BEN Reports First Quarter 2024 Financial Results

May 14, 2024
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JACKSON, Wyo.--(BUSINESS WIRE)--May 14, 2024-- 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,
2024

 

December 31,
2023

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
March 31,

 

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
31,

 

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

 

 

$

—

 

 

Investors:
Ryan Flanagan, ICR
ryan.flanagan@icrinc.com

Media:
Dan Brennan, ICR
dan.brennan@icrinc.com

Source: Brand Engagement Network Inc.