Brand Engagement Network Inc. ("BEN") (NASDAQ:BNAI), an emerging provider of personalized customer engagement AI, today announced its financial results and key business highlights for the first quarter ended March 31st, 2024.
"We are excited to announce our first set of results as a public company following our Nasdaq listing in March," said Michael Zacharski, CEO of BEN. "We are making solid progress on our key strategic priorities, and believe we are well-positioned to accelerate growth and scale our differentiated AI platform."
First Quarter 2024 Key Business Highlights
- Closed business combination with DHC Acquisition Corp. and began trading on Nasdaq under symbol "BNAI".
- Strengthened Board of Directors with multiple appointments including the additions of Janine Grasso and Jon Liebowitz, with Chris Heller serving as Board Advisor.
- Launched BENAuto in partnership with AFG Companies, delivering unique AI Assistants to support various automotive use cases.
- Announced pilot partnership with MedAdvisor Solutions to bring BEN's AI Assistant technology to certain pharmacies to help enhance patient outcomes.
Conference Call and Webcast Information
The Company will host a conference call and webcast today, Tuesday, May 14, 2024, at 5:00 p.m. Participants can register here to access the live webcast of the conference call. Alternatively, those who want to join the conference call via phone can register at 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 BEN
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 where there is a massive workforce gap and an opportunity to transform how consumers engage with networks, providers, and brands. The backbone of BEN's success is a rich portfolio of conversational AI applications that drive better customer experience, increased automation and operational efficiencies. Powered by a proprietary large language model developed based on years of research and development from leading experts in AI and advanced security methodologies, BEN seeks to partner with companies with complementary capabilities and networks to enable meaningful business outcomes.
Additional information about BEN can be found here: https://beninc.ai/.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are not historical facts, and involve risks and uncertainties that could cause actual results of DHC and 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 "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," 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: failure to realize the anticipated benefits of the Business Combination; risks relating to the uncertainty of the projected financial information with respect to BEN; the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement; 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; and 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; the risks of operating and effectively managing growth in evolving and uncertain macroeconomic conditions, such as high inflation and recessionary environments; and continuing risks relating to the COVID 19 pandemic. 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.
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
|
March 31,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
3,304,283 |
|
|
$ |
1,685,013 |
|
Accounts receivable, net of allowance |
|
7,500 |
|
|
|
10,000 |
|
Due from Sponsor |
|
3,000 |
|
|
|
— |
|
Prepaid expenses and other current assets |
|
1,038,993 |
|
|
|
201,293 |
|
Total current assets |
|
4,353,776 |
|
|
|
1,896,306 |
|
Property and equipment, net |
|
1,176,235 |
|
|
|
802,557 |
|
Intangible assets, net |
|
17,847,086 |
|
|
|
17,882,147 |
|
Other assets |
|
13,475,000 |
|
|
|
1,427,729 |
|
TOTAL ASSETS |
$ |
36,852,097 |
|
|
$ |
22,008,739 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
4,416,613 |
|
|
$ |
1,282,974 |
|
Accrued expenses |
|
7,773,389 |
|
|
|
1,637,048 |
|
Due to related parties |
|
693,036 |
|
|
|
— |
|
Deferred revenue |
|
— |
|
|
|
2,290 |
|
Short-term debt |
|
223,300 |
|
|
|
223,300 |
|
Total current liabilities |
|
13,106,338 |
|
|
|
3,145,612 |
|
Warrant liabilities |
|
1,974,560 |
|
|
|
— |
|
Note payable - related party |
|
500,000 |
|
|
|
500,000 |
|
Long-term debt |
|
668,674 |
|
|
|
668,674 |
|
Total liabilities |
|
16,249,572 |
|
|
|
4,314,286 |
|
Commitments and contingencies (Note M) |
|
|
|
||||
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, 2024 or December 31, 2023 |
|
— |
|
|
|
— |
|
Common stock par value of $0.0001 per share, 750,000,000 shares authorized. As of March 31, 2024 and December 31, 2023, respectively, 33,592,055 and 23,270,404 shares issued and outstanding |
|
3,360 |
|
|
|
2,327 |
|
Additional paid-in capital |
|
40,785,294 |
|
|
|
30,993,846 |
|
Accumulated deficit |
|
(20,186,129 |
) |
|
|
(13,301,720 |
) |
Total stockholders' equity |
|
20,602,525 |
|
|
|
17,694,453 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
36,852,097 |
|
|
$ |
22,008,739 |
|
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
Three Months Ended
|
||||||
|
2024 |
|
2023 |
||||
Revenues |
$ |
49,790 |
|
|
$ |
— |
|
Operating expenses: |
|
|
|
||||
General and administrative |
|
6,480,535 |
|
|
|
2,616,724 |
|
Depreciation and amortization |
|
117,347 |
|
|
|
19,232 |
|
Research and development |
|
250,671 |
|
|
|
2,000 |
|
Total operating expenses |
|
6,848,553 |
|
|
|
2,637,956 |
|
Loss from operations |
|
(6,798,763 |
) |
|
|
(2,637,956 |
) |
Other income (expenses): |
|
|
|
||||
Interest expense |
|
(25,050 |
) |
|
|
— |
|
Interest income |
|
3,118 |
|
|
|
— |
|
Change in fair value of warrant liabilities |
|
(60,823 |
) |
|
|
— |
|
Other |
|
(2,891 |
) |
|
|
— |
|
Other income (expenses), net |
|
(85,646 |
) |
|
|
— |
|
Net loss |
$ |
(6,884,409 |
) |
|
$ |
(2,637,956 |
) |
Net loss per common share- basic and diluted |
$ |
(0.27 |
) |
|
$ |
(0.15 |
) |
Weighted-average common shares - basic and diluted |
|
25,233,890 |
|
|
|
17,129,921 |
|
BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
|
Three Months Ended March
|
||||||
|
2024 |
|
2023 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(6,884,409 |
) |
|
$ |
(2,637,956 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization expense |
|
117,347 |
|
|
|
19,232 |
|
Allowance for uncollected receivables |
|
30,000 |
|
|
|
— |
|
Write off of deferred financing fees |
|
1,427,729 |
|
|
|
— |
|
Change in fair value of warrant liabilities |
|
60,823 |
|
|
|
— |
|
Stock based compensation |
|
406,980 |
|
|
|
2,442,701 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Prepaid expense and other current assets |
|
(820,876 |
) |
|
|
(51,100 |
) |
Accounts receivable |
|
(27,500 |
) |
|
|
500 |
|
Accounts payable |
|
783,637 |
|
|
|
108,890 |
|
Accrued expenses |
|
358,630 |
|
|
|
53,413 |
|
Other assets |
|
— |
|
|
|
8,850 |
|
Deferred revenue |
|
(2,290 |
) |
|
|
— |
|
Net cash used in operating activities |
|
(4,549,929 |
) |
|
|
(55,470 |
) |
Cash flows from investing activities: |
|
|
|
||||
Purchase of property and equipment |
|
(13,037 |
) |
|
|
— |
|
Capitalized internal-use software costs |
|
(158,028 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(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 |
|
6,325,000 |
|
|
|
— |
|
Proceeds received from warrant exercise |
|
15,264 |
|
|
|
— |
|
Payment of deferred financing costs |
|
(858,292 |
) |
|
|
— |
|
Advances to related parties |
|
— |
|
|
|
(4,790 |
) |
Proceeds received from related party advance repayments |
|
— |
|
|
|
58,250 |
|
Net cash provided by financing activities |
|
6,340,264 |
|
|
|
53,460 |
|
Net increase (decrease) in cash and cash equivalents |
|
1,619,270 |
|
|
|
(2,010 |
) |
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 |
$ |
3,304,283 |
|
|
$ |
— |
|
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 |
$ |
50,075 |
|
|
$ |
— |
|
Stock-based compensation capitalized as part of capitalized software costs |
$ |
291,725 |
|
|
$ |
— |
|
Conversion of accounts payable and short-term debt into common shares |
$ |
— |
|
|
$ |
50,000 |
|
Warrants exercise through settlement of accounts payable |
$ |
— |
|
|
$ |
30,000 |
|
Issuance of common stock pursuant to Reseller Agreement |
$ |
13,475,000 |
|
|
$ |
— |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240514728662/en/