Business Context and Reporting Period
Company: Verb Technology Company, Inc. (Note: Request metadata listed "TON Strategy Co," but the filing identifies the registrant as Verb Technology Company, Inc.)
Filing Type: Form 8-K (Current Report)
Date of Report: February 28, 2025
Event: Entry into a Binding Term Sheet to acquire Lyvecom, Inc., an AI-driven video commerce platform.
Key Financial Metrics and Transaction Terms
This filing details a proposed acquisition rather than periodic financial results. Key transaction values include:
- Cash Consideration: $3,000,000 for outstanding capital stock.
- Debt Repayment: $1,125,000 to repay S.A.F.E. instrument investors and $100,000 to satisfy a third-party loan.
- Stock Consideration: Issuance of common stock valued at $1,000,000 on the closing date, capped at 19.9% of outstanding shares. Any shortfall due to the cap will be paid in cash.
- Earn-Out: Up to $3,000,000 in additional cash over 24 months based on performance metrics.
- Executive Compensation: Two-year employment agreement for Maxwell Drut (CTO) with a $250,000 annual base salary and a 25% bonus target.
Liquidity and Debt: The filing text does not provide current liquidity, cash flow, or existing debt levels for Verb Technology Company, Inc.
Material Changes and Conditions
The primary material change is the initiation of the Lyvecom acquisition. The transaction is subject to the following conditions:
- Completion of Lyvecom's audit for the years ended December 31, 2024, and December 31, 2023.
- Execution of definitive agreements incorporating the Term Sheet terms.
- Termination Date: If not consummated by June 30, 2025, either party may terminate.
- Audit Penalty: If Lyvecom fails to deliver audited statements by May 30, 2025, they must reimburse Verb's audit fees (potentially via credit against existing service fees).
Outlook, Risks, and Contingencies
Outlook: Management intends to use best efforts to consummate the transaction to integrate Lyvecom's AI-driven video commerce capabilities.
Risks and Contingencies:
- Closing Failure: The deal may not close if audits are not completed or definitive agreements are not reached by June 30, 2025.
- Valuation Cap: The stock portion of the deal is limited to 19.9% of outstanding shares; if the share price drops, the company must pay the difference in cash.
- Existing Agreements: An existing services agreement between the parties will terminate upon closing.
Investor Verification Checklist
- Verify the final purchase price and stock issuance count once the closing date share price is determined.
- Confirm the status of Lyvecom's audits for 2023 and 2024, as these are closing conditions.
- Review the full Binding Term Sheet (Exhibit 10.1) for specific performance metrics triggering the $3,000,000 earn-out.
- Assess the impact of the potential 19.9% equity dilution on existing shareholders.
- Monitor the June 30, 2025 deadline for transaction consummation.