Business Context and Reporting Period
This Form 8-K is filed by Verb Technology Company, Inc. (referred to in metadata as TON Strategy Co) for the reporting period of April 11, 2019. The filing primarily announces the completion of the acquisition of Sound Concepts and related corporate governance changes.
Key Financial Metrics and Transaction Details
- Total Acquisition Value: $25,000,000
- Cash Consideration: $15,000,000 paid to Sound Concepts shareholders.
- Stock Consideration: 3,194,888 restricted shares of Common Stock issued with a fair market value of $10,000,000.
- Net Cash Outlay: Approximately $11,000,000. This figure is derived after accounting for $4,000,000 in units purchased by Sound Concepts shareholders in the company's concurrent Public Offering.
- Funding Source: Net proceeds from a public offering of units that closed on April 9, 2019.
Material Changes
The primary material change is the consolidation of Sound Concepts into Verb Technology Company, Inc. as of April 11, 2019. All outstanding Sound Concepts capital stock was cancelled and converted into the cash and stock consideration described above. Additionally, the company's capital structure was altered by the issuance of nearly 3.2 million restricted shares.
Management Commentary and Corporate Governance
Effective with the closing of the acquisition, Chad J. Thomas stepped down from his role as Chief Technology Officer. He remains a full-time employee in the new capacity of Director of Product Development. In this role, he will manage the combined legacy Sound Concepts and Verb technology teams and oversee integration efforts with platforms including Salesforce, Oracle NetSuite, Adobe Marketo, and Microsoft.
Investor Verification Checklist
- Verify the closing date and terms of the Public Offering referenced as the funding source for the acquisition.
- Confirm the exact number of shares outstanding post-issuance of the 3,194,888 restricted shares.
- Review the attached Press Release (Exhibit 99.1) for further details on the strategic rationale and integration timeline.
- Check subsequent filings for the impact of the $11,000,000 net cash outlay on the company's liquidity position.