Company Overview - Brand Engagement Network Inc. (BEN) is a global leader in secure and reliable conversational AI solutions, with offices in Jackson, Wyoming, and Seoul, South Korea [4] - The company offers AI-powered digital assistants and lifelike avatars to enhance customer experiences and boost productivity [4] - BEN's solutions are designed to be safe, intelligent, and scalable, ensuring data sovereignty and privacy for consumers and businesses [4] Market Position - BEN is positioned to capture opportunities in the $30 billion conversational AI industry with tailored solutions that are cost-effective and scalable [5] - The company utilizes small language models that run efficiently on CPUs, contrasting with generalist AI models that rely on expensive GPUs [5] Innovation and Technology - BEN holds 21 granted and 27 pending patents, leading in personalization, adaptive AI, and secure integration [5] - The MYDAS platform, developed by Cataneo, optimizes advertising for major broadcasters, unlocking new revenue streams [5] Industry Applications - BEN's AI solutions are versatile and applicable across various industries, including automotive, healthcare, and media, creating measurable impact [5] Security and Compliance - The company ensures transparency and reliability with HIPAA and SOC2 compliance, making it suitable for regulated industries like healthcare [5] Leadership and Strategy - BEN's leadership team possesses the expertise to drive industry transformation and maintain its competitive edge in customer engagement [5] Recent Developments - BEN announced the acquisition of Cataneo GmbH for $19.5 million, which manages over €5 billion in annual media spend, combining BEN's Generative AI with Cataneo's Mydas platform [5] - The company has formed strategic partnerships with Kangaroo Health, IntelliTek, and INTERVENT to enhance AI-driven solutions in healthcare [5] Investor Engagement - Paul Chang, CEO of BEN, will present at the Small Cap Growth Virtual Investor Conference on February 6, 2025, allowing real-time interaction with investors [1]

Termination of Agreement and Legal Action - Brand Engagement Network Inc (BEN) terminated its Exclusive Reseller Agreement with AFG Companies Inc (AFG) and filed a lawsuit against AFG and its CEO, alleging fraudulent misrepresentation, breach of contract, and concealment of a ransomware attack [1] - The Agreement, signed in August 2023, aimed to expedite BEN's entry into the automotive market but was hindered by AFG's failure to provide access to the agreed-upon operational-ready data platform [2] - BEN believes AFG's actions caused significant delays in key automotive initiatives and irreparably damaged trust in the partnership [2] Impact on Automotive Initiatives - The termination of the Agreement was deemed essential to protect BEN's strategy and focus on delivering impactful AI solutions to the automotive industry [3] - BEN's systems, data, and customers were not impacted by the ransomware attack, as it occurred before any integration with AFG [3] Automotive AI Agent Rollout - BEN is finalizing preparations to launch its Automotive AI Agent, which integrates with major automotive data and service platform providers and supports over 13,000 dealerships nationwide [4] - The AI Agent aims to streamline dealership operations by improving lead conversion, automating scheduling, enhancing service efficiency, and providing advanced analytics [4] - BEN plans to expand its efforts through pilot programs in the Midwest, stronger reseller partnerships in Mexico, and collaborations with Canadian dealership groups [4] Expansion of AI Healthcare Solutions - BEN continues to expand its AI healthcare solutions, which transform patient engagement and streamline communications while adhering to key regulations such as HIPAA, GDPR, SOC 2 Type 1, and CCPA [5] - These solutions prioritize robust data security and reduce administrative burdens, enabling healthcare providers to focus on delivering high-quality care [5] Commitment to Trust and Partnerships - BEN emphasizes the importance of data security and trust in the automotive industry, particularly in light of the termination of the Agreement with AFG [6] - The company's decisive action strengthens its ability to prioritize initiatives that benefit its automotive partners [6] Company Overview - Brand Engagement Network Inc (BEN) is a global leader in AI-powered customer engagement solutions, headquartered in Jackson, Wyoming, with offices in Seoul, South Korea [6] - BEN delivers advanced technology to enhance data utilization, improve interactions, and drive operational efficiency across industries such as automotive, healthcare, and customer service [6] - The company provides a secure, scalable AI platform through SaaS, Private Cloud, and On-Premises technology, ensuring data privacy and security while enabling efficient operations [6]

Core Insights - The collaboration between Brand Engagement Network, Inc. (BEN), Cataneo, Vybroo, and Grupo Siete aims to modernize Mexico's radio advertising landscape through AI-driven solutions [11][12][13] - The MYDAS platform will enable real-time campaign management, optimizing ad placement and enhancing listener engagement [1][12] - The pilot program will be launched in key markets including Mexico City, Culiacán, Mazatlán, and Guasave [3] Company Summaries - Brand Engagement Network, Inc. is a global provider of conversational AI solutions, focusing on enhancing customer experiences and productivity through AI-powered digital assistants and lifelike avatars [14] - Cataneo is a media technology company that offers comprehensive media management solutions, including the MYDAS platform, which supports over 1,000 media brands across 200+ channels [15] - Vybroo specializes in audiovisual identity and aims to connect businesses with their brand message through innovative audio and video solutions [16] - Grupo Siete, with over 47 years of experience, is a leading name in Mexico's media landscape, known for its commitment to responsible communication and high-quality radio programming [7]

Equity Issuance and Financing - The company raised $5.925 million through a private placement by issuing 1.185 million shares of common stock at $5.00 per share[146] - The company entered into a Standby Equity Purchase Agreement with Yorkville, allowing it to sell up to $50 million of common stock over a 36-month period[152] - The company issued 120,000 shares of common stock and 240,000 warrants to The Williams Family Trust for $0.3 million[158] - The company issued 1,980,000 shares of Common Stock and 3,960,000 warrants for aggregate gross proceeds of approximately $5.0 million in a private placement on May 28, 2024[160] - As of November 13, 2024, the company issued 1,594,500 shares of Common Stock for aggregate gross proceeds of $3,986,250, resulting in the issuance of 797,250 May One-Year Warrants and 797,250 May Five-Year Warrants[160] - The company entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville, allowing the sale of up to $50.0 million of Common Stock, with shares issued at 96% or 97% of the Market Price depending on the pricing period[192] - On August 26, 2024, the company entered into the August SPA, issuing 1,185,000 shares of Common Stock at $5.00 per share for an aggregate purchase price of $5.9 million[195] - As of November 13, 2024, a total of 220,000 shares of Common Stock have been issued to the August Purchasers for gross proceeds of $0.55 million, with delays in funding from certain investors amounting to $1.25 million[198] - On August 26, 2024, the company issued an aggregate of 960,000 warrants with an exercise price of $5.00 per share and a five-year expiration period[199] - On July 1, 2024, the company entered into the July SPA, issuing 120,000 shares of Common Stock and 240,000 July Warrants for an aggregate purchase price of $0.3 million[201] - On May 28, 2024, the company entered into the May SPA, issuing 1,980,000 shares of Common Stock and 3,960,000 May Warrants for aggregate gross proceeds of approximately $5.0 million[203] - As of November 13, 2024, a total of 1,594,500 shares of Common Stock have been issued to the May Purchasers for aggregate gross proceeds of $3,986,250, with delays in funding from certain investors amounting to $963,750[206] - Cash provided by financing activities for the nine months ended September 30, 2024, was approximately $10.3 million, primarily from the sale of Common Stock and exercise of options and warrants[219] Debt and Convertible Instruments - The company issued a $1.7 million promissory note to Yorkville, maturing on March 11, 2025, with a potential interest rate increase to 18% upon default[153] - The company converted $0.4 million of outstanding fees into 151,261 shares of common stock at $2.38 per share through a Fee Conversion Agreement[154] - The company converted $0.4 million of debt into 93,333 shares of common stock at $4.50 per share through a Debt Conversion Agreement[159] - The company issued a $1.9 million convertible promissory note on April 12, 2024, with an 8% annual interest rate starting October 14, 2024[161] - As of September 30, 2024, the company had four outstanding bank loans totaling approximately $0.9 million, with interest rates ranging from 4.667% to 6.69%[212] Acquisitions and Investments - The company acquired Cataneo GmbH for a total purchase price of $19.5 million, consisting of $9 million in cash and 4.2 million shares of common stock at $2.50 per share[141] - The company agreed to pay a cash purchase price of $9.0 million at the closing of the Cataneo Acquisition, with potential additional cash payments for equity consideration[214] - Cash used in investing activities for the nine months ended September 30, 2024, was approximately $0.2 million, primarily for capitalized internal-use software costs[218] Financial Performance and Expenses - The company reported $0.1 million in revenue for the three months ended September 30, 2024, compared to no revenue for the same period in 2023[174] - General and administrative expenses increased by $1.9 million to $4.2 million for the three months ended September 30, 2024, primarily due to professional fees and employee-related costs[175] - Depreciation and amortization expenses increased by $0.8 million to $1.0 million for the three months ended September 30, 2024, due to amortization of developed technology[176] - Research and development expenses increased by $0.1 million to $0.2 million for the three months ended September 30, 2024, due to increased headcount from the acquisition of DM Lab[177] - The company reported a net loss of $5.8 million for the three months ended September 30, 2024, compared to a net loss of $2.6 million for the same period in 2023[173] - General and administrative expenses increased by $8.3 million to $16.0 million for the nine months ended September 30, 2024, primarily due to professional fees and employee-related costs[181] - The company reported a net loss of $15.8 million for the nine months ended September 30, 2024, compared to a net loss of $8.3 million for the same period in 2023[182] - Gain on debt extinguishment for the nine months ended September 30, 2024 was approximately $1.9 million, related to settlement of accounts payable and accrued expenses through the issuance of 93,333 and 151,261 shares of Common Stock and negotiated cash settlement[187] - Change in fair value of warrant liabilities for the nine months ended September 30, 2024 was approximately $0.8 million, associated with non-cash charge for changes in the fair value of warrant liabilities[188] - Cash used in operating activities for the nine months ended September 30, 2024, was approximately $11.7 million, primarily due to a net loss of $15.8 million[216] Liquidity and Capital Resources - As of September 30, 2024, the company's principal source of liquidity was cash of approximately $0.1 million, with an accumulated deficit of approximately $29.1 million[189] - The company does not expect to rely on cash proceeds from Warrant exercises for funding operations, as it plans to seek additional funds through debt or equity issuance[210] - The company has no off-balance sheet financing arrangements as of September 30, 2024[224] Research and Development - The company entered into a research and development sponsorship agreement with Korea University for up to 528.0 million Korean won (approximately $0.4 million) from January 2024 through December 2024[213] - The company paid $211.2 million Korean won (approximately $0.2 million) under the Korea University agreement as of September 30, 2024, with $316.8 million Korean won (approximately $0.2 million) remaining[213] Executive Compensation and Separation - The company's former Co-CEO, Michael Zacharski, received $0.3 million in separation and bonus payments upon his resignation[155] Regulatory and Legal Status - The company is classified as an "emerging growth company" under the JOBS Act, allowing delayed adoption of new accounting standards[225]

Exhibit 99.1 BEN Reports Third Quarter 2024 Financial Results JACKSON, Wyo., Nov. 14, 2024 – Brand Engagement Network Inc. ("BEN") (Nasdaq: BNAI), a global leader in secure and reliable conversational AI solutions, today announced its financial results and key business highlights for the third quarter ended September 30, 2024. "In the third quarter, we made significant progress in delivering secure, scalable AI solutions and advancing our mission to transform industries with intelligent technology," said Pa ...

Exhibit 99.1 BEN Reports Second Quarter 2024 Financial Results JACKSON, WY – August 14, 2024 – 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 s ...

Financial Performance - The net loss for the three months ended June 30, 2024, was approximately $3.0 million, a slight improvement compared to a net loss of $3.1 million in the same period in 2023[143]. - Revenue for the six months ended June 30, 2024, was $0.05 million, compared to no revenue in the same period of 2023[149]. - Net loss for the six months ended June 30, 2024, was approximately $9.9 million, compared to a net loss of $5.7 million in the same period of 2023, representing an increase in loss of $4.2 million[151]. - The company expects to continue incurring losses and negative cash flows due to increased general and administrative expenses and ongoing product research and development[156]. Operating Expenses - Total operating expenses for the three months ended June 30, 2024, were $6.3 million, an increase of $3.2 million from $3.1 million in the same period in 2023[143]. - General and administrative expenses were approximately $5.3 million, an increase of approximately $2.5 million compared to the same period in 2023[144]. - General and administrative expenses increased to approximately $11.8 million for the six months ended June 30, 2024, up by approximately $6.4 million from $5.4 million in 2023[150]. - Total operating expenses for the six months ended June 30, 2024, were approximately $13.2 million, an increase of $7.5 million compared to $5.7 million in 2023[151]. - Significant operating costs are expected to continue, impacting future profitability, including research and development expenses and general administrative expenses[133]. Research and Development - Research and development expenses for the three months ended June 30, 2024, were approximately $0.4 million, an increase of approximately $0.3 million compared to the same period in 2023[146]. Cash Flow and Financing - Cash used in operating activities for the six months ended June 30, 2024, was approximately $8.6 million, compared to $1.3 million for the same period in 2023, primarily due to a net loss of approximately $9.9 million in 2024 versus $5.7 million in 2023[173][174]. - Cash provided by financing activities during the six months ended June 30, 2024, was approximately $8.5 million, significantly higher than $2.1 million in 2023, mainly from proceeds received from the sale of Common Stock[176][177]. - The company entered into a private placement in May 2024, raising approximately $5.0 million through the issuance of 1,980,000 shares of Common Stock[160]. - The company had cash of approximately $1.4 million and an accumulated deficit of approximately $23.2 million as of June 30, 2024[156]. Debt and Liabilities - Gain on debt extinguishment for the three months ended June 30, 2024, was approximately $1.8 million, related to the settlement of accounts payable through the issuance of shares of Common Stock[147]. - Gain on debt extinguishment for the six months ended June 30, 2024, was approximately $1.8 million, with no such gain reported in 2023[154]. - Change in fair value of warrant liabilities for the three months ended June 30, 2024, was approximately $1.5 million, reflecting a non-cash charge for changes in the fair value of the warrant liability[148]. - Change in fair value of warrant liabilities for the six months ended June 30, 2024, was approximately $1.4 million, with no such expenses incurred in 2023[155]. - The company has outstanding loans totaling approximately $0.9 million, with interest rates ranging from 4.667% to 6.69%[168]. Cash Management - The net cash inflow from changes in operating assets and liabilities for the six months ended June 30, 2024, was approximately $1.0 million, driven by a $3.6 million increase in accounts payable[173]. - The company reported a net decrease in cash and cash equivalents of approximately $253,588 for the six months ended June 30, 2024, compared to an increase of $286,073 in 2023[172]. - Cash used in investing activities was approximately $0.1 million for the six months ended June 30, 2024, down from approximately $0.6 million in 2023, primarily related to capitalized internal-use software costs[175]. Company Status and Future Outlook - The company has not generated any significant revenue to date, as it remains in the development stage[134]. - The company anticipates substantial additional capital will be required to develop products and fund operations for the foreseeable future[133]. - The company is focused on expanding its operations and driving brand awareness, particularly following the acquisition of DM Lab Co., LTD in May 2023[144]. - There were no material changes to critical accounting policies and estimates from the previous reporting period[179]. - The company has no off-balance sheet financing arrangements as of June 30, 2024[181]. - The company is classified as an "emerging growth company" under the JOBS Act, allowing it to delay adopting new accounting standards[182]. - The financial statements may not be comparable to those of companies that comply with new accounting pronouncements as of public company effective dates due to the extended transition period[183].

Revenue and Financial Performance - For the three months ended March 31, 2024, the company generated $49,790 in revenue, a significant increase compared to no revenue in the same period of 2023[131]. - The net loss for the three months ended March 31, 2024 was $6.9 million, compared to a net loss of $2.6 million in the same period of 2023, reflecting an increase of $4.2 million[130]. - The company incurred a net loss of approximately $6.9 million during the three months ended March 31, 2024, with cash used in operating activities of approximately $4.5 million[145]. - Cash provided by financing activities during the three months ended March 31, 2024 was approximately $6.3 million, primarily from the sale of Common Stock[148]. - The company expects to continue incurring losses and negative cash flows due to increased expenses related to product research and development[137]. Expenses - General and administrative expenses for the three months ended March 31, 2024 were approximately $6.5 million, an increase of approximately $3.9 million from $2.6 million in the same period of 2023[132]. - Research and development expenses for the three months ended March 31, 2024 were approximately $0.3 million, an increase of approximately $0.2 million compared to $2,000 in the same period of 2023[134]. - Total operating expenses for the three months ended March 31, 2024 were $6.8 million, an increase of $4.2 million from $2.6 million in the same period of 2023[128]. - The company expects to incur significant operating costs related to research and development, capital expenditures, and general administrative expenses as it scales operations[119]. - The company anticipates an increase in professional fees and other public company costs following the completion of the merger[121]. Capital and Financing - As of March 31, 2024, the company had cash of approximately $3.3 million and an accumulated deficit of approximately $20.2 million[137]. - The company had four outstanding bank loans totaling approximately $0.9 million, with interest rates ranging from 4.667% to 6.69%[139]. - The company entered into a promissory note agreement for $0.6 million with a related party, maturing on June 25, 2025[140]. - The company received $5.5 million from AFG in March 2024, concurrent with the Merger, but did not receive net cash due to transaction expenses[138]. Research and Development - The company has ongoing research and development sponsorship agreements with Korea University, with total payments expected to reach approximately $0.4 million in 2024[142]. - The company has a patent portfolio that is expected to be a cornerstone of its artificial intelligence solutions targeting industries such as automotive, healthcare, and financial services[112]. Business Combination - The company entered into a business combination with DHC on March 14, 2024, issuing 25,641,321 shares of common stock to Prior BEN stockholders[113]. Internal Controls - Management has identified a material weakness in internal controls over financial reporting, which has not yet been remediated[159].

Financial Performance - BEN reported revenues of $49,790 for Q1 2024, compared to $0 in Q1 2023[13] - The net loss for Q1 2024 was $6,884,409, compared to a net loss of $2,637,956 in Q1 2023, reflecting an increase in losses of approximately 161%[13] - Operating expenses for Q1 2024 totaled $6,848,553, significantly higher than $2,637,956 in Q1 2023, marking an increase of about 160%[13] - Net loss for the three months ended March 31, 2024, was $6,884,409, compared to a net loss of $2,637,956 for the same period in 2023, representing an increase of 161%[14] - Depreciation and amortization expense increased to $117,347 from $19,232 year-over-year[14] - Net cash used in operating activities was $4,549,929, significantly higher than $55,470 in the prior year[14] Assets and Liabilities - Total current assets increased to $4,353,776 as of March 31, 2024, up from $1,896,306 as of December 31, 2023, representing a growth of approximately 129%[11] - Total liabilities rose to $16,249,572 as of March 31, 2024, compared to $4,314,286 as of December 31, 2023, indicating an increase of about 276%[11] - BEN's accumulated deficit increased to $(20,186,129) as of March 31, 2024, compared to $(13,301,720) as of December 31, 2023, indicating a rise in accumulated losses[12] - Cash and cash equivalents increased to $3,304,283 as of March 31, 2024, up from $1,685,013 as of December 31, 2023, a growth of approximately 96%[11] - Cash and cash equivalents at the end of the period were $3,304,283, up from $1,685,013 at the beginning of the period[14] Financing Activities - Net cash provided by financing activities was $6,340,264, compared to $53,460 in the same period last year[14] - The company raised $6,325,000 from the sale of common stock during the quarter[14] Strategic Initiatives - The company launched BENAuto in partnership with AFG Companies, providing unique AI Assistants for automotive applications[3] - BEN announced a pilot partnership with MedAdvisor Solutions to implement its AI Assistant technology in pharmacies[3] - The company strengthened its Board of Directors with new appointments, enhancing governance and strategic oversight[3] Other Financial Information - Capitalized internal-use software costs amounted to $158,028, with an additional $50,075 capitalized in accrued expenses[14] - Stock-based compensation capitalized as part of capitalized software costs was $291,725[14] - The company recorded a write-off of deferred financing fees totaling $1,427,729[14] - The change in fair value of warrant liabilities was $60,823, indicating potential volatility in financial instruments[14]

Business Combination and Corporate Changes - The company completed a business combination with Brand Engagement Network Inc. on March 14, 2024, and changed its name to Brand Engagement Network Inc. after migrating to a Delaware corporation[14]. Revenue and Market Potential - The company generated minimal revenues in 2022, primarily from beta testing discontinued products, but obtained its first customer in the healthcare industry in November 2023[17]. - The total addressable market for the company's AI assistants is estimated to exceed $10 billion and is projected to grow to $30 billion by 2030[26]. - Future expansion plans include increasing use cases in the healthcare market and entering new markets such as financial services[25]. - The company plans to expand its offerings into retail, hospitality, enterprise, and contact centers, targeting a total addressable market of approximately $30 billion by 2028[46]. AI Assistant Development and Features - The company aims to enhance customer engagement through customizable AI assistants that integrate with clients' real-time data systems while ensuring compliance with privacy laws[17]. - The AI assistants are designed to operate in various environments, including cloud, localized, and hybrid settings, providing seamless integration for businesses[16]. - The company has recently piloted use cases for its AI assistants in the automotive sector, including dealership reporting and service assistance[23]. - The company has acquired DM Lab Co., LTD. to develop its first AI assistant prototype, marking a strategic move in its product development[15]. - The AI assistants can be deployed within a few days, significantly reducing the traditional deployment time associated with AI systems[22]. - The company focuses on configurable safety and security features to ensure unbiased training and protect proprietary data[20]. AI Adoption Trends - 47% of advanced industries have utilized AI capabilities, with one-third of organizations regularly using generative AI in at least one function[27]. - 60% of organizations that reported AI adoption are using generative AI, and 94% of large companies plan to integrate voice AI within the next two years[27]. Data-Driven Organizations - Data-driven organizations are 23 times more likely to acquire customers, six times more likely to retain customers, and 19 times more likely to be profitable[31]. - Organizations using big data experienced an 8% increase in profit and a 10% reduction in costs[31]. Industry Insights - By 2030, over 29 billion IoT-connected devices are expected globally, and by 2025, more than 95% of new digital workloads will be deployed on cloud-native platforms[32]. - 25% of all U.S. healthcare expenditure is wasted on administrative complexity, with 42% of physicians experiencing burnout[42]. - The automotive industry comprises over 450,000 organizations globally, with 95% of used-car searches initiated online[43]. - The financial services sector includes over 227,000 organizations, with 54% of insurance companies not having upgraded their legacy systems[44]. Intellectual Property and Compliance - As of December 31, 2023, the company had 21 issued patents, including 10 U.S. patents and 11 issued abroad, with expiration dates ranging from September 9, 2028, to April 18, 2031[53]. - The company has 19 pending patent applications, which, if issued, would expire between 2041 and 2043[53]. - The company employs internal and external controls to protect proprietary technology and confidential information, including agreements with employees and contractors[54]. - The regulatory environment for artificial intelligence is rapidly evolving, with potential compliance costs expected to increase due to new regulations[55]. - The company must comply with various privacy laws, including HIPAA, which establishes standards for the use and disclosure of protected health information[56]. Operational Overview - As of December 31, 2023, the company had 26 full-time employees and 12 independent contractors[62]. - The company does not maintain any material properties, indicating a focus on operational efficiency[62]. - The company is not currently involved in any legal proceedings that would materially affect its business or financial condition[64]. - Management does not anticipate that recently issued accounting standards will have a material effect on consolidated financial statements[265].