Business Context and Reporting Period
This Form 8-K filing by Verb Technology Company, Inc. (trading as VERB) reports events occurring on September 4, 2020. The company, incorporated in Nevada, operates as a technology firm with principal executive offices in Newport Beach, California. The filing details the acquisition of SoloFire (dba Ascend Certification, LLC) by Verb Acquisition Co., LLC, a wholly-owned subsidiary of the Company.
Key Financial Metrics and Transaction Details
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins) for the reporting period. Instead, it discloses specific transaction values related to the acquisition of SoloFire:
- Base Purchase Price: $5,700,000.
- Adjustments: Less $517,750 in certain adjustments.
- Net Consideration: $5,182,250 (subject to post-closing working capital adjustments).
- Payment Structure:
- Promissory Note: $1,982,250 issued to seller representative Steve Deverall.
- Equity Consideration: $3,200,000 paid via 2,642,159 Class B Units of Verb Acquisition.
- Debt Terms: The Promissory Note accrues interest at 0.14% per annum and matures on October 1, 2020. It is unconditionally guaranteed by Verb Technology Company, Inc.
Material Changes and Agreements
The primary material change is the entry into a Material Definitive Agreement to acquire SoloFire. The Company determined this transaction does not constitute the acquisition of a significant amount of assets under Item 2.01. Key agreements executed include:
- Membership Interest Purchase Agreement: Transferred all outstanding membership interests of SoloFire to Verb Acquisition.
- Exchange Agreement: Allows holders of Class B Units to exchange them for the Company's common stock on a 1:1 basis starting six months after the closing date.
- Guaranty of Payment: The parent company guaranteed the payment and performance of the Promissory Note.
Outlook, Risks, and Contingencies
The filing does not contain forward-looking guidance, management commentary on future performance, or specific risk factors beyond standard transactional contingencies. Notable contingencies include:
- Working Capital Adjustments: The final purchase price is subject to post-closing adjustments.
- Debt Maturity: The $1,982,250 Promissory Note matures in approximately one month (October 1, 2020), though it may be prepaid without penalty.
- Equity Conversion: The Class B Units are convertible to common stock only after a six-month holding period.
Investor Verification Checklist
- Verify the final purchase price after post-closing working capital adjustments are calculated.
- Confirm the Company's liquidity position to ensure repayment of the $1,982,250 Promissory Note due October 1, 2020.
- Review the impact of the 2,642,159 Class B Units on potential future dilution once the six-month exchange period begins.
- Examine the full text of the Membership Interest Purchase Agreement (Exhibit 10.1) for specific representations and warranties regarding SoloFire's assets and liabilities.