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    VERI   US92347M1009

VERITONE, INC.

(VERI)
  Report
Delayed Nasdaq  -  04:00 2022-12-09 pm EST
7.650 USD   +1.19%
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VERITONE, INC. : Entry into a Material Definitive Agreement, Financial Statements and Exhibits (form 8-K)

09/12/2022 | 04:12pm EST

Item 1.01. Entry into a Material Definitive Agreement.

On September 14, 2021, pursuant to the terms of the Agreement and Plan of Merger, dated as of July 21, 2021 (the "Merger Agreement"), by and among Veritone, Inc, a Delaware corporation (the "Company"), PandoLogic Ltd., a company incorporated under the laws of the state of Israel ("PandoLogic"), 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, the Company completed its acquisition of Pandologic through a merger of Merger Sub with and into PandoLogic (the "Merger" and together with the other transactions related thereto, the "Transactions"), with PandoLogic surviving the Merger as a wholly-owned subsidiary of the Company. Capitalized terms used in this Current Report on Form 8-K but not otherwise defined herein have the meanings given to them in the Merger Agreement, a copy of which was filed with the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2021.

Under the Merger Agreement, the Securityholders and COP Participants are eligible to receive additional contingent consideration from the Company, which would be paid with a combination of cash and Common Stock, based upon the financial performance of PandoLogic in fiscal years 2021 (the "2021 Earn-Out Amount) and 2022 (the "2022 Earn-Out Amount"), and subject to adjustments as set forth in the Merger Agreement. The Company paid $20,840,000 for the 2021 Earn-Out Amount during the six months ended June 30, 2022.

On September 6, 2022, the Company and PandoLogic entered into Amendment No. 1 to the Agreement and Plan of Merger (the "Amendment"). The Amendment provides that the 2022 Earn-Out Amount will be no less than $10,825,000 (the "Minimum 2022 Earn-Out Amount"), irrespective of the actual financial performance of PandoLogic for the 2022 Earn-Out Period. In the event net revenue of PandoLogic (on a consolidated basis, including PandoLogic, Inc.), calculated in accordance with GAAP, for the 2022 Earn-Out Period exceeds the 2022 Revenue Minimum, the 2022 Earn-Out Amount shall be as calculated in accordance with Section 2.16(a)(ii) of the Merger Agreement less the Minimum 2022 Earn-Out Amount.

In exchange for the Minimum 2022 Earn-Out Amount, the Amendment further provides that certain restrictive operational covenants and obligations of the Company shall terminate as of the date of the Amendment and for the early release of certain escrow funds to the Company and to the Paying Agent for further distribution to the Securityholders and COP Participants. The Amendment also provides for releases as to certain matters related to the Merger Agreement and the Amendment.

Assuming the Minimum Earn-Out Amount is paid as contemplated in the Amendment, the overall consideration paid in connection with the Transactions under the Merger Agreement, net of cash acquired, will be approximately $114 million1 or 1.6 times PandoLogic's calendar year 2021 revenue.

The foregoing descriptions of the Merger Agreement and the Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the Merger Agreement and the Amendment, copies of which are filed herewith as Exhibits 2.1 and 2.2, respectively, and are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits


(d) Exhibits.




1  Calculated as the sum of $74.7 million in cash, net of cash acquired, and
   2,233,187 shares of Common Stock valued using the closing stock price on each
   issuance date (or, with respect to Common Stock to be issued as part of the
   2022 Earn-Out Amount, estimated as of the date of the Amendment) as
   follows: (i) 1,704,822 shares of Common Stock issued on September 14, 2021,
   the closing date of the Merger, (ii) 352,330 shares of Common Stock issued on
   March 31, 2022, the date of determination of the 2021 Earn-Out Amount and
   (iii) 176,035 shares of Common Stock estimated to be issued for the Minimum
   2022 Earn-Out Amount as of the date of the Amendment.


--------------------------------------------------------------------------------


EXHIBIT NO.   DESCRIPTION

2.1             Agreement and Plan of Merger, dated as of July 21, 2021, by and
              among Veritone, Inc., Melisandra Ltd., PandoLogic Ltd. and
              Shareholder Representative Services, LLC, as the Securityholder
              Representative (incorporated by reference to Exhibit 2.1 to the
              Registrant's Quarterly Report on Form 10-Q for the quarter ended
              June 30, 2021 filed on August 5, 2021).

2.2             Amendment No. 1 to Agreement and Plan of Merger, dated September
              6, 2022, by and between Veritone, Inc. and Shareholder
              Representative Services, LLC.

104           Cover Page Interactive Data File (formatted in Inline XBRL and
              contained in Exhibit 101)






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