Veritone, Inc.VERI
Veritone, Inc. Debt Disclosure
Debt
Convertible Senior Notes
In November 2021, the Company issued $201,250 aggregate principal amount of 1.75% convertible senior notes in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The issuance included the full exercise of an option granted by the Company to the initial purchasers of the Convertible Notes to purchase an additional $26,250 aggregate principal amount of Convertible Notes. The Convertible Notes are senior, unsecured obligations of the Company and rank senior in right of payment to all of the Company’s indebtedness that is expressly subordinated in right of payment to the Convertible Notes; equal in right of payment with all existing and future liabilities of the Company that are not so subordinated; effectively junior to any of secured indebtedness of the Company to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) and any preferred equity of the Company’s current or future subsidiaries. The Convertible Notes bear interest at a rate of 1.75% per year payable semi-annually in arrears on May 15 and November 15 of each year, beginning on May 15, 2022. The Convertible Notes will mature on November 15, 2026, unless earlier converted, redeemed, or repurchased in accordance with the terms of the Convertible Notes.
Holders of the Convertible Notes may convert all or any portion of their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding May 15, 2026, only under the following conditions: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2022 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business days period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the Convertible Notes on each such trading day; (3) if the Company calls such Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the applicable redemption date; or (4) upon the occurrence of specified corporate events. On or after May 15, 2026, holders may convert all or any portion of their Convertible Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.
The conversion rate for the Convertible Notes initially is 27.2068 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $36.76 per share of common stock). The conversion rate is subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date or following the Company’s issuance of a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its Convertible Notes in connection with such a corporate event or who elects to convert its Convertible Notes called (or deemed called) for redemption during the related redemption period, as the case may be.
The Company may not redeem the Convertible Notes prior to November 20, 2024. The Company may redeem for cash all or any portion of the Convertible Notes (subject to certain limitations), at its option, on or after November 20, 2024 if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the Convertible Notes.
If the Company undergoes a fundamental change prior to the maturity date, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes. The fundamental change repurchase price will be equal to 100% of the principal amount of the Convertible Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The total debt issuance costs incurred and recorded by the Company amounted to $6,304, which were recorded as a reduction to the face amount of the Convertible Notes and are being amortized to interest expense using the effective interest method over the contractual term of the Convertible Notes. The effective interest rate on the Convertible Notes is approximately 2.42% per annum.
In December 2022, the Company repurchased $60,000 of its Convertible Notes from a limited number of holders in privately negotiated transactions for an aggregate purchase price of $39,029. For accounting purposes, pursuant to FASB ASC Topic 470, Debt (“ASC 470”), these transactions were accounted for as an extinguishment of the Convertible Notes. The Company recognized a gain on extinguishment of $19,097 as a result, which was recorded in (gain) loss on extinguishment of debt within the Company’s consolidated statement of income during the fourth quarter of 2022.
In December 2023, the Company repurchased $50,000 of its Convertible Notes from a limited number of holders in privately negotiated transactions for an aggregate purchase price of $37,500. For accounting purposes, pursuant to ASC 470, these transactions were accounted for as an extinguishment of the Convertible Notes. The Company recognized a gain on extinguishment of $30,023 as a result, which was recorded in (gain) loss on extinguishment of debt within the Company’s consolidated statement of income during the fourth quarter of 2023.
In November 2025, the Company repurchased $45,670 of its Convertible Notes from a limited number of holders in privately negotiated transactions for an aggregate purchase consideration of $39,049, in cash which included $393 of accrued interest, plus 625,000 shares of common stock with a fair value of $3,162. As the Company was experiencing financial difficulties and the debt holders granted a concession, these transactions were accounted for under the TDR guidance. As the future undiscounted cash flows were less than the carrying amount of the debt, the Company recognized a gain of $1,448. The Company paid third party fees of $2,100 in connection with the transaction, which reduced the gain recorded. The gain on TDR reduced basic and diluted loss per share by $0.02 per share during the year ended December 31, 2025.
As of December 31, 2025, the outstanding principal on the Convertible Notes was $45,580, the unamortized debt issuance costs were $263, and the carrying amount was $45,317 which was recorded to Convertible Notes, current portion within the Company’s consolidated balance sheet. As of December 31, 2024, the outstanding principal on the Convertible Notes was $91,250, the unamortized debt issuance costs were $1,115, and the carrying amount was $90,135, which was recorded to Convertible Notes, within the Company’s consolidated balance sheet. The fair value of the Convertible Notes was approximately $42,890 and $39,373 as of December 31, 2025 and 2024, respectively, and was determined by utilizing over-the-counter market quotes, which are considered Level 2 inputs as defined in Note 7, Fair Value Measurements.
During the years ended December 31, 2025 and 2024, the Company recognized $2,038 and $2,171, respectively, of interest expense relating to the Convertible Notes, which included $549 and $574, respectively, relating to non-cash interest expense relating to amortization of debt issuance costs.
In connection with the 2022 pricing of the Convertible Notes, with the full exercise by the initial purchasers of their option to purchase additional Convertible Notes in November 2021, the Company paid approximately $18,616 to enter into capped call transactions with respect to its common shares (the “Capped Call Transactions”) with various financial institutions. Subsequently, in conjunction with the repurchases of portions of the Convertible Notes, during December 2022, December 2023, and November 2025, the Company entered into agreements with the option counterparties to the Capped Call Transactions to terminate a portion of such existing transactions. See Note 11, Stockholders’ Equity, for additional discussion on the Capped Call Transactions entered into in conjunction with the issuance of these Convertible Notes.
Senior Secured Term Loan
On December 13, 2023, the Company entered into a $77,500 Term Loan with a syndicate of financial institutions as lenders (the “Lenders”). The Term Loan was set to mature upon the earlier of: (1) December 13, 2027; or (2) August 14, 2026 if the outstanding principal on the Convertible Notes exceeded $30,000 as of that date. All indebtedness outstanding under the Term Loan was guaranteed by each of the Company’s direct and indirect material subsidiaries and secured by the equity interests and substantially all of the assets of the Company and its direct and indirect material subsidiaries. The initial discount on the Term Loan of $23,807 along with the capitalized issuance costs of $3,120 began to be amortized to interest expense over the term of the loan using the effective interest method.
During its term, the Term Loan bore interest at a rate of Term SOFR plus 8.50% per annum, with a 3.00% floor for Term SOFR. Interest was due at least quarterly on amounts outstanding under the Term Loan. The Term Loan was payable in consecutive quarterly installments, which began in June 2024, with the outstanding balance of the Term Loan payable on the scheduled maturity date. In addition, the Term Loan, as amended, required mandatory prepayments from the net cash proceeds received for, among other things, (i) certain asset sales as described above, and (ii) insurance recoveries on loss of property that were not otherwise reinvested in other assets of the Credit Parties at a 10% prepayment premium. The Company had the option to elect to prepay the Term Loan, in whole or in part, in cash, subject to a make-whole premium during the first year of the Term Loan, a 14.0% prepayment premium during the second year of the Term Loan, and a 7.0% premium during the third year of the Term Loan.
The Term Loan has certain customary default provisions, representations and warranties and affirmative and negative covenants.
In October 2024, and in conjunction with the Divestiture, the Company, as required by the terms of the Credit Agreement, used net proceeds from the sale to pay down $30,512 in principal and $3,051 in prepayment premiums and $252 in accrued interest on the Term Loan, as of December 31, 2024, after giving effect to such repayment, $41,176 aggregate principal amount remained outstanding under the Term Loan. During the year ended December 31, 2024, $17,234 was recognized in interest expense which is presented in net income from discontinued operations. This amount included $1,762 in amortization of initial discounts and issuance costs, write off of $9,161 of the unamortized debt discount and issuance costs at the time of the partial repayment of the Term Loan in October 2024, and the prepayment penalty of $3,051, and is included in net income from discontinued operations.
Interest expense was allocated to discontinued operations using the proportion of the principal repayment required to be made as a result of the Divestiture over the total Term Loan principal outstanding at the Divestiture Closing Date. Interest on debt that was required to be repaid as a result of a disposal was allocated to discontinued operations, as was the case under the Credit Agreement. As a result, the Company allocated interest expense and amortization of discounts and issuance costs relating to repayment of the Term Loan, as required by the Divestiture, to discontinued operations. For the year ended December 31, 2024, the Company allocated $17,234 of interest expense, including amortization of initial discounts and issuance costs, to discontinued operations as a result of the Divestiture.
On March 13, 2025, the Company entered into a Limited Consent (the “Limited Consent”) to the Credit Agreement, with the lenders and administrative agent party thereto. Pursuant to the Limited Consent, the lenders consented to the delivery by the Company of the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2024 and a report of the Company’s independent certified public accountants relating thereto that do not meet certain requirements of the Credit Agreement requiring, among other things, delivery of audited consolidated financial statements and a report thereon of the Company’s independent certified public accountants that are unqualified as to going concern. As consideration for the Limited Consent, the Company paid an aggregate of $1,000 in cash to the lenders party to the Limited Consent.
On April 24, 2025, the Company entered into a First Amendment to Credit and Guaranty Agreement (the “First Amendment”). The First Amendment provided that (a) the minimum Consolidated Liquidity (as defined in the Credit Agreement) covenant was reduced from $15,000 to $10,000 for the period of time beginning on April 24, 2025 and extending through June 16, 2025, and (b) the mandatory prepayment covenant under the Credit Agreement with respect to asset sales was amended to (i) require that 100% of the Net Asset Sale Proceeds (as defined in the Credit Agreement) be used to repay the obligations under the Credit Agreement (increased from 60% of the Net Asset Sale Proceeds prior to the First Amendment), and (ii) clarify the requirement that the Company use all future proceeds that it received in connection with the previously closed sale of its formerly wholly-owned subsidiary, Veritone One, including any earn-out payments and releases of previously escrowed amounts, to repay obligations under the Credit Agreement. In connection with obtaining the requisite lenders’ consent to the First Amendment, the Company issued to the consenting lenders 228,311 shares of the Company’s common stock, representing a number of shares having an aggregate value equal to $500, based on a price per share of $2.19, which was the closing price per share of the Company’s common stock on The Nasdaq Global Market on April 23, 2025, the trading day immediately prior to the effective date of the First Amendment. For accounting purposes, pursuant to ASC 470”, this transaction was accounted for as a modification of the Credit Agreement. The $500 of costs were recorded on the Company’s consolidated balance sheet and were amortized using the effective-interest method.
On June 13, 2025, the Company entered into a Second Amendment to Credit and Guaranty Agreement (the “Second Amendment”). The Second Amendment provided that the minimum Consolidated Liquidity (as defined in the Credit Agreement) covenant was (i) reduced to $5,000 for the period of time beginning on June 13, 2025 and extending through June 30, 2025, (ii) increased to $10,000 for the period of time beginning on July 1, 2025 and extending through August 31, 2025 and (iii) increased to $15,000 beginning on September 1, 2025 and extending through maturity. In connection with obtaining the requisite lenders’ consent to the Second Amendment, the Company issued to the consenting lenders 253,744 shares of the Company’s common stock, representing a number of shares having an aggregate value equal to $373, based on a price per share of $1.47, which was the closing price per share of the Company’s common stock on The Nasdaq Global Market on June 12, 2025, the trading day immediately prior to the effective date of the Second Amendment. For accounting purposes, pursuant to ASC 470, this transaction was accounted for as a modification of the Credit Agreement. The $373 of costs were recorded on the Company’s consolidated balance sheet and were amortized over the life of the Credit Agreement using the effective-interest method until November 2025 when the Term Loan was repaid in full.
On June 30, 2025, the Company entered into a Third Amendment to Credit and Guaranty Agreement (the “Third Amendment”). The Third Amendment provided that Consolidated Liquidity (as defined in the Credit Agreement) (i) could not be less than $5,000 for the period of time beginning on June 13, 2025 and extending through August 31, 2025 and (ii) would be increased to $15,000 beginning on September 1, 2025 and extending through maturity. The Company did not pay a consent fee in connection with the Third Amendment.
On August 29, 2025, the Company entered into a Fourth Amendment to Credit and Guaranty Agreement (the “Fourth Amendment”). The Fourth Amendment provided that Consolidated Liquidity (as defined in the Credit Agreement) (i) could not be less than $5,000 for the period of time beginning on June 13, 2025 and extending through September 12, 2025 and (ii) would be increased to $15,000 beginning on September 13, 2025 and extending through maturity. The Company did not pay a consent fee in connection with the Fourth Amendment. Except as set forth in the Limited Consent, the First Amendment, the Second Amendment, the Third Amendment, and the Fourth Amendment, the terms of the Credit Agreement remained unchanged. As of December 31. 2024 and up to the date of repayment, the Company was in compliance with its debt covenants under the Term Loan, as amended.
On October 23, 2025, the Company, as required by the terms of the Term Loan, used net proceeds from the partial release of the Indemnity Escrow to pay down $3,562 in principal, $29 in accrued interest, and $356 in prepayment premiums on the Term Loan.
On November 12, 2025, the Company repaid in full all amounts outstanding under the Term Loan, or approximately $31,801, as well as $480 of accrued interest and $4,452 of prepayment premiums in accordance with the terms of the Term Loan. For accounting purposes, pursuant to ASC 470, this transaction was accounted for as an extinguishment of the Term Loan. The Company recognized a loss on extinguishment of $14,443 as a result, which is inclusive of third-party fees of $451 and was recorded in loss on debt extinguishment within the Company’s consolidated statement of operations and comprehensive loss during the fourth quarter of 2025.
During the year ended December 31, 2025, the Company repaid a total amount of $41,176 on amounts outstanding under the Term Loan. During the year ended December 31, 2024, the Company repaid a total amount of $36,324 on amounts outstanding under the Term Loan. As of December 31, 2025 and 2024, the amount outstanding under the Term Loan was $0 and $41,176, respectively.
During the year ended December 31, 2025, the Company recognized $7,915 of interest expense relating to the Term Loan, which included $3,908 relating to non-cash interest expense relating to the debt discount. For the year ended December 31, 2024, interest expense related to the Term Loan including amortization of initial discounts and issuance costs, was 10,528. The effective annual interest rate was approximately 34.2%.
In connection with the Term Loan, the Company issued warrants to the Lenders (the “Term Loan Warrants”) to purchase up to 3,008,540 shares of the Company’s common stock at an exercise price of $2.576 per share with a termination date of December 12, 2028. At the date of issuance, the Company classified the Warrants as equity and recognized them in additional paid-in capital within its consolidated balance sheet. As of December 31, 2025, there were 2,508,683 Warrants that remained unexercised and outstanding.
Capped Calls
In connection with the 2022 pricing of the Convertible Notes, with the full exercise by the initial purchasers of their option to purchase additional Convertible Notes in November 2021, the Company used approximately $18,616 of the net proceeds from the issuance of the Convertible Notes to enter into privately negotiated capped call transactions, which are referred to as the capped calls, with various financial institutions.
The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of shares of the Company’s common stock underlying the Convertible Notes. The capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon conversion of the Convertible Notes and/or offset some or all of any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that such market price exceeds the cap price of the capped call transactions. The initial cap price of the capped calls is $48.55 per share of common stock, which represents a premium of 75% over the last reported sale price of the Company’s common stock of $27.74 per share on November 16, 2021, and is subject to certain customary adjustments under the terms of the capped calls; provided that the cap price will not be reduced to an amount less than the strike price of $35.76 per share.
The capped call transactions are separate transactions and are not part of the terms of the Convertible Notes. The capped calls met the criteria for classification as equity and, as such, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within stockholders’ equity.
In connection with the 2025 repurchase of the Convertible Notes, the Company entered into transactions to unwind a portion of the capped calls. The Company did not receive any proceeds from the unwinding of the capped calls in 2025.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 15, 2026 | Showing above |
| 2024 | Apr 1, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | Mar 16, 2023 | |
| 2021 | Mar 17, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.