EX-99..1
Published on August 15, 2022
EXHIBIT 99.1
On August 9, 2022, the management and the audit committee (the “Audit Committee”) of the Board of Directors of Veritone, Inc. (the “Company”), after consideration of the relevant facts and circumstances, determined that the Company’s previously issued financial statements as of and for the three months ended March 31, 2022 should no longer be relied upon due to an error related to the calculation of fair value of contingent consideration at the time of the acquisition of PandoLogic Ltd., which led to an understatement of goodwill, intangible assets, and contingent consideration at the time of the acquisition, and an overstatement of subsequent changes to the fair value of contingent consideration, and an understatement of subsequent intangible amortization expense.
The following tables present the effects of the aforementioned restatement to the specific line items presented in the Company’s previously reported unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022 (in thousands, except per share amounts):
Condensed Consolidated Balance Sheet (unaudited)
|
|
|
As of March 31, 2022 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|||
|
Intangible assets, net |
|
$ |
86,563 |
|
|
$ |
5,304 |
|
|
$ |
91,867 |
|
|
Goodwill |
|
|
36,630 |
|
|
|
7,970 |
|
|
|
44,600 |
|
|
Total assets |
|
|
469,004 |
|
|
|
13,274 |
|
|
|
482,278 |
|
|
Contingent consideration, non-current |
|
|
35,416 |
|
|
|
265 |
|
|
|
35,681 |
|
|
Other non-current liabilities |
|
|
16,440 |
|
|
|
776 |
|
|
|
17,216 |
|
|
Total liabilities |
|
|
413,004 |
|
|
|
1,041 |
|
|
|
414,045 |
|
|
Accumulated deficit |
|
|
(380,076 |
) |
|
|
12,233 |
|
|
|
(367,843) |
|
|
Total stockholders' equity |
|
|
56,000 |
|
|
|
12,233 |
|
|
|
68,233 |
|
|
Total liabilities and stockholders' equity |
|
|
469,004 |
|
|
|
13,274 |
|
|
|
482,278 |
|
Condensed Consolidated Statement of Operations and Comprehensive Loss (unaudited)
|
|
|
Three Months Ended |
|
|||||||||
|
|
|
March 31, 2022 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|||
|
General and administrative |
|
$ |
28,917 |
|
|
$ |
(6,596 |
) |
|
$ |
22,321 |
|
|
Amortization |
|
|
4,693 |
|
|
|
323 |
|
|
|
5,016 |
|
|
Total operating expenses |
|
|
61,485 |
|
|
|
(6,273) |
|
|
|
55,212 |
|
|
Loss from operations |
|
|
(27,078 |
) |
|
|
6,273 |
|
|
|
(20,805) |
|
|
Loss before provision for income taxes |
|
|
(28,264 |
) |
|
|
6,273 |
|
|
|
(21,991) |
|
|
Provision for income taxes |
|
|
177 |
|
|
|
(39) |
|
|
|
138 |
|
|
Net loss |
|
|
(28,441 |
) |
|
|
6,312 |
|
|
|
(22,129) |
|
|
Basic and diluted net loss per share |
|
|
(0.80 |
) |
|
|
0.18 |
|
|
|
(0.62) |
|
|
Total comprehensive loss |
|
|
(28,251 |
) |
|
|
6,312 |
|
|
|
(21,939) |
|
Condensed Consolidated Statement of Stockholders’ Equity (unaudited)
|
|
|
Accumulated Deficit |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|||
|
Balance as of December 31, 2021 |
|
$ |
(350,958 |
) |
|
$ |
5,921 |
|
|
$ |
(345,037 |
) |
|
Net loss |
|
|
(28,441 |
) |
|
|
6,312 |
|
|
|
(22,129 |
) |
|
Balance as of March 31, 2022 |
|
|
(380,076 |
) |
|
|
12,233 |
|
|
|
(367,843 |
) |
|
|
|
Total Stockholders' Equity |
|
|||||||||
|
Balance as of December 31, 2021 |
|
|
80,579 |
|
|
|
5,921 |
|
|
|
86,500 |
|
|
Net loss |
|
|
(28,441 |
) |
|
|
6,312 |
|
|
|
(22,129 |
) |
|
Balance as of March 31, 2022 |
|
|
56,000 |
|
|
|
12,233 |
|
|
|
68,233 |
|
Condensed Consolidated Statement of Cash Flows (unaudited)
|
|
|
Three Months Ended |
|
|||||||||
|
|
|
March 31, 2022 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Restated |
|
|||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(28,441 |
) |
|
$ |
6,312 |
|
|
$ |
(22,129 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
4,891 |
|
|
|
321 |
|
|
|
5,212 |
|
|
Change in fair value of contingent consideration |
|
|
11,641 |
|
|
|
(6,596 |
) |
|
|
5,045 |
|
|
Change in deferred taxes |
|
|
(426 |
) |
|
|
(39 |
) |
|
|
(465 |
) |
There was no impact on cash flows from investing or financing activities.
The Company also evaluated the aggregate effects of the errors to its previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the errors were not material to the previously issued financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 or for any quarterly periods included therein.
The following tables reflect the impact of the revision to the specific line items presented in the Company’s previously reported consolidated financial statements as of and for the year-ended December 31, 2021 (in thousands, except per share amounts):
Consolidated Balance Sheet
|
|
|
As of December 31, 2021 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Adjusted |
|
|||
|
Intangible assets, net |
|
$ |
88,247 |
|
|
$ |
5,625 |
|
|
$ |
93,872 |
|
|
Goodwill |
|
|
34,058 |
|
|
|
7,970 |
|
|
$ |
42,028 |
|
|
Total assets |
|
|
504,752 |
|
|
|
13,595 |
|
|
|
518,347 |
|
|
Contingent consideration, current |
|
|
19,988 |
|
|
|
65 |
|
|
|
20,053 |
|
|
Total current liabilities |
|
|
191,276 |
|
|
|
65 |
|
|
|
191,341 |
|
|
Contingent consideration, non-current |
|
|
24,737 |
|
|
|
6,796 |
|
|
|
31,533 |
|
|
Other non-current liabilities |
|
|
13,078 |
|
|
|
813 |
|
|
|
13,891 |
|
|
Total liabilities |
|
|
424,173 |
|
|
|
7,674 |
|
|
|
431,847 |
|
|
Accumulated deficit |
|
|
(350,958 |
) |
|
|
5,921 |
|
|
|
(345,037 |
) |
|
Total stockholders' equity |
|
|
80,579 |
|
|
|
5,921 |
|
|
|
86,500 |
|
|
Total liabilities and stockholders' equity |
|
|
504,752 |
|
|
|
13,595 |
|
|
|
518,347 |
|
Consolidated Statement of Operations and Comprehensive Loss
|
|
|
Year Ended |
|
|||||||||
|
|
|
December 31, 2021 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Adjusted |
|
|||
|
General and administrative |
|
$ |
97,918 |
|
|
$ |
(6,251 |
) |
|
$ |
91,667 |
|
|
Amortization |
|
|
8,497 |
|
|
|
375 |
|
|
|
8,872 |
|
|
Total operating expenses |
|
|
182,554 |
|
|
|
(5,876 |
) |
|
|
176,678 |
|
|
Loss from operations |
|
|
(67,249 |
) |
|
|
5,876 |
|
|
|
(61,373 |
) |
|
Loss before provision for income taxes |
|
|
(67,849 |
) |
|
|
5,876 |
|
|
|
(61,973 |
) |
|
Provision for income taxes |
|
|
2,744 |
|
|
|
(45 |
) |
|
|
2,699 |
|
|
Net loss |
|
|
(70,593 |
) |
|
|
5,921 |
|
|
|
(64,672 |
) |
|
Basic and diluted net loss per share |
|
|
(2.12 |
) |
|
|
0.18 |
|
|
|
(1.94 |
) |
|
Total comprehensive loss |
|
|
(70,763 |
) |
|
|
5,921 |
|
|
|
(64,842 |
) |
Consolidated Statement of Stockholders’ Equity
|
|
|
Accumulated Deficit |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Adjusted |
|
|||
|
Net loss |
|
$ |
(70,593 |
) |
|
$ |
5,921 |
|
|
$ |
(64,672 |
) |
|
Balance as of December 31, 2021 |
|
|
(350,958 |
) |
|
|
5,921 |
|
|
|
(345,037 |
) |
|
|
|
Total Stockholders' Equity |
|
|||||||||
|
Net loss |
|
|
(70,593 |
) |
|
|
5,921 |
|
|
|
(64,672 |
) |
|
Balance as of December 31, 2022 |
|
|
80,579 |
|
|
|
5,921 |
|
|
|
86,500 |
|
Consolidated Statement of Cash Flows (unaudited)
|
|
|
Year Ended |
|
|||||||||
|
|
|
December 31, 2021 |
|
|||||||||
|
|
|
As Reported |
|
|
Adjustment |
|
|
As Adjusted |
|
|||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(70,593 |
) |
|
$ |
5,921 |
|
|
$ |
(64,672 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,035 |
|
|
|
375 |
|
|
|
9,410 |
|
|
Change in fair value of contingent consideration |
|
|
18,325 |
|
|
|
(6,251 |
) |
|
|
12,074 |
|
|
Change in deferred taxes |
|
|
— |
|
|
|
(45 |
) |
|
|
(45 |
) |
There was no impact on cash flows from investing or financing activities.