Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

☐ 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: 001-38834

Verb Technology Company, Inc.

(Exact name of registrant as specified in its charter)

Nevada		90-1118043
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3024 Sierra Juniper Court Las Vegas, Nevada		89138
(Address of principal executive offices)		(Zip Code)

(855) 250-2300

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value		VERB		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 1, 2024, there were 993,071 shares of common stock, $0.0001 par value per share, outstanding.

VERB TECHNOLOGY COMPANY, INC.

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS		3
PART I - FINANCIAL INFORMATION		4
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)		4
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		26
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		34
ITEM 4 - CONTROLS AND PROCEDURES		35
PART II - OTHER INFORMATION		36
ITEM 1 - LEGAL PROCEEDINGS		36
ITEM 1A - RISK FACTORS		36
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		36
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES		36
ITEM 4 - MINE SAFETY DISCLOSURES		36
ITEM 5 - OTHER INFORMATION		36
ITEM 6 - EXHIBITS		36
SIGNATURES		38

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the three months ended September 30, 2024 (this “Quarterly Report”), includes “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”), which statements are subject to considerable risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not statements of historical facts and can be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “will,” “would” or similar expressions and the negatives of those expressions. Forward-looking statements also include the assumptions underlying or relating to such statements.

Our forward-looking statements are based on our management’s current beliefs, assumptions and expectations about future events and trends, which affect or may affect our business, strategy, operations, financial performance or liquidity. Although we believe these forward-looking statements are based upon reasonable assumptions, they are subject to numerous known and unknown risks and uncertainties and are made in light of information currently available to us. Some of the risks and uncertainties that may impact our forward-looking statements include, but are not limited to, the following factors:

● our incursion of significant net losses and uncertainty whether we will achieve or maintain profitable operations;

● our ability to grow and compete in the future, and to execute our business strategy;

● our ability to maintain and expand our customer base and to convince our customers to increase the use of our services and/or platform;

● the competitive market in which we operate;

● our ability to increase the number of our strategic relationships or grow the revenues received from our current strategic relationships;

● our ability to develop enhancements and new features to our existing service or acceptable new services that keep pace with technological developments;

● our ability to successfully launch new product platforms, including MARKET.live, the rate of adoption of these platforms and the revenue generated from these platforms;

● our ability to deliver our services, as we depend on third party Internet providers;

● our ability to attract and retain qualified management personnel;

● our susceptibility to security breaches and other disruptions;

● our ability to maintain compliance with the listing requirements of the Nasdaq Capital Market; and

● the impact of, and our ability to operate our business and effectively manage our growth under evolving and uncertain global economic, political, and social trends, including legislation banning or otherwise hampering our strategic relationships such as TikTok, inflation, rising interest rates, and recessionary concerns.

The foregoing list may not include all of the factors that impact the forward-looking statements made in this Quarterly Report. Our actual financial condition and results could differ materially from those expressed or implied by our forward-looking statements as a result of various additional factors, including those discussed in the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”), as well as in the other reports we file with the Securities and Exchange Commission (the “SEC”). You should read this Quarterly Report, and the other documents we file with the SEC, with the understanding that our actual future results may be materially different from the results expressed or implied by our forward-looking statements.

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.

Forward-looking statements speak only as of the date they were made, and, except to the extent required by law or the rules of the Nasdaq Capital Market, we undertake no obligation to update or review any forward-looking statement because of new information, future events or other factors.

We qualify all of our forward-looking statements by these cautionary statements.

PART I — FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023		5

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)		6

Condensed Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2024 and 2023 (unaudited)		7

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)		8

Notes to Condensed Consolidated Financial Statements (unaudited)		9-25

VERB TECHNOLOGY COMPANY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30, 2024			December 31, 2023
	(unaudited)
ASSETS

Current assets
Cash	$	10,515		$	4,353
Short-term investments		5,077			-
Prepaid expenses and other current assets		233			331
Total current assets		15,825			4,684

Capitalized software development costs, net		3,242			3,990
ERC receivable		2,263			1,528
Property and equipment, net		192			43
Operating lease right-of-use assets		172			218
Intangible assets, net		184			117
Other assets		259			259

Total assets	$	22,137		$	10,839

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable	$	956		$	1,408
Accrued expenses		2,252			2,324
Accrued payroll		360			420
Accrued officers’ compensation		-			648
Notes payable, current		20			1,787
Accrued interest		-			533
Operating lease liabilities, current		75			67
Preferred dividend payable		240			-
Derivative liability		-			1

Total current liabilities		3,903			7,188

Long-term liabilities
Notes payable, non-current		103			362
Operating lease liabilities, non-current		102			164
Total liabilities		4,108			7,714

Commitments and contingencies (Note 13)		-			-

Stockholders’ equity
Series C Preferred Stock, $0.0001 par value, 5,000 shares authorized, 895 and 3,000 shares issued and outstanding as of September 30, 2024 and December 31, 2023		895			2,980
Common stock, $0.0001 par value, 400,000,000 shares authorized, 763,230 and 106,157 shares issued and outstanding as of September 30, 2024 and December 31, 2023		1			1

Additional paid-in capital		200,788			175,766
Accumulated deficit		(183,655	)		(175,622	)

Total stockholders’ equity		18,029			3,125

Total liabilities and stockholders’ equity	$	22,137		$	10,839

See accompanying notes to the condensed consolidated financial statements

VERB TECHNOLOGY COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023

Revenue	$	128		$	29		$	172		$	34

Costs and expenses
Cost of revenue, exclusive of depreciation and amortization shown separately below		54			5			90			7
Depreciation and amortization		273			564			798			1,730
General and administrative		2,113			2,850			7,218			9,080
Total costs and expenses		2,440			3,419			8,106			10,817

Operating loss from continuing operations		(2,312	)		(3,390	)		(7,934	)		(10,783	)

Other income (expense)
Interest income		193			-			361			-
Unrealized gain on short-term investments		109			-			109			-
Interest expense		(1	)		(219	)		(236	)		(989	)
Financing costs		-			-			(90	)		(1,239	)
Other income, net		46			64			648			844
Change in fair value of derivative liability		-			4			1			210
Total other income (expense), net		347			(151	)		793			(1,174	)

Net loss from continuing operations		(1,965	)		(3,541	)		(7,141	)		(11,957	)

Loss from discontinued operations, net of tax		-			(168	)		-			(7,122	)

Net loss		(1,965	)		(3,709	)		(7,141	)		(19,079	)

Series C Preferred Stock dividend payable		(99	)		-			(240	)		-
Deemed dividend due to redemption of Series C Preferred Stock		(652	)					(652	)
Deemed dividend due to warrant reset		-			-			-			(164	)

Net loss to common stockholders	$	(2,716	)	$	(3,709	)	$	(8,033	)	$	(19,243	)
Loss per share from continuing operations - basic and diluted	$	(3.82	)	$	(130.64	)	$	(17.16	)	$	(516.80	)
Loss per share from discontinued operations - basic and diluted	$	0.00		$	(6.20	)	$	0.00		$	(303.66	)
Weighted average number of common shares outstanding - basic and diluted		710,106			27,104			468,252			23,454

See accompanying notes to the condensed consolidated financial statements

VERB TECHNOLOGY COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share and per share data)

(unaudited)

For the nine months ended September 30, 2024

	Shares			Amount			Shares		Amount		Capital		Deficit			Total
	Preferred Stock										Additional Paid-in		Accumulated
	Shares			Amount			Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2023		3,000		$	2,980			106,157	$	1	$	175,766	$	(175,622	)	$	3,125
Sale of common stock from public offerings		-			-			415,487		-		18,596		-			18,596
Fair value of vested restricted stock awards, stock options and warrants		-			-			197		-		822		-			822
Fair value of common shares issued as payment on notes payable		-			-			95,573		-		2,867		-			2,867
Series C Preferred Shares redeemed in exchange for common shares		(2,105	)		(2,085	)		145,816		-		2,737		(652	)		-
Series C Preferred Stock dividend payable		-			-			-		-		-		(240	)		(240	)
Net loss		-			-			-		-		-		(7,141	)		(7,141	)
Balance at September 30, 2024		895		$	895			763,230	$	1	$	200,788	$	(183,655	)	$	18,029

For the nine months ended September 30, 2023

	Preferred Stock								Additional Paid-in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance at December 31, 2022		-	$	-		14,590	$	1	$	158,629	$	(153,464	)	$	5,166
Balance		-	$	-		14,590	$	1	$	158,629	$	(153,464	)	$	5,166

Sale of common stock from public offering		-		-		5,033		-		6,628		-			6,628
Fair value of vested restricted stock awards, stock options and warrants		-		-		1,002		-		1,932		-			1,932
Deemed dividend due to warrant reset		-		-		-		-		164		(164	)		-
Issuance of shares for fractional adjustments related to Reverse Stock Split		-		-		156		-		-		-			-
Fair value of common shares issued for services		-		-		641		-		200		-			200
Fair value of common shares issued to settle accrued expenses and litigation		-		-		1,383		-		346		-			346
Fair value of common shares issued as payment on notes payable		-		-		16,539		-		4,092		-			4,092
Net loss		-		-		-		-		-		(19,079	)		(19,079	)
Balance at September 30, 2023		-	$	-		39,344	$	1	$	171,991	$	(172,707	)	$	(715	)
Balance		-	$	-		39,344	$	1	$	171,991	$	(172,707	)	$	(715	)

See accompanying notes to the condensed consolidated financial statements

VERB TECHNOLOGY COMPANY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	2024			2023
	Nine Months Ended September 30,
	2024			2023

Operating Activities:
Net loss	$	(7,141	)	$	(19,079	)
Loss from discontinued operations, net of tax		-			7,122
Adjustments to reconcile net loss used in operating activities, net of discontinued operations:
Depreciation and amortization		798			1,730
Share-based compensation		958			1,985
Amortization of debt discount		99			238
Amortization of debt issuance costs		73			182
Change in fair value of derivative liability		(1	)		(210	)
Finance costs		90			1,239
Unrealized gain on short-term investments		(109	)		-
Gain on lease termination		-			(263	)
Effect of changes in assets and liabilities, net of discontinued operations:
Prepaid expenses and other current assets		(39	)		52
Operating lease right-of-use assets		46			170
Other assets		-			13
ERC receivable		(735	)		-
Accounts payable, accrued expenses, and accrued interest		(887	)		265
Operating lease liabilities		(53	)		(63	)
Net cash used in operating activities attributable to continuing operations		(6,901	)		(6,619	)
Net cash used in operating activities attributable to discontinued operations		-			(1,855	)

Investing Activities:
Capitalized software development costs		-			(239	)
Purchases of short-term investments		(5,103	)		-
Proceeds from sales of short-term investments		135			-
Purchases of property and equipment		(182	)		(22	)
Purchases of intangible assets		(84	)		(14	)
Net cash used in investing activities attributable to continuing operations		(5,234	)		(275	)
Net cash provided by investing activities attributable to discontinued operations		-			4,750

Financing Activities:
Proceeds from sale of common stock offerings		18,596			6,628
Payments for accrued offering costs related to common stock offerings		(105	)		-
Payments for accrued offering costs related to preferred stock offering		(180	)		-
Payment of convertible note payable – related party		-			(40	)
Payment of notes payable		(14	)		(383	)
Payment of convertible notes payable		-			(1,350	)
Net cash provided by financing activities attributable to continuing operations		18,297			4,855
Net cash used in financing activities attributable to discontinued operations		-			(2,367	)

Net change in cash		6,162			(1,511	)

Cash - beginning of period		4,353			2,429
Cash - end of period	$	10,515		$	918

See accompanying notes to the condensed consolidated financial statements

VERB TECHNOLOGY COMPANY, INC.

Notes to Condensed Consolidated Financial Statements

For the Three and Nine Months Ended September 30, 2024 and 2023

(in thousands, except share and per share data)

(unaudited)

1. DESCRIPTION OF BUSINESS

Our Business

References in this document to the “Company,” “Verb,” “we,” “us,” or “our” are intended to mean Verb Technology Company, Inc., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis.

Our business is currently comprised of three distinct, yet complimentary business units, all three of which are currently operating and generating revenue, and one of which is currently operating in “stealth mode” as we continue to refine the user experience for that business unit as we continue to ramp sales. The first business unit is MARKET.live focused on interactive video-based social commerce. Our MARKET.live platform is a multi-vendor, livestream social shopping destination leveraging the convergence of ecommerce and entertainment. Brands, retailers and creators that join MARKET.live have the ability to broadcast livestream shopping events simultaneously on numerous social media channels, including TikTok, YouTube, LinkedIn, Facebook, Instagram, Twitch, as well as on MARKET.live, reaching exponentially larger audiences. The Company’s recent technological integrations with META, created a seamless, native, friction-free checkout process for Facebook and Instagram users to purchase MARKET.live vendors’ products within each of those popular apps. This integration allows Facebook and Instagram users to browse products featured in MARKET.live shoppable videos, place products in a native shopping cart and checkout – all without leaving Facebook or Instagram. We recently announced a technology integration with Pinterest and we will continue to expand the universe of social platforms our clients can access through our platform.

Last year we completed development work on a new MARKET.live capability that facilitated a deeper integration into the TikTok Shop social media platform, designed to expose MARKET.live shoppable programming to tens of millions of potential viewers/purchasers. This capability allows shoppers watching a MARKET.live stream on TikTok to stay on that site and check out through that site, eliminating the friction or reluctance of TikTok users to leave their TikTok feed in order to complete their purchase on MARKET.live. Our technology integration allows the purchase data to flow back through MARKET.live and to the individual vendors and stores on MARKET.live seamlessly for fulfillment of the orders.

Earlier this year, we announced an expanded strategic relationship with TikTok evidenced by a formal partnership with TikTok Shop pursuant to which MARKET.live became a service provider for TikTok Shop and officially designated as a TikTok Shop Partner (TSP). Under the terms of the partnership, TikTok Shop refers consumer brands, retailers, influencers and affiliates leads to MARKET.live for a menu of MARKET.live contract-based recurring fee revenue services that include, among other things, assistance in onboarding to TikTok Shop and establishing a TikTok store, hosting training sessions and webinars for prospective TikTok Shop sellers, full creative services including content creation and full remote and in-studio production services, host/influencer casting and management, TikTok Shop maintenance and enhancements for existing TikTok clients’ stores. The same services are currently provided to consumer brands that contact us directly or through several brand agencies with which we maintain affiliate relationships.

The second business unit is GO FUND YOURSELF!, a revolutionary interactive social crowd funding platform for public and private companies seeking broad-based exposure across numerous social media channels for their crowd-funded Regulation CF and Regulation A offerings. The platform combines a ground-breaking interactive TV show with MARKET.live’s back-end capabilities allowing viewers to tap on their screen to facilitate an investment, in real time, as they watch companies presenting before the show’s panel of “Titans”. Presenting companies that sell consumer products are able to offer their products directly to viewers during the show in real time through shoppable onscreen icons. The Go Fund Yourself business unit generates revenue from cash fees we charge to issuers to appear on the show and for marketing, ad, and content creation and distribution services. For those issuers that sell products during each airing of the show through our platform, we charge a fee up to 25% of the gross sales revenue for all products sold.

Historically, and continuing up through June 13, 2023, the Company was a Software-as-a-Service (“SaaS”) applications platform developer that offered a SaaS platform for the direct sales industry comprised of a suite of interactive video-based sales enablement business software products marketed on a subscription basis, (the “SaaS Assets”).

On June 13, 2023, the Company disposed of all of its operating SaaS Assets pursuant to an asset purchase agreement in consideration of the sum of $6,500, $4,750 of which was paid in cash by the buyer at the closing of the transaction (the “Sale of the SaaS Assets”). Additional payments of $1,750 will be paid to us by the buyer if certain profitability and revenue targets are met within the two-year period following the closing as set forth more particularly in the asset purchase agreement. The sale of the SaaS Assets was undertaken to allow us to focus our resources on MARKET.live, and the business verticals that platform could support. We expect our burgeoning MARKET.live business unit will, over time, create greater shareholder value than we could have been created through the continued operation of our SaaS Assets.

As of September 30, 2024, the Company had cash of $10,515 and short-term investments of $5,077.

Economic Disruption

Our business is dependent in part on general economic conditions. Many jurisdictions in which our customers are located and our products are sold have experienced and could continue to experience unfavorable general economic conditions, such as inflation, increased interest rates and recessionary concerns, which could negatively affect demand for our products. Under difficult economic conditions, customers may seek to cease spending on our current products or fail to adopt our new products, which could negatively affect our financial performance. We cannot predict the timing or magnitude of an economic slowdown or the timing or strength of any economic recovery. These and other economic factors could have a material adverse effect on our business, financial condition, and results of operations.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on April 1, 2024 (the “2023 Annual Report”). The consolidated balance sheet as of December 31, 2023 included herein was derived from the audited consolidated financial statements as of that date.

On October 8, 2024, we implemented a 1-for-200 reverse stock split (the “Reverse Stock Split”) of our common stock, $0.0001 par value per share (the “Common Stock”). Our Common Stock commenced trading on a post Reverse Stock Split basis on October 9, 2024. As a result of the Reverse Stock Split, every two hundred (200) shares of our pre-Reverse Stock Split Common Stock were combined and reclassified into one share of our Common Stock. The number of shares of Common Stock subject to outstanding options, warrants, and convertible securities were also reduced by a factor of two hundred and the exercise price of such securities increased by a factor of two hundred, as of October 8, 2024. All historical share and per-share amounts reflected throughout our condensed consolidated financial statements and other financial information in this Quarterly Report have been adjusted to reflect the Reverse Stock Split. The par value per share of our Common Stock was not affected by the Reverse Stock Split.

As discussed above, among the terms of the Sale of the SaaS Assets was that additional payments of $1,750 will be paid to us by the buyer if certain profitability and revenue targets are met within the two-year period following the closing. The contingent payments were not recorded at the closing date of the sale and will be recognized as the cash is received and the contingency resolved pursuant to ASC 450-30.

Accordingly, the Company’s consolidated financial statements are being presented pursuant to ASC 360-10-45-9 which requires that a disposal group be classified as held for sale in the period in which all of the held for sale criteria are met. In addition to held for sale accounting, the Company had also met the criterion pursuant to ASC 205-20, Discontinued Operations, as a strategic shift from operating and managing a SaaS business to operating and managing a live streaming shopping platform has occurred because of the sale. The Company’s consolidated results of operations and statements of cash flows have been reclassified to reflect the presentation of discontinued operations. See Note 6 for details of the assets and liabilities related to the SaaS sale and discontinued operations.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results.

Principles of Consolidation

The consolidated financial statements have been prepared in accordance with GAAP and include the accounts of Verb, Verb Acquisition Co., LLC , and verbMarketplace, LLC. All intercompany accounts have been eliminated in the consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported periods. Significant estimates include assumptions made in analysis of assumptions made in purchase price allocations, impairment testing of long-term assets, realization of deferred tax assets, determining fair value of derivative liabilities, and valuation of equity instruments issued for services. Some of those assumptions can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions.

Investments

In accordance with ASC 320, Investments – Debt Securities, the Company accounts for its investments as trading securities consisting of U.S. Treasury securities and corporate bonds that are reported at fair value on the Company’s condensed consolidated balance sheet at September 30, 2024. Unrealized gains and losses on these investments are included in other income (expense), net within the Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2024.

The Company’s investments in trading securities are classified as current based on the intent of management, the nature of the investments and their availability for use in current operations. See Note 3 – Investments and Fair Value Measurements for further details of the Company’s investments at September 30, 2024.

Segment Information

Effective July 1, 2024, the Company operates as two reportable segments, MARKET.live and Go Fund Yourself. We identify our segments in accordance with ASC 280, Segment Reporting, and in the manner in which our Chief Executive Officer, as our chief operating decision maker (“CODM”), allocates resources and assesses financial performance. See Note 14 for disclosures of Segment Information.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standard Board’s (“FASB”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue through June 13, 2023 was derived primarily from providing application services through the SaaS application, digital marketing and sales support services. During that period, the Company also derived revenue from the sale of customized print products and training materials, branded apparel, and digital tools, as demanded by its customers. As a result of the sale of the SaaS business, revenue that was recorded historically from the SaaS business has been reclassified as part of discontinued operations. See Note 6 for revenue disclosures related to the SaaS business.

MARKET.live revenue is derived from contract-based recurring fee revenue services that include, among other things, assistance in onboarding clients to TikTok Shop and establishing a TikTok store, hosting training sessions and webinars for prospective TikTok Shop sellers, full creative services including content creation and full remote and in-studio production services, host/influencer casting and management, TikTok Shop maintenance and enhancements for existing TikTok clients’ stores. Clients are referred to us through our existing partnership with TikTok Shop as well as from several brand agencies with which we maintain affiliate relationships.

GO FUND YOURSELF! derives revenue from cash fees we charge to issuers to appear on the show and for marketing, ad, and content creation and distribution services. For those issuers that sell products during each airing of the show through our platform, we charge a fee up to 25% of the gross sales revenue for all products sold.

A performance obligation is a promise in a contract to transfer a distinct product. Performance obligations promised in a contract are identified based on the goods that will be transferred that are both capable of being distinct and are distinct in the context of the contract, whereby the transfer of the goods is separately identifiable from other promises in the contract. Performance obligations include establishing and maintaining customer online stores, providing access to the Company’s e-commerce platform and customer service support.

Customers do not have the contractual right to take possession of the Company’s software. Revenue is recognized in an amount that reflects the contractual consideration that the Company receives in exchange for its services.

Revenue is recognized on a net basis from maintaining e-commerce platforms and online orders, as the Company is engaged primarily in an agency relationship with its customers and earns defined amounts based on the individual contractual terms for the customer and the Company does not take possession of the customers’ inventory or any credit risks relating to the products sold.

Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales in the consolidated statements of operations. Revenues during the three and nine months ended September 30, 2024 and 2023, were substantially all generated from clients and customers located within the United States of America.

Cost of Revenue

Cost of revenue primarily consists of processing fees and independent contractors associated with the MARKET.live platform and independent contractors for shows related to Go Fund Yourself.

Capitalized Software Development Costs

The Company capitalizes internal and external costs directly associated with developing internal-use software, and hosting arrangements that include an internal-use software license, during the application development stage of its projects. The Company’s internal-use software is reported at cost less accumulated amortization. Amortization begins once the project has been completed and is ready for its intended use.

Due to changes in management’s assessment of its capitalized software development asset, the Company revised the asset’s remaining useful life effective January 1, 2024 and will amortize the asset on a straight-line basis over a period of four years. Software maintenance activities or minor upgrades are recorded as expense in the period performed.

Amortization expense related to capitalized software development costs is recorded in depreciation and amortization in the condensed consolidated statements of operations.

Preferred Stock

The Company applies the accounting standards for distinguishing liabilities from equity when determining the classification and measurement of its preferred stock. Preferred shares subject to mandatory redemption are classified as liability instruments and are measured at fair value. Conditionally redeemable preferred shares (including preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, preferred shares are classified as part of stockholders’ equity. Accordingly, the Series C Preferred Stock offering on December 29, 2023 is classified as part of stockholders’ equity as of September 30, 2024 and December 31, 2023.

Fair Value of Financial Instruments

The Company follows the guidance of FASB ASC 820 and ASC 825 for disclosure and measurement of the fair value of its financial instruments. FASB ASC 820 establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The three (3) levels of fair value hierarchy defined by ASC 820 are described below:

	Level 1:	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
	Level 2:	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
	Level 3:	Pricing inputs that are generally observable inputs and not corroborated by market data.

The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short-term nature. The carrying amount of notes payable approximates the fair value due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities, see Note 3 for Investments and Fair Value Measurements and Note 8 for Derivative Liability.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

The Company uses Level 2 inputs for its valuation methodology for the derivative liabilities as their fair values were determined by using a Binomial pricing model. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjusted to fair value of derivatives.

Share-Based Compensation

The Company issues stock options and warrants, shares of common stock and restricted stock units as share-based compensation to employees and non-employees. The Company accounts for its share-based compensation in accordance with FASB ASC 718, Compensation – Stock Compensation. Share-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock and is recognized as expense over the service period. Forfeitures are accounted for as they occur. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for services.

Net Loss Per Share

Basic net loss per share is computed by using the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential shares of common stock that were outstanding during the period. Dilutive potential shares of common stock consist of incremental shares of common stock issuable upon exercise of stock options. No dilutive potential shares of common stock were included in the computation of diluted net loss per share because their impact was anti-dilutive.

As of September 30, 2024, and 2023, the Company had total outstanding options of 9,038 and 10,284, respectively, and warrants of 3,545 and 4,598, respectively, and outstanding restricted stock awards of 556 and 778, respectively, and convertible notes issued to a related party that were convertible into 0 and 106 shares at $8,240.00 per share, respectively, which were excluded from the computation of net loss per share because they are anti-dilutive.

At the close of business on April 5, 2024, the Company’s unexercised publicly traded warrants under the symbol VERBW expired pursuant to their original terms and as such Nasdaq suspended trading the 879 remaining warrants and the trading symbol VERBW was delisted from Nasdaq.

Concentration of Credit and Other Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and accounts receivable. Cash is deposited with a limited number of financial institutions. The balances held at any one financial institution at times may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits of up to $250.

The Company’s concentration of credit risk includes its concentrations from key customers and vendors. The details of these significant customers and vendors are presented in the following table for the nine months ended September 30, 2024 and 2023:

SCHEDULE OF CONCENTRATION RISK

	Nine Months Ended September 30,
	2024	2023
The Company’s largest customers are presented below as a percentage of the aggregate

Revenues	Two customers accounted for 41% of revenues	No customers individually over 10%

The Company’s largest vendors are presented below as a percentage of the aggregate

Purchases	One vendor accounted for 18% of its purchases individually and in the aggregate	One vendor accounted for 28% of its purchases individually and in the aggregate

Supplemental Cash Flow Information

	2024		2023
	Nine Months Ended September 30,
	2024		2023

Supplemental disclosures of cash flow information:
Cash paid for interest	$	4	$	242
Cash paid for income taxes	$	1	$	2

Supplemental disclosure of non-cash investing and financing activities attributable to continuing operations:
Fair value of common shares issued as payment on notes payable	$	2,777	$	4,092
Fair value of common shares issued to redeem Series C preferred shares		2,737		-
Fair value of common shares issued to settle accrued expenses		-		346
Derecognition of operating lease right-of-use assets		-		1,186
Derecognition of operating lease liabilities		-		1,870
Derecognition of other assets and liabilities related to lease termination		-		421
Recognition of operating lease right-of-use asset and related lease liability		-		245
Supplemental disclosure of non-cash investing and financing activities attributable to discontinued operations:
Discount recognized from advances on future receipts	$	-	$	558

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The adoption of this standard did not have any material impact on the Company’s financial statements.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements.

3. INVESTMENTS AND FAIR VALUE MEASUREMENTS

The Company invests its surplus funds in excess of operational and capital requirements in a diversified portfolio of marketable securities, with the objectives of delivering competitive returns while maintaining a high degree of liquidity.

A summary of our short-term investments as of September 30, 2024 and December 31, 2023, are as follows (in thousands):

SCHEDULE OF SHORT TERM INVESTMENT

	September 30, 2024		December 31, 2023

U.S. treasury securities	$	3,873	$	-
Marketable debt securities		1,204		-
Short-term investments	$	5,077	$	-

Marketable securities

Marketable securities as of September 30, 2024 consisted of the following:

SCHEDULE OF MARKETABLE SECURITIES

(in thousands)	Cost of Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value

Marketable debt securities
U.S. treasury securities	$	3,789	$	84	$	-	$	3,873
Corporate bonds		1,179		25		-		1,204
Total marketable debt securities	$	4,968	$	109	$	-	$	5,077

Fair Value Measurements

Our financial instruments include cash, prepaid expenses, accounts payable, and accrued liabilities. The fair value of cash, prepaid expenses, accounts payable and accrued liabilities approximate their carrying values due to their short-term nature, which are all considered Level 1. The fair value of long-term debt approximates its carrying value.

Our financial instruments measured at fair value on a recurring basis consisted of U.S. treasury securities, corporate bonds and derivatives (see Note 8). U.S. treasury securities are classified within Level 1 of the fair value hierarchy as they are valued based on quoted market price in an active market. Corporate bonds are valued based on quoted prices in markets that are less active and are generally classified within Level 2 of the fair value hierarchy. We did not hold Level 1 or Level 2 financial instruments as of December 31, 2023.

Financial instruments valued based on unobservable inputs which reflect the reporting entity’s own assumptions or data that market participants would use in valuing an instrument are generally classified within Level 3 of the fair value hierarchy. We did not hold Level 3 financial instruments as of September 30, 2024, and December 31, 2023.

Financial instruments measured at fair value on a recurring basis as of September 30, 2024 are classified based on the valuation technique in the table below:

Fair Value Measurements Using

(in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total

Marketable debt securities
U.S. treasury securities	$	3,873	$	-	$	-	$	3,873
Corporate bonds		-		1,204		-		1,204
Total marketable debt securities	$	3,873	$	1,204	$	-	$	5,077

4. CAPITALIZED SOFTWARE DEVELOPMENT COSTS

In 2020, the Company began developing MARKET.live, a livestream ecommerce platform, and has capitalized $7,131 of internal and external development costs as of September 30, 2024 and December 31, 2023, respectively. In October 2021, the Company entered into a 10-year license and services agreement with a third party (the “Primary Contractor”) to develop on a work-for-hire basis certain components of MARKET.live. The Primary Contractor’s fees for developing such components, including the license fee, is $5,750. The Primary Contractor was paid an additional $500 bonus in April 2022 for services rendered pursuant to the license and service agreement.

For the three and nine months ended September 30, 2024 and 2023, the Company amortized $249 and $538, respectively and $748 and $1,615, respectively.

Capitalized software development costs, net consisted of the following:

	September 30, 2024			December 31, 2023

Beginning balance	$	3,990		$	6,176

Additions		-			23
Amortization		(748	)		(2,209	)
Ending balance	$	3,242		$	3,990

The expected future amortization expense for capitalized software development costs as of September 30, 2024, is as follows:

Year ending	Amortization
2024 remaining	$	250
2025		998
2026		997
2027		997
2028 and thereafter		-
Total amortization	$	3,242

5. OPERATING LEASES

The components of lease expense and supplemental cash flow information related to leases for the period are as follows:

SCHEDULE OF LEASE COST

	2024			2023
	Nine Months Ended September 30,
	2024			2023
Lease cost
Operating lease cost (included in general and administrative expenses in the Company’s statement of operations)	$	102		$	227

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	68		$	121
Weighted average remaining lease term – operating leases (in years)		2.00			3.00
Weighted average discount rate – operating leases		9.0	%		9.0	%

	September 30, 2024		December 31, 2023
Operating leases
Right-of-use assets	$	172	$	218

Short-term operating lease liabilities	$	75	$	67
Long-term operating lease liabilities		102		164
Total operating lease liabilities	$	177	$	231

Year ending	Operating Leases
2024 remaining	$	24
2025		96
2026		75
2027		-
2028 and thereafter		-
Total lease payments		195
Less: Imputed interest/present value discount		(18	)
Present value of lease liabilities	$	177

6. DISCONTINUED OPERATIONS

On June 13, 2023, the Company entered into a definitive agreement to sell all of its SaaS operating assets and liabilities for $6,500, including $4,750 of cash due upon closing. The operations of the SaaS business have been presented within discontinued operations. Upon completion of the sale of assets, in which the buyer assumed all liabilities related to the SaaS business, the Company recorded an impairment of $5,441 within loss from discontinued operations as the carrying amount of the net assets exceeded the sale price, less selling costs.

The following information presents the net revenues and net loss of the SaaS business for the three and nine months ended September 30, 2024 and 2023:

	2024		2023
	Three Months Ended September 30,
	2024		2023

Net revenues	$	-	$	-

Net loss	$	-	$	(168	)

	2024		2023
	Nine Months Ended September 30,
	2024		2023

Net revenues	$	-	$	3,814

Net loss	$	-	$	(7,122	)

7. NOTES PAYABLE

The Company has the following outstanding notes payable as of September 30, 2024 and December 31, 2023:

SCHEDULE OF NOTES PAYABLE

Note	Issuance Date	Maturity Date	Interest Rate			Original Borrowing		Balance at September 30, 2024			Balance at December 31, 2023
Note payable (A)	May 15, 2020	May 15, 2050		3.75	%	$	150	$	123		$	137
Promissory note payable (B)	November 7, 2022	May 7, 2024		9.0	%		5,470		-			1,179
Promissory note payable (C)	October 11, 2023	April 11, 2025		9.0	%		1,005		-			1,005
Debt discount									-			(99	)
Debt issuance costs									-			(73	)
Total notes payable									123			2,149
Non-current									(103	)		(362	)
Current								$	20		$	1,787

	(A)	On May 15, 2020, the Company executed an unsecured loan with the SBA under the Economic Injury Disaster Loan program in the amount of $150. Installment payments, including principal and interest, began on October 26, 2022. As of September 30, 2024 and December 31, 2023, the outstanding principal and accrued interest balance due under the note was $123 and $137, respectively.

	(B)	On November 7, 2022, the Company entered into a note purchase agreement (the “November Note Purchase Agreement”) and promissory note with an institutional investor (the “November Note Holder”) providing for the sale and issuance of an unsecured, non-convertible promissory note in the original principal amount of $5,470, which has an original issue discount of $470, resulting in gross proceeds to the Company of approximately $5,000 (the “November Note,” and such financing, the “November Note Offering”). The November Note matures eighteen months following the date of issuance. Commencing six months from the date of issuance, the Company is required to make monthly cash redemption payments in an amount not to exceed $600. The November Note may be repaid in whole or in part prior to the maturity date for a 10% premium. The November Note requires the Company to use up to 20% of the gross proceeds raised from future equity or debt financings, or the sale of any subsidiary or material asset, to prepay the November Note, subject to a $2,000 cap on the aggregate prepayment amount. Until all obligations under the November Note have been paid in full, the Company is not permitted to grant a security interest in any of its assets, or to issue securities convertible into shares of common stock, subject in each case to certain exceptions. verbMarketplace, LLC entered into a guaranty, dated November 7, 2022, in connection with the November Note Offering, pursuant to which it guaranteed the obligations of the Company under the November Note in exchange for receiving a portion of the loan proceeds.

		In connection with the November Note Offering, the Company incurred $335 of debt issuance costs. The debt issuance costs and the debt discount of $450 were being amortized over the term of the November Notes using the effective interest rate method. As of December 31, 2023, the amount of unamortized debt discount and debt issuance costs was $99 and $73, respectively. During the nine months ended September 30, 2024, the Company amortized the remaining amount of $99 of debt discount and $73 of debt issuance costs.

		During the nine months ended September 30, 2024, the Company issued 57,422 shares of its common stock pursuant to an exchange agreement in exchange for a reduction of $1,720 on the outstanding balance of the November Notes. The shares issued for the share exchange agreement were valued based upon the Nasdaq at-the-market price and is being consistently applied for each share exchange. As a result, there was no gain or loss on the transaction. On March 18, 2024, the Company paid the November Notes in full.

	(C)	On October 11, 2023, the Company entered into a note purchase agreement with an institutional investor pursuant to which the investor purchased the Note in the aggregate principal amount of $1,005. The Note bears interest at 9.0% per annum compounded daily. The maturity date of the Note is 18 months from the date of its issuance. During the nine months ended September 30, 2024, the Company issued 38,151 shares of its common stock pursuant to an exchange agreement in exchange for a reduction of $1,057 on the outstanding balance of the Note. The shares issued under the share exchange agreement were valued based upon the Nasdaq at-the-market price and is being consistently applied for each share exchange. The shares issued for the final share exchange agreement on May 3, 2024 were valued at a 10% discount resulting in a loss on this particular transaction of $90. This amount has been recorded as a finance cost in the Company’s condensed consolidated statement of operations for the nine months ended September 30, 2024. On May 3, 2024, the Note was repaid in full.

The following table provides a breakdown of interest expense:

SCHEDULE OF INTEREST EXPENSE

	2024		2023
	Three Months Ended September 30,
	2024		2023

Interest expense – amortization of debt discount	$	-	$	75
Interest expense – amortization of debt issuance costs		-		55
Interest expense – other		1		89

Total interest expense	$	1	$	219

Total interest expense for notes payable to related parties was $0 and $23 for the three months ended September 30, 2024 and 2023, respectively. The Company paid $0 and $8 in interest to related parties for the three months ended September 30, 2024 and 2023, respectively.

	2024		2023
	Nine Months Ended September 30,
	2024		2023

Interest expense – amortization of debt discount	$	99	$	238
Interest expense – amortization of debt issuance costs		73		182
Interest expense		64		569

Total interest expense	$	236	$	989

Total interest expense for notes payable to related parties was $0 and $69 for the nine months ended September 30, 2024 and 2023, respectively. The Company paid $0 and $8 in interest to related parties for the nine months ended September 30, 2024 and 2023, respectively.

8. DERIVATIVE LIABILITY

Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. In prior years, the Company granted certain warrants that included a fundamental transaction provision that could give rise to an obligation to pay cash to the warrant holder. As a result, the fundamental transaction clause of these warrants are accounted for as a derivative liability in accordance with ASC 815 and are being re-measured every reporting period with the change in value reported in the statement of operations.

The derivative liabilities were valued using a Binomial pricing model with the following average assumptions:

	September 30, 2024			December 31, 2023
Stock Price	$	9.60		$	34.00
Exercise Price	$	1,600.00		$	1,600.00
Expected Life		0.39			1.08
Volatility		106	%		202	%
Dividend Yield		0	%		0	%
Risk-Free Interest Rate		4.65	%		4.79	%
Total Fair Value	$	-		$	1

The expected life of the warrants was based on the remaining contractual term of the instruments. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected dividend yield was based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. The risk-free interest rate was based on rates established by the Federal Reserve Bank.

During the nine months ended September 30, 2024 and 2023, the Company recorded income of $1 and $210, respectively, to account for the changes in the fair value of these derivative liabilities during the period. At September 30, 2024, the fair value of the derivative liability was $0.

9. CAPITAL STOCK

Common Stock

The Company’s common stock activity for the nine months ended September 30, 2024 is as follows:

Shares Issued as Part of ATM Offerings

During December 2023, the Company entered into a sales agreement with Ascendiant Capital Markets LLC (“Ascendiant Sales Agreement”) to sell shares of its common stock pursuant to a prospectus supplement to the Company’s Registration Statement on Form S-3 (File No. 333-264038). For the nine months ended September 30, 2024, the Company has issued 278,501 shares of the Company’s common stock pursuant to the Ascendiant Sales Agreement and received net proceeds of $12,130, net of offering costs of $136.

Regulation A Public Offering

During the nine months ended September 30, 2024, the Company issued 136,986 shares of its common stock and received net proceeds of $6,466, net of offering costs of $109, resulting from a Form 1-A public offering of its common stock pursuant to Regulation A.

The shares that were offered and sold at-the-market under Nasdaq rules and pursuant to the Company’s Form 1-A, initially filed by the Company with the Securities and Exchange Commission under the Securities Act of 1933, as amended, on February 14, 2024 and qualified on March 11, 2024.

The Company filed a second Form 1-A on May 30, 2024, which was qualified on June 11, 2024. The Company did not sell any securities pursuant to the second Form 1-A. The second Form 1-A was withdrawn on September 3, 2024.

Shares Issued as Payment on Notes Payable

During the nine months ended September 30, 2024, the Company issued 57,422 shares of its common stock to Streeterville in exchange for a reduction of $1,720 on the outstanding balance of the November Notes.

During the nine months ended September 30, 2024, the Company issued 38,151 shares of its common stock pursuant to an exchange agreement in exchange for a reduction of $1,057 on the outstanding balance of the Note.

Shares Issued for Services

During the nine months ended September 30, 2024, the Company issued 23 shares of common stock to its CEO, Rory Cutaia, associated with the vesting of Restricted Stock Units.

During the nine months ended September 30, 2024, the Company issued 171 shares of common stock to its Interim Chief Financial Officer associated with the vesting of Restricted Stock Units.

Series C Preferred Shares Redeemed in Exchange for Common Shares

During the nine months ended September 30, 2024, the Company redeemed 2,105 Series C Preferred Shares in exchange for 145,816 common shares in order to reduce the amount of dividend to be accrued. The Company recorded a deemed dividend of $652 to Series C Preferred Shareholders during the nine months ended September 30, 2024.

See Note 15 – Subsequent Events.

Preferred Stock

The Company’s preferred stock activity for the nine months ended September 30, 2024 was as follows:

Series C

On December 28, 2023, the Company filed a certificate of designation of preferences and rights (the “Certificate of Designation”) of Series C Preferred Stock (the “Series C Preferred Stock”), with the Secretary of State of Nevada, designating 5,000 shares of preferred stock, par value $0.0001 of the Company, as Series C Preferred Stock. Each share of Series C Preferred Stock shall have a stated face value of $1,300.00 (“Stated Value”). The Series C Preferred Stock is not convertible into common shares of capital stock of the Company and as such is non-dilutive to current stockholders.

Each share of Series C Preferred Stock shall accrue a rate of return on the Stated Value at the rate of 10% per year, compounded annually to the extent not paid as set forth in the Certificate of Designation, and to be determined pro rata for any fractional year periods (the “Preferred Return”). The Preferred Return shall accrue on each share of Series C Preferred Stock from the date of its issuance and shall be payable or otherwise settled as set forth in the Certificate of Designation.

Commencing on the 1 year anniversary of the issuance date of each share of Series C Preferred Stock, each such share of Series C Preferred Stock shall accrue an automatic quarterly dividend, based on three quarters of 91 days each and the last quarter of 92 days (or 93 days for leap years), which shall be calculated on the Stated Value of such share of Series C Preferred Stock, and which shall be payable in additional shares of Series C Preferred Stock, based on the Stated Value, or in cash as set forth in the Certificate of Designation (each, as applicable, the “Quarterly Dividend”). For the period beginning on the 1 year anniversary of the issuance date of a share of Series C Preferred Stock to the 2 year anniversary of the issuance date of a share of Series C Preferred Stock, the Quarterly Dividend shall be 2.5% per quarter, and for all periods following the 2 year anniversary of the issuance date of a share of Series C Preferred Stock, the Quarterly Dividend shall be 5% per quarter.

Subject to the terms and conditions set forth in the Certificate of Designation, at any time the Company may elect, in the sole discretion of the Board of Directors, to redeem all, but not less than all, of the Series C Preferred Stock then issued and outstanding from all of the Series C Preferred Stock Holders (a “Corporation Optional Redemption”) by paying to the applicable Series C Preferred Stock Holders an amount in cash equal to the Series C Preferred Liquidation Amount (as defined in the Certificate of Designation) then applicable to such shares of Series C Preferred Stock being redeemed in the Corporation Optional Conversion (the “Redemption Price”).

The Series C Preferred Stock confers no voting rights on holders, except with respect to matters that materially and adversely affect the voting powers, rights or preferences of the Series C Preferred Stock or as otherwise required by applicable law.

On December 29, 2023, the Company entered into a Securities Purchase Agreement with Streeterville, pursuant to which the Company sold and Streeterville purchased 3,000 shares of the Company’s newly designated non-convertible Series C Preferred Stock (the “Series C Shares”) for a total purchase price of $3,000. The Shares have a 10% stated annual dividend, no voting rights and has a face value of $1,300 per share. The sale of the Series C Shares was consummated on December 29, 2023.

During the nine months ended September 30, 2024, the Company redeemed 2,105 Series C Preferred Shares in exchange for 145,816 common shares in order to reduce the amount of dividend to be accrued. The transaction was done at the Nasdaq at-the-market price. No broker was involved in the transaction and no fees or commissions were paid or incurred by the Company. The Company recorded a deemed dividend of $652 to Series C Preferred Shareholders to account for the difference between the initial investment of $1,000 per Series C Preferred Share and the Stated Value of $1,300 per Series C Preferred Share, the Redemption Price.

During the nine months ended September 30, 2024, the Company accrued $240 in preferred stock dividend payable.

See Note 15 – Subsequent Events.

10. RESTRICTED STOCK UNITS

A summary of restricted stock unit activity for the nine months ended September 30, 2024 is presented below.

				Weighted-
				Average
				Grant Date
	Shares			Fair Value

Non-vested at January 1, 2024		767		$	1,176.00
Granted		-			-
Vested/deemed vested		(197	)		1,499.74
Forfeited		(14	)		8,480.00
Non-vested at September 30, 2024		556		$	867.17

The total fair value of restricted stock units that vested or deemed vested during the nine months ended September 30, 2024 was $295. The total stock compensation expense recognized relating to the vesting of restricted stock units for the three and nine months ended September 30, 2024 amounted to $84 and $293, respectively. As of September 30, 2024, the amount of unvested compensation related to issuances of restricted stock units was $292 which will be recognized as an expense in future periods as the shares vest.

11. STOCK OPTIONS

A summary of option activity for the nine months ended September 30, 2024 is presented below.

SCHEDULE OF STOCK OPTION ACTIVITY

						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
				Exercise		Contractual		Intrinsic
	Options			Price		Life (Years)		Value

Outstanding at January 1, 2024		10,435		$	240.14		4.60	$	-
Granted		-			-		-		-
Forfeited		(1,397	)		306.75		-		-
Exercised		-			-		-		-
Outstanding at September 30, 2024		9,038		$	229.83		3.85	$	-

Vested September 30, 2024		4,900		$	243.74		3.85	$	-

Exercisable at September 30, 2024		4,900		$	243.74		3.85	$	-

At September 30, 2024, the intrinsic value of the outstanding options was $0.

The total stock compensation expense recognized relating to the vesting of stock options for the three and nine months ended September 30, 2024 amounted to $100 and $529. As of September 30, 2024, the total unrecognized share-based compensation expense was $904, which is expected to be recognized as part of operating expense through September 2027.

The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions:

	Nine Months Ended September 30,
	2024			2023
Risk-free interest rate		4.62	%		4.29	%
Average expected term		5 years			5 years
Expected volatility		139.2	%		136.2	%
Expected dividend yield		-			-

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future.

12. STOCK WARRANTS

The Company has the following warrants outstanding as of September 30, 2024, all of which are exercisable:

SCHEDULE OF WARRANTS OUTSTANDING

	Warrants			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value

Outstanding at January 1, 2024		4,598		$	6,752.00		3.10	$	-
Granted		-			-		-		-
Forfeited		(1,053	)		24,098.44		-		-
Exercised		-			-		-		-
Outstanding at September 30, 2024, all vested		3,545		$	1,769.64		3.18	$	-

At September 30, 2024 the intrinsic value of the outstanding warrants was $0.

On January 24, 2023, the Company entered into an underwriting agreement with Aegis relating to the January 2023 offering, issuance and sale of 4,506 shares of the Company’s common stock at a public offering price of $1,600.00 per share. As a result of this transaction, certain warrants which previously had an exercise price of $2,720.00 per share, had the exercise price reduced to $1,600.00 per share, which resulted in the Company recognizing a deemed dividend of $164.

13. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is currently in a dispute with a former employee of its predecessor bBooth, Inc. who has interposed a breach of contract claim in which he alleges that in 2015 he was entitled to approximately $300 in unpaid bonus compensation. This former employee filed his complaint in the Superior Court of California for the County of Los Angeles on November 20, 2019, styled Meyerson v. Verb Technology Company, Inc., et al. (Case No. 19STCV41816). The Company disputed the former employee’s claims and interposed several affirmative defenses, including that the claims are contradicted by documentary evidence, barred by the applicable statute of limitations, and barred by a written, executed release. On February 9, 2021, the former employee’s counsel filed a motion for summary judgment, or in the alternative, summary adjudication against the Company. On October 13, 2021, the California court issued an order (i) denying the former employee’s motion for summary judgment on his claims against the Company, but (ii) granting the former employee’s motion to dismiss the Company’s affirmative defenses, which ruling the Company contends was in error. Under the rules, the Company is precluded from appealing the dismissal of its affirmative defenses until after a trial. On August 29, 2023, after a bench trial at which the Company was precluded from introducing evidence of its affirmative defenses, the court found in favor of Plaintiff Meyerson; and judgment was entered in Meyerson’s favor in the amount of $584 which included interest. Meyerson’s counsel thereafter submitted an untimely request for attorney’s fees and costs which the Company has opposed. After due consideration, the Court awarded Meyerson’s counsel only approximately $8 in counsel fees. After the trial, the Company filed a timely appeal from the judgment (Meyerson v. Verb Technology Company, Inc. (2023 2nd Appellate District) Case No.: B334777, seeking among other things, that the trial court’s finding be vacated and that the Company’s affirmative defenses be reinstated. As of this date, the appeal has yet to be heard. In the interim, the Company bonded the judgement preventing any enforcement or collection of the judgement while the appeal is pending. The Company has accrued the liability at September 30, 2024 and believes the accrual is adequate pending the outcome of the appeal process.

The Company knows of no material proceedings in which any of its directors, officers, or affiliates, or any registered or beneficial stockholder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.

The Company believes it has adequately reserved for all litigation within its financial statements.

Board of Directors

The Company has committed an aggregate of $598 in board fees to its three independent board members over the term of their appointment for services to be rendered. This amount includes a one-time performance-based bonus payment to a board member that is non-recurring. The Company’s CEO does not receive compensation for serving on the Board of Directors.

Board fees are accrued and paid monthly. The members will serve on the board until the annual meeting for the year in which their term expires or until their successors have been elected and qualified.

Total board fees expensed during the nine months ended September 30, 2024 was $501.

14. SEGMENT REPORTING

The Company currently operates two reportable segments, MARKET.live and Go Fund Yourself. The Company also operates a third business unit, currently operating in stealth mode, which for the period ending September 30, 2024, the Company does not deem to be a reportable segment.

The following tables summarize the Company’s reportable segment information and unallocated corporate expenses (in thousands):

SCHEDULE OF SEGMENT REPORTING

(in thousands)	MARKET.live			Go Fund Yourself			Corporate			Consolidated			MARKET.live			Go Fund Yourself		Corporate			Consolidated
	Three months ended September 30, 2024												Three months ended September 30, 2023
	Reportable Segments												Reportable Segments
(in thousands)	MARKET.live			Go Fund Yourself			Corporate			Consolidated			MARKET.live			Go Fund Yourself		Corporate			Consolidated

Revenues	$	103		$	25		$	-		$	128		$	29		$	-	$	-		$	29

Costs and expenses:
Cost of revenue, exclusive of depreciation and amortization shown separately below		35			19			-			54			5			-		-			5
Depreciation and amortization		250			3			20			273			539			-		25			564
General and administrative		847			204			1,062			2,113			636			-		2,214			2,850

Total costs and expenses		1,132			226			1,082			2,440			1,180			-		2,239			3,419
Operating loss	$	(1,029	)	$	(201	)	$	(1,082	)	$	(2,312	)	$	(1,151	)	$	-	$	(2,239	)	$	(3,390	)

(in thousands)	MARKET.live		Go Fund Yourself		Corporate		Consolidated		MARKET.live		Go Fund Yourself		Corporate		Consolidated
	Nine months ended September 30, 2024								Nine months ended September 30, 2023
	Reportable Segments								Reportable Segments
(in thousands)	MARKET.live		Go Fund Yourself		Corporate		Consolidated		MARKET.live		Go Fund Yourself		Corporate		Consolidated

Revenues	$	147	$	25	$	-	$	172	$	34	$	-	$	-	$	34

Costs and expenses:
Cost of revenue, exclusive of depreciation and amortization shown separately below		71		19		-		90		7		-		-		7
Depreciation and amortization		749		3		46		798		1,616		-		114		1,730
General and administrative		2,865		222		4,131		7,218		1,963		-		7,117		9,080

Total costs and expenses		3,685		244		4,177		8,106		3,586		-		7,231		10,817

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VERB Verb Technology Company Inc