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 June 30, 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

incorporation or organization)

(I.R.S. Employer .

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 August 14, 2026, 7,488,046 shares of the Issuer’s common stock, $0.0001 par value per share, and 1,644,096 public warrants (after giving effect to the 1-for-10 reverse stock split on December 12, 2025) representing the right to acquire one share of the issuer’s common stock at an exercise price of $115.00 per share were outstanding.

Table of Contents

			PAGE
Part I. Financial Information			4
	Item 1. Financial Statements		4
		Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025	4
		Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025	5
		Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 and 2025	6
		Unaudited Condensed Consolidated Statement of Cash Flows For the Six Months Ended June 30, 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		23
	Item 3. Quantitative and Qualitative Disclosures About Market Risk		29
	Item 4. Controls and Procedures		30
Part II. Other Information			31
	Item 1. Legal Proceedings		31
	Item 1A. Risk Factors		31
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		31
	Item 3. Defaults Upon Senior Securities		31
	Item 4. Mine Safety Disclosures		31
	Item 5. Other Information		31
	Item 6. Exhibits		32
Signatures			33

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 successfully integrate Cataneo GmbH (“Cataneo”) which was acquired on June 30, 2026, and to realize the anticipated benefits of the acquisition; the risk associated with the integration of Cataneo’s operations, technology, and personnel; and the possibility that the expected benefits of the acquisition may not be realized or may take longer to realize than expected;
	●	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”).

	June 30, 2026			December 31, 2025 ^()
ASSETS
Current assets
Cash and cash equivalents	$	708,202		$	172,124
Accounts receivable		829,142			250,120
Accounts receivable-Related Party, net		123,844			-
Accounts receivable		123,844			-
Prepaid and other current assets		953,287			1,213,777
Total current assets		2,614,475			1,636,021
Property and equipment, net		330,986			287,073
Right of use asset		839,271			329,505
Intangible assets, net		15,006,781			13,050,901
Goodwill		10,758,546			-
Investments		1,152,530			-
Other non-current assets		2,283			-
Total assets	$	30,704,872		$	15,303,500

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		3,206,471			5,042,010
Accrued expenses		4,121,773			3,666,784
Lease liability, current		314,847			-
Short-term debt		369,570			1,342,352
Convertible debt		760,000			760,000
Income tax payables		144,978			-
Other current liabilities		345,743			-
Total current liabilities		9,263,382			10,811,146
Lease liability, non-current		530,716			309,752
Long-term debt		58,416			-
Warrant liabilities		230,173			721,758
Deferred tax liabilities		1,182,088			-
Total liabilities		11,264,775			11,842,656

Commitments and contingencies (Note I)		-			-

Stockholders’ equity
Preferred stock par value $0.0001 per share, 10,000,000 shares authorized, none designated. No shares issued or outstanding as of June 30, 2026 and December 31, 2025		-			-
Common stock par value of $0.0001 per share, 750,000,000 shares authorized; 7,433,350 shares issued and outstanding as of June 30, 2026, 5,783,524 shares issued and outstanding as of December 31, 2025 (*)		742			578
Additional paid-in capital		81,506,244			59,102,850
Accumulated deficit		(62,066,889	)		(55,642,584	)
Total stockholders’ equity		19,440,097			3,460,844
Total liabilities and stockholders’ equity	$	30,704,872		$	15,303,500

	2026			2025			2026			2025
	For the three months ended June 30,						For the six months ended June 30,
	2026			2025			2026			2025
Revenue		56,562			5,000			160,873			15,000
Revenue-related party, net	$	103,521		$	-		$	103,521		$	-
Cost of goods sold		-			-			-			-
Gross profit		160,083			5,000			264,394			15,000

Operating expenses
General and administrative expenses		2,634,629			1,848,021			4,998,533			5,062,210
Research and development		5,004			7,398			31,948			18,095
Depreciation and amortization		1,051,344			974,889			2,098,755			1,914,095
Total operating expenses		3,690,977			2,830,308			7,129,236			6,994,400

Loss from operations		(3,530,894	)		(2,825,308	)		(6,864,842	)		(6,979,400	)

Other income (expense)
Interest expense, net		(14,693	)		(21,609	)		(72,300	)		(146,651	)
Change in fair value of warrant liabilities		197,292			(190,715	)		491,585			424,177
Gain on debt extinguishment		-			3,959,054			89,340			3,959,054
Other income (expense), net		(5,033	)		(16,342	)		(11,099	)		37,670
Total other income, net		177,566			3,730,388			497,526			4,274,250

Income (loss) before income tax expense		(3,353,328	)		905,080			(6,367,316	)		(2,705,150	)
Income tax expense		(10,000	)		-			(56,989	)		-
Net income (loss)	$	(3,363,328	)	$	905,080		$	(6,424,305	)	$	(2,705,150	)

Net loss per common share, basic and diluted (*)	$	(0.49	)	$	0.21		$	(1.00	)	$	(0.66	)
Weighted average number of common shares outstanding, basic and diluted (*)		6,824,379			4,216,612			6,426,123			4,124,018

	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, 2024		-	$	-		3,816,899	$	382	$	49,661,259	$	(47,017,149	)	$	2,644,492
Sale of common stock		-		-		118,643		12		1,325,530		-			1,325,542
Stock issued upon conversion of convertible notes		-		-		31,667		3		379,997		-			380,000
Stock issued for SEPA liability		-		-		64,357		6		432,472		-			432,482
Warrant exercises		-		-		78,713		8		1,499,542		-			1,499,550
Stock-based compensation		-		-		22,359		2		374,924		-			374,926
Stock issued in settlement of liabilities		-		-		58,803		6		265,488		-			265,494
Net loss		-		-		-		-		-		(3,610,230	)		(3,610,230	)
Balance, March 31, 2025		-		-		4,191,441		419		53,939,216		(50,627,379	)		3,312,256
Stock-based compensation		-		-		-		-		128,839		-			128,839
Warrant exercises		-		-		2,551		-		50,000		-			50,000
Issuance of common stock		-		-		78,658		8		1,328,963		-			1,328,971
Net income		-		-		-		-		-		905,080			905,080
Balance, June 30, 2025		-	$	-		4,272,650	$	427	$	55,447,018	$	(49,722,299	)	$	5,725,146

	1.	Identification of the Contract, or Contracts, with a Customer.
	2.	Identification of the Performance Obligations in the Contract.
	3.	Determination of the Transaction Price.
	4.	Allocation of the Transaction Price to the Performance Obligations in the Contract.
	5.	Recognition of Revenue when, or as, Performance Obligations are Satisfied.

	●	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.

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	$	-

	June 30, 2026		December 31, 2025
Unvested restricted shares	$	-	$	-
Options		138,640		138,640
Warrants		3,273,204		4,206,300
Convertible note (as converted)		633,334		1,555,946
Total	$	4,045,178	$	5,900,886

	June 30, 2026		December 31, 2025
Security deposits	$	112,176	$	107,226
Cataneo GmbH deposit		-		550,000
Prepaid VAT		13,417		1,993
Prepaid professional fees		534,180		424,835
Prepaid insurance		282,197		99,437
Other		11,317		30,286
Prepaid expenses and other current assets	$	953,287	$	1,213,777

	June 30, 2026			December 31, 2025
Equipment	$	700,722		$	676,785
Furniture		12,012			13,591
Capitalized software		240,515			240,515
Cataneo property and equipment		39,601			-
Total		992,850			930,891
Accumulated depreciation and amortization		(661,864	)		(643,818	)
Property and equipment, net of accumulated depreciation and amortization	$	330,986		$	287,073

	2026			2025
	For the six months ended June 30,
	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(6,424,305	)	$	(2,705,150	)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization expense		2,098,755			1,914,095
Allowance for uncollected receivables		-			30,000
Change in fair value of warrant liabilities		(491,585	)		(424,177	)
Gain on debt extinguishment		(89,340	)		(3,959,054	)
Equity based compensation		224,000			498,440
Stock issued for services		596,640			-
Non-cash interest expense		72,300			86,042
Reduction in the right of use asset		94,229			87,120
Changes in operating assets and liabilities:
Accounts receivable		63,933			(8,112	)
Prepaid and other current assets		270,987			(877,247	)
Accounts payable		(2,202,790	)		600,842
Accrued expenses		246,654			(336,925	)
Lease liability		(68,184	)		(143,008	)
NET CASH USED IN OPERATING ACTIVITIES		(5,608,706	)		(5,237,134	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investments		(1,152,473	)		-
Payment for business acquisitions, net of cash acquired		(8,480,285	)		-
Purchase of property and equipment		(4,312	)		-
Capitalized internal-use software costs		(161,437	)		(141,512	)
NET CASH USED IN INVESTING ACTIVITIES		(9,798,507	)		(141,512	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds received from option and warrant exercises		5,984,750			1,549,550
Repayments of short term debt		(50,000	)		1,102,866
Repayment of note payable		(630,332	)		(57,200	)
Proceeds from the sale of common stock		10,454,978			2,654,513
Proceeds from Standby Equity Purchase Agreement liability		183,895			-
NET CASH PROVIDED BY FINANCING ACTIVITIES		15,943,291			5,249,729

Net change in cash and cash equivalents		536,078			(128,917	)
Cash, beginning of period		172,124			149,273
Cash, end of period	$	708,202		$	20,356

	June 30, 2026
	Gross		Accumulated Amortization			Net
Amortizing intangible assets:
Patent portfolio	$	1,268,563	$	(729,119	)	$	539,444
Developed technology		18,692,109		(8,117,970	)		10,574,139
Cataneo Customer Relationships		896,236		-			896,236
Cataneo capitalized software		2,996,962		-			2,996,962
Total	$	23,853,870	$	(8,847,089	)	$	15,006,781

Years Ending December 31:

Remainder of 2026	$	2,564,968
2027		4,644,704
2028		4,472,748
2029		2,101,271
2030 and beyond		1,223,090
Total	$	15,006,781


Purchase consideration:
Common Stock, at fair value	$	4,363,290
Deferred consideration payable		341,190
Cash paid		9,000,043
Total purchase consideration	$	13,704,522

Purchase price allocation:
Cash	$	601,839
Accounts receivable		766,799
Prepaid and other current assets		10,497
Other non-current assets		2,340
Property and Equipment		39,601
Intangible assets		3,893,198
Goodwill		10,758,547
Operating lease right of use asset		603,995
Accounts payable and accrued expenses		(554,872	)
Other current liabilities		(345,743	)
Income taxes payable		(144,978	)
Deferred tax liabilities		(1,182,088	)
Lease liability		(603,995	)
Debt		(140,618	)
Fair value of net assets acquired	$	13,704,522

	Fair value		Useful life
Customer Relationships	$	896,236	5
Capitalized software		2,996,962	5
Total intangible assets	$	3,893,198

(in thousands)	2026 Pro Forma			2025 Pro Forma		2026 Pro Forma		2025 Pro Forma
	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2026 Pro Forma			2025 Pro Forma		2026 Pro Forma		2025 Pro Forma
Revenue	$	2,855		$	2,534	$	5,581	$	4,833
Net income (loss)	$	(3,208	)	$	1,200	$	(