Being AI Limited Analysis

Overview

Being AI is a diversified artificial intelligence services, development and investment group.

Being AI comprises three business models: Being Consultants (providing AI and advanced technology support to third-party companies), Being Labs (developing AI and patentable technologies) and Being Ventures (investing in industries that will be significantly enhanced with the deployment of AI and advanced technologies).

Being Consultants, Being Labs and Being Ventures are in the early stages of generating revenue. Initial Ventures investments are in logistics (with Send Global) and education (with AGE).

Being AI was previously known and listed on the NZX Main Board as Ascension Capital (ACE). On 11 December 2023, ACE announced to NZX that it had reached a conditional agreement to acquire the Being AI Group via a proposed ‘reverse listing’. On 28 March 2024, ACE Shareholders passed resolutions to approve the proposed acquisition and ACE was renamed Being AI Limited (ticker code ‘BAI’).

Performance

The following information was extracted from Being AI's ("BAI") Full Year Results, released 30 May 2024:

Today Being AI Limited (NZX: BAI) has released its preliminary unaudited results for FY 2024 to the market.

Financial Performance Summary

During FY 2024, BAI:

• generated revenues of $40.52 million.
• achieved a 23% increase in operating EBITDA to $2.97 million.
• generated a $1.069 million net loss after tax, which loss included the accounting treatment of the reverse takeover transaction (“RTO”) – a $1.69 million share-based expense.

Explanation of Financial Performance and Financial Results

As a RTO into a non-trading shell company, the accounting rules under NZ GAAP require the difference between the fair value of the consideration paid to purchase the listed shell company (through the transfer of shares) plus the net liabilities acquired, to be expensed as a share-based payment.

As part of the RTO, the Company acquired 100% of Being Consultants and its 100% owned subsidiaries, Being Labs Limited and Being Ventures Limited. The Company paid an initial $5 million to acquire the shares in Being Consultants settled through the issue of shares. In addition, the vendors of Being Consultants were given a right to further ‘earn-in’ shares based on the Company’s share price achieving certain milestones over the next three years. The liability for the future payment of these earn-in shares is recognised at its fair value at balance date and has been valued at $5.6 million by an independent valuer. Because Being Consultants has no trading history the valuation has been based on industry metrics from similar Nasdaq and ASX listed small cap businesses.

The Group has total assets of $37.3 million and $3.8 million in equity. The RTO valued Send Global at $25 million and AGE at $15 million. Because of the accounting rules this value is not reflected in the Group’s balance sheet. If it were, total assets would be $78million and equity would be $44.8 million.