What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-06 · 119 added, 80 removed, 294 unchanged (40% of the section changed)

23 unchanged sentences

75,000,000 shares authorized;

32,676,286 and 31,799,354 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

32,870,767 and 31,799,354 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

9 unchanged sentences

Three Months Ended

Six Months Ended

Operating expenses:

5 unchanged sentences

Loss from operations

Other (expense) income, net

Other expense, net

Loss before provision for income taxes

11 unchanged sentences

(in thousands, except share amounts)

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Comprehensive

Balance as of March 31, 2021

Common stock issued under employee stock plans, net

Common stock issued for services

Stock-based compensation expense

Balance as of June 30, 2021

Six Months Ended June 30, 2021

Comprehensive

Balance as of December 31, 2020

4 unchanged sentences

Other comprehensive gain

Balance as of June 30, 2021

The accompanying notes are an integral part of these condensed consolidated financial statements.

VERITONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

Three Months Ended June 30, 2020

Comprehensive

Balance as of March 31, 2020

Three Months Ended March 31, 2020

Common stock offerings, net

Common stock issued under employee stock plans, net

Stock-based compensation expense

Exercise of warrants

Warrant issuance

Other comprehensive gain

Balance as of June 30, 2020

Six Months Ended June 30, 2020

Comprehensive

3 unchanged sentences

Stock-based compensation expense

Exercise of warrants

Warrant issuance

Other comprehensive gain

Balance as of March 31, 2020

Balance as of June 30, 2020

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Issuance of warrants

Loss on disposal of fixed assets

6 unchanged sentences

Expenditures billable to clients

Prepaid expenses and other current assets

Prepaid expenses and other assets

Accounts payable

3 unchanged sentences

Other liabilities

Net cash provided by operating activities

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from the sale of equipment

Capital expenditures

Net cash used in investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

Proceeds from common stock offerings, net

Proceeds from loan

Repayment of loan

Proceeds from the exercise of warrants

19 unchanged sentences

The Company’s advertising services also include its VeriAds TM Network, which is comprised of programs that enable broadcasters, podcasters and social media influencers to generate incremental advertising revenue.

In July 2021, the Company announced its entry into a definitive agreement to acquire PandoLogic Ltd., a company incorporated under the laws of the state of Israel (“Pandologic”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Melisandra Ltd., a company incorporated under the laws of the State of Israel and a wholly-owned subsidiary of the Company (“Merger Sub”), and Shareholder Representative Services, LLC, a Colorado limited liability company, solely in its capacity as the representative of the Securityholders and COP Participants.

See Note 10 for further details on the Merger Agreement.

PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

4 unchanged sentences

The information included in this Form 10-Q should be read in conjunction with the information included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 5, 2021.

Interim results for the three months ended March 31, 2021 are not necessarily indicative of the results the Company will have for the full year ending December 31, 2021.

Interim results for the three and six months ended June 30, 2021 are not necessarily indicative of the results the Company will have for the full year ending December 31, 2021.

The accompanying condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which are normal, recurring and necessary to fairly state the Company’s financial position, results of operations and cash flows.

All significant intercompany transactions have been eliminated in consolidation.

The financial data and the other information disclosed in these notes to the condensed consolidated financial statements reflected in the three month periods presented are unaudited.

The financial data and the other information disclosed in these notes to the condensed consolidated financial statements reflected in the three and six month periods presented are unaudited.

The December 31, 2020 balance sheet included herein was derived from the audited financial statements but does not include all disclosures or notes required by GAAP for complete financial statements.

7 unchanged sentences

During the years ended December 31, 2020 and 2019, the Company generated cash flows from operations of $ 1,433 and negative cash flows from operations of $ 30,432 , respectively, and incurred net losses of $ 47,876 and $ 62,078 , respectively.

In the three months ended March 31, 2021, the Company generated cash flows from operations of $ 6,209 and incurred a net loss of $ 30,567 .

As of March 31, 2021, the Company had an accumulated deficit of $ 310,932 .

Historically, the Company has satisfied its capital needs with the net proceeds from sales of

equity securities, issuance s of convertible debt, and the exercise of common stock options and warrants.

In 2020, the Company completed an offering of its common stock for aggregate net proceeds of $ 59,771 and raised additional net proceeds of $ 5,986 through sales of its common stock under an E quity D istribution A greement dated June 1, 2018 (the “Equity Distribution Agreement”) .

In the first three months of 202 1 , the Company received net proceeds of $ 4,254 from the issuance of common stock under the Company’s employee stock plan s and $ 2,279 from the exercise of common stock warrants.

In the six months ended June 30, 2021, the Company generated negative cash flows from operations of $ 991 and incurred a net loss of $ 43,282 .

As of June 30, 2021, the Company had an accumulated deficit of $ 323,647 .

Historically, the Company has satisfied its capital needs with the net proceeds from sales of equity securities, issuances of convertible debt, and the exercise of common stock options and warrants.

In 2020, the Company completed an offering of its common stock for aggregate net proceeds of $ 59,771 and raised additional net proceeds of $ 5,986 through sales of its common stock under an Equity Distribution Agreement dated June 1, 2018 (the “Equity Distribution Agreement”).

In the first six months of 2021, the Company received net proceeds of $ 4,794 from the issuance of common stock under the Company’s employee stock plans and $ 2,279 from the exercise of common stock warrants.

The Company expects to continue to generate net losses for the foreseeable future as it makes significant investments in developing and selling its aiWARE SaaS solutions.

Management believes that the Company’s existing balances of cash and cash equivalents, which totaled $ 127,459 as of March 31, 2021, will be sufficient to meet its anticipated cash requirements for at least twelve months from the date that these financial statements are issued.

Management believes that the Company’s existing balances of cash and cash equivalents, which totaled $ 120,627 as of June 30, 2021, will be sufficient to meet its anticipated cash requirements for at least twelve months from the date that these financial statements are issued.

However, should the Company’s current cash and cash equivalents not be sufficient to support the development of its business to the point at which it has positive cash flows from operations, the Company plans to meet its future needs for additional capital through equity and/or debt financings.

Equity financings may include sales of common stock.

Such financing may not be available on terms favorable to the Company or at all.

8 unchanged sentences

Significant Customers

One individual customer accounted for 10 % of the Company’s net revenues for the three months ended March 31, 2021.

No individual customer accounted for 10 % or more of the Company’s net revenues for the three months ended March 31, 2020.

One individual customer accounted for 10 % of the Company’s net revenues for the three months ended June 30, 2021.

One individual customer accounted for 11 % of the Company’s net revenues for the three months ended June 30, 2020.

No individual customer accounted for 10 % or more of the Company’s net revenues for the six months ended June 30, 2020 or the six months ended June 30, 2021.

Two advertising clients individually accounted for 10 % or more of the Company’s accounts receivable as of June 30, 2021 and December 31, 2020.

Remaining Performance Obligations

As of March 31, 2021, the aggregate amount of the transaction prices under the Company’s contracts allocated to the Company’s remaining performance obligations was $ 4,730 , approximately 74 % of which the Company expects to recognize as revenue over the next twelve months , and the remainder thereafter.

As of June 30, 2021, the aggregate amount of the transaction prices under the Company’s contracts allocated to the Company’s remaining performance obligations was $ 4,668 , approximately 71 % of which the Company expects to recognize as revenue over the next twelve months , and the remainder thereafter.

This aggregate amount excludes amounts allocated to remaining performance obligations under contracts that have an original duration of one year or less and variable consideration that is allocated to remaining performance obligations.

11 unchanged sentences

Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in the statement of operations.

This standard will be effective for the Company beginning with the first quarter of fiscal year 2022, assuming the Company maintains its emerging growth company status .

This standard will be effective for the Company beginning with the first quarter of fiscal year 2022.

The Company is currently evaluating the expected impact this standard will have on its policies and procedures pertaining to its existing and future lease arrangements, its disclosure requirements and its consolidated financial statements, but anticipates that the required recognition of a lease liability and related right-of-use asset may significantly increase both assets and liabilities recognized and reported on its balance sheet.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments – Credit Losses (Topic 326).

which requires measurement and recognition of expected credit losses for financial assets held.

This standard will be effective for the Company beginning in the first quarter of fiscal year 2023, assuming the Company maintains its emerging growth company status, and early adoption is permitted.

2016-13, Financial Instruments – Credit Losses (Topic 326) which requires measurement and recognition of expected credit losses for financial assets held.

This standard will be effective for the Company beginning in the first quarter of fiscal year 2023, and early adoption is permitted.

The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures as well as the timing of adoption.

In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, Income Taxes .

In December 2019, the FASB issued ASU No.

2019-12 to simplify the accounting in ASC 740, Income Taxes .

This standard removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences.

This guidance also clarifies and simplifies other areas of ASC 740.

This standard will be effective for the Company beginning in the first quarter of fiscal year 2022, assuming the Company maintains its emerging growth company status, and early adoption is permitted .

This standard will be effective for the Company beginning in the first quarter of fiscal year 2022, and early adoption is permitted .

The Company is currently evaluating the impact that this standard will have on its financial statements and related disclosures as well as the timing of adoption.

2 unchanged sentences

Three Months Ended

Six Months Ended

Weighted-average common shares outstanding

6 unchanged sentences

Three Months Ended

Six Months Ended

Common stock options and restricted stock units

12 unchanged sentences

The Company’s money market funds are categorized as Level 1 within the fair value hierarchy.

As of March 31, 2021, the Company’s cash and cash equivalents balances were as follows:

As of June 30, 2021, the Company’s cash and cash equivalents balances were as follows:

Money market funds

9 unchanged sentences

GOODWILL AND INTANGIBLE ASSETS, NET

The carrying amount of goodwill was $ 6,904 as of March 31, 2021 and December 31, 2020.

The carrying amount of goodwill was $ 6,904 as of June 30, 2021 and December 31, 2020.

Intangible Assets

The following table sets forth the Company’s finite-lived intangible assets resulting from business acquisitions and other purchases, which continue to be amortized:

March 31, 2021

June 30, 2021

December 31, 2020

5 unchanged sentences

Noncompete agreements

The following table presents future amortization of the Company’s finite-lived intangible assets at March 31, 2021:

The following table presents future amortization of the Company’s finite-lived intangible assets at June 30, 2021:

2021 (6 months)

2 unchanged sentences

Cash and cash equivalents

As of March 31, 2021 and December 31, 2020, the Company had cash and cash equivalents of $ 127,459 and $ 114,817 , respectively, including $ 51,129 and $ 40,052 , respectively, of cash received from advertising clients for future payments to vendors.

As of June 30, 2021 and December 31, 2020, the Company had cash and cash equivalents of $ 120,627 and $ 114,817 , respectively, including $ 48,226 and $ 40,052 , respectively, of cash received from advertising clients for future payments to vendors.

Accounts Receivable, Net

12 unchanged sentences

Property, equipment and improvements, net

During the three months ended March 31, 2021, in connection with the sublease of its former corporate office space located in Costa Mesa, California, the Company wrote-off approximately $ 3,559 in property and equipment and leasehold improvements and recorded a net loss on disposal of $ 1,894 .

Depreciation expense was $ 175 and $ 256 for the three months ended March 31, 2021 and 2020, respectively.

During the six months ended June 30, 2021, in connection with the sublease of its former corporate office space located in Costa Mesa, California, the Company wrote-off approximately $ 3,559 in property and equipment and leasehold improvements and recorded a net loss on disposal of $ 1,894 .

Depreciation expense was $ 78 and $ 253 for the three and six months ended June 30, 2021, respectively.

Depreciation expense was $ 256 and $ 512 for the three and six months ended June 30, 2020, respectively.

Accounts Payable

6 unchanged sentences

Three Months Ended

Six Months Ended

aiWARE SaaS Solutions

1 unchanged sentence

Total revenue

During the three months ended March 31, 2021 and 2020, the Company made $ 82,421 and $ 54,749 , respectively, in gross media placements, of which $ 79,625 and $ 50,050 respectively, were billed directly to clients.

Of the amounts billed directly to clients, $ 71,673 and $ 44,499 represented media-related costs netted against billings during the three months ended March 31, 2021 and 2020, respectively.

Other (Expense) Income, Net

Other (expense) income, net for the periods presented was comprised of the following:

Other Expense, Net

Other expense, net for the periods presented was comprised of the following:

Three Months Ended

Six Months Ended

Interest income, net

Change in fair value of warrant liability

Other (expense) income, net

Other expense, net

COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

The Company recognized contract termination costs as a liability when it ceased using the rights conveyed under the Lease.

During the first quarter ended March 31, 2021, the Company recorded approximately $ 3,367 in charges resulting from the Sublease, consisting of $ 1,894 loss on disposal of property and equipment and leasehold improvements, $ 1,211 loss on sublease, and $ 262 in initial direct costs.

As of March 31, 2021, future minimum lease payments were as follows:

2021 (nine months)

During the six months ended June 30, 2021, the Company recorded approximately $ 3,367 in charges resulting from the Sublease, consisting of $ 1,894 loss on disposal of property and equipment and leasehold improvements, $ 1,211 loss on sublease, and $ 262 in initial direct costs.

As of June 30, 2021, future minimum lease payments were as follows:

2021 (six months)

Total minimum payments

As of March 31, 2021, minimum sublease rental income to be received in the future under noncancelable subleases was approximately $ 4,254 .

The total rent expense for all operating leases, excluding the charges related to the Sublease discussed above, was $ 571 and $ 766 for the three months ended March 31, 2021 and 2020, respectively.

As of June 30, 2021, minimum sublease rental income to be received in the future under noncancelable subleases was approximately $ 3,970 .

The total rent expense for all operating leases, excluding the charges related to the Sublease discussed above, was $ 306 and $ 877 for the three and six months ended June 30, 2021, and $ 751 and $ 1,517 for the three and six months ended June 30, 2020, respectively.

The Company collects and remits sales tax in jurisdictions in which it has a physical presence or it believes nexus exists, which therefore obligates the Company to collect and remit sales tax.

During the three months ended March 31, 2021, the Company recorded a liability of $ 138 for potential exposure in several states where there is uncertainty about the point in time at which the Company established a sufficient business connection to create nexus.

As of March 31, 2021, the total accrued liability for potential sales tax exposure was $ 1,179 .

During the three and six months ended June 30, 2021, the Company recorded a liability of $ 146 and $ 284 , respectively, for potential exposure in several states where there is uncertainty about the point in time at which the Company established a sufficient business connection to create nexus.

As of June 30, 2021, the total accrued liability for potential sales tax exposure was $ 845 .

Other Contingencies

3 unchanged sentences

Common Stock Issuances

In June 2018, the Company entered into an Equity Distribution Agreement with JMP Securities as sales agent, pursuant to which it could offer and sell, from time to time, through JMP Securities, shares of its common stock having an aggregate offering price of up to $ 50,000 .

During the three months ended March 31, 2020, the Company issued and sold an aggregate of 1,292,208 shares of its common stock pursuant to the Equity Distribution Agreement and received net proceeds from such sales of $ 2,984 after deducting expenses of $ 92 .

During the six months ended June 30, 2021 and 2020, the Company issued an aggregate of 803,367 shares of its common stock and 199,942 shares of its common stock, respectively, in connection with the exercise of stock options, issuance of stock awards and vesting of restricted stock units under its stock incentive plans and purchases under its Employee Stock Purchase Plan (the “ESPP”).

During the six months ended June 30, 2021, the Company issued a total of 167,495 shares of its common stock upon the exercise of warrants for an aggregate exercise price of $ 2,279 and issued an aggregate of 84,723 shares of its common stock upon exercises of warrants to purchase an aggregate of 91,833 shares of its common stock, which were effected on a net exercise basis without cash payment of the exercise price.

During the six months ended June 30, 2020, the Company issued a total of 154,311 shares of its common stock upon the exercise of warrants for an aggregate exercise price of $ 2,100 .

During the six months ended June 30, 2021, the Company issued an aggregate of 15,828 shares of its common stock for services provided to the Company.

During the six months ended June 30, 2020, the Company issued and sold an aggregate of 1,491,317 shares of its common stock pursuant to the Equity Distribution Agreement with JMH Securities (as sales agent) and received net proceeds from such sales of $ 6,006 after deducting expenses of $ 270 .

The Company voluntarily terminated the Equity Distribution Agreement in January 2021.

During the three months ended March 31, 2021, the Company issued a total of 167,495 shares of its common stock upon the exercise of warrants for an aggregate exercise price of $ 2,279 and issued an aggregate of 84,723 shares of its common stock upon exercises of warrants to purchase an aggregate of 91,833 shares of its common stock, which were effected on a net exercise basis without cash payment of the exercise price.

During the three months ended March 31, 2021 and 2020, the Company issued an aggregate of 608,886 shares of its common stock and 111,427 shares of its common stock, respectively, in connection with the exercise of stock options, issuance of stock awards and vesting of restricted stock units under its stock incentive plans and purchases under its Employee Stock Purchase Plan (the “ESPP”).

During the three months ended March 31, 2021, the Company issued an aggregate of 15,828 shares of its common stock for services provided to the Company.

Stock-Based Compensation

During the three months ended March 31, 2021, the Company granted options to purchase an aggregate of 92,000 shares of its common stock that are subject to time-based vesting conditions.

During the six months ended June 30, 2021, the Company granted options to purchase an aggregate of 200,955 shares of its common stock that are subject to time-based vesting conditions.

The Company valued these stock options using the Black-Scholes Merton option pricing model.

The following assumptions were used to compute the grant date fair values of the stock options granted during the three months ended March 31, 2021:

The following assumptions were used to compute the grant date fair values of the stock options granted during the six months ended June 30, 2021:

Expected term (in years)

2 unchanged sentences

Expected dividend yield

The assumptions used in calculating the fair values of purchase rights granted under the ESPP during the three months ended March 31, 2021 are set forth in the table below:

The assumptions used in calculating the fair values of purchase rights granted under the ESPP during the six months ended June 30, 2021 are set forth in the table below:

Expected term (in years)

4 unchanged sentences

Three Months Ended

Six Months Ended

Stock-based compensation expense by type of award:

9 unchanged sentences

Equity Award Activity Under Stock Plans

The Company’s stock award activity for the three months ended March 31, 2021 was as follows:

The Company’s stock award activity for the six months ended June 30, 2021 was as follows:

Average Grant

1 unchanged sentence

Unvested at December 31, 2020

Unvested at March 31, 2021

All stock awards granted during the three months ended March 31, 2021 were fully vested upon grant.

As of March 31, 2021, there was no unrecognized compensation cost related to stock awards granted under the Company’s stock plans.

Unvested at June 30, 2021

All stock awards granted during the six months ended June 30, 2021 were fully vested upon grant.

As of June 30, 2021, there was no unrecognized compensation cost related to stock awards granted under the Company’s stock plans.

Restricted Stock Units

The Company’s restricted stock unit activity for the three months ended March 31, 2021 was as follows:

The Company’s restricted stock unit activity for the six months ended June 30, 2021 was as follows:

Average Grant

1 unchanged sentence

Unvested at December 31, 2020

Unvested at March 31, 2021

As of March 31, 2021, total unrecognized compensation cost related to restricted stock units was $ 16,840 , which is expected to be recognized over a weighted average period of 0.9 year.

Unvested at June 30, 2021

As of June 30, 2021, total unrecognized compensation cost related to restricted stock units was $ 11,705 , which is expected to be recognized over a weighted average period of 0.8 year.

Performance-Based Stock Options

The activity during the three months ended March 31, 2021 related to stock options that are subject to performance-based vesting conditions tied to the achievement of stock price goals by the Company was as follows:

The activity during the six months ended June 30, 2021 related to stock options that are subject to performance-based vesting conditions tied to the achievement of stock price goals by the Company was as follows:

Weighted-Average

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Exercisable at March 31, 2021

During the first quarter of 2021, the Company achieved all of the stock price milestones applicable to substantially all of the performance-based stock options and, as a result, such performance-based stock options vested and all associated unrecognized compensation was accelerated and recognized in full as a one-time expense of $ 16,268 in the first quarter of 2021.

The aggregate intrinsic value of the options exercised during the three months ended March 31, 2021 was $ 5,815 .

No options were exercised during the three months ended March 31, 2020.

No performance-based stock options were granted during the three months ended March 31, 2021 and 2020, and no performance-based stock options vested during the three months ended March 31, 2020.

Outstanding at June 30, 2021

Exercisable at June 30, 2021

During the first six months of 2021, the Company achieved all of the stock price milestones applicable to substantially all of the performance-based stock options and, as a result, such performance-based stock options vested and all associated unrecognized compensation was accelerated and recognized in full as a one-time expense of $ 16,268 during the six months ended June 30, 2021.

The aggregate intrinsic value of the options exercised during the six months ended June 30, 2021 was $ 6,517 .

No options were exercised during the six months ended June 30, 2020.

No performance-based stock options were granted during six months ended June 30, 2021 and 2020, and no performance-based stock options vested during the six months ended June 30, 2020.

Stock Options

The activity during the three months ended March 31, 2021 related to all other stock options was as follows:

The activity during the six months ended June 30, 2021 related to all other stock options was as follows:

Weighted-Average

Outstanding at December 31, 2020

Outstanding at March 31, 2021

Exercisable at March 31, 2021

The weighted average grant date fair value of stock options granted during the three months ended March 31, 2021 and 2020 was $ 32.68 and $ 1.64 per share, respectively.

The aggregate intrinsic value of the stock options exercised during the three months ended March 31, 2021 was $ 7,848 .

No stock options were exercised during the three months ended March 31, 2020.

The total grant date fair value of stock options vested during the three months ended March 31, 2021 and 2020 was $ 733 and $ 2,371 , respectively.

At March 31, 2021, total unrecognized compensation expense related to stock options was $ 7,765 and is expected to be recognized over a weighted average period of 3.0 years.

Outstanding at June 30, 2021

Exercisable at June 30, 2021

The weighted average grant date fair value of stock options granted during the six months ended June 30, 2021 and 2020 was $ 23.09 and $ 2.06 per share, respectively.

The aggregate intrinsic value of the stock options exercised during the six months ended June 30, 2021 and 2020 was $ 8,198 and $ 177 , respectively The total grant date fair value of stock options vested during the six months ended June 30, 2021 and 2020 was $ 1,313 and $ 4,067 , respectively.

At June 30, 2021, total unrecognized compensation expense related to stock options was $ 8,137 and is expected to be recognized over a weighted average period of 3.0 years.

The aggregate intrinsic values in the tables above represent the difference between the fair market value of the Company’s common stock and the average option exercise price of in-the-money options, multiplied by the number of such stock options.

Employee Stock Purchase Plan

During the three months ended March 31, 2021, a total of 67,068 shares of common stock were purchased under the Company’s ESPP.

As of March 31, 2021, accrued employee contributions for future purchases under the ESPP totaled $ 119 .

During the six months ended June 30, 2021, a total of 67,068 shares of common stock were purchased under the Company’s ESPP.

As of June 30, 2021, accrued employee contributions for future purchases under the ESPP totaled $ 223 .

SUBSEQUENT EVENTS

On July 21, 2021, the Company entered into a definitive agreement to acquire Pandologic Ltd., a company incorporated under the laws of the state of Israel (“Pandologic”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) for total consideration of $ 150 million (the “Merger Consideration”).

The Merger Consideration consists of upfront payments of $ 50 million in cash and $ 35 million in common stock (approximately 1.7 million shares) and $ 65 million payable based on earnouts tied to financial performance of Pandologic in fiscal 2021 and 2022, which amount will be paid in a combination of cash and common stock.

The Merger Consideration is subject to adjustment based on Pandologic cash, indebtedness, transaction expenses and working capital as of the closing date (the “Closing”).

The Company and Pandologic have agreed to customary representations, warranties, covenants and closing conditions under Israeli law in the Merger Agreement.

The Merger Agreement provides for customary termination rights for both the Company and Pandologic, including, among other bases for termination, if the Merger is not consummated prior to October 21, 2021.

The Closing is subject to customary conditions (as defined) and is expected to close by late Q3 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements