Brand Engagement Network (BNAI) Q3 2024 earnings summary

Executive summary

• New CEO Paul Chang outlined a vision to scale secure, closed conversational AI, with expansion in healthcare, automotive, and financial services, and Dr. Richard S. Isaacs joined the board.

• Entered a definitive agreement to acquire Cataneo GmbH, a Munich-based media technology company, for $19.5 million in cash and stock, expected to close by year-end 2024.

• Completed a business combination with DHC Acquisition Corp. in March 2024, resulting in a public Nasdaq listing.

• Key partnerships and integrations in Q3 included Cox Automotive's Dealer.com, Vybroo, Farmacias Roma, KangarooHealth, IntelliTek, INTERVENT, and Members Only Health.

• The company remains in a development stage, with minimal revenue and significant ongoing operating losses.

Financial highlights

• Q3 2024 revenue was $50,000, with $99,790 for the nine months ended September 30, 2024, compared to no revenue in prior year periods.

• Net loss for Q3 2024 was $5.8 million, or $0.16 per share, and $15.8 million, or $0.50 per share, for the nine months ended September 30, 2024.

• Operating expenses rose to $5.3 million in Q3 2024, driven by higher professional fees, employee costs, and transaction expenses.

• Cash used in operating activities was $11.7 million for the nine months ended September 30, 2024; cash and equivalents at period end were $72,878.

• Total assets increased to $31.9 million at September 30, 2024, from $22.0 million at year-end 2023.

Outlook and guidance

• Management expects continued operating losses and negative cash flows for at least the next 12 months, with substantial doubt about the company's ability to continue as a going concern.

• The company will require additional capital to fund operations, R&D, and the Cataneo acquisition, and is seeking financing through equity, debt, and a $50 million Standby Equity Purchase Agreement (SEPA) with Yorkville.

• Focus remains on performance, execution, converting pilots into revenue, and enhancing liquidity.

• Cataneo acquisition is expected to be earnings and value-accretive for shareholders and expand media technology capabilities.