DHC Acquisition (DHCA) - 2023 Q4 - Annual Results

Business Combination Details - The Business Combination between DHC Acquisition Corp and Brand Engagement Network Inc. is set to result in the issuance of approximately 25,641,300 shares of New BEN Common Stock at a deemed value of $10.00 per share[7]. - Following the Business Combination, BEN stockholders will own 67.4% of the combined entity, while DHC's public shareholders will hold 1.6%[13]. - The Business Combination is expected to be accounted for as a reverse recapitalization, treating DHC as the acquired company for financial reporting purposes[8]. - The Business Combination is contingent upon the consummation of various agreements, including the Reseller Agreement and Subscription Agreement[10]. - The business combination will be accounted for as a reverse recapitalization, with DHC treated as the acquired company[21]. - The company disbursed $20.8 million to redeem 1,921,922 shares of DHC Class A Shares at a redemption price of $10.80 per share[30]. - The business combination resulted in the issuance of 25,641,300 shares of New BEN Common Stock to holders of BEN Common Stock[30]. - The historical accumulated deficit of DHC was eliminated, amounting to $8.7 million, concurrent with the closing of the business combination[30]. - The company reclassified $1.3 million of DHC Class A Shares subject to possible redemption from temporary equity into permanent equity[30]. - The company issued 200,000 shares of New BEN Common Stock to settle $2.0 million of DHC transaction expenses incurred at closing[30]. - The company reflected a write-off of DHC's deferred underwriting fee payable of $0.4 million[30]. - The company reclassified $1.4 million of deferred financing costs to additional paid-in capital as a result of the business combination[30]. Financial Performance - Pro forma combined revenues for the year ended December 31, 2023, are $35,210, with a gross profit of $35,210[20]. - Total expenses for the pro forma combined operations are $21,339,764, resulting in a net operating loss of $21,304,554[20]. - The net income (loss) for the pro forma combined entity is $(21,171,372) for the year ended December 31, 2023[20]. - Pro forma net loss for the year ended December 31, 2023, was $21.17 million, resulting in a basic and diluted net loss per share of $0.63[29]. - The total stockholders' equity (deficit) is reported at $9,980,718[18]. - Total current assets amount to $8,652,005, with cash and cash equivalents at $8,436,045[18]. - Total liabilities amount to $17,372,815, with current liabilities at $15,875,321[18]. Pro Forma Adjustments and Estimates - The pro forma combined balance sheet as of December 31, 2023 will reflect the historical cost of DHC's net assets with no goodwill recorded[8]. - The unaudited pro forma financial information does not account for anticipated synergies or cost savings post-Business Combination[12]. - The pro forma adjustments are based on management's estimates and are subject to change as additional information becomes available[12]. - Management has made significant estimates and assumptions in determining pro forma adjustments, which may differ materially from final amounts[24]. - The weighted-average shares outstanding for basic and diluted calculations were 33,713,099[29]. - Pro forma net loss per share is calculated based on the weighted average shares outstanding, reflecting the business combination as if it occurred on January 1, 2023[28]. Agreements and Contributions - BEN has entered into a Reseller Agreement with AFG, which includes issuing shares valued at $17,500,000 and a cash contribution of $6,500,000 from AFG[10]. - AFG purchased 456,621 shares of BEN Common Stock at $2.19 per share for approximately $1.0 million, and Genuine Lifetime LLC purchased 1,826,484 shares for approximately $4.0 million[10]. - The company accrued an additional $4.7 million for estimated direct and incremental transaction costs related to the business combination[30]. - The company anticipates one-time direct and incremental transaction costs to be reflected as a reduction in additional paid-in capital[25].