Financial Performance - Revenue for Q3 2025 reached $60.12 million, a 20.24% increase from $50.00 million in Q3 2024[17] - Gross profit for the nine months ended September 30, 2025, was $75.12 million, compared to $99.79 million for the same period in 2024, reflecting a decrease of 24.83%[17] - The net loss for Q3 2025 was $2.48 million, compared to a net loss of $5.82 million in Q3 2024, indicating an improvement of 57.45%[17] - For the nine months ended September 30, 2025, the company reported a net loss of $5,187,125, a significant improvement compared to a net loss of $15,757,196 for the same period in 2024, representing a reduction of approximately 67%[24] - The net loss for the three months ended September 30, 2025 was $2,481,975, a significant improvement of $3,341,108 from a net loss of $5,823,083 in 2024[156] - The Company incurred a net loss of $5,187,125 for the nine months ended September 30, 2025, an improvement of $10,570,071 compared to a net loss of $15,757,196 in 2024[163] Assets and Liabilities - Total current assets increased to $1.83 billion as of September 30, 2025, up from $1.23 billion at the end of 2024, representing a growth of 49.49%[16] - Total liabilities decreased to $12.92 billion from $15.51 billion at the end of 2024, a reduction of 16.73%[16] - The company reported a total stockholders' equity of $3.45 million as of September 30, 2025, an increase from $2.64 million at the end of 2024, reflecting a growth of 30.54%[16] - The company had an accumulated deficit of $52,204,274 as of September 30, 2025, highlighting ongoing financial challenges[28] - The Company’s cash and cash equivalents at the end of the year were $102,715, a slight increase from $72,878 at the end of the previous year[24] Operating Expenses - Operating expenses for the nine months ended September 30, 2025, totaled $9.37 million, down from $18.50 million in the same period of 2024, a decrease of 49.33%[17] - General and administrative expenses decreased to approximately $1,451,867 for the three months ended September 30, 2025, down by approximately $2,752,079 from $4,203,946 in 2024[156][158] - Total operating expenses for the three months ended September 30, 2025 were $2,376,733, a decrease of $2,952,779 compared to $5,329,512 in 2024[156] Cash Flow - The company experienced cash used in operating activities of $5,344,393 for the nine months ended September 30, 2025, compared to $11,666,133 for the same period in 2024, indicating a 54% decrease in cash outflow[24] - Cash used in operating activities for the nine months ended September 30, 2025, was approximately $5.34 million, a decrease from $11.67 million in the same period of 2024[195][197] - Cash provided by financing activities for the nine months ended September 30, 2025, was approximately $5.88 million, compared to $10.27 million in 2024[199] Stock and Financing Activities - The company issued 1,186,426 shares of common stock during the period, raising approximately $1.33 million in additional paid-in capital[19] - The company raised $2,654,513 from the sale of common stock during the nine months ended September 30, 2025, compared to $10,274,937 in the same period of 2024, reflecting a decrease of approximately 74%[24] - The Company issued 1,185,000 shares at $5.00 per share, totaling $5,925,000[88] - The Company issued 1,500,000 shares to Yorkville during the nine months ended September 30, 2025[178] Debt and Defaults - The company issued a promissory note of approximately $1,700,000, with a maturity date of March 11, 2025, and is currently in default[77] - As of September 30, 2025, the Company is in default on the Yorkville Promissory Note with an outstanding balance of $416,667, which was settled for $487,453[134] - The Cohen Convertible Note, issued for $1.9 million, is in default with an outstanding balance of $760,000 as of September 30, 2025[135] Future Outlook - The company anticipates continuing to incur operating losses and negative cash flows for at least the next 12 months, raising substantial doubt about its ability to continue as a going concern[28] - The Company expects to continue seeking additional funds primarily through the issuance of debt or equity securities to support its operations[190] - The Company plans to raise additional capital through equity or debt financing to fund operations and product development[171] Research and Development - The company’s research and development activities are supported by an office in the Republic of Korea, focusing on innovative AI technologies[39] - The Company has a significant intellectual property portfolio that is expected to be a cornerstone for its AI solutions in targeted industries such as automotive, healthcare, and financial services[130] Agreements and Partnerships - The Company entered into a definitive Shareholder, License and Reseller Agreement with SKYE LATAM on November 6, 2025, to expand its AI footprint in Latin America and Spain[127] - The Company has established a partnership with SKYE Inteligencia LATAM to commercialize its AI technology across Latin America and Spain, receiving 25% of SKYE LATAM's common stock and 35% of gross revenues from software and services[132] - The Company entered into a reseller agreement with AFG, issuing a nontransferable warrant for 3,750,000 shares of common stock[83] Compliance and Internal Controls - The Company plans to remediate a material weakness in internal controls over financial reporting, including hiring a Chief Financial Officer and engaging third-party professionals for complex accounting matters[211] - The Company has no off-balance sheet financing arrangements as of September 30, 2025[203]
Brand Engagement Network Inc.(BNAI) - 2025 Q3 - Quarterly Report