Veritone, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Summary of Significant Accounting Policies (Tables)

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2017

Net revenues for the three- and nine-month periods presented were comprised of the following:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Media agency revenues	$	3,288	$	2,223	$	9,926	$	6,197
AI platform revenues		431		98		988		211

Total net revenues	$	3,719	$	2,321	$	10,914	$	6,408

Schedule of Other Income (Expense), Net

Other income (expense), net for the three- and nine-month periods presented were comprised of the following:


	Three Months Ended September 30,					Nine Months Ended September 30,
	2017		2016			2017			2016
Interest income (expense), net	$	36	$	(1,346	)	$	(4,198	)	$	(1,341	)
Stock warrants issued		—		—			(5,790	)		—
Write-off of deferred debt discounts and issuance costs		—		—			(10,132	)		—
Write-off of legal fees in connection with the Primary Warrant		—		(253	)		—			(253	)
Gain on fair value change of warrant liability		—		117			7,114			117
Other		52		26			134			(6	)

Other income (expense), net	$	88	$	(1,456	)	$	(12,872	)	$	(1,483	)

Computation of Basic and Diluted Net Loss Per Common Share

The following table presents the computation of basic and diluted net loss per common share for the periods presented:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Net loss per share:
Numerator
Net loss	$	(19,369	)	$	(7,427	)	$	(46,811	)	$	(17,915	)
Accretion of redeemable convertible preferred stock		—			(795	)		(4,470	)		(2,383	)

Net loss attributable to common stockholders	$	(19,369	)	$	(8,222	)	$	(51,281	)	$	(20,298	)

Denominator
Weighted-average common shares outstanding		14,936,809			2,480,524			8,820,609			2,068,164
Less: Weighted-average shares subject to repurchase		(153,443	)		(125,412	)		(180,431	)		(110,568	)

Denominator for basic and diluted net loss per share attributable to common stockholders		14,783,366			2,355,112			8,640,178			1,957,596

Basic and diluted net loss per share attributable to common stockholders	$	(1.31	)	$	(3.49	)	$	(5.94	)	$	(10.37	)

Effect of Anti-dilutive Securities

Other potentially dilutive securities that were not included in the calculation of diluted net loss per share attributable to common stockholders because their effect would be anti-dilutive are as follows (in weighted-average common

equivalent shares):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Common stock options		4,432,611		687,258		2,636,548		660,762
Warrants to purchase common stock		1,524,579		1,348,308		987,200		1,185,214
Shares issuable upon conversion of convertible to note payable		—		736,076		—		736,076
Shares issuable upon conversion of redeemable convertible preferred stock		—		4,921,382		—		4,830,323

Total		5,957,190		7,693,024		3,623,748		7,412,375

Schedule of Cash and Available-For-Sale Securities' Cost, Gross Unrealized Losses and Fair Value by Significant Investment Category

The following table shows the Company’s cash and available-for-sale securities’ cost, gross unrealized losses and fair value by significant investment category recorded as cash and cash equivalents or marketable securities as of September 30, 2017:


	Cost		Gross Unrealized Losses			Fair Value		Cash and Cash Equivalents		Marketable Securities
Cash	$	13,711	$	—		$	13,711	$	13,711	$	—
Level 1:
Money market funds		3,057		—			3,057		3,057		—
Level 2:
Corporate securities		43,726		(62	)		43,664		3,994		39,670

Total	$	60,494	$	(62	)	$	60,432	$	20,762	$	39,670

Summary of Quantitative Information with Respect to Significant Unobservable Inputs

The following table summarizes quantitative information with respect to the significant unobservable inputs used for the Company’s stock warrants that are categorized as Level 3 within the fair value hierarchy:


	December 31, 2016
Volatility		80.0	%
Risk free rate		1.84	%
Discount for lack of marketability		20.0	%

The following table summarizes quantitative information with respect to the significant unobservable inputs used to value the Company’s 10% Warrant that are categorized as Level 3 within the fair value hierarchy:


	May 17, 2017
Volatility		70.0	%
Risk free rate		1.44	%
Discount for lack of marketability		0	%

Reconciliation of Level 3 Measurement of Company's Primary Warrant

The following table represents a reconciliation of the Level 3 measurement of the Company’s Primary Warrant (see related discussion in Note 3):


Balance, December 31, 2016	$	7,114
Less: Change in fair value of warrant liability		(7,114	)

Balance, September 30, 2017	$	—