Brand Engagement Network Inc.

Brand Engagement Network Inc. (BEN) operates in the rapidly advancing generative AI industry, focusing on the engagement layer where human interaction connects directly to enterprise systems, workflows, and real-world outcomes. The total addressable market for conversational AI, which BEN targets, is estimated to grow from approximately $10 billion ¹ to $47 billion ² by 2030. The company's technology is built on a proprietary Engagement Language Model (ELM™) designed for secure, closed-loop environments using organization-approved data and embedded governance and compliance controls. BEN's solutions are designed to operate effectively across cloud, on-premises, and hybrid environments, supporting seamless integration with customer systems and deployment of multimodal AI Agents within native applications, kiosks, and software development kit integrations.

BEN's core business model revolves around providing configurable, enterprise-grade conversational AI solutions that connect human intent to enterprise systems, workflows, and execution, while delivering secure, consistent, and compliant interactions. The company generates revenue through its AI Agent offerings, which are trained on client-specific internal data to provide tailored customer service, education, and engagement solutions. These AI Agents can connect to clients’ real-time data systems to access approved information, enabling personalized responses while maintaining compliance with privacy and data protection regulations. The company also offers tools that support clients’ customers in managing their personal data and interactions. As a pre-revenue company, revenue in 2022 through 2024 was minimal, with initial revenues in 2022 generated from beta testing a mobile advertising platform that was subsequently discontinued.

The company's product and service lines are categorized by industry-specific and cross-industry use cases. In hospitality and service operations, solutions include a Guest Experience Solution for managing guest requests and delivering personalized recommendations, an Operations Coordination Solution for connecting customer interactions to internal workflows, and a Concierge Solution for context-aware recommendations and booking support. In healthcare and life sciences, offerings include a Patient Engagement Solution for education and support, a Care Navigation Solution for scheduling and accessing services, and an Insurance and Benefits Solution for education on healthcare coverage. Additionally, a Comprehensive Continuum of Care Solution facilitates integrated management of acute, chronic, and complex multi-morbidity presentations. For advertising and media, BEN offers an Interactive Engagement Solution to transform digital content into conversational experiences. In the automotive sector, solutions include a Retail and Service Solution for enhancing customer interactions and a Technician Support Solution for real-time information and procedural guidance.

For the fiscal year ended December 31, 2025, BEN reported total revenue of $275,120 ³, an increase from $99,790 ⁴ in 2024. The company incurred a net loss of $(8,625,435) ⁵ in 2025, a significant improvement from a net loss of $(33,715,429) ⁶ in 2024. Loss from operations improved from $(36,473,971) ⁷ in 2024 to $(12,626,149) ⁸ in 2025. Total operating expenses decreased from $36,573,761 ⁹ in 2024 to $12,901,269 ¹⁰ in 2025. Cash and cash equivalents at year-end 2025 were approximately $172,124 ¹¹, up from $149,273 ¹² in 2024. Total liabilities were reduced from $15,505,376 ¹³ as of December 31, 2024, to $11,842,656 ¹⁴ as of December 31, 2025, a reduction of approximately $3.6 million ¹⁵. The accumulated deficit as of December 31, 2025, was $55,642,584 ¹⁶. Basic and diluted EPS for 2025 was $(1.97) ¹⁷, compared to $(10.25) ¹⁸ in 2024. Cash used in operating activities was $(5,086,356) ¹⁹ in 2025, an improvement from $(14,039,704) ²⁰ in 2024.

Year-over-year, revenue increased by $175,330 ²¹. General and administrative expenses decreased by approximately $10,369,656 ²² in 2025 compared to 2024, primarily due to $3.1 million ²³ in transaction costs incurred in the prior period related to the Business Combination not recurring. Research and development expenses decreased by approximately $964,806 ²⁴ in 2025, mainly due to the termination of a sponsorship agreement with Korea University and a decrease in stock compensation expense. Depreciation and amortization expenses increased by approximately $1,136,970 ²⁵ in 2025, primarily due to amortization expense associated with developed technology placed into service in mid-2024. The company also recognized a gain on debt extinguishment of $4,191,074 ²⁶ in 2025, up from $1,946,310 ²⁷ in 2024.

Significant operational developments in 2025 included the advancement of the general availability of BEN's platform for enterprise deployment. The company expanded geographically and across new verticals, strengthening its presence in Mexico through partnerships with SKYE LATAM and related entities, including the formation of Skye Salud for healthcare modernization. In the United States, engagement with healthcare organizations deepened, and expansion into the insurance sector occurred through a strategic partnership with Swiss Life Global Solutions. Momentum was maintained in South Africa through collaborations with Valio Technologies and hospitality partners, and BEN entered the hospitality vertical through a collaboration with Seven Visions Resort & Places, The Dvin, in Yerevan, Armenia. In advertising and media, reseller and deployment activity expanded through Vybroo and Grupo Siete in Mexico and other international markets. The company also terminated its exclusive global automotive reseller agreement with AFG Companies, Inc. in January 2025 and initiated legal action against them.

Management anticipates that significant additional expenditures will be necessary to develop and expand the business, including through stock and asset acquisitions, before significant positive operating cash flows can be achieved. The company will need to raise additional capital to continue to fund operations and product research and development, primarily through the issuance of debt or equity securities for cash. However, the company cannot conclude that these financing efforts are probable of being implemented or, if probable, will be in sufficient amounts to satisfy contractual obligations coming due over the next 12 months.

A major growth area for BEN is the automotive industry, where the company believes there is a significant opportunity for conversational and agentic AI due to increasing cost pressures, evolving consumer expectations for digitally enabled engagement, and the need for efficiency improvements across dealership and service operations. Following the termination of its agreement with AFG Companies, Inc., BEN shifted its automotive commercialization strategy to focus on connecting to vehicle operators and delivering in-vehicle engagement capabilities, such as hands-free search, reservations, and maintenance management through AI-driven voice interaction. The company is in discussions with a global auto manufacturer (OEM) to implement this strategy and anticipates a business decision by the end of Q2 2026.

Another growth area involves expanding supported use cases across existing verticals and into additional industries, including hospitality, insurance, and other service-based sectors. This expansion is driven by scaling deployments, international growth, and further development of platform capabilities. The company's recent developments in 2025, such as the exclusive licensing partnership with SKYE Inteligencia LATAM in Latin America and Spain, the strategic partnership with Valio Technologies in Africa, and collaborations in hospitality with Seven Visions Resort & Places, The Dvin, and in insurance with Swiss Life Global Solutions, reflect this strategy. These initiatives aim to deploy AI in real-world operational environments where engagement drives measurable actions and outcomes, contributing to platform refinement, multilingual deployment capabilities, and integration with third-party systems.

Regarding margin trajectory and cost structure, the company expects to continue to incur significant operating costs that will impact future profitability. These include research and development expenses as new products are introduced and existing offerings are improved, capital expenditures for expanding development and sales capacities, additional operating costs for production ramp-up, general and administrative expenses as operations scale, interest expense from debt financing activities, and selling and distribution expenses for brand building and marketing. The company has a history of losses and negative cash flows from operations, with an accumulated deficit of approximately $55,642,584 ¹⁶ at December 31, 2025, and expects these to continue for the foreseeable future.

Operationally, the company's ongoing development efforts are focused on expanding platform scalability, strengthening enterprise integrations, and supporting real-world operational environments. BEN aims to ensure its AI solutions operate effectively across cloud, on-premises, and hybrid environments, supporting seamless integration with customers’ systems. The company also plans to dedicate significant resources to sales and marketing initiatives, including in markets where it has limited or no experience. As of December 31, 2025, BEN had approximately 29 ²⁸ full-time employees, including 2 ²⁹ executive officers, and also engages independent contractors and consultants. The company has an office in the Republic of Korea dedicated to research and development activities.

For capital allocation, the company will need to raise additional capital to continue to fund operations and product research and development. This will primarily be through the issuance of debt or equity securities for cash. The company's ability to continue as a going concern is dependent upon its ability to raise additional capital and ultimately achieve sustainable revenues and profitable operations. As of December 31, 2025, the company's cash of approximately $172,124 ¹¹ is insufficient to meet anticipated cash requirements for at least the next 12 months.

Management explicitly flagged several structural headwinds and execution risks to its growth plan. These include the company's limited operating history, which makes it difficult to evaluate prospects and forecast future results, and a history of losses with no guarantee of achieving consistent profitability. The company expects to be dependent on a limited number of customers and end markets, and a decline in revenue from, or loss of, any significant customer could have a material adverse effect. The total addressable market opportunity for its products may be much smaller than estimated. Sales cycles may be long and unpredictable, particularly for large subscriptions, requiring considerable time and expense, with no guarantee that pilot programs will convert into long-term sales. The company's revenue growth also depends on customers purchasing additional subscriptions and renewing existing ones, and retention rates may decline or fluctuate due to various factors. Furthermore, the company relies on strategic relationships with third parties, including channel partners, and the success of these relationships is not guaranteed, as evidenced by the termination of the exclusive reseller agreement with AFG.

Geographic, regulatory, and macro factors identified as constraints include the rapidly evolving and complex laws, rules, and regulations to which the business is subject, both domestically and internationally, in areas such as intellectual property, data privacy, cybersecurity, and AI governance. Compliance with these requirements can be onerous and expensive, potentially impacting the company's competitive position and ability to develop and deploy products. The increasing focus on AI risks and strategic importance has already led to regulatory restrictions and may result in additional ones, potentially limiting the ability of downstream customers to acquire, deploy, and use systems that include BEN's products. The company's operations could also be affected by the deterioration of economic conditions in South Korea, where a significant number of employees and operations are located.

The company faces material risks including its limited operating history and a history of recurring losses, with an accumulated deficit of approximately $55,642,584 ¹⁶ as of December 31, 2025, and negative cash flows from operations of $(5,086,356) ¹⁹ in 2025, raising substantial doubt about its ability to continue as a going concern. Dependence on a limited number of customers and end markets, coupled with long and unpredictable sales cycles, poses a significant risk to future revenue. The total addressable market for conversational AI may be smaller than the estimated growth from $10 billion ¹ to $47 billion ² by 2030. Legal proceedings, such as the lawsuit against AFG Companies, Inc. for fraudulent misrepresentation and breach of contract, including a failed payment of $6,500,000 ³⁰, are expensive and could harm the business. The company has identified material weaknesses and significant deficiencies in its internal control over financial reporting, which have not been remediated as of April 15, 2026, potentially affecting the accuracy and timeliness of financial reporting. Intense and growing competition in the rapidly evolving AI market, where competitors may have greater resources, technology, and market presence, could weaken BEN's competitive position. The nascent and rapidly changing nature of AI technology, coupled with social and ethical issues, could slow adoption and result in reputational harm or liability. Reliance on third-party cloud-based infrastructure providers exposes the company to risks of disruptions, failures, and security vulnerabilities. Cybersecurity threats, including ransomware attacks and data breaches, could lead to regulatory investigations, litigation, fines, and reputational harm, despite the company's current belief that no known risks are reasonably likely to materially affect it. Evolving and stringent U.S. and foreign data privacy and security laws, such as HIPAA, CCPA, and GDPR, impose complex compliance obligations and potential for significant fines, up to 20 million Euros or 4% of annual global revenue ³¹ under GDPR, for non-compliance. The company's common stock may also face delisting from Nasdaq if it fails to maintain listing standards, such as the $1.00 ³² minimum bid price requirement, which it regained compliance with on December 31, 2025, but cannot guarantee continued compliance.

Management's overall tone emphasizes the company's position as an innovative artificial intelligence platform provider focused on transforming engagement and analytics for businesses through security-focused, multimodal communication and human-like AI assistants. They highlight the proprietary Engagement Language Model (ELM™) and its capabilities in natural language processing, anomaly detection, multisensory awareness, sentiment and environmental analysis, and real-time personalization as powerful tools to elevate customer experiences, optimize cost management, and supercharge operational efficiency. The company acknowledges its development stage, having not generated significant revenue to date, and anticipates continued operating losses and negative cash flows for the foreseeable future, necessitating substantial additional capital. Management's strategic priorities include expanding the customer base through direct sales and strategic partnerships, implementing a "land and expand" strategy to deepen customer engagements, and continuously developing product and vertical expansion. They also emphasize collaboration with academic and research institutions to enhance technology and access talent, and continuing collaboration with Cataneo GmbH for go-to-market efforts, particularly in international markets.