Brand Engagement Network Inc. Reports Unregistered Equity Sales

TL;DR

BNAI sold unregistered equity, watch for dilution.

AI Summary

On April 12, 2024, Brand Engagement Network Inc. (formerly DHC Acquisition Corp.) filed an 8-K report detailing unregistered sales of equity securities. The company, incorporated in Delaware, is involved in computer integrated systems design and is headquartered in Jackson, Wyoming. This filing relates to their common stock and redeemable warrants.

Why It Matters

This filing indicates potential dilution for existing shareholders due to the issuance of new equity or warrants, which could impact the stock price.

Risk Assessment

Risk Level: medium — Unregistered sales of equity can lead to dilution and signal potential financial distress or a need for capital, increasing risk for existing investors.

Key Numbers

• 0.0001 — Par Value per Share (Represents the nominal value of each share of common stock.)
• 11.50 — Warrant Exercise Price (The price at which redeemable warrants can be exercised for common stock.)

Key Players & Entities

• Brand Engagement Network Inc. (company) — Registrant
• DHC Acquisition Corp. (company) — Former company name
• April 12, 2024 (date) — Date of earliest event reported
• 11.50 (dollar_amount) — Exercise price for redeemable warrants

FAQ

Key Financial Figures

• $0.0001 — ch registered Common Stock, par value $0.0001 per share BNAI The Nasdaq Stock Mar
• $11.50 — of Common Stock at an exercise price of $11.50 per share BNAIW The Nasdaq Stock Ma
• $1,900,000 — sion ("CCM") in the principal amount of $1,900,000 (the "Cohen Convertible Note"). Beginni
• $1.20 — Conversion Purchase Price is less than $1.20 per share (the "Floor Price") on the Co

Filing Documents

• form8-k.htm (8-K) — 46KB
• 0001493152-24-015215.txt ( ) — 264KB
• bnai-20240412.xsd (EX-101.SCH) — 4KB
• bnai-20240412_def.xml (EX-101.DEF) — 26KB
• bnai-20240412_lab.xml (EX-101.LAB) — 36KB
• bnai-20240412_pre.xml (EX-101.PRE) — 25KB
• form8-k_htm.xml (XML) — 6KB

From the Filing

UNITED SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 12, 2024 BRAND ENGAGEMENT NETWORK INC. (Exact name of registrant as specified in its charter) Delaware 001-40130 98-1574798 (State or other jurisdiction of incorporation or organization) (Commission File Number) (I.R.S. Employer Identification No.) 145 E. Snow King Ave PO Box 1045 Jackson , WY 32001 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (214) 452-2300 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). 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. Item 3.02. Unregistered Sales of Equity Securities In connection with the close of its previously announced business combination, on April 12, 2024, Brand Engagement Network Inc. (the "Company") issued a convertible promissory note to J.V.B. Financial Group, LLC, acting through its Cohen & Company Capital Markets division ("CCM") in the principal amount of $1,900,000 (the "Cohen Convertible Note"). Beginning on October 14, 2024, interest will accrue at the fixed rate of eight percent (8%) per annum on the outstanding principal amount until the Cohen Convertible Note is paid in full. Interest is payable monthly in cash or in-kind at the election of the Company. The Company may prepay the Cohen Convertible Note in whole or in part at any time or from time to time without penalty or premium. The Company may be required to prepay all or a portion of the Cohen Convertible Note upon the consummation of certain capital raising activities as described therein. The maturity date of the Cohen Convertible Note is March 14, 2025. Beginning on December 14, 2024 (the "First Conversion Date"), the Cohen Convertible Note is convertible into shares of common stock, par value $0.0001 per share (the "Common Stock") of the Company equal to: (i) up to 40% of the outstanding principal balance plus accrued interest due under the Cohen Convertible Note divided by (ii) a price per share (the "Conversion Purchase Price") equal to 92.75% of the arithmetic average of the Daily VWAP (as defined therein) for the five VWAP Trading Days (as defined therein) ending on the VWAP Trading Day immediately preceding the applicable Conversion Date (as defined below); provided, that, if the Conversion Purchase Price is less than $1.20 per share (the "Floor Price") on the Conversion Date, CCM may not convert any portion of the Cohen Convertible Note on such Conversion Date at a price less than the Floor Price. Additionally, on the 14 th day of each successive month commencing with January 14, 2025 (each such day, an "Additional Conversion Date") and together with the First Conversion Date, the "Conversion Dates"), CCM may convert a portion of Cohen Convertible Note to a number of shares equal to (i) up to 20% of the outstanding principal balance of the Cohen Convertible Note plus accrued interest due under the Cohen Convertible Note divided by (ii) the Conversion Purchase Price (subject to the Floor Price). A maximum of 1,583,334 shares of Common Stock may be issued upon conversion of the Cohen Convertible Note (the "Conversion Shares"). The offering and sale of the Cohen Convertible Note and the Conversion Shares was made in a private placement transaction exempt for registration in reliance on the exemption afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and corresp

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