BEN Reports Second Quarter 2024 Financial Results

JACKSON, Wyo., Aug. 14, 2024 (GLOBE NEWSWIRE) -- Brand Engagement Network Inc. (“BEN”) (Nasdaq: BNAI), an emerging provider of safe and secure customer engagement AI, today announced its financial results and key business highlights for the second quarter ended June 30, 2024.

“In the second quarter, we made continued progress on market validation initiatives, with meaningful acceleration in new proof of concepts” said Paul Chang, Co-CEO of BEN. “Looking to the second half of 2024, we expect the maturation of earlier engagements into production-ready deployments”.

Second Quarter 2024 Key Business Highlights

  • Announced promotion of Paul Chang to Co-CEO, with responsibility including the entire BEN commercial operations focused on market validation and commercial growth of the business.
  • Closed a private placement at a premium to market price with existing investors of its common stock and warrants to purchase common stock in the aggregate amount of $4.95 million.
  • Announced collaboration with Skills Acquisition and Innovation Laboratory (SAIL), an educational resource of The Department of Surgery at New York Presbyterian/Weill Cornell Medical Center, to explore AI applications for physician training & patient engagement and access to healthcare.
  • Announced partnership with Valio Technologies to develop AI assistants to support university students’ mental health at universities across South Africa.
  • Achieved Health Insurance Portability and Accountability Act (HIPAA) compliance for healthcare AI assistants demonstrating that its AI-driven virtual assistant solutions meet the highest requirements for secure handling of sensitive patient data.
  • Announced collaboration with OSF HealthCare, an integrated health system caring for patients throughout Illinois and Michigan, to bring BEN’s AI assistants to healthcare providers’ facilities.
  • Announced collaboration with Provana, a highly specialized knowledge process management provider, to integrate BEN’s AI assistants into Provana’s contact center solutions.

Conference Call and Webcast Information

The Company will host a conference call and webcast today, Wednesday, August 14, 2024, at 5:00 p.m. ET hosted by Paul Chang, Co-CEO, Bill Williams, CFO, and introducing Skye, one of BEN’s AI Assistants. 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, 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: 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.

BEN Contacts

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

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

BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 
 June 30, 2024 December 31, 2023*
ASSETS   
Current assets:   
Cash and cash equivalents$1,431,425  $1,685,013 
Accounts receivable, net of allowance    10,000 
Due from Sponsor 3,000    
Prepaid expenses and other current assets 1,011,125   201,293 
Total current assets 2,445,550   1,896,306 
Property and equipment, net 266,777   802,557 
Intangible assets, net 17,866,317   17,882,147 
Other assets 13,475,000   1,427,729 
TOTAL ASSETS$34,053,644  $22,008,739 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$3,574,255  $1,282,974 
Accrued expenses 5,834,362   1,637,048 
Due to related parties 693,036    
Deferred revenue    2,290 
Convertible note 1,900,000    
Short-term debt 891,974   223,300 
Total current liabilities 12,893,627   3,145,612 
Warrant liabilities 517,899    
Note payable - related party    500,000 
Long-term debt    668,674 
Total liabilities 13,411,526   4,314,286 
    
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, 2024 or December 31, 2023     
Common stock par value of $0.0001 per share, 750,000,000 shares authorized. As of June 30, 2024 and December 31, 2023, respectively, 36,096,269 and 23,270,404 shares issued and outstanding 3,610   2,327 
Additional paid-in capital 43,874,341   30,993,846 
Accumulated deficit (23,235,833)  (13,301,720)
Total stockholders’ equity 20,642,118   17,694,453 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$34,053,644  $22,008,739 
    
* Derived from audited information   
    


BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
 Three Months Ended 
June 30,
 Six Months Ended 
June 30,
 2024
 2023
 2024
 2023
Revenues$  $  $49,790  $ 
Cost of revenues           
Gross profit       49,790    
Operating expenses:       
General and administrative 5,255,136   2,779,722   11,765,671   5,396,446 
Depreciation and amortization 682,244   220,702   799,591   239,934 
Research and development 355,565   76,378   606,236   78,378 
Total operating expenses 6,292,945   3,076,802   13,171,498   5,714,758 
Loss from operations (6,292,945)  (3,076,802)  (13,121,708)  (5,714,758)
Other income (expenses):       
Interest expense (19,403)     (44,453)   
Interest income 114      3,232    
Gain on debt extinguishment 1,847,992      1,847,992    
Change in fair value of warrant liabilities 1,456,661      1,395,838    
Other (42,123)  (31,750)  (15,014)  (31,750)
Other income (expenses), net 3,243,241   (31,750)  3,187,595   (31,750)
Loss before income taxes (3,049,704)  (3,108,552)  (9,934,113)  (5,746,508)
Income taxes           
Net loss$(3,049,704) $(3,108,552) $(9,934,113) $(5,746,508)
Net loss per common share- basic and diluted$(0.09) $(0.15) $(0.34) $(0.31)
Weighted-average common shares - basic and diluted 33,993,867   20,193,447   29,635,857   18,662,480 
                


BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 
 Six Months Ended June 30,
 2024
 2023
Cash flows from operating activities:   
Net loss$(9,934,113) $(5,746,508)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization expense 799,591   239,934 
Allowance for uncollected receivables 30,000    
Write off of deferred financing fees 1,427,729    
Change in fair value of warrant liabilities (1,395,838)   
Gain on debt extinguishment (1,847,992)   
Stock based compensation, including the issuance of restricted shares 1,262,090   4,284,468 
Changes in operating assets and liabilities:   
Prepaid expense and other current assets (793,008)  (124,153)
Accounts receivable (20,000)  500 
Accounts payable 3,591,279   (224,141)
Accrued expenses (1,730,320)  250,967 
Other assets    67,370 
Deferred revenue (2,290)   
Net cash used in operating activities (8,612,872)  (1,251,563)
Cash flows from investing activities:   
Purchase of property and equipment (26,316)  (7,359)
Purchase of patents    (172,220)
Capitalized internal-use software costs (73,414)  (144,448)
Asset acquisition (Note E)    (257,113)
Net cash used in investing activities (99,730)  (581,140)
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 8,518,750    
Proceeds from convertible notes    1,400,000 
Proceeds from related party note    620,000 
Proceeds received from option exercises    10,938 
Proceeds received from warrant exercise 20,264   10,000 
Payment of deferred financing costs (858,292)  (36,934)
Payment of related party note (80,000)   
Advances to related parties    (31,565)
Proceeds received from related party advance repayments    146,337 
Net cash provided by financing activities 8,459,014   2,118,776 
Net (decrease) increase in cash and cash equivalents (253,588)  286,073 
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$1,431,425  $288,083 
        


BRAND ENGAGEMENT NETWORK INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
 
 Six Months Ended June 30,
 2024 2023
Supplemental Cash Flow Information   
Cash paid for interest$ $
Cash paid for income taxes$ $
Supplemental Non-Cash Information   
Issuance of common stock pursuant to Reseller Agreement$13,475,000 $
Stock-based compensation capitalized as part of capitalized software costs$205,154 $
Settlement of accounts payable and debt into common shares$322,008 $432,963
Settlement of accounts payable into convertible note$1,900,000 $
Conversion of notes into common shares$ $1,400,000
Warrants exercise through settlement of accounts payable$ $30,000
Property and equipment in accounts payable$ $45,701
Financing costs in accrued expenses$200,000 $
Issuance of common stock in connection with asset acquisition$ $16,012,750

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