8-K: Verb Technology to Acquire AI Social Selling Startup Lyvecom, Positioning MARKET.live as an Industry Leader

Verb Technology Company, Inc. announces a binding term sheet to acquire LyveCom, an AI-driven video commerce platform, to enhance MARKET.live.

Summary

• Verb Technology Company, Inc. has entered into a binding term sheet to acquire LyveCom, an AI-driven video commerce platform.
• The purchase price includes $3 million in cash, $1.125 million for repayment of Lyvecom's SAFE instruments, $100,000 to satisfy an existing loan, and $1 million in VERB common stock, capped at 19.9% of VERB's outstanding shares.
• An earn-out payment of up to $3 million in cash is possible over a 24-month period based on performance metrics.
• The acquisition is expected to close within 60 days, pending completion of Lyvecom's audit.
• Maxwell Drut, Co-Founder and CEO of LyveCom, will become Chief Technology Officer at MARKET.live with an annual base salary of $250,000 and a 25% bonus target.
• The integration of Lyvecom's technology aims to provide an omnichannel livestream shopping experience, leveraging AI-powered video content automation and personalized shopping experiences.
• The new MARKET.live platform will offer features like one-click simulcasting, AI-driven video commerce, frictionless merchant integration, new strategic partnerships, and real-time data & analytics.
• The global social commerce industry is projected to surpass $1.29 trillion by 2028 with a CAGR of 13.7%.

Sentiment

Score: 8

Explanation: The document conveys a positive sentiment due to the strategic acquisition, potential for growth, and innovative features of the enhanced platform. The management's optimistic statements and the projected growth of the social commerce industry further contribute to the positive outlook.

Positives

• The acquisition of LyveCom is expected to enhance VERB's MARKET.live platform with advanced AI capabilities.
• The integration aims to provide an omnichannel livestream shopping experience, increasing brand exposure and sales potential.
• The new MARKET.live platform will offer features like one-click simulcasting, AI-driven video commerce, frictionless merchant integration, new strategic partnerships, and real-time data & analytics.
• Maxwell Drut's appointment as Chief Technology Officer is expected to bring valuable expertise to MARKET.live.
• The acquisition positions VERB to capitalize on the rapidly growing social commerce industry, projected to reach $1.29 trillion by 2028.

Negatives

• The transaction is subject to closing conditions, including the completion of Lyvecom's audit, which could potentially delay or prevent the acquisition.
• The issuance of VERB common stock is capped at 19.9% of outstanding shares, which may require a cash payment to cover any shortfall in the $1 million equity consideration.
• The earn-out payment is contingent on achieving specific performance metrics, which may not be met.
• The integration of LyveCom's technology and the launch of the new MARKET.live platform may face unforeseen challenges.

Risks

• The acquisition is subject to closing conditions, including the completion of Lyvecom's audit, which could potentially delay or prevent the acquisition.
• The integration of LyveCom's technology and the launch of the new MARKET.live platform may face unforeseen challenges.
• The earn-out payment is contingent on achieving specific performance metrics, which may not be met.
• The company's reliance on AI-driven solutions may expose it to risks related to technological advancements and competition.
• The company's ability to onboard an extensive list of clients, including top agency partners and direct-to-consumer brands, may be affected by market conditions and competition.

Future Outlook

The acquisition is expected to close within the next 60 days, and the integration of Lyvecom's technology is expected to enhance MARKET.live's capabilities and market position. The company anticipates explosive growth and recurring revenue expansion.

Management Comments

• Maxwell Drut stated that the combination of LyveCom's technology with VERB's market reach will create one of the most advanced, omnichannel video shopping ecosystems in the U.S.
• Rory J. Cutaia stated that the acquisition underscores VERB's commitment to innovation and shaping the future of social commerce.

Industry Context

The acquisition reflects the growing trend of integrating AI and video commerce in the e-commerce industry. The global social commerce industry is experiencing rapid growth, with projections indicating a market size of $1.29 trillion by 2028.

Comparison to Industry Standards

• MARKET.live aims to differentiate itself from closed marketplaces like Amazon Live and TikTok Shop by offering brands full control over their audience, content, and conversions.
• The platform's focus on AI-driven solutions and omnichannel capabilities aligns with the industry's shift towards personalized and interactive shopping experiences.
• The company's strategic partnerships with Tapcart, Shopify Shop App, Klaviyo, and Recharge aim to expand its footprint into mobile commerce and high-growth DTC brands, similar to how Shopify has expanded its reach through partnerships and integrations.

Management Changes

Stakeholder Impact

• Shareholders: Potential for increased revenue and market share.
• Employees: Integration of teams and potential for career growth.
• Customers: Enhanced shopping experience and access to new features.
• Suppliers: Potential for increased business opportunities.
• Merchants: Access to AI-powered video commerce solutions and expanded reach.

Next Steps

• Complete Lyvecom's audit.
• Finalize and execute definitive agreements.
• Close the acquisition within the next 60 days.
• Integrate Lyvecom's technology into MARKET.live.
• Launch the new MARKET.live platform.
• Onboard an additional extensive list of clients, including top agency partners and direct-to-consumer brands.
• Launch next generation social commerce capabilities, including AI Avatar Live Shopping Hosts.

Key Dates