Veritone, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data and percentages)

1. Description of Business

Veritone, Inc., a Delaware corporation (“Veritone,” and together with its subsidiaries, collectively, the “Company”), is a provider of artificial intelligence (“AI”) computing solutions. The Company’s proprietary AI operating system, aiWARE™, uses machine learning algorithms, or AI models, together with a suite of powerful applications, to reveal valuable insights from vast amounts of structured and unstructured data. aiWARE serves as the foundation for the Company’s AI solutions and bespoke applications and offers access to hundreds of cognitive categories through one common software infrastructure. Highly modular and customizable, aiWARE enables expansive scale with the flexibility to deploy in the cloud, at the edge or in hybrid environments. The Company’s aiWARE platform offers capabilities that are designed to mimic human cognitive functions such as perception, prediction and problem solving, enabling users to quickly, efficiently and cost effectively transform unstructured data into structured data, and analyze and optimize data to drive business processes and insights. aiWARE is based on an open architecture that enables new AI models, applications and workflows to be added quickly and efficiently, resulting in a scalable and evolving solution that can be leveraged by organizations across a range of industries.

The Company offers Software Products & Services to Commercial Enterprise and Public Sector customers using the Company’s aiWARE platform and Veritone Hire solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions.

The Company also offers Managed Services, which include cloud-native digital content management solutions and content licensing services and representation services, through among other things, its VeriAds Network, which is comprised of programs that enable broadcasters, podcasters and social media influencers to generate incremental revenue. These offerings leverage the Company’s aiWARE technologies, providing customers with unique capabilities to enrich and drive expanded revenue opportunities from their content.

2. Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s (“SEC”) Regulation S-X. Accordingly, as permitted by Article 10 of Regulation S-X, it does not include all of the information required by generally accepted accounting principles in the U.S. (“U.S. GAAP”) for complete financial statements. The condensed consolidated balance sheet as of December 31, 2025 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP, as permitted by Article 10 of Regulation S-X. The Company’s unaudited condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 include Veritone, Inc. and all of its subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to state fairly the Company’s unaudited condensed consolidated financial statements as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 10-K”). Operating results for the three and six months ended June 30, 2026 and 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026.

Liquidity, Capital Resources, and Going Concern

These consolidated financial statements have been prepared in accordance with U.S. GAAP assuming the Company will continue as a going concern over the next twelve months from the issuance date of these condensed consolidated financial statements, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

As of June 30, 2026, the Company had cash and cash equivalents of approximately $12,424, working capital deficit of $53,058 and accounts receivable, net of $28,042, and the amount outstanding under our debt obligations was $45,467, net of unamortized discount cost, all of which related to the Company’s 1.75% convertible senior notes due 2026 (the “Convertible Notes”). Additionally, for the six months ended June 30, 2026, net loss was $41,668 and net cash used in operating activities was $22,126. The Company’s ability to continue as a going concern is dependent on its ability to generate significant cash flows, obtain sufficient proceeds from any future offerings of securities, and/or obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. The Company expects operating losses to continue in the foreseeable future as it continues to invest in growing its business. To alleviate these conditions, management is actively engaged in cost reduction activities and discussions to obtain alternative financing prior to the maturity of the Convertible Notes in November 2026. However, there can be no assurance that the Company will be able to obtain alternative financing as it is ultimately outside of the control of the Company.

In the near term, and to meet its obligations as they come due, the Company is evaluating additional strategies to obtain funding for future operations. These strategies may include, but are not limited to, obtaining equity financing; incurring debt; and/or further restructuring of operations to grow revenues and decrease operating expenses, including capturing past cost reductions and potential future cost synergies from the Company’s past acquisitions, and executing the Company’s cost reduction strategy announced in March 2026 and restructuring plan announced in June 2026. In addition, the Company has the ability to offer and sell shares of its common stock having an aggregate offering price of up to $50,000 from time to time under the May 2026 Sales Agreement, a portion of which had been sold as of June 30, 2026 (see Note 10, Stockholders' Equity).

However, due to the Company’s projected cash needs combined with its current liquidity level and history of net losses and cash used to fund operating activities, there is substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements.

The going concern assumption contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company may not be able to access additional equity under acceptable terms, and may not be successful in future operational restructurings, earning any of its deferred purchase consideration, meeting its minimum liquidity threshold under its Credit Agreement or growing its revenue base, and its ability to execute on its operating plans may be materially adversely impacted. If the Company becomes unable to continue as a going concern, it may have to dispose of other or additional assets and might realize significantly less value than the values at which they are carried on its condensed consolidated financial statements. These actions may cause the Company’s stockholders to lose all or part of their investment in the Company’s common stock. The condensed consolidated financial statements do not include any adjustments that might result from the Company being unable to continue as a going concern. If the Company cannot continue as a going concern, adjustments to the carrying values and classification of its assets and liabilities and the reported amounts of income and expenses could be required and could be material.

Reclassifications

Certain reclassifications were made to the prior period condensed consolidated statement of operations and condensed consolidated statement of cash flows to conform to the current period presentation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of revenues and expenses. Actual results could differ from those estimates.

Significant items subject to estimates and assumptions include, but are not limited to, the accounting recognition and presentation of revenue, allowance for credit losses, impairment of long-lived assets, the valuation of contingent consideration, the valuation of senior secured debt, the valuation of non-cash consideration received in barter transactions, the valuation of stock awards and stock warrants, restructuring costs and income taxes, where applicable. Actual results may differ from these estimates.

There has been uncertainty and disruption in the global economy and financial markets due to a number of factors, including lingering economic disruption caused by international conflicts, financial instability, the global inflationary environment and elevated interest rates and the imposition of tariffs, trade tensions, and global trade disputes. The Israel-Hamas and Iran conflicts have also adversely impacted the Company’s business operations because the Company has an office and personnel based in Herzliya, Israel. The Company is not aware of any specific event or circumstance that would require an update to its estimates or assumptions or a revision of the carrying value of its assets or liabilities as of the date of filing of this Quarterly Report on Form 10-Q.

These estimates and assumptions may change as new events occur and additional information is obtained. As a result, actual results could differ materially from these estimates and assumptions.

Recently Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This ASU allows entities to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset when developing reasonable and supportable forecasts as part of estimating expected credit losses. The amendments in this update are effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements. The adoption of this guidance during the first quarter of 2026 did not have a material financial impact on the Company’s consolidated financial statements.

New Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods that is generally not presented in the financial statements today. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This ASU modernizes the accounting for software costs that are accounted for under Subtopic 350-40 and improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. The amendments in this update are effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the potential impact of this adoption on its condensed consolidated financial statements.

Significant Customers

During the three months ended June 30, 2026, one customer represented more than 10% of the Company’s consolidated revenue. During the six months ended June 30, 2026 and 2025 and the three months ended June 30, 2025, no customer represented more than 10% of the Company’s consolidated revenue.

Remaining Performance Obligations

As of June 30, 2026, the aggregate amount of the transaction prices under the Company’s contracts allocated to the Company’s remaining performance obligations was $20,618, approximately 65% of which the Company expects to recognize as revenue over the next twelve months, and the remainder thereafter to be recognized over the next five years. This aggregate amount excludes amounts allocated to remaining performance obligations under contracts that have an original duration of one year or less and variable consideration that is allocated to remaining performance obligations. Excluded based on this policy are balances related to Veritone Hire solutions representing gross purchase orders to be satisfied in less than one year. Revenues will be recognized net of costs to fulfill these orders.

Segment Information

The Company operates asone reportable segment. The Company reports segment information based on the internal reporting used by the chief operating decision maker (“CODM”) for making decisions and assessing performance as the source of the Company’s reportable segment. The Company’s CODM is its Chief Executive Officer. The CODM assesses performance and decides how to allocate resources using consolidated net loss as reported within the Company’s consolidated statements of operations. The CODM also uses loss from operations to assess the performance of the segment to allocate resources, including but not limited to, employees, property, financial and capital, primarily the annual budget and periodic forecasting process. The CODM considers variances to budget or forecast on a monthly, quarterly and annual basis in making these decisions about allocating capital and personnel to the segment. The Company, through its single reportable segment, is managed on a consolidated basis.

Significant segment expenses, which represent the difference between revenue and loss from continuing operations before provision for income taxes, consist of the following:

Other segment items include occupancy, insurance, and other costs.

Seasonality

The Company experiences seasonal fluctuations in its revenue and operating performance as a result of the utilization of its platform and associated revenues from its Software Products & Services as a result of factors such as the timing of large projects, the length and complexity of sales cycles, trends impacting the Company’s target vertical markets and the Company’s revenue recognition policies and any changes to those policies. Within a given quarter, a higher proportion of the Company’s agreements are signed toward the end of such quarter. Although these seasonal factors are common in the technology industry, historical patterns should not be considered a reliable indicator of the Company’s future sales activity or performance in any period.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025.

3. Revision of Previously Issued Condensed Consolidated Financial Statements

Revision of Previously Issued Financial Statements

In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2025, the Company’s management identified immaterial errors within its previously issued unaudited condensed consolidated financial statements as of and for the quarterly period ended June 30, 2025 (“Q2 2025”) as included in its Quarterly Report for the quarter ended June 30, 2025 that was originally filed with the SEC on August 8, 2025. The immaterial errors resulted in: (i) an $0.8 million overstatement of revenue, a $0.7 million overstatement of accounts receivable and corresponding $0.7 million overstatement of cost of revenue (exclusive of depreciation and amortization) and accrued expenses and other current liabilities, (ii) $0.4 million overstatement of cost of revenue (exclusive of depreciation and amortization) and accrued expenses and other current liabilities, and (iii) a $1.3 million understatement of goodwill, a $0.7 million understatement in intangible assets, net and a corresponding $2.0 million overstatement of accumulated other comprehensive income (loss) as of June 30, 2025.

The Company evaluated the materiality of the errors and concluded the errors were not material to Q2 2025. Financial information as of and for the three and six months ended June 30, 2025 has been revised in this report to correct the errors. The following table presents a reconciliation of the Company’s unaudited condensed consolidated financial information as originally reported to the revised amounts as of and for three and six months ended June 30, 2025:

Condensed Consolidated Balance Sheet

Condensed Consolidated Statement of Operations and Comprehensive Loss

Condensed Consolidated Statement of Cash Flows

4. Restructuring and Restructuring-Related Activities

In June 2026, the Company made the decision to implement a restructuring plan (the “Plan”), which includes a workforce reduction that was initiated on June 10, 2026, and a reduction in certain third-party operating costs. These actions were intended to reduce the Company’s operating expenses as part of a realignment of its business and cost structure. As of August 13, 2026, the Company had realized approximately $11.3 million in annualized cost savings through reduction of workforce and certain operating expenses.

The Company expects that the Plan will reduce the size of the Company’s workforce by at least 25% of its employee count as of March 31, 2026.

The workforce reduction began on June 10, 2026 in structured phases and is expected to be substantially completed by the first half of 2027. Employees affected by the Plan may be eligible to receive, among other things, severance payments based on the applicable employee’s length of service with the Company and the continuation of benefits for a specified time period post-termination, provided, that each affected employee’s eligibility for severance benefits is contingent upon such employee’s execution of a separation agreement, which includes a general release of claims against the Company.

In addition to restructuring costs, the Company will also incur costs that do not constitute restructuring under ASC 420, Exit and Disposal Cost Obligations, and which the Company instead refers to as business transformation costs. These costs consist primarily of expenditures directly related to the Plan and include employee retention costs, professional fees and investments in automation and technology. The following table provides a summary of the Company’s estimates of total pre-tax charges associated with the Plan, by major type of cost, of which approximately $4.4 million to $5.3 million are expected to result in cash outlays (in thousands):

The following table provides a summary of restructuring activities (in thousands):

(1) Balance at June 30, 2026 is recorded in accrued payroll and employee related liabilities in the consolidated balance sheet.

(2) Balance at June 30, 2026 was recorded to accrued expenses in the consolidated balance sheet and pertain to software no longer deemed necessary based on the restructuring plan.

5. Debt

Senior Secured Term Loan

On December 13, 2023 (the “Term Loan Closing Date”), the Company and certain of its subsidiaries, as guarantors, entered into a Credit and Guaranty Agreement (as amended, the “Credit Agreement”) with certain funds managed by Highbridge Capital Management, LLC and with certain other lenders (collectively, the “Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. The Credit Agreement provided for a $77,500 senior secured term loan (the “Term Loan”), which was fully drawn by the Company on the Term Loan Closing Date. On the Term Loan Closing Date, the Company used $37,500 of the Term Loan proceeds to repurchase $50,000 principal amount of its Convertible Notes. As a result of the collective transactions at the Term Loan Closing Date, the Company recorded the Term Loan at fair value and recognized a one-time gain of $30,000 on the extinguishment of convertible debt. The initial discount on the Term Loan of $23,807 along with the capitalized issuance costs of $3,120 each were amortized to interest expense over the term of the loan using the effective interest method. The amortization of initial discounts and issuance costs was $0 and $1,156 for the three months ended June 30, 2026 and 2025, respectively, and $0 and $2,215 for the six months ended June 30, 2026 and 2025, respectively. On the Term Loan Closing Date, the Company issued warrants (the “Warrants”) to the Lenders (in such capacity, the “Warrant Holders”) 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 June 30, 2026, there were 2,508,683 Warrants that remained unexercised and outstanding.

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 November 12, 2025, the Company repaid in full the outstanding principal amount 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.

During the year ended December 31, 2025, the Company repaid a total amount of $41,176 on amounts outstanding under the Term Loan. As of December 31, 2025, the amount outstanding under the Term Loan was $0.

For the three months ended June 30, 2026 and 2025, interest expense related to the Term Loan, including amortization of initial discounts and issuance costs, was $0 and $2,276, respectively. For the six months ended June 30, 2026 and 2025, interest expense related to the Term Loan, including amortization of initial discounts and issuance costs, was $0 and $4,751, respectively.

Convertible Senior Notes

In November 2021, the Company issued, at par value, $201,250 aggregate principal amount of the Convertible Notes. 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 were issued pursuant to and are subject to the terms and conditions of an indenture, which is referred to as the Indenture, between the Company and U.S. Bank National Association, as trustee. The Convertible Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. In December 2022, the Company repurchased $60,000 aggregate principal amount of the Convertible Notes at approximately 65% of par (the “2022 Repurchase Transaction”). In December 2023, the Company repurchased $50,000 aggregate principal amount of the Convertible Notes at approximately 75% of par (the “2023 Repurchase Transaction”).

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 price of $39,049, which included $393 of accrued interest, plus 625,000 shares of common stock with a fair value of $3,162 awarded to the shareholders. For accounting purposes, pursuant to ASC 470, these transactions were accounted for as an extinguishment of the Convertible Notes. The Company recognized a gain of $3,589 on the restructuring offset by $2,100 in third-party fees for a net gain of $1,448. As the Company was deemed to be experiencing financial difficulty and received a concession attributed to the pay down, the Company recorded a gain on troubled debt restructuring in accordance with ASC 470-60, Troubled Debt Restructuring by Debtors within the Company’s consolidated statement of loss during the fourth quarter of 2025.

As of June 30, 2026, the Company has $45,580 in aggregate principal amount of the Convertible Notes outstanding and unamortized debt issuance costs of $113.

The Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 1.75% per year. Interest accrues from November 19, 2021 and is 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 day 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 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 Convertible Notes are the Company’s senior unsecured obligations 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 net proceeds from the issuance of the Convertible Notes were approximately $194,945, after deducting debt issuance costs. 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 Convertible Notes are recorded as a liability within convertible senior notes, non-current.

Interest expense related to the Convertible Notes, including amortization of issuance costs, was $349 and $546 for the three months ended June 30, 2026 and 2025, respectively, and $698 and $1,091 for the six months ended June 30, 2026 and 2025, respectively. The effective interest rate for the three and six months ended June 30, 2026 and 2025 was approximately 2.42%. As of June 30, 2026, the if-converted value of the Convertible Notes didnot exceed the outstanding principal amount. As of June 30, 2026, the total estimated fair value of the Convertible Notes was $44,754, which was determined based on a market approach using actual bids and offers of the Convertible Notes in an over-the-counter market during the period. The Company considers these assumptions to be Level 2 inputs in accordance with the fair value hierarchy described in Note 7, Fair Value Measurements.

Capped Calls

In connection with the pricing of the Convertible Notes and subsequent exercise by the initial purchasers of their option to purchase additional Convertible Notes, each 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 didnot receive any proceeds from the unwinding of the capped calls in 2025.

6. Loss Per Share

The shares of common stock into which both the January 2025 Pre-Funded Warrants and June 2025 Pre-Funded Warrants (See Note 11, Stockholders’ Equity) may be exercised are considered outstanding from the date of issuance of the January 2025 Pre-Funded Warrants and June 2025 Pre-Funded Warrants for the purposes of computing basic loss per share because the shares may be issued for little or no consideration and because the January 2025 Pre-Funded Warrants and June 2025 Pre-Funded Warrants were fully vested and immediately exercisable upon issuance.

The following participating securities have been excluded from the computation of diluted loss per share for the periods presented because including them would have been anti-dilutive:

7. Fair Value Measurements

The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurement (“ASC 820”), for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows:

•Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.

•Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

•Level 3 inputs are unobservable inputs for the asset or liability.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised primarily of domestic and foreign bank accounts and money market funds. These cash and cash equivalents are valued based on Level 1 inputs which consist of quoted prices in active markets. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents. As of June 30, 2026 and December 31, 2025, the Company’s cash and cash equivalents approximated their estimated fair value. As such, there areno unrealized gains or losses related to the Company’s cash and cash equivalents.

Investments

The Company holds a strategic investment in a technology company that was determined to not have a readily determinable fair value. This investment is carried at a cost of $2,970 on the Company’s condensed consolidated balance sheets within other assets as of June 30, 2026 and December 31, 2025 and is categorized as Level 3 within the fair value hierarchy.

Because these investments do not have readily determinable fair values, the Company has elected to measure these investments under ASC 321, Investments—Equity Securities, at cost minus impairments, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments. No impairment was recorded for the three and six months ended June 30, 2026 and 2025. The Company re-measures its investments if there is an observable transaction in a class of security similar to the Company’s investments and there were no such re-measurements for the three and six months ended June 30, 2026 and 2025.

8. Goodwill and Other Intangible Assets

Goodwill

Goodwill recorded in connection with the Company’s acquisitions is primarily attributable to the assembled workforce and anticipated operational synergies. There wereno additions to, or impairments of, goodwill during the three and six months ended June 30, 2026 and 2025.

The Company has only one reporting unit and evaluates goodwill for impairment at the single reporting unit level.

The following table displays the changes in the carrying amount of goodwill:

Intangible Assets

The gross carrying amounts and accumulated amortization of the Company’s finite-lived intangible assets as of June 30, 2026 and December 31, 2025 were as follows:

Amortization expense related to developed technology, customer relationships, and trademarks and trade names is recorded in depreciation and amortization within the Company’s consolidated statements of operations. Amortization expense of finite-lived intangible assets was $4,415 and $5,879 for the three months ended June 30, 2026 and 2025, respectively, and $8,831 and $11,826 for the six months ended June 30, 2026 and 2025, respectively.

The following table presents future amortization of the Company’s finite-lived intangible assets as of June 30, 2026:

9. Consolidated Financial Statement Details

Consolidated Balance Sheets Details

Accounts Receivable, Net and Allowance for Credit Losses

Accounts receivable, net consisted of the following:

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Property, Equipment and Improvements, Net

Property, equipment and improvements, net consisted of the following:

Depreciation expense was $1,352 and $1,293 for the three months ended June 30, 2026 and 2025, respectively. Depreciation expense was $2,714 and $2,294 for the six months ended June 30, 2026 and 2025, respectively.

The Company’s property, equipment and improvements, net by geographic area are as follows:

Other Assets

Other assets consisted of the following:

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

Other Non-Current Liabilities

Other non-current liabilities consisted of the following:

Contract Liabilities

Contract liabilities consist of deferred revenue. Deferred revenue represents billings under non-cancelable contracts before the related product or service is transferred to the customer. The portion of deferred revenue that is anticipated to be recognized as revenue during the succeeding twelve-month period is recorded as deferred revenue within the Company's condensed consolidated balance sheets. Deferred revenue was comprised of the following:

Consolidated Statements of Operations and Comprehensive Loss Details

Revenue

The Company serves two customer groups: (1) Commercial Enterprise, which today consists of customers in the commercial sector, including media and entertainment customers, representation customers and Veritone Hire solutions customers (inclusive of Broadbean customers); and (2) Public Sector, which consists of customers in the public sector industries, including state, local and federal government, legal, and compliance customers.

Software Products & Services consists of revenue generated from the Company’s aiWARE platform, including its Veritone Data Refinery (“VDR”) product, and our Talent Acquisition solutions, any related support and maintenance services, and any related professional services associated with the deployment and/or implementation of such solutions.

Managed Services consists of revenues generated from content licensing customers, representation services, and, to a lesser extent, from advertising customers and related services.

The table below illustrates the presentation of our revenues based on the above definitions:

Provision for Income Taxes

In accordance with ASC 740-270, Income Taxes, the provision or benefit from income taxes for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter, the Company updates the estimate of the annual effective tax rate, and if the estimated tax rate changes, the Company records a cumulative adjustment. A separate estimated annual effective tax rate is applied for jurisdictions where an entity anticipates an ordinary loss or has an ordinary loss for the year to date for which no tax benefit can be recognized.

The Company’s effective tax rate was a benefit of 1.4% and 3.5% for the three months ended June 30, 2026 and 2025, respectively, and an expense of 2.2% and a benefit of (1.2)% for the six months ended June 30, 2026 and 2025, respectively. The difference between the effective tax rate and the U.S. federal statutory rate of 21% is primarily due to a valuation allowance established on the Company’s domestic federal and state net deferred tax assets, as well as the impact of foreign operations subject to tax in foreign jurisdictions. The change in the effective tax rates for the three and six months ended June 30, 2026 as compared to the comparable prior year period is primarily due to the impact of taxes on foreign operations and valuation allowances against domestic net deferred tax assets.

As of June 30, 2026 and December 31, 2025, the Company had deferred tax assets of $860 and $835, respectively, and deferred tax liabilities of $2,936 and $4,111, respectively, which are included in other assets and other non-current liabilities, respectively, within the Company’s condensed consolidated balance sheets. As of June 30, 2026, the Company continues to provide a valuation allowance against deferred tax assets that are not expected to be realizable. The Company continues to evaluate the realizability of deferred tax assets and the related valuation allowance. If the Company’s assessment of the deferred tax assets or the corresponding valuation allowance were to change, the Company would record the related adjustment to income during the period in which the determination is made.

The Company is subject to taxation in the United States, Israel, the United Kingdom, France, and Australia. The United States, Israel, and the United Kingdom comprise the majority of the Company’s operations. In general, the U.S. federal statute of limitations is three years. However, the Internal Revenue Service may still adjust a tax loss or credit carryover in the year the tax loss or credit carryover is utilized. As such, the Company’s U.S. federal tax returns and state tax returns are open for examination since inception. The Israeli statute of limitations period is generally four years commencing at the end of the year in which the return was filed. As of June 30, 2026, the Company’s 2024 U.S. Federal tax return and Israeli tax returns for 2020 through 2024 are under examination.

On July 4, 2025, the U.S. enacted H.R. 1 “A bill to provide for reconciliation pursuant to Title II of H. Con. Res. 14”, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). The OBBBA contains significant provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international framework. The legislation has multiple effective dates, with certain provisions effective for the tax year beginning after December 31, 2024, and others effective for tax years beginning after December 31, 2025. Veritone has evaluated the OBBBA provisions enacted during the quarter and has included the related impact in the provision for income taxes for the three months ended June 30, 2026, which was not material.

10. Leases, Commitments, and Contingencies

Leases

In January 2025, the Company entered into a non-cancellable agreement to lease office space in London to replace its existing office space. The base rent is approximately $3 per month, translated at the June 30, 2026 spot rate, in the aggregate over the original lease term of 71 months from the commencement date. In June 2026, the Company extended its lease at its headquarters in Irvine, CA until August 2029. The base rent is approximately $29 per month and increases to $30 per month over the life of the lease for total payments of $1,000.

Deferred Purchase Consideration

In connection with its acquisition of an influencer-based management company in March 2022, the Company committed to make deferred purchase consideration payments totaling $3,500 contingent upon recipient’s continued employment through December 31, 2025. The first payment of $1,000 was made in the first quarter of 2024, the second payment of $1,000 was made in the first quarter of 2025, and the final payment of $1,500 was made in the first quarter of 2026.

Legal and Other Contingencies

From time to time, the Company may be involved in litigation relating to claims arising out of its operations in the normal course of business. The Company currently is not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on the Company’s results of operations, financial position or cash flows.

In December 2024, the Company received $2,500 in unclaimed funds associated with the PandoLogic acquisition from its escrow agent. Based on the jurisdiction of the potential future claims and underlying statute of limitations, the Company has recognized the unclaimed funds as part of other non-current liabilities within its consolidated balance sheets, which amounted to $2,481 and $2,500 as of June 30, 2026 and December 31, 2025, respectively, and will continue to evaluate the merit of such claims.

On May 21, 2026, a stockholder, individually and on behalf of all others similarly situated, filed a complaint against the Company, Ryan Steelberg, and Michael L. Zemetra as current officers of the Company in the United States District Court for the Central District of California, captioned Ahmed Elwan v. Veritone, Inc. et al, No. 8:26-cv-01275 (the “Securities Action”). The complaint alleges violations of Sections 10(b) and 20(a) of the Exchange Act, in connection with allegedly false and misleading statements made by the Company during the period from October 14, 2025, to April 14, 2026 (the “Class Period”). Specifically, the complaint alleges that, among other things, the Company had inaccurately recorded and misclassified certain revenue and costs resulting in overstatements of revenues and other metrics, and maintained allegedly deficient internal controls over accounting and financial reporting. The deadline for any putative class member to seek appointment for lead plaintiff and lead counsel was July 20, 2026. The Court set a hearing on the pending motions for appointment of lead plaintiff and lead counsel for September 1, 2026. Defendants are not required to respond to the complaint until after the Court appoints a lead plaintiff and lead counsel and the lead plaintiff identifies or files an operative complaint.

On June 24, 2026, a purported stockholder of the Company filed a shareholder derivative action in the United States District Court for the District of California, captioned Sean Lea v. Ryan S Steelberg et al, No. 8:26-cv-01634 purportedly on behalf of nominal defendant Veritone, Inc., against certain Company executives and Company board members. This lawsuit concerns generally the same factual allegations as asserted in the Securities Action.

11. Stockholders’ Equity

January 2025 Registered Direct Offering

On January 2, 2025, the Company issued and sold an aggregate of 4,414,878 shares of common stock at a price of $2.53 per share and pre-funded warrants to purchase up to 3,608,838 shares of common stock at a price of $2.52 per pre-funded warrant (the “January 2025 Pre-Funded Warrants”), with an exercise price of $0.01, in a registered direct offering with Esousa Group Holdings, LLC. The aggregate net proceeds were approximately $19,947, after deducting offering expenses.

The January 2025 Pre-Funded Warrants generally cannot be exercised if the holder’s aggregate beneficial ownership would be more than 9.99% of the total issued and outstanding shares of the Company’s common stock following such exercise. The exercise price and number of shares of common stock issuable upon the exercise of the January 2025 Pre-Funded Warrants are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the warrant agreement.

The January 2025 Pre-Funded Warrants were evaluated pursuant to ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The Company classified the January 2025 Pre-Funded Warrants as a component of stockholders’ equity within additional paid-in capital and recorded them at fair value on the issuance date, which approximated their sales price. The January 2025 Pre-Funded Warrants were equity classified because they were freestanding financial instruments that are legally detachable and separately exercisable, were immediately exercisable, did not embody an obligation for the Company to repurchase its common shares, permitted the holders to receive a fixed number of common shares upon exercise, were indexed to the Company’s common shares and met the equity classification criteria.

On October 17, 2025, the January 2025 Pre-Funded Warrants were exercised in full, and as of December 31, 2025, no January 2025 Pre-Funded Warrants remained outstanding.

June 2025 Registered Direct Offering and Private Placement

On June 30, 2025, the Company agreed to issue and sell an aggregate of 6,452,293 shares of the Company’s common stock at a price of $1.09 per share and pre-funded warrants to purchase up to 1,804,587 shares of the Company’s common stock (the “June 2025 Pre-Funded Warrants”), priced at $1.08 per pre-funded warrant, with an exercise price of $0.01 per share, to certain institutional and accredited investors in a registered direct offering. The sale and issuance of shares and warrants were completed on July 1, 2025. The aggregate net proceeds were approximately $8,095, after deducting placement agent fees and offering expenses.

The June 2025 Pre-Funded Warrants provide that the holder may not exercise any portion of the June 2025 Pre-Funded Warrants to the extent that immediately prior to or after giving effect to such exercise, the holder (together with its affiliates) would beneficially own more than 9.99% of the Company’s outstanding common stock (the “Maximum Percentage”) after such exercise. By written notice to the Company, the holder may from time to time increase or decrease the Maximum Percentage to any other percentage specified not in excess of 19.99% (the “Maximum Cap”). Subject to the Maximum Percentage or, as applicable, the Maximum Cap, the June 2025 Pre-Funded Warrants are immediately exercisable and may be exercised at any time until the June 2025 Pre-Funded Warrants are exercised in full. If, at the time of exercise, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance or resale of the shares of common stock issuable from time to time upon exercise of the June 2025 Pre-Funded Warrants, in lieu of making cash payment otherwise contemplated to be made to the Company upon exercise of a June 2025 Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the June 2025 Pre-Funded Warrants. The exercise price and number of shares of common stock issuable upon the exercise of the June 2025 Pre-Funded Warrants are subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described in the June 2025 Pre-Funded Warrants.

On October 17, 2025, the June 2025 Pre-Funded Warrants were exercised in full, and as of December 31, 2025, no June 2025 Pre-Funded Warrants remained outstanding.

The June 2025 Pre-Funded Warrants were evaluated pursuant to ASC 480 and ASC 815. The Company classified the June 2025 Pre-Funded Warrants as a component of stockholders’ equity within additional paid-in capital and recorded them at fair value on the issuance date, which approximated their sales price. The June 2025 Pre-Funded Warrants were equity classified because they were freestanding financial instruments that are legally detachable and separately exercisable, were immediately exercisable, did not embody an obligation for the Company to repurchase its common shares, permitted the holders to receive a fixed number of common shares upon exercise, were indexed to the Company’s common shares and met the equity classification criteria.

Additionally, on June 30, 2025, pursuant to the terms of the securities purchase agreement, the Company and Ryan Steelberg, the Company’s President, Chief Executive Officer and Chairman of its Board of Directors, as trustee of The RSS Living Trust dated April 6, 2012 (the “RSS Trust”) entered into a securities purchase agreement (the “Steelberg Purchase Agreement”), pursuant to which the RSS Trust agreed to purchase from the Company, and the Company agreed to issue and sell to the RSS Trust, up to 709,220 shares of the Company’s common stock for a gross aggregate offering price of $1,000, at a price per share equal to the greater of (i) $1.41 (representing the consolidated closing bid price of the Company’s common stock on June 27, 2025) and (ii) the consolidated closing bid price of the Company’s common stock on the date that is the second full trading day after the date on which the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (“Q2 Form 10-Q”) is filed with the SEC (such transaction, the “Private Placement” and such shares, the “Private Placement Shares”).

The Private Placement Shares were initially classified as a liability within the Company’s condensed consolidated balance sheet pursuant to ASC 480. The Private Placement Shares were liability classified because the Company was obligated to deliver a variable number of shares based on the closing bid price of its common stock on the trading day preceding the closing date, while the monetary obligation was fixed at inception. The liability was recorded at its fair value of approximately $1,000, equal to the gross aggregate offering price of the Private Placement Shares.

The Private Placement closed on August 13, 2025, the third full trading day after the filing of the Company’s Q2 Form 10-Q with the SEC. In connection with the closing of the Private Placement, the Company issued 366,300 shares of its common stock at a price per share of $2.73, the consolidated closing bid price of the Company’s common stock on August 12, 2025, and simultaneously extinguished the liability related to the Private Placement Shares as described above. The aggregate net proceeds were approximately $916, after deducting placement agent fees and offering expenses. The Private Placement Shares were not registered under the Securities Act and were offered pursuant to the exemption from registration provided in Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder. The RSS Trust is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act.

At the Market Program

On November 19, 2024, the Company entered into a sales agreement (the "Sales Agreement") with Needham & Company, LLC and H.C. Wainwright & Co., LLC (the “Sales Agents”), to establish an “at-the-market” equity offering program (the "ATM Program"), pursuant to which the Company may offer and sell from time to time, at its option, shares of its common stock having an aggregate offering price of up to $35,000 through the Sales Agents. Sales under the Sales Agreement were conducted as “at-the-market” equity offerings as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on The Nasdaq Global Market or other trading markets for the Company’s common stock. The issuance and sale of shares of the Company’s common stock under the Sales Agreement was made pursuant to the Company’s registration statement on Form S-3 (File No. 333-280148), which became effective on June 21, 2024, and the related prospectus supplement dated November 19, 2024, in each case filed with the SEC. From inception through October 2025, the Company received $33,507 in net proceeds from sales of 11,740,454 shares of its common stock pursuant to the ATM Program. The ATM Program was completed and terminated in October 2025.

2026 At the Market Program

On May 21, 2026, the Company entered into a sales agreement (the “May 2026 Sales Agreement”) with UBS Securities LLC, Needham & Company, LLC and Craig-Hallum Capital Group LLC, as sales agents (collectively, the “May 2026 Sales Agents”), to establish an “at-the-market” equity offering program (the “2026 ATM Program”), pursuant to which the Company may offer and sell from time to time, at its option, shares of the Company’s common stock having an aggregate offering price of up to $50,000 through the May 2026 Sales Agents. Sales under the May 2026 Sales Agreement are conducted as “at-the-market” equity offerings as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on The Nasdaq Global Market or other trading markets for the Company’s common stock. The issuance and sale of shares of the Company’s common stock under the May 2026 Sales Agreement is made pursuant to the Company’s registration statement on Form S-3 (File No. 333-280148), which became effective on June 21, 2024 and the related prospectus supplement dated May 21, 2026, in each case filed with the SEC. From inception through June 30, 2026, the Company received $9,376 in net proceeds from sales of 5,911,219 shares of its common stock pursuant to the 2026 ATM Program.

12. Stock-Based Compensation

The Company has stock-based compensation plans, which are more fully described in Note 12, Stock-Based Compensation, to the Consolidated Financial Statements included in the 2025 10-K. During the six months ended June 30, 2026, the Company granted restricted stock units (“RSUs”) subject to service conditions, RSUs subject to service and performance conditions, and RSUs subject to service and market conditions.

Stock Options

The following table summarizes the activities for all stock options under the Company’s stock-based compensation plans for the six months ended June 30, 2026:

(1)The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards.

(2)Includes 3,521 and 3,530 performance condition stock options as of June 30, 2026 and December 31, 2025, respectively.

(3)Includes 9 performance condition stock options.

(4)Includes 3,521 performance condition stock options.

(5)Includes 3,521 performance condition stock options.

There wereno stock options granted during the three and six months ended June 30, 2026 and 2025. The total intrinsic value of stock options exercised during the three months ended June 30, 2026 and 2025 was immaterial.

As of June 30, 2026, the total unrecognized compensation cost related to all nonvested stock options was $61 and the related weighted-average period over which it is expected to be recognized was approximately 0.84 years.

Restricted Stock Units

The following table summarizes the activities for all RSUs under the Company’s stock-based compensation plans for the six months ended June 30, 2026:

(1)Includes 742 and 323 performance condition RSUs as of June 30, 2026 and December 31, 2025, respectively.

(2)Includes 580 performance condition RSUs.

(3)Includes 161 performance condition RSUs.

The total vesting date fair value of RSUs which vested during the three months ended June 30, 2026 and 2025 was $854 and $392, respectively. The total vesting date fair value of RSUs which vested during the six months ended June 30, 2026 and 2025 was $1,691 and $1,120, respectively.

As of June 30, 2026, the total unrecognized compensation cost related to all nonvested RSUs was $6,476 and the related weighted-average period over which it is expected to be recognized was approximately 1.87 years.

Stock-Based Compensation Expense

The following table provides information about stock-based compensation expense by award type:

The following table provides information about stock-based compensation expense by financial statement line item:

Stock-based compensation expense capitalized as part of internal-use software was $41 and $53 for the three months ended June 30, 2026 and 2025, respectively, and $87 and $110 for the six months ended June 30, 2026 and 2025, respectively.

13. Related Party Transactions

Steel Holdings Consulting Agreement

On January 4, 2023, the Company entered into a consulting agreement with Steel Holdings, LLC effective January 1, 2023 (the “Steel Holdings Consulting Agreement”). Steel Holdings, LLC is an entity affiliated with Chad Steelberg, formerly a member of the Board, as well as the Company’s former Chairman of the Board and former Chief Executive Officer. Under the Steel Holdings Consulting Agreement, the Company retained Mr. Steelberg as a consultant to provide ongoing Chief Executive Officer transition services and to manage and oversee the further development of the Company’s aiWARE platform.

In January 2024, the Company entered into an amended and restated independent contractor services agreement with Steel Holdings, LLC (the “Amended Consulting Agreement”), which superseded and replaced the Steel Holdings Consulting Agreement. Pursuant to the Amended Consulting Agreement, Mr. Steelberg will provide technical advisory services related to the Company’s software, software architecture and technology strategy as requested by the Company’s Chief Executive Officer until December 31, 2025, the termination date of the Amended Consulting Agreement. In consideration for such services, the Company paid Steel Holdings, LLC $1,000 in cash on July 1, 2024 and agreed to pay Steel Holdings, LLC $50 per month in cash for the period from January 2024 through December 2025. The Company reimbursed Steel Holdings, LLC for reasonable and documented expenses incurred in connection with providing the services in accordance with the Company’s standard travel and expense policies.

The Amended Consulting Agreement expired by its terms on December 31, 2025.

In January 2026, following the termination of the Amended Consulting Agreement, the Company entered into a new independent contractor services agreement with Steel Holdings, LLC (the “2026 Consulting Agreement”). Pursuant to the 2026 Consulting Agreement, Mr. Steelberg will provide technical advisory services related to the Company’s software and services, including strategic government sales and business development services, identification and pursuit of prospective customers, partners, and revenue opportunities, and supporting the Company’s go-to-market execution, as requested by the Company’s Chief Executive Officer until December 31, 2026, the termination date of the 2026 Consulting Agreement. In consideration for such services, the Company will pay to Steel Holdings, LLC $12,500 per month in cash for the period from January 2026 through December 2026. The Company will reimburse Steel Holdings, LLC for reasonable and documented expenses incurred in connection with providing the services in accordance with the Company’s standard travel and expense policies.

The 2026 Consulting Agreement may be terminated by either party with 90 days’ notice. If the Company terminates the 2026 Consulting Agreement for any reason other than Steel Holdings, LLC’s material breach, then any remaining compensation payments under the 2026 Consulting Agreement will become due and payable.

There wereno other material related party transactions during the six months ended June 30, 2026.

14. Subsequent Events

Increase in Authorized Shares

On July 7, 2026, at the Company’s annual meeting of stockholders, the Company’s stockholders approved an amendment to the Company’s Fourth Amended and Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 150,000,000 shares to 225,000,000 shares.

Second Amended and Restated 2023 Equity Incentive Plan and Related CEO Strategic Awards

On July 7, 2026, at the Company’s annual meeting of stockholders, the Company’s stockholders approved the Second Amended and Restated 2023 Equity Incentive Plan, which increased the number of shares of common stock authorized for issuance thereunder by 3,000,000 shares. At the same meeting, the Company’s stockholders also approved the grant of time-based and performance-based restricted stock unit awards to Ryan Steelberg, the Company’s President, Chief Executive Officer and Chairman of the Board. The Company is evaluating the grant-date fair value and related stock-based compensation expense associated with these awards.

Chief Executive Officer Salary Reduction

In July 2026, Ryan Steelberg, the Company’s Chief Executive Officer, voluntarily reduced his annual base salary by 50%, from $665,000 to $332,500, in support of the Company’s ongoing cost reduction initiatives.

May 2026 Sales Agreement

Subsequent to June 30, 2026, the Company continued to offer and sell shares of its common stock under the May 2026 Sales Agreement. From July 1, 2026 through the date of this report, the Company sold 1,297,485 shares of its common stock for aggregate net proceeds of approximately $1.8 million.