Verb(VERB) - 2020 Q3 - Quarterly Report

PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED) This section presents the unaudited condensed consolidated financial statements of Verb Technology Company, Inc. for the periods ended September 30, 2020, and December 31, 2019 (for balance sheet) or September 30, 2019 (for income statement and cash flows), along with detailed notes explaining the company's business, significant accounting policies, acquisitions, and various financial instruments and equity transactions Condensed Consolidated Balance Sheets (unaudited) This section presents the unaudited condensed consolidated balance sheets, detailing the company's financial position with assets, liabilities, and equity as of specified dates Total Assets | Date | Amount ($) | | :--- | :--- | | September 30, 2020 | 42,575,000 | | December 31, 2019 | 28,359,000 | Total Liabilities | Date | Amount ($) | | :--- | :--- | | September 30, 2020 | 20,801,000 | | December 31, 2019 | 16,914,000 | Total Stockholders' Equity | Date | Amount ($) | | :--- | :--- | | September 30, 2020 | 21,774,000 | | December 31, 2019 | 11,445,000 | Condensed Consolidated Statements of Operations (unaudited) This section presents the unaudited condensed consolidated statements of operations, outlining the company's revenues, expenses, and net loss for the specified periods Revenue (Three Months Ended Sep 30) | Revenue Type | Sep 30, 2020 ($) | Sep 30, 2019 ($) | Change ($) | | :--- | :--- | :--- | :--- | | SaaS recurring subscription revenue | 1,478,000 | 953,000 | 525,000 | | Other Digital | 360,000 | 485,000 | (125,000) | | Welcome kits and fulfillment | 836,000 | 1,164,000 | (328,000) | | Shipping | 186,000 | 271,000 | (85,000) | | Total revenue | 2,860,000 | 2,873,000 | (13,000) | Net Loss (Three Months Ended Sep 30) | Period | Net Loss ($) | | :--- | :--- | | Sep 30, 2020 | (7,320,000) | | Sep 30, 2019 | (3,115,000) | Net Loss Per Share (Three Months Ended Sep 30) | Period | EPS ($) | | :--- | :--- | | Sep 30, 2020 | (0.18) | | Sep 30, 2019 | (0.13) | Condensed Consolidated Statements of Stockholders Equity (unaudited) This section presents the unaudited condensed consolidated statements of stockholders' equity, detailing changes in equity components over the specified periods Total Stockholders' Equity | Date | Amount ($) | | :--- | :--- | | September 30, 2020 | 21,774,000 | | December 31, 2019 | 11,445,000 | Common Stock Shares Outstanding | Date | Shares | | :--- | :--- | | September 30, 2020 | 46,663,790 | | December 31, 2019 | 24,496,197 | Condensed Consolidated Statements of Cash Flows (unaudited) This section presents the unaudited condensed consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities Net Cash Used in Operating Activities (Nine Months Ended Sep 30) | Period | Amount ($) | | :--- | :--- | | Sep 30, 2020 | (9,790,000) | | Sep 30, 2019 | (6,506,000) | Net Cash Provided by Financing Activities (Nine Months Ended Sep 30) | Period | Amount ($) | | :--- | :--- | | Sep 30, 2020 | 19,617,000 | | Sep 30, 2019 | 22,334,000 | Cash - End of Period | Date | Amount ($) | | :--- | :--- | | Sep 30, 2020 | 10,722,000 | | Sep 30, 2019 | 1,885,000 | Notes to Condensed Consolidated Financial Statements (unaudited) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, acquisitions, and various financial instruments - The financial statements include Condensed Consolidated Balance Sheets, Statements of Operations, Stockholders Equity, Cash Flows, and accompanying Notes[11] 1. DESCRIPTION OF BUSINESS Verb Technology Company, Inc. is a Software-as-a-Service (SaaS) applications platform developer, offering interactive video-based sales enablement software products like verbCRM, verbLEARN, and verbLIVE on a subscription basis. The company also previously provided non-digital printing and fulfillment services - Company's current name: Verb Technology Company, Inc., changed from nFüsz, Inc. on February 1, 2019[27] - Implemented a 1-for-15 reverse stock split on February 1, 2019[28] - Primary business: SaaS applications platform developer, offering interactive video-based sales enablement software products (verbCRM, verbLEARN, and verbLIVE) on a subscription basis[29] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section outlines the basis of presentation for the unaudited interim financial statements, principles of consolidation, and key accounting policies including going concern, use of estimates, concentration of credit and other risks, reclassifications, revenue recognition, cost of revenue, derivative financial instruments, share-based payments, net loss per share, goodwill and intangible assets, long-lived assets, fair value of financial instruments, segments, and recent accounting pronouncements. The company has a going concern doubt due to recurring losses and negative cash flows - The company incurred a net loss of $12,690,000 and used $9,790,000 cash in operations for the nine months ended September 30, 2020, raising substantial doubt about its ability to continue as a going concern[34] - As of September 30, 2020, the company had $10,772,000 in cash, believed to be sufficient to sustain operations through September 2021[35] - Revenue is primarily derived from SaaS subscriptions, recognized over the subscription period (estimated 36 months), and non-digital services (printing, fulfillment, shipping) recognized upon completion and shipment[44][50][53] 3. ACQUISITIONS This note details two significant acquisitions: Verb Direct in April 2019 and Ascend Certification (SoloFire) in September 2020. Both acquisitions aimed to augment and diversify Verb's SaaS business, contributing to goodwill and intangible assets - Both Verb Direct and SoloFire acquisitions were intended to augment and diversify Verb's internet and SaaS business, generating future synergies[71][78] Pro Forma Net Loss (Nine Months Ended Sep 30) | Period | Net Loss ($) | | :--- | :--- | | Sep 30, 2020 (Proforma) | (13,158,000) | | Sep 30, 2019 (Proforma) | (9,252,000) | a. ACQUISITION OF VERB DIRECT This section details the acquisition of Verb Direct, including the purchase price, consideration, and the resulting goodwill and intangible assets recorded - Acquisition Date: April 12, 2019[71] - Purchase Price: $22,820,000, consisting of $15,000,000 cash and 3,327,791 restricted shares of Verb's Common Stock (fair value $7,820,000)[71] - Goodwill & Intangible Assets: **$22,67