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Brand Engagement Network Inc.(BNAI) - 2024 Q1 - Quarterly Report
BNAIBrand Engagement Network Inc.(BNAI)2024-05-14 20:37

Revenue and Financial Performance - For the three months ended March 31, 2024, the company generated 49,790inrevenue,asignificantincreasecomparedtonorevenueinthesameperiodof2023[131].−ThenetlossforthethreemonthsendedMarch31,2024was49,790 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 2.6millioninthesameperiodof2023,reflectinganincreaseof2.6 million in the same period of 2023, reflecting an increase of 4.2 million[130]. - The company incurred a net loss of approximately 6.9millionduringthethreemonthsendedMarch31,2024,withcashusedinoperatingactivitiesofapproximately6.9 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 6.3million,primarilyfromthesaleofCommonStock[148].−Thecompanyexpectstocontinueincurringlossesandnegativecashflowsduetoincreasedexpensesrelatedtoproductresearchanddevelopment[137].Expenses−GeneralandadministrativeexpensesforthethreemonthsendedMarch31,2024wereapproximately6.3 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 3.9millionfrom3.9 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 0.3million,anincreaseofapproximately0.3 million, an increase of approximately 0.2 million compared to 2,000inthesameperiodof2023[134].−TotaloperatingexpensesforthethreemonthsendedMarch31,2024were2,000 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 4.2millionfrom4.2 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 3.3millionandanaccumulateddeficitofapproximately3.3 million and an accumulated deficit of approximately 20.2 million[137]. - The company had four outstanding bank loans totaling approximately 0.9million,withinterestratesrangingfrom4.6670.9 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 5.5millionfromAFGinMarch2024,concurrentwiththeMerger,butdidnotreceivenetcashduetotransactionexpenses[138].ResearchandDevelopment−ThecompanyhasongoingresearchanddevelopmentsponsorshipagreementswithKoreaUniversity,withtotalpaymentsexpectedtoreachapproximately5.5 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].