Brand Engagement Network Inc. Stock Compensation Disclosure
Equity Compensation Plans
2021 Incentive Stock Option Plan
In May 2021, the Company adopted the 2021 Incentive Stock Option Plan (“2021 Option Plan”) that provides for the grant of the following types of stock awards: (i) incentive stock Options, (ii) non-statutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. The 2021 Option Plan was administered by the Company’s Board of Directors (the “Board of Directors”). In connection with the Closing, all outstanding awards were assumed by BEN pursuant to the terms of the Business Combination Agreement and the Board of Directors declared that there will be no further issuances under the 2021 Option Plan. Forfeitures under the 2021 Option Plan are automatically added to shares available for issuance under the 2024 Plan.
2024 Long-Term Incentive Plan
In connection with the Closing, the 2024 Long-Term Incentive Plan (the “2024 Plan”) became effective. The 2024 Plan provides for the grant of the following types of stock awards: (i) incentive stock options, (ii) nonqualified stock options, (iii) stock appreciation rights, (iv) restricted stock, (v) restricted stock units, (vi) performance awards, (vii) dividend equivalent rights, (viii) performance awards, (ix) performance goals, (x) tandem awards, (xi) prior plan awards, and (xii) other awards. The 2024 Plan is administered by the Board of Directors. The 2024 Plan awards are available to employees, officers and contractors. The option grants authorized for issuance under the 2024 Plan may total up to shares of Common Stock. As of December 31, 2025, shares remained available for grant under the 2024 Plan.
Option Awards
2025 Activity
Generally, options have a service vesting condition of % cliff after year and then monthly thereafter for months (% per month).
| December 31, 2025 | December 31, 2024 | |||||||
| Expected term | Years | Years | ||||||
| Risk-free interest rate | % | % | ||||||
| Dividend yield | % | % | ||||||
| Volatility | % | % | ||||||
There were no stock options granted for the period ended December 31, 2025.
| Number of Shares | Weighted Average Exercise Price | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (in years) | |||||||||||||
| Outstanding as of December 31, 2023 | 2,430,900 | $ | 4.19 | |||||||||||||
| Granted | 108,040 | $ | 8.10 | |||||||||||||
| Forfeited | (1,104,710 | ) | $ | 3.48 | ||||||||||||
| Exercised | (47,830 | ) | $ | 0.38 | ||||||||||||
| Outstanding as of December 31, 2024 | 1,386,400 | $ | 4.90 | $ | 2.58 | $ | ||||||||||
| Outstanding as of December 31, 2025 | 1,386,400 | 4.90 | 2.58 | |||||||||||||
| Vested and expected to vest as of December 31, 2025 | 1,386,400 | 4.90 | 2.58 | |||||||||||||
| Exercisable as of December 31, 2025 | $ | $ | $ | $ | ||||||||||||
The Company recorded stock-based compensation expense related to options of $ and $ in the years, ended December 31, 2025 and 2024, respectively, to the accompanying consolidated statements of operations.
Common Stock Warrants
Compensatory Warrants
As of December 31, 2025, there were 0 warrants outstanding at a weighted average exercise price of $32.20 per share, with expiration dates ranging from 2028 to 2033. No compensatory warrants were issued during the period ended December 31, 2025.
The following table provides the estimates included in the inputs to the Black-Scholes pricing model for the AFG and compensatory warrants granted:
| December 31, 2025 | December 31, 2024 | |||||||
| Expected term | 2 Years | 3 Years | ||||||
| Risk-free interest rate | 4.46 | % | 4.46 | % | ||||
| Dividend yield | 0.00 | % | 0.00 | % | ||||
| Volatility | 55.14 | % | 55.14 | % | ||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| General and administrative | $ | 629,984 | $ | 862,614 | ||||
| Research and development | 192,446 | 263,510 | ||||||
| $ | 822,430 | $ | 1,126,124 | |||||
Restricted share awards
During the year ended December 31, 2025, the Company issued restricted share awards to certain of its directors and officers. All of the restricted share awards granted vested immediately upon grant. The fair value of a restricted share award is equal to the fair market value price of the Company’s Common Stock on the date of grant. The Company recorded stock-based compensation expense of $ for the year ended December 31, 2025 related to these restricted share awards.
| Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Nonvested at January 1, 2025 | $ | |||||||
| Granted | 464,244 | 1.02 | ||||||
| Vested | (464,244 | ) | 1.02 | |||||
| Nonvested at January 1, 2025 | $ | |||||||
| Granted | 223,586 | 1.02 | ||||||
| Vested | (223,586 | ) | 1.02 | |||||
| Nonvested at December 31, 2025 | $ | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 16, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.