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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to       

Commission File Number: 001-38093

 

Veritone, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

47-1161641

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

2420 17th St., Office 3002, Denver, CO 80202

(Address of principal executive offices, including zip code)

(888) 507-1737

(Registrant’s telephone number, including area code)

 

 

Securities registered pursuant to Section 12(b) of the Exchange Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Common Stock, par value $0.001 per share

 

VERI

 

The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

Accelerated filer

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2) of the Exchange Act.  Yes   No

As of November 12, 2021, 34,876,616 shares of the registrant’s common stock were outstanding.

 

 

 


 

VERITONE, INC.

QUARTERLY REPORT ON FORM 10-Q

September 30, 2021

TABLE OF CONTENTS

 

Special Note Regarding Forward-Looking Statements

 

 

PART I.

 

FINANCIAL INFORMATION

 

2

Item 1.

 

Financial Statements (Unaudited)

 

2

 

 

Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020

 

2

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2021 and 2020

 

3

 

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 and 2020

 

4

 

 

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020

 

6

 

 

Notes to the Condensed Consolidated Financial Statements

 

7

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

22

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

32

Item 4.

 

Controls and Procedures

 

32

PART II.

 

OTHER INFORMATION

 

33

Item 1.

 

Legal Proceedings

 

33

Item 1A.

 

Risk Factors

 

33

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

37

Item 3.

 

Defaults Upon Senior Securities

 

37

Item 4.

 

Mine Safety Disclosures

 

37

Item 5.

 

Other Information

 

37

Item 6.

 

Exhibits

 

38

Signatures

 

39

 

 

 


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend that such forward-looking statements be subject to the safe harbors created thereby. For this purpose, any statements made in this Quarterly Report on Form 10-Q that are not historical or current facts may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “anticipates,” “believes,” “seeks,” “estimates,” “expects,” “intends,” “continue,” “can,” “may,” “plans,” “potential,” “projects,” “should,” “could,” “will,” “would” or similar expressions and the negatives of those expressions are intended to identify forward-looking statements , although not all forward-looking statements contain these identifying words. Such forward-looking, statements include, but are not limited to, any statements that refer to projections of our future financial condition and results of operations, capital needs and financing plans, competitive position, industry environment, potential growth and market opportunities, acquisition plans and strategies, compensation plans, governance structure and policies and/or the price of our common stock.

The forward-looking statements included herein represent our management’s current expectations and assumptions based on information available as of the date of this report. These statements involve numerous known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that may cause or contribute to such differences include, but are not limited to, those discussed in more detail in Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) of Part I, and Item 1A (Risk Factors) of Part II, of this Quarterly Report on Form 10-Q, and in Item 1 (Business) and Item 1A (Risk Factors) of Part I of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 5, 2021. Readers should carefully review these risks, as well as the additional risks described in other documents we file from time to time with the Securities and Exchange Commission. In light of the significant risks and uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking information, which speak only as of the date of this report.

Moreover, we operate in an evolving environment. New risks and uncertainties emerge from time to time and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual future results to be materially different from those expressed or implied by any forward-looking statements.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. We qualify all of our forward-looking statements by these cautionary statements.

1


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERITONE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share and share data)

(Unaudited)

 

 

 

As of

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

72,645

 

 

$

114,817

 

Accounts receivable, net

 

 

57,903

 

 

 

16,666

 

Expenditures billable to clients

 

 

25,236

 

 

 

18,365

 

Prepaid expenses and other current assets

 

 

10,683

 

 

 

6,719

 

Total current assets

 

 

166,467

 

 

 

156,567

 

Property, equipment and improvements, net

 

 

1,178

 

 

 

2,354

 

Intangible assets, net

 

 

92,904

 

 

 

10,744

 

Goodwill

 

 

27,999

 

 

 

6,904

 

Long-term restricted cash

 

 

855

 

 

 

855

 

Other assets

 

 

1,793

 

 

 

230

 

Total assets

 

$

291,196

 

 

$

177,654

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Accounts payable

 

$

33,102

 

 

$

15,632

 

Accrued media payments

 

 

75,171

 

 

 

55,874

 

Client advances

 

 

8,402

 

 

 

6,496

 

Contingent consideration, current

 

 

19,307

 

 

 

-

 

Other accrued liabilities

 

 

37,131

 

 

 

10,246

 

Total current liabilities

 

 

173,113

 

 

 

88,248

 

Contingent consideration, non-current

 

 

8,533

 

 

 

-

 

Other non-current liabilities

 

 

1,884

 

 

 

1,196

 

Total liabilities

 

 

183,530

 

 

 

89,444

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Common stock, par value $0.001 per share; 75,000,000 shares authorized; 34,857,163 and 31,799,354 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

 

 

35

 

 

 

32

 

Additional paid-in capital

 

 

442,870

 

 

 

368,477

 

Accumulated deficit

 

 

(335,091

)

 

 

(280,365

)

Accumulated other comprehensive (loss) income

 

 

(148

)

 

 

66

 

Total stockholders' equity

 

 

107,666

 

 

 

88,210

 

Total liabilities and stockholders' equity

 

$

291,196

 

 

$

177,654

 

 

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

2


VERITONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(in thousands, except per share and share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

$

22,655

 

 

$

15,718

 

 

$

60,156

 

 

$

40,890

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

5,808

 

 

 

4,553

 

 

 

15,862

 

 

 

11,566

 

Sales and marketing

 

 

5,906

 

 

 

5,255

 

 

 

17,586

 

 

 

15,116

 

Research and development

 

 

5,254

 

 

 

3,587

 

 

 

14,860

 

 

 

10,673

 

General and administrative

 

 

15,037

 

 

 

11,950

 

 

 

62,225

 

 

 

34,836

 

Amortization

 

 

1,683

 

 

 

1,346

 

 

 

3,840

 

 

 

4,040

 

Total operating expenses

 

 

33,688

 

 

 

26,691

 

 

 

114,373

 

 

 

76,231

 

Loss from operations

 

 

(11,033

)

 

 

(10,973

)

 

 

(54,217

)

 

 

(35,341

)

Other expense, net

 

 

(15

)

 

 

(4

)

 

 

(37

)

 

 

(108

)

Loss before provision for income taxes

 

 

(11,048

)

 

 

(10,977

)

 

 

(54,254

)

 

 

(35,449

)

Provision for income taxes

 

 

396

 

 

 

36

 

 

 

472

 

 

 

41

 

Net loss

 

$

(11,444

)

 

$

(11,013

)

 

$

(54,726

)

 

$

(35,490

)

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.34

)

 

$

(0.40

)

 

$

(1.67

)

 

$

(1.31

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

33,332,668

 

 

 

27,593,315

 

 

 

32,752,939

 

 

 

27,162,880

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(11,444

)

 

$

(11,013

)

 

$

(54,726

)

 

$

(35,490

)

Foreign currency translation gain, net of income taxes

 

 

-

 

 

 

6

 

 

 

7

 

 

 

11

 

Total comprehensive loss

 

$

(11,444

)

 

$

(11,007

)

 

$

(54,719

)

 

$

(35,479

)

 

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

3


VERITONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)

 

 

 

 

Three Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Total

 

Balance as of June 30, 2021

 

 

32,870,767

 

 

$

33

 

 

$

403,768

 

 

$

(323,647

)

 

$

73

 

 

$

80,227

 

Common stock issued under employee stock plans, net

 

 

281,574

 

 

 

 

 

 

2,332

 

 

 

 

 

 

 

 

 

2,332

 

Common stock issued for acquisition

 

 

1,704,822

 

 

 

2

 

 

 

31,498

 

 

 

 

 

 

 

 

 

31,500

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,272

 

 

 

 

 

 

 

 

 

5,272

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,444

)

 

 

 

 

 

(11,444

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(221

)

 

 

(221

)

Balance as of September 30, 2021

 

 

34,857,163

 

 

$

35

 

 

$

442,870

 

 

$

(335,091

)

 

$

(148

)

 

$

107,666

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Total

 

Balance as of December 31, 2020

 

 

31,799,354

 

 

$

32

 

 

$

368,477

 

 

$

(280,365

)

 

$

66

 

 

$

88,210

 

Common stock issued under employee stock plans, net

 

 

1,084,941

 

 

 

1

 

 

 

7,125

 

 

 

 

 

 

 

 

 

7,126

 

Common stock issued for acquisition

 

 

1,704,822

 

 

 

2

 

 

 

31,498

 

 

 

 

 

 

 

 

 

31,500

 

Common stock issued for services

 

 

15,828

 

 

 

 

 

 

250

 

 

 

 

 

 

 

 

 

250

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

33,241

 

 

 

 

 

 

 

 

 

33,241

 

Exercise of warrants

 

 

252,218

 

 

 

 

 

 

2,279

 

 

 

 

 

 

 

 

 

2,279

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(54,726

)

 

 

 

 

 

(54,726

)

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(214

)

 

 

(214

)

Balance as of September 30, 2021

 

 

34,857,163

 

 

$

35

 

 

$

442,870

 

 

$

(335,091

)

 

$

(148

)

 

$

107,666

 

 

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

 

4


 

VERITONE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(Unaudited)

 

 

 

 

 

 

Three Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Total

 

Balance as of June 30, 2020

 

 

27,516,307

 

 

$

28

 

 

$

296,967

 

 

$

(256,966

)

 

$

51

 

 

$

40,080

 

Common stock offerings, net

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

 

 

 

 

(10

)

Common stock issued under employee stock plans, net

 

 

97,548

 

 

 

 

 

 

216

 

 

 

 

 

 

 

 

 

216

 

Release of Machine Box holdback consideration

 

 

105,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

5,148

 

 

 

 

 

 

 

 

 

5,148

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,013

)

 

 

 

 

 

(11,013

)

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

 

6

 

Balance as of September 30, 2020

 

 

27,719,753

 

 

$

28

 

 

$

302,321

 

 

$

(267,979

)

 

$

57

 

 

$

34,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income

 

 

Total

 

Balance as of December 31, 2019

 

 

25,670,737

 

 

$

26

 

 

$

279,828

 

 

$

(232,489

)

 

$

46

 

 

$

47,411

 

Common stock offerings, net

 

 

1,491,317

 

 

 

2

 

 

 

5,994

 

 

 

 

 

 

 

 

 

5,996

 

Common stock issued under employee stock plans, net

 

 

297,490

 

 

 

 

 

 

356

 

 

 

 

 

 

 

 

 

356

 

Release of Machine Box holdback consideration

 

 

105,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

13,735

 

 

 

 

 

 

 

 

 

13,735

 

Exercise of warrants

 

 

154,311

 

 

 

 

 

 

2,100

 

 

 

 

 

 

 

 

 

2,100

 

Warrant issuance

 

 

 

 

 

 

 

 

308

 

 

 

 

 

 

 

 

 

308

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(35,490

)

 

 

 

 

 

(35,490

)

Other comprehensive gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

 

 

11

 

Balance as of September 30, 2020