Brand Engagement Network Inc 10-K for FY2024

Brand Engagement Network Inc. (BNAI)

10-K 2025-03-31 For: 2024-12-31

Added on April 08, 2026

About this 10-K

Brand Engagement Network Inc filed this 10-K on March 31, 2025, covering the fiscal year ended December 31, 2024 (FY2024).

Headline figures

Fiscal year ended December 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $99.79K; up 183.4% from $35.21K a year earlier
Net loss: $33.72M; compared with a net loss of $11.73M a year earlier
Diluted EPS: -$1.02; compared with -$0.57 a year earlier

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Delaware						98-1574798
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

145 E. Snow King Ave PO Box 1045 Jackson, WY						83001
(Address of Principal Executive Offices)						(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	BNAI	The Nasdaq Stock Market LLC
Redeemable Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share	BNAIW	The Nasdaq Stock Market LLC


		Page
Cautionary Note Regarding Forward-Looking Statements		4

PART I.		5
Item 1.	Business	5
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	43
Item 1C.	Cybersecurity	43
Item 2.	Properties	44
Item 3.	Legal Proceedings	44
Item 4.	Mine Safety Disclosures	44

PART II.		45
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	45
Item 6.	[Reserved]	45
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	46
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 8.	Financial Statements and Supplementary Data	63
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	89
Item 9A.	Controls and Procedures	89
Item 9B.	Other Information	91
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	91

PART III.		92
Item 10.	Directors, Executive Officers and Corporate Governance	92
Item 11.	Executive Compensation	97
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	112
Item 13.	Certain Relationships and Related Transactions, and Director Independence	115
Item 14.	Principal Accounting Fees and Services	118

PART IV.		118
Item 15.	Exhibits and Financial Statement Schedules	118
Item 16.	Form 10-K Summary	123


			●			our ability to develop and attain market acceptance for our products and services;

			●			our ability to maintain the listing of our securities on Nasdaq and to regain compliance with Nasdaq listing standards;

			●			the attraction and retention of qualified directors, officers, employees and key personnel;

			●			our need for additional capital and whether additional financing will be available on favorable terms, or at all;

			●			the lack of a market for our Common Stock and Public Warrants and the volatility of the market price and trading price for our Common Stock and Public Warrants;

			●			our ability to meet the conditions to close, including the raising of sufficient financing to fund our pending acquisition (the "Cataneo Acquisition") of Cataneo Gmbh ("Cataneo"), our ability to pay down payments in accordance with the Purchase Agreement and our ability to integrate and realize the anticipated benefits of the Cataneo Acquisition;

			●			the impact of lawsuits and other litigation matters on our business, including the AFG Lawsuit (as defined below).

			●			our limited operating history;

			●			the length of our sales cycle and the time and expense associated with it;

			●			our ability to grow our customer base;

			●			our dependency upon third-party service providers for certain technologies;

			●			competition from other companies offering artificial intelligence products that have greater resources, technology, relationships and/or expertise;


			●			our ability to compete effectively in a highly competitive market;

			●			our ability to protect and enhance our corporate reputation and brand;

			●			our ability to hire, retain, train and motivate qualified personnel and senior management and our ability to deploy our personnel and resources to meet customer demand;

			●			our ability to grow through acquisitions and successfully integrate any such acquisitions;

			●			our ability to grow through acquisitions and successfully integrate any such acquisitions, including our pending acquisition of Cataneo;


x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



			●			the impact from future regulatory, judicial, and legislative changes in our industry;

			●			increases in costs, disruption of supply or shortage of materials, which could harm our business;

			●			our ability to successfully maintain, protect, enforce and grow our intellectual property rights;

			●			our future financial performance, including the ability of future revenues to meet projected annual bookings;

			●			our ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses;

			●			our ability to generate sufficient revenue from each of our revenue streams; or

			●			other risks, uncertainties and factors set forth in this Annual Report on Form 10-K, including those set forth under the section titled “- Risk Factors.”


			●			High-Quality Knowledge Base: We maintain a carefully vetted and regularly updated knowledge base to provide accurate, current information. The information is generally provided to us by our clients who utilize their own experts in their corresponding fields.


			●			Sophisticated Retrieval Mechanisms: Our retrieval system is designed to find the most relevant and reliable information for each query.

			●			Careful Curation of Retrieved Information: We prompt the foundation model to base its responses primarily on the retrieved information, reducing the likelihood of generating unfounded statements.



			●			Uncertainty Communication: We implement prompting strategies that encourage the model to express uncertainty when retrieved information is insufficient or ambiguous. Our prompting strategies are triggered whenever our systems detect that the safety threshold is too low.


			●			Web AI Agent: A solution for transforming the online experience for dealership customers. By understanding customer needs and preferences, our AI Agent works in tandem with the sales team to provide enhanced customer experiences online that carry through to the dealership.

			●			In-Vehicle Experience: Connecting directly with vehicle data, mobile application, and contextual information to provide drivers with engaging experiences, providing relevant and meaningful engagement opportunities from automotive vertical participants.


			●			Sales AI Agent: Available on life-size kiosks, and offers uniformity and personalization to each customer through an intuitive interface. This integration ensures a smooth transition from online browsing to in-person dealership experience.

			●			Service AI Agent: Designed to enhance the way customers interact with automotive service departments by combining proprietary cutting-edge AI and an intuitive interface to deliver enhanced customer service experiences for consumers requiring vehicle maintenance, booking appointments and those who want to learn more about service options and service programs.

			●			Technician AI Agent: Offering real-time guidance, know-how and information to automotive technicians, safeguarding original equipment manufacturer (“OEM”) compliance and serving as a vital partner in the garage.


			●			Drug Adherence AI Agent: Providing educational assistance to patients concerning newly prescribed or existing medications, including administration methods, with the goal of driving drug adherence and improving disease management.

			●			Vaccine AI Agent: Providing vaccine education and scheduling assistance for seasonal vaccines like the flu and COVID-19, as well as age-related vaccines such as human papillomavirus, herpes simplex virus and shingles and other potential vaccines.

			●			Health Insurance AI Agent: Supporting healthcare insurance, Medicare Advantage, information, and decision support.

			●			Chronic Disease Management AI Agent: Designed to support chronic disease management, with a current focus on type 2 diabetes, rheumatology, and behavioral health.


			●			Companies with AI capabilities focused on solutions in the conversational interface, language understanding and processing;

			●			Organizations offering products within our current target verticals; and

			●			Legacy providers, including large technology companies with existing and fast-growing AI offerings.


			●			Accuracy and precision of NLP and natural language understanding;

			●			Degree of available and seamless multimodality;

			●			Flexible deployment model and cross-platform support;

			●			Ease and speed of adoption and use;

			●			Customization and flexibility to customer needs;

			●			Individualized personalization and contextualization;

			●			Data security, privacy, and regulatory compliance;

			●			Extensibility of product innovation, research, and pipeline;

			●			Depth of vertical expertise and specialization;

			●			Scope of channel and distribution partner network;

			●			Pricing, cost structures, and returns on investment;

			●			Strength of sales and marketing efforts;

			●			Financial and other resources and name recognition;

			●			Existing customer relationships;

			●			Brand salience, reputation, and level of adoption; and

			●			Track records of success in complex environments.


			●			Future resales of our Common Stock may cause the market price of our Common Stock to drop significantly, even if the Company’s business is doing well.

			●			Certain existing securityholders acquired their securities in the Company at prices below the current trading price of such securities, and may experience a positive rate of return based on the current trading price. Future investors in our Company may not experience a similar rate of return.

			●			We have a limited operating history, which makes it difficult to evaluate our prospects and future results of operations.

			●			We have a history of losses and may not be able to achieve profitability on a consistent basis or at all.


			●			We expect to be dependent on a limited number of customers and end markets. A decline in revenue from, or the loss of, any significant customer, could have a material adverse effect on our financial condition and operating results.

			●			The total addressable market opportunity for our current and future products may be much smaller than we estimate.

			●			We may need additional capital, and we cannot be certain that additional financing will be available on favorable terms, or at all.

			●			Our results of operations and key financial and operational metrics are likely to fluctuate significantly on a quarterly basis in future periods and may not fully reflect the underlying performance of our business, which makes our future results difficult to predict and could cause our results of operations to fall below expectations.

			●			Our sales cycles may be long and unpredictable, particularly with respect to large subscriptions, and our sales efforts require considerable time and expense.

			●			Our business depends on customers purchasing additional subscriptions and products from us and renewing their subscriptions. If customers do not renew or expand their subscriptions with us, our revenue may decline and our business, financial condition and results of operations may be harmed.



			●			AI is a nascent and rapidly changing technology. The slowing or stopping of the development or acceptance of AI technologies may adversely affect our business.

			●			Issues in the use of AI or machine learning in our software may result in reputational harm or liability.

			●			Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

			●			Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) could have a material adverse effect on our business and stock price.

			●			Future sales of shares by existing shareholders could cause our stock price to decline.

			●			The Company may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous to the holder, thereby making the Public Warrants worthless.

			●			We have the ability to require holders of the Public Warrants to exercise such warrants on a cashless basis, which will cause holders to receive fewer shares of Common Stock upon their exercise of the Public Warrants than they would have received had they been able to exercise their Public Warrants for cash.

			●			Our management does not have prior experience in operating a public company.

			●			A substantial number of the Company’s Common Stock are restricted securities and as a result, there may be limited liquidity for our Common Stock.


			●			Our revenue growth depends in part on the success of our strategic relationships with third parties, including channel partners, and if we are unable to establish and maintain successful relationships with them, our business, operating results, and financial condition could be adversely affected.

			●			Our ability to sell our software and services to customers is dependent on the quality of our offerings, and our failure to maintain the quality of our offerings could have a material adverse effect on our sales and results of operations.

			●			We may not be able to effectively develop and expand our sales, marketing and customer support capabilities.

			●			We may generate a significant portion of our revenues primarily from a few major customers, and loss of business from such customers could reduce our revenues and significantly harm our business.

			●			If we are not able to grow, maintain and enhance our brand and reputation, our relationships with our customers, partners, investors and employees may be harmed, and our business and results of operations may be adversely affected.

			●			If we are unable to achieve and sustain a level of liquidity sufficient to support our operations and fulfill our obligations, our business, operating results and financial position could be adversely affected.

			●			Changes in our subscription or pricing models could adversely affect our operating results.

			●			The benefits of our products to customers and projected return on investment have not been substantiated through long-term trials or use.

			●			We may acquire or invest in companies and technologies, which may divert our management’s attention, and result in additional dilution to our stockholders. We may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions or investments.

			●			Our ability to complete the Acquisition is dependent on our ability to obtain financing on favorable terms, or at all.

			●			We may be unable to successfully integrate our business with Cataneo or realize the expected benefits of the Acquisition on our expected timeframe or at all. In addition, if we choose to acquire or invest in other new businesses, products or technologies, we may be unable to complete these acquisitions or successfully integrate them in a cost-effective and/or non-disruptive manner.


			●			the success of our sales and marketing efforts;

			●			our ability to increase our margins;



			●			the timing of expenses and revenue recognition;

			●			the timing and amount of payments received from our customers;

			●			termination of one or more large contracts by customers or channel providers;

			●			the time- and cost-intensive nature of our sales efforts and the length and variability of sales cycles;

			●			the amount and timing of operating expenses related to the maintenance and expansion of our business and operations;

			●			the timing and effectiveness of new sales and marketing initiatives;

			●			changes in our pricing policies or those of our competitors;

			●			the timing and success of new products, features, and functionality introduced by us or our competitors;

			●			cyberattacks and other actual or perceived data or security breaches;

			●			our ability to hire and retain employees, in particular, those responsible for the development, operations and maintenance, and selling or marketing of our software; and our ability to develop and retain talented sales personnel who are able to achieve desired productivity levels in a reasonable period of time and provide sales leadership in areas in which we are expanding our sales and marketing efforts;


			●			changes in the competitive dynamics of our industry;

			●			the cost of and potential outcomes of future claims or litigation, which could have a material adverse effect on our business;

			●			indemnification payments to our customers or other third parties;

			●			ability to scale our business with increasing demands;

			●			the timing of expenses related to any future acquisitions; and

			●			general economic, regulatory, and market conditions, including the impact of public health crises such as the COVID-19 pandemic and international affairs such as the conflict between Russia and Ukraine and in the Middle East which may cause financial market volatility.


			1			The Company has not invested the resources to properly document its risks affecting the financial statements and controls in place to mitigate those risks in accordance with the requirements for a functioning internal control system.

			2			The Company, has not yet invested the necessary resources into the accounting and reporting functions in order to properly account for and prepare its US GAAP compliant financial statements on a timely basis.

			3			The Company has failed to properly account for its merger with Datum Point Labs ("DPL"), specifically to obtain a historical value of the patent portfolio acquired by DPL in May 2019, since the merger was between entities under common control.

			4			The Company has failed to timely obtain valuation reports for its underlying common shares or to value its equity grants in accordance with US GAAP.

			5			The Company has failed to properly account for the extinguishment of certain liabilities through the issuance of common shares or through the exercise of warrants.

			6			The Company has failed to properly classify the acquired developed technology from DM Lab Co., LTD ("DM Lab") as an in-process research and development asset.


			1			The Company has failed to impute interest on non-interest bearing related party advances.

			2			The Company incorrectly recorded certain selling, general and administrative expenses.

			3			The Company has incorrectly included certain 2023 liabilities in accounts payable at December 31, 2022.


			●			AI companies focused on solutions in the conversational interface, language understanding and processing;

			●			organizations offering products within our current target verticals; and

			●			legacy providers, including large technology providers seeking to add or scale AI capabilities.


			●			an acquisition may negatively affect our financial results because it may require us to incur charges or assume substantial debt or other liabilities, may cause adverse tax consequences or unfavorable accounting treatment, may expose us to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the acquisition;

			●			costs and potential difficulties associated with the requirement to test and assimilate the internal control processes of the acquired business;


			●			we may encounter difficulties or unforeseen expenditures assimilating or integrating the businesses, technologies, infrastructure, products, personnel or operations of the acquired companies, particularly if the key personnel of the acquired company choose not to work for us or if we are unable to retain key personnel, if their technology is not easily adapted to work with ours, or if we have difficulty retaining the customers of any acquired business due to changes in ownership, management, or otherwise;

			●			we may not realize the expected benefits of the acquisition;

			●			an acquisition may disrupt our ongoing business, divert resources, increase our expenses, and distract our management;

			●			an acquisition may result in a delay or reduction of customer subscriptions for our offerings for both us and the company acquired due to customer uncertainty about continuity and effectiveness of service from either company;

			●			the potential impact on relationships with existing customers, vendors, and channel providers as business partners as a result of acquiring another company or business that competes with or otherwise is incompatible with those existing relationships;

			●			the potential that our due diligence of the acquired company or business does not identify significant problems or liabilities, or that we underestimate the costs and effects of identified liabilities;

			●			exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an acquisition, including but not limited to claims from former employees, customers, or other third parties, which may differ from or be more significant than the risks our business faces;

			●			potential goodwill impairment charges related to acquisitions;

			●			we may encounter difficulties in, or may be unable to, successfully sell any acquired offerings;

			●			an acquisition may involve the entry into geographic or business markets in which we have little or no prior experience or where competitors have stronger market positions;



			●			an acquisition may require us to comply with additional laws and regulations, or to engage in substantial remediation efforts to cause the acquired company to comply with applicable laws or regulations, or result in liabilities resulting from the acquired company's failure to comply with applicable laws or regulations;

			●			our use of cash to pay for an acquisition would limit other potential uses for our cash;

			●			if we incur debt to fund such acquisition, such debt may subject us to material restrictions on our ability to conduct our business as well as financial maintenance covenants; and

			●			to the extent that we issue a significant amount of equity securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease.


			●			continued worldwide growth in the adoption and use of AI technology;

			●			changes in consumer demographics;

			●			changes in public tastes and preferences;

			●			the popularity or acceptance of AI technology; and

			●			government and quasi-government regulation of AI technology, including any restrictions on access, operation and the use of AI.


			●			cease selling or using products that incorporate the intellectual property rights that we allegedly infringe, misappropriate or violate;

			●			make substantial payments for legal fees, settlement payments or other costs or damages;

			●			obtain a license, which may not be available on reasonable terms or at all, to sell or use the relevant technology; or

			●			redesign the allegedly infringing products to avoid infringement, misappropriation or violation, which could be costly, time-consuming or impossible.


			●			a limited availability of market quotations for our securities;

			●			reduced liquidity for our securities;

			●			a determination that our Common Stock is a "penny stock" which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for the Company's securities;

			●			a limited amount of news and analyst coverage; and

			●			a decreased ability to issue additional securities or obtain additional financing in the future.


			●			a classified board of directors so that not all members of the board of directors are elected at one time;

			●			the right of the board of directors to establish the number of directors and fill any vacancies and newly created directorship;

			●			director removal solely for cause;

			●			super-majority voting to amend certain provisions of our Charter and any provision of our Bylaws;

			●			"blank check" preferred stock that our board of directors could use to implement a shareholder rights plan;

			●			the right of our board of directors to issue our authorized but unissued Common Stock and Preferred Stock without stockholder approval;

			●			no ability of our stockholders to call special meetings of stockholders;


			●			no right of our stockholders to act by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

			●			limitations on the liability of, and the provision of indemnification to, our director and officers;

			●			the right of the board of directors to make, alter, or repeal our Bylaws; and

			●			advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.


	Years Ended December 31,				Increase (Decrease)
	2024		2023
Revenues	$	99,790	$	35,210	$	64,580


Operating expenses:
General and administrative	19,242,571		10,841,024		8,401,547
Depreciation and amortization	2,728,411		637,990		2,090,421
Research and development	1,127,779		236,710		891,069
Impairment of deferred customer acquisition costs	13,475,000		—		13,475,000
Total operating expenses	36,573,761		11,715,724		24,858,037
Loss from operations	(36,473,971)		(11,680,514)		(24,793,457)
Other income (expenses):
Interest expense	(202,945)		(56,515)		(146,430)
Interest income	3,328		15,520		(12,192)
Gain on debt extinguishment	1,946,310		—		1,946,310
Change in fair value of warrant liabilities	994,687		—		994,687
Other	17,162		(9,757)		26,919


Other income (expenses), net	2,758,542		(50,752)		2,809,294


Net loss	$	(33,715,429)	$	(11,731,266)	$	(21,984,163)


	Years Ended December 31,
	2024		2023
Cash used in operating activities	$	(14,039,704)	$	(5,054,749)
Cash used in investing activities	(281,390)		(1,139,035)
Cash provided by financing activities	12,785,354		7,876,787
Net (decrease) increase in cash and cash equivalents	$	(1,535,740)	$	1,683,003


			Page
Report of Independent Registered Public Accounting Firm			64
Consolidated Balance Sheets			65
Consolidated Statements of Operations			66
Consolidated Statements of Stockholders’ (Deficit) Equity			67
Consolidated Statements of Cash Flows			68
Notes to Consolidated Financial Statements			70


	December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	149,273	$	1,685,013
Accounts receivable, net of allowance	30,888		10,000
Due from Sponsor	3,000		—
Prepaid expenses and other current assets	1,042,398		201,293
Total current assets	1,225,559		1,896,306
Property and equipment, net	292,757		802,557
Intangible assets, net	16,124,370		17,882,147
Right of use asset - operating lease	507,182		—
Other assets	—		1,427,729
TOTAL ASSETS	$	18,149,868	$	22,008,739
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,995,235	$	1,282,974
Accrued expenses	4,593,712		1,637,048
Due to related parties	693,036		—
Deferred revenue	—		2,290
Convertible note	1,140,000		—
Short-term debt	1,655,080		223,300
Operating lease liability	173,497		—
Total current liabilities	14,250,560		3,145,612
Warrant liabilities	919,050		—
Operating lease liability	335,766		—
Note payable - related party	—		500,000
Long-term debt	—		668,674
Total liabilities	15,505,376		4,314,286
Commitments and Contingencies (Note N)
Stockholders’ equity:
Preferred stock par value $0.0001 per share, 10,000,000 shares authorized, none designated. There are no shares issued or outstanding as of December 31, 2024 or December 31, 2023	—		—
Common stock par value of $0.0001 per share, 750,000,000 shares authorized. As of December 31, 2024 and 2023, respectively, 39,573,988 and 23,270,404 shares issued and outstanding	3,957		2,327
Additional paid-in capital	49,657,684		30,993,846
Accumulated deficit	(47,017,149)		(13,301,720)
Total stockholders’ equity	2,644,492		17,694,453
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	18,149,868	$	22,008,739