Brand Engagement Network Inc.(BNAI) - 2022 Q4 - Annual Report

Financial Overview - The company completed its initial public offering of 30,000,000 units at a price of $10.00 per unit, raising net proceeds of approximately$309.45 million, which were placed in a trust account[15]. - As of December 31, 2022, the company had approximately $313.91 million held in the Trust Account available for a business combination, assuming no redemptions[42]. - Following the redemption of 26,298,498 Class A ordinary shares, the balance in the trust account was approximately$47.61 million[43]. - The company has access to up to $212,608 of proceeds held outside of the trust account as of December 31, 2022, to pay potential claims[97]. - The company may only return approximately$10.00 per public share or less to shareholders in the event of liquidation due to claims of creditors[102]. Business Combination Strategy - The company aims to identify and acquire technology-enabled businesses in sectors such as automotive, consumer, aerospace/defense, enterprise software, and e-commerce, focusing on those that can materially grow revenue and earnings[18]. - The acquisition strategy includes targeting companies that can benefit from operational improvements and efficiency gains through technology solutions[24]. - The company seeks targets that have strong management teams, good access to public capital markets, and significant embedded expansion opportunities[24]. - The company is positioned to evaluate and improve a target's growth prospects and create shareholder value following a business combination[24]. - The company has not selected any business combination target and has not initiated substantive discussions with any potential targets[46]. Management and Governance - The management team has a track record of leading over 100 initial public offerings and M&A transactions, overseeing more than $500 million in capital, which enhances its attractiveness as a merger partner[20]. - The board of directors consists of seasoned executives with extensive experience in acquisitions, divestitures, and corporate strategy, enhancing the company's competitive edge[21]. - The company will ensure that any initial business combination has an aggregate fair market value of at least 80$5,000,001 for redemptions, ensuring net tangible assets are maintained[70]. - Public shareholders can redeem their shares regardless of their voting decision, and the management team has agreed to waive their redemption rights for founder shares[74]. - A public shareholder is restricted from redeeming more than 15% of the shares sold in the initial public offering without prior consent, which aims to prevent large shareholders from blocking the business combination[79]. - The company requires the affirmative vote of a majority of shareholders, specifically 436,408 public shares or 9.4% of the total outstanding shares, to approve the initial business combination[74]. Regulatory and Reporting Obligations - The company is eligible to take advantage of certain exemptions from various reporting requirements as an "emerging growth company" under the JOBS Act[38]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.07 billion or the market value of its Class A ordinary shares held by non-affiliates exceeds$700 million[40]. - The company is subject to reporting obligations under the Exchange Act, including filing annual, quarterly, and current reports with the SEC[106]. - The company has filed a Registration Statement on Form 8-A with the SEC, making it subject to Exchange Act rules and regulations[110]. - The company may face limitations in acquiring target businesses that cannot provide financial statements in accordance with federal proxy rules[108]. Risks and Challenges - The company anticipates that its success may depend entirely on the performance of a single business post-combination, leading to potential risks from lack of diversification[56]. - The company may incur losses if the evaluation of a target business does not lead to a completed business combination[54]. - The company may encounter intense competition from other entities in identifying and selecting a target business for its initial business combination[103]. - The company may need to obtain additional financing to complete its initial business combination if the transaction requires more cash than available from the trust account[48]. - If the business combination is not approved, shareholders who elected to redeem their shares will not be entitled to redeem for their pro rata share of the trust account[86].