller acknowledges that any delay on its part in the performance of its obligations may have an impact on BEN’s performance of its activities under this Agreement or under any Statement of Work, and BEN shall not be liable for any delay to the extent caused by Reseller’s failure to fulfill any of its requirements under the Agreement, this Schedule A and/or any SOW. If the Professional Services are performed on Reseller premises or if BEN needs to attend at Reseller premises for the development of the Deliverables, Reseller shall provide to BEN such workspace, computers, equipment and software as is reasonably required by BEN for the performance of the Professional Services and the development of the Deliverables. Reseller shall be responsible for assisting BEN in the development of BEN core products that are used to provide the Services at its own expense. Any customizations to the BEN core products after the parties have agreed to the original core products shall be considered Professional Services, and Reseller shall not charge BEN for any such Professional Services. Reseller shall use its reasonable best efforts to work with BEN to develop BEN core products.
Reseller shall designate a Project Management Contact for the purposes of communication with BEN. The Project Management Contact shall be the primary point of contact for Reseller with BEN for matters relating to the provision of Professional Services and development of Deliverables.
4. Price and Payment. Reseller shall pay BEN the fees set forth in the Statement of Work either on a time and materials basis at BEN’s then-current price, or on a fixed price per project basis to be negotiated between the parties and set forth in the applicable SOW. Reseller shall reimburse BEN for all reasonable out of pocket expenses (including travel, lodging and related expenses) incurred by BEN in the performance of any Professional Services or development of any Deliverables, provided that such expenses are approved in advance in writing by Reseller. The fees for Professional Services and development of Deliverables shall exclude all applicable federal, state, provincial, value-added, goods and services, harmonized and local taxes (other than [**]).
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Unless otherwise specified in the Statement of Work, BEN shall invoice Reseller for fees for Professional Services and development of Deliverables provided pursuant to this Agreement or a Statement of Work on a monthly basis. All such fees shall be paid within thirty (30) days of the date of the invoice.
5. Term and Termination. This Schedule A shall remain in effect only during the Term of the Agreement. Unless provided otherwise in a Statement of Work, Reseller may terminate a Statement of Work without cause upon thirty (30) days prior written notice to BEN. Unless provided otherwise in a Statement of Work, if Reseller terminates a Statement of Work for convenience, Reseller shall pay BEN the full fee for any Professional Services performed (including all other costs for which BEN has the right to reimbursement) up to the effective date of termination of such Statement of Work, provided that if the fees for any Deliverables are [**].
Each party [**].
6. Intellectual Property Rights. Except as set forth in the Agreement or otherwise set forth in the relevant Statement of Work, BEN shall own all right, title and interest and all intellectual property rights to any Deliverables created by BEN pursuant to this Schedule A or any Statement of Work hereunder. BEN shall retain all right title and interest and all intellectual property rights to any and all BEN proprietary information and BEN software (including, without limitation, any modifications to the Services). Subject to payment of the applicable fees set forth in the Statement of Work, BEN grants to Reseller a non-exclusive, non-transferable (except as provided in the Agreement) license to use the Deliverables created pursuant to this Schedule A or any Statement of Work during the term and for the purposes described in the accompanying Statement of Work.
7. Indemnification. Each party shall indemnify and defend the other party against any claims and costs awarded by a court of competent jurisdiction (including reasonable attorney’s fees) arising out of or relating to the other party’s negligence or intentional misconduct where actions result in death or bodily injury to any person or damage to tangible or real property, provided that: (a) the indemnified party gives the indemnifying party prompt notice in writing of each claim received by the indemnified party, (b) the indemnified party gives the indemnifying party the right to control and direct the investigation, defense and settlement of each claim, and (c) the indemnified party has not compromised or settled the claim.
8. Non-Solicitation. Reseller shall not enter into a contract for or of service with an employee of BEN who has been involved with, directly or indirectly, any of the Professional Services or development of any Deliverables hereunder within [**].
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Appendix A
Form of Statement of Work
The following [**] for
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
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IN WITNESS WHEREOF, the authorized representatives of the parties hereby bind the parties by signing below:
| SKYE INTELIGENCIA LATAM | ||
| Signature | ||
| Name | ||
| Title | ||
| Date | ||
| Brand Engagement Network Inc. | ||
| Signature | ||
| Name | ||
| Title | ||
| Date | ||
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EXHIBIT 99.1
Brand Engagement Network Finalizes $5 Million Exclusive AI Licensing Partnership in Latin America, Unlocking Government and Commercial Markets
WILMINGTON, Del., and MEXICO CITY — November 10, 2025 — Brand Engagement Network, Inc. (Nasdaq: BNAI) (“BEN”), an innovator in conversational AI solutions for regulated industries, today announced the completion of a strategic partnership with SKYE Inteligencia LATAM, S.A.P.I. de C.V. (“SKYE LATAM”).
Key Deal Terms (Effective October 30, 2025) [2]:
| ● | $5,000,000 preferred equity contribution from SKYE LATAM to BEN (recognized as IP licensing revenue) | |
| ● | 25% common stock ownership in SKYE LATAM + 1 board seat | |
| ● | 35% revenue share on software, SaaS, services, and subscriptions across all industries | |
| ● | Exclusive government-sector license in Latin America and Spain | |
| ● | Non-exclusive rights in all other verticals | |
| ● | Perpetual term with right of first refusal on any sale |
The partnership leverages BEN’s proprietary Engagement Language Model (ELM™) and Retrieval-Augmented Generation (RAG) to deliver compliant, localized AI solutions for public and private sectors. With growing data sovereignty mandates, including Mexico’s Federal Law on Protection of Personal Data, Brazil’s General Data Protection Law (“LGPD”) and Argentina’s 2025 localization rules - SKYE LATAM is positioned to lead AI adoption in regulated markets. [1]
“We expect this partnership to propel our AI into the heart of Latin America’s digital transformation—a region of over 663 million people primed for AI-driven efficiencies,” said Tyler Luck, Acting CEO and Co-Founder of BEN. “By teaming up with other like-minded entrepreneurs, we’re not just licensing technology, we’re building a scalable ecosystem supported by established business partners and their networks to help redefine public-sector modernization and enterprise productivity across the continent. With our 25% ownership, board seat, and preferred equity structure, BEN is well-positioned to capture recurring value.”
Gastón Iván Gaxiola Romero, SKYE LATAM CEO and Chairman of the Board, added: “BEN’s AI platform enables transparent, trustworthy solutions. Through SKYE LATAM, we will have the ability to empower governments and enterprises to modernize while respecting local data laws. We believe this collaboration positions us to lead Latin America’s AI revolution.”
This marks BEN’s first major international licensing deal. With early adoption across life sciences, healthcare, insurance, financial services, hospitality, retail, and automotive, BEN continues to gain momentum in regulated markets.
About Brand Engagement Network (BEN)
Brand Engagement Network Inc. (Nasdaq: BNAI) (“BEN”) develops conversational AI agents built for regulated and customer-centric industries. Its proprietary Engagement Language Model (ELM™) with retrieval-augmented generation enables enterprises to deploy multimodal, compliance-first AI across chat, voice, avatar, and digital channels. With 21 issued patents and growing adoption, BEN is positioned at the intersection of enterprise AI and regulatory demand.
Forward-Looking Statements
This press release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are not statements of historical facts. Forward-looking statements may be identified, without limitation, by the use of words such as “may,” “will,” “intends,” “expects,” “anticipates,” “plans,” “believes,” “seeks,” “estimates” or comparable terminology. The Company cautions that these forward-looking statements are based on a combination of facts and factors currently known by the Company as well as projections of the future, about which it cannot be certain. Actual results could differ materially from the expectations and projections expressed in these forward-looking statements as a result of certain factors, including those set forth in the Company’s filings with the Securities and Exchange Commission (“SEC”), including our most recent annual report on Form 10-K and quarterly report on Form 10-Q available on the Company’s investor relations website at https://investors.beninc.ai/ and on the SEC website at www.sec.gov.. These forward-looking statements speak only as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.
[1] Sources: Infosecurity Magazine, “Brazil’s ANPD Suspends Meta’s AI Data Processing Over LGPD Violations” (July 2024), infosecurity-magazine.com/news/brazil-anpd-meta-lgpd-2024; ComplianceHub, “LGPD Fines Tracker: BRL 98M+ in Penalties (2023–2025)” (accessed Nov 2025), compliancehub.io/lgpd-fines-2025, Information Technology and Innovation Foundation (ITIF);, “Argentina’s New Data Localization Rules: Implications for U.S. Tech” (Jan 2025), itif.org/publications/2025/01/argentina-data-localization, The Wall Street Journal, “Latin America Pushes Back on U.S. Tech Giants Over Data Control” (Oct 15, 2024) Bloomberg, “Mexico, Brazil Ramp Up Cloud Data Scrutiny Amid Sovereignty Push” (Mar 2025) UNCTAD Digital Economy Report 2024, Chapter 3: “Data Flows and Development” (p. 67–72).
[2] Certain signature pages reflect dates in DD-MM-YY format as used in Mexico (e.g., “5-11-25” = November 5, 2025; “6-11-25” = November 6, 2025). All signatures were received on or before November 6, 2025.
Media Contact: Amy Rouyer, amy@beninc.ai
Investor Relations: investors@beninc.ai
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number: 001-40130
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 98-1574798 | |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) | |
300 Delaware Ave Suite 210 Wilmington, DE |
19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
650-714-2747
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
As of November 25, 2025, 44,880,795 shares of the Issuer’s common stock, $0.0001 par value per share, and 10,315,024 public warrants representing the right to acquire one share of the Issuer’s common stock for $11.50, were outstanding.
Table of Contents
| Page | ||
| Part I. Financial Information | 4 | |
| Item 1. Financial Statements | 4 | |
| Unaudited Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 | 4 | |
| Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 | 5 | |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 | 6 | |
| Unaudited Condensed Consolidated Statement of Cash Flows For the Nine Months Ended September 30, 2025 and 2024 | 7 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | 8 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 42 | |
| Item 4. Controls and Procedures | 42 | |
| Part II. Other Information | 43 | |
| Item 1. Legal Proceedings | 43 | |
| Item 1A. Risk Factors | 44 | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 44 | |
| Item 3. Defaults Upon Senior Securities | 44 | |
| Item 4. Mine Safety Disclosures | 44 | |
| Item 5. Other Information | 44 | |
| Item 6. Exhibits | 45 | |
| Signatures | 46 |
Brand Engagement Network, BEN, our logo and our other trademarks or service marks appearing in this report are the property of Brand Engagement Network Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names included in this report are without the ®, ™ or other applicable symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
Unless otherwise indicated, “Brand Engagement Network,” “BEN,” “the Company,” “our,” “us,” or “we,” refer to Brand Engagement Network Inc. and its consolidated subsidiaries.
| 2 |
Forward-Looking Statements
This Quarterly Report on Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933, as amended, (the “Securities Act”) and the Securities Exchange Act of 1934, as amended, (the “Exchange Act”). All statements other than statements of historical facts are statements that could be deemed to be forward-looking statements. These statements are based on current expectations, estimates, forecasts and projections about the industries in which we operate and the beliefs and assumptions of our management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “endeavors,” “strives,” “may” and “assumes,” variations of such words and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to supply chain constraints, our strategy, competition, future operations and production capacity, future financial position, future revenues, projected costs, profitability, expected cost reductions, capital adequacy, expectations regarding demand and acceptance for our technologies, growth opportunities and trends in the markets in which we operate, prospects and plans, objectives of management, and other characterizations of future events or circumstances are forward-looking statements. Readers are cautioned that these forward-looking statements are subject to risks, uncertainties, and assumptions that are difficult to predict, including industry trends, inflation and interest rate trends and impacts and other macro-economic impacts on our business, results of operations and financial condition and governmental and our responses to such events, including those identified in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, in Part II, Item 1A, “Risk Factors” of the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2025, and that are otherwise described or updated from time to time in our other filings with the Securities and Exchange Commission. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
| 3 |
Part I. Financial Information
Item 1. Financial Statements
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2025 | December 31, 2024* | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 102,715 | $ | 149,273 | ||||
| Accounts receivable, net of allowance | 50,120 | 30,888 | ||||||
| Prepaid and other current assets | 1,679,858 | 1,045,398 | ||||||
| Total current assets | 1,832,693 | 1,225,559 | ||||||
| Property and equipment, net | 74,570 | 292,757 | ||||||
| Intangible assets, net | 14,089,752 | 16,124,370 | ||||||
| Right of use asset | 375,229 | 507,182 | ||||||
| Total assets | 16,372,244 | 18,149,868 | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 4,952,273 | 5,995,235 | ||||||
| Accrued expenses | 3,606,616 | 4,593,712 | ||||||
| Due to related parties | - | 693,036 | ||||||
| Lease liability, current | - | 173,497 | ||||||
| Short-term debt | 2,986,872 | 1,655,080 | ||||||
| Convertible debt | 760,000 | 1,140,000 | ||||||
| Total current liabilities | 12,305,761 | 14,250,560 | ||||||
| Lease liability, non-current | 361,824 | 335,766 | ||||||
| Warrant liabilities | 251,547 | 919,050 | ||||||
| Total liabilities | 12,919,132 | 15,505,376 | ||||||
| Commitments and contingencies (Note L) | - | - | ||||||
| Stockholders’ deficit | ||||||||
| Preferred stock par value $0.0001 per share, 10,000,000 shares authorized, none designated. There are no shares issued or outstanding as of September 30, 2025 or December 31, 2024 | - | - | ||||||
| Common stock par value of $0.0001 per share, 750,000,000 shares authorized. As of September 30, 2025 and December 31, 2024, respectively, 44,880,795 and 39,573,988 shares issued and outstanding | 4,430 | 3,957 | ||||||
| Additional paid-in capital | 55,652,956 | 49,657,684 | ||||||
| Accumulated deficit | (52,204,274 | ) | (47,017,149 | ) | ||||
| Total stockholders’ equity | 3,453,112 | 2,644,492 | ||||||
| Total liabilities and stockholders’ deficit | $ | 16,372,244 | $ | 18,149,868 | ||||
*Derived from audited information at December 31, 2024
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 60,120 | $ | 50,000 | $ | 75,120 | $ | 99,790 | ||||||||
| Cost of goods sold | - | - | - | - | ||||||||||||
| Gross profit | 60,120 | 50,000 | 75,120 | 99,790 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative expenses | 1,451,867 | 4,203,946 | 6,514,077 | 15,969,617 | ||||||||||||
| Research and development | (3,629 | ) | 153,191 | 14,466 | 759,427 | |||||||||||
| Advertising and marketing expenses | - | - | - | |||||||||||||
| Depreciation and amortization | 928,495 | 972,375 | 2,842,590 | 1,771,966 | ||||||||||||
| Total operating expenses | 2,376,733 | 5,329,512 | 9,371,133 | 18,501,010 | ||||||||||||
| Gain (Loss) from operations | (2,316,613 | ) | (5,279,512 | ) | (9,296,013 | ) | (18,401,220 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense, net | (43,421 | ) | (17,963 | ) | (190,072 | ) | (59,184 | ) | ||||||||
| Change in fair value of warrant liabilities | 243,326 | (632,969 | ) | 667,503 | 762,869 | |||||||||||
| Gain (loss) on debt extinguishment | (347,666 | ) | 98,318 | 3,611,388 | 1,946,310 | |||||||||||
| FX exchange gain (loss) | - | - | ||||||||||||||
| Other income (expense), net | (17,601 | ) | 9,043 | 20,069 | (5,971 | ) | ||||||||||
| Total other income (expense), net | (165,362 | ) | (543,571 | ) | 4,108,888 | 2,644,024 | ||||||||||
| Loss before income tax benefit | (2,481,975 | ) | (5,823,083 | ) | (5,187,125 | ) | (15,757,196 | ) | ||||||||
| Income tax benefit (expense) | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (2,481,975 | ) | $ | (5,823,083 | ) | $ | (5,187,125 | ) | $ | (15,757,196 | ) | ||||
| Net income (loss) per common share, basic and diluted | $ | (0.06 | ) | $ | (0.16 | ) | $ | (0.13 | ) | $ | (0.50 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 42,166,121 | 35,539,043 | 41,240,177 | 31,623,082 | ||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025
| Preferred Stock | Common stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance, December 31, 2024 | - | $ | - | 38,168,988 | $ | 3,957 | $ | 49,657,684 | $ | (47,017,149 | ) | $ | 2,644,492 | |||||||||||||||
| Sale of common stock | - | - | 1,186,426 | 86 | 1,325,456 | 1,325,542 | ||||||||||||||||||||||
| Stock issued in conversion of convertible notes | 316,666 | 32 | 379,968 | 380,000 | ||||||||||||||||||||||||
| Stock issued for Standby Equity Purchase Agreement liability | - | - | 643,574 | 64 | 432,418 | 432,482 | ||||||||||||||||||||||
| Warrant exercises | 787,132 | 79 | 1,499,471 | 1,499,550 | ||||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | 223,586 | 22 | 374,904 | 374,926 | ||||||||||||||||||||||||
| Stock issued in settlement of liabilities | - | - | 588,026 | 59 | 265,435 | 265,494 | ||||||||||||||||||||||
| Net loss | (3,610,230 | ) | (3,610,230 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2025 | - | - | 41,914,398 | 4,299 | 53,935,336 | (50,627,379 | ) | 3,312,256 | ||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | - | - | - | - | 128,839 | 128,839 | ||||||||||||||||||||||
| Warrant exercises | - | 25,510 | 3 | 49,997 | 50,000 | |||||||||||||||||||||||
| Issuance of common shares | - | - | 786,580 | 79 | 1,328,892 | 1,328,971 | ||||||||||||||||||||||
| Net income | 905,080 | 905,080 | ||||||||||||||||||||||||||
| Balance, June 30, 2025 | - | - | 42,726,488 | 4,381 | 55,443,064 | (49,722,299 | ) | 5,725,146 | ||||||||||||||||||||
| Issuance of common shares | 486,974 | 49 | (49 | ) | - | |||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | 209,941 | 209,491 | ||||||||||||||||||||||||||
| Net loss | - | - | - | (2,481,975 | ) | (2,481,975 | ) | |||||||||||||||||||||
| Balance, September 30, 2025 | - | $ | - | 43,213,462 | $ | 4,430 | $ | 55,652,956 | $ | (52,204,274 | ) | $ | 3,453,112 | |||||||||||||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
| Preferred Stock | Common stock | Additional Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| BALANCES, December 31, 2023 | - | $ | - | 23,270,404 | $ | 2,327 | $ | 30,993,846 | $ | (13,301,720 | ) | $ | 17,694,453 | |||||||||||||||
| Stock issued to DHC shareholders in reverse recapitalization | - | - | 7,885,220 | 789 | (10,722,277 | ) | - | (10,721,488 | ) | |||||||||||||||||||
| Issuance of common stock pursuant to Reseller Agreement | - | - | 1,750,000 | 175 | 13,474,825 | 13,475,000 | ||||||||||||||||||||||
| Sale of common stock | - | - | 645,917 | 65 | 6,324,935 | 6,325,000 | ||||||||||||||||||||||
| Warrant exercises | - | - | 40,514 | 4 | 15,260 | 15,264 | ||||||||||||||||||||||
| Stock-based compensation | - | - | 698,705 | 698,705 | ||||||||||||||||||||||||
| Net loss | (6,884,409 | ) | (6,884,409 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2024 | - | - | 33,592,055 | 3,360 | 40,785,294 | (20,186,129 | ) | 20,602,525 | ||||||||||||||||||||
| Stock issued in settlement of accounts payable and loans payable | - | - | 93,333 | 9 | 321,999 | 322,008 | ||||||||||||||||||||||
| Sale of common stock | 877,500 | 198 | 1,993,552 | 1,993,750 | ||||||||||||||||||||||||
| Warrant exercises | - | - | 13,505 | 1 | 4,999 | 5,000 | ||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | - | - | 381,915 | 42 | 768,497 | 768,539 | ||||||||||||||||||||||
| Net loss | (3,049,704 | ) | (3,049,704 | ) | ||||||||||||||||||||||||
| Balance, June 30, 2024 | - | - | 34,958,308 | 3,610 | 43,874,341 | (23,235,833 | ) | 20,642,118 | ||||||||||||||||||||
| Issuance of common stock for Standby Equity Purchase Agreement commitment fee | - | - | 280,899 | 28 | 499,972 | 500,000 | ||||||||||||||||||||||
| Stock issued in settlement of accrued expenses | - | - | 151,261 | 15 | 261,667 | 261,682 | ||||||||||||||||||||||
| Sale of common stock | 602,500 | 131 | 1,756,056 | 1,756,187 | ||||||||||||||||||||||||
| Option and warrant exercises | - | - | 98,335 | 10 | 79,750 | 79,760 | ||||||||||||||||||||||
| Stock-based compensation, including vested restricted shares | - | - | 35,461 | - | 334,913 | 334,913 | ||||||||||||||||||||||
| Net loss | - | - | - | - | - | (5,823,083 | ) | (5,823,083 | ) | |||||||||||||||||||
| Balance, September 30, 2024 | - | $ | - | 36,126,764 | $ | 3,794 | $ | 46,806,699 | $ | (29,058,916 | ) | $ | 17,751,577 | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months ended September 30, 2025 | Nine Months ended September 30, 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | (5,187,125 | ) | $ | (15,757,196 | ) | ||
| Adjustments to reconcile net income to net cash | ||||||||
| Depreciation expense | 2,842,590 | 1,771,966 | ||||||
| Allowance for uncollected receivables | 30,000 | 30,000 | ||||||
| Write off of deferred financing fees | - | 1,427,729 | ||||||
| Change in fair value of warrant liabilities | (667,503 | ) | (762,869 | ) | ||||
| Gain on debt extinguishment | (3,611,388 | ) | (1,946,310 | ) | ||||
| Amortization of right-to-use asset | 131,953 | - | ||||||
| Amortization of debt discount | 86,042 | - | ||||||
| SEPA financing costs | - | 525,000 | ||||||
| Equity based compensation | 708,381 | 1,581,744 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (49,232 | ) | (50,888 | ) | ||||
| Prepaid and other current assets | (634,460 | ) | (856,986 | ) | ||||
| Accounts payable | 1,081,126 | 5,393,334 | ||||||
| Accrued expenses | 72,662 | (3,019,367 | ) | |||||
| Lease liability | (147,439 | ) | ||||||
| Deferred revenue | - | (2,290 | ) | |||||
| CASH USED IN OPERATING ACTIVITIES | (5,344,393 | ) | (11,666,133 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | - | (53,023 | ) | |||||
| Purchase of intangible asset | (584,459 | ) | (162,940 | ) | ||||
| CASH USED IN INVESTING ACTIVITIES | (584,459 | ) | (215,963 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Cash and cash equivalents acquired in connection with the reverse recapitalization | - | 858,292 | ||||||
| Payment of financing costs | - | (883,292 | ) | |||||
| Proceeds received from option and warrant exercises | 1,549,550 | 100,024 | ||||||
| Proceeds from short term loans | 1,823,866 | |||||||
| Repayment of note payable | (145,635 | ) | (80,000 | ) | ||||
| Proceeds from the sale of common stock | 2,654,513 | 10,274,937 | ||||||
| CASH PROVIDED BY FINANCING ACTIVITIES | 5,882,294 | 10,269,961 | ||||||
| Change in cash and cash equivalents | (46,558 | ) | (1,612,135 | ) | ||||
| Cash, beginning of year | 149,273 | 1,685,013 | ||||||
| Cash, end of year | $ | 102,715 | $ | 72,878 | ||||
| SUPPLEMENTAL CASH FLOW DISCLOSURES | ||||||||
| Cash paid for interest | - | - | ||||||
| SUPPLEMENTAL DISCLOSURES | ||||||||
| Issuance of common stock for Standby Equity Purchase Agreement liability | 432,482 | $ | 500,000 | |||||
| Issuance of common stock pursuant to Reseller Agreement | $ | - | $ | 13,475,000 | ||||
| Stock-based compensation capitalized as part of capitalized software costs | 5,325 | $ | 220,413 | |||||
| Settlement of liabilities into common shares | $ | 265,494 | $ | 583,690 | ||||
| Settlement of accounts payable into convertible note | $ | 380,000 | $ | 1,900,000 | ||||
| Financing costs in accounts payable and accrued expenses | $ | - | $ | 200,000 | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| 7 |
BRAND ENGAGEMENT NETWORK INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE A — NATURE OF OPERATIONS AND GOING CONCERN
Nature of Operations
Brand Engagement Network Inc. (formerly Blockchain Exchange Network Inc.) (together with its subsidiaries, “BEN” or “the Company”) was formed in Jackson, Wyoming on April 17, 2018, and was named in honor of the renowned Founding Father and inventor, Benjamin Franklin. In 2019, the Company became a wholly-owned subsidiary of Datum Point Labs (“DPL”), and then was spun out of DPL in May 2021. BEN acquired DPL in December 2021.
The Company is an innovative artificial intelligence (“AI”) platform provider, designed to interface with emerging technologies, including blockchain, internet of things, and cloud computing, that drives digital transformation across various industries and provides businesses with unparalleled competitive edge. BEN offers a suite of configured and customizable applications, including natural language processing, anomaly detection, encryption, recommendation engines, sentiment analysis, image recognition, personalization, and real-time decision-making. These applications help companies improve customer experiences, optimize cost drivers, mitigate risks, and enhance operational efficiency.
Liquidity and Going Concern
The accompanying unaudited condensed consolidated financial statements have been prepared as though the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. As of September 30, 2025, the Company had an accumulated deficit of $ 52,204,274, a net loss of $2,481,975 and a net loss of $5,187,125 for the three and nine months ended September 30, 2025, respectively, and net cash used in operating activities of $5,344,393 during the nine months ended September 30, 2025. Management expects to continue to incur operating losses and negative cash flows from operations for at least the next 12 months. The Company has financed its operations to date from proceeds from the sale of Common Stock, exercises of warrants, the issuance of promissory notes and convertible debt, and its transactions with AFG Companies Inc. (“AFG”). On August 26, 2024, the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (“Yorkville”), whereby the Company has the right, but not the obligation, to sell up to $50,000,000 of its shares of Common Stock at the Company’s request any time during the 36 months following the execution of the SEPA, subject to certain conditions. However, the Company’s ability to access the proceeds from the SEPA is subject to market conditions, such as trading volume, the price of the Company’s Common Stock and other factors beyond the Company’s control. The Company’s current liquidity position raises substantial doubt about the Company’s ability to continue as a going concern.
The Company believes that its existing cash and cash equivalents and proceeds from the May SPA, August SPA, SEPA (Note I), and Yorkville Promissory Note (Note H) will be insufficient to meet its anticipated cash requirements for at least the next 12 months from the date the unaudited condensed consolidated financial statements are issued. The Company will need to raise additional capital to continue to fund operations and product research and development. The Company believes that it will be able to obtain additional working capital through equity financings, additional debt, or other arrangements to fund future operations, and it intends to raise capital through equity or debt investments in the Company by third parties, including through the SEPA, however, the Company’s cannot conclude these are probable of being implemented or, if probable of being implemented, being in sufficient enough amounts to satisfy the Company’s contractual amounts as they presently exist that are coming due over the next 12 months as of the date of such filing.
The assumptions upon which the Company has based its estimates are routinely evaluated and may be subject to change. The actual amount of the Company’s expenditures will vary depending upon several factors including but not limited to the design, timing, and the progress of the Company’s research and development programs, and the level of financial resources available. The Company can adjust its operating plan spending based on available financial resources.
The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
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NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Consolidation
The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company’s unaudited condensed consolidated
financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements and related notes have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC.
Unaudited interim results
These unaudited condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual audited financial statements and the notes thereto as of and for the year ended December 31, 2024 found in the Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 are unaudited but have been prepared on the same basis as the annual audited financial statements and include all normal, recurring adjustments that management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year.
Use of Estimates
The preparation of the accompanying unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments, and assumptions. Significant estimates in the Company’s consolidated financial statements include, but are not limited to, assumptions used to measure stock-based compensation, useful lives of intangible assets, warrant liabilities, and derivative liabilities.
These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.
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Segment and geographic information
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance. The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM manages the Company’s operations on a consolidated basis for the purpose of allocating resources. The Company views its operations as, and manages its business in, one operating segment.
The accounting policies of its segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for its segment based on net loss, which is reported on the consolidated statements of operations. The measure of segment assets is reported on the balance sheet as total assets. The CODM uses cash forecast models in deciding how to invest into the segment. The CODM analyzes the Company’s net loss and monitors budget versus actual results to assess the performance of the Company. Significant expenses are not regularly available or reviewed by the CODM. Other segment expenses include other income (expenses), net, which were $165,362 and $543,571 during the three months ended September 30, 2025 and 2024 and $4,108,888 and $2,644,024 during the nine months ended September 30, 2025 and 2024.
The Company has an office in the Republic of Korea dedicated to research and development activities.
Significant Risks and Uncertainties
There can be no assurance that the Company’s research and development will be successfully commercialized. Developing and commercializing goods and services require significant time and capital and is subject to regulatory review and approval as well as competition from other AI technology companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting intellectual property.
Revenue Recognition and Accounts Receivable
The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”) for all periods presented. The core principle of ASC 606 is to recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. This principle is achieved by applying the following five-step approach:
| 1. | Identification of the Contract, or Contracts, with a Customer. | |
| 2. | Identification of the Performance Obligations in the Contract. | |
| 3. | Determination of the Transaction Price. | |
| 4. | Allocation of the Transaction Price to the Performance Obligations in the Contract. | |
| 5. | Recognition of Revenue when, or as, Performance Obligations are Satisfied. |
Trade receivables represent amounts due from customers and are stated net of the allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of specific customer accounts, the aging of the accounts receivable, historical experience, and other currently available evidence. If there is a deterioration of a major customer’s credit worthiness or actual defaults are higher than the historical experience, management’s estimates of the recoverability of amounts due the Company could be adversely affected. Trade receivables of the Company as of September 30, 2025 and December 31, 2024 are net of an allowance for expected credit losses amounting to $0 and $20,000, respectively.
Impairment of Definite Lived Intangible Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the carrying amount of the asset exceeds its estimated undiscounted net cash flows, before interest, the Company will recognize an impairment loss equal to the difference between its carrying amount and its estimated fair value. If impairment is recognized, the reduced carrying amount of the asset will be accounted for as its new cost. Generally, fair values are estimated using discounted cash flow, replacement cost or market comparison analyses. The process of evaluating for impairment requires estimates as to future events and conditions, which are subject to varying market and economic factors. Therefore, it is reasonably possible that a change in an estimate resulting from judgments as to future events could occur which would affect the recorded amounts of the asset. No impairment losses were recorded for the three and nine months ended September 30, 2025 or 2024.
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In-Process Research and Development
The fair value of in-process research and development (“IPR&D”) acquired in an asset acquisition, that has been determined to have alternative future uses in accordance with ASC Topic 350, Intangibles—Goodwill and Other (“ASC 350”), is capitalized as an indefinite-lived intangible asset until the completion of the related research and development activities in accordance with ASC 350 or the determination that impairment is necessary. If the related research and development is completed, the asset is reclassified as a definite-lived asset at the time of completion and is amortized over its estimated useful life as research and development costs in accordance with ASC 730-10-25-2(c) and ASC 350. During the second quarter of 2024, the Company’s IPR&D was completed and reclassified as a definite-lived asset and began amortizing over its estimated useful life of 5 years.
During the three and nine months ended September 30, 2025 and 2024, the Company did not recognize an impairment charge related to its indefinite-lived IPR&D.
Research and Development Costs
Costs incurred in connection with research and development activities are expensed as incurred. These costs include rent for facilities, hardware and software equipment costs, employee related costs, consulting fees for technical expertise, prototyping, and testing.
Stock-Based Compensation
The Company recognizes stock-based compensation for stock-based awards (including stock options, restricted stock units, and restricted stock awards) in accordance with ASC Topic 718, Compensation — Stock Compensation. Determining the appropriate fair value of stock-based awards requires numerous assumptions, some of which are highly complex and subjective. The Company estimates the fair value of its stock option and warrant awards on the grant date using the Black-Scholes option-pricing model. The fair value of each restricted stock award is measured as the fair value per share of the Company’s Common Stock at the date of grant.
Stock-based awards generally vest subject to the satisfaction of service requirements, or the satisfaction of both service requirements and achievement of certain performance conditions or market and service conditions. For stock-based awards that vest subject to the satisfaction of service requirements or market and service conditions, stock-based compensation is measured based on the fair value of the award on the date of grant and is recognized as stock-based compensation on a straight-line basis over the requisite service period. For stock-based awards that have a performance component, stock-based compensation is measured based on the fair value on the grant date and is recognized over the requisite service period as achievement of the performance objective becomes probable.
The Black-Scholes option-pricing model requires the use of judgments and assumptions, including fair value of its Common Stock, the option’s expected term, the expected price volatility of the underlying stock, risk free interest rates and the expected dividend yield.
The Black-Scholes model assumptions are further described below:
| ● | Common stock — the fair value of the Company’s Common Stock. | |
| ● | Expected Term — The expected term of employee options with service-based vesting is determined using the “simplified” method, as prescribed in the SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term. | |
| ● | Expected Volatility — The Company lacks its own historical stock data. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly traded set of peer companies. |
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| ● | Risk-Free Interest Rate — The Company bases the risk-free interest rate on the U.S. Treasury yield curve commensurate with the expected term of each option. | |
| ● | Expected Dividend —The Company has never declared or paid any cash dividends on its Common Stock and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models. |
Cash and Cash Equivalents
The Company considers all highly-liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and are held for the purpose of meeting short-term liquidity requirements, rather than for investment purposes. The Company maintains its cash and cash equivalent balances in the form of business checking accounts and money market accounts, the balances of which, at times, may exceed federally insured limits.
Capitalized Internal-Use Software Costs
Pursuant to ASC 350-40, Internal-Use Software, the Company capitalizes development costs for internal use software projects once the preliminary project stage is completed, management commits to funding the project, and it is probable that the project will be completed, and the software will be used to perform the function intended. The Company ceases capitalization at such time as the computer software project is substantially complete and ready for its intended use. The determination that a software project is eligible for capitalization and the ongoing assessment of recoverability of capitalized software development costs requires considerable judgment by management with respect to certain external factors, including, but not limited to, estimated economic life and changes in software and hardware technologies.
The Company capitalizes costs for internal-use software once project approval, funding, and feasibility are confirmed. These costs primarily consist of external consulting fees and direct labor costs. When the internal-use software is ready for its intended use, the Company reclassifies the internal-use software to developed software intangible assets and amortizes the asset over an estimated useful life ranging from 3 to 5 years. No impairment losses were recorded for the three and nine months ended September 30, 2025.
Leases
The Company determines whether an arrangement is or contains a lease, its classification, and its term at the lease commencement date. Leases with a term greater than one year will be recognized on the balance sheet as right-of-use (“ROU”) assets, current lease liabilities, and if applicable, long-term lease liabilities. The Company includes renewal options to extend the lease term where it is reasonably certain that it will exercise these options. Lease liabilities and the corresponding ROU assets are recorded based on the present values of lease payments over the lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rates, which are the rates that would be incurred to borrow on a collateralized basis, over similar terms, amounts equal to the lease payments in a similar economic environment. Payments for non-lease components or that are variable in nature that do not depend on a rate or index are not included in the lease liability and are typically expensed as incurred. If significant events, changes in circumstances, or other events indicate that the lease term or other inputs have changed, the Company would reassess lease classification, remeasure the lease liability using revised inputs as of the reassessment date, and adjust the ROU assets. Lease expense is recognized on a straight-line basis over the expected lease term for operating classified leases.
Foreign Currency Transactions
Foreign currency transaction gains and losses are a result of the effect of exchange rate changes on transactions denominated in currencies other than the functional currency. Gains and losses arising from foreign currency transactions and the effects of remeasurements are captured within the net loss within statement of operations. Foreign currency transaction gains and losses were not material for the three and nine months ended September 30, 2025 and 2024.
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Warrant Liabilities
The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC Topic 480, Distinguishing Liabilities from Equity, ASC Topic 505, Equity, and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The Company accounts for the public warrants, each representing the right to acquire one share of Common Stock for $11.50 (the “Public Warrants”) and the private placement warrants, each representing the right to acquire one share of Common Stock for $11.50 (the “Private Placement Warrants”), in accordance with the guidance contained in ASC 815 under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Public Warrants and Private Placement Warrants as liabilities at their fair value and adjust the Public Warrants and Private Placement Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s unaudited condensed consolidated statements of operations.
Fair Value of Financial Instruments
The Company accounts for financial instruments under ASC 820, Fair Value Measurements (“ASC 820”). This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:
Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 — observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and
Level 3 — assets and liabilities whose significant value drivers are unobservable.
The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:
SCHEDULE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS
| Fair value measurement at reporting date using | ||||||||||||
| September 30, 2025 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Liabilities: | ||||||||||||
| Warrant liabilities - Public Warrants | $ | - | $ | 157,819 | $ | - | ||||||
| Warrant liabilities - Private Placement Warrants | - | 93,728 | - | |||||||||
| Total Warrant Liabilities | $ | - | $ | 251,547 | $ | - | ||||||
| Fair value measurement at reporting date using | ||||||||||||
| December 31, 2024 | (Level 1) | (Level 2) | (Level 3) | |||||||||
| Liabilities: | ||||||||||||
| Warrant liabilities - Public Warrants | $ | - | $ | 576,606 | $ | - | ||||||
| Warrant liabilities - Private Placement Warrants | - | 342,444 | - | |||||||||
| Total Warrant Liabilities | $ | - | $ | 919,050 | $ | - | ||||||
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The Public Warrants and Private Placement Warrants assumed in connection with the Business Combination were accounted for as liabilities in accordance with ASC 815 and are presented within warrant liabilities on the accompanying unaudited condensed consolidated balance sheets. The warrant liabilities are initially measured at fair value at the day of the Business Combination and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations.
The fair value of the Public Warrants and Private Placement Warrants is estimated based on the closing price of the Public Warrants, an observable market quote but is classified as a Level 2 fair value measurement due to the lack of an active market.
Gain on debt extinguishment
Gain on extinguishment of debt for the nine months ended September 30, 2025 was approximately $3,611,388, related to settlement due to related parties (see note K), accounts payable and accrued expenses through negotiated cash settlement. Gain on extinguishment of debt for the three and nine months ended September 30, 2024 was approximately $98,318, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement, and $1,946,310, respectively.
Net Loss per Share
Basic loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted loss per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the loss of the Company. In computing diluted loss per share, the treasury stock method assumes that outstanding instruments are exercised/converted, and the proceeds are used to purchase Common Stock at the average market price during the period. Instruments may have a dilutive effect under the treasury stock method only when the average market price of the Common Stock during the period exceeds the exercise price/conversion rate of the instruments. The Company accounts for stock issued in spin-out transactions and consummations of mergers of entities under common control retrospectively. For diluted net loss per share, the weighted-average number of shares of Common Stock is the same for basic net loss per share due to the fact that when a net loss exists, potentially dilutive securities are not included in the calculation when the impact is anti-dilutive.
The following potentially dilutive securities are excluded from the calculation of weighted average shares of Common Stock outstanding because their inclusion would have been anti-dilutive:
SCHEDULE OF ANTIDILUTIVE SECURITIES EXCLUDED FROM COMPUTATION OF EARNINGS PER SHARE
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| Unvested restricted shares | $ | 687,830 | $ | 0 | ||||
| Options | 1,386,400 | 1,386,400 | ||||||
| Warrants | 16,440,962 | 24,846,321 | ||||||
| Convertible note (as converted) | 633,334 | 1,583,334 | ||||||
| Total | $ | 19,148,526 | $ | 27,816,055 | ||||
Recently Issued but Not Yet Adopted Accounting Standards
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. This ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued. The Company is currently evaluating the effect of this pronouncement on its disclosures.
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In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
NOTE C — MERGER WITH DHC
On March 14, 2024, the Company consummated its previously announced business combination (the “Closing”) pursuant to the Business Combination Agreement, dated September 7, 2023 (as amended, the “Business Combination Agreement”), by and among DHC Acquisition Corp., a Cayman Islands exempted company (“DHC”), Brand Engagement Network Inc., a Wyoming corporation (“Prior BEN”), BEN Merger Subsidiary Corp., a Delaware corporation and a direct, wholly-owned subsidiary of DHC (“Merger Sub”) and DHC Sponsor, LLC, a Delaware limited liability company (the “Sponsor”). The transactions contemplated by the Business Combination Agreement, including the Domestication and the Merger (each as defined below) are collectively referred to herein as the “Business Combination.”
Prior to the Closing, as contemplated by the Business Combination Agreement, DHC became a Delaware corporation named “Brand Engagement Network Inc.” (the “Domestication”). Following the Domestication, on March 14, 2024, pursuant to the Business Combination Agreement, Merger Sub merged with and into Prior BEN (the “Merger”).
Except as otherwise indicated, references herein to “BEN,” the “Company,” or the “Combined Company,” refer to Brand Engagement Network Inc. Inc. on a post-Merger basis, and references to “Prior BEN” refer to the business of privately-held Brand Engagement Network Inc. prior to the completion of the Merger. References to “DHC” refer to DHC Acquisition Corp. prior to the completion of the Merger.
The Merger was accounted for as a reverse recapitalization under U.S. GAAP because the primary assets of DHC were cash and cash equivalents. For financial reporting purposes Prior BEN was determined to be the accounting acquirer based upon the terms of the Merger and other factors, including: (i) Prior BEN stockholders owned approximately 76% of the Combined Company and (ii) Prior BEN management held all key positions of management. Accordingly, the Merger was treated as the equivalent of Prior BEN issuing stock to assume the net liabilities of DHC. As a result of the Merger, the net liabilities of DHC were recorded at their historical cost in the unaudited condensed consolidated financial statements and the reported operating results prior to the Merger are those of Prior BEN. The following table summarizes the assets acquired and liabilities assumed as part of the reverse recapitalization:
SCHEDULE OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED
| March 14, 2024 | ||||
| Cash and cash equivalents | $ | 858,292 | ||
| Due from Sponsor | 3,000 | |||
| Prepaid and other current assets | 16,824 | |||
| Accounts payable | (2,352,328 | ) | ||
| Accrued expenses | (5,782,211 | ) | ||
| Due to related parties | (693,036 | ) | ||
| Warrant liability | (1,913,737 | ) | ||
| Net liabilities assumed | $ | (9,863,196 | ) | |
Total transaction costs were $4,121,000, of which $858,292 were charged directly to additional paid-in capital to the extent of cash received.
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NOTE D — PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:
SCHEDULE OF PREPAID EXPENSES AND OTHER CURRENT ASSETS
September 30, 2025 | December 31, 2024 | |||||||
| Security deposits | $ | 107,226 | $ | 108,441 | ||||
| Cataneo GmbH deposit | 550,000 | - | ||||||
| Prepaid VAT | 1,993 | 32,468 | ||||||
| Prepaid professional fees | 438,075 | 284,081 | ||||||
| Prepaid insurance | 535,454 | 567,977 | ||||||
| Other | $ | 47,110 | 52,431 | |||||
| Prepaid expenses and other current assets | $ | 1,679,858 | $ | 1,045,398 | ||||
NOTE E — PROPERTY AND EQUIPMENT, NET
Property and equipment include equipment, furniture, and capitalized software. Furniture and equipment are depreciated using the straight-line method over estimated useful lives of three years. Capitalized software costs are amortized straight-line over an estimated useful life ranging from 5 to 10 years.
Property and equipment consists of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
September 30, 2025 | December 31, 2024 | |||||||
| Equipment | $ | 676,785 | $ | 337,856 | ||||
| Furniture | 13,591 | 348,754 | ||||||
| Capitalized software | 19,716 | 216,751 | ||||||
| Total | 710,092 | 903,361 | ||||||
| Accumulated depreciation and amortization | (635,522 | ) | (610,604 | ) | ||||
| Property and equipment, net of accumulated depreciation and amortization | $ | 74,570 | $ | 292,757 | ||||
For the three months ended September 30, 2025 and 2024 depreciation and amortization of property and equipment totaled $928,495 and $972,375, respectively. For the nine months ended September 30, 2025 and 2024 depreciation and amortization of property and equipment totaled $2,842,590 and $1,771,966, respectively.
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NOTE F — INTANGIBLE ASSETS
The following table summarizes intangible assets included on the consolidated balance sheet:
SCHEDULE OF INDEFINITE - LIVED INTANGIBLE ASSETS
| September 30, 2025 | ||||||||||||
| Gross | Accumulated Amortization | Net | ||||||||||
| Amortizing intangible assets: | ||||||||||||
| Patent portfolio | $ | 1,262,779 | $ | (623,255 | ) | $ | 639,524 | |||||
| Developed technology | 18,578,857 | (5,128,629 | ) | 13,450,228 | ||||||||
| Total | $ | 19,841,636 | $ | (5,751,884 | ) | $ | 14,089,752 | |||||
| December 31, 2024 | ||||||||||||
| Gross | Accumulated Amortization | Net | ||||||||||
| Amortizing intangible assets: | ||||||||||||
| Patent portfolio | $ | 1,259,864 | $ | (517,960 | ) | $ | 741,904 | |||||
| In-process research and development | 17,755,347 | (2,372,881 | ) | 15,382,466 | ||||||||
| Total | $ | 19,015,211 | $ | (2,890,841 | ) | $ | 16,124,370 | |||||
Total amortization expense including amortization related to developed software was $946,403 and $1,764,285 for the three months ended September 30, 2025 and 2024, respectively. Total amortization expense including amortization related to developed software was $2,756,853 and $2,939,063 for the nine months ended September 30, 2025 and 2024, respectively.
Future amortization of intangible assets are estimated to be as follows:
SCHEDULE OF FINITE-LIVED INTANGIBLE ASSETS, FUTURE AMORTIZATION EXPENSE
| Years Ending December 31: | ||||
| 2025 (remaining 6 months) | $ | 1,004,163 | ||
| 2026 | 4,014,256 | |||
| 2027 | 3,803,107 | |||
| 2028 | 3,697,532 | |||
| 2029 | 1,305,049 | |||
| Thereafter | 61,766 | |||
| Total | $ | 13,885,873 | ||
NOTE G — ACCRUED EXPENSES
Accrued expenses consist of the following:
SCHEDULE OF ACCRUED EXPENSES
| September 30, 2025 | December 31, 2024 | |||||||
| Accrued professional fees | $ | 1,396,126 | $ | 2,747,211 | ||||
| Accrued compensation and related expenses | 1,540,359 | 1,730,043 | ||||||
| Legal Settlement Liability | 487,453 | - | ||||||
| Accrued other | 65,500 | 116,458 | ||||||
| Accrued interest | 117,178 | - | ||||||
| Accrued expenses | $ | 3,606,616 | $ | 4,593,712 | ||||
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NOTE H — DEBT
Promissory Note
On November 11, 2024, the Company issued a promissory note in the aggregate original principal amount of approximately $1,700,000 to Yorkville (the “Promissory Note”). The Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Promissory Note. The Company was required to make monthly cash payments beginning on December 15, 2024, and continuing on the same day of each successive calendar month of principal in the amount of the sum of (i) $0.4 million of principal (or the outstanding principal amount if less than such amount), plus (ii) a payment premium in an amount equal to 5% of the principal amount being paid, if applicable, and (iii) any accrued and unpaid interest as of each Installment Date. The Company shall, at its own option, repay each Installment Amount either (i) in cash on or before each Installment Date, or (ii) by submitting one or more advance notice(s) under the SEPA (as defined below), on or before the applicable Installment Date, or any combination of (i) or (ii) as determined by the Company. If the Company repays the Installment Amount in cash, the cash payment shall include the Payment Premium. If the Company elects an Advance Repayment for all or a portion of an Installment Amount, then no Payment Premium will apply. In addition, for so long as the Promissory Note is outstanding, with respect to any advance notice submitted by the Company under the SEPA, the Company shall select an Option 2 Pricing Period (as defined in the SEPA), unless otherwise agreed by Yorkville. The Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of September 30, 2025, the Company is in default with the Promissory Note and recognized incremental default interest during the period ended September 30, 2025.
During the nine months ended September 30, 2025, 1,000,000 shares of Common Stock were issued to Yorkville resulting in the reduction of the Promissory Note of $432,482 . During the three and nine months ended September 30, 2025, the Company recognized $0 and $86,042 in interest expense related to the Promissory Note, respectively. As of September 30, 2025, the remaining balance of $416,667 was included within short-term debt in the accompanying consolidated balance sheets. On May 28, 2025, the Company received a written notice of default from Yorkville. As of the date of this filing, the Company has reached a settlement with Yorkville, and approximately $487,453 has been included in accrued expenses and is expected to be paid in the next year.
During the nine months ended September 30, 2025, the Company issued various short term related party promissory notes payable for proceeds of approximately $1.5 million, which bear interest at the rate of approximately 12% per annum.
Convertible Notes
On April 12, 2024, the Company issued a convertible promissory note to J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division (“CCM”) in the principal amount of $1,900,000 (the “Cohen Convertible Note”), to settle outstanding invoices totaling $1,900,000 related to investment banking services rendered to the Company in connection with the Business Combination. Beginning on October 14, 2024, interest will accrue at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. The maturity date of the Cohen Convertible Note was March 14, 2025. During the three and nine months ended September 30, 2025, the Company recognized $0 and $27,701 in interest expense related to the Cohen Convertible Note. As of September 30, 2025, the Company was in default of the Cohen Convertible Note.
On December 14, 2024 (the “First Conversion Date”), $760,000 of the Cohen Convertible Note converted into 633,333 shares of Common Stock at $1.20 per share (the “Floor Price”). On the 14th day of each successive month commencing with January 14, 2025 (each such day, an “Additional Conversion Date” and together with the First Conversion Date, the “Conversion Dates”), CCM may convert a portion of Cohen Convertible Note to a number of shares equal to (i) up to 20% of the outstanding principal balance of the Cohen Convertible Note plus accrued interest due under the Cohen Convertible Note divided by (ii) a price per share (the “Conversion Purchase Price”) equal to 92.75% of the arithmetic average of the Daily Volume-Weighted Average Price (“VWAP”) for the five VWAP Trading Days (as defined therein) ending on the VWAP Trading Day immediately preceding the applicable Conversion Date (subject to the Floor Price). During the three and nine months ended September 30, 2025, $0 and $380,000 of the Cohen Convertible Note converted into 316,666 shares of Common Stock at $1.20 per share, respectively. As of September 30, 2025, the remaining balance of $760,000 was included within the convertible note in the accompanying consolidated balance sheets.
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Short-term Debt Related to Acquisition of DM Lab
As of September 30, 2025, the Company had four loans outstanding that were assumed in the DM Lab transaction, totaling $891,974, a decrease of $252,601 from the acquisition date due to the amount converted to equity on May 25, 2023. The loans carry varying interest rates ranging from 4.667% to 6.69%. During the three months ended September 30, 2025 and 2024 the Company incurred interest expense of $22,231 and $11,627, respectively, which is included in interest expense in the unaudited condensed consolidated statement of operations. During the nine months ended September 30, 2025 and 2024 the Company incurred interest expense of $43,474 and $38,647, respectively, which is included in interest expense in the unaudited condensed consolidated statement of operations. All loans are due within 12 months from the balance sheet date and have no optional or mandatory redemption or conversion features. These obligations have been classified as current liabilities on the balance sheet and the fair value of the loans approximates the carrying amount due to their short-term nature. Additionally, there are no associated restrictive covenants, third-party guarantees, or pledged collateral. As of the reporting date, there have been no defaults on these loans. In January 2025, the Company obtained a waiver to extend the due dates of $668,674 of its short-term debt to January 2026.
NOTE I — STOCKHOLDERS’ EQUITY
In August 2023, the Company entered into the Reseller Agreement with AFG whereby AFG agreed to operate as the exclusive channel partner and reseller of the Company’s software as a service in the motor vehicle marketing and manufacturing industry for a term of five years. The Company issued a nontransferable warrant (“Reseller Warrant”) that entitled AFG to purchase up to 3,750,000 shares of Common Stock at an exercise price of $10.00 and a fair value of $2.52 per warrant. The 3,750,000 warrants were cancelled in January 2025, upon the termination of the Reseller Agreement.
On May 28, 2024, the Company entered into a Securities Purchase Agreement (the “May SPA”) with certain investors (the “May Purchasers”), pursuant to which the Company agreed to issue and sell to the May Purchasers an aggregate of 191,980,000 shares of Common Stock of the Company at a price per share of $2.50 and an aggregate of 3,960,000 warrants to purchase 3,960,000 shares of Common Stock, which was divided into two tranches consisting of (i) 1,980,000 warrants immediately exercisable for a term of one year from (the “May One-Year Warrants”) and (ii) 1,980,000 warrants immediately exercisable for a term of five years (the “May Five-Year Warrants,” together with the May One-Year Warrants, the “May Warrants”), each with an exercise price of $2.50 per share, subject to customary adjustments, for an aggregate purchase price of $4,950,000.
On May 30, 2024, the Company issued to the May Purchasers an aggregate of 200,000 Shares and 400,000 Warrants (consisting of 200,000 One-Year Warrants and 200,000 Five-Year Warrants) for an aggregate gross proceeds of $500,000. Upon the issuances of such shares of Common Stock, an aggregate of 1,260,000 May One-Year Warrants and 1,260,000 May Five-Year Warrants were issued to the May Purchasers and were immediately exercisable. The remaining shares were issued to an escrow account and such shares along with the May Warrants remain in escrow until the conditions in the May SPA are satisfied. The May Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the May SPA ending on October 29, 2024. For every $2.50 paid to the Company, the Company will release one share of Common Stock and two May Warrants from escrow to the May Purchasers. If a May Purchaser fails to pay its required funding by the respective deadline, the May Purchaser’s entire commitment under the May SPA will become immediately due and payable. During the three months ended March 31, 2025, the Company issued 330,000 shares of Common Stock to the May Purchasers for proceeds of approximately $750,000. As of September 30, 2025, 1,901,281 May One-Year Warrants and 1,251,587 May Five-Year Warrants are outstanding.
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On July 1, 2024, the Company entered into a separate Securities Purchase Agreement (the “July SPA”) with The Williams Family Trust for the issuance and sale of 120,000 shares of Common Stock at a price per share of $2.50 and an aggregate of 240,000 warrants, consisting of (i) 120,000 warrants with a term of one year and (ii) 120,000 warrants with a term of five years for an aggregate purchase price of $300,000. The warrants are immediately exercisable for Common Stock at a price of $2.50 per share. As of September 30, 2025, all 240,000 warrants remain outstanding.
On August 26, 2024, the Company entered into a Securities Purchase Agreement (the “August SPA”) with certain investors (the “August Purchasers”), pursuant to which the Company will issue and sell an aggregate of 1,185,000 shares of the Company’s Common Stock at a price per share of $5.00, for an aggregate purchase price of $5,925,000.
In connection with the August SPA, on August 26, 2024 (the “Assignment Effective Date”), the Company entered into that certain share assignment and lockup release agreement (the “Assignment Agreement”) with certain members of Sponsor and certain other existing stockholders and affiliates of the Company (collectively, the “Sponsor Members” and each a “Sponsor Member”) and the August Purchasers, pursuant to which, as an inducement to enter into the August SPA, the August Purchasers assumed, all of the Sponsor Members’ rights, title and interest in an aggregate of 1,185,000 shares of Common Stock (the “Sponsor Securities”) held by Sponsor on their behalf as of the Assignment Effective Date (the “Assignment”). In exchange for the Assignment by the Sponsor Members of the Sponsor Securities to the August Purchasers, the Company agreed to release 1,252,500 shares of Common Stock from certain restrictions on transfer contained in either a (i) prior letter agreement by and among the Company’s predecessor, DHC, Sponsor and the other signatories thereto or (ii) in certain lockup agreements executed by certain of the Sponsor Members in connection with the consummation of the Company’s prior business combination. The Sponsor Members transferred an aggregate of 1,185,000 Sponsor Securities into an escrow account. The Sponsor Securities are released from the escrow account on a pro rata basis upon the making of the required fundings on the terms and conditions described in the August SPA. In the event an August Purchaser fails to make required funding contemplated by the August SPA, a pro rata portion of the Sponsor Securities shall be released from the escrow account to the Company and the Company will cancel such Sponsor Securities.
On August 30, 2024, in connection with the August SPA and the Assignment Agreement, the Company issued to the August Purchasers an aggregate of 100,000 shares for an aggregate gross proceeds of $500,000. The remaining shares were issued to an escrow account and such shares remain in escrow until the conditions in the August SPA are satisfied. The August Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the August SPA ending on April 5, 2025.
For every $5.00 paid to the Company, the Company will release one share of Common Stock under the August SPA and one share of Common Stock under the Assignment Agreement to the August Purchasers. If an August Purchaser fails to pay its required funding by the respective deadline, the investor’s entire commitment under the August SPA will become immediately due and payable. As of September 30, 2025, the Company has experienced delays in funding, from one of the investors under the August SPA. in the aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such amounts or any future required fundings by investors will be made.
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On August 26, 2024, the Company entered into the SEPA with Yorkville. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $50,000,000 of the Company’s shares of Common Stock, at the Company’s request any time during the commitment period commencing on August 26, 2024 (the “SEPA Effective Date”) and terminating on the 36-month anniversary of the SEPA Effective Date. Each issuance and sale by the Company to Yorkville under the SEPA (an “Advance”) is subject to a maximum limit equal to an amount equal to 100% of the aggregate volume traded of the Company’s Common Stock on Nasdaq for the five trading days immediately preceding an Advance notice. The shares will be issued and sold to Yorkville at a per share price equal to, at the election of the Company as specified in the relevant Advance notice: (i) 96% of the Market Price (as defined below) for any period commencing on the receipt of the Advance notice by Yorkville and ending on 4:00 p.m. New York City time on the applicable Advance notice date (the “Option 1 Pricing Period”), and (ii) 97% of the Market Price for any three consecutive trading days commencing on the Advance notice date (the “Option 2 Pricing Period,” and each of the Option 1 Pricing Period and the Option 2 Pricing Period, a “Pricing Period”). “Market Price” is defined as, for any Option 1 Pricing Period, the daily VWAP of the Common Stock on Nasdaq, and for any Option 2 Pricing Period, the lowest VWAP of the Common Stock on Nasdaq during the Option 2 Pricing Period. The Advances are subject to certain limitations, including that Yorkville cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding Common Stock at the time of an Advance or acquiring since the SEPA Effective Date under the SEPA more than 19.99% of the Company’s issued and outstanding Common Stock, as of the SEPA Effective Date (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including, where the Company has obtained stockholder approval to issue in excess of the Exchange Cap in accordance with the rules of Nasdaq or such issuances do not require stockholder approval under Nasdaq’s “minimum price rule.” Additionally, if the total number of shares of Common Stock traded on Nasdaq during the applicable Pricing Period is less than the Volume Threshold (as defined below), then the number of shares of Common Stock issued and sold pursuant to such Advance notice will be reduced to the greater of (i) 30% of the trading volume of the Common Stock on Nasdaq during the relevant Pricing Period as reported by Bloomberg L.P., or (ii) the number of shares of Common Stock sold by Yorkville during such Pricing Period, but in each case not to exceed the amount requested in the Advance notice. “Volume Threshold” is defined as a number of shares of Common Stock equal to the quotient of (a) the number of shares in the Advance notice requested by the Company divided by (b) 0.30. As consideration for Yorkville’s commitment to purchase the shares of Common Stock pursuant to the SEPA, the Company paid Yorkville, (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee (the “Commitment Fee”) of $500,000 by the issuance to Yorkville of an aggregate of 280,899 shares of Common Stock (“Commitment Shares”). During the nine months ended September 30, 2025, the Company issued an aggregate of 1,500,000 shares of Common Stock to Yorkville.
The Company accounts for the SEPA as a derivative that grants the Company the right, but not the obligation, to issue additional shares of Common Stock. Due to certain settlement provisions, the SEPA is precluded from equity classification. The SEPA derivative is recognized at inception and accounted for on a fair value basis. The Company determined the fair value of the SEPA derivative at inception and as of September 30, 2025 to be de minimis.
On January 13, 2025, the Company entered into the January Warrant Exercise Agreement with certain Purchasers. Pursuant to the August SPA, the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the Contribution Warrant to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account as of September 30, 2025.
Under the January Warrant Exercise Agreement, the exercise price of the Committed Warrants was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on the Exercise Schedule. Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue the Reload Warrants. Upon a Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term. If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue the Optional Reload Warrants. In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
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During the three and nine months ending September 30, 2025, Purchasers exercised 0 and 812,642 Committed Warrants to purchase 0 and 812,642 shares of Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1,549,468, and such Purchasers were or shall be issued 787,132 shares of Common Stock, 787,132 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has been terminated with respect to such Purchasers. As of September 30, 2025, the Company has experienced delays in the exercise of warrants of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement.
Common Stock Warrants
In connection with the Business Combination, the Company assumed 10,314,952 Public Warrants and 6,126,010 Private Placement Warrants, which are all outstanding as of September 30, 2025. Each whole Public Warrant and Private Placement Warrant entitles the holder to purchase one share of the Company’s Common Stock at an exercise price of $11.50 per share. The Public Warrants and Private Placement Warrants were exercisable beginning on April 13, 2024 and expire on April 14, 2029.
The Private Placement Warrants are identical to the Public Warrants, except that (x) the Private Placement Warrants and the Common Stock issuable upon the exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of a business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and be non-redeemable as described above so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
In connection with the May SPA, the Company also entered into a Letter Agreement to Exercise Warrants (“May Warrant Exercise Agreement”) with certain of the May Purchasers (the “Required Warrant Parties”). Under the May Warrant Exercise Agreement, if the Company uses commercially reasonable efforts to raise an additional $3,250,000 in capital (excluding amounts raised under the May SPA) but is unable to do so by October 31, 2024, the Required Warrant Parties will be required to exercise for cash certain of their May Warrants on a monthly basis in the amounts and on the dates as determined in the May Warrant Exercise Agreement. For each May Warrant so exercised, the Company will issue one new May one-Year Warrant and one new May five-Year Warrant (collectively, “May Reload Warrants”) each with an exercise price of $2.50 to the Required Warrant Party. A maximum of 2,600,000 May Reload Warrants may be issued pursuant to the May Warrant Exercise Agreement. Upon receipt of an aggregate of $3,250,000 of actual cash proceeds from the August SPA, the May Warrant Exercise Agreement will terminate automatically.
On August 26, 2024, in connection with the August SPA and the Assignment Agreement, the Company entered into a warrant purchase agreement (the “August Warrant Agreement”) with each of the warrantholders signatory thereto (the “Warrantholders”), pursuant to which the Company issued to the Warrantholders an aggregate of 960,000 warrants to purchase Common Stock (the “August Warrants”), with an exercise price of $5.00 per share with an expiration period of five years from the date of issuance.
Equity Compensation Plans
2021 Incentive Stock Option Plan
In May 2021, the Company adopted the 2021 Incentive Stock Option Plan (“2021 Option Plan”) that provides for the grant of the following types of stock awards: (i) incentive stock Options, (ii) non-statutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. The 2021 Option Plan was administered by the Company’s Board of Directors (the “Board of Directors”). In connection with the Closing, all outstanding awards were assumed by BEN pursuant to the terms of the Business Combination Agreement and the Board of Directors declared that there will be no further issuances under the 2021 Option Plan. Forfeitures under the 2021 Option Plan are automatically added to shares available for issuance under the 2023 Plan.
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2023 Long-Term Incentive Plan
In connection with the Closing, the 2023 Long-Term Incentive Plan (the “2023 Plan”) became effective. The 2023 Plan provides for the grant of the following types of stock awards: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) restricted stock, (v) restricted stock units, (vi) performance awards, (vii) dividend equivalent rights, (viii) performance awards, (ix) performance goals, (x) tandem awards, (xi) prior plan awards, and (xii) other awards. The 2023 Plan is administered by the Board of Directors. The 2023 Plan awards are available to employees, officers and contractors. The option grants authorized for issuance under the 2023 Plan may total up to 2,942,245 shares of Common Stock. As of September 30, 2025, 3,332,115 shares remained available for grant under the 2023 Plan.
NOTE J — EQUITY-BASED COMPENSATION
Option Awards
2025 Activity
Generally, options have a service vesting condition of 25% cliff after 1 year and then monthly thereafter for 36 months (2.067% per month).
The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the options granted:
SCHEDULE OF SHARE-BASED PAYMENT AWARD, STOCK OPTIONS, VALUATION ASSUMPTIONS
| Three Months Ended March 31, 2024 | ||||
| Expected term | 5.0 Years | |||
| Risk-free interest rate | 4.13 | % | ||
| Dividend yield | 0.00 | % | ||
| Volatility | 54.79 | % | ||
There were no stock options granted for the period ended September 30, 2025.
A summary of option activity for the nine months ended September 30, 2025 is as follows:
SCHEDULE OF STOCK OPTION ACTIVITY
| Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (in years) | |||||||||||||
| Outstanding as of December 31, 2024 | 1,386,400 | 4.90 | 2.58 | 8.59 | ||||||||||||
| Outstanding as of September 30, 2025 [A3] | 1,386,400 | 4.90 | 2.58 | 7.84 | ||||||||||||
| Vested and expected to vest as of September 30, 2025 [A4] | 1,386,400 | 4.90 | 2.58 | 7.84 | ||||||||||||
| Exercisable as of September 30, 2025 [A5] | 0 | 0 | 0 | 7.76 | ||||||||||||
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The aggregate intrinsic value of options outstanding and options exercisable as of September 30, 2025 was $0, as the exercise price for all outstanding options was in excess of the Company’s trading price at September 30, 2025. At September 30, 2025, future stock-based compensation for options granted and outstanding of $767,820 will be recognized over a remaining weighted-average requisite service period of 0.61 Years.
The Company recorded stock-based compensation expense related to options of $209,941 and $294,654 in the three months ended September 30, 2025 and 2024, respectively, to the accompanying unaudited condensed consolidated statements of operations. The Company recorded stock-based compensation expense related to options of $713,684 and $933,244 in the nine months ended September 30, 2025 and 2024, respectively, to the accompanying unaudited condensed consolidated statements of operations.
Common Stock Warrants
Compensatory Warrants
As of September 30, 2025, there were 955,359 warrants outstanding at a weighted average exercise price of $3.20 per share, with expiration dates ranging from 2028 to 2033. No compensatory warrants were issued during the period ended September 30, 2025.
The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the AFG and compensatory warrants granted:
SCHEDULE OF FAIR VALUE MEASUREMENT INPUTS AND VALUATION TECHNIQUES
| Three Months Ended March 31, 2024 | ||||
| Expected term | 3.0 Years | |||
| Risk-free interest rate | 4.46 | % | ||
| Dividend yield | 0.00 | % | ||
| Volatility | 55.14 | % | ||
The Company has recorded stock-based compensation related to its options, restricted share awards, and warrants in the accompanying unaudited condensed consolidated statements of operations as follows:
SCHEDULE OF STOCK BASED COMPENSATION
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| General and administrative | $ | 209,941 | $ | 279,395 | $ | 706,961 | $ | 772,831 | ||||||||
| Research and development | - | 15,259 | 6,723 | 220,413 | ||||||||||||
| Total | $ | 209,941 | $ | 294,654 | $ | 713,684 | $ | 993,244 | ||||||||
Stock-based compensation capitalized as part of capitalized software costs for the nine months ended September 30, 2025 and 2024 was $6,723 and $20,745, respectively, which is in addition to amounts included in the table above.
Restricted share awards
During the nine months ended September 30, 2025, the Company issued 223,586 restricted share awards to certain of its directors and officers. All of the restricted share awards granted vested immediately upon grant. The fair value of a restricted share award is equal to the fair market value price of the Company’s Common Stock on the date of grant. The Company recorded stock-based compensation expense of $413,346 for the nine months ended September 30, 2025 related to these restricted share awards.
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The following table summarizes activity related to restricted share awards:
SCHEDULE OF ACTIVITY RELATED TO RESTRICTED SHARE AWARDS
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Nonvested at January 1, 2025 | - | - | ||||||
| Granted | 223,586 | 1.02 | ||||||
| Vested | (223,586 | ) | 1.02 | |||||
| Nonvested at September 30, 2025 | - | - | ||||||
NOTE K — RELATED PARTY TRANSACTIONS
AFG Reseller Agreement
On August 19, 2023, the Company entered into the Reseller Agreement, providing for, among other things, AFG to act as the Company’s exclusive reseller of certain products on terms and conditions set forth therein and, as partial consideration to AFG for such services, the Company issued 1,750,000 shares of Common Stock with an aggregate fair value of $13,475,000 based on the closing stock price on the date of the Merger. Additionally, the Company issued AFG a warrant to purchase up to 3,750,000 shares of Common Stock, with each warrant exercisable for one share of Common Stock at an exercise price of $10.00 and a fair value of $2.52 per warrant (Note H). The Company terminated the Reseller Agreement in January 2025, resulting in the forfeiture of the 3,750,000 warrants.
Advances to Officers and Directors
Certain officers and directors advanced funds to or were advanced from the Company on an undocumented, non-interested bearing, due on demand basis. As of September 30, 2025, there were no amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying unaudited condensed consolidated balance sheet. As of December 31, 2024, $0 and $185,029 of amounts owed to related parties were included within accrued expenses and accounts payable, respectively, in the accompanying consolidated balance sheet. During the nine months ended September 30, 2025 and 2024, the Company recorded professional and other fees and cost related to consulting services from related parties of $77,299 and $35,220, respectively, within general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.
Related Party Advance
The Company received non-interest bearing and payable upon demand related party advances from DHC’s Sponsor in connection with the Merger. During the nine months ended September 30, 2025, the Company wrote off the balance owed, which resulted in a gain on debt extinguishment of $693,036, respectively, in the accompanying unaudited condensed consolidated statement of operations. As of September 30, 2025 and December 31, 2024, the Company had $0 and $693,036 in related party advances in the accompanying unaudited consolidated balance sheets.
AFG Claims Assignment
In January 2025, the Company entered into a Claims Assignment Agreement with a related party that is also party to the May SPA. Pursuant to the Claims Assignment Agreement, the Company purchased the related party’s rights to damages related to the AFG litigation (Note L) for $525,000 which satisfied the related party’s obligations under the May SPA. The Company expensed the $525,000 within general and administrative expenses during the nine months ended September 30, 2025.
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NOTE L — COMMITMENTS AND CONTINGENCIES
The Company is subject to various legal and regulatory proceedings, claims, and assessments, as well as other contingencies, that arise in the ordinary course of business. The Company accrues for these contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company regularly reviews and updates its accruals for contingencies and makes adjustments as necessary based on changes in circumstances and the emergence of new information.
Leases
In September 2024, the Company entered into an operating lease for its office space in South Korea which expires in 2027. The Company’s operating lease right-of-use (“ROU”) asset and related lease liability was initially measured at the present value of future lease payments over the lease term. The Company is responsible for payment of certain real estate taxes and other expenses on its lease. These amounts are generally considered to be variable and are not included in its measurement of the ROU asset and lease liability. The Company accounts for non-lease components, such as maintenance, separately from lease components.
During the three and nine months ended September 30, 2025, the Company’s operating lease costs were $55,822 and $180,008, respectively. As of September 30, 2025, the remaining term of the Company’s operating lease was 1.91 years and the discount rate was 8%.
Operating cash used in operating leases was $52,006 during the three months ended September 30, 2025. Operating cash used in operating leases was $154,987 during the nine months ended September 30, 2025.
Future maturities of the operating lease liability was as follows as of September 30, 2025:
SCHEDULE OF FUTURE MATURITIES OF THE OPERATING LEASE LIABILITY
| Years Ending December 31: | ||||
| 2025 (remaining three months) | 53,035 | |||
| 2026 | 214,263 | |||
| 2027 | 145,671 | |||
| Total future minimum payments | 412,969 | |||
| Less imputed interest | (51,145 | ) | ||
| Present value of lease liabilities | 361,824 | |||
Litigation
AFG Litigation
On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
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Recoverables and liabilities for contingencies, arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a recoverable or liability has been earned or incurred and the amount of the assessment and/or remediation can be reasonably estimated.
Related Party Investigation
The Company’s management team assigned an advisor to the Board to conduct an internal investigation of potential related party transactions with certain members of DHC Sponsor, LLC, prior to the merger with Brand Engagement Network, Inc. These matters are still under investigation.
Employment contracts
The Company has entered into employment contracts with its officers and certain employees that provide for severance and continuation benefits in the event of termination of employment either by the Company without cause or by the employee for good reason, both as defined in the agreements, along with any unpaid vested options, equity or earned bonuses. In addition, in the event of termination of employment following a change in control, as defined in each agreement the employee shall receive a prorated bonus payment and severance payments (as defined in each agreement).
Share Purchase and Transfer Agreement
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Unterseer and CUTV, the “Sellers”) (the “Purchase Agreement”), pursuant to which, among other things, the Sellers agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price, in the form of cash and Company common stock, of $19.5 million, subject to certain adjustments. In addition, after signing, the parties executed amendments on February 6, 2025, May 26, 2025 and July 3, 2025 that, among other things, (i) provided for certain down-payments by BEN that would be non-refundable and applied as set-off against any Sellers’ claims in a pre-closing termination scenario (including reasonable professional fees/costs and a $350,000 penalty referenced in Section 12.4.2), and (ii) temporarily suspended and then re-instated the Sellers’ contractual withdrawal rights on the dates specified therein. On September 14, 2025, the parties terminated the Purchase Agreement. The termination was effected through a written notice from the Seller, which the Company acknowledged and accepted, in accordance with the terms of the Purchase Agreement.
NOTE M — SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions, in accordance with ASC 855 Subsequent Events, that occurred after the balance sheet date up to the date the financial statements are issued. The Company did not identify any subsequent events, other than the below, that would have required adjustment or disclosure in these unaudited financial statements.
The Company entered into a definitive Shareholder, License and Reseller Agreement with SKYE Inteligencia LATAM, S.A.P.I. de C.V. (“SKYE LATAM”) on November 6, 2025, which is effective as of October 31, 2025, to expand the Company’s AI footprint in Latin America and Spain. Under the Agreements:
| - | The Company granted SKYE LATAM an exclusive license to deploy its proprietary Engagement Language Model (ELM™) And Retrieval-Augmented Generation (RAG) framework across federal state, and local government markets in the territory. | |
| - | In consideration, the Company received (1) preferred equity (to be recognized as non-cash intellectual property license revenue under ASC 606 upon transfer of control in Q4 2025), and (2) 25% of SKYE LATAM’s common stock (MXN 25,000 subscription, approximately $1,250 at an exchange rate of 20.5 MXN/USD, accounted for under the equity method of ASC 323). As of the date these financial statements were issued, a third-party valuation has not been completed and the fair value of the preferred equity received has not yet been determined. | |
| - | The Company holds one seat on SKYE LATAM’s five-member board and is entitled to 35% of gross revenues from software, SaaS, services, and subscriptions (excluding hardware) generated by SKYE LATAM across all industries. |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included elsewhere in this Quarterly Report on Form 10-Q (this “Report”). Unless the context otherwise requires, all references in this section to “we,” “us,” “our,” the “Company” or “BEN” refer to Brand Engagement Network Inc., a Delaware corporation. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Annual Report”) and with the unaudited consolidated financial statements and related notes thereto presented in this Report.
Overview
We are an emerging provider of conversational artificial intelligence (“AI”) assistants, with the purpose of transforming engagement and analytics for businesses through our security-focused, multimodal communication and human-like AI assistants. Our AI assistants are built on proprietary natural language processing, anomaly detection, multisensory awareness, sentiment and environmental analysis, as well as real-time individuation and personalization capabilities. We believe these powerful tools will empower businesses to elevate customer experiences, optimize cost management and supercharge operational efficiency. Our platform is designed to configure, train and operate AI assistants that engage with professionals and consumers through multiple channels, boosting customer experience and providing instant personalized assistance for consumers in the automotive and healthcare markets.
We still hold significant intellectual property in the form of a patent portfolio that we believe will be a cornerstone of our artificial intelligence solutions for certain industries that we expect to target, including the automotive, healthcare, and financial services industries.
Recent Events
The Cataneo Purchase Agreement
As previously disclosed, on October 29, 2024, Brand Engagement Network Inc., a Delaware corporation (the “Company”) entered into a Share Purchase and Transfer Agreement with Christian Unterseer, in his individual capacity (“Unterseer”), CUTV GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“CUTV”), and CUNEO AG, a stock corporation incorporated under the laws of the Federal Republic of Germany (“Cuneo” and together with Unterseer and CUTV, the “Sellers”) (the “Cataneo Purchase Agreement”), pursuant to which, among other things, the Sellers agreed to sell all of the outstanding equity interests of Cataneo GmbH, a limited liability company incorporated under the laws of the Federal Republic of Germany (“Cataneo”) to the Company for an aggregate purchase price, in the form of cash and Company common stock, of $19.5 million, subject to certain adjustments. In addition, after signing, the parties executed amendments on February 6, 2025, May 26, 2025 and July 3, 2025 that, among other things, (i) provided for certain down-payments by BEN that would be non-refundable and applied as set-off against any Sellers’ claims in a pre-closing termination scenario (including reasonable professional fees/costs and a $350,000 penalty referenced in Section 12.4.2), and (ii) temporarily suspended and then re-instated the Sellers’ contractual withdrawal rights on the dates specified therein. On September 14, 2025, the Company received a notice from the Sellers purporting to withdraw from the SPA pursuant to Section 12.4.2. The notice states that prior addenda temporarily suspending the Sellers’ withdrawal right expired on August 31, 2025, after which the Sellers exercised their withdrawal right with immediate effect. On September 14, 2025, the parties terminated the Cataneo Purchase Agreement. The termination was effected through a written notice from the Seller, which the Company acknowledged and accepted, in accordance with the terms of the Cataneo Purchase Agreement. In connection with the termination of the Cataneo Purchase Agreement, the Company will make a final payment to the Seller of $100,000 (the “Final Payment”). The Final Payment and all previously paid down-payments, which, including the Final Payment, total to approximately $650,000, are not refundable and are applied as a set-off against any of Sellers’ claims permitted by Section 12.4.2. The Company otherwise bears its own expenses. The parties’ confidentiality and similar obligations that expressly survive under the Cataneo Purchase Agreement continue in effect. Any interim exclusivity, no-shop, or similar undertakings expired by their terms in connection with the withdrawal and are no longer in effect.
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SKYE Inteligencia LATAM Partnership
On October 30, 2025, BEN entered into a Reseller Agreement and Shareholder Agreement, with SKYE Inteligencia LATAM, S.A.P.I. de C.V. (“SKYE LATAM”), to commercialize BEN’s AI technology across Latin America and Spain. Under the Shareholder Agreement, SKYE LATAM issued to BEN a preferred capital contribution, recognized as a intellectual property licensing revenue under U.S. GAAP and BEN received 25% of SKYE LATAM’s common stock. BEN was also granted one seat on SKYE LATAM’s five-member board of directors. Under the Reseller Agreement, SKYE LATAM was appointed as the exclusive reseller of BEN’s AI solutions (including ELM™ and RAG) in the government sector across Latin America and Spain. SKYE LATAM has non-exclusive rights in all other industry verticals and BEN is entitled to 35% of gross revenues from software, Saas, Services, and subscription, across all industries in the territory.
Financing Registration Statements
The Company has primarily financed its operations through a series of securities purchase agreements, promissory notes, and other equity and debt financings with affiliates and non-affiliates (“Financing Arrangements”). Pursuant to the respective transaction documents, the Company filed multiple resale registration statements on Form S-1 (“Financing Registration Statements”) with respect to the Common Stock, warrants, and Common Stock underlying warrants sold or to be sold under certain of these Financing Arrangements. However, these Financing Registration Statements became stale on March 31, 2025, the date of the filing of our 2024 Annual Report, because the financial statements included in the Financing Registration Statements did not meet the SEC’s currency requirements as of March 31, 2025. The Company is in the process of re-evaluating, on a individualized basis, its need for these Financing Registration Statements, and filing all applicable supplements and amendments to the Financing Registration Statements. See “Liquidity and Capital Resources—Capital Resources and Available Liquidity” for additional details on our Financing Arrangements.
Yorkville Promissory Note
On November 11, 2024, the Company issued a non-convertible unsecured promissory note (the “Yorkville Promissory Note”) in the aggregate original principal amount of approximately $1.7 million to YA II PN, Ltd. (“Yorkville”). The Yorkville Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Promissory Note. The Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of September 30, 2025, the Company is in default on the Yorkville Promissory Note and there remains an unpaid and outstanding balance of $416,667. On May 28, 2025, the Company received a written notice of default from Yorkville. Subsequent to quarter ended September 30, 2025, the Company reached a settlement with Yorkville and agreed to pay $487,453 in full settlement of all outstanding claims. All remaining amounts payable to Yorkville as a result of this settlement, were paid in the fourth quarter of 2025.
Cohen Convertible Note
On April 12, 2024, the Company issued a convertible promissory note to J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division in the principal amount of $1.9 million (the “Cohen Convertible Note”), to settle outstanding invoices totaling $1.9 million related to investment banking services rendered to the Company in connection with its merger with Prior BEN and DHC (as defined in Note C to our Notes to Unaudited Condensed Consolidated Financial Statements) (the merger, the “Business Combination”). Beginning on October 14, 2024, interest began accruing at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. During the nine months ended September 30, 2025, $380,000 of the Cohen Convertible Note converted into, and the Company issued, 316,666 shares of Common Stock at $1.20 per share. The Cohen Convertible Note matured on March 14, 2025. As of September 30, 2025, the Company is in default on the Cohen Convertible Note and there remains an unpaid and outstanding balance of $760,000.
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Warrant Exercise and Reload Agreement
On January 13, 2025, the Company entered into that certain Warrant Exercise and Reload Agreement (the “January Warrant Exercise Agreement”) with certain investors (the “Purchasers”). Pursuant to the August SPA (as defined below), the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the contribution warrant (the “Contribution Warrant”) to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account (the “Escrow Shares”).
Under the January Warrant Exercise Agreement, the exercise price of 1,074,999 May Warrants (as defined below) (the “Committed Warrants”) was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on a schedule set forth in the January Warrant Exercise Agreement (the “Exercise Schedule”). Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue (i) one new warrant to purchase one share of Common Stock exercisable for a term of two years and (ii) one new warrant to purchase one share of Common Stock exercisable for a term of five years, each with an exercise price of $1.71 per share (together, the “Reload Warrants”). Upon a Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term (the “Optional Warrants”). If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue to such Purchaser (i) one new warrant to purchase one share of Common Stock with an exercise price of $1.71 per share with a term of two years and (ii) one new warrant to purchase one share of Common Stock with an exercise price of $1.71 with a term of five years (the “Optional Reload Warrants”). In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
During the three and nine months ended September 30, 2025, Purchasers exercised 0 and 812,642 Committed Warrants to purchase 0 and 812,642 shares of Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1,549,468, and such Purchasers were or shall be issued 787,132 shares of Common Stock, 787,132 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has been terminated with respect to such Purchasers. As of September 30, 2025, the Company has experienced delays in the exercise of warrants of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement.
AFG Termination of Reseller Agreement
On August 19, 2023, the Company and AFG Companies Inc. (“AFG”) entered into a Reseller Agreement (the “Reseller Agreement”) providing for, among other things, AFG to act as BEN’s exclusive reseller of certain products in a designated territory on certain terms and conditions. As partial consideration to AFG for such services to BEN, (i) Prior BEN issued to AFG a number of shares of Prior BEN common stock which converted into 1,750,000 shares of Common Stock and (ii) a non-transferable warrant to purchase up to 3,750,000 shares of Common Stock at a price of $10.00 per share, with AFG’s right to exercise such warrant vesting based upon revenues earned from the sales of BEN products paid by AFG to BEN pursuant to the Reseller Agreement (the “Reseller Warrant”).
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On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed (the “AFG Lawsuit”).
On January 17, 2025, the Company delivered a notice of termination (“Notice”) to AFG Companies, Inc. (“AFG”) terminating the Reseller Agreement. The Notice only applies to the Reseller Agreement and does not affect AFG’s obligations under the Subscription Agreement; however, in light of the Notice and the AFG Lawsuit, the Company is uncertain whether AFG will fulfill its obligations under the Subscription Agreement. Accordingly, none of the information presented in this Report assumes that either the Reseller Warrant will become exercisable or that any AFG Installment Shares will be issued.
The Company remains committed to, and intends to continue developing, its automotive vertical. The Company intends to utilize additional channel partners and grow its sales team to further expand its customer base and drive revenues. The Company is finalizing preparations to launch its Automotive AI Agent, a solution that integrates with major automotive data and service platform providers and supports over 13,000 dealerships nationwide. Additionally, the Company plans to expand its efforts through pilot programs in the Midwest, stronger reseller partnerships in Mexico, and collaborations with Canadian dealership groups. Recently, the Company has secured automotive pilots using its AI agent, which the Company believes will improve lead conversions, automates scheduling tools, enhances service efficiency, and enables advanced analytics to streamline operations.
AFG Securities Purchase Agreement Lawsuit
On September 7, 2023, the Company and AFG entered into a Subscription Agreement (the “AFG Subscription Agreement”) providing for (i) the purchase of shares of Prior BEN Common Stock in a private placement by the AFG and certain of its affiliates (the “AFG Investors”) as of immediately prior to the Closing Date, which converted into the right to receive 650,000 shares of Common Stock with an aggregate initial value of $6.5 million and (ii) the purchase of shares Common Stock in four installments commencing on March 14, 2025, with an aggregate purchase price of $26.0 million, at a purchase price per share prior to the installment purchase date that is the lesser of $10.00 and the average of the last reported sales prices of Common Stock for the twenty (20) trading days immediately preceding the applicable installment purchase date, subject to a floor price of $2.11 (the “AFG Installment Shares”).
On March 18, 2025, the Company filed a lawsuit against AFG in the Southern District of New York, Manhattan Division, alleging AFG failed to fulfill its contractual obligations by failing to make the required March 13, 2025 payment of $6.5 million. The Company has suffered significant damages including but not limited to: a. $6.5 million in unpaid contractually obligated funds, b. Prejudgment interest at the statutory rate of 9% per annum from March 13, 2025, c. Consequential damages, including disruption of BEN’s financial planning and loss of investment opportunities, including the acquisition of Cataneo GmBh d. Reputational harm impacting BEN’s standing with investors and business partners, and e. Attorney’s fees and costs incurred in enforcing the Agreement.
Key Factors and Trends Affecting our Business
Productions and Operations
We expect to continue to incur significant operating costs that will impact our future profitability, including research and development expenses as we introduce new products and improves existing offerings; capital expenditures for the expansion of our development and sales capacities and driving brand awareness; additional operating costs and expenses for production ramp-up; general and administrative expenses as we scale our operations; interest expense from debt financing activities; and selling and distribution expenses as we build our brand and market our products. To date, we have not yet sold any of our products beyond their pilot stage. As a result, we will require substantial additional capital to develop products and fund operations for the foreseeable future.
Revenues
We are a development stage company and have not generated any significant revenue to date.
Public Company Costs
We expect to hire additional staff and implement new processes and procedures to address public company requirements, particularly with respect to internal controls compliance and public company reporting obligations. We also expect to incur substantial additional expenses for, among other things, directors’ and officers’ liability insurance, director compensation and fees, listing fees, SEC registration fees, and additional costs for investor relations, accounting, audit, legal and other functions.
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If we cease to become an emerging growth company, we will become subject to the provisions and requirements under Section 404(b) of the Sarbanes-Oxley Act of 2002, which will require us to undergo audits of our internal controls over financial reporting as part of our yearly financial statement audits, resulting in a significant increase in consultant and audit costs over previous levels going forward.
Components of Results of Operations
Operating expenses
General and administrative expenses
General and administrative expenses consist of employee-related expenses including salaries, benefits, and stock-based compensation as well as fees paid for legal, accounting and tax services, consulting fees and facilities costs not otherwise included in research and development expense. We have and expect to further incur significant expenses as a result of becoming a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance, investor relations and other administrative expenses and professional services.
Depreciation and amortization
Depreciation expense relates to property and equipment which consists of equipment, furniture and capitalized software. Amortization expense relates to intangible assets.
Research and development cost
Costs incurred in connection with research and development activities are expensed as incurred. These costs include rent for facilities, hardware and software equipment costs, consulting fees for technical expertise, prototyping, and testing.
Interest expense
Interest expense consists of interest on our related party note payable and short-term debt.
Interest income
Interest income consists of interest earned on our excess cash.
Change in fair value of warrant liabilities
Change in fair value of warrant liabilities reflected the non-cash charge for changes in the fair value of the warrant liability that is subject to re-measurement at each balance sheet date.
Other expenses
Other expenses primarily consists of foreign currency gains or losses as a result of exchange rate fluctuations on transactions denominated in Korean won.
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Results of Operations
Comparison of the Three Months Ended September 30, 2025 and 2024
| Three Months Ended September 30, | Increase (Decrease) | |||||||||||
| 2025 | 2024 | |||||||||||
| Revenues | 60,120 | 50,000 | 10,120 | |||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 1,451,867 | 4,203,946 | (2,752,079 | ) | ||||||||
| Depreciation and amortization | 928,495 | 972,375 | (43,880 | ) | ||||||||
| Research and development | (3,629 | ) | 153,191 | (156,820 | ) | |||||||
| Total operating expenses | 2,376,733 | 5,329,512 | (2,952,779 | ) | ||||||||
| Loss from operations | (2,316,613 | ) | (5,279,512 | ) | 2,962,899 | |||||||
| Other income (expenses): | ||||||||||||
| Interest expense | (43,421 | ) | (17,963 | ) | (25,458 | ) | ||||||
| Change in fair value of warrant liabilities | 243,326 | (632,969 | ) | 876,295 | ||||||||
| Gain (loss) on debt extinguishment | (347,666 | ) | 98,318 | (445,984 | ) | |||||||
| Other | (17,601 | ) | 9,043 | (26,644 | ) | |||||||
| Other income (expenses), net | (165,362 | ) | (543,571 | ) | 378,209 | |||||||
| Net loss | (2,481,975 | ) | (5,823,083 | ) | 3,341,108 | |||||||
Revenues
During the three months ended September 30, 2025 revenue was $60,120. During the three months ended September 30, 2024, the Company earned $50,000 in revenue through proof of concept and revenue sharing.
General and administrative expenses
General and administrative expenses for the three months ended September 30, 2025 were approximately $1,451,867, decrease of approximately $2,752,079, compared to the three months ended September 30, 2024. The decrease was primarily due transaction costs of $3.1 million incurred in connection with the Business Combination in the prior period. We have only recently begun to raise proceeds through the offering of our Common Stock and convertible notes to investors and therefore expect, in the near term at a minimum, to continue to utilize the issuance of equity based instruments as compensation to reduce our cash outlays.
Depreciation and amortization expenses
Depreciation and amortization expenses for the three months ended September 30, 2025 were approximately $928,495, an increase of approximately $43,880, compared to the three months ended September 30, 2024. The increase was primarily due to the amortization expense associated with the developed technology placed into service in the second quarter of 2024.
Research and development expenses
Research and development expenses for the three months ended September 30, 2025 were approximately $(3,629), a decrease of approximately $156,820, compared to the three months ended September 30, 2024. The decrease in research and development expenses was primarily due to the sponsorship agreement with Korea University no longer being active and a decrease in stock compensation expense.
Gain on debt extinguishment
Loss on extinguishment of debt for the three months ended September 30, 2025 was approximately $445,984, related to settlement of accounts payable through the negotiated cash settlement. Gain on extinguishment of debt for the three months ended September 30, 2024 was approximately $98,318, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement.
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Change in fair value of warrant liabilities
Change in fair value of the warrant liabilities for the three months ended September 30, 2025 was approximately $243,326 loss associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date. The change in the fair value of the warrant liabilities during the three months ended September 30, 2024 was $$632,969 associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date.
Comparison of the Nine Months Ended September 30, 2025 and 2024
| Nine Months Ended September 30, | Increase (Decrease) | |||||||||||
| 2025 | 2024 | |||||||||||
| Revenues | 75,120 | 99,790 | (24,670 | ) | ||||||||
| Operating expenses: | ||||||||||||
| General and administrative | 6,514,077 | 15,969,617 | (9,455,540 | ) | ||||||||
| Depreciation and amortization | 2,842,590 | 1,771,966 | 1,070,624 | |||||||||
| Research and development | 14,466 | 759,427 | (744,961 | ) | ||||||||
| Total operating expenses | 9,371,133 | 18,501,010 | (9,129,877 | ) | ||||||||
| Loss from operations | (9,296,013 | ) | (18,401,220 | ) | 9,105,207 | |||||||
| Other income (expenses): | ||||||||||||
| Interest expense | (190,072 | ) | (59,184 | ) | (130,888 | ) | ||||||
| Change in fair value of warrant liabilities | 667,503 | 762,869 | (95,366 | ) | ||||||||
| Gain (loss) on debt extinguishment | 3,611,388 | 1,946,310 | 1,665,078 | |||||||||
| Other | 20,069 | (5,971 | ) | 26,044 | ||||||||
| Other income (expenses), net | 4,108,888 | 2,644,024 | 1,464,864 | |||||||||
| Net loss | (5,187,125 | ) | (15,757,196 | ) | 10,570,071 | |||||||
Revenues
During the nine months ended September 30, 2025, revenue was $75,120. During the nine months ended September 30, 2024, the Company earned $99,790 in revenue through proof of concept and revenue sharing.
General and administrative expenses
General and administrative expenses for the nine months ended September 30, 2025 were approximately $6,514,077, decrease of approximately $9,455,540, compared to the nine months ended September 30, 2024. The decrease was primarily due transaction costs of $3.1 million incurred in connection with the Business Combination in the prior period. We have only recently begun to raise proceeds through the offering of our Common Stock and convertible notes to investors and therefore expect, in the near term at a minimum, to continue to utilize the issuance of equity based instruments as compensation to reduce our cash outlays.
Depreciation and amortization expenses
Depreciation and amortization expenses for the nine months ended September 30, 2025 were approximately 2,842,590, an increase of approximately $1,070,624, compared to the nine months ended September 30, 2024. The increase was primarily due to the amortization expense associated with the developed technology placed into service in the second quarter of 2024.
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Research and development expenses
Research and development expenses for the nine months ended September 30, 2025 were approximately $14,466, a decrease of approximately $759,427, compared to the nine months ended September 30, 2024. The decrease in research and development expenses was primarily due to the sponsorship agreement with Korea University no longer being active and a decrease in stock compensation expense.
Gain on debt extinguishment
Gain on extinguishment of debt for the nine months ended September 30, 2025 was approximately $3,611,388, related to settlement of accounts payable through the negotiated cash settlement. Gain on extinguishment of debt for the nine months ended September 30, 2024 was approximately $1.8 million, related to settlement of accounts payable through the issuance of 93,333 shares of Common Stock and negotiated cash settlement.
Change in fair value of warrant liabilities
Change in fair value of the warrant liabilities for the nine months ended September 30, 2025 was approximately $667,503 associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date. Change in fair value of the warrant liabilities for the nine months ended September 30, 2024 was approximately $1.4 million associated with the non-cash charge for changes in the fair value of the warrant liabilities that is subject to re-measurement at each balance sheet date.
Liquidity and Capital Resources
Capital Resources and Available Liquidity
As of September 30, 2025, our principal source of liquidity was cash of approximately $102,715. We have financed operations to date with proceeds from the Yorkville Promissory Note, transactions with AFG, sales of our Common Stock, the SEPA (as defined below), warrant exercises and debt issuances to related and non-related parties. As described in Note A of our unaudited condensed consolidated financial statements, we have incurred recurring losses and negative cash flows from operations since inception and had an accumulated deficit of approximately $52,204,274 at September 30, 2025. We expect losses and negative cash flows to continue for the foreseeable future, primarily as a result of increased general and administrative expenses, continued product research and development and marketing efforts. Management anticipates that significant additional expenditures will be necessary to develop and expand our business, including through stock and asset acquisitions, before significant positive operating cash flows can be achieved. Our ability to continue as a going concern is dependent upon our ability to raise additional capital and to ultimately achieve sustainable revenues and profitable operations. Current available funds are insufficient to complete our business plan and as a consequence, we will need to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in the case of equity financing. Our history of losses, our negative cash flow from operations, our limited cash resources on hand and our dependence on our ability to obtain additional financing to fund our operations after the current cash resources are exhausted raises substantial doubt about our ability to continue as a going concern. Our management concluded that our recurring losses from operations, and the fact that we have not generated significant revenue or positive cash flows from operations, raised substantial doubt about our ability to continue as a going concern for the next 12 months after issuance of our financial statements. Our auditors also included an explanatory paragraph in their report to our consolidated financial statements as of and for the year ended December 31, 2024 with respect to this uncertainty.
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The Company will need to raise additional capital to continue to fund operations and product research and development. The Company believes that it will be able to obtain additional working capital through equity financings, additional debt, or other arrangements to fund future operations, and it intends to raise capital through equity or debt investments in the Company by third parties, including through the SEPA or other public offerings or private placements. However, the Company’s cannot conclude these are probable of being implemented or, if probable of being implemented, being in sufficient enough amounts to satisfy our contractual amounts as they presently exist that are coming due over the next 12 months as of the date of such filing.
Cohen Convertible Note
On April 12, 2024, we issued the Cohen Convertible Note, to settle outstanding invoices totaling $1.9 million related to investment banking services rendered to the Company in connection the Business Combination. Beginning on October 14, 2024, interest began accruing at the fixed rate of 8% per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. On the 14th day of each successive month commencing with January 14, 2025, the holder may convert a portion of Cohen Convertible Note to a number of shares equal to (i) up to 20% of the outstanding principal balance of the Cohen Convertible Note plus accrued interest due under the Cohen Convertible Note divided by (ii) a price per share equal to 92.75% of the arithmetic average of the Daily Volume-Weighted Average Price (“VWAP”) for the five VWAP Trading Days (as defined therein) ending on the VWAP Trading Day immediately preceding the applicable conversion date (subject to the Floor Price, as defined therein). The Cohen Convertible Note matured on March 14, 2025. As of September 30, 2025, the Company is in default on the Cohen Convertible Note and there remains an unpaid and outstanding balance of $760,000.
May Private Placement
On May 28, 2024, the Company entered into a Securities Purchase Agreement (the “May SPA”) with certain investors (the “May Purchasers”), pursuant to which the Company sold to the May Purchasers an aggregate of 1,980,000 shares of Common Stock and 3,960,000 warrants, consisting of 1,980,000 warrants with a term of one year (the “May One-Year Warrants”) and 1,980,000 warrants with a term of five years (the “May Five-Year Warrants” together with the May One-Year Warrants, the “May Warrants”), for aggregate proceeds consisting of $4.4 million in cash and $0.5 million through the offset of an obligation of the Company to the May Purchasers. All May Warrants were originally exercisable for shares of Common Stock at an exercise price of $2.50 per share, which was later amended under the January Warrant Exercise Agreement (described below.) Pursuant to the May SPA, 1,780,000 shares of Common Stock and May Warrants to purchase 3,560,000 shares of Common Stock were put in escrow until each May Purchaser deposited certain amounts on a monthly basis with the Company. Upon payment of each required funding, a pro rata portion of the shares of Common Stock and May Warrants in escrow are to be issued and released to the May Purchasers. During the quarter ending September 30, 2025, a total of [0 ] shares of Common Stock were issued to the May Purchasers for an aggregate gross proceeds of $750,000, As of September 30, 2025, 1,901,281 May One-Year Warrants and 1,251,587 May Five-Year Warrants are outstanding.
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July Private Placement
On July 1, 2024, the Company entered into a July Securities Purchase Agreement with The Williams Family Trust (the “July SPA”) for the issuance and sale of 120,000 shares of Common Stock and 240,000 warrants, consisting of 120,000 warrants with a term of one year (the “July One-Year Warrants”) and 120,000 warrants with a term of five years (the ‘July Five-Year Warrants,” together with the July One-Year Warrants, the “July Warrants”) to The Williams Family Trust for an aggregate purchase price of $0.3 million. The July Warrants are exercisable for Common Stock at a price of $2.50 per share and were immediately issued upon the closing date of July 1, 2024. As of September 30, 2025, 240,000 warrants remain outstanding.
August Private Placement
On August 26, 2024, we consummated a series of transactions (the “August Financing”) whereby we (i) agreed to issue 1,185,000 shares of our Common Stock at a price per share of $5.00 pursuant to that certain Securities Purchase Agreement, dated August 26, 2024 (the “August SPA”) by and among the Company and certain investors signatory thereto (the “August Purchasers”), (ii) issued 960,000 warrants to purchase our Common Stock at an exercise price of $5.00 (the “August Warrants”) pursuant to that certain Warrant Purchase Agreement, dated August 26, 2024 (the “Warrant Purchase Agreement”) by and among the Company and certain purchasers signatory thereto, and (iii) facilitated the transfer of 1,185,000 shares held by DHC Sponsor, LLC (“Sponsor”) issued in connection with the Company’s predecessor, DHC Acquisition Corp.’s (“DHC”) initial public offering to the August Purchasers, pursuant to that certain share assignment and lockup release agreement (the “Assignment Agreement”) with certain members of Sponsor and certain other existing stockholders and affiliates of the Company and the August Purchasers in exchange for releases from certain restrictions on transfer.
On August 30, 2024, the Company issued to the August Purchasers an aggregate of 100,000 shares of Common Stock and 960,000 August Warrants, and the August Purchasers paid an aggregate of $0.5 million in connection with the closing of the August Financing.
The remaining shares were issued to an escrow account and such shares remain in escrow until the conditions in the August SPA are satisfied. The August Purchasers are required to pay to the Company monthly cash installments in the amounts and on the dates as determined in the August SPA ending on April 5, 2025. Upon payment of each required funding, a pro rata portion of the shares of Common Stock and August Warrants in escrow are to be issued and released to the August Purchasers. If an investor fails to pay its required funding by the respective deadline, the investor’s entire commitment under the August SPA will become immediately due and payable. As of September 30, 2025, the August SPA has been terminated with respect to certain August Purchasers who have exercised their portion of the Committed Warrants under the January Warrant Exercise Agreement. As of September 30, 2025, the Company has experienced delays in the exercise of warrants of one August Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent an August Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such August Purchaser under the August SPA and such obligations of any investor under the August SPA who is not an August Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the August Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement. For additional information, please see “Warrant Exercise and Reload Agreement” below.
Standby Equity Purchase Agreement
On August 26, 2024 (the “SEPA Effective Date”), the Company entered into a Standby Equity Purchase Agreement (the “SEPA”) with Yorkville. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $50.0 million of the Company’s shares of Common Stock, at the Company’s request any time during the commitment period commencing on the SEPA Effective Date and terminating on the 36-month anniversary of the SEPA Effective Date. The shares will be issued and sold to Yorkville at a per share price equal to, at the election of the Company as specified in the relevant notice: (i) 96% of the Market Price (as defined therein) for any period commencing on the receipt of the notice by Yorkville and ending on 4:00 p.m. New York City time on the applicable notice date, and (ii) 97% of the Market Price for any three consecutive trading days commencing on the notice date. Issuances are subject to certain limitations, including that Yorkville cannot purchase any shares that would result in it beneficially owning more than 4.99% of the Company’s outstanding Common Stock at the time of an issuance or acquiring since the SEPA Effective Date under the SEPA more than 19.99% of the Company’s issued and outstanding Common Stock, as of the SEPA Effective Date. Additionally, if the total number of shares of Common Stock traded on Nasdaq during the applicable period is less than the Volume Threshold (as defined therein), then the number of shares of Common Stock issued and sold pursuant to such notice will be reduced as prescribed in the SEPA. As consideration for Yorkville’s commitment to purchase the shares of Common Stock pursuant to the SEPA, the Company paid Yorkville, (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee of $0.5 million by the issuance to Yorkville of an aggregate of 280,899 shares of Common Stock. During the nine months ended September 30, 2025, the Company issued an aggregate of 1,500,000 shares of Common Stock to Yorkville pursuant to the SEPA.
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Yorkville Promissory Note
On November 11, 2024, the Company issued the Yorkville Promissory Note in the aggregate original principal amount of approximately $1.7 million to Yorkville. The Yorkville Promissory Note does not bear interest, subject to a potential increase of the interest rate to 18.0% per annum upon the occurrence of certain events of default as described in the Yorkville Promissory Note. The Yorkville Promissory Note matured on March 11, 2025, and was issued at an original issue discount of 10%. As of September 30, 2025, the Company is in default on the Yorkville Promissory Note and there remains an unpaid and outstanding balance of $0.5 million. On May 28, 2025, the Company received a written notice of default from Yorkville. Subsequent to quarter ended September 30, 2025, the Company reached a settlement with Yorkville and agreed to pay $487,453 in full settlement of all outstanding claims. All remaining amounts payable to Yorkville as a result of this settlement, were paid in the fourth quarter of 2025.
Warrant Exercise and Reload Agreement
On January 13, 2025, the Company entered into the January Warrant Exercise Agreement with certain Purchasers. Pursuant to the August SPA, the Purchasers previously purchased 110,000 shares of Common Stock, and the Company issued the Contribution Warrant to purchase up to 960,000 shares of Common Stock at an exercise price of $5.00 per share in exchange for certain holders of Common Stock contributing 1,185,000 shares of Common Stock into an escrow account maintained in connection with the August SPA, of which 1,075,000 shares of Common Stock remain in such escrow account as of September 30, 2025.
Under the January Warrant Exercise Agreement, the exercise price of the Committed Warrants was reduced to $1.96 per share, until May 30, 2025, after which point the exercise price for any unexercised Committed Warrants shall automatically revert back to $2.50 per share. Pursuant to the January Warrant Exercise Agreement, the Purchasers agreed to exercise the Committed Warrants for cash on the Exercise Schedule. Upon each Committed Warrant exercised in accordance with the Exercise Schedule, the Company shall issue the Reload Warrants. Upon a Purchaser’s completion in full under the Warrant Exercise but no later than May 30, 2025, all remaining May Warrants issued under the May SPA held by such Purchaser shall immediately upon completion of such exercise automatically be amended to become exercisable for $1.96 per share for the remainder of their term. If a Purchaser exercises an Optional Warrant by June 30, 2025, the Company shall issue the Optional Reload Warrants. In addition, under the January Warrant Exercise Agreement, for each share of Common Stock for which a Purchaser exercises a Committed Warrant, one Escrow Share will be released from escrow and transferred to such Purchaser, for an aggregate of up to 1,074,999 Escrow Shares among all Purchasers, rounded down to the nearest whole share. Additionally, the exercise price of the Contribution Warrant was reduced to $1.71 per share.
During the nine months ended September 30, 2025, Purchasers exercised 812,642 Committed Warrants to purchase 812,642 shares of Common Stock pursuant to the January Warrant Exercise Agreement for aggregate gross proceeds of $1.5 million, and such Purchasers were or shall be issued 812,642 shares of Common Stock, 812,642 Escrow Shares, and 1,574,264 Reload Warrants. The August SPA has been terminated with respect to such Purchasers. As of September 30, 2025, the Company has experienced delays in the exercise of warrants of one Purchaser for the January 31, 2025 exercise date under the January Warrant Exercise Agreement. in an aggregate amount of $0.2 million. The Company is uncertain and cannot guarantee whether such exercises will be made. To the extent a Purchaser fails to exercise its portion of the Committed Warrants, the obligations of such Purchaser under the August SPA and such obligations of any investor under the August SPA who is not a Purchaser under the January Warrant Exercise Agreement, shall remain, and the August SPA will only terminate as to the Purchasers who have completed their January 31, 2025 exercise pursuant to the terms of the January Warrant Exercise Agreement.
AFG Termination of Reseller Agreement
On August 19, 2023, the Company and AFG Companies Inc. (“AFG”) entered into a Reseller Agreement (the “Reseller Agreement”) providing for, among other things, AFG to act as BEN’s exclusive reseller of certain products in a designated territory on certain terms and conditions. As partial consideration to AFG for such services to BEN, (i) Prior BEN issued to AFG a number of shares of Prior BEN common stock which converted into 1,750,000 shares of Common Stock and (ii) a non-transferable warrant to purchase up to 3,750,000 shares of Common Stock at a price of $10.00 per share, with AFG’s right to exercise such warrant vesting based upon revenues earned from the sales of BEN products paid by AFG to BEN pursuant to the Reseller Agreement (the “Reseller Warrant”).
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On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed (the “AFG Lawsuit”).
On January 17, 2025, the Company delivered a notice of termination (“Notice”) to AFG Companies, Inc. (“AFG”) terminating the Reseller Agreement. The Notice only applies to the Reseller Agreement and does not affect AFG’s obligations under the Subscription Agreement; however, in light of the Notice and the AFG Lawsuit, the Company is uncertain whether AFG will fulfill its obligations under the Subscription Agreement. Accordingly, none of the information presented in this Report assumes that either the Reseller Warrant will become exercisable or that any AFG Installment Shares will be issued.
The Company remains committed to, and intends to continue developing, its automotive vertical. The Company intends to utilize additional channel partners and grow its sales team to further expand its customer base and drive revenues. The Company is finalizing preparations to launch its Automotive AI Agent, a solution that integrates with major automotive data and service platform providers and supports over 13,000 dealerships nationwide. Additionally, the Company plans to expand its efforts through pilot programs in the Midwest, stronger reseller partnerships in Mexico, and collaborations with Canadian dealership groups. Recently, the Company has secured automotive pilots using its AI agent, which the Company believes will improve lead conversions, automates scheduling tools, enhances service efficiency, and enables advanced analytics to streamline operations.
AFG Securities Purchase Agreement Lawsuit
On September 7, 2023, the Company and AFG entered into a Subscription Agreement (the “AFG Subscription Agreement”) providing for (i) the purchase of shares of Prior BEN Common Stock in a private placement by the AFG and certain of its affiliates (the “AFG Investors”) as of immediately prior to the Closing Date, which converted into the right to receive 650,000 shares of Common Stock with an aggregate initial value of $6.5 million and (ii) the purchase of shares Common Stock in four installments commencing on March 14, 2025, with an aggregate purchase price of $26.0 million, at a purchase price per share prior to the installment purchase date that is the lesser of $10.00 and the average of the last reported sales prices of Common Stock for the twenty (20) trading days immediately preceding the applicable installment purchase date, subject to a floor price of $2.11 (the “AFG Installment Shares”).
On March 18, 2025, the Company filed a lawsuit against AFG in the Southern District of New York, Manhattan Division, alleging AFG failed to fulfill its contractual obligations by failing to make the required March 13, 2025 payment of $6.5 million. The Company has suffered significant damages including but not limited to: a. $6.5 million in unpaid contractually obligated funds, b. Prejudgment interest at the statutory rate of 9% per annum from March 13, 2025, c. Consequential damages, including disruption of BEN’s financial planning and loss of investment opportunities, including the acquisition of Cataneo GmBh d. Reputational harm impacting BEN’s standing with investors and business partners, and e. Attorney’s fees and costs incurred in enforcing the Agreement.
Cash Exercise of Warrants
There is no assurance that the holders of our warrants described under this section will elect to exercise for cash any or all of such warrants, especially when the trading price of our Common Stock is less than the exercise price per share of such warrants. We believe the likelihood that warrantholders will exercise their respective warrants, and therefore the amount of cash proceeds that we would receive, is dependent upon the trading price of our Common Stock. If the trading price for our Common Stock is less than the exercise price per share of a warrant, we expect that a warrantholder would not exercise their warrants. To the extent that any warrants are exercised on a “cashless basis” under certain conditions, we would not receive any proceeds from the exercise of such warrants.
As of the date of this filing, we have neither included nor intend to include any potential cash proceeds from the exercise of our warrants in our short-term or long-term liquidity sources or capital resource planning. Instead, we intend to seek additional funds, primarily through the issuance of debt or equity securities for cash to operate our business, including through the business development activities discussed above to continue to support our operations. Therefore, the availability or unavailability of any proceeds from the exercise of our warrants is not expected to affect our ability to fund our operations. We will continue to evaluate the probability of warrant exercise over the life of our warrants and the merit of including potential cash proceeds from the exercise thereof in our liquidity sources and capital resources planning.
To the extent such warrants are exercised, additional Common Stock will be issued, which will result in dilution to the holders of our Common Stock and increase the number of shares of Common Stock eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Common Stock, which increases the likelihood of periods when our Warrants will not be in the money prior to their expiration.
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Material Cash Requirements
Our material cash requirements include the following potential and expected obligations:
Bank Loans
As of September 30, 2025, we had four loans outstanding, all of which were assumed in the acquisition of DM Lab in May 2023, totaling approximately $0.9 million. The loans carry varying interest rates ranging from 4.667% to 6.69% and have varying maturity dates ranging from January to March 2025. The loans do not have optional or mandatory redemption or conversion features. In January 2025, we obtained a waiver to extend the due dates of the short-term debt to January 2026.
We enter into agreements in the normal course of business with various vendors, which are generally cancellable upon notice. Payments due upon cancellation typically consist only of payments for services provided or expenses incurred, including non-cancellable obligations of service providers, up to the date of cancellation.
The Cataneo Purchase Agreement
In connection with the termination of the Cataneo Purchase Agreement, the Company will make a final payment to the Seller of $100,000 (the “Final Payment”). The Final Payment and all previously paid down-payments, which, including the Final Payment, total to approximately $650,000, are not refundable and are applied as a set-off against any of Sellers’ claims permitted by Section 12.4.2. The Company otherwise bears its own expenses.
Cash Flows
The following table summarizes our cash flows for the periods presented:
| Nine Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash used in operating activities | (5,344,393 | ) | (11,666,133 | ) | ||||
| Cash used in investing activities | (577,867 | ) | (215,963 | ) | ||||
| Cash provided by financing activities | 5,882,294 | 10,269,961 | ||||||
| Net decrease in cash and cash equivalents | (39,966 | ) | (1,612,135 | ) | ||||
Operating activities
Cash used in operating activities was approximately $5,344,393 during the nine months ended September 30, 2025 primarily due to our net loss of approximately $5,187,125. The net loss included non-cash charges of approximately $1,177,319, which consisted of approximately $3,060,585 of depreciation and amortization expense, $708,381 in equity-based compensation expense, including the issuance of restricted shares, and non-cash interest expense, offset by $667,503 gain due to the change in fair value of warrant liabilities and a gain on forgiveness of debt of $4,098,841. The net cash inflow of approximately $810,112 from changes in our operating assets and liabilities was primarily due to an increase in accrued expenses of $560,115, increase in accounts payable of $1,081,128, a decrease in prepaid expense and other current assets of $634,460 and a decrease in operating lease liability of $147,439.
Cash used in operating activities was approximately $11,666,133 during the nine months ended September 30, 2024 primarily due to our net loss of approximately $15,757,196. The net loss included non-cash charges of approximately $2,627,260, which consisted of approximately $1,427,729 of write offs of deferred financing fees, $1,581,744 in equity-based compensation expense, including the issuance of restricted shares, $1,771,966 of depreciation and amortization expense, partially offset by $1,946,310 in gains on debt extinguishment and $762,869 in changes in fair value of the warrant liabilities. The net cash inflow of approximately $1,463,803 from changes in our operating assets and liabilities was primarily due to an increase in accounts payable of $5,393,334, partially offset by a decrease of accrued expenses of $3,019,367, a decrease in prepaid expense and other current assets of $856,986.
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Investing activities
Cash used in investing activities during the nine months ended September 30, 2025 was approximately $577,867, which consisted primarily of capitalized internal-use software costs.
Cash used in investing activities during the nine months ended September 30, 2024 was approximately $215,963, which consisted primarily of capitalized internal-use software costs and purchase of fixed assets and equipment.
Financing activities
Cash provided financing activities during the nine months ended September 30, 2025 was approximately $5,882,294, which consisted of proceeds received from the sale of Common Stock and proceeds from warrant exercises and short term loans.
Cash provided by financing activities during the nine months ended September 30, 2024 was approximately $10,269,961, consisted primarily of proceeds received from the sale of Common Stock of $180,024.
Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of expenses during the reported period. We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.
During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations of BEN”, found in our 2024 Annual Report.
Recent Accounting Pronouncements
See Note B to our consolidated financial statements, found in our 2024 Annual Report for a description of recent accounting pronouncements applicable to our unaudited condensed consolidated financial statements.
Off-Balance Sheet Financing Arrangements
We have no obligations, assets or liabilities that would be considered off-balance sheet arrangements as of September 30, 2025. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
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Emerging Growth Company Status
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
We expect to elect to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and pursuant to Item 305 of Regulation S-K, we are not required to disclose information under this section.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Based upon the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls were not effective as of September 30, 2025, based on the material weaknesses identified below.
Material Weakness in Internal Control over Financial Reporting
As discussed elsewhere in this Report, the Company completed the Merger on March 14, 2024. Prior to the Merger, DHC disclosed in the Risk Factors of its Form S-4/A filed on February 12, 2024, a material weakness in internal controls over financial reporting. Management has concluded this material weakness has not been remediated as an internal control deficiency was identified relating to the lack in investment of resources into accounting and reporting functions to properly account for and prepare U.S. GAAP compliant financial statements on a timely basis and to properly document risks affecting financial statements and controls in place to mitigate those risks in accordance with the requirements for a functioning internal control system, the accounting for the merger with DPL, the accounting for the extinguishment of certain liabilities through the issuance of common stock or through the exercise of warrants, the improper classification of the acquired developed technology from DM Lab as an in-process research and development asset, and the delay in obtaining valuation reports as it relates to valuing equity grants. Notwithstanding this material weakness, management has concluded that our unaudited condensed consolidated financial statements included in this Report are fairly stated in all material respects in accordance with U.S. GAAP for each of the periods presented herein.
This material weakness could result in a misstatement of account balances or disclosures that would result in a material misstatement of our annual or interim consolidated financial statements that may not be detected.
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Plan for Remediation of the Material Weakness in Internal Control over Financial Reporting
In response, the Company’s management has continued implementation of a plan to remediate this material weakness. These remediation measures are ongoing and include the following; hiring a Chief Financial Officer, which was completed in the fourth quarter of 2024, and adding additional review procedures by qualified personnel over complex accounting matters, which include engaging third-party professionals with whom to consult regarding complex accounting applications.
The material weaknesses will be considered remediated once management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time, and management has concluded, through testing, that these controls are effective. We believe we are making progress toward achieving the effectiveness of our internal controls and disclosure controls; however, we cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.
Changes in Internal Control over Financial Reporting
Other than the changes made to the material weakness described above, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the three and nine months ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Part II. Other Information
Item 1. Legal Proceedings
AFG Litigation
On January 16, 2025, the Company filed a lawsuit against AFG and its Chief Executive Officer, Ralph Wright Brewer III, in the Northern District of Texas, Dallas Division alleging fraudulent misrepresentation, breach of contract, and the concealment of a ransomware attack on its own network shortly before the Reseller Agreement was executed. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
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On March 26, 2025, the Company filed a First Amended Complaint against AFG in the Southern District of New York alleging breach of contract against AFG with respect to the AFG Subscription Agreement. Specifically, the Company alleges that AFG failed to fund its required March 13, 2025 payment in the amount of $6,500,000. In the lawsuit, the Company seeks actual damages in the amount of the missed payment, pre- and post-judgment interest, consequential damages and attorneys’ fees and costs. It also seeks a declaration from the court that AFG was and is obligated to purchase an aggregate of $6.5 million of additional shares of the Company’s Common Stock on each of the first four anniversaries of the Initial Offering Closing Date and Business Combination Closing (as defined in the AFG Subscription Agreement) pursuant to the AFG Subscription Agreement. On May 12, 2025, AFG filed an Answer and Counterclaims in which it denies the allegations of the lawsuit and asserts counterclaims for an unspecified amount of damages against the Company. Given that the litigation remains in its early stages, the Company is currently unable to estimate the potential range of recoverable damages or the potential loss or range of loss, if any, resulting from a favorable or unfavorable outcome.
Related Party Investigation
The Company’s management team assigned an advisor to the Board to conduct an internal investigation of potential related party transactions with certain members of DHC Sponsor, LLC, prior to the merger with Brand Engagement Network, Inc. These matters are still under investigation.
From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. Apart from the foregoing, we are not presently a party to any other legal proceedings that we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, cash flows or financial condition. Defending such proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors
As of the date of this Report, there have been no material changes from the risk factors disclosed in our 2024 Annual Report. Any of these factors could result in a significant or material adverse effect on our result of operations or financial conditions. Additional risk factors not presently known to us may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Director and Officer Trading Arrangements
None of our directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as such terms are defined in Items 408(a) and 408(c) of Regulation S-K, respectively) during the quarterly period covered by this Report.
| 44 |
Item 6. Exhibits
The exhibits listed below are filed as part of this Report or incorporated herein by reference.
| Exhibit | Description | |
| 2.1#^ | Business Combination Agreement and Plan of Reorganization, dated as of September 7, 2023, by and among Brand Engagement Network Inc., BEN Merger Subsidiary Corp., DHC Acquisition Corp and, solely with respect to Section 7.21 and 9.03 thereto, DHC Sponsor, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 8, 2023). | |
| 2.2# | Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on October 30, 2024). | |
| 2.3 | Addendum to Share Purchase and Transfer Agreement, dated October 29, 2024, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on February 12, 2025). | |
| 2.4 | Addendum II to Share Purchase and Transfer Agreement, dated May 26, 2025, by and among Brand Engagement Network Inc., Christian Unterseer, CUTV GmbH and CUNEO AG (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on May 30, 2025). | |
| 3.1 | Certificate of Incorporation of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |
| 3.2 | Bylaws of Brand Engagement Network Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K (File No. 001-40130) filed with the Securities and Exchange Commission on March 20, 2024). | |
| 10.1^ | Redacted Shareholder Agreement, effective October 30, 2025. | |
| 10.2^ | Redacted Reseller Agreement, effective October 30, 2025. | |
| 31.1* | Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification of Principal Executive Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification of Principal Financial Officer in accordance with 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101* | The following financial information from Brand Engagement Network Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements. | |
| 101.INS* | Inline XBRL Instance Document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith
** The certifications as Exhibit 32.1 and Exhibit 32.2 are not deemed “filed” with the Securities and Exchange Commission and are not to be incorporated by the reference into any filing of Brand Engagement Network Inc. under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Report, irrespective of any general incorporation language contained in such filing.
# Schedules to this exhibit have been omitted pursuant to Item 601(b)(2) of Registration S-K. The registrant hereby agrees to furnish a copy of any omitted schedules to the Commission upon request.
^ Certain information has been redacted from this exhibit pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and is the type of information that the registrant customarily and actually treats as private or confidential. The registrant hereby undertakes to furnish supplemental copies of the unredacted exhibit upon request by the SEC.
| 45 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Brand Engagement Network Inc. (Registrant) | ||
| Date: November 25, 2025 | By: | /s/ Tyler Luck |
| Name: | Tyler Luck | |
| Title: | Acting Chief Executive Officer | |
| (Duly Authorized Officer and Principal Executive Officer) | ||
| Date: November 25, 2025 | By: | /s/ Walid Khiari |
| Name: | Walid Khiari | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer) | ||
| 46 |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
IN ACCORDANCE WITH 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tyler Luck, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Brand Engagement Network Inc. for the period ended September 30, 2025; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 25, 2025 | |
| /s/ Tyler Luck | |
| Tyler Luck | |
| Acting Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
IN ACCORDANCE WITH 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Walid Khiari, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Brand Engagement Network Inc. for the period ended September 30, 2025; | |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 25, 2025 | |
| /s/ Walid Khiari | |
| Walid Khiari | |
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
IN ACCORDANCE WITH 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Brand Engagement Network Inc. (the “Company”) for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tyler Luck, in my capacity as Acting Chief Executive Officer of the Company and not in my individual capacity, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report. |
| Date: November 25, 2025 | |
| /s/ Tyler Luck | |
| Tyler Luck | |
| Acting Chief Executive Officer |
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
IN ACCORDANCE WITH 18 U.S.C. SECTION 1350,
AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Brand Engagement Network Inc. (the “Company”) for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walid Khiari, in my capacity as Chief Financial Officer of the Company and not in my individual capacity, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
| 1. | The Report fully complies with the requirements of section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and | |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report. |
| Date: November 25, 2025 | |
| /s/ Walid Khiari | |
| Walid Khiari | |
| Chief Financial Officer |
The foregoing certification is being furnished as an exhibit to the Report pursuant to Item 601(b)(32) of Regulation S-K and Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and, accordingly, is not being filed as part of the Report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 26, 2025
Brand Engagement Network Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-40130 | 98-1574798 | ||
| (State
or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS
Employer Identification No.) |
| 300 Delaware Ave | ||
| Suite 210 | ||
| Wilmington, DE | 19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (307) 757-3650
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On November 26, 2025, the Board of Directors of Brand Engagement Network Inc. approved a resolution by unanimous written consent to amend the Company’s existing bylaws to reduce the quorum requirement for stockholder meetings from a majority to one-third (1/3) of the shares entitled to vote. The amendment is compliant with applicable NASDAQ and Securities and Exchange Commission requirements.
Item 5.07 Submission of Matters to a Vote of Security Holders.
The 2025 Annual Meeting of Stockholders of Brand Engagement Network Inc. (the “Company”) was held on November 26, 2025. On November 3, 2025, the record date for the Annual Meeting, there were 45,139,886 shares of the Company’s common stock outstanding and entitled to vote, of which 37% were present for purposes of establishing a quorum. At that meeting, stockholders took the actions below with respect to the proposals described in the Company’s 2025 Annual Proxy Statement, filed on November 6, 2025. With respect to the three proposals put before the stockholders, the voting results were as follows:
Proposal 1 – Election of two Class I directors to the Company’s Board of Directors
The following directors were elected for a term of three years until the Company’s 2028 Annual Meeting of Stockholders:
| Nominee | Votes For | Withheld | ||||||
| Dr. Ruy Carrasco | 16,446,515 | 455,864 | ||||||
| Thomas Morgan Jr. | 16,447,742 | 454,637 | ||||||
Proposal 2 – Ratification of the selection of L.J. Soldinger Associates, LLC as our independent auditor for fiscal year 2025
The ratification of the appointment of L.J. Soldinger Associates, LLC as the Company’s independent registered public accounting firm for the year ending December 31, 2025 was approved by the following vote:
| Votes For | Votes Against | Abstentions | ||||||||||
| Proposal 2 | 16,668,300 | 10,348 | 223,731 | |||||||||
Proposal 3 – Approval of Amendment to our Certificate of Incorporation to effect a reverse stock split
The proposal to effect a reverse stock split of the outstanding shares of the Company’s common stock by a ratio of not less than 1 for 2 and not more than 1 for 10, with the exact ratio to be set by the Board within the above range in its sole discretion, without further approval or authorization of our stockholders was approved by the following vote:
| Votes For | Votes Against | Abstentions | ||||||||||
| Proposal 3 | 16,408,499 | 492,445 | 1,435 | |||||||||
Item 9.01 Financial Statements and Exhibits
| Exhibit 3.1 | Amendment No.1 to Bylaws of Brand Engagement Networks, Inc. | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | |||
| Date: | November 28, 2025 | By: | /s/ Tyler Luck |
Tyler Luck, Interim Chief Executive Officer | |||
Exhibit 3.1 (Amendment to Section 3.5 of the Bylaws)
Section 3.5 of the Bylaws of Brand Engagement Network Inc. is hereby amended and restated to read in its entirety as follows:
Section 3.5 Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the holders of at least one-third (1/3) of the shares entitled to vote at a meeting of stockholders, present in person or represented by proxy, shall constitute a quorum for the transaction of business at such meeting. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairperson of the meeting may adjourn the meeting from time to time in the manner provided in Section 3.6 of these Bylaws until a quorum shall be present or represented. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally noticed. If a quorum is not present or represented at an adjourned meeting, the stockholders entitled to vote thereat, present in person or by proxy,shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 1, 2025
Brand Engagement Network Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
300 Delaware Ave Suite 210 |
||
| Wilmington, DE | 19801 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (307) 757-3650
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC | ||
| Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | BNAIW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.03 Material Modifications to Rights of Security Holders
To the extent required by Item 3.03 of Form 8-K, the information contained in Item 5.03 of this Current Report on Form 8-K is incorporated herein by reference.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Changes in Fiscal Year
On December 1, 2025, Brand Engagement Network Inc. (the “Company”) filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a one-for-ten (1-for-10) reverse stock split (the “Reverse Stock Split”) of its common stock, par value $0.0001 (the “Common Stock”), effective on December 12, 2025 at 12:01 am Eastern Time (the “Effective Time”).
As a result of the Reverse Stock Split, at the Effective Time, every ten (10) shares of Common Stock issued and outstanding will be automatically combined and converted into one (1) issued and outstanding share of Common Stock. The Reverse Stock Split will not change the authorized number of shares or the par value of the Common Stock, nor modify any voting rights of the Common Stock.
The Reverse Stock Split is intended to enable the Company to regain compliance with the Nasdaq $1.00 minimum bid price requirement, the compliance period for which has been extended through December 29, 2025. There can be no assurance that the trading price of the Common Stock will remain at or above $1.00 per share following the Reverse Stock Split.
The Company’s Common Stock will continue trading on The Nasdaq Capital Market (“Nasdaq”) under its existing symbol “BNAI” and will begin trading on a split-adjusted basis when the market opens on December 12, 2025. At the Effective Time, the new CUSIP number for the Common Stock will be 104932 207. The Company’s public warrants will continue trading on Nasdaq under the existing symbol “BNAIW.”
No fractional shares will be issued in connection with the Reverse Stock Split. In lieu of any interest in a fractional share to which a stockholder would otherwise be entitled as a result of the Reverse Stock Split, such holder shall be entitled to receive cash in an amount equal to such fraction multiplied by the closing price of the Common Stock on The Nasdaq Capital Market on the trading day immediately preceding the Effective Time. Cash payments for fractional shares will be mailed by the exchange agent promptly after the Effective Time and may be subject to U.S. federal income tax.
Also, at the Effective Time, based on the 1-for-10 split ratio, the number of shares of Common Stock issuable under our outstanding equity awards will decrease proportionately, with any fractional shares rounded down to the nearest whole share, with a corresponding adjustment made to the exercise prices of outstanding option awards, rounded up to the nearest whole cent. In addition, the number of shares of Common Stock available for issuance under our equity incentive plans will be proportionately adjusted based on the 1-for-10 split ratio, such that fewer shares will be available for issuance under our equity incentive plans.
Further, at the Effective Time, all outstanding warrants will be adjusted in accordance with their terms, which will result in the number of shares issuable upon exercise of a warrant holder’s aggregate number of warrants, after adjustment, being rounded down to the nearest whole share and proportionate adjustments will be made to the exercise price.
Our transfer agent, Continental Stock Transfer & Trust Company, is acting as the exchange agent for the Reverse Stock Split. Registered stockholders holding pre-split shares of the Company’s Common Stock electronically in book-entry form are not required to take any action to receive post-split shares. Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to such broker’s particular processes, and will not be required to take any action in connection with the Reverse Stock Split.
The foregoing description is qualified in its entirety by the full text of the Certificate of Amendment, which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |
| 3.1 | Certificate of Amendment | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | |||
| Date: | December 1, 2025 | By: | /s/ Tyler Luck |
| Tyler Luck | |||
Acting Chief Executive Officer | |||
(Principal Executive Officer) | |||
Exhibit 3.1
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
BRAND ENGAGEMENT NETWORK INC.
(a Delaware corporation)
BRAND ENGAGEMENT NETWORK INC., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:
FIRST: The name of the Corporation is Brand Engagement Network Inc. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware (“Secretary”) on March 14, 2024 (the “Certificate of Incorporation”).
SECOND: Pursuant to Section 242(b) of the Delaware General Corporation Law (the “DGCL”) the Board of Directors of the Corporation has duly adopted, and the stockholders of the Corporation, have approved the amendments to the Certificate of Incorporation set forth in this Certificate of Amendment.
THIRD: Pursuant to Section 242 of the DGCL, Article IV of the Certificate of Incorporation is hereby amended by adding to the end of such section the following:
(D) Effective at 12:01 a.m. Eastern Time (the “Reverse Stock Split Effective Time”) on December 12, 2025, every ten (10) issued and outstanding shares of common stock, par value $0.0001 (“Common Stock”) of the Corporation will be combined into and automatically become one (1) validly issued, fully paid and non-assessable share of Common Stock of the Corporation (the “2025 Reverse Stock Split”) and the authorized shares of the Corporation shall remain as set forth in the Certificate of Incorporation. No fractional share shall be issued in connection with the 2025 Reverse Stock Split. All shares of Common Stock that are held by a stockholder will be aggregated and each fractional share resulting from such aggregation held by a stockholder shall be cancelled. In lieu of any interest in a fractional share to which a stockholder would otherwise be entitled as a result of the 2025 Reverse Stock Split, such holder shall be entitled to receive cash in an amount equal to such fraction multiplied by the closing price of the Common Stock on the Nasdaq Capital Market on the trading day immediately preceding the Effective Time.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer this 1st day of December, 2025.
| BRAND ENGAGEMENT NETWORK INC. | ||
| By: | /s/ James D. Henderson, Jr. | |
| Name: | James D. Henderson, Jr. | |
| Title: | Secretary and Corporate Counsel | |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 11, 2025
BRAND ENGAGEMENT NETWORK INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-41933 | 98-1574798 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
1245 Champagne Drive South |
||
| Wilmington, Delaware | 19804 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (214) 559-4242
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Events.
On December 11, 2025, the Company issued a press release announcing the formation of Skye Salud and the strategic partnership with KNOBLOCH Information Group and Skye Inteligencia LATAM. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release dated December 11, 2025 | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRAND ENGAGEMENT NETWORK INC. | |||
| Date: | December 11, 2025 | By: | /s/ Tyler Luck |
| Name: | Tyler Luck | ||
| Title: | Acting Chief Executive Officer | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
https://www.prnewswire.com/news-releases/knobloch-information-group-ben-and-skye-
inteligencia-latam-form-skye-salud-to-modernize-healthcare-in-mexico-with-sovereign-ai-302639146.html
KNOBLOCH Information Group, BEN, and Skye Inteligencia LATAM Form Skye Salud
to Modernize Healthcare in Mexico with Sovereign AI
WILMINGTON, Del. & MEXICO CITY — December 11, 2025 — Brand Engagement Network, Inc. (Nasdaq: BNAI) (“BEN”), a developer of secure, governed multimodal AI for regulated industries, together with Skye Inteligencia LATAM and KNOBLOCH Information Group, Mexico’s premier healthcare data authority, today announced the formation of Skye Salud, a new Mexican S.A.P.I. established under a binding agreement to deploy Mexico’s first nationwide sovereign augmented-intelligence platform. This landmark venture is poised to modernize clinical workflows, enhance patient safety, and dramatically expand access to high-quality care across a healthcare system serving over 130 million people.
Addressing Urgent Challenges in a Massive, High-Growth Market.
A Transformational Partnership with KNOBLOCH Information Group: Mexico’s Premier Healthcare Data Authority. Mexico’s healthcare system faces escalating chronic-disease burdens—including over 14 million adults living with diabetes, alongside widespread hypertension and cardiovascular conditions—while many institutions remain reliant on paper records or fragmented Electronic Medical Records (EMRs). These gaps hinder care continuity, diagnostic accuracy, and efficiency. Independent industry research projects Mexico’s EHR and EMR market to grow from USD $2.4 billion in 2025 to USD $5.3 billion by 2031 at approximately 14% CAGR, with this robust double-digit compound annual growth accelerating through 2031 as institutions shift from paper-based workflows to modern digital systems.
Skye Salud is being developed as a secure, Spanish-language native platform designed to integrate seamlessly with existing systems. The platform, targeted for initial Q1 2026 pilots, is intended to support clinicians with ambient scribing, structured documentation, predictive alerts, and population-health insights—all designed to augment, not replace, human judgment.
A Transformational Partnership with KNOBLOCH Information Group: Mexico’s Premier Healthcare Data Authority - Skye Salud was formed under a binding agreement between Skye Inteligencia LATAM and KNOBLOCH Information Group, with both holding an equal 50% ownership. Through BEN’s existing licensing and shareholder agreements with Skye Inteligencia LATAM, BEN, under its license agreement, will receive 35% of applicable gross revenues generated by Skye Inteligencia LATAM’s operations, including those related to Skye Salud. This structure aligns long-term incentives across all partners and reinforces BEN’s revenue opportunities as the platform scales. Skye Inteligencia LATAM will hold two of the three board seats.
The defining strength of Skye Salud is the strategic partnership with KNOBLOCH Information Group, one of Mexico’s most respected and influential leaders in pharmaceutical market intelligence and healthcare infrastructure. Founded in 2000 by Juan Knobloch, M., Director General of KNOBLOCH Information Group, the company is the country’s leading independent provider of audited sell-out data for the private pharmaceutical market, competing directly with global giants.
Key public metrics underscore KNOBLOCH Information Group’s unmatched scale and dominance:
| ● | Audits 99% of Mexico’s private pharmaceutical market, which represents approximately 74% of the total pharmaceutical market. | |
| ● | Tracks real-time sell-out data from a panel of 82 institutions, including national and regional wholesalers, drugstore chains, supermarkets, generic wholesalers, and telemarketing firms. | |
| ● | Captures data encompassing billions of units sold annually, providing granular insights into pricing, distribution, sales trends, and product launches. | |
| ● | Delivers the foundational data used to compensate an estimated 70% of pharmaceutical sales representatives in Mexico through its A.T.V.® Territorial Sales Management system. | |
| ● | Covers nearly 85% of the overall Mexican pharmaceutical market at the sell-out level, including 70% from direct sell-out information. | |
| ● | Audits alternative channels that now account for about 37% of the private market in units, including low-priced branded generics and private labels (representing ~12% of total private market volume). |
Access to comprehensive, real-time pharmaceutical data has historically been a significant barrier for effective AI deployment in healthcare markets like Mexico’s. KNOBLOCH Information Group’s extensive, proprietary datasets—built over decades of auditing and analysis—provide a critical foundation for overcoming this challenge, enabling data-informed clinical intelligence at scale.
With decades of strong relationships across public institutions, including the Instituto Mexicano del Seguro Social (IMSS) and the Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (ISSSTE), as well as pharmacy networks and regional health authorities, KNOBLOCH Information Group offers unmatched operational expertise, regulatory guidance, and local execution—speeding up Skye Salud’s journey to nationwide adoption.
“Partnering with KNOBLOCH Information Group is transformative for BEN and for healthcare in Mexico,” said Tyler Luck, Acting CEO of BEN. “Their dominant position in pharmaceutical data and intelligence, combined with our sovereign AI technology, creates a powerhouse capable of driving real, scalable improvements in clinical care for millions.”
“Skye Salud unites our extensive healthcare data infrastructure and national reach with cutting-edge augmented intelligence tailored for Mexico,” said Juan Knobloch, M., Director General of KNOBLOCH Information Group. “Together, we are laying the foundation for a modern, secure digital ecosystem that can support more consistent and efficient care across the country.”
World-Class Clinical Leadership - Skye Salud benefits from oversight by two renowned BEN board members: Dr. Richard Isaacs, a nationally recognized head and neck oncologic surgeon and former CEO of The Permanente Medical Group and The Permanente Federation, where he oversaw care delivery for more than 13 million patients and led one of the nation’s most significant clinical-technology modernization initiatives; and Dr. Ruy Carrasco, a U.S. citizen with Mexican heritage and a distinguished pediatric rheumatologist whose career has focused on improving chronic-disease management and advancing health-equity outcomes for underserved communities across the U.S. and Mexico.
Their combined experience leading large-scale clinical operations, advancing digital modernization, and improving chronic-disease outcomes ensures that Skye Salud’s development roadmap is guided by physician-executives deeply attuned to the realities of frontline care.
Dr. Isaacs stated that “Mexico’s opportunity to strengthen quality care and reduce—or potentially eliminate—preventable medical errors coupled with rapid digital-health modernization, reflects broader global trends, with analysts projecting strong double-digit CAGR growth in the country’s EHR and EMR market through 2031—reinforcing the strategic importance of building secure, scalable clinical infrastructure through Skye Salud.”
With physician leadership and strategic partnerships guiding development, Skye Salud is being structured around five foundational pillars:
Skye Salud’s Five Pillars of Excellence:
| ● | Data Access: Leveraging KNOBLOCH Information Group’s real-time pharma intelligence. | |
| ● | Patient Safety: Predictive Alerts for high-risk conditions. | |
| ● | Operational Efficiency: Ambient scribing and seamless EMR integration. | |
| ● | Personalized Care: Spanish-native tools for frontline clinicians. | |
| ● | Population Health Insights: Proactive monitoring at scale. | |
| Key Features: One-tap ambient SOAP-note generation, predictive clinical insights, and phased rollout targeted for Q1 2026 pilot programs in public hospitals, pharmacy clinics, and chronic-disease programs. |
A Phased Roadmap Toward National Deployment - Pilot programs are expected to launch in the first quarter of 2026 across public hospitals, pharmacy-based clinics, state chronic-disease programs, regional health authorities, and medical education institutions, with a broader rollout to follow.
Together, KNOBLOCH Information Group’s national data infrastructure, BEN’s sovereign AI technology, and Skye Inteligencia LATAM’s regional expertise form a uniquely strong foundation for advancing healthcare modernization and increasing access to high-quality clinical support across Mexico.
Skye Salud represents a coordinated commitment to building secure, scalable digital infrastructure that supports the future of healthcare delivery across Mexico.
About Brand Engagement Network, Inc. (BEN): Brand Engagement Network, Inc. (Nasdaq: BNAI) develops conversational AI agents for regulated industries. Its ELM™ with retrieval-augmented generation powers multimodal, compliance-focused AI across chat, voice, avatar, and digital channels. With 21 issued patents and adoption in life sciences, healthcare, insurance, financial services, hospitality, retail, and automotive, BEN remains at the forefront of enterprise AI and regulatory standards. Visit www.beninc.ai.
About Skye Salud: Skye Salud is a Mexican S.A.P.I. formed by Skye Inteligencia LATAM and KNOBLOCH Information Group to modernize healthcare delivery. The sovereign, Spanish- native platform is being developed to integrate with existing systems to strengthen documentation, safety, and access nationwide.
About Skye Inteligencia LATAM: Skye Inteligencia LATAM deploys secure, sovereign AI solutions for Latin America’s regulated sectors, through its partnership with BEN to address critical infrastructure challenges in healthcare, government, and enterprises.
About KNOBLOCH Information Group: Founded in 2000, KNOBLOCH Information Group is Mexico’s leading independent provider of pharmaceutical market intelligence, delivering audited sell-out data and territorial sales management tools that power decision-making for the industry’s largest stakeholders.
Media Contact: Amy Rouyer Brand Engagement Network, Inc. Email: amy.rouyer@beninc.ai
Investor Relations Contact: Brand Engagement Network, Inc. Email: investors@beninc.ai
Forward-Looking Statements: Certain statements in this communication are “forward-looking statements” within the meaning of federal securities laws. They are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, BEN’s current expectations, assumptions, plans, strategies, and anticipated results. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. There are a number of risks, uncertainties and conditions that may cause BEN’s actual results to differ materially from those expressed or implied by these forward-looking statements, including but not limited to the risk factors described in Part I, Item 1A of Risk Factors in BEN’s Annual Report on Form 10-K for the year ended December 31, 2024 and the other risk factors identified from time to time in BEN’s other filings with the Securities and Exchange Commission (the “SEC”). These forward-looking statements may include words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “should,” “may,” “will,” “might,” “could,” “would,” or similar expressions.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 18, 2025
Brand Engagement Network, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 88-1270880 | ||
(State or other jurisdiction of incorporation) |
Commission File Number: |
IRS Employer Identification No.: |
300 Delaware Ave
Suite 210
Wilmington, DE 19801
[Registrant Address]
307-757-3650
[Registrant Telephone Number]
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | BNAI | Nasdaq |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On December 17, 2025, BEN Capital Fund One LLC, a long-term investor of the Company, converted $504,684 of matured debt into equity at a conversion price of $2.10 per share, fully satisfying the related principal, accrued interest, and loan fees.
The converted indebtedness consisted of principal, accrued interest, and loan fees related to certain promissory notes that had matured through December 31, 2025. In exchange for the conversion, the Company issued shares of its common stock at a conversion price of $2.10 per share. The issuance of shares was made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933 and/or Regulation D promulgated thereunder.
Item 2.03 Creation or Extinguishment of a Direct Financial Obligation
As a result of the debt conversion described above, the Company extinguished more than $500,000 of outstanding indebtedness owed to BEN Capital Fund 1 LLC and satisfied in full its loan obligations for notes that had matured through December 31, 2025.
Item 8.01 Other Events
In addition to the debt conversion described above, the Company previously reduced outstanding liabilities through negotiated settlements and payments with third-party counterparties, including a $250,010 reduction in accounts payable and the satisfaction of vendor-related obligations exceeding $487,452. When combined with the debt conversion, these actions reduced the Company’s outstanding liabilities by more than $1.24 million.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 is incorporated herein by reference. The shares of common stock issued in connection with the debt conversion were issued in a transaction exempt from registration under Section 4(a)(2) of the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit 99.1 | Press Release dated December 18, 2025 (furnished herewith). |
| Exhibit 10.1 | Debt Conversion Agreement between Brand Engagement Network, Inc. and BEN Capital Fund 1 LLC (to be filed). |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network, Inc. | |||
| Date: | December 18, 2025 | By: | /s/ Tyler Luck |
Acting Chief Executive Officer (or appropriate signing officer) | |||
Exhibit 10.1
Exhibit 99.1
PRESS RELEASE
FOR IMMEDIATE RELEASE
BEN (Nasdaq: BNAI) Strengthens Balance Sheet with Over $1.24 Million in Liability Reductions
Including Conversion of $504,684 in affiliate debt at $2.10 Per Share
WILMINGTON, Del. — December 18, 2025 — Brand Engagement Network, Inc. (Nasdaq: BNAI) (“BEN” or the “Company”), a developer of secure and governed multimodal artificial intelligence solutions for regulated industries, today announced actions that strengthened its balance sheet through the conversion of debt into equity and the reduction of outstanding liabilities.
On December 17, 2025, BEN Capital Fund One LLC, a long-term investor of the Company, converted $504,684 of matured debt into equity at a conversion price of $2.10 per share, fully satisfying the related principal, accrued interest, and loan fees.
Additionally, the Company has reduced outstanding liabilities through negotiated settlements and payments with third-party counterparties, including more than $250,010 reduction in accounts payable and the complete satisfaction of a vendor-related obligations exceeding $487,306. Collectively, these actions have reduced the Company’s outstanding liabilities by more than $1,242,000, significantly improving the Company’s balance sheet and financial flexibility.
Additional information regarding these transactions is included in a Current Report on Form 8-K filed with the Securities and Exchange Commission.
About Brand Engagement Network, Inc.
Brand Engagement Network, Inc. (Nasdaq: BNAI) develops secure, governed multimodal artificial intelligence solutions designed for regulated industries. The Company’s technology enables intelligent, compliant engagement across conversational AI, voice, and digital interfaces.
Forward-Looking Statements: Certain statements in this communication are “forward-looking statements” within the meaning of federal securities laws. They are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect, among other things, BEN’s current expectations, assumptions, plans, strategies, and anticipated results. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. There are a number of risks, uncertainties and conditions that may cause BEN’s actual results to differ materially from those expressed or implied by these forward-looking statements, including but not limited to the risk factors described in Part I, Item 1A of Risk Factors in BEN’s Annual Report on Form 10-K for the year ended December 31, 2024 and the other risk factors identified from time to time in BEN’s other filings with the Securities and Exchange Commission (the “SEC”). These forward-looking statements may include words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “project,” “should,” “may,” “will,” “might,” “could,” “would,” or similar expressions.
Media Contact
Amy
Rouyer
amy@beninc.ai
Investor Contact
Investor
Relations
investors@beninc.ai
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 2025
Brand Engagement Network, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 88-1270880 | ||
(State or other jurisdiction of incorporation) | Commission File Number: |
IRS Employer Identification No.: |
300 Delaware Ave
Suite 210
Wilmington, DE 19801
[Registrant Address]
307-757-3650
[Registrant Telephone Number]
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | BNAI | Nasdaq |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On December 20, 2025, Brand Engagement Network, Inc. (the “Company”) entered into separate conversion agreements with several long-term investors, pursuant to which the investors converted an aggregate of $1,250.004 in outstanding debt and other liabilities into equity at a conversion price of $2.10 per share. The conversions included $899,934 in loans and $350,070 in short-term liabilities, fully satisfying the related principal, accrued interest, and fees.
The specific conversions were as follows:
| ● | BEN Capital Fund I, LLC converted $279,384 of debt into 133,040 shares of common stock and received 133,040 warrants to purchase common stock at $2.10 per share, expiring in 90 days. | |
| ● | L5 LLC (or its assignee) converted $350,070 of short-term liabilities into 166,700 shares of common stock. | |
| ● | Joseph Bevash converted $275,100 of debt into 131,000 shares of common stock and received 131,000 warrants to purchase common stock at $2.10 per share, expiring in 90 days. | |
| ● | Michael Reinberger converted $150,150 of debt into 71,500 shares of common stock and received 71,500 warrants to purchase common stock at $2.10 per share, expiring in 90 days. | |
| ● | Joseph Cohen Trust dated 4/17/2009 converted $110,250 of debt into 52,500 shares of common stock and received 52,500 warrants to purchase common stock at $2.10 per share, expiring in 90 days. | |
| ● | Scott Wheeler converted $85,050 of debt into 40,500 shares of common stock and received 40,500 warrants to purchase common stock at $2.10 per share, expiring in 90 days. |
The issuances were made in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder. The forms of the conversion agreements and warrant agreements are filed as Exhibits 10.1 through 10.6 to this Current Report on Form 8-K (note: in a real filing, attach the actual agreements; this draft assumes they would be filed separately for each party).
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. As a result of the debt conversions described above, the Company extinguished $1,250,004 of outstanding indebtedness and liabilities.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. The shares of common stock and warrants issued in connection with the debt conversions were issued in transactions exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 7.01 Regulation FD Disclosure
On December 22, 2025, the Company issued a press release announcing the debt conversions and related liability reductions. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 8.01 Other Events
In addition to the debt conversions described above, the Company previously announced on December 18, 2025, the conversion of $504,684 into equity at a conversion price of $2.10 per share. This was in addition to other negotiated settlements and payments with third-party counterparties, including a reduction of accounts payable of $250,010 and the complete satisfaction of vendor-related obligations exceeding $487,306. Collectively, these actions bring the Company’s total reduction in outstanding liabilities for Q4 2025 to $2,492,004.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release dated December 22, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network, Inc. | ||
| Date: December 22, 2025 | By: | /s/ Tyler J. Luck |
| Name: | Tyler J. Luck | |
| Title: | Acting Chief Executive Officer | |
Exhibit 99.1
BEN (Nasdaq: BNAI) Reduces Q4 2025 Liabilities by Approximately $2.5 Million Through Debt Conversions
FOR IMMEDIATE RELEASE
WILMINGTON, Del. — December 22, 2025 — Brand Engagement Network, Inc. (Nasdaq: BNAI) (“BEN” or the “Company”), a developer of secure and governed multimodal artificial intelligence solutions for regulated industries, today announced that it reduced outstanding liabilities by approximately $2.5 million during the fourth quarter of 2025 through a series of debt-to-equity conversions, negotiated settlements, and payments.
On December 20, 2025, several long-term investors entered into conversion agreements with the Company, converting an aggregate of $1,250,004 of debt and other liabilities into equity at a conversion price of $2.10 per share. The conversions included $899,934 in loans and $350,070 in short-term liabilities.
As previously announced on December 18, 2025, the Company completed the conversion of $504,684 of affiliate debt into equity at a conversion price of $2.10 per share.
In addition to these debt-to-equity conversions, the Company executed other liability-reduction initiatives during the quarter, including a $250,010 reduction in accounts payable and the satisfaction of vendor-related obligations totaling approximately $487,306.
Collectively, these actions reduced the Company’s outstanding liabilities by approximately $2,492,004 during the fourth quarter of 2025. The Company believes these actions further strengthen its capital structure and support long-term operational and strategic flexibility.
Additional information regarding these transactions is included in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission.
About Brand Engagement Network, Inc.
Brand Engagement Network, Inc. (BEN) (Nasdaq: BNAI) develops secure, governed multimodal artificial intelligence solutions designed for regulated industries. The Company’s technology enables intelligent, compliant engagement across conversational AI, voice, avatar, and digital interfaces, supporting enterprise requirements for trust, governance, and scalability. Visit www.brandengagementnetwork.com.
Media Contact
Amy Rouyer
amy@beninc.ai
Investor Relations Contact
investors@beninc.ai
Forward-Looking Statements
Certain statements in this communication constitute “forward-looking statements” within the meaning of the federal securities laws, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements reflect management’s current expectations, assumptions, and beliefs regarding future events and are subject to risks, uncertainties, and changes in circumstances that could cause actual results to differ materially from those expressed or implied. Such risks and uncertainties include, but are not limited to, those described in Part I, Item 1A (Risk Factors) of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and in other filings made by the Company with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made, and the Company undertakes no obligation to update them except as required by law.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 19, 2025
Brand Engagement Network, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
(State or other jurisdiction of incorporation) |
Commission File Number: |
IRS Employer Identification No.: |
300 Delaware Ave
Suite 210
Wilmington, DE 19801
[Registrant Address]
307-757-3650
[Registrant Telephone Number]
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | BNAI | Nasdaq |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On December 19, 2025, Brand Engagement Network, Inc. (the “Company” or “BEN”) entered into a Vendor Services Project Agreement with a leading global advertising and communications agency, a unit of one of the world’s largest advertising holding companies, pursuant to a purchase order received on December 19, 2025. The Agreement provides for the development of a custom AI engagement communication solution supporting an established prescription pharmaceutical product for a top-10 global pharmaceutical client of the Agency. The identities of the Agency and pharmaceutical company remain confidential pending formal release of the AI solution.
Under the Agreement, the Company expects to recognize $250,000 in revenue during the fourth quarter of 2025, subject to performance and acceptance, for development services provided under two Statements of Work. Monthly recurring license fees, separate from the development services, are anticipated to commence in the first quarter of 2026, subject to final implementation and deployment.
Item 9.01. Financial Statements and Exhibits.
| Exhibit 99.1 | Press Release dated December 29, 2025 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network, Inc. | ||
| Date: December 29, 2025 | By: | /s/ Tyler Luck |
| Name: | Tyler Luck | |
| Title: | Acting Chief Executive Officer | |
Exhibit 99.1
Brand Engagement Network Finalizes Agreement for a Proprietary AI Engagement Solution with a Leading Global Ad Agency for One of the World’s Top Pharmaceutical Companies
WILMINGTON, Del., December 29, 2025 – Brand Engagement Network Inc. (Nasdaq: BNAI) (“BEN” or the “Company”), a provider of safe and secure generative AI for businesses and their consumers, today announced it has entered into a Vendor Services Project Agreement with a leading global advertising and communications agency, a unit of one of the world’s top advertising holding companies, for the development of a custom AI engagement communication method for a top 10 global pharmaceutical client’s established prescription pharmaceutical drug. The identities of the pharmaceutical company and the agency remain confidential pending a formal release of the AI solution.
Under the agreement, BEN is expected to recognize $250,000 in revenue for development services spanning two Statements of Work in Q4’ 2025. BEN anticipates monthly recurring license fees, separate from the development work, in the first quarter of 2026.
This development, together with BEN’s exclusive Latin American licensing partnership and the new venture to launch Skye Salud an AI healthcare platform for Mexico, is expected to contribute positively to the Company’s Q4 2025 results while highlighting increasing adoption of BEN’s secure AI technology in the healthcare vertical in both the U.S. and Mexico.
Tyler Luck, Chief Executive Officer of BEN, commented, “This agreement reflects BEN’s progression in healthcare, in which our technology delivers trusted, secured, and efficient AI for pharma manufacturers, healthcare providers, and patients. We are committed to creating experiences for consumers where their needs are met with accuracy, reliability, and integrity.”
For more information about the agreement and settlement, please refer to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2025. For additional background on BEN’s previously announced healthcare initiatives in Latin America, including the Skye Salud platform in Mexico, please refer to the Company’s prior press release available on its investor relations website: https://investors.brandengagementnetwork.com/news/ben-and-skye-inteligencia-announce-formation-of-skye-salud-a-sovereign-augmented-intelligence-healthcare-platform-for-mexico
About Brand Engagement Network (BEN) (Nasdaq: BNAI)
BEN (Brand Engagement Network) is a leading provider of conversational AI technology and human-like AI avatars headquartered in Jackson, WY. BEN delivers highly personalized, multi-modal (text, voice, and vision) AI engagement, with a focus on industries with massive workforce gaps and opportunities to transform how consumers engage with networks, providers, and brands. The backbone of BEN’s success is its rich portfolio of conversational AI applications that drive better customer experience, increased automation, and enhanced operational efficiencies. BEN seeks to partner with companies with complementary capabilities and networks to enable meaningful business outcomes. For more information about BEN, please visit www.beninc.ai.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of present or historical fact, included in this press release regarding the company’s future financial performance, strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans, and objectives of management are forward-looking statements. When used in this press release, the words “could,” “should,” “will,” “may,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project,” and the negative of such terms and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the company’s control. The company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: (i) risks associated with our limited operating history; (ii) our ability to achieve profitability in the future; (iii) our ability to demonstrate the value of our solution to our customers; (iv) our ability to attract new customers and convince them of the value of our solution; (v) our ability to retain and expand our relationships with existing customers; (vi) our dependence on our senior management team and other key employees; (vii) risks associated with downturns in the economy and reductions in advertising and marketing spend; (viii) risks associated with our presence in the emerging and evolving market for generative AI products and services; (ix) our ability to manage our growth effectively; (x) risks associated with the impact of geopolitical and macroeconomic instability; (xi) risks associated with the intense competition in our industry; (xii) risks associated with our reliance on third-party platforms; (xiii) risks associated with changes in applicable laws or regulations and with the difficulties and complexities associated with newly emerging technologies; (xiv) risks associated with cyber privacy and security concerns; (xv) our ability to maintain, protect, and enhance our intellectual property rights; and (xvi) our ability to successfully identify, execute, and integrate future acquisitions. For a further discussion of these and other factors that could impact the company’s future results, performance, or transactions, see the section entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the company’s Quarterly Report on Form 10-Q for the period ended September 30, 2025, filed with the Securities and Exchange Commission (the “SEC”), and in other reports that the company files with the SEC from time to time. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the company presently does not know or that the company currently believes are immaterial that could also cause actual results to differ materially from those contained in the forward-looking statements. In addition, forward-looking statements reflect the company’s current expectations, plans, or forecasts of future events and views as of the date of this press release. The company anticipates that subsequent events and developments will cause these assessments to change. However, while the company may elect to update these forward-looking statements at some point in the future, the company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
BEN Investor Relations Contact:
Investors@beninc.ai
BEN Media Contact:
amy@beninc.ai
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 2025
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1720034 | ||
| (State
or other jurisdiction of incorporation) |
(Commission
File Number) |
(IRS
Employer Identification No.) |
300 Delaware Ave,
Suite 210,
Wilmington, DE 19801
(Address of principal executive offices, including zip code)
(307) 757-3650
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Events.
On December 31, 2025, Brand Engagement Network Inc. (the “Company”) received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”), which requires the Company’s common stock to maintain a minimum closing bid price of $1.00 per share.
As previously disclosed, on December 30, 2024, the Company was notified by Nasdaq that it was not in compliance with the Minimum Bid Price Rule. The December 31, 2025 letter from Nasdaq confirmed that for the 12 consecutive business days from December 12, 2025 to December 30, 2025, the closing bid price of the Company’s common stock was at $1.00 per share or greater. Accordingly, the Company is now in compliance with the Minimum Bid Price Rule, and Nasdaq considers this matter closed.
A copy of the Nasdaq compliance letter dated December 31, 2025 is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
| Exhibit Number | Description | |
| 99.1 | Letter from Nasdaq dated December 31, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Date: December 31, 2025 | By: | /s/ Tyler Luck |
| Tyler Luck | ||
| Interim Chief Executive Officer | ||
Exhibit 99.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 20, 2026
Brand Engagement Network Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40130 | 98-1574798 | ||
| (State or other jurisdiction | (Commission | (IRS Employer | ||
| of incorporation) | File Number) | Identification No.) |
300 Delaware Ave, Suite 210
Wilmington, DE 19801
(Address of principal executive offices, including zip code)
(307) 757-3650
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock, par value $0.0001 per share | BNAI | The Nasdaq Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On January 20, 2026, Brand Engagement Network, Inc. (the “Company”) finalized a strategic licensing and investment arrangement with Valio Technologies (Pty) Ltd (“Valio”) and a newly formed South Africa–based entity.
Valio Technologies is led by Lefentse Nokaneng, who also serves as General Manager: Research at Brand South Africa, South Africa’s official national branding agency.
Pursuant to the arrangement, the Company will receive a $2,050,000 preferred equity contribution, which will be recognized as intellectual property licensing revenue. The arrangement provides the Company with 25% common equity ownership in the newly formed entity and one board seat, as well as a 35% revenue share on software, SaaS, services, and subscription revenues. The agreement grants the entity an exclusive license to deploy the Company’s technology across government and private-sector markets in Africa on a perpetual basis, subject to customary rights of first refusal on any sale.
In connection with the Company’s expansion in Africa, the Company and Valio have entered into a memorandum of understanding with Nelson Mandela University for a governance- and institution-approved artificial intelligence pilot deployment designed to support student well-being. The memorandum of understanding is non-binding and does not create any material financial obligation for the Company.
The foregoing description of the arrangement does not purport to be complete and is qualified in its entirety by the terms of the definitive agreement.
Item 9.01 Financial Statements and Exhibits (d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release dated January 21, 2026 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Brand Engagement Network Inc. | ||
| Date: January 21, 2026 | By: | /s/ Tyler Luck |
| Tyler Luck | ||
| Chief Executive Officer | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
Brand Engagement Network Secures $2.050 Million AI Licensing Partnership in Africa
Featuring Institution-Approved Mental Health Pilot at Nelson Mandela University
WILMINGTON, Del. and Johannesburg, South Africa, Jan. 21, 2026—Brand Engagement Network, Inc. (Nasdaq: BNAI) (“BEN”), a provider of secure, governed conversational AI solutions for regulated industries, today announced the finalization of a strategic partnership with Valio Technologies (Pty) Ltd (“Valio”) to establish an exclusive AI licensing framework for government and commercial markets across Africa. The partnership includes a memorandum of understanding with Nelson Mandela University for a regulated, institution-approved pilot deployment of artificial intelligence designed to enhance student wellbeing.
Key Deal Terms
| ● | $2,050,000 preferred equity contribution from a newly formed South Africa–based entity to BEN, recognized as intellectual property licensing revenue | |
| ● | 25% common equity ownership in the newly formed entity and one board seat | |
| ● | 35% revenue share across software, SaaS, services, and subscription offerings | |
| ● | Exclusive license for government and private-sector markets across Africa | |
| ● | Perpetual term with right of first refusal on any sale |
The partnership leverages BEN’s proprietary Engagement Language Model (ELM™) and Retrieval-Augmented Generation (RAG) technologies to deliver compliant, localized AI solutions aligned with growing data sovereignty and regulatory requirements across African markets.
Nelson Mandela University: Governed AI in Practice. As part of the Africa expansion, BEN and Valio have entered into a memorandum of understanding with Nelson Mandela University to implement a governance framework for an AI-powered mental health support initiative for students. The planned deployment is intended to operate within a secure, closed-loop environment and is trained exclusively on institution-approved content, without access to external public models or the open internet.
The initiative is designed to complement the University’s existing counseling, wellness, and psychosocial services by expanding access to confidential, culturally relevant support while maintaining strict governance, institutional oversight, and appropriate escalation to human care when required. This comes at a critical time, as mental health challenges among university students are at alarming levels globally. In South Africa, prevalence rates for anxiety disorders reach up to 37.1% among students1, with post-traumatic stress disorder (PTSD) affecting 21-24.5%2, and overall perceived stress impacting 64.7% of university students across Africa3. Similarly, in the United States, 37% of college students report moderate to severe anxiety4, 44% experience depression symptoms5, and 60% meet criteria for at least one mental health issue6, underscoring the universal need for innovative, governed solutions like this pilot.
“In mental health applications, accuracy, governance, and trust are essential,” said Lefentse Nokaneng, Chief Executive Officer of Valio Technologies and General Manager: Research at Brand South Africa, South Africa’s official national branding agency7. “We selected BEN because its technology is built with control and accountability at its core, supporting institutions as they responsibly explore how AI can complement existing support services.”
“This partnership reflects our strategy of pairing commercial scale with real-world, institution-approved deployments,” said Tyler Luck, Chief Executive Officer and Co-Founder of BEN. “Africa, with its rapidly growing digital economy and more than 1.4 billion people, represents a significant opportunity for governed AI adoption across public and private sectors. By combining exclusive licensing, equity participation, and trusted institutional collaborations like Nelson Mandela University, we are building a scalable ecosystem aligned with regulatory, cultural, and societal priorities.”
Valio Technologies is also the creator of eYakho Health, a digital health platform that aims to become one of Africa’s largest connected health networks, linking patients, clinicians, pharmacies, diagnostic providers, and hospitals through a unified digital ecosystem accessible across the continent.
This announcement marks BEN’s second major international AI licensing agreement — following the highly successful Skye LATAM partnership in Latin America — and underscores growing demand for compliant, sovereignty-aligned AI solutions across life sciences, healthcare, insurance, financial services, hospitality, retail, and automotive sectors.
About Brand Engagement Network, Inc. (Nasdaq: BNAI) Brand Engagement Network, Inc. (“BEN”) is a provider of secure, enterprise-grade artificial intelligence solutions that enable natural conversations, workflow automation, and real-world execution across text, voice, and avatar-based experiences. Designed for regulated and high-impact industries, BEN delivers highly personalized, multimodal AI within secure, closed-loop environments—helping organizations modernize operations, improve decision-making, and enhance customer engagement. BEN’s platform is powered by proprietary technology, including its Engagement Language Model (ELM™), and is built with governance, compliance, and reliability embedded by design. For more information, please visit www.brandengagementnetwork.com.
About Valio Technologies (Pty) Ltd Valio Technologies (Pty) Ltd is a Pan-African technology company focused on deploying enterprise-grade artificial intelligence, automation, and digital platforms tailored to developing and emerging markets. Valio partners with public- and private-sector organizations to deliver locally governed, scalable technology solutions across sectors including healthcare, government services, and enterprise modernization. Valio is also the creator of eYakho Health, one of Africa’s largest digital health networks. For more information, visit www.valiotechnologies.com.
About Nelson Mandela University Nelson Mandela University is a public comprehensive university in South Africa, named in honor of Nelson Rolihlahla Mandela, and recognized for its commitment to transformative education, research, and community engagement. For more information, visit www.mandela.ac.za.
BEN Media Contact: amy@beninc.ai
BEN Investor Relations Contact: investors@beninc.ai
Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Factors that may affect results are detailed in the Company’s filings with the U.S. Securities and Exchange Commission. BEN undertakes no obligation to update any forward-looking statements.
Sources / Footnotes
1 Anxiety disorders prevalence in South African students: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10607458/ (2023 study)
2 PTSD prevalence in South African students: https://www.tandfonline.com/doi/full/10.1080/09540261.2021.1997893 (2021–2022 data)
3 Perceived stress across African university students: https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-022-12921-2 (2022 meta-analysis)
4 US college student anxiety: https://healthymindsnetwork.org/hms/ (2023 Healthy Minds Study)
5 US college student depression: https://jedfoundation.org/mental-health-and-college/ (2023 data)
6 Overall mental health prevalence in US college students: https://www.nimh.nih.gov/health/statistics/mental-illness (NIMH, adjusted for college population 2023)
7 Brand South Africa leadership reference: https://www.sanews.gov.za/south-africa/south-africa-captivating-global-destination
