Business Context and Reporting Period
This Form 8-K, filed on April 17, 2025, reports events occurring on April 11, 2025, for Verb Technology Company, Inc. (Nasdaq: VERB). The filing details the completion of the acquisition of Lyvecom, Inc., an AI-driven video commerce platform.
Key Financial Metrics and Transaction Terms
The acquisition closed on April 11, 2025, with the following consideration structure:
- Cash Payment: $3,000,000 paid for Lyvecom's outstanding capital stock.
- Debt Repayment: $1,125,000 repaid to Lyvecom investors holding Simple Agreement for Future Equity (S.A.F.E.) instruments.
- Related Party Loan: $100,000 paid to a Lyvecom related party to satisfy an existing loan.
- Equity Issuance: 184,812 restricted shares of Verb Technology common stock valued at $1,000,000 (based on a 30-day VWAP of approximately $5.41).
- Total Immediate Consideration: $5,225,000 in cash plus $1,000,000 in equity.
- Earn-Out Potential: Up to an additional $3,000,000 in cash over 24 months contingent on performance metrics.
The filing does not provide specific revenue, profit, cash flow, or margin data for Verb Technology or Lyvecom within the text of this report. Audited financial statements for Lyvecom and pro forma information are scheduled to be filed within 71 days.
Material Changes
The primary material change is the consolidation of Lyvecom into Verb Technology. This transaction expands Verb's portfolio into AI-driven video commerce. The issuance of 184,812 restricted shares represents a dilution event for existing shareholders, subject to lock-up and leak-out agreements.
Outlook, Risks, and Contingencies
Management Commentary: The acquisition is intended to integrate Lyvecom's AI-driven video commerce capabilities into Verb's operations.
Risks and Contingencies:
- Earn-Out Uncertainty: The potential $3,000,000 earn-out is contingent on Lyvecom achieving specific performance metrics over the next 24 months.
- Regulatory Compliance: The restricted shares were issued under Section 4(a)(2) of the Securities Act and are not registered; they cannot be offered or sold in the U.S. absent registration or an exemption.
- Indemnification: The agreement includes customary indemnification provisions for breaches of representations, warranties, and covenants.
Investor Verification Checklist
- Verify the specific performance metrics required to trigger the $3,000,000 earn-out payment.
- Review the upcoming audited financial statements of Lyvecom (due within 71 days) to assess historical profitability and debt levels.
- Monitor the pro forma financial information to understand the impact of the acquisition on Verb's consolidated balance sheet and earnings.
- Confirm the lock-up and leak-out terms for the 184,812 restricted shares issued to Lyvecom shareholders.