Brand Engagement Network Inc 8-K/A, filed Sep 17, 2026
Brand Engagement Network Inc. (BNAI)
About this 8-K/A
Brand Engagement Network Inc filed this 8-K/A on September 17, 2026, reporting on events of June 30, 2026.
Items reported
- Item 9.01: Financial statements and exhibits
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
of Common Stock at an exercise price of $115.00 per share |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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EXPLANATORY NOTE
Item 9.01. Financial Statements and Exhibits.
| (a) | Financial Statements of Business Acquired |
The financial statements required by Item 9.01(a) and the notes related thereto are filed as Exhibits 99.1 and 99.2 hereto and are incorporated herein by reference.
| (b) | Pro Forma Financial Information |
The unaudited pro forma condensed consolidated financial information required by Item 9.01(b) and the notes related thereto are filed as Exhibit 99.3 hereto and are incorporated herein by reference.
| (d) | Exhibits |
Exhibit Number |
Description | |
| 23.1 | Consent of Independent Registered Public Accounting Firm. | |
| 99.1 | Audited financial statements of Cataneo GmbH for the years ended December 31, 2025 and 2024. | |
| 99.2 | Unaudited condensed consolidated financial statements of Cataneo GmbH as of March 31, 2026 and for the three months ended March 31, 2026 and 2025. | |
| 99.3 | Unaudited pro forma condensed financial statements and the related notes thereto. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | September 16, 2026 | By: | /s/ Tyler Luck |
| Tyler
Luck Chief Executive Officer |
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statements on Form S-4 (No. 333-275058) and on Form S-8 (File Nos. 333-279383 and 333-292748) of Brand Engagement Network Inc. of our report, dated September 16, 2026, with respect to the consolidated financial statements of Cataneo GmbH as of December 31, 2025 and 2024, and for the years then ended, which appears in Brand Engagement Network Inc.’s Current Report on Form 8-K/A filed with the Securities and Exchange Commission on September 16, 2026.
/s/ L J Soldinger Associates, LLC
Deer Park, Illinois
United States of America
September 16, 2026
Exhibit 99.1
Cataneo GmbH
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
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To the Board of Directors and Stockholders
of Cataneo GmbH
Opinion
We have audited the accompanying consolidated financial statements of Cataneo GmbH (a Corporation) and its subsidiaries, Cataneo, informacijske rešitve, d.o.o., and Contentmarket AI GmbH (the “Company”), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of their operations and their cash flows for the years then ended prepared in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company, and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are available to be issued.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.
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INDEPENDENT AUDITOR’S REPORT (Continued)
In performing an audit in accordance with generally accepted auditing standards, we:
| ● | Exercise professional judgment and maintain professional skepticism throughout the audit. |
| ● | Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. |
| ● | Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed. |
| ● | Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of then consolidated financial statements. |
| ● | Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time. |
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.
/s/ L J Soldinger Associates, LLC
L J Soldinger Associates, LLC
Deer Park, IL
September 16, 2026
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Cataneo GmbH
(Expressed in U.S. Dollars)
| December 31, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 292,049 | $ | 85,337 | ||||
| Accounts receivable, net | 966,666 | 1,394,079 | ||||||
| Deferred contract fulfilment costs | 614,968 | 507,368 | ||||||
| Prepaid and other current assets | 58,115 | 95,013 | ||||||
| Total Current Assets | 1,931,798 | 2,081,797 | ||||||
| Property and equipment, net | 28,993 | 33,802 | ||||||
| Intangible assets, net | 1 | 7 | ||||||
| Capitalized software development costs, net | 1,648,399 | 1,291,310 | ||||||
| Investments | 59 | 52 | ||||||
| Right of use asset - operating leases | 781,401 | 842,793 | ||||||
| Deferred contract fulfilment costs, non-current | 1,354,461 | 1,584,268 | ||||||
| Other non-current assets | 2,347 | 2,070 | ||||||
| Deferred tax assets | 301,493 | 260,507 | ||||||
| Total Assets | $ | 6,048,952 | $ | 6,096,606 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Accounts payable and accrued expenses | $ | 552,345 | $ | 915,959 | ||||
| Contract liabilities, current | 1,802,125 | 1,504,070 | ||||||
| Lease liability - operating lease, current | 321,306 | 257,445 | ||||||
| Short-term debt | 221,394 | 749,985 | ||||||
| Income tax payables | 103,748 | 865 | ||||||
| Other current liabilities | 331,549 | 214,534 | ||||||
| Total current liabilities | 3,332,467 | 3,642,858 | ||||||
| Contract liabilities, non-current | 2,729,874 | 2,309,239 | ||||||
| Lease liability - operating lease, non-current | 460,095 | 585,348 | ||||||
| Long-term debt | 102,298 | 252,220 | ||||||
| Total Liabilities | 6,624,734 | 6,789,665 | ||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Stockholders’ Deficit | ||||||||
| Share capital | 28,295 | 28,295 | ||||||
| Retained Earnings | (557,873 | ) | (760,189 | ) | ||||
| Accumulated other comprehensive income (loss) | (46,204 | ) | 38,835 | |||||
| Total Stockholders’ Deficit attributable to parent | (575,782 | ) | (693,059 | ) | ||||
| Noncontrolling interests | - | - | ||||||
| Total Stockholders’ Deficit | (575,782 | ) | (693,059 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 6,048,952 | $ | 6,096,606 | ||||
See accompanying notes to financial statements
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Cataneo GmbH
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Expressed in U.S. Dollars)
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 9,573,948 | $ | 9,800,276 | ||||
| Cost of revenues | (4,876,671 | ) | (5,112,692 | ) | ||||
| Gross profit | 4,697,277 | 4,687,584 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | 2,760,916 | 3,080,813 | ||||||
| Research and development expenses | 1,210,296 | 1,261,046 | ||||||
| Total operating expenses | 3,971,212 | 4,341,859 | ||||||
| Income from operations | 726,065 | 345,725 | ||||||
| Other (expense) income: | ||||||||
| Interest income | (1 | ) | (91,255 | ) | ||||
| Interest expense | 22,564 | 58,343 | ||||||
| Other income (expenses), net | 401,368 | (133,032 | ) | |||||
| Total other expense, net | 423,931 | (165,944 | ) | |||||
| Income before taxes | 302,134 | 511,669 | ||||||
| Income tax expense | (99,818 | ) | (25,785 | ) | ||||
| Net income | 202,316 | 485,884 | ||||||
| Net income attributable to: | ||||||||
| Parent | 202,316 | 461,699 | ||||||
| Noncontrolling interests | - | 24,185 | ||||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | (85,039 | ) | 73,255 | |||||
| Comprehensive income | $ | 117,277 | $ | 534,954 | ||||
See accompanying notes to financial statements
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Cataneo GmbH
Statements of Changes in Stockholders’ Deficit
For the years ended December 31, 2025 and 2024
(Expressed in U.S. Dollars)
| Share | Retained | Accumulated Other Comprehensive | Total Stockholders’ | |||||||||||||
| Capital | Earnings | Income (or Loss) | Equity | |||||||||||||
| Balance Jan 1, 2024 | $ | 28,295 | $ | (1,221,888 | ) | $ | (34,420 | ) | $ | (1,228,013 | ) | |||||
| Net Income | 461,699 | - | 461,699 | |||||||||||||
| Foreign currency translation | 73,255 | 73,255 | ||||||||||||||
| Balance Dec 31, 2024 | 28,295 | (760,189 | ) | 38,835 | (693,059 | ) | ||||||||||
| Net Income | 202,316 | 202,316 | ||||||||||||||
| Foreign currency translation | (85,039 | ) | (85,039 | ) | ||||||||||||
| Balance, December 31,2025 | $ | 28,295 | $ | (557,873 | ) | $ | (46,204 | ) | $ | (575,782 | ) | |||||
See accompanying notes to financial statements
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Cataneo GmbH
(Expressed in U.S. Dollars)
| For the Years Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from Operating Activities: | ||||||||
| Net Income | $ | 202,315 | $ | 485,884 | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 524,102 | 446,230 | ||||||
| Allowance for uncollected receivables | 151,774 | - | ||||||
| Loss on debt extinguishment | - | (399,078 | ) | |||||
| Amortization of right-to-use asset | 61,392 | 321,729 | ||||||
| Gain/loss sale of PPE/intangibles | 408 | 7,421 | ||||||
| Changes in current assets and current liabilities: | ||||||||
| Accounts receivable | 275,639 | (330,625 | ) | |||||
| Deferred fulfillment costs | 121,930 | 154,009 | ||||||
| Deferred tax assets | (158,754 | ) | (210,671 | ) | ||||
| Prepaid and other assets | 36,898 | 114,518 | ||||||
| Accounts payable and accrued expenses | (363,614 | ) | (246,041 | ) | ||||
| Contract liabilities | 718,690 | 741,955 | ||||||
| Lease liability-current | 63,861 | (6,394 | ) | |||||
| Other current liabilities | 219,898 | 22,593 | ||||||
| Lease liability-non-current | (125,253 | ) | (315,335 | ) | ||||
| Deferred tax liabilities | 117,768 | 61,540 | ||||||
| Net cash provided by operating activities | 1,847,054 | 847,735 | ||||||
| Cash flows from Investing Activities: | ||||||||
| Purchase of property and equipment | (20,195 | ) | (18,619 | ) | ||||
| Purchase of intangible asset | (856,588 | ) | (593,564 | ) | ||||
| Net cash used in investing activities | (876,783 | ) | (612,183 | ) | ||||
| Cash flows from Financing Activities: | ||||||||
| Proceeds from loans | 389,486 | |||||||
| Repayment of loans | (678,513 | ) | (800,113 | ) | ||||
| Net cash provided by financing activities | (678,513 | ) | (410,627 | ) | ||||
| Net change in cash | 291,758 | (175,075 | ) | |||||
| Net Effect of changes in exchange rates on cash | (85,046 | ) | 60,736 | |||||
| Cash, beginning of the period | 85,337 | 199,675 | ||||||
| Cash, end of the period | 292,049 | 85,336 | ||||||
| Supplemental cashflow information: | ||||||||
| Interest paid | - | - | ||||||
| Income taxes paid | 2,840 | - | ||||||
See accompanying notes to financial statements
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Cataneo GmbH
Notes to the Financial Statements
Note 1 - Organization and Description of Business
Cataneo GmbH (the “Company”) is a limited liability company (Gesellschaft mit beschränkter Haftung, or “GmbH”) organized under the laws of Germany. The Company’s principal offices are located in Munich, Germany.
The Company is an enterprise software company that develops and provides integrated software solutions for the media and broadcasting industry. The Company’s software platforms are designed to support critical business operations, including advertising sales management, traffic and scheduling, media planning, rights management, customer relationship management, and business intelligence. The Company’s solutions enable media organizations to automate and optimize operational and financial workflows across multiple distribution channels, including television, digital, radio, print, and other multimedia platforms.
The Company’s software solutions are designed to integrate with customers’ existing technology environments and support complex, high-volume operations for broadcasters, publishers, media companies, and advertising organizations. In addition to software licensing, the Company provides implementation, customization, consulting, maintenance, technical support, and training services to customers operating in domestic and international markets.
Revenue is primarily derived from software license arrangements, maintenance and support agreements, implementation and consulting services, and other professional service contracts. The Company continues to invest in research and development to enhance its software platforms, expand product functionality, and address the evolving needs of the global media and broadcasting industry.
Note 2 - Significant Accounting Policies
Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial statements include the assets, liabilities, results of operations, and cash flows of Cataneo GmbH. The Company’s functional currency is the Euro (€), and the accompanying financial statements have been translated into U.S. dollars for reporting purposes in accordance with U.S. GAAP.
Basis of consolidation
The accompanying consolidated financial statements include the accounts of Cataneo GmbH and its wholly owned and controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the collectibility of accounts receivable, the capitalization and useful lives of software development costs and intangible assets, impairment assessments, deferred tax assets, lease assumptions, and revenue recognition. Actual results could differ from those estimates.
Foreign currency translation
The Company’s functional currency is the Euro (€). Assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Revenue and expenses are translated using average exchange rates during the reporting period. Translation adjustments resulting from the process are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.
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Transactions denominated in currencies other than the functional currency are remeasured into the functional currency using the exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in foreign currencies are remeasured at period-end exchange rates, and resulting gains and losses are recognized in earnings.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with financial institutions, and highly liquid investments with original maturities of three months or less when purchased. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities.
Accounts receivable, net
Accounts receivable are recorded at the invoiced amount and are presented net of an allowance for expected credit losses. The Company evaluates the collectibility of accounts receivable using historical collection experience, customer-specific risk factors, current economic conditions, and reasonable and supportable forecasts in accordance with the current expected credit loss (“CECL”) model. Amounts determined to be uncollectible are written off when all collection efforts have been exhausted. During the year ended December 31, 2025, the Company recorded $151,774 related to uncollectible accounts receivable.
Advertising costs
Advertising costs are expensed as incurred. Advertising costs were $61,748 and $63,254 for the years ended December 31, 2025 and 2024, respectively.
Deferred contract fulfillment costs
Deferred contract fulfillment costs represent incremental costs incurred to fulfill customer contracts that are expected to be recovered. These costs are capitalized when they relate directly to a contract, generate or enhance resources used to satisfy future performance obligations, and are expected to be recoverable. Deferred contract fulfillment costs are amortized on a systematic basis consistent with the transfer of the related goods or services to the customer and are periodically evaluated for impairment.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist primarily of advance payments for goods and services to be received within one year and other miscellaneous receivables expected to be realized within the normal operating cycle.
Property, plant and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.
Expenditures for maintenance and repairs are charged to expense as incurred, while major improvements are capitalized.
Intangible assets
Intangible assets consist primarily of acquired software, intellectual property, and other identifiable intangible assets. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Capitalized software development costs
Software development costs incurred during the application development stage of internal-use software are capitalized in accordance with applicable U.S. GAAP. Costs incurred during the preliminary project stage and post-implementation activities are expensed as incurred.
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Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives once the related software is placed into service. Management periodically evaluates these assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.
Right-of-use assets
The Company determines whether an arrangement contains a lease at contract inception. Right-of-use assets represent the Company’s right to use an underlying asset over the lease term and are recognized at the commencement date based on the present value of future lease payments.
Other noncurrent assets
Other noncurrent assets consist primarily of deposits and other assets expected to be realized beyond one year.
Contract liabilities
Contract liabilities represent consideration received from customers in advance of satisfying the related performance obligations. Contract liabilities are recognized as revenue as the Company satisfies its contractual performance obligations.
Lease liabilities
Lease liabilities represent the present value of future lease payments over the lease term. Lease liabilities are measured using the discount rate implicit in the lease when readily determinable or the Company’s incremental borrowing rate.
Debt
Debt is recorded at the principal amount outstanding, net of any unamortized discounts or issuance costs. Interest expense is recognized using the effective interest method.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised goods or services transfers to the customer in an amount that reflects the consideration the Company expects to receive.
The Company generates revenue primarily from software license arrangements, software maintenance and support services, implementation services, consulting services, and other professional services. The Company evaluates customer contracts to identify performance obligations and allocates the transaction price based on the relative standalone selling prices of each distinct performance obligation. Revenue is recognized either over time or at a point in time depending on the nature of the underlying performance obligation and the pattern in which control transfers to the customer.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates expected to apply in the periods in which those temporary differences reverse.
The Company evaluates the realizability of deferred tax assets and records a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized.
Fair value measurements
The Company measures certain financial assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities, and other short-term financial instruments approximate fair value due to their short-term maturities.
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The Company did not have any financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2025 or December 31, 2024.
There were no transfers between Levels 1, 2, or 3 during the years ended December 31, 2025 and 2024.
Concentrations of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits and accounts receivable. The Company maintains cash balances with reputable financial institutions and monitors the creditworthiness of its customers on an ongoing basis.
Recent accounting pronouncements
Management evaluates the impact of newly issued accounting standards and adopts those standards when required. The Company does not expect the adoption of recently issued accounting standards that are not yet effective to have a material impact on its financial statements unless otherwise disclosed.
Note 3 - Prepaid Expenses and Other Current Assets
Prepaid and other current assets consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Prepaid Expenses | $ | 38,811 | $ | 39,247 | ||||
| Receivables from employees (due within 1 year) | 10,584 | 10,370 | ||||||
| Advances and deposits | 889 | - | ||||||
| Recoverable VAT and input tax receivables | 7,585 | 25,419 | ||||||
| Income tax receivables | - | 19,977 | ||||||
| Other | 246 | - | ||||||
| Total prepaid expenses and other current assets | $ | 58,115 | $ | 95,013 | ||||
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Note 4 - Property, Plant and Equipment, Net
Property and equipment, net consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Equipment | $ | 3,063 | $ | 3,440 | ||||
| Furniture | 25,930 | 30,363 | ||||||
| Other tangible assets | 7,706 | 6,796 | ||||||
| Total | 36,698 | 40,599 | ||||||
| Accumulated depreciation | (7,706 | ) | (6,796 | ) | ||||
| Property and equipment, net of accumulated depreciation | $ | 28,993 | $ | 33,802 | ||||
Depreciation expense was $1,000 and $1,000 for the years ended December 31, 2025 and 2024, respectively.
Note 5 - Intangible Assets
Intangible assets, net, were $1 and $7 as of December 31, 2025 and 2024, respectively. The Company amortizes finite-lived intangible assets over their estimated useful lives and evaluates such assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
Note 6 - Capitalized Software Development Costs
Capitalized software development costs consist of costs incurred during the application development stage that qualify for capitalization. Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives of five years once the related software is placed into service. Amortization expense is included in cost of revenues.
Capitalized software development costs consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Capitalized software development costs, gross | $ | 2,691,369 | $ | 2,085,483 | ||||
| Accumulated amortization | (1,042,970 | ) | (794,173 | ) | ||||
| Capitalized software development costs, net | $ | 1,648,399 | $ | 1,291,310 | ||||
Amortization expense related to capitalized software development costs was $499,500 and $406,965 for the years ended December 31, 2025 and 2024, respectively.
Note 7 - Deferred Contract Fulfillment Costs
Deferred contract fulfillment costs represent capitalized costs incurred to fulfill customer contracts and are classified as current or noncurrent based on the expected timing of amortization. Management applies judgment in determining whether fulfillment costs are eligible for capitalization and in estimating the period over which such costs are amortized. The Company considers the expected period of benefit associated with the related customer contracts and performance obligations, which is estimated to be approximately five years.
Deferred contract fulfillment costs consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Current portion | $ | 614,968 | $ | 507,368 | ||||
| Non-current portion | 1,354,461 | 1,584,268 | ||||||
| Total deferred contract fulfillment costs | $ | 1,969,429 | $ | 2,091,636 | ||||
Amortization expense related to deferred contract fulfillment costs was $929,066 and $282,539 for the years ended December 31, 2025 and 2024, respectively.
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Note 8 - Debt
The Company’s debt consists primarily of borrowings used to finance its operations. Debt is classified as current or noncurrent based on the contractual repayment terms.
The Company maintains a working capital credit facility with Münchner Bank eG with a borrowing limit of €500,000 (approximately $586,800 as of December 31, 2025). Borrowings under the facility bear interest at 6.75% per annum. The facility is available until further notice, subject to the terms and conditions of the credit agreement. The outstanding balance under the facility was $37,724 and $408,121 as of December 31, 2025 and 2024, respectively.
During 2024, the Company entered into a debt restructuring arrangement under which the outstanding balance approximately $399,000 was forgiven and a portion remained payable under revised repayment terms. During 2025, the Company continued making scheduled repayments in accordance with the agreement, resulting in a reduction of outstanding borrowings as of December 31, 2025. The outstanding balance under the arrangement was $186,797 and $239,280 as of December 31, 2025 and 2024, respectively.
The Company has two loans with Stadtsparkasse München with original principal amounts of €350,000 and €650,000. The €350,000 loan bears interest at 1.815% per annum, requires monthly principal and interest payments, and matures on March 31, 2026. The €650,000 loan bears interest at 2.29% per annum, requires monthly principal and interest payments, and matures on May 30, 2026. The balance of these loans was approximately $99,170 and $297,037 as of December 31, 2025 and 2024, respectively.
Note 9 - Leases
The Company leases office facilities, vehicles, and certain equipment under operating lease agreements. The Company recognizes right-of-use (“ROU”) assets and lease liabilities for its operating leases in accordance with ASC 842, Leases. Lease liabilities are measured at the present value of future lease payments over the lease term, and the related ROU assets are recognized based on the corresponding lease liabilities, adjusted for applicable prepaid lease payments and lease incentives.
Operating lease right-of-use assets and lease liabilities consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Operating lease right-of-use assets | $ | 781,401 | $ | 842,793 | ||||
| Operating lease liabilities - current | 321,306 | 257,445 | ||||||
| Operating lease liabilities - non-current | 460,095 | 585,348 | ||||||
| Total operating lease liabilities | $ | 781,401 | $ | 842,793 | ||||
Note 10 - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Accounts Payable | $ | 346,710 | $ | 818,960 | ||||
| Accrued compensation and related expenses | 92,835 | 71,630 | ||||||
| Accrued professional fees | 11,924 | 9,844 | ||||||
| Other accrued liabilities | 100,877 | 15,526 | ||||||
| Total accounts payable and accrued expenses | $ | 552,345 | $ | 915,959 | ||||
| 14 |
Note 11 - Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, as described in Note 2. The Company generates revenue primarily from recurring software-as-a-service (“SaaS”) arrangements, including usage, licensing, hosting, operation, maintenance, and support services for media companies. The Company also provides implementation services and customer-specific software development and customization services.
Recurring SaaS revenue is recognized over time as customers simultaneously receive and consume the benefits of the hosted services. Management has concluded that implementation activities do not provide a distinct benefit to customers separate from the underlying SaaS services. Accordingly, implementation fees are recorded as contract liabilities and recognized as revenue over the estimated five-year customer benefit period. Customer-specific software development and customization services are evaluated on a contract-by-contract basis to determine whether revenue is recognized over time or at a point in time, depending on the nature of the underlying performance obligation.
Disaggregation of revenue
Revenue recognized based on contract type consists of the following:
| Year ended December 31, 2025 | Year ended December 31, 2024 | |||||||
| Media and advertising services | $ | 9,573,948 | $ | 9,719,050 | ||||
| Software and technology services | - | - | ||||||
| AI and professional services | - | 81,226 | ||||||
| Total revenue | $ | 9,573,948 | $ | 9,800,276 | ||||
Timing of Revenue Recognition
Revenue based on timing of control transferred to the customer consists of the following:
| Timing of Revenue Recognition | Year ended December 31, 2025 | Year ended December 31, 2024 | ||||||
| Performance obligations transferred over time | $ | 9,573,948 | $ | 9,800,276 | ||||
Customers may be billed or make payments in advance of the Company satisfying the related performance obligations. Such advance billings and collections are recorded as contract liabilities and recognized as revenue as the related performance obligations are satisfied. Implementation fees are recognized over the estimated five-year customer benefit period.
Contract Balances
Contract liabilities primarily represent implementation fees billed or collected in advance of revenue recognition. These amounts are recognized as revenue over the estimated five-year customer benefit period as the related performance obligations are satisfied.
| 15 |
Contract balances consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Current contract liabilities | $ | 1,802,125 | $ | 1,504,070 | ||||
| Non-current contract liabilities | 2,729,874 | 2,309,239 | ||||||
| Total contract liabilities | $ | 4,531,999 | $ | 3,813,309 | ||||
Amortization of contract liabilities into revenue was $2,581,317 and $2,139,716 for the years ended December 31, 2025 and 2024, respectively.
Deferred contract fulfillment costs are discussed in Note 7. The change in contract liabilities during the year ended December 31, 2025 primarily reflects new amounts billed or collected in advance of the satisfaction of the related performance obligations, partially offset by amounts recognized as revenue during the year.
Note 12 - Income Taxes
The Company accounts for income taxes in accordance with the accounting policy described in Note 2. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and liabilities.
Income tax expense consisted of the following:
| December 31, 2025 | December 31, 2024 | |||||||
| Income tax expense, current | $ | 105,723 | $ | 8,281 | ||||
| Income tax expense (income), deferred | (5,905 | ) | 17,504 | |||||
Total income tax expense | $ | 99,818 | $ | 25,785 | ||||
| 16 |
The components of net deferred tax assets included in the accompanying balance sheets were as follows:
| December 31, 2025 | December 31, 2024 | |||||||
| Assets | ||||||||
| Contract liabilities | 1,494,653 | 1,257,629 | ||||||
| Other deferred tax assets | - | 118,574 | ||||||
| Total Assets | 1,494,653 | 1,376,203 | ||||||
| Liabilities | ||||||||
| Capitalized software development costs, net | 543,642 | 425,874 | ||||||
| Deferred contract fulfilment costs | 649,518 | 689,822 | ||||||
| Total Liabilities | 1,193,160 | 1,115,696 | ||||||
| Net Deferred tax assets | $ | 301,493 | $ | 260,507 | ||||
Note 13 - Commitments and Contingencies
The Company is party to contractual commitments entered into in the ordinary course of business. During 2025, the Company entered into an agreement with Oracle for cloud computing services with an initial contractual term of twelve months. Under the agreement, the Company committed to purchase €70,000 of Oracle PaaS and IaaS Universal Credits. Costs associated with these services are recognized as incurred in accordance with the Company’s accounting policies.
As of December 31, 2025 and 2024, management is not aware of any pending or threatened litigation, claims, or other contingencies that would require recognition or disclosure in the accompanying financial statements.
Note 14 - Related Party Transactions
During the ordinary course of business, the Company entered into transactions with related parties.
In March 2025, the Company received a request for payment from a customer for liquidated damages arising from the Company’s alleged role in a project delay. Following negotiations, in July 2026, the parties agreed to settle the claim for €150,000, to be paid through a set-off against a combination of existing invoices and future service fees. The Company accrued €150,000 for the claim as of December 31, 2025, which is reflected in contract liabilities.
In 2021, the Company and 4e Sports & Media GmbH jointly founded Contentmarket AI GmbH to support the development of software solutions. Both parties provided financing to Contentmarket AI GmbH, and the Company provided additional funding in subsequent years to support ongoing development activities.
Note 15 - Subsequent Events
Subsequent events have been evaluated through September 16, 2026, which represents the date the financial statements were available to be issued, and no events, other than those discussed below, have occurred through that date that would impact the unaudited, condensed consolidated financial statements.
On June 30, 2026, Brand Engagement Network Inc. (“BEN”) completed its acquisition of 100% of the outstanding equity interests of the Company. The total stated aggregate consideration under the definitive agreement was $19.5 million. For U.S. GAAP accounting purposes, the consideration transferred was measured at its acquisition-date fair value of approximately $13.7 million, consisting of approximately $9.0 million in cash, $4.3 million in the fair value of BEN common stock issued, and $0.4 million of other consideration.
| 17 |
Exhibit 99.2
Cataneo GmbH
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026 and December 31, 2025
| 1 |
| 2 |
Consolidated Balance Sheets
(Expressed in U.S. Dollars)
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 649,104 | $ | 292,049 | ||||
| Accounts receivable, net | 668,415 | 966,666 | ||||||
| Deferred contract fulfilment costs | 603,545 | 614,968 | ||||||
| Prepaid and other current assets | 7,828 | 58,115 | ||||||
| Total Current Assets | 1,928,892 | 1,931,798 | ||||||
| Property and equipment, net | 32,860 | 28,993 | ||||||
| Intangible assets, net | 1 | 1 | ||||||
| Capitalized software development costs, net | 1,655,074 | 1,648,399 | ||||||
| Investments | 58 | 59 | ||||||
| Right of use asset - operating leases | 689,481 | 781,401 | ||||||
| Deferred contract fulfilment costs, non-current | 1,178,415 | 1,354,461 | ||||||
| Other non-current assets | 2,304 | 2,347 | ||||||
| Deferred tax assets | 278,775 | 301,493 | ||||||
| Total Assets | $ | 5,765,860 | $ | 6,048,952 | ||||
| Liabilities and Stockholders’ Deficit | ||||||||
| Accounts payable and accrued expenses | $ | 477,627 | $ | 552,345 | ||||
| Contract liabilities, current | 1,887,650 | 1,802,125 | ||||||
| Lease liability - operating lease, current | 316,446 | 321,306 | ||||||
| Short-term debt | 121,410 | 221,394 | ||||||
| Income tax payables | 101,207 | 103,748 | ||||||
| Other current liabilities | 409,008 | 331,549 | ||||||
| Total current liabilities | 3,313,348 | 3,332,467 | ||||||
| Contract liabilities, non-current | 2,394,670 | 2,729,874 | ||||||
| Lease liability - operating lease, non-current | 373,036 | 460,095 | ||||||
| Long-term debt | 79,665 | 102,298 | ||||||
| Total Liabilities | 6,160,719 | 6,624,734 | ||||||
| Stockholders’ Deficit | ||||||||
| Share capital | 28,295 | 28,295 | ||||||
| Retained Earnings | (384,941 | ) | (557,873 | ) | ||||
| Accumulated other comprehensive income (loss) | (38,213 | ) | (46,204 | ) | ||||
| Total Stockholders’ Deficit | (394,859 | ) | (575,782 | ) | ||||
| Total Liabilities and Stockholders’ Deficit | $ | 5,765,860 | $ | 6,048,952 | ||||
| 3 |
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Expressed in U.S. Dollars)
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenue | $ | 2,501,482 | $ | 2,416,649 | ||||
| Cost of revenues | (1,266,348 | ) | (1,223,598 | ) | ||||
| Gross profit | 1,235,134 | 1,193,051 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | (684,982 | ) | (703,371 | ) | ||||
| Research and development expenses | (327,205 | ) | (272,127 | ) | ||||
| Total operating expenses | (1,012,187 | ) | (975,498 | ) | ||||
| Income from operations | 222,947 | 217,553 | ||||||
| Other (expense) income: | ||||||||
| Interest expense | (478 | ) | (5,672 | ) | ||||
| Other income (expenses), net | (30,652 | ) | (62,648 | ) | ||||
| Total other expense, net | (31,130 | ) | (68,320 | ) | ||||
| Income before taxes | 191,817 | 149,233 | ||||||
| Income tax expense | (18,883 | ) | 70,492 | |||||
| Net income | 172,934 | 219,725 | ||||||
| Net income attributable to: | ||||||||
| Parent | 172,934 | 219,725 | ||||||
| Noncontrolling interests | - | - | ||||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | 7,991 | (24,266 | ) | |||||
| Comprehensive income | 180,925 | 195,459 | ||||||
| 4 |
Statements of Changes in Stockholders’ Deficit
For the three months ended March 31, 2026 and 2025
(Expressed in U.S. Dollars)
| Share | Retained | Accumulated Other Comprehensive Income | Total Stockholders’ | |||||||||||||
| Capital | Earnings | (or Loss) | Equity | |||||||||||||
| Balance Dec 31, 2024 | 28,295 | (760,189 | ) | 38,835 | (693,059 | ) | ||||||||||
| Net Income/(loss) (attributable to parent) | 219,725 | - | 219,725 | |||||||||||||
| Foreign currency translation | (24,266 | ) | (24,266 | ) | ||||||||||||
| Balance Mar 31, 2025 | 28,295 | (540,464 | ) | 14,569 | (497,600 | ) | ||||||||||
| Balance Dec 31, 2025 | 28,295 | (557,873 | ) | (46,204 | ) | (575,782 | ) | |||||||||
| Net Income | 172,934 | 172,934 | ||||||||||||||
| Foreign currency translation | 7,991 | 7,991 | ||||||||||||||
| Balance, Mar 31,2026 | $ | 28,295 | $ | (384,939 | ) | $ | (38,213 | ) | $ | (394,857 | ) | |||||
| 5 |
Statements of Cash Flows
(Expressed in U.S. Dollars)
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from Operating Activities: | ||||||||
| Net Income | $ | 172,934 | $ | 219,725 | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation expense | 139,484 | 117,017 | ||||||
| Allowance for uncollected receivables | - | - | ||||||
| Loss on debt extinguishment | - | - | ||||||
| Amortization of right-to-use asset | 91,920 | 66,328 | ||||||
| Gain/loss sale of PPE/intangibles | - | - | ||||||
| Changes in current assets and current liabilities: | ||||||||
| Accounts receivable | 402,995 | 251,298 | ||||||
| Other non-current assets | 187,513 | 80,706 | ||||||
| Deferred tax assets | 20,517 | (297,445 | ) | |||||
| Prepaid and other assets | 50,287 | 59,752 | ||||||
| Accounts payable and accrued expenses | (179,462 | ) | (494,522 | ) | ||||
| Contract liabilities | (249,679 | ) | 1,144,992 | |||||
| Lease liability-current | (4,860 | ) | (34,891 | ) | ||||
| Other current liabilities | 74,918 | (54,470 | ) | |||||
| Other non-current liabilities | - | - | ||||||
| Lease liability-non-current | (87,059 | ) | (31,437 | ) | ||||
| Deferred tax liabilities | 2,201 | 32,450 | ||||||
| Net cash provided by operating activities | 621,709 | 1,059,503 | ||||||
| Cash flows from Investing Activities: | ||||||||
| Purchase of property and equipment | (3,867 | ) | (1,931 | ) | ||||
| Purchase of intangible asset | (146,159 | ) | (209,265 | ) | ||||
| Purchase of subsidiaries, net of cash acquired | - | (379,207 | ) | |||||
| Net cash used in investing activities | (150,026 | ) | (590,403 | ) | ||||
| Cash flows from Financing Activities: | ||||||||
| Proceeds from loans | (99,984 | ) | (321,553 | ) | ||||
| Repayment of loans | (22,633 | ) | 13,982 | |||||
| Net cash used in financing activities | (122,617 | ) | (307,571 | ) | ||||
| Net change in cash | 349,066 | 161,529 | ||||||
| Cumulative translation adjustment | 7,989 | (11,948 | ) | |||||
| Cash, beginning of the period | 292,049 | 85,337 | ||||||
| Cash, end of the period | $ | 649,104 | $ | 234,918 | ||||
| 6 |
Notes to the Financial Statements
Note 1 - Organization and Description of Business
Cataneo GmbH (the “Company”) is a limited liability company (Gesellschaft mit beschränkter Haftung, or “GmbH”) organized under the laws of Germany. The Company’s principal offices are located in Munich, Germany.
The Company is an enterprise software company that develops and provides integrated software solutions for the media and broadcasting industry. The Company’s software platforms are designed to support critical business operations, including advertising sales management, traffic and scheduling, media planning, rights management, customer relationship management, and business intelligence. The Company’s solutions enable media organizations to automate and optimize operational and financial workflows across multiple distribution channels, including television, digital, radio, print, and other multimedia platforms.
The Company’s software solutions are designed to integrate with customers’ existing technology environments and support complex, high-volume operations for broadcasters, publishers, media companies, and advertising organizations. In addition to software licensing, the Company provides implementation, customization, consulting, maintenance, technical support, and training services to customers operating in domestic and international markets.
Revenue is primarily derived from software license arrangements, maintenance and support agreements, implementation and consulting services, and other professional service contracts. The Company continues to invest in research and development to enhance its software platforms, expand product functionality, and address the evolving needs of the global media and broadcasting industry.
Note 2 - Significant Accounting Policies
Basis of presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial statements include the assets, liabilities, results of operations, and cash flows of Cataneo GmbH. The Company’s functional currency is the Euro (€), and the accompanying financial statements have been translated into U.S. dollars for reporting purposes in accordance with U.S. GAAP.
Basis of consolidation
The accompanying consolidated financial statements include the accounts of Cataneo GmbH and its wholly-owned and controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant estimates include, but are not limited to, the collectibility of accounts receivable, the capitalization and useful lives of software development costs and intangible assets, impairment assessments, deferred tax assets, lease assumptions, and revenue recognition. Actual results could differ from those estimates.
| 7 |
Foreign currency translation
The Company’s functional currency is the Euro (€). Assets and liabilities are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Revenue and expenses are translated using average exchange rates during the reporting period.
Translation adjustments resulting from the process are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.
Transactions denominated in currencies other than the functional currency are remeasured into the functional currency using the exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in foreign currencies are remeasured at period-end exchange rates, and resulting gains and losses are recognized in earnings.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with financial institutions, and highly liquid investments with original maturities of three months or less when purchased. Cash equivalents are carried at cost, which approximates fair value due to their short-term maturities.
Accounts receivable, net
Accounts receivable are recorded at the invoiced amount and are presented net of an allowance for expected credit losses. The Company evaluates the collectibility of accounts receivable using historical collection experience, customer-specific risk factors, current economic conditions, and reasonable and supportable forecasts in accordance with the current expected credit loss (“CECL”) model. Amounts determined to be uncollectible are written off when all collection efforts have been exhausted. During the three months ended March 31, 2026, the Company did not record any expense related to uncollectible accounts receivable.
Advertising costs
Advertising costs are expensed as incurred. Advertising costs were $12,750 and $9,130 for the three months ended March 31, 2026 and 2025, respectively.
Deferred contract fulfillment costs
Deferred contract fulfillment costs represent incremental costs incurred to fulfill customer contracts that are expected to be recovered. These costs are capitalized when they relate directly to a contract, generate or enhance resources used to satisfy future performance obligations, and are expected to be recoverable. Deferred contract fulfillment costs are amortized on a systematic basis consistent with the transfer of the related goods or services to the customer and are periodically evaluated for impairment.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consist primarily of advance payments for goods and services to be received within one year and other miscellaneous receivables expected to be realized within the normal operating cycle.
Property, plant and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets.
Expenditures for maintenance and repairs are charged to expense as incurred, while major improvements are capitalized.
Intangible assets
Intangible assets consist primarily of acquired software, intellectual property, and other identifiable intangible assets. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful lives. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
| 8 |
Capitalized software development costs
Software development costs incurred during the application development stage of internal-use software are capitalized in accordance with applicable U.S. GAAP. Costs incurred during the preliminary project stage and post-implementation activities are expensed as incurred.
Capitalized software development costs are amortized on a straight-line basis over their estimated useful lives once the related software is placed into service. Management periodically evaluates these assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable.
Right-of-use assets
The Company determines whether an arrangement contains a lease at contract inception. Right-of-use assets represent the Company’s right to use an underlying asset over the lease term and are recognized at the commencement date based on the present value of future lease payments.
Other noncurrent assets
Other noncurrent assets consist primarily of deposits and other assets expected to be realized beyond one year.
Contract liabilities
Contract liabilities represent consideration received from customers in advance of satisfying the related performance obligations. Contract liabilities are recognized as revenue as the Company satisfies its contractual performance obligations.
Lease liabilities
Lease liabilities represent the present value of future lease payments over the lease term. Lease liabilities are measured using the discount rate implicit in the lease when readily determinable or the Company’s incremental borrowing rate.
Debt
Debt is recorded at the principal amount outstanding, net of any unamortized discounts or issuance costs. Interest expense is recognized using the effective interest method.
Revenue recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of the promised goods or services transfers to the customer in an amount that reflects the consideration the Company expects to receive.
The Company generates revenue primarily from software license arrangements, software maintenance and support services, implementation services, consulting services, and other professional services. The Company evaluates customer contracts to identify performance obligations and allocates the transaction price based on the relative standalone selling prices of each distinct performance obligation. Revenue is recognized either over time or at a point in time depending on the nature of the underlying performance obligation and the pattern in which control transfers to the customer.
Income Taxes
The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates expected to apply in the periods in which those temporary differences reverse.
The Company evaluates the realizability of deferred tax assets and records a valuation allowance when it is more likely than not that some or all of the deferred tax assets will not be realized.
| 9 |
Fair value measurements
The Company measures certain financial assets and liabilities at fair value in accordance with ASC 820, Fair Value Measurement. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amounts of cash, accounts receivable, accounts payable, accrued liabilities, and other short-term financial instruments approximate fair value due to their short-term maturities.
The Company did not have any financial assets or liabilities measured at fair value on a recurring basis as of March 31, 2026 or December 31, 2025.
There were no transfers between Levels 1, 2, or 3 during the three months ended March 31, 2026 and 2025.
Concentrations of credit risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash deposits and accounts receivable. The Company maintains cash balances with reputable financial institutions and monitors the creditworthiness of its customers on an ongoing basis.
Recent accounting pronouncements
Management evaluates the impact of newly issued accounting standards and adopts those standards when required. The Company does not expect the adoption of recently issued accounting standards that are not yet effective to have a material impact on its financial statements unless otherwise disclosed.
Note 3 - Prepaid Expenses and Other Current Assets
Prepaid and other current assets consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Prepaid Expenses | $ | - | $ | 38,811 | ||||
| Receivables from employees (due within 1 year) | - | 10,584 | ||||||
| Advances and deposits | 979 | 889 | ||||||
| Other | 2,287 | 246 | ||||||
| Recoverable VAT and input tax receivables | 3,771 | 7,585 | ||||||
| Income tax receivable | 791 | - | ||||||
| Total prepaid expenses and other current assets | $ | 7,828 | $ | 58,115 | ||||
| 10 |
Note 4 - Property, Plant and Equipment, Net
Property and equipment, net consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Equipment | $ | - | $ | 3,063 | ||||
| Furniture | - | 25,930 | ||||||
| Other tangible assets | 303,002 | 7,706 | ||||||
| Total | 303,002 | 36,698 | ||||||
| Accumulated depreciation and amortization | (270,142 | ) | (7,706 | ) | ||||
| Property and equipment, net of accumulated depreciation and amortization | $ | 32,860 | $ | 28,993 | ||||
Depreciation expense was $10,618 and $275,305 for the three months ended March 31, 2026 and 2025, respectively.
Note 5 - Intangible Assets
Intangible assets, net, were $1 and $1 as of March 31, 2026 and December 31, 2025, respectively. The Company amortizes finite-lived intangible assets over their estimated useful lives and evaluates such assets for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable.
Note 6 - Capitalized Software Development Costs
Capitalized software development costs consist of costs incurred during the application development stage that qualify for capitalization. Capitalized software development costs are amortized on a straight-line basis over an estimated useful life of five years once the related software is placed into service.
| March 31, 2026 | December 31, 2025 | |||||||
| Capitalized software development costs, gross | $ | 2,723,729 | $ | 2,691,369 | ||||
| Accumulated amortization | (1,068,655 | ) | (1,042,970 | ) | ||||
| Capitalized software development costs, net | $ | 1,655,074 | $ | 1,648,399 | ||||
Amortization expense related to capitalized software development costs was $139,490 and $248,797 for the three months ended March 31, 2026 and 2025, respectively.
Note 7 - Deferred Contract Fulfillment Costs
Deferred contract fulfillment costs represent capitalized costs incurred to fulfill customer contracts and are classified as current or noncurrent based on the expected timing of amortization.
Deferred contract fulfillment costs consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Current portion | $ | 603,545 | $ | 614,968 | ||||
| Non-current portion | 1,178,415 | 1,354,461 | ||||||
| Total | $ | 1,781,960 | $ | 1,969,429 | ||||
Amortization expense related to deferred contract fulfillment costs was $153,283 and $110,655 for the three months ended March 31, 2026 and 2025, respectively.
| 11 |
Note 8 - Debt
The Company’s debt consists primarily of borrowings used to finance its operations. Debt is classified as current or noncurrent based on the contractual repayment terms.
The Company maintains a working capital credit facility with Münchner Bank eG with a borrowing limit of €500,000. Borrowings under the facility bear interest at 6.75% per annum. The facility is available until further notice, subject to the terms and conditions of the credit agreement.
During 2024, the Company entered into a debt restructuring arrangement under which a portion of outstanding debt was forgiven and a portion remained payable under revised repayment terms. During 2025 and the three months ended March 31, 2026, the Company continued making scheduled repayments in accordance with the agreement, resulting in a reduction of outstanding borrowings as of March 31, 2026.
The Company has two loans with Stadtsparkasse München with original principal amounts of €350,000 and €650,000. The €350,000 loan bore interest at 1.815% per annum, required monthly principal and interest payments, and was fully repaid as scheduled on March 31, 2026. The €650,000 loan bears interest at 2.29% per annum, requires monthly principal and interest payments, and matures on May 30, 2026.
Note 9 - Leases
The Company leases office facilities, vehicles, and certain equipment under operating lease agreements. The Company recognizes right-of-use (“ROU”) assets and lease liabilities for its operating leases in accordance with ASC 842, Leases. Lease liabilities are measured at the present value of future lease payments over the lease term, and the related ROU assets are recognized based on the corresponding lease liabilities, adjusted for applicable prepaid lease payments and lease incentives.
Operating lease assets and liabilities consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Operating lease right-of-use assets | $ | 689,481 | $ | 781,401 | ||||
| Operating lease liabilities - current | 316,446 | 321,306 | ||||||
| Operating lease liabilities - non-current | 373,035 | 460,095 | ||||||
| Total operating lease liabilities | $ | 689,481 | $ | 781,401 | ||||
Note 10 - Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Accounts Payable | $ | 348,465 | $ | 346,710 | ||||
| Accrued compensation and related expenses | - | 92,835 | ||||||
| Accrued professional fees | - | 11,924 | ||||||
| Other accrued liabilities | 129,162 | 100,877 | ||||||
| Total accounts payable and accrued expenses | $ | 477,627 | $ | 552,345 | ||||
| 12 |
Note 11 - Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, as described in Note 2. The Company generates revenue primarily from recurring software-as-a-service (“SaaS”) arrangements, including usage, licensing, hosting, operation, maintenance, and support services for media companies. The Company also provides implementation services and customer-specific software development and customization services.
Recurring SaaS revenue is recognized over time as customers simultaneously receive and consume the benefits of the hosted services. Management has concluded that implementation activities do not provide a distinct benefit to customers separate from the underlying SaaS services. Accordingly, implementation fees are recorded as contract liabilities and recognized as revenue over the estimated five-year customer benefit period. Customer-specific software development and customization services are evaluated on a contract-by-contract basis to determine whether revenue is recognized over time or at a point in time, depending on the nature of the underlying performance obligation.
Disaggregation of revenue
Revenue recognized based on contract type consists of the following:
| March 31, 2026 | March 31, 2025 | |||||||
| Media and advertising services | 2,501,482 | 2,416,649 | ||||||
| Software and technology services | $ | - | $ | - | ||||
| AI and professional services | - | - | ||||||
| Total revenue | $ | 2,501,482 | $ | 2,416,649 | ||||
Timing of Revenue Recognition
Revenue based on timing of control transferred to the customer consists of the following:
| Timing of Revenue Recognition | March 31, 2026 | March 31, 2025 | ||||||
| Performance obligations transferred over time | $ | 2,501,482 | $ | 2,416,649 | ||||
Contract Balances
Contract liabilities primarily represent implementation fees billed or collected in advance of revenue recognition. These amounts are recognized as revenue over the estimated customer benefit period as the related performance obligations are satisfied.
Contract balances consisted of the following:
| March 31, 2026 | December 31, 2025 | |||||||
| Current contract liabilities | 1,887,650 | 1,802,125 | ||||||
| Noncurrent contract liabilities | 2,394,670 | 2,729,874 | ||||||
| Total contract liabilities | $ | 4,282,320 | $ | 4,531,998 | ||||
Deferred contract fulfillment costs are discussed in Note 7. The change in contract liabilities during the three months ended March 31, 2026 primarily reflects implementation fees billed or collected in advance of the satisfaction of the related performance obligations, partially offset by amounts recognized as revenue during the period.
| 13 |
Note 12 - Income Taxes
The Company accounts for income taxes in accordance with the accounting policy described in Note 2. Deferred tax assets and liabilities are recognized for temporary differences between the financial reporting basis and tax basis of assets and liabilities.
The components of net deferred tax assets included in the accompanying balance sheets were as follows:
| March 31, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Lease liability - operating lease, current | $ | 40,666 | $ | - | ||||
| Lease liability - operating lease, non-current | 47,940 | - | ||||||
| Contract liabilities | 456,174 | 1,494,693 | ||||||
| Contract liabilities, non-current | - | - | ||||||
| Other deferred tax assets | 279,838 | - | ||||||
| Total deferred tax assets | 824,618 | 1,494,693 | ||||||
| Liabilities | ||||||||
| Right of use asset - operating leases | 91,203 | - | ||||||
| Capitalized software development costs, net | 218,928 | 543,642 | ||||||
| Deferred contract fulfillment costs | 235,713 | 649,518 | ||||||
| Deferred contract fulfillment costs, non-current | - | - | ||||||
| Total deferred tax liabilities | 545,843 | 1,193,160 | ||||||
| Net deferred tax asset (liability) | $ | 278,775 | $ | 301,493 | ||||
| 14 |
Note 13 - Commitments and Contingencies
The Company is party to contractual commitments entered into in the ordinary course of business. During 2025, the Company entered into an agreement with Oracle for cloud computing services with an initial contractual term of 12 months. Under the agreement, the Company is committed to purchasing Oracle Cloud service credits, which are billed quarterly in advance. Costs associated with these services are recognized as incurred in accordance with the Company’s accounting policies.
As of March 31, 2026 and December 31, 2025, management is not aware of any pending or threatened litigation, claims, or other contingencies that would require recognition or disclosure in the accompanying financial statements.
Note 14 - Related Party Transactions
During the ordinary course of business, the Company entered into transactions with related parties.
In 2021, the Company and 4e Sports & Media GmbH jointly founded Contentmarket AI GmbH to support the development of software solutions. Both parties provided financing to Contentmarket AI GmbH, and the Company provided additional funding in subsequent years to support ongoing development activities.
During 2024, the Company entered into an agreement with 4e Sports & Media GmbH to acquire a portion of 4e Sports’ outstanding loan receivable from Contentmarket AI GmbH. Under the agreement, the remaining portion of the loan and related accrued interest were waived by 4e Sports & Media GmbH, and the Company agreed to repay the acquired portion through scheduled installment payments extending through 2028. Management believes these transactions were conducted in accordance with the terms of the related agreements.
Note 15 - Subsequent Events
Subsequent events have been evaluated through September 16, 2026, which represents the date the financial statements were available to be issued, and no events have occurred through that date that would require recognition or disclosure in the unaudited, condensed consolidated financial statements.
| 15 |
Exhibit 99.3
Summary of Transaction
On June 30, 2026 (the “Acquisition Date”), Brand Engagement Network Inc. (“the Company”) completed its acquisition of Cataneo GmbH (“Cataneo”). The Company acquired all of the outstanding shares of the Cataneo based on the Share Purchase and Transfer Agreement (“SPA”). The aggregate consideration paid by the Company for the acquisition involved issuing shares and transfer of cash to the shareholders.
The acquisition of Cataneo was determined to constitute a business combination in accordance with Accounting Standards Codification 805, Business Combinations (“ASC 805”) under generally accepted accounting principles in the United States (“GAAP”).
Pro Forma Information
The unaudited pro forma condensed combined financial statements have been prepared in accordance with Article 11 of Regulation S-X under the Securities Act of 1933, as amended by the final rule, Release No.33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” and have been adjusted to include estimated transaction accounting adjustments which give effect to the Cataneo Acquisition and the application of the acquisition method of accounting under GAAP. Under the acquisition method of accounting, the preliminary purchase price is allocated to the underlying tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with any excess purchase price allocated to goodwill. The pro forma adjustments are based on preliminary estimates and currently available information and assumptions that Brand Engagement Network Inc’s management believes are reasonable. The notes to the unaudited pro forma condensed combined financial statements provide a discussion of how such adjustments were derived and presented in the unaudited pro forma condensed combined financial statements (“Acquisition Adjustments”). Changes in facts and circumstances or discovery of new information may result in revised estimates. Actual results and valuations may differ materially from the assumptions within the accompanying unaudited pro forma condensed combined financial information.
The accompanying unaudited pro forma condensed combined statements of operations for the three month ended March 31, 2026 and for the year ended December 31, 2025 combine the historical consolidated statements of operations for Brand Engagement Network Inc and the historical statements of operations for Cataneo for the same period.
The unaudited pro forma condensed combined statements of operations for the three month ended March 31, 2026 and for the year ended December 31, 2025 give effect to the Acquisition as if it occurred on January 1, 2025.
The unaudited pro forma condensed combined financial statements are for illustrative and informational purposes only and are not intended to represent what Brand Engagement Network Inc’s results of operations or financial position would have been had the Acquisition occurred on the dates indicated, or what they will be for any future periods. The unaudited pro forma condensed combined financial statements do not reflect the realization of any expected cost savings, other synergies as a result of the acquisition, or integration costs.
The unaudited pro forma condensed combined financial statements and related notes have been derived from, and should be read in conjunction with:
(i) the historical audited consolidated financial statements of Brand Engagement Network Inc and accompanying notes included in Brand Engagement Network Inc’s Quarterly Report on Form 10-Q for the three month ended March 31, 2026, and Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (“SEC”) on May [ ], 2026 and on February [ ], 2026 respectively;
(ii) the historical financial statements of Cataneo and accompanying notes for the three month ended March 31, 2026 and year ended December 31, 2025, appearing within this Current Report on Form 8-K/A as Exhibit 99.1; and
| 1 |
BRAND ENGAGEMENT NETWORK, INC.
Unaudited Pro Forma Condensed Combined
Statement of Operations
for the three-month ended March 31, 2026 and year ended December 31, 2025
| |
BEN March 31, 2026 |
|
|
Cataneo March 31, 2026 |
|
|
Transaction Adjustments |
|
|
Note Ref | |
Pro Forma Combined |
|
||||||
| (Note 5) | |||||||||||||||||||
| Revenue | $ | 104,311 | $ | 2,501,482 | $ | - | $ | 2,605,793 | |||||||||||
| Cost of goods sold | - | (1,266,348 | ) | (1,266,348 | ) | ||||||||||||||
| Gross profit | 104,311 | 1,235,134 | 1,339,445 | ||||||||||||||||
| Operating expenses | |||||||||||||||||||
| General and administrative expenses | (2,363,904 | ) | (684,982 | ) | (876,274 | ) | 4A | (3,925,160 | ) | ||||||||||
| Research and development | (26,944 | ) | (327,205 | ) | (354,149 | ) | |||||||||||||
| Advertising and marketing expenses | |||||||||||||||||||
| Impairment of deferred customer acquisition costs | - | ||||||||||||||||||
| Depreciation and amortization | (1,047,411 | ) | (110,508 | ) | 4B | (1,157,919 | ) | ||||||||||||
| Total costs and expenses | (3,438,259 | ) | (1,012,187 | ) | (986,782 | ) | (5,437,228 | ) | |||||||||||
| Gain (Loss) from operations | (3,333,948 | ) | 222,947 | (986,782 | ) | (4,097,783 | ) | ||||||||||||
| Other income (expense): | |||||||||||||||||||
| Interest income | - | ||||||||||||||||||
| Interest expense, net | (57,607 | ) | (478 | ) | - | (58,085 | ) | ||||||||||||
| Change in fair value of warrant liabilities | 294,293 | - | - | 294,293 | |||||||||||||||
| Gain (loss) on debt extinguishment | 89,340 | - | - | 89,340 | |||||||||||||||
| Other income (expense), net | (6,066 | ) | (30,652 | ) | (36,718 | ) | |||||||||||||
| Total other income, net | 319,960 | (31,130 | ) | - | 288,830 | ||||||||||||||
| Income (Loss) before income tax benefit | (3,013,988 | ) | 191,817 | (986,782 | ) | (3,808,953 | ) | ||||||||||||
| Income tax benefit (expense) | (46,989 | ) | (18,883 | ) | (65,872 | ) | |||||||||||||
| Net income (loss) | $ | (3,060,977 | ) | $ | 172,934 | $ | (986,782 | ) | $ | (3,874,825 | ) | ||||||||
| Net income (loss) per common share, basic and diluted | $ | (0.51 | ) | - | - | $ | (0.60 | ) | |||||||||||
| Weighted average number of common shares outstanding, basic and diluted | 5,967,831 | - | 485,158 | 4C | 6,452,989 | ||||||||||||||
| 3 |
| |
|
BEN December 31, 2025 |
|
|
Cataneo December 31, 2025 |
|
|
Transaction Adjustments |
|
|
Note Ref | |
Pro Forma Combined |
|
|||||
| (Note 5) | |||||||||||||||||||
| Revenue | $ | 275,120 | $ | 9,573,948 | $ | - | $ | 9,849,068 | |||||||||||
| Cost of goods sold | - | (4,876,671 | ) | (4,876,671 | ) | ||||||||||||||
| Gross profit | 275,120 | 4,697,277 | 4,972,397 | ||||||||||||||||
| Operating expenses | - | ||||||||||||||||||
| General and administrative expenses | (8,872,915 | ) | (2,760,916 | ) | (876,274 | ) | 4A | (12,510,105 | ) | ||||||||||
| Research and development | (162,973 | ) | (1,210,296 | ) | (1,373,269 | ) | |||||||||||||
| Advertising and marketing expenses | - | - | |||||||||||||||||
| Impairment of deferred customer acquisition costs | - | - | |||||||||||||||||
| Depreciation and amortization | (3,865,381 | ) | (442,033 | ) | 4B | (4,307,414 | ) | ||||||||||||
| Total costs and expenses | (12,901,269 | ) | (3,971,212 | ) | (1,318,307 | ) | (18,190,788 | ) | |||||||||||
| Gain (Loss) from operations | (12,626,149 | ) | 726,065 | (1,318,307 | ) | (13,218,391 | ) | ||||||||||||
| Other income (expense): | |||||||||||||||||||
| Interest income | - | 1 | 1 | ||||||||||||||||
| Interest expense, net | (410,460 | ) | (22,564 | ) | - | (433,024 | ) | ||||||||||||
| Change in fair value of warrant liabilities | 197,292 | - | - | 197,292 | |||||||||||||||
| Gain (loss) on debt extinguishment | 4,191,074 | - | - | 4,191,074 | |||||||||||||||
| FX exchange gain (loss) | - | - | - | ||||||||||||||||
| Other income (expense), net | 22,808 | (401,368 | ) | (378,560 | ) | ||||||||||||||
| Total other income (expense), net | 4,000,714 | (423,931 | ) | 3,576,783 | |||||||||||||||
| Income (Loss) before income tax benefit | (8,625,435 | ) | 302,134 | (1,318,307 | ) | (9,641,608 | ) | ||||||||||||
| Income tax benefit (expense) | - | (99,818 | ) | (99,818 | ) | ||||||||||||||
| Net income (loss) | $ | (8,625,435 | ) | $ | 202,316 | $ | (1,318,307 | ) | $ | (9,741,426 | ) | ||||||||
| Net income (loss) per common share, basic and diluted | $ | (1.97 | ) | - | - | $ | (2.00 | ) | |||||||||||
| Weighted average number of common shares outstanding, basic and diluted | 4,375,328 | - | 485,158 | 4C | 4,860,486 | ||||||||||||||
| 4 |
BRAND ENGAGEMENT NETWORK, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Note 1 – Description of Cataneo Acquisition
On June 30, 2026 (the “Acquisition Date”), Brand Engagement Network Inc. (“the Company”) through it’s wholly owned subsidiary GForce 112 GmbH completed its acquisition of Cataneo GmbH (“Cataneo”). The Company acquired all of the outstanding shares of the Cataneo based on the Share Purchase and Transfer Agreement (“SPA”). The aggregate consideration paid by the Company for the acquisition involved issuing shares and transfer of cash to the shareholders.
Note 2 – Basis of Presentation
The Cataneo Acquisition is being accounted for as a business combination using the acquisition method of accounting under US GAAP, in accordance with the provisions of ASC 805, Business Combinations, (“ASC 805”) which requires assets acquired and liabilities assumed to be recorded at their acquisition date fair value. ASC 820, Fair Value Measurements, defines the term “fair value” as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.
Brand Engagement Network and Cataneo’s historical financial statements were prepared in accordance with US GAAP. Based on an analysis of Brand Engagement Network and Cataneo’s significant accounting policies, the Company has not identified any material differences in accounting policies that would have an impact on the unaudited pro forma condensed combined financial statements. As a result, the unaudited pro forma condensed combined financial statements do not assume any differences in accounting policies.
The pro forma adjustments presented in this unaudited pro forma condensed combined financial information represent management’s estimates based on information available as of the date of this Form 8-K and such estimates are subject to revision as further information is obtained. Accordingly, the pro forma adjustments for the Cataneo Acquisition are preliminary and subject to further adjustment as additional information becomes available and the various analysis and other valuations are performed. Any adjustments may have a significant effect on total assets, total liabilities, total equity, operating expenses, and depreciation and amortization expenses, and such results may be significant.
The assumptions underlying the pro forma adjustments are described in the accompanying notes to this unaudited pro forma condensed combined financial information.
The unaudited pro forma condensed combined financial information may not be indicative of Brand Engagement Network’s future performance and does not necessarily reflect what Brand Engagement Network’s financial position and results of operations would have been had these transactions occurred at the beginning of the period presented.
Further, the unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of Brand Engagement Network following the completion of the Cataneo Acquisition. Additionally, the unaudited pro forma condensed combined financial information does not reflect any revenue enhancements, anticipated synergies, operating efficiencies, or cost savings that may be achieved related to the Cataneo Acquisition, nor does it reflect any costs or expenditures that may be required to achieve any possible synergies.
| 5 |
Brand Engagement Network will finalize the accounting for the acquisition as soon as practicable within the measurement period, but in no event later than one year from the acquisition date, in accordance with ASC 805.
The functional currency of Cataneo is Euro, being the currency of the primary economic environment in which it operates, consequently, the financial statements have been translated to US dollar for the purpose of consolidation.
Note 3 – Preliminary Purchase Price Allocation
Preliminary Purchase Consideration
The estimated fair value of the consideration transferred is $13.7 million, and is comprised of the following components:
| Purchase consideration: | ||||
| Fair value of common stock consideration | $ | 4,363,290 | ||
| Cash | 9,000,043 | |||
| Deferred Consideration | 341,190 | |||
| Total fair value of consideration transferred | $ | 13,704,522 | ||
Fair value of common stock consideration: Represents 255,014 shares of Brand Engagement Network restricted common stock equal to $4.4 million based on the stock price on June 30, 2026.
| 6 |
Preliminary Estimates of Fair Value
The following table summarizes the tangible and identifiable intangible assets acquired, and liabilities assumed used to prepare pro forma adjustments in the unaudited pro forma condensed combined statements of operations:
| Purchase consideration: | ||||
| Fair value of common stock consideration | $ | 4,363,290 | ||
| Cash | 9,000,043 | |||
| Deferred Consideration | 341,190 | |||
| Total fair value of consideration transferred | 13,704,522 | |||
| Identifiable Assets Acquired and liabilities assumed | ||||
| Cash and cash equivalents | 678,367 | |||
| Accounts receivable, net | 668,415 | |||
| Deferred contract fulfilment costs | 5,292 | |||
| Prepaid and other current assets | 7,828 | |||
| Property and equipment, net | 32,860 | |||
| Intangible assets, net | 896,236 | |||
| Capitalized software development costs, net | 2,969,005 | |||
| Investments | 58 | |||
| Right of use asset (Op.L) | 689,481 | |||
| Deferred contract fulfilment costs, non-current | 159,896 | |||
| Other non-current assets | 2,304 | |||
| Accounts payable and accrued expenses | (477,626 | ) | ||
| Contract liabilities, current | (759,645 | ) | ||
| Lease liability (Op.L), current | (316,446 | ) | ||
| Short-term debt | (121,410 | ) | ||
| Income tax payables | (101,207 | ) | ||
| Other current libilites | (409,008 | ) | ||
| Contract liabilities, non-current | (474,255 | ) | ||
| Lease liability (Op.L), non-current | (373,036 | ) | ||
| Long-term debt | (79,665 | ) | ||
| Deferred tax liabilities | (820,407 | ) | ||
| Net identifiable assets acquired | 2,177,037 | |||
| Goodwill | 11,527,486 | |||
| Net assets acquired | $ | 13,704,523 | ||
The final estimates of fair value will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary calculation used in the pro forma adjustments. The final estimates of fair value may include (i) changes in allocations to intangible assets including goodwill, (ii) other changes to assets and liabilities, and (iii) changes to the assessment of tax positions and tax rates.
| 7 |
Intangible Assets
Preliminary identifiable intangible assets in the unaudited pro forma condensed combined financial information consist of the following :
| Approximate | Useful life | |||||
| Customer relationships | $ | 896,236 | 5 years | |||
| Capitalized software | 2,969,005 | 5 years | ||||
| Total intangible assets | $ | 3,865,241 | ||||
The amortization related to the identifiable intangible assets is reflected as an Acquisition Adjustment in the unaudited pro forma condensed combined statements of operations based on the estimated useful lives above as further described in Note 4. The fair values of the identifiable intangible assets are preliminary and are based on Management’s estimates as of the Closing Date. The Company applied judgment in estimating the fair value of these intangibles which involved the use of significant assumptions with respect to revenue forecasts, revenue growth, attrition rates, royalty rates, discount rates, and economic lives.
Note 4 – Acquisition Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations
(a) Reflects an adjustment for transaction costs incurred in connection with the acquisition that are not reflected in the historical financial statements.
(b) Reflects the recognition of pro forma amortization expense of approximately $0.1 million and $0.4 million for the three months ended 31 March, 2026 and the year ended December 31, 2025 respectively related to the definite-lived intangible assets identified in the preliminary purchase price allocation, consisting of customer relationships with an estimated useful life of 60 months and software with an estimated useful life of 60 months.
(c) Reflects the adjustment to the weighted-average number of common shares outstanding for the BEN common shares issued as consideration in connection with the acquisition of Cataneo, assuming such shares were outstanding as of the beginning of the earliest period presented.
| 8 |