Veritone(VERI) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents unaudited condensed consolidated financial statements and detailed notes for periods ended June 30, 2025 and 2024 Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | ASSETS (June 30, 2025) | Amount ($) | ASSETS (Dec 31, 2024) | Amount ($) | | :--------------------- | :--------- | :-------------------- | :--------- | | Cash and cash equivalents | 13,568 | Cash and cash equivalents | 16,911 | | Accounts receivable, net | 31,859 | Accounts receivable, net | 31,997 | | Total current assets | 57,940 | Total current assets | 59,406 | | Total assets | 186,806 | Total assets | 198,060 | | LIABILITIES & EQUITY (June 30, 2025) | Amount ($) | LIABILITIES & EQUITY (Dec 31, 2024) | Amount ($) | | :--------------------- | :--------- | :-------------------- | :--------- | | Accounts payable | 15,088 | Accounts payable | 11,023 | | Deferred revenue | 12,345 | Deferred revenue | 12,056 | | Total current liabilities | 64,842 | Total current liabilities | 60,957 | | Total liabilities | 185,588 | Total liabilities | 184,608 | | Total stockholders' equity | 1,218 | Total stockholders' equity | 13,452 | - Total assets decreased from $198.06 million at December 31, 2024, to $186.81 million at June 30, 2025[19] - Total stockholders' equity significantly decreased from $13.45 million to $1.22 million over the same period[19] Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss This section details the company's financial performance, including revenue, operating loss, and net loss for the reported periods Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :---------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | 24,013 | 24,058 | (45) | (0.2%) | | Operating loss | (19,318) | (20,306) | 988 | (4.9%) | | Net loss | (26,798) | (22,231) | (4,567) | 20.5% | | Loss per share, basic and diluted | (0.54) | (0.59) | 0.05 | (8.5%) | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :---------------------------------- | :------- | :------- | :--------- | :--------- | | Revenue | 46,476 | 48,211 | (1,735) | (3.6%) | | Operating loss | (40,952) | (44,676) | 3,724 | (8.3%) | | Net loss | (46,673) | (47,429) | 756 | (1.6%) | | Loss per share, basic and diluted | (0.95) | (1.26) | 0.31 | (24.6%) | - Net loss increased by 20.5% for the three months ended June 30, 2025, reaching $(26.8) million[20] - For the six months ended June 30, 2025, net loss slightly decreased by 1.6% to $(46.7) million, and loss per share improved by 24.6% to $(0.95)[20] Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity This section outlines changes in the company's equity, reflecting capital transactions and net losses Changes in Stockholders' Equity (in thousands) | Item | Dec 31, 2024 ($) | Mar 31, 2025 ($) | June 30, 2025 ($) | | :--------------------------------------- | :--------------- | :--------------- | :---------------- | | Total Stockholders' Equity | 13,452 | 14,754 | 1,218 | | Common stock issued (registered direct offering) | - | 19,942 | 8,160 | | Stock-based compensation | - | 1,800 | 1,764 | | Net loss | - | (19,875) | (26,798) | - Total stockholders' equity decreased significantly from $13.45 million at December 31, 2024, to $1.22 million at June 30, 2025, primarily due to net losses and foreign currency translation adjustments, despite capital raises[22] Unaudited Condensed Consolidated Statements of Cash Flows This section details the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--------------------------------- | :------- | :------- | | Net cash used in operating activities | (25,277) | (27,791) | | Net cash used in investing activities | (2,311) | (1,599) | | Net cash provided by (used in) financing activities | 25,259 | (3,959) | | Net change in cash, cash equivalents, and restricted cash | (3,462) | (33,349) | | Cash, cash equivalents, and restricted cash, end of period | 13,856 | 46,957 | - Net cash used in operating activities decreased by $2.5 million (from $27.8 million to $25.3 million) for the six months ended June 30, 2025[25] - Net cash provided by financing activities significantly increased to $25.3 million in 2025, compared to net cash used of $4.0 million in 2024, primarily due to proceeds from stock and warrant issuances[25] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements 1. Description of Business Veritone, Inc. provides AI computing solutions through its aiWARE™ operating system, focusing on software and managed services - Veritone's core business revolves around its aiWARE™ AI operating system, which uses machine learning algorithms to derive insights from structured and unstructured data[28] - The company offers Software Products & Services (aiWARE platform, Veritone Hire solutions) and Managed Services (digital content management, content licensing, representation services)[29][30] - Veritone divested its full-service advertising agency, Veritone One, on October 17, 2024, to strategically shift focus to core software and applications, reclassifying its financial results as discontinued operations[31] 2. Significant Accounting Policies This note outlines the basis of financial statement presentation, going concern assumption, and key accounting practices - The financial statements are prepared assuming the Company will continue as a going concern, but management identified substantial doubt about this ability over the next twelve months due to debt obligations, historical negative cash flows, and recurring losses[34] - The Company is exploring potential financing structures, including discussions with current debt holders, equity financing, and operational restructurings to improve liquidity and address going concern issues[35] - The Company operates as one reportable segment, with the CEO assessing performance and allocating resources based on consolidated net loss and loss from operations[46] - The Company experiences seasonal fluctuations in revenue, particularly with Commercial Enterprise revenues (including Veritone Hire) being higher in the second half of the fiscal year[49] 3. Discontinued Operations, Business Combinations, and Divestiture This note details the strategic divestiture of Veritone One and other asset sales, reclassifying their financial results - Veritone completed the sale of its wholly-owned subsidiary, Veritone One, on October 17, 2024, for an aggregate purchase price of $104 million, including an $18 million earnout[52][54] - The divestiture of Veritone One was a strategic shift to focus on core software and applications, leading to its reclassification as discontinued operations[52] Operating Results of Discontinued Operations (Veritone One) (in thousands) | Metric (Three Months Ended June 30, 2024) | Amount ($) | | :---------------------------------------- | :--------- | | Revenue | 6,934 | | Operating income | 2,644 | | Net income | 1,146 | | Metric (Six Months Ended June 30, 2024) | Amount ($) | | :---------------------------------------- | :--------- | | Revenue | 14,417 | | Operating income | 5,174 | | Net income | 2,148 | - In April 2024, the Company sold its interest in GridBeyond for $1.8 million in cash, resulting in a loss on sale of $172 thousand[58] 4. Debt This note details the company's debt structure, including the Senior Secured Term Loan and Convertible Senior Notes, and recent amendments - As of June 30, 2025, Veritone had $37.3 million aggregate principal amount outstanding under its Senior Secured Term Loan, which matures on December 13, 2027[60][73] - The Term Loan's minimum Consolidated Liquidity covenant was amended multiple times in 2025, reducing it to $5 million for June-August 2025, then increasing to $10 million for July-August 2025, and $15 million from September 1, 2025, through maturity[63][64][65] - The Company issued common stock to lenders in connection with the First ($500 thousand value) and Second ($373 thousand value) Amendments to the Credit Agreement[63][64] - As of June 30, 2025, Veritone had $91.25 million in aggregate principal amount of 1.75% Convertible Senior Notes outstanding, maturing on November 15, 2026[74][75] 5. Loss Per Share This note explains the calculation of basic and diluted loss per share, identifying anti-dilutive securities - Pre-funded warrants issued in January and June 2025 are considered outstanding for basic loss per share calculation due to immediate exercisability for little or no consideration[88] Anti-Dilutive Securities Excluded from Diluted Loss Per Share (in thousands) | Security Type | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Stock options and restricted stock units | 10,175 | 10,107 | | Warrants to purchase common stock | 2,655 | 2,655 | | Common stock issuable (convertible notes) | 2,483 | 2,483 | | Total | 15,313 | 15,245 | 6. Fair Value Measurements This note describes the company's fair value measurement methodologies, categorizing assets and liabilities by input levels - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[90][96] - The Veritone One earnout receivable is recorded at fair value using a Monte Carlo simulation pricing model, categorized as Level 3, with significant assumptions including internal rate of return (22.5%), risk-free rate (4.8%), and revenue volatility (45.0%) as of June 30, 2025[93][94] Fair Value of Veritone One Earnout Receivable (in thousands) | Metric | Amount ($) | | :-------------------------------------- | :--------- | | Fair value as of December 31, 2024 | 7,667 | | Change in fair value (Other expense (income), net) | 784 | | Fair value as of June 30, 2025 | 8,451 | 7. Goodwill and Other Intangible Assets This note details the company's goodwill and finite-lived intangible assets, including their carrying amounts and amortization expense - Goodwill remained at $53.11 million as of June 30, 2025, with no additions or impairments during the three and six months ended June 30, 2025 and 2024[99] Finite-Lived Intangible Assets (Net Carrying Amount, in thousands) | Asset Type | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------ | :---------------- | :-------------------- | | Developed technology | 6,126 | 10,539 | | Customer relationships | 40,989 | 48,134 | | Trademarks and trade names | 617 | 827 | | Total | 47,732 | 59,500 | - Amortization expense for finite-lived intangible assets was $5.88 million for the three months and $11.83 million for the six months ended June 30, 2025[100] - The Company performed annual goodwill impairment assessments as of May 31, 2025, and an updated analysis as of June 30, 2025, concluding that goodwill was not impaired[102][103] 8. Consolidated Financial Statement Details This note provides detailed breakdowns of balance sheet accounts and revenue by customer group and service type Revenue Breakdown by Customer Group and Service Type (Three Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | | :------------------------------- | :---------------- | :---------------- | | Software Products & Services | | | | Commercial Enterprise | 15,334 | 14,510 | | Public Sector | 2,135 | 1,122 | | Total Software Products & Services | 17,469 | 15,632 | | Managed Services | | | | Representation Services | 1,529 | 3,541 | | Licensing | 5,015 | 4,885 | | Total Managed Services | 6,544 | 8,426 | | Total Revenue | 24,013 | 24,058 | Revenue Breakdown by Customer Group and Service Type (Six Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | | :------------------------------- | :---------------- | :---------------- | | Software Products & Services | | | | Commercial Enterprise | 28,483 | 28,212 | | Public Sector | 3,469 | 2,640 | | Total Software Products & Services | 31,952 | 30,852 | | Managed Services | | | | Representation Services | 4,301 | 7,033 | | Licensing | 10,223 | 10,326 | | Total Managed Services | 14,524 | 17,359 | | Total Revenue | 46,476 | 48,211 | - For the three months ended June 30, 2025, Software Products & Services revenue increased by $1.8 million (11.8%) year-over-year, while Managed Services revenue decreased by $1.9 million (22.3%)[111] - The effective tax rate was an expense of 3.4% for Q2 2025 (vs. benefit of 0.3% in Q2 2024) and an expense of 1.2% for YTD 2025 (vs. benefit of 2.2% in YTD 2024), primarily due to valuation allowance on domestic deferred tax assets and foreign operations[116] 9. Leases, Commitments, and Contingencies This note details lease obligations, deferred purchase consideration, and the absence of material legal proceedings - In January 2025, the Company entered into a new non-cancellable lease for office space in London with a base rent of approximately $2.53 million over 71 months[120] - Deferred purchase consideration payments for the March 2022 Acquisition ($1.5 million) and VSL acquisition ($300 thousand) were completed in Q1 2024[121][122] - The Company is not currently involved in any legal proceedings that would have a material adverse effect on its financial position[123] 10. Stockholders' Equity This note details significant activities impacting stockholders' equity, including capital raises through stock and warrant issuances - In January 2025, the Company issued 4,414,878 shares of common stock and pre-funded warrants for 3,608,838 shares, raising approximately $20.3 million in gross proceeds[125] - In June 2025, the Company agreed to issue 6,452,293 shares of common stock and pre-funded warrants for 1,804,587 shares, with gross proceeds of approximately $9.0 million, completed on July 1, 2025[128] - A concurrent private placement with the RSS Trust (affiliated with CEO Ryan Steelberg) for up to 709,220 shares of common stock is expected to raise $1.0 million[131] - Through June 30, 2025, the 'at-the-market' (ATM) equity offering program generated $7.8 million in net proceeds from the sale of 3,716,873 shares of common stock[134] 11. Stock-Based Compensation This note details the company's stock-based compensation plans, including stock options and restricted stock units Stock Options Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Options Outstanding | | :----------------------------------- | :---------------------------- | | Outstanding as of December 31, 2024 | 8,438 | | Forfeited or expired | (295) | | Outstanding as of June 30, 2025 | 8,140 | | Weighted Average Exercise Price (June 30, 2025) | $12.98 | Restricted Stock Units (RSUs) Activity (Six Months Ended June 30, 2025, in thousands) | Metric | Number of Shares | | :----------------------------------- | :--------------- | | Outstanding and nonvested as of December 31, 2024 | 1,902 | | Granted | 1,035 | | Vested | (495) | | Forfeited | (517) | | Outstanding and nonvested as of June 30, 2025 | 1,925 | | Weighted Average Grant Date Fair Value Per Share (June 30, 2025) | $3.98 | Total Stock-Based Compensation Expense (in thousands) | Period (Ended June 30) | 2025 ($) | 2024 ($) | | :--------------------- | :------- | :------- | | Three Months | 1,710 | 2,058 | | Six Months | 3,453 | 3,593 | 12. Related Party Transactions This note describes transactions with related parties, including consulting agreements and private placements - The Company has an Amended Consulting Agreement with Steel Holdings, LLC (affiliated with former CEO Chad Steelberg) for technical advisory services, with payments of $50 thousand per month through December 2025[146] - Ryan Steelberg, current CEO, was appointed Chairman of the Board effective January 22, 2024[149] - A private placement of up to 709,220 shares of common stock for $1.0 million is being made to the RSS Trust, of which Ryan Steelberg is trustee[150] 13. Subsequent Events This note discloses the enactment of the One Big Beautiful Bill Act (OBBBA) and its potential financial impact - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, amending U.S. tax law regarding bonus depreciation, R&D, and foreign derived intangible income[152] - The Company is currently evaluating the impact of OBBBA on its condensed consolidated financial statements, anticipating impacts to deferred tax liability and income tax payable[119][152] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, strategic shifts, and liquidity challenges Overview Veritone is an AI solutions provider leveraging its aiWARE™ operating system, with a recent strategic divestiture of Veritone One - Veritone is an AI solutions provider, leveraging its aiWARE™ operating system for Commercial Enterprise and Public Sector customers, offering Software Products & Services and Managed Services[154] - The company divested its full-service advertising agency, Veritone One, on October 17, 2024, reclassifying its historical financial results as discontinued operations[155] Revenue Summary (in millions) | Period (Ended June 30) | 2025 ($) | 2024 ($) | | :--------------------- | :------- | :------- | | Three Months Revenue | 24.0 | 24.1 | | Six Months Revenue | 46.5 | 48.2 | - Software Products & Services revenue increased to $17.5 million (Q2 2025) and $32.0 million (YTD 2025) from $15.6 million and $30.9 million in the corresponding prior-year periods, respectively[156] Recent Developments This section highlights recent amendments to the Credit Agreement and capital raising activities through stock and warrant offerings - The Credit Agreement was amended three times in 2025, reducing the minimum Consolidated Liquidity covenant to $5 million for June-August 2025, then increasing to $10 million for July-August 2025, and $15 million from September 1, 2025[157][159][161] - The Company issued common stock to lenders as consideration for the First ($500 thousand value) and Second ($373 thousand value) Amendments to the Credit Agreement[158][160] - In January 2025, a registered direct offering of common stock and pre-funded warrants generated approximately $20.3 million in gross proceeds[163] - In June 2025, another registered direct offering and a private placement with the CEO's trust generated approximately $9.0 million and $1.0 million in gross proceeds, respectively[165][167] One Big Beautiful Bill Act (OBBBA) This section discusses the recent enactment of the OBBBA and its potential impact on the company's financial statements - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, introducing changes to U.S. tax law, including provisions for bonus depreciation and R&D expenditures[169] - The Company is currently evaluating the potential impact of OBBBA on its financial position, results of operations, and cash flows[169] Opportunities, Challenges, and Risks This section outlines the company's strategic initiatives, cost reductions, customer trends, and the impact of global economic factors - Software Products & Services revenue improved by 11.8% (Q2 2025) and 3.6% (YTD 2025) compared to prior-year periods, despite persistent economic and geopolitical challenges[171] - The Company enacted significant cost reductions, achieving over $50.0 million of net annualized strategic cost reductions since January 1, 2023, including a 19% workforce reduction and an additional $8.0 million in 2025 cost reductions[172] - Software Products & Services customers declined by 10.8% to 3,067 as of June 30, 2025, primarily due to fewer consumption-based customers and sunsetting legacy Career Builder customers, offset by public safety customer growth[173] - New product launches like iDEMs and VDR are expected to drive substantial growth in 2025, with the VDR sales pipeline increasing to over $10.0 million[174] - The divestiture of Veritone One in October 2024 was a strategic decision to enhance focus on core AI solutions, streamline operations, and improve financial liquidity[177] - Global economic and geopolitical factors, including conflicts in Ukraine and Israel, inflation, and high interest rates, continue to create uncertainty and may negatively impact demand for products and services[181][182] Non-GAAP Financial Measures and Key Performance Indicators This section presents non-GAAP financial measures and key performance indicators, including net loss, gross profit, and customer metrics - Non-GAAP net loss for the three months ended June 30, 2025, was $(8.7) million, an increase from $(6.9) million in the prior-year period[190] - For the six months, non-GAAP net loss was $(19.8) million, up from $(14.5) million[190] Non-GAAP Net Loss Reconciliation (in thousands) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Net loss | (26,798) | (22,231) | | Adjustments (total) | 18,085 | 15,381 | | Non-GAAP net loss | (8,713) | (6,850) | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | | :---------------------------------- | :------- | :------- | | Net loss | (46,673) | (47,429) | | Adjustments (total) | 26,830 | 32,960 | | Non-GAAP net loss | (19,843) | (14,469) | Non-GAAP Gross Profit and Margin (in thousands, percentages) | Metric (Three Months Ended June 30) | 2025 ($) | 2024 ($) | 2025 (%) | 2024 (%) | | :---------------------------------- | :------- | :------- | :------- | :------- | | Non-GAAP gross profit | 16,535 | 17,716 | | | | Non-GAAP gross margin | | | 68.9% | 73.6% | | Metric (Six Months Ended June 30) | 2025 ($) | 2024 ($) | 2025 (%) | 2024 (%) | | :---------------------------------- | :------- | :------- | :------- | :------- | | Non-GAAP gross profit | 31,164 | 34,922 | | | | Non-GAAP gross margin | | | 67.1% | 72.4% | - Non-GAAP gross margin decreased by 470 basis points (QoQ) and 530 basis points (YoY) due to a higher mix of lower gross margin revenue from consumption-based and one-time software[194] Software Products & Services Key Performance Indicators (in thousands) | KPI | June 30, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------------------- | :------------ | :------------- | :------------ | | Total Software Products & Services Customers | 3,437 | 3,156 | 3,067 | | Annual Recurring Revenue (SaaS) | $49,223 | $47,494 | $50,350 | | Annual Recurring Revenue (Consumption) | $18,701 | $11,223 | $12,249 | | Total New Bookings | $14,047 | $15,835 | $15,766 | | Gross Revenue Retention | >90% | >90% | >90% | Results of Operations This section analyzes revenue by customer group and service type, along with detailed operating expenses Revenue Breakdown by Customer Group and Service Type (Three Months Ended June 30, in thousands) | Revenue Category | June 30, 2025 ($) | June 30, 2024 ($) | Change ($) | Change (%) | | :------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Commercial Enterprise Software Products & Services | 15,334 | 14,510 | 824 | 5.7% | | Commercial Enterprise Managed Services | 6,544 | 8,426 | (1,882) | (22.3%) | | Public Sector Software Products & Services | 2,135 | 1,122 | 1,013 | 90.3% | | Total Revenue | 24,013 | 24,058 | (45) | (0.2%) | Operating Expenses (Three Months Ended June 30, in thousands) | Operating Expense Category | June 30, 2025 ($) | June 30, 2024 ($) | Change ($) | Change (%) | | :------------------------------- | :---------------- | :---------------- | :--------- | :--------- | | Cost of revenue (excl. D&A) | 7,478 | 6,342 | 1,136 | 17.9% | | Sales and marketing | 11,096 | 11,208 | (112) | (1.0%) | | Research and development | 4,932 | 6,082 | (1,150) | (18.9%) | | General and administrative | 12,653 | 13,855 | (1,202) | (8.7%) | | Depreciation and amortization | 7,172 | 6,877 | 295 | 4.3% | - Cost of revenue (exclusive of D&A) increased by 17.9% for the three months ended June 30, 2025, primarily due to a higher mix of lower margin revenue, including VDR[211] - Research and development expenses decreased by 18.9% (QoQ) and 30.1% (YTD) due to personnel-related cost reductions, capitalized internal-use software costs, and reduced consulting services[215][216] - Net income from discontinued operations (Veritone One) was $1.1 million for the three months and $2.1 million for the six months ended June 30, 2024, primarily from $6.9 million and $14.4 million in revenue, respectively[226] Liquidity and Capital Resources This section discusses the company's cash position, debt obligations, and ongoing efforts to address going concern issues - As of June 30, 2025, the Company had $13.6 million in cash and cash equivalents[229] - The Company has $37.3 million outstanding under its Term Loan (matures Dec 2027) and $91.3 million under Convertible Notes (matures Nov 2026)[230] - Management determined there is substantial doubt about the Company's ability to continue as a going concern over the next twelve months due to debt service obligations, historical negative cash flows, and recurring losses[230] - The Company is exploring various financing structures, including discussions with current debt holders, equity financing, and operational restructurings to improve liquidity[231] Cash Flows This section analyzes cash flows from continuing operations, highlighting changes in operating, investing, and financing activities Cash Flows Summary (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :--------------------------------- | :------- | :------- | | Net cash used in operating activities – continuing operations | (25,277) | (31,338) | | Net cash used in investing activities – continuing operations | (2,311) | (1,447) | | Net cash provided by (used in) financing activities – continuing operations | 25,259 | (3,959) | | Net change in cash, cash equivalents, and restricted cash from continuing operations | (3,462) | (36,744) | - Net cash used in continuing operating activities decreased by $6.0 million to $25.3 million for the six months ended June 30, 2025, driven by lower net loss and favorable changes in operating assets and liabilities[234] - Net cash provided by continuing financing activities increased by $29.2 million to $25.3 million, primarily due to proceeds from stock and pre-funded warrant issuances[236] Contractual Obligations and Known Future Cash Requirements This section outlines the company's debt obligations and other known future cash commitments - As of June 30, 2025, debt obligations include $37.3 million principal on the Term Loan (matures Dec 2027) and $91.3 million on Convertible Notes (matures Nov 2026)[237] - The Term Loan requires full repayment if $30.0 million or more of Convertible Notes are outstanding on August 14, 2026[237] - The Company has recorded a $2.4 million gross liability for uncertain tax positions, but cannot reasonably estimate the timing of payment[238] Critical Accounting Policies and Estimates This section confirms no material changes to the company's critical accounting policies and estimates - There have been no material changes to the Company's critical accounting policies and estimates as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024[240] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Veritone is not required to provide quantitative and qualitative disclosures about market risk - Veritone, Inc. is a smaller reporting company and is therefore not required to provide disclosures about market risk[241] Item 4. Controls and Procedures Management concluded that disclosure controls were ineffective due to material weaknesses in internal control over financial reporting, with remediation ongoing - As of June 30, 2025, the Company's disclosure controls and procedures were not effective at the reasonable assurance level[242] - Material weaknesses identified include ineffective information and communication processes, insufficient entity-level controls, issues with foreign exchange consolidation, and deficiencies in IT general controls[244][245][246] - Remediation actions include engaging an outside firm, developing a robust risk assessment plan, implementing training programs for ITGCs, documenting ITGCs, and hiring additional staff[247][252] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, despite ongoing remediation efforts[250] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any legal proceedings that would materially adversely affect its financial position - The Company is not currently involved in any legal proceedings that would materially adversely affect its financial results[254] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[255] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds to report[256] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report during the period - No defaults upon senior securities to report[257] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[258] Item 5. Other Information There is no other information to report in this section - No other information to report[259] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements, amendments, and certifications - The report includes exhibits such as the Equity Purchase Agreement for Veritone One, amendments to the Credit and Guaranty Agreement, and forms of pre-funded warrants[260][261] - Certifications by the Principal Executive Officer and Principal Financial Officer are furnished as Exhibit 32.1[261][262] Signatures The report is duly signed on behalf of Veritone, Inc. by Michael L. Zemetra on August 8, 2025 - The report was signed by Michael L. Zemetra, Executive Vice President, Chief Financial Officer and Treasurer, on August 8, 2025[267][268]