Brand Engagement Network Inc.

session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Susan Zhu, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thank you for joining Ben's Q1 2025 earnings conference call. Joining me on today's call are CEO Paul Chang and CFO and COO Waleed Kiari. The company's first quarter results were disseminated yesterday and are available on the Investor Relations website at www.investors.beninc.ai. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies, and long-term goals. These comments are based on management's plans, predictions, and expectations as of today, which may change over time. The company's actual results could differ materially due to a number of risks and uncertainties. For more information about the risks and uncertainties involving forward-looking statements and factors that could cause actual results to differ materially from those projected or implied by forward-looking statements, please see the risks The risk factor is set forth in Ben's most recent annual report on Form 10-K as supplemented by the risk factors in its most recent quarterly report on Form 10-Q. Forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. As a reminder, this call is being webcast from the Investor Relations website. An audio replay will be available on the website in a few hours. With that, I'll turn it over to Paul to share our Q1 update. Over to you, Paul.

Thank you, Susan. Good afternoon, everyone, and thank you all for joining us today. Q1 marked another step forward for Ben as a business. As generative AI continues to evolve rapidly, the need for secure, scalable, and cost-effective solutions has never been more urgent. This is where Ben continues to stand apart. While some of the largest models are making headlines for their size, cost, complexity, and unfortunately for their mistakes, our focus remains on delivering practical AI that businesses can actually use without the risk of unmanaged responses or uncontrolled user interactions. The official launch of our iSky platform this quarter has generated strong early traction across multiple industries. The message from the market is clear. Businesses want AI that is purpose-built with deep expertise and designed to solve real problems, not just demonstrate surface knowledge of various subjects. We built iSky to solve the challenges we kept hearing in the market. Large language models that are difficult to trust, prone to hallucinations, and expensive to deploy at scale. iSky solves all of this. It combines industry-specific training, a modular architecture, and a lightweight design that gives businesses the rules and controls they demand to be able to service their customers. A major milestone in the quarter end was the launch of our partnership with Swiss Life Global Solutions, a global leader in cross-border insurance and employee benefits. With operations in over 85 countries and more than $280 billion in assets, Swiss Life partnered with Ben to deliver secure, generative AI power solutions across this global network of clients and insurance partners. Our platform will support a range of use cases, including streamlining sales and enrollment, reducing call center volume, and enhancing member services with self-service tools for coverage details, claims, and more. Subsequent to quarter end, we also announced a partnership with Seven Visions Resort and Places, the Divin, an iconic award-winning luxury destination in Eastern Europe. We intend to demonstrate how Ben's secure, human-like AI can deliver 24-7 service in a hospitality setting where personalization, trust, and speed are paramount. It's a clear example of how our iSky architecture supports rapid configuration and high-impact use cases in new verticals. Additionally, our partnership with Valeo Technologies has led to an important project with University of KwaZulu-Natal to co-develop an AI Tower mental health program for students in underserved regions of South Africa. The solution is designed to scale with anonymized insights, enabling institutions to better target support while maintaining full privacy compliance. In the automotive sector, we continue to develop use cases not only for the dealers, but now also for large OEMs, further entrenching Ben's technology with customers who can help scale our solutions. As shared last quarter, we signed a definitive agreement to acquire Catanel, a Germany-based media technology company specializing in ad sales and inventory management for major European broadcasters. With the extension deadline approaching in June, we remain on track and anticipate transforming the ad tech industry. For the first time ever, brands can now manage and control their entire customer journey from ads to engagement to conversion. Waleed will provide an update on the progress we've made to date and how this acquisition supports our long-term growth strategy. As we move through 2025, we remain focused on executing our strategy, delivering practical, scalable AI solutions, expanding into new verticals, and strengthening our global partnerships. While we have demonstrated market validation, we look forward to adding large household names to our list of customers and begin to deploy our solutions in production environments. We are energized by the traction we're seeing and confident that our platform, people, and partnership position us well for continued growth. With that, I'll turn it over to our CFO and COO, Waleed Kiari, for a financial update and the latest on the Cat's Nail acquisition. Thank you very much, Paul.

Hi, everyone. On the financial front, This quarter has been primarily about continuing our efforts to better manage our expenses and rationalize our cost base. We've reduced our general and administrative expenses, our GNA, by close to 50% compared with Q1 of last year. This is a testament to stronger operational discipline and rigor on the part of the entire band team as we as a company have just celebrated our one-year anniversary as a public company and keep maturing our processes. Allocating as many of our dollars to our product and go-to-market focus is a priority for me and for the team. Additionally, as you may have noticed out of our 8K file this morning, we recently secured a $3.5 million line of credit from Core Capital Partners, a Texas-based investment firm. This facility provides Ben with additional financial flexibility going forward. On the strategic front, we continue to see market validation for a combination of Ben and Cathnail. For end customers in the media and advertising space, the combination would provide the ability to create awareness for their products and services and help them engage naturally with their targeted audiences. From an operational standpoint, among many features on Capnum's platform, one product set is particularly valuable. Its ad inventory management solution, which could feed Ben's engagement AI platform with the ready content with which to engage customers. In summary, Ben is getting smarter about operating costs, gaining financial flexibility, and continuing to prepare to integrate its plan-first acquisition. Together, these initiatives are strengthening our financial foundation, expanding our product capabilities, and positioning us to create long-term value for customers and shareholders. With that, I'll turn it back to the operator for Q&A. Thank you very much. Thank you.

As a reminder, to ask a question, you need to press star 1-1 on your telephone. To withdraw your question, please press star 1-1 again.

Please stand by while we compile the Q&A roster.

And I show our first question comes from the line of Jack Coderra from Maxim Group, LLC. Please go ahead.

Hi, thanks. This is Jack Coderra calling in for Jack Banderard. Thanks for taking my question. And I just wanted to start, I know it's small today, but what actually contributed to revenue in the quarter? Was this a pilot program or, you know, a small actual production contract?

Yep, so I can take that.

Yes, all of our pilots are, while they're early in testing for our customers, they are paid pilots. But the scope of the pilot and the duration is somewhat short. So they are contributing to revenue, although not significant just yet.

Okay. And then, you know, if I could get a little bit more broadly speaking, you know, of the various collaborations, and you guys kind of highlighted some in the pilot programs across, you know, auto, healthcare, pharma, et cetera. Do you have any visibility into which these may lead to, say, initial production contracts in the near term?

Well, I would say both in healthcare and life sciences, where the pilots have been going on for quite some time, we anticipate some of those to convert into production deployment. And in auto, we got somewhat of a late start in the auto space, but our strong relationships with production and OEM, our strong relationship with several large dealership networks, and our current integration with dealer.com. We are actually quite bullish on the automotive space and our ability to launch pilots quickly and then convert those pilots into production. We have a high level of confidence that that could actually occur this calendar year, even though, as mentioned, we got a bit of a late start. We have a lot of momentum behind us, and our technology and our offering has been well adopted by some of those early customers.

Okay, that's super helpful. And, you know, if I could ask one more clarification question, you know, it was positive to hear that you've kind of expanded beyond dealers and you've found an OEM as well, but what You know, can you give a little bit more clarity? I think in a dealer.com partnership announcement, you mentioned you were finalizing preparation for automotive rollout. Can you give a little bit more granularity as to, like, what that means and, like, what the status of that vertical is?

Sure. Yes. So when we say finalizing our rollout, what we've done is we've zeroed in on an use case. that is high value to the dealerships and also highly relevant and beneficial to the consumers. So some of those functionality have been already tested. We've demoed that solution to dealerships. We've done technical integration, which requires live data feed from other sources such as dealer.com. So all of those components needed to deploy the solution at scale has been tested. We are now in the process of deploying it for a handful of dealers as a pilot. So that is in a great position. And then working with a very large OEM, They're looking at slightly different use cases that provide benefit for themselves and the dealerships across the regions. And they are very excited about moving those use cases forward as well, which would benefit the OEMs but ultimately benefit the dealers as well.

Okay, that's a super helpful color. Thank you.

Thank you. I'm sure no further questions in the queue. At this time, I'd like to turn the call back to Paul Chang, CEO, for closing remarks.

Thanks very much. Thank you, everyone, for joining us today. We are incredibly excited about our accomplishments to date, but more so about the upcoming future opportunities. We look forward to continuing to keeping you up to date on our progress in this exciting market. Thank you very much. Thank you.

This concludes our conference call today. Thank you for participating. You may now disconnect.