Brand Engagement Network (BNAIW) risk factors, FY2025 10-K

Brand Engagement Network's FY2025 10-K, filed Apr 16, 2026, lists 54 risk factors in 3 groups. Against the prior year's 63: 7 new, 16 dropped, 13 substantially reworded.

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Risk factors listed
543 groups
New this year
7vs 63 last year
Dropped
16since the prior 10-K
Substantially reworded
13of those kept
Section length
22k wordsItem 1A

What the changes say

  • The filing reports an $8.3 million 2025 net loss, $55.3 million accumulated deficit, and continuing risk of unprofitable growth.

What changed since the prior 10-K

New

  • NewRisks Related to our Business and Industry

    The Company does not have a properly documented internal control system in accordance with the requirements of the Committee on Sponsoring Organizations (“COSO”) or some similarly appropriate internal control methodology or formal documentation of the Company’s systems of internal control

    Internal controls are not formally documented under COSO or a similar framework, and expense-classification errors could cause financial-reporting misstatements.

  • NewRisks Related to our Business and Industry

    The Company improperly allocated proceeds received pertaining to certain equity instruments issued in connection with debt

    The Company improperly allocated proceeds between debt and related equity instruments, creating complex accounting and financial-reporting risks.

  • NewRisks Related to our Business and Industry

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

    Enterprise software sales may take considerable time and expense because purchasing decisions depend on budgets, internal systems, economic conditions, and competing offers.

  • NewRisks Related to our Business and Industry

    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

    Revenue depends on customers renewing one-to-three-year subscriptions and buying more products, but usage, pricing, competition, and AI spending may change.

  • NewRisks Related to our Business and Industry

    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

    A few major customers may initially provide much of the Company’s revenue, and losing or reducing any relationship could materially hurt results.

  • NewRisks Related to our Business and Industry

    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

    Acquisitions or technology investments could fail to close, integrate, or deliver benefits while increasing management demands, costs, and operating complexity.

  • NewRisks Related to Ownership of Our Common Stock and Public Warrants

    If the Company falls out of compliance with the Bid Price Requirement in the future, the Common Stock may be subject to delisting. There can be no assurance that the Company will continue to be compliant with the Bid Price Requirement

    Failure to maintain Nasdaq’s bid-price requirement could lead to delisting, reduced liquidity, penny-stock treatment, limited coverage, and harder future financing.

Dropped

  • Dropped

    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

    Existing holders’ future resales could depress the stock price despite business performance.

  • Dropped

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

  • Dropped

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

    The Company may need additional financing on uncertain or unfavorable terms.

  • Dropped

    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

  • Dropped

    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

  • DroppedRisks Related to our Business and Industry

    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

  • DroppedRisks Related to our Business and Industry

    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

    Completing and financing the Cataneo Acquisition, integrating it, and realizing benefits may fail.

  • DroppedRisks Related to our Business and Industry

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

    Nasdaq delisting could restrict trading and impose additional investor and company burdens.

  • DroppedRisks Related to our Business and Industry

    Our ability to complete the Acquisition is dependent on our ability to meet the conditions to close, including the ability to obtain financing on favorable terms, or at all and our ability to pay down payments in accordance with the Purchase Agreement

    Public Warrants could be redeemed or forced into cashless exercise, reducing their value.

  • DroppedRisks Related to Intellectual Property, Information Technology, Data Privacy and Security

    and we cannot guarantee that third parties' infrastructure in our supply chain or our third-party partners' supply chains have not been compromised

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

    We do not intend to pay dividends for the foreseeable future

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

    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

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

    required to be filed with the SEC or (ii) we are no longer an emerging growth company. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

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

    Accounting resources, the DPL merger, patent valuation, and equity-grant valuation may not meet US GAAP requirements.

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

    consecutive business days, the Staff will provide written notification to the Company that it has regained compliance with the Bid Price Requirement (unless the Staff exercises its discretion to extend the 10-day period)

    DM Lab’s acquired technology may be improperly classified as in-process research and development.

  • DroppedRisks Related to Ownership of Our Common Stock and Public Warrants

    The issuances of additional shares of Common Stock under the SEPA may result in dilution of holders of Common Stock and have a negative impact on the market price of the Common Stock

    2023 liabilities may have been incorrectly included in 2022 accounts payable.

Reworded

  • 100% rewrittenRisks Related to our Business and Industry

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

    The risk now quantifies $8.3 million and $33.7 million net losses, a $55.3 million accumulated deficit, and expected expense growth.

  • 100% rewrittenRisks Related to our Business and Industry

    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

    The risk now centers on protecting the brand in conversational AI, data management, and analytics, including reliability, security, and competition.

  • 100% rewrittenRisks Related to our Business and Industry

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

    The risk now emphasizes that product benefits and customer return on investment lack long-term validation, potentially causing cancellations, delays, and lost revenue.

  • 100% rewrittenRisks Related to our Business and Industry

    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

    The risk now focuses on dependence on channel providers, resellers, OEMs, integrators, vendors, and cloud platforms as an increasingly important growth route.

  • 84% rewrittenRisks Related to our Business and Industry

    market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities

    The risk text is substantively unchanged, continuing to warn that unfinished internal controls could cause misstatements, restatements, publicity, sanctions, or investigations.

  • 77% rewrittenRisks Related to Ownership of Our Common Stock and Public Warrants

    Failure to establish and maintain effective internal controls in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our business and stock price

    The Sarbanes-Oxley discussion now clarifies when auditor attestation may begin and that inadequate documentation, design, or operation could produce an adverse report.

  • 66% rewrittenRisks Related to our Business and Industry

    We may offer discounts on our pricing models to drive awareness of our products and encourage usage and adoption. If these marketing strategies fail to lead to customers entering into long-term contracts with company-favorable pricing terms, our ability to grow our revenue will be adversely affected

    The duplicate discussion of unsubstantiated product benefits was removed; the remaining risk concerns discounted pricing failing to generate favorable long-term contracts.

  • 62% rewrittenRisks Related to our Business and Industry

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

    The sales, marketing, and support-capability risk is substantively unchanged, retaining concerns about investment, revenue generation, and hiring qualified sales personnel.

  • 57% rewrittenRisks Related to our Business and Industry

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

  • 49% rewrittenRisks Related to Ownership of Our Common Stock and Public Warrants

    Our business and operations could be negatively affected if we become subject to any securities litigation, shareholder activism or “short squeeze” trading activity, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price

    Was: Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price

  • 46% rewrittenRisks Related to our Business and Industry

    Deterioration of the economic conditions in South Korea could adversely affect our current business, financial conditions and results of operation

  • 31% rewrittenRisks Related to Ownership of Our Common Stock and Public Warrants

    Our Common Stock may be delisted from the Nasdaq Capital Market which could negatively impact the price of our Common Stock, liquidity and our ability to access the capital markets

  • 28% rewrittenRisks Related to Intellectual Property, Information Technology, Data Privacy and Security

    We may be unable to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products

All 54 risk factors

Headings as the filing states them, in filing order.

Risks Related to our Business and Industry

  1. 01We have a limited operating history, which makes it difficult to evaluate our prospects and future results of operations57% rewritten
  2. 02We have a history of losses and may not be able to achieve profitability on a consistent basis or at all100% rewritten
  3. 03We 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
  4. 04The total addressable market opportunity for our current and future products may be much smaller than we estimate
  5. 05We have filed a lawsuit against one of our commercial partners, and lawsuits and other litigation matters are expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, or results of operations
  6. 06The Company does not have a properly documented internal control system in accordance with the requirements of the Committee on Sponsoring Organizations (“COSO”) or some similarly appropriate internal control methodology or formal documentation of the Company’s systems of internal controlNew
  7. 07The Company improperly allocated proceeds received pertaining to certain equity instruments issued in connection with debtNew
  8. 08However, we cannot assure you that these measures will significantly improve or remediate the material weaknesses and significant deficiencies described above. As of April 15, 2026, the material weaknesses and significant deficiencies have not been remediated
  9. 09market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities84% rewritten
  10. 10Our sales cycles may be long and unpredictable, particularly with respect to large subscriptions, and our sales efforts require considerable time and expenseNew
  11. 11Our 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 harmedNew
  12. 12Our 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 affected100% rewritten
  13. 13Our 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
  14. 14Downturns or upturns in our sales may not be immediately reflected in our financial position and results of operations
  15. 15We face intense and growing competition for our products and services, including advancements in artificial intelligence (“AI”) and we may lack sufficient financial or other resources to maintain or improve our competitive positions
  16. 16We may not be able to effectively develop and expand our sales, marketing and customer support capabilities62% rewritten
  17. 17We 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 businessNew
  18. 18If 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 affected100% rewritten
  19. 19We may not be able to successfully manage our growth, and if we are not able to grow efficiently, our business, financial condition and results of operations could be harmed
  20. 20If 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
  21. 21Changes in our subscription or pricing models could adversely affect our operating results
  22. 22We may offer discounts on our pricing models to drive awareness of our products and encourage usage and adoption. If these marketing strategies fail to lead to customers entering into long-term contracts with company-favorable pricing terms, our ability to grow our revenue will be adversely affected66% rewritten
  23. 23The benefits of our products to customers and projected return on investment have not been substantiated through long-term trials or use100% rewritten
  24. 24The loss of one or more key members of our management team or personnel, or our failure to attract, integrate and retain additional personnel in the future, could harm our business and negatively affect our ability to successfully grow our business
  25. 25If 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 mannerNew
  26. 26We 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
  27. 27The occurrence of any of these risks could have a material adverse effect on our business, results of operations, and financial condition. Moreover, we cannot assure you that we would not be exposed to unknown liabilities
  28. 28Our operations could be affected by the rapidly evolving, complex laws, rules and regulations to which our business will become subject, and political and other actions may adversely impact our business
  29. 29We may become involved in legal, regulatory, and administrative inquiries and proceedings, and unfavorable outcomes in litigation or other matters could negatively impact our business, financial conditions, and results of operations
  30. 30AI is a nascent and rapidly changing technology. The slowing or stopping of the development or acceptance of AI technologies may adversely affect our business
  31. 31Social and ethical issues relating to the use of new and evolving technologies, such as AI, in our offerings may result in reputational harm and liability
  32. 32Deterioration of the economic conditions in South Korea could adversely affect our current business, financial conditions and results of operation46% rewritten

Risks Related to Intellectual Property, Information Technology, Data Privacy and Security

  1. 33We will rely in part upon third-party providers of cloud-based infrastructure to host our products. Any disruption in the operations of these third-party providers, limitations on capacity or interference with our use could adversely affect our business, financial condition and results of operations
  2. 34A real or perceived defect, security vulnerability, error, or performance failure in our software could cause us to lose revenue, damage our reputation, and expose us to liability
  3. 35We could incur substantial costs as a result of any claim of infringement, misappropriation or violation of another party’s intellectual property rights
  4. 36Unauthorized use of our proprietary technology and intellectual property could adversely affect our business and results of operations
  5. 37Our failure to protect our intellectual property rights and proprietary information could diminish our brand and other intangible assets
  6. 38Issues in the use of AI or machine learning in our software may result in reputational harm or liability
  7. 39We may be unable to respond quickly enough to changes in technology and technological risks and to develop our intellectual property into commercially viable products28% rewritten
  8. 40Applicable data privacy and security obligations may require us to provide notice of data security incidents involving certain types of data, including personal data. Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences
  9. 41Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future. These developments may further complicate compliance efforts and increase legal risk and compliance costs for us and the third parties upon whom we rely

Risks Related to Ownership of Our Common Stock and Public Warrants

  1. 42We incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to compliance with our public company responsibilities and corporate governance practices
  2. 43Failure to establish and maintain effective internal controls in accordance with Section 404 of Sarbanes-Oxley could have a material adverse effect on our business and stock price77% rewritten
  3. 44Delaware law and provisions in our Certificate of Incorporation and Bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the trading price of our Common Stock
  4. 45The provision in our Charter requiring exclusive venue in the Court of Chancery in the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against directors and officers
  5. 46Future sales of shares by existing shareholders could cause our stock price to decline
  6. 47The 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
  7. 48We 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
  8. 49The exclusive forum clause set forth in the warrant agreement governing the Public Warrants may have the effect of limiting an investor’s rights to bring legal action against us and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us
  9. 50Our business and operations could be negatively affected if we become subject to any securities litigation, shareholder activism or “short squeeze” trading activity, which could cause us to incur significant expense, hinder execution of business and growth strategy and impact our stock price49% rewritten
  10. 51If our operating and financial performance in any given period does not meet the guidance provided to the public or the expectations of investment analysts, the market price of our Common Stock and Public Warrants may decline
  11. 52A substantial number of the Company’s Common Stock are restricted securities and as a result, there may be limited liquidity for our Common Stock
  12. 53Our Common Stock may be delisted from the Nasdaq Capital Market which could negatively impact the price of our Common Stock, liquidity and our ability to access the capital markets31% rewritten
  13. 54If the Company falls out of compliance with the Bid Price Requirement in the future, the Common Stock may be subject to delisting. There can be no assurance that the Company will continue to be compliant with the Bid Price RequirementNew

Other Brand Engagement Network 10-Ks

  • FY2024 10-K risk factors
    63 risks

    The company faces severe profitability, liquidity, and financial control weaknesses, including material weaknesses in accounting and internal controls under SOX 404.

    Filed Mar 31, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.