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Brand Engagement Network Inc. (NASDAQ:BNAI), a Delaware-based company specializing in computer integrated systems design with a current market capitalization of $24.58 million, has entered into an addendum to modify the terms of a previously announced acquisition. According to InvestingPro analysis, the company faces significant cash burn challenges, with a concerning current ratio of 0.09. The amendment, effective as of Wednesday, February 6, 2025, pertains to the company’s purchase of Cataneo GmbH from sellers Christian Unterseer, CUTV GmbH, and CUNEO AG.
The initial agreement, dated October 29, 2024, involved Brand Engagement Network acquiring all outstanding equity interests of Cataneo GmbH for $19.5 million. This sum included $9 million in cash and 4.2 million shares of Brand Engagement Network’s common stock, valued at $2.50 per share.
The addendum introduces several key changes to facilitate the acquisition process. It stipulates an initial down payment of $350,000 by February 13, 2025, and temporarily suspends the sellers’ right to withdraw from the agreement until February 28, 2025. This suspension could extend through April 30, 2025, provided the company makes additional monthly down payments of $100,000, which will be credited toward the cash consideration.
Moreover, the sellers have agreed to retract their previous decision to receive $3,000,000 in cash instead of equity consideration, with the provision that they can re-exercise this right before the acquisition closes. The sellers have also waived their right to approve the financing terms of the transaction.
In the event of termination due to the company’s failure to pay or if the agreement ends before the scheduled closing for other reasons, the sellers may set off any claims against the initial and additional down payments. However, any remaining balance of these payments will not be refundable to Brand Engagement Network.
This adjustment to the acquisition terms underscores the company’s commitment to expanding its portfolio and its strategic growth initiatives, despite current financial challenges. InvestingPro data reveals that while analysts anticipate sales growth in the current year, the company’s short-term obligations exceed its liquid assets. The completion of the acquisition is subject to customary closing conditions.
The information provided in this article is based on a press release statement from Brand Engagement Network Inc. and reflects the company’s current plans regarding the acquisition. The completion of the deal remains subject to various conditions and approvals.
In other recent news, Brand Engagement Network Inc., a computer-integrated systems design firm, has been warned of a potential delisting from The Nasdaq Stock Market LLC. This notice comes as a result of the company’s common stock falling below the required minimum bid price for 30 consecutive business days, violating Nasdaq’s Listing Rule 5450(a)(1). To regain compliance, Brand Engagement Network has a 180-day period to have its stock close at $1.00 or higher for at least 10 consecutive business days.
In response, the company is exploring various options, including a potential reverse stock split. Despite the delisting risk, the trading of the company’s common stock or redeemable warrants on The Nasdaq Global Market remains unaffected. Brand Engagement Network has expressed its intention to take the necessary steps to maintain its Nasdaq listing, yet there is no assurance of compliance or continued listing. These recent developments are based on the company’s SEC filing and reflect the company’s current intentions regarding this matter.
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