Q1 2024 Brand Engagement Network Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Brand Engagement Network first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that 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 Brand Engagement Network Investor Relations Ryan Flanagan. Please go ahead.
Sure.
Good day, and thank you for standing by.
Speaker Change: Welcome to the brand engagement network first quarter 2024 earnings call.
Speaker Change: At this time all participants are in a listen only mode.
After the Speakers' presentation there.
There will be a question and answer session.
Speaker Change: To ask a question during the session you will need a press star one on your telephone.
Speaker Change: You will then hear an automated message advising your hands raised.
Speaker Change: For all your question. Please press star one again.
Speaker Change: Please be advised that today's conference is being recorded.
Speaker Change: Now I'd like to hand, the conference over to brand engagement network Investor Relations Ryan Flanagan. Please go ahead.
Ryan Flanagan: Thank you. Hi, everyone, and thanks for joining our Q1 Earnings Conference call. Joining me on the call today are Michael Zaharsky, our CEO, and Bill Williams, our CFO. By now, everyone should have access to our earnings announcement.
Ryan Flanagan: Thank you.
Speaker Change: Thanks for joining our Q1 earnings conference call joining me on the call today are Michael the heartbeat of our CEO and Dale Williams, our CFO by now everyone should have access to our earnings announcement.
Ryan Flanagan: This announcement is also on our investor relations website. 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 our plans, predictions, and expectations as of today, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors outlined in our filings with the SEC, including our Form 10-K and upcoming Form 10-Q.
Speaker Change: As mentioned also on our Investor Relations website.
Speaker Change: During this call we will make forward looking statements, including statements about our business outlook strategies and long term goals.
Speaker Change: These comments are based on our plans predictions and expectations as of today, which may change over time.
Speaker Change: Our actual results could differ materially due to a number of risks and uncertainties.
Speaker Change: Including the risk factors outlined in our filings with the SEC.
Speaker Change: Our Form 10-K and upcoming Form 10-Q.
Ryan Flanagan: Forward-looking statements represent management's current estimates, and the company assumes no obligation to update any forward-looking statements in the future. Also, during this call, we will discuss certain non-GAAP financial measures. These non-gap measures are not intended to be a substitute for a gap.
Speaker Change: Forward looking statements represent management's current estimates and the company assumes no obligation to update any forward looking statements in the future.
Speaker Change: Also during this call we will discuss certain non-GAAP financial measures.
Speaker Change: These non-GAAP measures are not intended to be a substitute for our GAAP results.
Ryan Flanagan: And finally, this call in its entirety is being webcast from our Investor Relations website at www.investors.bininc.ai, and an audio replay will be available on our website in a few hours. With that, I'd like to turn the call over to Michael.
Speaker Change: And finally this call in its entirety is being webcast from our Investor Relations website at Www Dot investors Dot Ben.
Speaker Change: Got AI and an audio replay will be available on our website in a few hours.
Speaker Change: With that I'd like to turn the call over to Michael Michael.
Michael Zaharsky: Thank you all for joining us today on what has been our first quarterly earnings call as a public company. We're thrilled to be listed on NASDAQ under the ticker BNAI and to have the opportunity to talk about key business highlights, our strategic vision, and financial results for the first quarter of 2024 before discussing our results and exciting developments across the business. I'd like to take a few minutes and provide some commentary on our financial positioning following the completion of our business combination. Just eight weeks ago, Ben is currently funded by a combination of minority capital from the proceeds of the business combination and a commitment from our automotive vertical strategic partner, exclusive reseller, and investor, AFG Company.
Michael Michael: Thank you all for joining us today on what has been first quarterly earnings call as a public company.
Michael Michael: We're thrilled to be listed on the NASDAQ under the ticker of B in AI and to have the opportunity to talk about key business highlights our strategic vision and financial results from the first quarter of 2024.
Michael Michael: Before discussing our results and exciting developments across the business I'd like to take a few minutes and provide some commentary on our financial positioning following the completion of our business combination just eight weeks ago.
Michael Michael: Ben is currently funded by a combination of minority capital from the proceeds of the business combination and a commitment from our automotive vertical strategic partner exclusive reseller and investor AFG companies.
Michael Zaharsky: We are incredibly excited about our joint work in the automotive space and our shared vision of conversational and multimodal AI solutions that we believe will transform the dealership experience, both for the customer, CX, and the dealership staff productivity and dealership performance. You will hear more about these key metrics, CX, productivity, and performance, as we talk about organic growth in our core business throughout and exiting the SPAC process.
Michael Michael: We are incredibly excited about our joint work in the automotive space and our shared vision of conversational and multi modal AI solutions that we believe will transform the dealership experience both for the customer.
Michael Michael: Next the dealership staff productivity and dealership principles performance.
Michael Michael: You'll hear more about these key metrics CX productivity and performance as we talk about organic growth of our core business.
Speaker Change: Throughout and exiting the spec process banded not unlike many companies seeking to dis back enter into any forward purchase agreements or other structured financings in connection with closing with the result, being a simplified balance sheet with improved visibility.
Michael Zaharsky: Ben did not, unlike many companies seeking to de-SPAC, enter into any forward purchase agreements or other structured financings in connection with the closing, with the result being a simplified balance sheet with improved visibility into our shares outstanding and potential dilution to our stockholders. Moving forward, we believe this will allow us to explore and enter into more traditional financings without the negative effects and complexities associated with the SPAC financial structure. I'd also like to note that our SPAC sponsor principals, Chris Gartner and Thomas Morgan, Jr., are continuing with the company as chairman and director, respectively.
Michael Michael: Into our shares outstanding and potential dilution to our stockholders.
Michael Michael: Moving forward, we believe this will allow us to explore and enter into more traditional financings without the negative effects and complexities associated with spec financial structures.
Michael Michael: I'd also like to note that our spec sponsor principles, Chris Gartner and Thomas Morgan Junior are continuing with the company as chairman and director respectively and.
Michael Zaharsky: In addition to benefiting from their deep financial experience and counsel from an operating standpoint, we view their commitment as validation of our mission, our product, and our strategic direction. With that as a backdrop, we are excited to announce that, with the assistance of our banking partners, we are currently assessing avenues for additional liquidity and growth. Bill will discuss in greater detail momentarily.
Michael Michael: In addition to benefiting from their deep financial experience and counsel from an operating standpoint, we view their commitment as validation of our mission, our product and our strategic direction.
Michael Michael: With that as a backdrop, we are excited to announce.
Bill: Now with the assistance of our banking partners. We are currently assessing avenues for additional liquidity and growth capital Bill will discuss in greater detail momentarily, but as we continue to work on improving our liquidity and capital position. We are also closely managing our internal costs to ensure our business is built for growth and scale.
Michael Zaharsky: But as we continue to work on improving our liquidity and capital position, we are also closely managing our internal costs to ensure our business is built for growth and scale and to last for the long term. Although many of the investors and analysts dialed in today are familiar with our story, since this is our first call as a public company, I wanted to allocate some extra time to talk through who we are and what we do.
Bill: And to last for the long term.
Bill: Although many of the investors and analysts dialed in today are familiar with our story. Since this is our first call as a public company I wanted to allocate some extra time to talk through who we are and what we do.
Michael Zaharsky: Years in the making, Ben is a B2B2C business-to-business-to-consumer conversational AI company focused on delivering personalized customer engagement. Deployed through human-like avatars, or as pure voice configurations, we provide a full stack and turnkey offering to businesses looking to improve their CX, productivity, and performance metrics. Beyond simply providing digital assistance, we believe that AI solutions for businesses must deliver and complete tasks. While there are several voice companies wrapping themselves in the generative AI cloak, our teams have been working with these technologies since 2018.
Ben: Years in the making Ben is our b to B to C business to business to consumer conversational AI company focused on delivering personalized customer engagement dipped.
Bill: <unk> deployed through human like avatars or as pure voice configurations, we provide a full stack and turnkey offering to businesses looking to improve their CX productivity and performance metrics.
Bill: <unk> simply providing digital assistance, we believe that AI solutions for businesses must deliver and complete tasks.
Bill: While there are several voice companies wrapping themselves in the degenerative AI cloak our teams have been working with these technologies since 2018 or.
Michael Zaharsky: Our approach utilizes small footprint language models that are contained on our servers, a walled garden approach, combined with mixed technologies for data retrieval so we can provide accurate answers to consumers. We intentionally do not use a large language model for this part of the task.
Bill: Our approach utilizes small footprint language models that are contained on our servers a walled garden approach.
Bill: Bind with mixed technologies for data retrieval. So we can provide accurate answers to consumers.
Bill: We intentionally do not use a large language model.
Bill: For this part of the task.
Michael Zaharsky: This approach delivers precise answers without hallucinations and is based on technology that is not easily emulated. Our platform is built around a powerful existing IP portfolio, complemented by our successful 2023 acquisition and integration of DM labs spun out from renowned researchers at Korea University. Each instance of our technology is for an individual customer, ensuring data remains solely within that instance of the platform and provides business differentiation in tune with its brand, values, and processes. It is truly theirs, them being our customer AI solution. It's their artificial intelligence.
Bill: This approach delivers precise answers without hallucination and is based on technology that is not easily emulate it.
Bill: Our platform is built around a powerful existing IP portfolio complemented by our successful 2023 acquisition and integration of D. M labs spun out from renowned researchers at Korea University.
Bill: Each instance of our technology is for an individual customer ensuring data remains solely within that instance of the platform and provides the business differentiation in tune with its brand values and processes. It is truly there they're being our customer AI.
Bill: <unk> is there AI.
Michael Zaharsky: Put simply, we make it easier and more affordable for companies to adopt and quickly deploy best-in-class conversational AI without compromising data privacy and data leakage. We are vertically focused on scaling in the automotive, healthcare, and financial services markets, leveraging strategic partnerships to accelerate market penetration through an easy-to-understand solution set and pricing model. Our solution set includes multiple offering tiers. For example, our Community Cloud, which is built on shared infrastructure and allows for simple configuration. A private cloud offering that features a proprietary cloud and allows for greater complexity and concurrency. And a Citadel version that is fully ring-fenced, highly specialized, and purpose-built for strict data security requirements and closed-loop systems.
Bill: Put simply we make it easier and more affordable for companies to adopt and quickly deploy best in class conversational AI without compromising data privacy and data leakage.
Bill: We are vertically focused on scaling in the automotive health care and financial services markets, leveraging strategic partnerships to accelerate market penetration through an easy to understand solution set and pricing model.
Bill: Our solution set includes multiple offering tiers, our community cloud, which is built on shared infrastructure and allows for simple configuration.
Bill: Private cloud offering that features a proprietary cloud and allows for greater complexity and concurrency.
Bill: And as Citadel version that is fully ring fenced highly specialized and purpose built for strict data security requirements and closed loop systems.
Michael Zaharsky: With each of our offering tiers sold on a recurring revenue basis, our pricing model benefits from SaaS economics with high incremental margin. In a marketplace with so many avenues where AI can make a meaningful contribution, deliberate focus is paramount.
Bill: With each of our offering tears sold on a recurring revenue basis, our pricing model benefits from SaaS economics with high incremental margins.
Bill: In a marketplace with so many avenues, where AI can make meaningful contributions deliberate focus is paramount.
Michael Zaharsky: At BENN, we are focused on delivering use cases specifically for our target healthcare, automotive, and financial services verticals, and within those verticals, the areas where we have identified the largest growth opportunities. In healthcare, we are focused on areas such as drug adherence, a $600 billion opportunity, and in automotive, we have targeted the auto dealership experience, which spans the 18,000 new car dealerships in the U.S. market and 50 million new and used cars sold every year.
Ben: Ben we are focused on delivering use cases, specifically for our target healthcare automotive and financial services verticals.
Bill: And within those verticals the opportunities, where we have identified the largest growth opportunities.
Bill: In healthcare, we are focused on areas such as drug adherence a $600 billion opportunity and in automotive we have targeted the auto dealership experience, which spans the 18000, new car dealerships in the U S market and $50 million in new and used cars sold every year.
Michael Zaharsky: Similarly, contact center solutions across these verticals and in financial services are opportunities of growing and significant scale, providing utility to a large consumer base that is increasingly demanding more personalized information and attention at a time when businesses are faced with labor shortages, wage gap equity, and increasingly less. I will now move on to discussing the significant progress we made across many fronts in the first quarter.
Speaker Change: Emily contact center solutions across these verticals and in financial services or opportunities of growing and significant scale, providing utility to a large consumer base that is increasingly demanding more personalized information and attention at a time when businesses are faced.
Speaker Change: With labor shortages wage gap equity and increasingly last time.
Speaker Change: I will now move on to discussing the significant progress we made across many fronts in the first quarter to start I'd like to mention steps, we have taken to operationalize our platform.
Michael Zaharsky: To start, I'd like to mention steps we have taken to operationalize our platform. We have optimized our AI modules for the cloud, and as a result, we are able to deploy our AI assistance to most consumer devices via the web, preserving resources on consumer devices by minimizing on-device drag. Second, during the National Auto Dealers Association show, or NADA, in February, we revealed five AI assistants purpose-built for the auto vertical, designed specifically to solve pressing industry challenges in the automotive space.
Speaker Change: We have optimized our AI modules for the cloud and as a result, we are able to deploy our AI assistance to most consumer devices via the web preserving resources on consumer devices by minimizing on device drag we strive to make it easy and accessible for all <unk>.
Speaker Change: Tumors to connect to and interact with our AI assistance on all of their devices.
Speaker Change: Second during the National Auto Dealers Association show in February we revealed five AI assistance purpose built for the auto vertical designed specifically to solve pressing industry challenges in the automotive space in partnership with channel partner and been Investor AFG companies. These AI.
Michael Zaharsky: In partnership with channel partner and Venn investor AFG Companies, these AI assistants leverage Venn's human-like AI avatars as multimodal conversational resources tailored for unique purposes that assist customers, as well as augment and enhance professionals, to provide improved customer service interactions and experiences. We were extremely pleased with the level of engagement, positive feedback, and significant pipeline contribution driven by dealer interaction with our technology. Third, we are pleased to announce early customer wins and new partnerships in the healthcare vertical, including MedAdvisor, a global leader of pharmacy-driven patient engagement solutions that will bring Ben's AI assistant to certain pharmacies to help enhance patient outcomes.
Speaker Change: Assistance leverage bends human like AI avatars as multimodal conversational resources tailored for unique purposes that assists customers as well as augment and enhance professionals to provide improved customer service interactions and experiences.
Speaker Change: We're extremely pleased with the level of engagement positive feedback and significant pipeline contribution driven by dealer interaction with our technology.
Speaker Change: Third we are pleased to announce early customer wins and new partnerships in the healthcare vertical including Med advisor a global leader of pharmacy, driven patient engagement solutions that will bring bends AI assistant to certain pharmacies to help enhance patient outcomes.
Michael Zaharsky: Similar to our partnership with AFG companies in the automotive vertical, which services more than 1,000 car dealers, we believe MedAdvisor provides us with a land and expand opportunity and a partnership to bring conversational AI into the pharmacy experience and to tap into the massive drug adherence ecosystem. We have also signed a pilot partnership with OSF Healthcare, an integrated health system caring for patients throughout Illinois and Michigan. We believe this partnership will address today's challenge where traditional chatbots have limited conversational skills and capacity, as well as limited basic knowledge of healthcare diagnoses and protocols.
Speaker Change: <unk> to our partnership with <unk> companies in the automotive vertical which services more than 1000 car dealerships. We believe met advisor provides us a land and expand opportunity and a partnership to bring conversational AI into the pharmacy experience and to tap into the massive drug adherence ecosystem.
Speaker Change: We have also signed a pilot partnership with OSF healthcare and integrated health system caring for patients throughout Illinois, and Michigan. We believe this partnership will address today's challenge, where traditional chat bots have limited conversational skills and capacity as well as limited based knowledge of health care.
Speaker Change: Diagnoses and protocols.
Michael Zaharsky: OSF Healthcare, which Fortune named one of the most innovative companies in 2023, possesses deep experience in industry-leading patient care. Together, OSF Healthcare and Ben will develop AI assistance that provides a more dynamic, adaptive, and thorough training experience for Advanced Practice Provider, APP, and Primary Care Fellowship participants. The partnership will also serve as an opportunity to demonstrate that conversational AI can provide an enhanced patient experience in real-world healthcare. Finally, to fast-track our ability to operate in the healthcare vertical, I'm excited to announce that last week our platform achieved HIPAA compliance. HIPAA compliance reinforces Ben's commitment to protecting patient healthcare information while also strengthening Ben's relationships with both healthcare partners and consumers and demonstrating Ben's data security and privacy practice.
Speaker Change: OSF healthcare, which fortune named one of the most innovative companies in 2023 possesses deep experience in industry, leading patient care.
Speaker Change: Together, OSF healthcare and Ben will develop AI assistance that provide a more dynamic adaptive and thorough training experience for advanced practice provider AEP primary care Fellowship participants.
Speaker Change: The partnership will also serve as an opportunity to demonstrate that conversational AI can provide an enhanced patient experience and real world health care.
Speaker Change: Finally, fast tracking our ability to operate in the health care vertical I am excited to announce that last week, our platform achieved HIPAA compliance.
Speaker Change: HIPAA compliance reinforces <unk> commitment to protecting patient health care information, while also strengthening Ben's relationships with both health care partners and consumers and demonstrating the data security and privacy practices underpinning Ben's virtual assistance.
Michael Zaharsky: Underpinning Ben's virtual world, the aforementioned partnerships in the automotive, healthcare, and financial services sectors are only one tip of the spear in our multi-dimensional sales strategy. We are also actively pursuing exclusive reseller arrangements at targeted systems integrators and with trusted industry partners, as well as building a direct selling motion to deepen and accelerate market penetration. Looking ahead, and before turning the call over to Bill, I would like to discuss three areas that we believe at Bend are key pillars of future growth.
Speaker Change: The aforementioned partnerships in the automotive health care and financial services sectors are only one tip of the spear in our multi dimensional sales strategy. We are also actively pursuing exclusive reseller arrangements at targeted systems integrators and with trusted industry partners.
Speaker Change: As well as building, a direct selling motion to deepen and accelerate market penetration.
Speaker Change: Looking ahead and before turning the call over to Bill I would like to discuss three areas that we believe that Ben are key pillars of future growth.
Michael Zaharsky: First, maintaining a focus on our key verticals, automotive, healthcare, and financial services, and specific use cases, only building assistance and modules that we can scale across those markets. Second, accelerating market penetration by supercharging our multi-dimensional sales strategy with a focus on turnkey solutions. Partnerships and opportunities to embed our modules, potentially making our modules and components available to the developer community, as well as exploring inorganic growth opportunities. Third, continuous improvement and innovation across our portfolio of productionized modules, enabling us to preserve our innovation gap with a differentiated offering relative to peers, all while maintaining financial discipline as we scale our business.
Speaker Change: First maintaining a focus on our key verticals automotive health care and financial services and specific use cases, only building assistance and modules that we can scale across those marketplaces.
Speaker Change: Second accelerating market penetration by Supercharging, our multi dimensional sales strategy with a focus on turnkey solutions.
Bill Smith: Partnerships and opportunities to embed our modules potentially making our modules and components available to the developer community as well as exploring inorganic growth opportunities.
Bill Smith: Third continuous improvement and innovation across our portfolio of production lies modules, enabling us to preserve innovation gap with a differentiated offering relative to peers, all while maintaining financial discipline as we scale our business.
Michael Zaharsky: We believe this is the roadmap to long-term success, and we are excited about our healthcare and automotive launches this year, delivering our product and improving the day-to-day lives of consumers. Overall, we see a tremendous opportunity to scale through increased market penetration in our target verticals and the conversion of several pilot programs into predictable recurring revenue streams. We have built momentum across key initiatives in the short time since our listing, and with the transaction closed, our focus is squarely on accelerating our traction in the market while maintaining a strategic and balanced approach to investing. With that, I'd like to turn things over to Bill, who will walk through our financial results for the first quarter and discuss our performance drivers and highlights. Bill, take it away!
Speaker Change: We believe this is the roadmap to long term success and we are excited about our health care and automotive launches this year, delivering our product and the day to day lives of consumers.
Speaker Change: Overall, we see a tremendous opportunity to scale through increased market penetration in our target verticals and the conversion of several pilot programs into predictable reoccurring revenue streams, we have built momentum across key initiatives in the short time since our listing and what the transaction closed our focus is squarely on accelerating our traction in the March.
Speaker Change: <unk>, while maintaining a strategic and balanced approach to investments.
Speaker Change: With that I'd like to turn things over to Bill who will walk through our financial results for the first quarter and discuss our performance drivers and highlights bill taken away.
Bill Williams: Thank you, Michael, and thanks everyone for joining us. I'll start by providing a brief recap of our Q1 results, and then I'll discuss areas of strategic focus for 2024 and our key assumptions as we pivot from pre-revenue to a SAS-based recurring revenue model. Now, starting with details about the court.
Bill Smith: Thank you Michael and thanks, everyone for joining us.
Bill Smith: I'll start by providing a brief recap of our Q1 results and then I'll discuss areas of strategic focus for 2024, and our key assumptions as we pivot from pre revenue to a SaaS based recurring revenue model.
Bill Smith: Now starting with details of the quarter.
Bill Williams: As a pre-revenue merging growth company, our Q1 revenue was de minimis, reflecting initial proof-of-concept deployments at pilot customers. Total operating expenses for the quarter were approximately $6.8 million, an increase of approximately $4.2 million compared to the prior year. The quarter-over-quarter increase was primarily due to approximately $3.2 million of transaction costs as a result of the merger. Additionally, we incurred $3.1 million in costs associated with the DM Labs acquisition that was completed in Q2 2023 as we began to expand and operationalize our AI platform in 2H23.
Bill Smith: As a pre revenue emerging growth company. Our Q1 revenue was de Minimis, reflecting initial proof of concept deployments at pilot customers.
Bill Williams: These incurred costs included a $1.5 million increase in employee-related costs, a $1 million increase in professional fees, $0.2 million increase in promotional costs, a.2 million increase in research and development costs, $0.1 million increase in depreciation and amortization, and $0.1 million increase in insurance costs. These costs were partially offset by a decrease in stock-based compensation of $2.1 million as we issued fully vested options and warrants in Q
Bill Smith: Total operating expenses for the quarter were approximately $6 $8 million, an increase of approximately $4 2 million compared to the prior year.
Bill Smith: The quarter over quarter increase was primarily due to approximately $3 2 million of transaction costs as a result of the merger.
Bill Smith: Additionally, we incurred $3 1 million in costs associated with the D. M Labs acquisition that was completed in Q2 2023, as we began to expand and operationalize, our AI platform and <unk> 23.
Bill Smith: These incurred costs included a one and a $5 million increase in employee related costs, a $1 million increase in professional fees <unk> 2 million increase in promotional costs.
Speaker Change: <unk> 2 million increase in research and development costs one.
Speaker Change: $1 million increase in depreciation and amortization and $1 million in insurance costs.
Speaker Change: These costs were partially offset by a decrease in stock based compensation of $2 1 million as we issued fully vested options and warrants in Q1 2023.
Bill Williams: The DiEM Labs acquisition, which included acquired IP, research, and technology assets, transformed BIM into a full-stack AI solutions platform. With the integration work complete, our 2024 focus is on laying the foundation across several key areas, including products, infrastructure, talent, partnerships, and initial customer relationships. We have initially focused on profitable growth in the auto, healthcare, and financial services sectors, with plans to expand into consumer and industrial verticals in the future. Throughout this journey, we are mindful of the need for efficiency, profitability, and liquidity.
Speaker Change: The <unk> Labs acquisition, which included acquired IP research and technology assets transformed <unk> into a full stack AI solutions platform.
Speaker Change: With the integration work complete our 2024 focus is on laying the foundation across several key areas.
Speaker Change: Including products infrastructure talent partnerships and initial customer relationships.
Speaker Change: We are initially focused on profitable growth in the auto healthcare and financial services sectors with plans to expand into consumer and industrial verticals in the future.
Speaker Change: Throughout this journey, we are mindful of the need for efficiency profitability and liquidity.
Bill Williams: Our revenue and profit model prioritizes recurring revenue and is primarily SaaS-based across our public and private cloud solutions with software licenses for our Citadel deployment. We believe we have a capital-light and efficient cost structure relative to our peers. With CAPEX consisting primarily of capitalized internal development costs and no investment in hardware or appliances, as kiosk costs are passed through or financed by our customers. Additionally, we employ a variable cost structure, leveraging our needs at AWS with a scaled approach.
Speaker Change: Our revenue and profit model prioritizes recurring revenue and is primarily a SaaS based across our public and private cloud solutions with software licenses for our set of <unk> deployments.
Speaker Change: We believe we have a capital light and efficient cost structure relative to our peers.
Speaker Change: With Capex consisted primarily of capitalized internal development cost and no investment in hardware or appliances as kiosk costs are pass through are financed by our customers.
Speaker Change: Additionally, we employ a variable cost structure, leveraging our needs at AWS with a scaled approach.
Bill Williams: Finally, we achieved efficiency gains through combined offshore and nearshore product development centered around our South Korea-based development team that was onboarded with our 2023 DM Labs acquisition. Now, to provide some insights into our sales process, I want to share an example of a product use case in healthcare. For a healthcare group suffering from poor patient medication adherence, which is a common challenge across the pharmaceutical industry, we have been able to identify problem areas and define our success by addressing them through operational and financial KPI. By utilizing our BED Healthcare AI avatar and LLM processing capability.
Speaker Change: Finally, we achieved efficiency gains through combined offshore and near shore product development centered around our South Korea based development team that was on boarded with our 2023 DM labs acquisition.
Speaker Change: Now to provide some insights into our sales motion I wanted to share. An example of a product use case and healthcare.
Speaker Change: For our healthcare group suffered from poor patient medication adherence, which is a common challenge across the pharmaceutical industry. We have been able to identify problem areas and have defined our success by addressing them through operational and financial Kpis.
Speaker Change: By utilizing our bid healthcare AI avatar and LLM processing capabilities, we ensure that patients receive support and guidance about proper medication adherence driving bottom line savings and top line growth for both pharmacies and for our pharma manufacturers.
Bill Williams: We ensure that patients receive support and guidance about proper medication adherence, driving bottom-line savings and top-line growth for both pharmacies and pharma manufacturers. From a standing start, we believe we have developed a robust sales pipeline and are seeing early conversion, which we expect to ramp up in the second half of 2024 and further accelerate in 2025. We have signed three pilot programs which we believe will generate projected ACB of approximately $1 million.
Speaker Change: From a standing start we believe we have developed a robust sales pipeline and are seeing early convergence, which we expect to ramp in the second half of 2024 and further accelerate in 2025, we.
Speaker Change: We have signed three pilot programs, which we believe will generate projected ACB of approximately $1 million.
Bill Williams: As we transform, transition, excuse me, from a pre-revenue business throughout 2024, we are building a foundation of balanced financial discipline. With a focus on profitable growth but also efficiency, cost containment, and meeting liquidity needs, we will increasingly emphasize and measure and report progress on bookings, pipeline, customer lifetime value, monthly and annual recurring revenue, new logos, customer acquisition costs, and growth rate sustainability as key measures of our system. And, of course, we'll incorporate sound financial fundamentals as measured by margins, operating expense leverage, EBITDA, free cash flow, and liquidity.
Speaker Change: As we transform transition excuse me from a pre revenue business throughout 2024, we are building a foundation of balanced financial discipline.
Speaker Change: With our focus on profitable growth, but also efficiency cost containment and meeting liquidity needs, we will increasingly emphasize and measure and report progress on bookings pipeline customer lifetime value monthly and annual recurring revenue new low.
Speaker Change: <unk> customer acquisition cost and growth rate sustainability as key measures of our success.
Speaker Change: And of course, we will incorporate sound financial fundamentals as measured by margins operating expense leverage EBITDA free cash flow and liquidity.
Bill Williams: To summarize our financial strategy, it is focused on momentum, platform scaling, and cost. Our five-year partnership with AFG and the Auto Vertical drives commercial traction and includes a $6.5 million annual capital commitment representing $32.5 million over the 24 to 28 period. And, as Michael mentioned, we are also in the process of a capital raise to fund both the journey and the resources to properly scale the platform. To optimize cash burn, we have implemented strict cost controls, ensuring cost discipline as we pursue logos in profitable markets. Now, I'll hand it back to Michael for closing remarks.
Speaker Change: To summarize our financial strategy is focused on momentum platform scaling and cost discipline.
Speaker Change: Our five year partnership with AFG in the auto vertical drives commercial traction and includes a $6 5 million dollar annual capital commitment representing $32 $5 million over the 24 to 2008 period.
Speaker Change: And as Michael mentioned, we are also in the process of a capital raise to fund both the journey and the resources to properly scale of the platform.
Speaker Change: To optimize cash burn we have implemented strict cost controls ensuring cost discipline as we pursue logos and profitable growth.
Michael Michael: Now I'll hand, it back to Michael for closing remarks.
Michael Zaharsky: Thanks, Bill. We are focused on bringing AI solutions that deliver tangible benefits to our B2B2C customers, driving superior customer experiences, enhanced productivity, and measurable performance. We have a unique and differentiated approach to AI, emphasizing safety and privacy that meets the regulatory and compliance requirements of business through human-like conversational avatars and voice capabilities. Looking ahead, our priorities for 2024 are accelerating market penetration and execution in our target vertical, scaling our operating platform, and ensuring we have the resources necessary to supercharge our journey.
Michael Michael: Thanks, Bill we are focused on bringing AI solutions that deliver tangible benefits to our b to b to C customers driving superior customer experience enhanced productivity and measurable performance.
Michael Michael: We have a unique and differentiated approach to AI, emphasizing safety and privacy that meets the regulatory and compliance requirements of businesses through Humanlike conversational avatars and voice capabilities looking.
Michael Michael: Looking ahead, our priorities for 2024 are accelerating market penetration and executing in our target verticals scaling our operating platform and ensuring we have the resources necessary to supercharge our journey.
Michael Zaharsky: I would also like to take this opportunity to thank the entire BEND team around the world for their hard work. It takes a team to win, and I believe we have assembled the best in the industry. I'm very excited about the opportunity. Thank you for your time. And with that, I'd like to open up to Q&A. Operator. As a reminder, to ask a question...
Michael Michael: I would also like to take this opportunity to thank the entire been team around the world for their hard work. It takes a team to win and I believe we have assembled the best in the industry I am very excited about the opportunity in front of us.
Michael Michael: Thank you for your time and with that I'd like to open up to Q&A operator.
Operator: If you have any questions that you would like to ask, please reach out to the BEND team through their Investor Relations website. This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Once again, if you would like to ask a question at this time, please press star one one on your telephone. I'm showing no questions in the queue at this time.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Once again, if you would like to ask a question at this time. Please press star one on your telephone.
Im showing no questions in the queue at this time.
Speaker Change: You have any questions that you would like to ask please reach out to the benzene through their Investor Relations website. This concludes today's conference call. Thank you for participating you may now disconnect.
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