8-K: Veritone Announces At-the-Market Equity Offering of up to $35 Million

Veritone, Inc. has entered into a sales agreement to potentially offer and sell up to $35 million of its common stock through an at-the-market equity offering.

Summary

• Veritone, Inc. has established an at-the-market (ATM) equity offering program.
• The company may offer and sell shares of its common stock through sales agents, Needham & Company, LLC and H.C. Wainwright & Co., LLC.
• The aggregate offering price of shares sold under this agreement could reach up to $35.0 million.
• Sales will be made at the company's discretion and through methods permitted for at-the-market offerings, including direct sales on the Nasdaq Global Market.
• The sales agents will receive compensation of up to 3.0% of the gross sales price of the shares sold, plus reimbursement for certain expenses.
• The company is not obligated to sell any shares under this agreement.
• The offering can be terminated by either party with ten days' notice or by mutual agreement.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the offering could dilute existing shareholders, it provides the company with financial flexibility. The terms are standard for this type of offering.

Positives

• The at-the-market offering provides Veritone with a flexible way to raise capital.
• The company has the option to sell shares as needed, rather than being obligated to a fixed amount.
• The sales agreement allows for sales directly on the Nasdaq Global Market, potentially reaching a broad investor base.
• The company has an existing registration statement in place, which streamlines the process.

Negatives

• The offering could dilute existing shareholders' ownership.
• The company will incur expenses related to the offering, including sales agent commissions and reimbursements.
• There is no guarantee that the company will be able to sell all $35 million of shares.
• The company's stock price could be negatively impacted by the announcement of the offering.

Risks

• The company's stock price could be negatively impacted by the potential increase in the number of shares available.
• The company may not be able to sell all of the shares at the desired price.
• The company's financial performance could be affected by the costs associated with the offering.
• The company's ability to raise capital through this method is dependent on market conditions.

Future Outlook

The company may offer and sell shares of its common stock from time to time at its option, with the potential to raise up to $35 million. The timing and amount of sales will depend on market conditions and the company's needs.

Industry Context

At-the-market offerings are a common method for publicly traded companies to raise capital, providing flexibility and potentially minimizing market disruption compared to traditional underwritten offerings. This approach allows companies to take advantage of favorable market conditions and raise funds as needed.

Comparison to Industry Standards

• Many companies, particularly in the technology sector, use at-the-market offerings to raise capital.
• The 3% commission is within the typical range for such offerings.
• The $35 million offering size is relatively modest, suggesting a targeted approach to capital raising.
• Comparable companies that have used ATM offerings include those with similar market capitalizations and growth profiles.

Stakeholder Impact

• Shareholders may experience dilution of their ownership.
• The company will have access to additional capital for operations or growth.
• The sales agents will earn commissions from the sales.
• The market will react to the announcement of the offering.

Next Steps

• Veritone will decide when and how many shares to sell under the agreement.
• The sales agents will attempt to sell the shares in the market.
• The company will monitor market conditions and its capital needs.
• The company will file required prospectus supplements with the SEC.

Key Dates

Keywords

at-the-market offering, equity offering, common stock, capital raise, sales agreement, Needham & Company, H.C. Wainwright, VERI, Nasdaq