Item
1.01. Entry into a Material Definitive Agreement.
Common
Stock Purchase Agreement
On
January 12, 2022, Verb Technology Company, Inc., a Nevada corporation (the “Company”), entered into a common stock purchase
agreement (the “Common Stock Purchase Agreement”) with Tumim Stone Capital LLC (the “Investor”). Pursuant to
the agreement, the Company has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase,
up to $50,000,000 of newly issued shares (the “Total Commitment”) of the Company’s common stock, par value $0.0001
per share (the “Common Stock”) from time to time during the term of the agreement (the “Equity Offering”), subject
to certain limitations and conditions. The Total Commitment is inclusive of 607,287 shares of Common Stock, valued at $750,000 at the
time of issuance (the “Commitment Shares”), issued to the Investor as consideration for its commitment to purchase shares
of Common Stock under the Common Stock Purchase Agreement.
The
Common Stock Purchase Agreement initially precludes the Company from issuing and selling more than 14,747,065 shares of its Common Stock,
including the Commitment Shares, which number of shares equals 19.99% of the Common Stock issued and outstanding immediately prior to
the execution of the agreement, unless the Company obtains stockholder approval to issue additional shares, or unless certain exceptions
apply. In addition, a beneficial ownership limitation in the agreement initially limits the Company from directing the Investor to purchase
shares of Common Stock if such purchases would result in the Investor beneficially owning more than 4.99% of the then outstanding shares
of Common Stock (subject to an increase to 9.99% at the Investor’s option upon at least 61 calendar days’ notice).
From
and after the initial satisfaction of the conditions to the Company’s right to commence sales of Common Stock to the Investor (such
event, the “Commencement,” and the date of initial satisfaction of all such conditions, the “Commencement Date”),
the Company may direct the Investor to purchase shares of Common Stock at a purchase price per share equal to 94% of the lowest daily
dollar volume-weighted average price for the Common Stock during the three consecutive trading day period immediately following the date
on which the Company delivers to the Investor a notice for such purchase. The Company will control the timing and amount of any such sales
of Common Stock to the Investor. Actual sales of shares of Common Stock to the Investor will depend on a variety of factors to be determined
by the Company from time to time, including, among other things, market conditions, the trading price of the common stock, and determinations
by the Company as to the appropriate sources of funding for the Company and its operations.
The
Commencement Date of the Equity Offering was January 12, 2022. Unless earlier terminated, the Common Stock Purchase Agreement will automatically
terminate upon the earliest of (i) the expiration of the 36-month period following the Commencement Date, (ii) the Investor’s purchase
or receipt of the Total Commitment worth of common stock, or (iii) the occurrence of certain other events set forth in the agreement.
The Company has the right to terminate the agreement at any time after Commencement, at no cost or penalty, upon five trading days’
prior written notice to the Investor. The Investor has the right to terminate the agreement upon five trading days’ prior written
notice to us, but only upon the occurrence of certain events set forth in the agreement.
The
Company intends to use the net proceeds, if any, from the Equity Offering for working capital and general corporate purposes, including
the promotion, marketing, and expansion of the Company’s MARKET platform. The Common Stock Purchase Agreement contains customary
representations, warranties and agreements by the Company, as well as customary indemnification obligations of the Company.
The
Common Stock Purchase Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The description of the terms of the Common Stock Purchase Agreement set forth above is qualified in its entirety by reference to such
exhibits.
Securities
Purchase Agreement, Convertible Notes, and Security Agreement
On
January 12, 2022, the Company also entered into a securities purchase agreement (the “Securities Purchase Agreement”) with three institutional investors (collectively, the “Note Holders”) providing for the sale and issuance of an
aggregate original principal amount of $6,300,000 in convertible notes due 2023 (each, a “Note,” and, collectively, the “Notes,”
and such financing, the “Note Offering”). The Company and the Note Holders also entered into a security agreement, dated
January 12, 2022 (“Security Agreement”), in connection with the Note Offering, pursuant to which the Company granted a security
interest to the Note Holders in substantially all of its assets.
The
Company received $6,000,000 in gross proceeds from the sale of the Notes (the “Note Proceeds”). The Note Offering closed on January 12, 2022. The Notes
bear interest of 6.0% per annum, have an original issue discount of 5.0%, mature 12 months from the closing date, and have an
initial conversion price of $3.00, subject to adjustment in certain circumstances as set forth in the Note.
Alliance
Global Partners (“AGP”) acted as the placement agent in connection with the Note Offering. The Company will pay to AGP a
cash placement fee equal to 5.5% of the Note Proceeds. The Company intends to use the Note Proceeds, less placement agent fees and
other expenses incurred in connection with the offering, for working capital and general corporate purposes, including the
promotion, marketing, and expansion of the Company’s MARKET platform.
The Securities Purchase Agreement contains customary
representations, warranties and agreements by the Company, customary representations and warranties of the Note Holders, customary
conditions to closing, and customary indemnification obligations of the Company.
The
Securities Purchase Agreement, the form of the Note, and the Security Agreement are filed as Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4,
respectively, to this Current Report on Form 8-K and are incorporated herein by reference. The descriptions of the terms of the Securities
Purchase Agreement, Note, and Security Agreement set forth above are qualified in their entirety by reference to such exhibits.
The
Equity Offering and the Note Offering are not conditioned upon or related to one another.
Registration
of Securities
The
securities in the Equity Offering and the Note Offering are being offered pursuant to an effective shelf registration statement on Form
S-3 (File No. 333-252167), which was filed by the Company with the Securities and Exchange Commission (“SEC”) on January 15,
2021 and declared effective on January 22, 2021, as amended by that certain registration statement on Form S-3 (File No. 333-262132),
which was filed by the Company on January 12, 2022 and declared immediately effective pursuant to Rule 462(b) under the Securities Act
of 1933, as amended (the “Securities Act”) (as amended, the “Registration Statement”). These offerings will be
made only by means of a prospectus supplement and the accompanying base prospectus that form part of the Registration Statement. A prospectus
supplement relating to the offerings will be filed with the SEC pursuant to Rule 424(b) under the Securities Act.
In
connection with these offerings, the legal opinion letter of Stradling Yocca Carlson & Rauth, P.C., counsel to the Company, regarding
the validity of (i) the shares of Common Stock to be issued from time to time in connection with the Equity Offering, (ii) the Notes,
and (iii) the shares of Common Stock issuable from time to time upon conversion of the Notes, is filed as Exhibit 5.1 to this Current
Report on Form 8-K. The legal opinion letter is also filed with reference to, and is hereby incorporated by reference into, the Registration
Statement.