Item
1.01 Entry into a Material Definitive Agreement.
On
February 25, 2020, Verb Technology Company, Inc., a Nevada corporation (“we,” “our,” or the “Company”),
had an initial closing (our “Initial Closing”) of a private placement (our “Private Placement”) of our
common stock, par value $0.0001 per share (our “Common Stock”). On February 5, 2020, we initiated our Private Placement,
which is for the sale and issuance of up to five million shares of our Common Stock at a per-share price of $1.20 (represents
a 20% discount to the $1.50 closing price of our Common Stock on that day), and is memorialized by a Subscription Agreement. The
Common Stock that we sold and issued in our Initial Closing (and that we may thereafter sell and issue in further closings through
March 31, 2020, as to the possibility or probability of any such further closings, we cannot provide any assurance) constitutes
privately placed restricted securities solely to accredited investors. We have not granted any warrants or options to the investors
in our Private Placement. Further, we have not provided any registration rights, anti-dilution rights, conversion rights, or any
other rights or preferences to the investors in our Private Placement. As of our Initial Closing, we sold and issued 1,610,833
shares of our Common Stock for gross proceeds of $1,933,000. As of the date of this Current Report on Form 8-K, for our Private
Placement, we have received executed Subscription Agreements from an aggregate of 19 additional accredited investors that, if
funded in full, would result in the sale and issuance of an aggregate of 1,195,000 additional shares of our Common Stock for additional
gross proceeds of $1,434,000. Accordingly, we currently anticipate that we may have further closings of our Private Placement
through and including March 31, 2020, although, as noted above, we cannot provide any assurances of the possibility or probability
of any further closings or the sale and issuance of any additional shares of Our Common Stock in our Private Placement. We intend
to use the net proceeds from our Private Placement for general corporate purposes.
Our
Private Placement is exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “1933
Act”), in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated
by the Securities and Exchange Commission (the “Commission”). Our Private Placement was managed by the Company;
however, in connection with our Initial Closing, we paid a non-U.S. based consultant (i) as a cash fee, an aggregate
of $190,800 (or 10% of the gross proceeds of our Initial Closing), (ii) as a non-accountable expense allowance, an aggregate
of $38,160 (or 2% of the gross proceeds of our Initial Closing), and (iii) five-year warrants, exercisable
for an aggregate of up to 159,000 shares of our Common stock at a cash-only exercise price of $1.92 per share. We made
the above-referenced payments only in respect of that portion of the gross proceeds from our Initial Closing for investors that
were referred to us by the consultant.
We
disclosed in our Quarterly Report on Form 10-Q for our fiscal quarter ended June 30, 2019, that, on
August 14, 2019, pursuant to a Securities Purchase Agreement, we privately sold and issued 5,030 shares of our Series A Convertible
Preferred Stock (our “Preferred Stock”) and granted certain common stock purchase warrants (our “August 2019
Warrants”) to a limited number of accredited investors (our “August 2019 Investors”). In connection with our
Private Placement, all of our August 2019 Investors, who, as of February 7, 2020, continued to own shares of our Preferred Stock
(i) waived their respective rights (the “February 2020 Waiver”) to participate in our Private Placement and (ii) declined
to accept the price protection rights to which they otherwise were entitled as holders of shares of our Preferred Stock. In connection
with the February 2020 Waiver, we granted to each of our August 2019 Investors a five-year common stock purchase warrant (our
“February 2020 Warrants”), the terms of which are substantially similar to the terms of our August 2019 Warrants,
with the sole material differences being the grant date and the $1.55 per-share exercise price. The initial per-share exercise
price of our August 2019 Warrants was $1.88 and, by virtue of our Private Placement, the per-share exercise price has been modified
to $1.20.
Filed
herewith to our Current Report on Form 8-K, as Exhibit 4.38 is the form of our February 2020 Warrants (granted by us in February
2020 and, potentially, March 2020); as Exhibit 10.58 is the form of our February 2020 Waiver; as Exhibit 10.58a is the form of
our alternative February 2020 Waiver; and as Exhibit 10.59 is the form of Subscription Agreement (February and March 2020) entered
into by the Private Placement investors and us.
The
foregoing descriptions of the material terms of our February 2020 Warrants, our February 2020 Waiver, our alternative February
2020 Waiver, and our Subscription Agreement are not complete and each is qualified in its entirety by reference to the full texts
thereof, as referenced above and as incorporated herein by reference.