UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2026

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

For the transition period from ___________ to ___________

Commission file number 001-40130

Brand Engagement Network Inc.

(Exact name of registrant as specified in its charter)

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

300 Delaware Ave
Suite 210
Wilmington, DE		19801
(Address of Principal Executive Offices)		(Zip Code)

(307) 757-3650

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of May 15, 2026, 6,507,687 shares of the Issuer’s common stock, $0.0001 par value per share, and 1,644,096 public warrants representing the right to acquire one share of the Issuer’s common stock for $0.16, were outstanding.

Table of Contents

		PAGE
Part I. Financial Information		4
Item 1. Financial Statements		4
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025		4
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025		5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025		6
Unaudited Condensed Consolidated Statement of Cash Flows For the Three Months Ended March 31, 2026 and 2025		7
Notes to Unaudited Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		27
Item 4. Controls and Procedures		28
Part II. Other Information		29
Item 1. Legal Proceedings		29
Item 1A. Risk Factors		29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3. Defaults Upon Senior Securities		29
Item 4. Mine Safety Disclosures		29
Item 5. Other Information		29
Item 6. Exhibits		30
Signatures		32

Brand Engagement Network, BEN, our logo and our other trademarks or service marks appearing in this report are the property of Brand Engagement Network Inc. Trade names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for convenience, the trademarks, service marks and trade names included in this report are without the ®, ™ or other applicable symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.

Unless otherwise indicated, “Brand Engagement Network,” “BEN,” “the Company,” “our,” “us,” or “we,” refer to Brand Engagement Network Inc. and its consolidated subsidiaries.

	●	our ability to develop and attain market acceptance for our products and services;
	●	our ability to maintain the listing of our securities on the Nasdaq Stock Market (“Nasdaq”);
	●	cybersecurity risks that may affect us directly or may impact us indirectly by virtue of their effects on our clients, markets or vendors, including our ability to identify and address cybersecurity risks, including those posed by the increasing use of artificial intelligence (such as, but not limited to, ransomware, data security breaches, “denial of service” attacks, “hacking” and identity theft) affecting us, our clients, and our third-party vendors and service providers;
	●	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;
	●	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 dependence 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;
	●	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; and
	●	other risks, uncertainties and factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”).

	March 31, 2026			December 31, 2025**
ASSETS
Current assets
Cash and cash equivalents	$	1,801,011		$	172,124
Accounts receivable, net of allowance		130,415			250,120
Prepaid and other current assets		1,665,548			1,213,777
Total current assets		3,596,974			1,636,021

Property and equipment, net		278,777			287,073
Intangible assets, net		12,151,882			13,050,901
Right of use asset		282,859			329,505
Total assets	$	16,310,492		$	15,303,500

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	3,361,217		$	5,042,010
Accrued expenses		3,872,270			3,666,784
Short-term debt		318,521			1,342,352
Convertible debt		760,000			760,000
Total current liabilities		8,312,008			10,811,146

Lease liability, non-current		289,136			309,752
Warrant liabilities		427,465			721,758
Total liabilities		9,028,609			11,842,656

Commitments and contingencies (Note I)		-			-

Stockholders’ equity
Preferred stock par value $0.0001 per share, 1,000,000 shares authorized, none designated. No shares issued or outstanding as of March 31, 2026 and December 31, 2025		-			-
Common stock par value of $0.0001 per share, 75,000,000 shares authorized; 6,491,925 shares issued and outstanding as of March 31, 2026, 5,783,524 shares issued and outstanding as of December 31, 2025 (*)		649			578
Additional paid-in capital		65,984,795			59,102,850
Accumulated deficit		(58,703,561	)		(55,642,584	)
Total stockholders’ equity		7,281,883			3,460,844
Total liabilities and stockholders’ equity	$	16,310,492		$	15,303,500

(*)		Adjusted retroactively for reverse stock split, see Note G
(**)		Derived from the audited information


	For the three months ended March 31,
	2026			2025
Revenue	$	104,311		$	10,000

Operating expenses
General and administrative expenses		2,363,904			3,214,189
Research and development		26,944			10,697
Depreciation and amortization		1,047,411			939,206
Total operating expenses		3,438,259			4,164,092

Loss from operations		(3,333,948	)		(4,154,092	)

Other income (expense)
Interest expense, net		(57,607	)		(125,042	)
Change in fair value of warrant liabilities		294,293			614,892
Gain on debt extinguishment		89,340			-
Other income (expense), net		(6,066	)		54,012
Total other income, net		319,960			543,862

Loss before income tax expense		(3,013,988	)		(3,610,230	)
Income tax expense		(46,989	)		-
Net loss	$	(3,060,977	)	$	(3,610,230	)

Net loss per common share, basic and diluted (*)	$	(0.51	)	$	(0.90	)
Weighted average number of common shares outstanding, basic and diluted (*)		5,967,831			4,014,036

	Shares		Amount		Shares		Amount		Capital		Deficit			Total
	Preferred Stock				Common stock				Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2025		-	$	-		5,783,524	$	578	$	59,102,850	$	(55,642,584	)	$	3,460,844
Sale of common stock		-		-		30,752		3		1,542,979		-			1,542,982
Stock issued in conversion of convertible notes		-		-		28,871		3		391,032		-			391,035
Stock issued for Standby Equity Purchase Agreement liability		-		-		-		-		183,895		-			183,895
Warrant exercises		-		-		646,059		65		4,447,069		-			4,447,134
Stock-based compensation		-		-		-		-		112,000					112,000
Stock issued in settlement of liabilities		-		-		2,719		-		204,970		-			204,970
Net loss		-		-		-		-		-		(3,060,977	)		(3,060,977	)
Balance, March 31, 2026		-	$	-		6,491,925	$	649	$	65,984,795	$	(58,703,561	)	$	7,281,883

	2026			2025
	For the three months ended March 31,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,060,977	)	$	(3,610,230	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization expense		1,047,411			939,206
Change in fair value of warrant liabilities		(294,293	)		(614,892	)
Equity based compensation		112,000			369,601
Non-cash interest expense		57,607			86,042
Reduction in the right of use asset		46,646			43,141
Changes in operating assets and liabilities:
Accounts receivable		119,705			(10,000	)
Prepaid and other current assets		(451,771	)		(558,402	)
Accounts payable		(1,680,793	)		903,961
Accrued expenses		400,384			(88,927	)
Lease liability		(20,616	)		(87,362	)
NET CASH USED IN OPERATING ACTIVITIES		(3,724,697	)		(2,627,862	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		8,297			-
Capitalized internal-use software costs		(148,392	)		(110,274	)
NET CASH USED IN INVESTING ACTIVITIES		(140,095	)		(110,274	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from option and warrant exercises		4,447,134			1,499,550
Repayments of short term debt		(50,000	)		-
Repayment of note payable		(630,332	)		-
Proceeds from the sale of common stock		1,542,982			1,325,542
Proceeds from Standby Equity Purchase Agreement liability		183,895			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		5,493,679			2,825,092

Net change in cash and cash equivalents		1,628,887			86,956
Cash, beginning of period		172,124			149,273
Cash, end of period	$	1,801,011		$	236,229

SUPPLEMENTAL NON-CASH DISCLOSURES
Issuance of common stock for Standby Equity Purchase Agreement liability	$	-		$	432,482
Stock-based compensation capitalized as part of capitalized software costs	$	-		$	5,325
Settlement of liabilities into common shares	$	204,970		$	265,494
Conversion of convertible notes into common shares	$	391,035		$	380,000

	●	Common stock - the fair value of the Company’s Common Stock.
	●	Expected Term - The expected term of employee options with service-based vesting is determined using the “simplified” method, as prescribed in the SEC’s Staff Accounting Bulletin No. 107, whereby the expected life equals the arithmetic average of the vesting term and the original contractual term of the option due to the Company’s lack of sufficient historical data. The expected term of nonemployee options is equal to the contractual term.
	●	Expected Volatility - The Company lacks its own historical stock data. Therefore, it estimates its expected stock volatility based primarily on the historical volatility of a publicly traded set of peer companies.
	●	Risk-Free Interest Rate - The Company bases the risk-free interest rate on the U.S. Treasury yield curve commensurate with the expected term of each option.
	●	Expected Dividend -The Company has never declared or paid any cash dividends on its Common Stock and does not plan to pay cash dividends in the foreseeable future, and, therefore, uses an expected dividend yield of zero in its valuation models.

March 31, 2026	(Level 1)		(Level 2)		(Level 3)
	Fair value measurement at reporting date using
March 31, 2026	(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liabilities - Public Warrants	$	-	$	268,189	$	-
Warrant liabilities - Private Placement Warrants		-		159,276		-
Total Warrant Liabilities	$	-	$	427,465	$	-

December 31, 2025	(Level 1)		(Level 2)		(Level 3)
	Fair value measurement at reporting date using
December 31, 2025	(Level 1)		(Level 2)		(Level 3)
Liabilities:
Warrant liabilities - Public Warrants	$	-	$	452,826	$	-
Warrant liabilities - Private Placement Warrants		-		268,932		-
Total Warrant Liabilities	$	-	$	721,758	$	-

	March 31, 2026		December 31, 2025
Unvested restricted shares		-		-
Options		1,386,400		1,386,400
Warrants		15,794,903		16,440,962
Convertible note (as converted)		604,463		633,334
Total		17,785,766		18,460,696

	March 31, 2026		December 31, 2025
Security deposits	$	107,226	$	107,226
Cataneo GmbH deposit		650,000		550,000
Prepaid VAT		1,993		1,993
Prepaid professional fees		483,804		424,835
Prepaid insurance		376,262		99,437
Other		46,263		30,286
Prepaid expenses and other current assets	$	1,665,548	$	1,213,777

	March 31, 2026			December 31, 2025
Equipment	$	676,785		$	676,785
Furniture		13,591			13,591
Capitalized software		240,515			240,515
Total		930,891			930,891
Accumulated depreciation and amortization		(652,114	)		(643,818	)
Property and equipment, net of accumulated depreciation and amortization	$	278,777		$	287,073

	March 31, 2026
	Gross		Accumulated Amortization			Net
Amortizing intangible assets:
Patent portfolio	$	1,265,268	$	(693,790	)	$	571,478
In-process research and development		18,692,109		(7,111,705	)		11,580,404
Total	$	19,957,377	$	(7,805,495	)	$	12,151,882


Remainder of 2026	$	3,227,227
2027		3,841,103
2028		3,698,532
2029		1,305,649
2030		79,371
Total	$	12,151,882

SEC Form 10-Q filed by Brand Engagement Network Inc.