[10-Q] VerifyMe, Inc. Quarterly Earnings Report
VerifyMe, Inc. reported consolidated net revenue of $4.52 million for the three months ended June 30, 2025 and $8.98 million for the six months ended June 30, 2025, down from $5.35 million and $11.11 million in the comparable prior-year periods. Gross profit was $1.59 million for the quarter and $3.08 million for six months. The company recorded a net loss of $0.29 million in Q2 2025 and a six-month net loss of $0.86 million, slightly improved from prior-year losses.
Liquidity strengthened as cash and cash equivalents rose to $6.07 million at June 30, 2025 from $2.82 million at December 31, 2024, driven in part by $4.35 million of net proceeds from warrant exercises. Total liabilities fell to $2.73 million from $5.85 million. Material items disclosed include payoff of the term note on January 21, 2025, convertible debt outstanding of $750 thousand as of June 30, 2025, an ATM program established for up to $15.8 million, a share repurchase of 201,486 shares for $153 thousand, and subsequent events including a $2.0 million loan to ZenCredit and UPS agreements entered on July 29, 2025.
VerifyMe, Inc. ha riportato ricavi netti consolidati per $4.52 million nei tre mesi terminati il 30 giugno 2025 e per $8.98 million nei sei mesi terminati il 30 giugno 2025, in calo rispetto a $5.35 million e $11.11 million nei corrispondenti periodi dell'anno precedente. Il margine lordo 猫 stato di $1.59 million nel trimestre e di $3.08 million nei sei mesi. La societ脿 ha registrato una perdita netta di $0.29 million nel Q2 2025 e una perdita netta semestrale di $0.86 million, con un leggero miglioramento rispetto alle perdite dell'anno precedente.
La liquidit脿 si 猫 rafforzata: la cassa e gli equivalenti di cassa sono saliti a $6.07 million al 30 giugno 2025 rispetto a $2.82 million al 31 dicembre 2024, in parte grazie a $4.35 million di proventi netti derivanti dall'esercizio di warrant. Le passivit脿 totali sono diminuite a $2.73 million da $5.85 million. Tra gli elementi materiali comunicati figurano l'estinzione della term note il 21 gennaio 2025, un debito convertibile residuo di $750 thousand al 30 giugno 2025, un programma ATM autorizzato fino a $15.8 million, il riacquisto di 201,486 azioni per $153 thousand, e eventi successivi quali un prestito di $2.0 million a ZenCredit e accordi con UPS stipulati il 29 luglio 2025.
VerifyMe, Inc. inform贸 ingresos netos consolidados de $4.52 million para los tres meses cerrados el 30 de junio de 2025 y de $8.98 million para los seis meses cerrados el 30 de junio de 2025, por debajo de $5.35 million y $11.11 million en los mismos periodos del a帽o anterior. El beneficio bruto fue de $1.59 million en el trimestre y de $3.08 million en los seis meses. La compa帽铆a registr贸 una p茅rdida neta de $0.29 million en el 2T 2025 y una p茅rdida neta semestral de $0.86 million, con una ligera mejora respecto a las p茅rdidas del a帽o anterior.
La liquidez se fortaleci贸: el efectivo y equivalentes aumentaron a $6.07 million al 30 de junio de 2025 desde $2.82 million al 31 de diciembre de 2024, impulsado en parte por $4.35 million de ingresos netos procedentes del ejercicio de warrants. Las obligaciones totales cayeron a $2.73 million desde $5.85 million. Entre los elementos materiales divulgados figuran el pago de la letra a plazo el 21 de enero de 2025, deuda convertible pendiente de $750 thousand al 30 de junio de 2025, un programa ATM establecido por hasta $15.8 million, una recompra de 201,486 acciones por $153 thousand, y hechos posteriores incluyendo un pr茅stamo de $2.0 million a ZenCredit y acuerdos con UPS suscritos el 29 de julio de 2025.
VerifyMe, Inc.電� 2025雲� 6鞗� 30鞚茧 膦呺霅� 3臧滌洈 霃欖晥鞚� 鞐瓣舶 靾滊Г於滌澊 $4.52 million, 6臧滌洈 霃欖晥鞚� $8.98 million毳� 旮半頄堨溂氅� 鞚措姅 鞝勲厔 霃欔赴($5.35 million 氚� $11.11 million)氤措嫟 臧愳唽頃� 靾橃箻鞛呺媹雼�. 攵勱赴氤� 毵れ稖齑濎澊鞚奠潃 $1.59 million, 靸侂皹旮� 毵れ稖齑濎澊鞚奠潃 $3.08 million鞚挫棃鞀惦媹雼�. 須岇偓電� 2025雲� 2攵勱赴鞐� $0.29 million鞚� 靾滌啇鞁れ潉, 靸侂皹旮办棎電� $0.86 million鞚� 靾滌啇鞁れ潉 旮半頃� 鞝勲厔 雽�牍� 靻岉彮 臧滌劆鞚� 氤挫榾鞀惦媹雼�.
鞙犽彊靹膘潃 臧滌劆霅橃柎 順勱笀 氚� 順勱笀靹膘瀽靷办澊 2025雲� 6鞗� 30鞚� 旮办 $6.07 million搿� 2024雲� 12鞗� 31鞚检潣 $2.82 million鞐愳劀 歃濌皜頄堨溂氅�, 鞚措姅 攵�攵勳爜鞙茧 鞗岆煱韸� 頄夓偓搿� 鞚疙暅 $4.35 million鞚� 靾滌垬鞚奠棎 旮办澑頃╇媹雼�. 齑濍秬毂勲姅 $5.85 million鞐愳劀 $2.73 million鞙茧 臧愳唽頄堨姷雼堧嫟. 瓿奠嫓霅� 欤检殧 頃鞙茧電� 2025雲� 1鞗� 21鞚检潣 毵岅赴 雽�於� 靸來櫂, 2025雲� 6鞗� 30鞚� 旮办 氙胳儊頇� 鞝勴櫂攵�毂� $750 thousand, 斓滊寑 $15.8 million 攴滊鞚� ATM 頂勲攴鸽灗 靹る, 201,486欤茧ゼ $153 thousand鞐� 鞛愳偓欤茧 鞛Г鞛呿暅 瓯�, 攴鸽Μ瓿� 頉勳啀 靷贝鞙茧 ZenCredit鞐� 雽�頃� $2.0 million 雽�於� 氚� 2025雲� 7鞗� 29鞚� 觳搓舶霅� UPS 瓿勳暯 霌膘澊 韽暔霅╇媹雼�.
VerifyMe, Inc. a d茅clar茅 un chiffre d'affaires net consolid茅 de $4.52 million pour les trois mois clos le 30 juin 2025 et de $8.98 million pour les six mois clos le 30 juin 2025, en baisse par rapport 脿 $5.35 million et $11.11 million sur les p茅riodes comparables de l'exercice pr茅c茅dent. La marge brute s'est 茅lev茅e 脿 $1.59 million pour le trimestre et 脿 $3.08 million pour les six mois. La soci茅t茅 a enregistr茅 une perte nette de $0.29 million au T2 2025 et une perte nette semestrielle de $0.86 million, l茅g猫rement am茅lior茅e par rapport 脿 l'ann茅e pr茅c茅dente.
La liquidit茅 s'est renforc茅e : la tr茅sorerie et 茅quivalents de tr茅sorerie ont augment茅 脿 $6.07 million au 30 juin 2025 contre $2.82 million au 31 d茅cembre 2024, en partie gr芒ce 脿 $4.35 million de produits nets issus de l'exercice de bons de souscription. Le total des passifs est pass茅 脿 $2.73 million contre $5.85 million. Les 茅l茅ments significatifs divulgu茅s comprennent le remboursement de la note 脿 terme le 21 janvier 2025, une dette convertible en cours de $750 thousand au 30 juin 2025, un programme ATM 茅tabli pour jusqu'脿 $15.8 million, un rachat de 201,486 actions pour $153 thousand, et des 茅v茅nements post茅rieurs incluant un pr锚t de $2.0 million 脿 ZenCredit et des accords UPS conclus le 29 juillet 2025.
VerifyMe, Inc. meldete konsolidierte Nettoums盲tze von $4.52 million f眉r die drei Monate zum 30. Juni 2025 und von $8.98 million f眉r die sechs Monate zum 30. Juni 2025, 驳别驳别苍眉产别谤 $5.35 million bzw. $11.11 million in den entsprechenden Vorjahreszeitr盲umen. Der Bruttogewinn belief sich auf $1.59 million im Quartal und $3.08 million in den sechs Monaten. Das Unternehmen verzeichnete im 2. Quartal 2025 einen Nettoverlust von $0.29 million und einen Halbjahresverlust von $0.86 million, was eine leichte Verbesserung 驳别驳别苍眉产别谤 dem Vorjahr darstellt.
Die Liquidit盲t hat sich verbessert: Kassenbestand und Zahlungsmittel盲quivalente stiegen zum 30. Juni 2025 auf $6.07 million 驳别驳别苍眉产别谤 $2.82 million zum 31. Dezember 2024, teilweise bedingt durch $4.35 million Nettomittel aus der Aus眉bung von Warrants. Die Gesamtverbindlichkeiten fielen von $5.85 million auf $2.73 million. Wesentliche offengelegte Posten umfassen die Abl枚sung der Term-Note am 21. Januar 2025, ausstehende wandelbare Verbindlichkeiten von $750 thousand zum 30. Juni 2025, ein eingerichtetes ATM-Programm von bis zu $15.8 million, einen Aktienr眉ckkauf von 201,486 Aktien f眉r $153 thousand sowie nachfolgende Ereignisse einschlie脽lich eines $2.0 million-Darlehens an ZenCredit und am 29. Juli 2025 geschlossene Vereinbarungen mit UPS.
- Cash balance increased to $6.07 million at June 30, 2025 from $2.82 million at December 31, 2024
- Net proceeds of $4.35 million from warrant exercises during the six months ended June 30, 2025
- Total liabilities decreased to $2.73 million from $5.85 million, reflecting lower debt and payoffs
- Term note paid in full on January 21, 2025, eliminating future principal payments on that note
- Shareholders' equity increased to $14.44 million from $10.21 million at year-end 2024
- Consolidated revenue declined to $8.98 million for six months ended June 30, 2025 from $11.11 million in prior year (a >5% decrease)
- Company remains loss-making with net losses of $0.29 million for the quarter and $0.86 million for six months
- High vendor concentration: one vendor accounted for 99% of transportation cost in Q2 2025
- Customer concentration and receivables concentration: two customers comprised 26% of accounts receivable at June 30, 2025
- Convertible debt outstanding of $750k as of June 30, 2025
Insights
TL;DR: Liquidity improved materially from warrant proceeds and lower debt, but revenue declined and the company remains loss-making.
VerifyMe's cash balance increased to $6.07M primarily from $4.35M in warrant exercise proceeds, improving short-term liquidity. Total liabilities declined to $2.73M, aided by payment of the term note, and the RLOC showed $0 outstanding at period end. However, consolidated revenue fell year-over-year to $8.98M for six months and the company recorded a $0.86M six-month net loss. Convertible debt of $750k remains on the balance sheet. Overall, the quarter is impactful for liquidity restoration but mixed operationally.
TL;DR: Governance actions show active capital management but operational concentration and persistent losses pose near-term risk.
The company executed equity-based financing (warrant inducement and exercises) and an ATM program, and repurchased shares under a board-authorized program, indicating active capital allocation. Concentration risks persist: one vendor accounted for 99% of transportation cost and two customers comprised 26% of receivables. The company continues to report net losses and carries outstanding convertible notes ($750k), warrant liabilities exercised into equity, and issued new warrants. These factors warrant monitoring from a governance and risk perspective; impact is material but mixed.
VerifyMe, Inc. ha riportato ricavi netti consolidati per $4.52 million nei tre mesi terminati il 30 giugno 2025 e per $8.98 million nei sei mesi terminati il 30 giugno 2025, in calo rispetto a $5.35 million e $11.11 million nei corrispondenti periodi dell'anno precedente. Il margine lordo 猫 stato di $1.59 million nel trimestre e di $3.08 million nei sei mesi. La societ脿 ha registrato una perdita netta di $0.29 million nel Q2 2025 e una perdita netta semestrale di $0.86 million, con un leggero miglioramento rispetto alle perdite dell'anno precedente.
La liquidit脿 si 猫 rafforzata: la cassa e gli equivalenti di cassa sono saliti a $6.07 million al 30 giugno 2025 rispetto a $2.82 million al 31 dicembre 2024, in parte grazie a $4.35 million di proventi netti derivanti dall'esercizio di warrant. Le passivit脿 totali sono diminuite a $2.73 million da $5.85 million. Tra gli elementi materiali comunicati figurano l'estinzione della term note il 21 gennaio 2025, un debito convertibile residuo di $750 thousand al 30 giugno 2025, un programma ATM autorizzato fino a $15.8 million, il riacquisto di 201,486 azioni per $153 thousand, e eventi successivi quali un prestito di $2.0 million a ZenCredit e accordi con UPS stipulati il 29 luglio 2025.
VerifyMe, Inc. inform贸 ingresos netos consolidados de $4.52 million para los tres meses cerrados el 30 de junio de 2025 y de $8.98 million para los seis meses cerrados el 30 de junio de 2025, por debajo de $5.35 million y $11.11 million en los mismos periodos del a帽o anterior. El beneficio bruto fue de $1.59 million en el trimestre y de $3.08 million en los seis meses. La compa帽铆a registr贸 una p茅rdida neta de $0.29 million en el 2T 2025 y una p茅rdida neta semestral de $0.86 million, con una ligera mejora respecto a las p茅rdidas del a帽o anterior.
La liquidez se fortaleci贸: el efectivo y equivalentes aumentaron a $6.07 million al 30 de junio de 2025 desde $2.82 million al 31 de diciembre de 2024, impulsado en parte por $4.35 million de ingresos netos procedentes del ejercicio de warrants. Las obligaciones totales cayeron a $2.73 million desde $5.85 million. Entre los elementos materiales divulgados figuran el pago de la letra a plazo el 21 de enero de 2025, deuda convertible pendiente de $750 thousand al 30 de junio de 2025, un programa ATM establecido por hasta $15.8 million, una recompra de 201,486 acciones por $153 thousand, y hechos posteriores incluyendo un pr茅stamo de $2.0 million a ZenCredit y acuerdos con UPS suscritos el 29 de julio de 2025.
VerifyMe, Inc.電� 2025雲� 6鞗� 30鞚茧 膦呺霅� 3臧滌洈 霃欖晥鞚� 鞐瓣舶 靾滊Г於滌澊 $4.52 million, 6臧滌洈 霃欖晥鞚� $8.98 million毳� 旮半頄堨溂氅� 鞚措姅 鞝勲厔 霃欔赴($5.35 million 氚� $11.11 million)氤措嫟 臧愳唽頃� 靾橃箻鞛呺媹雼�. 攵勱赴氤� 毵れ稖齑濎澊鞚奠潃 $1.59 million, 靸侂皹旮� 毵れ稖齑濎澊鞚奠潃 $3.08 million鞚挫棃鞀惦媹雼�. 須岇偓電� 2025雲� 2攵勱赴鞐� $0.29 million鞚� 靾滌啇鞁れ潉, 靸侂皹旮办棎電� $0.86 million鞚� 靾滌啇鞁れ潉 旮半頃� 鞝勲厔 雽�牍� 靻岉彮 臧滌劆鞚� 氤挫榾鞀惦媹雼�.
鞙犽彊靹膘潃 臧滌劆霅橃柎 順勱笀 氚� 順勱笀靹膘瀽靷办澊 2025雲� 6鞗� 30鞚� 旮办 $6.07 million搿� 2024雲� 12鞗� 31鞚检潣 $2.82 million鞐愳劀 歃濌皜頄堨溂氅�, 鞚措姅 攵�攵勳爜鞙茧 鞗岆煱韸� 頄夓偓搿� 鞚疙暅 $4.35 million鞚� 靾滌垬鞚奠棎 旮办澑頃╇媹雼�. 齑濍秬毂勲姅 $5.85 million鞐愳劀 $2.73 million鞙茧 臧愳唽頄堨姷雼堧嫟. 瓿奠嫓霅� 欤检殧 頃鞙茧電� 2025雲� 1鞗� 21鞚检潣 毵岅赴 雽�於� 靸來櫂, 2025雲� 6鞗� 30鞚� 旮办 氙胳儊頇� 鞝勴櫂攵�毂� $750 thousand, 斓滊寑 $15.8 million 攴滊鞚� ATM 頂勲攴鸽灗 靹る, 201,486欤茧ゼ $153 thousand鞐� 鞛愳偓欤茧 鞛Г鞛呿暅 瓯�, 攴鸽Μ瓿� 頉勳啀 靷贝鞙茧 ZenCredit鞐� 雽�頃� $2.0 million 雽�於� 氚� 2025雲� 7鞗� 29鞚� 觳搓舶霅� UPS 瓿勳暯 霌膘澊 韽暔霅╇媹雼�.
VerifyMe, Inc. a d茅clar茅 un chiffre d'affaires net consolid茅 de $4.52 million pour les trois mois clos le 30 juin 2025 et de $8.98 million pour les six mois clos le 30 juin 2025, en baisse par rapport 脿 $5.35 million et $11.11 million sur les p茅riodes comparables de l'exercice pr茅c茅dent. La marge brute s'est 茅lev茅e 脿 $1.59 million pour le trimestre et 脿 $3.08 million pour les six mois. La soci茅t茅 a enregistr茅 une perte nette de $0.29 million au T2 2025 et une perte nette semestrielle de $0.86 million, l茅g猫rement am茅lior茅e par rapport 脿 l'ann茅e pr茅c茅dente.
La liquidit茅 s'est renforc茅e : la tr茅sorerie et 茅quivalents de tr茅sorerie ont augment茅 脿 $6.07 million au 30 juin 2025 contre $2.82 million au 31 d茅cembre 2024, en partie gr芒ce 脿 $4.35 million de produits nets issus de l'exercice de bons de souscription. Le total des passifs est pass茅 脿 $2.73 million contre $5.85 million. Les 茅l茅ments significatifs divulgu茅s comprennent le remboursement de la note 脿 terme le 21 janvier 2025, une dette convertible en cours de $750 thousand au 30 juin 2025, un programme ATM 茅tabli pour jusqu'脿 $15.8 million, un rachat de 201,486 actions pour $153 thousand, et des 茅v茅nements post茅rieurs incluant un pr锚t de $2.0 million 脿 ZenCredit et des accords UPS conclus le 29 juillet 2025.
VerifyMe, Inc. meldete konsolidierte Nettoums盲tze von $4.52 million f眉r die drei Monate zum 30. Juni 2025 und von $8.98 million f眉r die sechs Monate zum 30. Juni 2025, 驳别驳别苍眉产别谤 $5.35 million bzw. $11.11 million in den entsprechenden Vorjahreszeitr盲umen. Der Bruttogewinn belief sich auf $1.59 million im Quartal und $3.08 million in den sechs Monaten. Das Unternehmen verzeichnete im 2. Quartal 2025 einen Nettoverlust von $0.29 million und einen Halbjahresverlust von $0.86 million, was eine leichte Verbesserung 驳别驳别苍眉产别谤 dem Vorjahr darstellt.
Die Liquidit盲t hat sich verbessert: Kassenbestand und Zahlungsmittel盲quivalente stiegen zum 30. Juni 2025 auf $6.07 million 驳别驳别苍眉产别谤 $2.82 million zum 31. Dezember 2024, teilweise bedingt durch $4.35 million Nettomittel aus der Aus眉bung von Warrants. Die Gesamtverbindlichkeiten fielen von $5.85 million auf $2.73 million. Wesentliche offengelegte Posten umfassen die Abl枚sung der Term-Note am 21. Januar 2025, ausstehende wandelbare Verbindlichkeiten von $750 thousand zum 30. Juni 2025, ein eingerichtetes ATM-Programm von bis zu $15.8 million, einen Aktienr眉ckkauf von 201,486 Aktien f眉r $153 thousand sowie nachfolgende Ereignisse einschlie脽lich eines $2.0 million-Darlehens an ZenCredit und am 29. Juli 2025 geschlossene Vereinbarungen mit UPS.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM
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(Mark one)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
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| (Address of Principal Executive Offices) | (Zip Code) | |
| ( | ||
| (Registrant’s Telephone Number, Including Area Code) | ||
(Former Name, Former Address and Former Fiscal year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) |
Name of each exchange on which Registered |
| The |
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T §
232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ¨ | Accelerated filer | ¨ | |
| x | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant
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Indicate the number of shares outstanding of each of the issuer’s
classes of common stock, as of the latest practicable date:
| 2 |
| PART I - FINANCIAL INFORMATION | ||
| ITEM 1. | Financial Statements | 4 |
| Consolidated Balance Sheets (Unaudited) | 4 | |
| Consolidated Statements of Operations (Unaudited) | 6 | |
| Consolidated Statements of Comprehensive Loss (Unaudited) | 7 | |
| Consolidated Statements of Cash Flows (Unaudited) | 8 | |
| Consolidated Statements of Stockholders' Equity (Unaudited) | 10 | |
| Notes to Consolidated Financial Statements (Unaudited) | 12 | |
| ITEM 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 30 |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 37 |
| ITEM 4. | Controls and Procedures | 37 |
| PART II - OTHER INFORMATION | ||
| ITEM 1. | Legal Proceedings | 38 |
| ITEM 1A. | Risk Factors | 38 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 |
| ITEM 3. | Defaults Upon Senior Securities | 39 |
| ITEM 4. | Mine Safety Disclosures | 39 |
| ITEM 5. | Other Information | 39 |
| ITEM 6. | Exhibits | 39 |
| SIGNATURES | 40 | |
| 3 |
| Table of Contents |
PART I - FINANCIAL STATEMENTS
ITEM 1.
VerifyMe, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
| June 30, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for credit loss reserve, $ | ||||||||
| Unbilled revenue | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Inventory | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| PROPERTY AND EQUIPMENT, NET | $ | $ | ||||||
| RIGHT OF USE ASSET | ||||||||
| INTANGIBLE ASSETS, NET | ||||||||
| GOODWILL | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Term note, current | $ | - | $ | |||||
| Accounts payable | ||||||||
| Other accrued expense | ||||||||
| Lease liability- current | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| LONG-TERM LIABILITIES | ||||||||
| Long-term lease liability | ||||||||
| Term note | - | |||||||
| Convertible note – related party | ||||||||
| Convertible note | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Series A Convertible Preferred Stock, $ | - | - | ||||||
| Series B Convertible Preferred Stock, $ | - | - | ||||||
| Common stock, $ | ||||||||
| Additional paid in capital | ||||||||
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| Treasury stock as cost; | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | - | |||||||
| STOCKHOLDERS' EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | $ |
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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VerifyMe, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| NET REVENUE | $ | $ | $ | $ | ||||||||||||
| COST OF REVENUE | ||||||||||||||||
| GROSS PROFIT | ||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Segment management and Technology(a) | ||||||||||||||||
| General and administrative (a) | ||||||||||||||||
| Research and development | ||||||||||||||||
| Sales and marketing (a) | ||||||||||||||||
| Total Operating expenses | ||||||||||||||||
| LOSS BEFORE OTHER INCOME (EXPENSE) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER (EXPENSE) INCOME | ||||||||||||||||
| Interest income (expenses), net | ( | ) | ( | ) | ||||||||||||
| Other expense, net | ( | ) | - | ( | ) | - | ||||||||||
| Change in fair value of contingent consideration | - | - | ||||||||||||||
| TOTAL OTHER INCOME (EXPENSE), NET | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| LOSS PER SHARE | ||||||||||||||||
| BASIC | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| DILUTED | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | ||||||||||||||||
| BASIC | ||||||||||||||||
| DILUTED | ||||||||||||||||
(a) Includes share-based compensation of $259 thousand and $592 thousand for the three and six months ended June 30, 2025, respectively, and $239 thousand and $697 thousand for the three and six months ended June 30, 2024 respectively.
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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VerifyMe, Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)
(In thousands)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 | |||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Change in fair value of interest rate, Swap | - | ( | ) | |||||||||||||
| Foreign currency translation adjustments | - | - | ( | ) | ||||||||||||
| Total Comprehensive Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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VerifyMe, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Six months ended | ||||||||
| June 30, 2025 | June 30, 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Allowance for doubtful accounts | ( | ) | ||||||
| Stock based compensation | ||||||||
| Change in fair value of contingent consideration | - | ( | ) | |||||
| Fair value of restricted stock awards and restricted stock units issued in exchange for services | ||||||||
| Loss on disposal of equipment | - | |||||||
| Impairments | - | |||||||
| Amortization and depreciation | ||||||||
| Gain on partial lease termination | ( | ) | - | |||||
| Unrealized loss on foreign currency transactions | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Unbilled revenue | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable, other accrued expenses and net change in operating leases | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of patents | - | ( | ) | |||||
| Leasehold Improvements | ( | ) | - | |||||
| Purchase of office equipment | - | ( | ) | |||||
| Capitalized software costs | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from Warrants Exercise | - | |||||||
| Proceeds from SPP Plan | - | |||||||
| Contingent consideration payments | - | ( | ) | |||||
| Tax withholding payments for employee stock-based compensation in exchange for shares surrendered | ( | ) | ( | ) | ||||
| Increase in treasury shares (share repurchase program) | ( | ) | ( | ) | ||||
| Repayment of debt and line of credit | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash | - | ( | ) | |||||
| NET INCREASE(DECREASE) CASH AND CASH EQUIVALENTS | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH- BEGINNING OF PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH- END OF PERIOD | $ | $ | ||||||
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| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | - | $ | - | ||||
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Lease modification | $ | $ | - | |||||
| Conversion of convertible note and accrued interest | $ | $ | - | |||||
| Change in fair value of interest rate, swap | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 9 |
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VerifyMe, Inc.
Consolidated Statements of Stockholders' Equity
(Unaudited)
(In thousands, except share data)
| Series A | Series B | |||||||||||||||||||||||||||||||||||||||||||||||
| Convertible | Convertible | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Common | Treasury | |||||||||||||||||||||||||||||||||||||||||||||
| Stock | Stock | Stock | Additional | Stock | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Loss | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Restricted stock awards | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Restricted Stock Units, net of shares withheld for employee tax | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Series A | Series B | |||||||||||||||||||||||||||||||||||||||||||||||
| Convertible | Convertible | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Common | Treasury | |||||||||||||||||||||||||||||||||||||||||||||
| Stock | Stock | Stock | Additional | Stock | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Loss | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Restricted stock awards | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Restricted stock units, net of shares withheld for employee tax | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Stock | - | - | - | - | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
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| Series A | Series B | |||||||||||||||||||||||||||||||||||||||||||||||
| Convertible | Convertible | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Common | Treasury | |||||||||||||||||||||||||||||||||||||||||||||
| Stock | Stock | Stock | Additional | Stock | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Loss | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Restricted stock awards | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Restricted stock units, net of shares withheld for employee tax | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Common stock issued in relation to Stock Purchase Plan | - | - | - | - | - | ( | ) | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Stock | - | - | - | - | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | - | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | - | - | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||
| Series A | Series B | |||||||||||||||||||||||||||||||||||||||||||||||
| Convertible | Convertible | |||||||||||||||||||||||||||||||||||||||||||||||
| Preferred | Preferred | Common | Treasury | |||||||||||||||||||||||||||||||||||||||||||||
| Stock | Stock | Stock | Additional | Stock | Accumulated Other | |||||||||||||||||||||||||||||||||||||||||||
| Number of | Number of | Number of | Paid-In | Number of | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Shares | Amount | Loss | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Warrants exercise | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Convertible note | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Restricted stock awards | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Restricted stock units, net of shares withheld for employee tax | - | - | - | - | - | ( | ) | - | - | |||||||||||||||||||||||||||||||||||||||
| Common stock issued for services | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Repurchase of Common Stock | - | - | - | - | ( | ) | - | - | ( | ) | - | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Accumulated other comprehensive loss | - | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
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VerifyMe, Inc.
Notes to the Consolidated Financial Statements (unaudited)
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of the Business
VerifyMe, Inc. (“VerifyMe,” “we,”
“us,” “our,” or the “Company”) was incorporated in the State of
The Company is a logistics company that specializes in time and temperature sensitive products, as well as providing brand protection and enhancement solutions. The Company operates a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global, LLC (“PeriShip Global”) which accounts for nearly all VerifyMe revenue, and an Authentication segment. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to deter counterfeit activities. Further information regarding our business segments is discussed below. The Company’s activities are subject to significant risks and uncertainties. See the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report.
Reclassifications
Certain amounts presented for the three and six months ended June 30, 2024, reflect reclassifications made to conform to the presentation in our current reporting period. These reclassifications had no effect on the previously reported net loss.
Basis of Presentation
The accompanying unaudited interim consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiary PeriShip Global. All significant intercompany balances and transactions have been eliminated upon consolidation. The consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the “SEC”) on March 12, 2025. The accompanying Interim Statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any future interim periods.
Segment Reporting
Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method by which to allocate resources and assess performance. The Company has two reportable segments, namely, (i) Precision Logistics and (ii) Authentication. See Note 11 Segment Reporting, for further discussion of the Company’s segment reporting structure.
Use of Estimates
The preparation of 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 disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on their financial statement disclosures.
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Notes to the Consolidated Financial Statements (unaudited)
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220). This standard requires disclosure of specific information about costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the potential effect that the updated standard will have on their financial statement disclosures.
Fair Value of Financial Instruments
The Company’s financial instruments consist of accounts receivable, unbilled revenue, accounts payable, notes payable and accrued expenses, equity investments, and long-term derivatives. The carrying value of accounts receivable, unbilled revenue, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable approximates fair value based on rates and other terms currently available to the Company for similar debt instruments.
The Company follows FASB Accounting Standard Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures, and applies it to all assets and liabilities that are being measured and reported on a fair value basis. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:
Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs that are not corroborated by market data
The level in the fair value within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of June 30, 2025 and December 31, 2024.
Amounts in Thousands ('000)
| Schedule of fair value assets measured on recurring basis | ||||
| Derivative Asset | ||||
| (Level 2) | ||||
| Balance as of December 31, 2024 | ||||
| Termination of SWAP, recognized in other comprehensive loss | ( | ) | ||
| Balance at June 30, 2025 | $ | - | ||
Revenue Recognition
The Company accounts for revenues according to ASC Topic 606, Revenue from Contracts with Customers which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers.
The Company applies the following five steps, separated by reportable segments, in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements.
| · | identify the contract with a customer; |
| · | identify the performance obligations in the contract; |
| · | determine the transaction price; |
| · | allocate the transaction price to performance obligations in the contract; and |
| · | recognize revenue as the performance obligation is satisfied. |
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Notes to the Consolidated Financial Statements (unaudited)
The Company generally considers completion of an agreement, or Statement of Work (“SOW”) and/or purchase order as a customer contract, provided collection is considered probable. For more detailed information about reportable segments, see Note 11 – Segment reporting.
Precision Logistics
Our Precision Logistics segment consists of two service lines, Proactive and Premium. Under our Proactive service line, clients pay us directly for carrier service coupled with our proactive logistics service. Terms typically range 7 days and no longer than 30 days. The Company has determined it is the principal and recognizes shipment fees in gross revenue. Under our Premium service line, we provide complete white-glove shipping monitoring and predictive analytics services. This service includes customer web portal access, weather monitoring, temperature control, full-service center support and last mile resolution. Payment terms are typically 30 - 45 days.
Under both service lines in our Precision Logistics segment, our performance obligation is met, and revenue is recognized when the packages are delivered. The transaction fees consist of fixed consideration made up of amounts contractually billed to the customer. There are no variable considerations in the transaction fee, in either service line.
Authentication
Our Authentication segment primarily consists of anti-counterfeit and brand protection. Terms typically range between 30 and 60 days. Our performance obligation is met, and revenue is recognized when our products are shipped or delivered depending on the specific agreement with the customer. The transaction fee is made up of fixed consideration based on the related purchase order or agreement.
Goodwill
Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC Topic 350, Intangibles-Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment test. The assessment considers factors such as, but not limited to, macroeconomic conditions, data showing other companies in the industry and our share price. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price.
Basic and Diluted Net Loss per Share of Common Stock
The Company follows ASC Topic 260, Earnings Per Share, when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for each of the periods presented, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same.
For the three and six months ended June 30, 2025,
and 2024, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the
calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the
periods presented. For the three and six months ended June 30, 2025, there were approximately
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Notes to the Consolidated Financial Statements (unaudited)
Stock-Based Compensation
We account for stock-based compensation under the provisions of ASC Topic 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes model. The assumptions used in the Black-Scholes option pricing model include risk-free interest rates, expected volatility and expected life of the stock options. Changes in these assumptions can materially affect estimates of fair value stock-based compensation, and the compensation expense recorded in future periods. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line method. We recognize forfeitures as they occur with a reduction in compensation expense in the period of forfeiture. For performance restricted stock units (“RSU”) with stock price appreciation targets (see Note 6 – Stock Options, Restricted Stock and Warrants), we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the performance period and there is no ongoing adjustment or reversal based on actual achievement during the period.
We account for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees.
All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if we had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured, and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service is completed.
NOTE 2 – REVENUE
Revenue by Category
The following series of tables present our revenue disaggregated by various categories (dollars in thousands).
| Schedule of disaggregation of revenue | ||||||||||||||||||||||||
| Precision Logistics | Authentication | Consolidated | ||||||||||||||||||||||
| Revenue | Three Months Ended June 30, | Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Proactive services | $ | $ | $ | - | $ | - | $ | $ | ||||||||||||||||
| Premium services | - | - | ||||||||||||||||||||||
| Brand protection services | - | - | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Precision Logistics | Authentication | Consolidated | ||||||||||||||||||||||
| Revenue | Six Months Ended June 30, | Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Proactive services | $ | $ | $ | - | $ | - | $ | $ | ||||||||||||||||
| Premium services | - | - | ||||||||||||||||||||||
| Brand protection services | - | - | ||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
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Notes to the Consolidated Financial Statements (unaudited)
Contract Balances
The timing of revenue recognition, billings and cash collections results in unbilled revenue (contract assets) and deferred revenue (contract liabilities) on the consolidated balance sheets. Amounts charged to our clients become billable according to the contract terms, which usually consider the delivery completion. Unbilled amounts will generally be billed and collected within 30 days but typically no longer than 60 days. When we advance bill clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within twelve months. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the six-month period ended June 30, 2025, were not materially impacted by any other factors.
Applying the practical expedient in ASC Topic 606, we recognize the incremental costs of obtaining contracts (i.e. sales commissions) as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. As of June 30, 2025, we did not have any capitalized sales commissions.
For all periods presented, contract liabilities were not significant.
The following table provides information about contract assets from contracts with customers:
| Schedule of contract assets from contracts with customers | ||||||||
| Contract Asset | ||||||||
| June 30, | ||||||||
| In Thousands | 2025 | 2024 | ||||||
| Beginning balance, January 1 | $ | $ | ||||||
| Contract asset additions | ||||||||
| Reclassification to accounts receivable, billed to customers | ( | ) | ( | ) | ||||
| Ending balance, June 30 (1) | $ | $ | ||||||
______________
| (1) |
NOTE 3 – BUSINESS COMBINATIONS
On December 8, 2024, the Company sold Trust Codes
Global pursuant to a Share Sale Agreement with a related party, Paul Ryan, former Executive Vice President of the Authentication Segment
and employee of Trust Codes Global Limited. This divestiture did not qualify as a discontinued operation. The purchase price per the agreement
was $1 NZD. We recognized a loss of $
NOTE 4 – INTANGIBLE ASSETS AND GOODWILL
Goodwill
Goodwill represents costs in excess of values assigned to the underlying net assets of acquired businesses. Intangible assets acquired are recorded at estimated fair value. Goodwill is deemed to have an indefinite life and is not amortized but is tested for impairment annually, and at any time when events suggest an impairment more likely than not has occurred. We test goodwill at the reporting unit level.
ASC Topic 350, “Intangibles - Goodwill and Other” (“ASC Topic 350”), permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. Under ASC Topic 350, an entity is not required to perform a quantitative goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP.
Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.
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Notes to the Consolidated Financial Statements (unaudited)
Each of our two reportable segments represents an operating segment under ASC Topic 280, Segment Reporting. We test our goodwill at the reporting unit level, or one level below an operating segment, under ASC Topic 350, “Intangibles - Goodwill and Other”. We determined that we have two reporting units for purposes of goodwill impairment testing, which represent our two reportable business segments, as discussed below.
Changes in the carrying amount of goodwill by reportable business segment for the six months ended June 30, 2025, were as follows (in thousands):
| Schedule of goodwill by reportable business segment | ||||||||||||
| Authentication | Precision Logistics | Total | ||||||||||
| Net book value at | ||||||||||||
| January 1, 2025 | $ | - | $ | $ | ||||||||
| 2025 Activity | ||||||||||||
| Net book value at | - | - | - | |||||||||
| June 30, 2025 | $ | - | $ | $ | ||||||||
Intangible Assets Subject to Amortization
Our intangible assets include amounts recognized in connection with patents and trademarks, capitalized software and acquisitions, including customer relationships, tradenames, developed technology and non-compete agreements. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives.
Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands):
| Schedule of intangible assets subject to amortization | ||||||||||||||||
| June 30, 2025 | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Weighted Average Remaining Useful Life (Years) | ||||||||||||
| Patents and Trademarks | $ | $ | ( | ) | $ | |||||||||||
| Customer Relationships | ( | ) | ||||||||||||||
| Developed Technology | ( | ) | ||||||||||||||
| Internally Used Software | ( | ) | ||||||||||||||
| Non-Compete Agreement | ( | ) | ||||||||||||||
| Deferred Implementation | ( | ) | ||||||||||||||
| Total Intangible Assets | $ | $ | ( | ) | $ | |||||||||||
| December 31, 2024 | ||||||||||||||||
| Patents and Trademarks | $ | $ | ( | ) | $ | |||||||||||
| Customer Relationships | ( | ) | ||||||||||||||
| Developed Technology | ( | ) | ||||||||||||||
| Internally Used Software | ( | ) | ||||||||||||||
| Non-Compete Agreement | ( | ) | ||||||||||||||
| Deferred Implementation | ( | ) | ||||||||||||||
| Total Intangible Assets | $ | $ | ( | ) | $ | |||||||||||
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Notes to the Consolidated Financial Statements (unaudited)
Amortization expense for intangible assets was
$
Patents and Trademarks
As of June 30, 2025, our current patent and trademark portfolios consist of six granted U.S. patents and one granted European patents, two pending foreign patent applications and several foreign trademarks.
The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows (in thousands):
| Schedule of future amortization expense | ||||
| Fiscal Year ending December 31, | ||||
| 2025 (six months remaining) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE 5 – STOCKHOLDERS’ EQUITY
The Company expensed $
The Company expensed $
On August
25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory
notes for the aggregate principal amount of $
On January 2, 2025, the Company issued
On March 31, 2025, the Company issued
On April 1, 2025, the Company issued
On June 19, 2025, the Company issued
On June 30, 2025, the Company issued
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Notes to the Consolidated Financial Statements (unaudited)
Non-Qualified Stock Purchase Plan
On June 10, 2021, the stockholders of the Company
approved a non-qualified stock purchase plan (the “2021 Plan”). The 2021 Plan provides eligible participants, including employees,
directors and consultants of the Company, the opportunity to purchase shares of the Company’s common stock thereby increasing their
interest in the Company’s continued success. The maximum number of common stock reserved and available for issuance under the 2021
Plan is 500,000 shares. The purchase price of shares of common stock acquired pursuant to the exercise of an option will be the lesser
of 85% of the fair market value of a share (a) on the enrollment date, and (b) on the exercise date. The 2021 Plan is not intended to
qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
The Company applied ASC Topic 718, Compensation-Stock Compensation and estimated the fair value using the Black-Scholes model, as the
2021 Plan is considered compensatory. In relation to the 2021 Plan the Company expensed $
Shares Held in Treasury
As of June 30, 2025, and December 31, 2024, the
Company had
On February 29, 2024, seven participants exercised
their option under the Company’s non-qualified stock purchase plan, and as a result,
Shares Repurchase Program
In December 2023, the Company’s Board of
Directors approved a share repurchase program to allow the Company to spend up to $
NOTE 6 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS
On November 14, 2017, the Executive Committee
of the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) which covered the potential
issuance of
On August 10, 2020, the Company’s Board
of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”) and on September 30, 2020, the Company’s stockholders
approved the 2020 Plan, which authorizes the potential issuance of up to
On March 28, 2022, the Company’s Board of
Directors adopted the First Amendment to the 2020 Plan and on June 9, 2022, the Company’s stockholders approved the First Amendment
to the 2020 Plan, which increased the shares authorized for potential issuance under the 2020 Plan to
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Notes to the Consolidated Financial Statements (unaudited)
The 2020 Plan, as amended, is administered by the Compensation Committee which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.
The Company has issued non-qualified stock options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management’s best estimates and involve inherent uncertainties and judgements.
Stock Options
The following table summarizes the activities for the Company’s stock options as of June 30, 2025:
| Schedule of stock options | ||||||||||||||||
| Options Outstanding | ||||||||||||||||
| Weighted - | ||||||||||||||||
| Average | ||||||||||||||||
| Remaining | Aggregate | |||||||||||||||
| Weighted- | Contractual | Intrinsic | ||||||||||||||
| Number of | Average | Term | Value | |||||||||||||
| Shares | Exercise Price | (in years) | (in thousands)(1) | |||||||||||||
| Balance as of December 31, 2024 | $ | $ | - | |||||||||||||
| Granted | - | - | ||||||||||||||
| Forfeited/Cancelled/Expired | ( |
) | ||||||||||||||
| Balance as of June 30, 2025 | $ | $ | - | |||||||||||||
| Exercisable as of June 30, 2025 | $ | $ | - | |||||||||||||
| (1) |
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Notes to the Consolidated Financial Statements (unaudited)
As of June 30, 2025, the Company had no unvested stock options.
During the six months ended June 30, 2025, and
2024, the Company expensed $
As of June 30, 2025, there was $
Restricted Stock Awards and Restricted Stock Units
The following table summarizes the unvested restricted stock awards as of June 30, 2025:
| Schedule of unvested restricted stock awards | ||||||||
| Weighted - | ||||||||
| Average | ||||||||
| Number of | Grant | |||||||
| Award Shares | Date Fair Value | |||||||
| Unvested at December 31, 2024 | $ | |||||||
| Granted | - | - | ||||||
| Vested | ( |
|||||||
| Balance at June 30, 2025 | - | $ | - | |||||
As of June 30, 2025, total unrecognized share-based
compensation cost related to unvested restricted stock awards is $
The following table summarizes the unvested restricted stock units as of June 30, 2025:
| Schedule of unvested restricted stock units | ||||||||
| Weighted - | ||||||||
| Average | ||||||||
| Number of | Grant | |||||||
| Unit Shares | Date Fair Value | |||||||
| Unvested at December 31, 2024 | $ | |||||||
| Granted | ||||||||
| Vested | ( |
) | |
|||||
| Forfeited | ( |
) | ||||||
| Balance at June 30, 2025 | $ | |||||||
As of June 30, 2025, total unrecognized
share-based compensation cost related to unvested time-based restricted stock units was $
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Notes to the Consolidated Financial Statements (unaudited)
The following table summarizes the unvested performance-based restricted stock units as of June 30, 2025:
| Schedule of unvested performance restricted stock units | ||||||||
| Weighted - | ||||||||
| Average | ||||||||
| Number of | Number of | |||||||
| Unit Shares | Unit Shares | |||||||
| Unvested at December 31, 2024 | $ | |||||||
| Granted | - | - | ||||||
| Forfeited/Cancelled | ( |
) | ||||||
| Balance at June 30, 2025 | $ | |||||||
For restricted stock units with stock price appreciation targets, we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the restricted stock unit’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value of each grant was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the derived service period and there is no ongoing adjustment or reversal based on actual achievement during the period.
As of June 30, 2025, total unrecognized share-based
compensation cost related to unvested performance based restricted stock units was $
Warrants
The following table summarizes the activities for the Company’s warrants as of June 30, 2025:
| Schedule of warrants outstanding | |||||||||||||||||
| Number of Warrant Shares | Weighted- Average Exercise Price | Weighted - Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands)(1) | ||||||||||||||
| Balance as of December 31, 2024 | |||||||||||||||||
| Granted | |||||||||||||||||
| Exercised | ( | ) | |||||||||||||||
| Expired | ( | ) | |||||||||||||||
| Balance as of June 30, 2025 | $ | ||||||||||||||||
| Exercisable as of June 30, 2025 | $ | $ | - | ||||||||||||||
| (1) |
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Notes to the Consolidated Financial Statements (unaudited)
On January 13, 2025, the Company entered into
a warrant inducement agreement with an institutional investor and holder of existing warrants to purchase up to
The Company recognized the fair value of the new
warrants using the Black-Scholes option pricing model. The fair value of the new warrants were estimated at $
On June 23, 2025, the Company’s warrants listed on Nasdaq under the symbol “VRMEW” (the “Uplist Warrants”) expired pursuant to the terms of the Form of Common Stock Purchase Warrant. On June 23, 2025, Nasdaq filed a Form 25 formalizing the suspension of the Uplist Warrants.
The following table presents the assumptions used to estimate the fair value of the new warrants on January 13, 2025:
| Schedule of assumptions used | ||
| January 13, 2025 | ||
| Risk free interest rate | ||
| Expected life | |
|
| Expected volatility | ||
| Expected dividend |
At-the-Market Equity Offering Program
On March 6, 2025, the Company entered into an
At-The-Market Sales Agreement (“ATM”) with Roth Capital Partners, LLC (“Roth”), pursuant to which the Company
may issue and sell, from time to time, shares of its common stock up to an aggregate offering price of $
In connection with the ATM program, the Company
incurred direct legal and audit fees totaling $
During the three and six months ended June 30, 2025, and as of the date of this filing, we have not sold any shares of common stock through the ATM.
NOTE 7—DEBT
PeriShip Global is a party to a debt facility
with PNC Bank, National Association (the “PNC Facility”). The PNC Facility includes a $
The PNC Facility includes a number of affirmative and restrictive covenants applicable to PeriShip Global, including, among others, a financial covenant to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 at the end of each fiscal year, affirmative covenants regarding delivery of financial statements, payment of taxes, and establishing primary depository accounts with PNC Bank, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. PeriShip Global is also restricted from paying dividends or making other distributions or payments on its capital stock if an event of default (as defined in the PNC Facility) has occurred or would occur upon such declaration of dividend. On August 14, 2024, the Company signed a waiver and amendment which provided a waiver for a certain event of default and extended the line of credit to September 30, 2025. On February 28, 2025, we received a waiver as of December 31, 2024 for certain events of default. PeriShip Global was in compliance with all affirmative and restrictive covenants under the PNC Facility at June 30, 2025.
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Notes to the Consolidated Financial Statements (unaudited)
As of January 21, 2025, the Term Note balance
of $
As of June 30, 2025, $
Effective
October 17, 2022, the Company entered into an interest rate swap agreement, with a notional amount of $
Convertible Debt
On August
25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory
notes for the aggregate principal amount of $
NOTE 8—INCOME TAXES
There are
Some of the federal tax carry forwards will expire
at various dates through 2037. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable
at that time. We are currently using an effective income tax rate of
Utilization of the net operating losses (NOL) carryforwards may be subject to a substantial annual limitation as required by Section 382 of the IRC, due to ownership changes of the company that could occur in the future, as well as similar state provisions. In general, an “ownership change” as defined by Section 382 results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income.
In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all, of the deferred tax assets may or will not be realized. The Company did not utilize any NOL deductions for the six months ended June 30, 2025.
NOTE 9– LEASES
The Company accounts for its leases under Accounting Standard Codification (“ASC”) Topic 842, “Leases”. The Company determines at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Our current long-term leases include an option to extend the term of the lease prior to the end of the initial term. It is not reasonably certain that we will exercise the option and have not included the impact of the option in the lease term for purposes of determining total future lease payments. As our lease agreement does not explicitly state the discount rate implicit in the lease, we use our promissory note borrowing rate to calculate the present value of future payments.
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Notes to the Consolidated Financial Statements (unaudited)
In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.
We have operating leases for office facilities. We do not have any finance leases.
Lease expenses are included in Segment management and technology expenses on the accompanying Consolidated Statements of Operations. The components of lease expense were as follows (in thousands):
| Schedule of components of lease expense | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Operating lease cost | $ | $ | $ | $ | ||||||||||||
| Short-term lease cost | ||||||||||||||||
| Total lease costs | $ | $ | $ | $ | ||||||||||||
Supplemental information related to leases was as follows (dollars in thousands):
| Schedule of supplemental information related to leases | ||||||||
| June 30, 2025 | December 31, 2024 | |||||||
| Operating Lease right-of-use asset | $ | $ | ||||||
| Current portion of operating lease liabilities | $ | $ | ||||||
| Non-current portion of operating lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | - | $ | - | ||||
| Weighted-average remaining lease term for operating leases (years) | ||||||||
| Weighted average discount rate for operating leases | % | % | ||||||
The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our consolidated balance sheets as of June 30, 2025 (in thousands):
| Schedule of operating lease liabilities maturities | ||||
| Year ending December 31, | ||||
| 2025 (Excluding six months ended June 30, 2025) | $ | |||
| 2026 | ||||
| 2027 | ||||
| Total future lease payments | ||||
| Less: imputed interest | ( | ) | ||
| Present value of future lease payments | ||||
| Less: current portion of lease liabilities | ( | ) | ||
| Long-term lease liabilities | $ | |||
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Notes to the Consolidated Financial Statements (unaudited)
NOTE 10– CONCENTRATIONS
For the three months ended June 30, 2025, one
customer represented
During the three and six months ended June 30, 2025, one vendor accounted
for
As of June 30, 2025, two customers made up
NOTE 11 – SEGMENT REPORTING
As of June 30, 2025, we operated through two reportable business segments: (i) Precision Logistics and (ii) Authentication. The Chief Executive Officer is the chief operating decision maker (“CODM”). These segments reflect the way the CODM evaluates the Company’s business performance and allocates resources. The CODM assesses performance by using revenue, gross margin, operating expenses and net earnings. These metrics are analyzed by reviewing budget and forecast versus actual and prior year versus current year reporting. The various income performance measures are reviewed to ensure proper pricing strategies, effective cost controls and cash management across the organization. Reported revenue includes only the revenue generated by sales to external customers.
Precision Logistics: This segment offers a value-added service provider for time and temperature sensitive parcel management. Through logistics management from a sophisticated IT platform with proprietary databases, package and flight-tracking software, weather, traffic, as well as dynamic dashboards with real-time visibility into shipment transit and last-mile events that are managed by a service center we provide our clients an end-to-end vertical approach for their most critical service delivery needs. Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries.
Authentication: This segment specializes in anti-counterfeit and brand protection.
We do not allocate the following items to the segments: general & administrative expenses and other income (expense).
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Notes to the Consolidated Financial Statements (unaudited)
The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated loss before income tax expense (in thousands):
| Schedule of segment reporting information | ||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Precision Logistics | Authentication | Consolidated | Precision Logistics | Authentication | Consolidated | |||||||||||||||||||
| NET REVENUE | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| COST OF REVENUE | ||||||||||||||||||||||||
| GROSS PROFIT | ||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Management and technology | ||||||||||||||||||||||||
| Research and development | - | - | ||||||||||||||||||||||
| Sales and marketing | ||||||||||||||||||||||||
| Other Segment Items | - | |||||||||||||||||||||||
| Total Segment expenses | ||||||||||||||||||||||||
| Segment Income | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
| General and Administrative | ( | ) | ( | ) | ||||||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
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Notes to the Consolidated Financial Statements (unaudited)
| Six Months Ended | Six Months Ended | |||||||||||||||||||||||
| June 30, | June 30, | |||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||
| Precision Logistics | Authentication | Consolidated | Precision Logistics | Authentication | Consolidated | |||||||||||||||||||
| NET REVENUE | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| COST OF REVENUE | ||||||||||||||||||||||||
| GROSS PROFIT | ||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Management and technology | ||||||||||||||||||||||||
| Research and development | - | - | ||||||||||||||||||||||
| Sales and marketing | ||||||||||||||||||||||||
| Other Segment Items | ( | ) | ||||||||||||||||||||||
| Total Segment expenses | ( | ) | ||||||||||||||||||||||
| Segment Income | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||
| General and Administrative | ( | ) | ( | ) | ||||||||||||||||||||
| Other Income (Expense) | ||||||||||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||||||||||||||||||
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Notes to the Consolidated Financial Statements (unaudited)
NOTE 12 – SUBSEQUENT EVENTS
ZenCredit Agreement
On August 8, 2025, we entered into a Master Loan
Agreement and Promissory Note (the “Loan Agreement”) with ZenCredit Ventures, LLC (“ZenCredit”). Pursuant to the
Loan Agreement, we agreed to loan ZenCredit up to $2 million. Pursuant to the terms of the Loan Agreement, ZenCredit will pay us regular
quarterly interest payments at an annual interest rate of
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information in this Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and notes.
Cautionary Note Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “intended,” “plan,” “could,” “target,” “potential,” “will,” “would,” “expect” and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements.
Our actual results and financial condition may differ materially from those expressed or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.
For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and our other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law.
Overview
VerifyMe, Inc. (“VerifyMe,” the “Company,” “we,” “us,” or “our”), is a logistics company that specializes in time and temperature sensitive products, as well as providing brand protection and enhancement solutions. We operate a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global and accounts for nearly all VerifyMe revenue, and an Authentication segment. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to deter counterfeit and diversion activities. Further information regarding our business segments is discussed below:
Precision Logistics: The Precision Logistics segment specializes in predictive analytics for optimizing delivery of time and temperature sensitive perishable products. We manage complex industry-specific shipping logistic processes that require critical time, temperature control and handling to prevent spoilage and delayed delivery times and brand impairment. Utilizing predictive analytics from multiple data sources including flight-tracking, weather, traffic, major carrier feeds, and time of day data, we provide our clients an end-to-end vertical approach for their most critical service delivery needs. Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, as well as delivering last-mile resolution for key markets, including the perishable healthcare and food industries.
Through our proprietary PeriTrack® customer dashboard, we provide an integrated tool that gives our customers an in-depth look at their shipping activities and allows them access to critical information in support of the specific needs of the supply chain stakeholders. We offer post-delivery services such as customized reporting for trend analysis, system performance reports, power outage maps, and other tailored reports.
Precision Logistics generates revenue from two business service models.
| · | ProActive Service – clients pay us directly for carrier service coupled with our proactive logistics assistance. |
| · | Premium Service – clients pay us directly or through our carrier partner for our complete white-glove shipping monitoring and predictive analytics service. This service includes customer web portal access, weather monitoring, temperature control, full-service center support and last mile resolution. |
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Products: The Precision Logistics segment includes the following bundled services as part of our service offerings to our customers:
| · | PeriTrack®: Our proprietary PeriTrack® customer dashboard was developed utilizing our extensive logistics operational knowledge. This integrated web portal tool gives our customers an in-depth look at their shipping activities based on real-time data. The PeriTrack® dashboard was designed to provide critical information in support of the specific needs of supply chain stakeholders and gives our customer resolution specialists a 360° view of shipping activity. PeriTrack® features tools tailored for shippers of perishable goods, which includes the In-Transit Shipment Tracker. This tool provides details on the unique shipper’s in-transit shipments, with the ability to select and analyze data on individual shipments. |
| · | Service Center: We have assembled a team of customer resolution specialists based in the U.S. This service team resolves shipping problems on behalf of our customers. The service center acts as a help desk and monitors shipping to delivery for our customers. |
| · | Pre-Transit Service: We help clients prepare their products for shipments by advising clients on packaging requirements for various types of perishable products. Each product type requires its own particular packaging to protect it during shipment, and we utilize our extensive knowledge and research to provide our customers with packaging recommendations to meet their unique needs. |
| · | Post-Delivery: We provide customized reporting for trend analysis, system performance reports, power outage maps, and many other reports to help our customers improve their processes and customer service outcomes. |
| · | Weather/Traffic Service: We have full-time meteorologists on staff to monitor weather. A package may experience a variety of weather conditions between the origin and destination, and our team actively monitors these conditions to maximize the number of timely and safely transmitted shipments. Similarly, traffic and construction also create unpredictable delays which our team works diligently to mitigate. If delays or other issues occur, we inform clients and work with them to proactively resolve such shipment issues. |
Authentication: The Authentication segment specializes in anti-counterfeit and brand protection. This is critical in the current landscape of increased counterfeit activity and customer expectations. VerifyMe has patented technologies that address the needs of brands.
Opportunities
Traditionally, most shipping businesses utilize the carrier’s data platform for tracking which generally informs the shipping enterprise, and their customers, when a package is in transit, when a package has been delivered, and some level of detail of the path which a package traveled. We believe taking the data feeds from a carrier and adding real-time visibility with predictive analytics and the human intervention factor of our service center gives us a competitive advantage against other third-party platforms that solely rely on the carrier’s data feeds. We utilize a variety of input sources beyond the carrier’s data feed. Our proprietary “Predictive Analytics” technology is fed real-time meteorology data, traffic and road construction data, and power grid information to help predict issues before they happen. If an alert is created the shipper and our service center will work to address the issue and save the perishable product from spoiling, saving the shipper significant costs and reducing the need to replace products that are no longer viable. We have meteorologists on staff that track world-wide weather patterns to address predicted issues before they happen. We believe the company has two significant areas of opportunity. First, our services are specifically designed to address the needs of small and medium size agriculture, food and beverage companies. Second, the pharmaceutical and healthcare industries represent significant opportunities due to the enhanced tracking and customer service associated with distribution of these products. We are focusing our sales emphasis on those industries.
Building logistics infrastructure is a capital-intensive process as the investment is locked in for a considerably long period. Due to the current economic environment, and our cost competitive offering, we believe companies may opt to outsource their precision logistics services to reduce their operational costs. The outsourcing of supply chain related and other logistics operations to service providers such as ours allows companies to improve the efficiency of their businesses by focusing their resources on core competencies. We believe outsourcing this function to our Precision Logistics segment provides the ideal solution for all parties involved.
Partnerships:
Precision Logistics has a direct partnership with a major global carrier company and has data feeds directly from the carrier into our proprietary logistics optimization software which provides shippers much more detailed information and predictive analytics on their shipment versus a standard shipping code look up which is provided by the carrier. In addition to relying on this strategic partner for shipping services we have a service agreement pursuant to which this strategic partner resells our services to its customers under a “white label” arrangement, which we refer to as our Premium service. Under this arrangement we provide our logistics services to our strategic partner’s customers in exchange for a pre-negotiated service fee per shipment. Our strategic partner has begun to provide its own service offerings to its customers and while we will continue to offer our Premium services, we expect our partner will prefer to offer their solution to customers as the primary recommendation and our solution will be offered as a secondary solution. This does not affect our Proactive services, and we expect to see growth under that service offering as we focus on providing Proactive services to customers directly.
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Our Authentication segment has a contract with HP Indigo, and a strategic partnership with INX, the third largest producer of inks in North America. We believe these partnerships can be used to enable brand owners to securely prevent counterfeiting.
Current Economic Environment
In response to market conditions and lower demand some carriers have implemented strategies to address a potential global recession. The major carrier that PeriShip Global partners with laid out steps it has taken to significantly reduce permanent costs by the end of its 2025 fiscal year in response to these market conditions and lower demand. In mid-December 2024, the carrier forecasted flat revenue year over year for 2025.
We have seen a softening in demand for some services related to high-end perishable items which seem to be impacted by reduced discretionary spending by U.S. consumers. While a recession, whether global or more localized to the U.S., may decrease the demand for our services that are more discretionary in nature, we believe that the internal cost cutting measures, if implemented by the major global carrier, may benefit out-sourced service providers. We are working with this major global carrier to address their small and medium-sized business clients, which we believe is an underserved market and presents growth opportunities for our Precision Logistics segment. However, the U.S. presidential administration has imposed tariffs on goods imported into the U.S. In response, several foreign governments have imposed new tariffs on certain goods imported from the U.S. and additional retaliatory measures against U.S. goods are expected. These or additional changes in U.S. or international trade policy, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions. We can provide no assurances that a decline in discretionary consumer spending will not have a negative impact on our revenues and results of operations.
Seasonality
We experience seasonal fluctuations in our net revenues from sales in our Precision Logistics segment. Revenues from sales are generally higher in the fourth quarter than in other quarters due to increased holiday shipments. The seasonality of our business may cause fluctuations in our quarterly operating results.
Recent Developments
UPS Agreements
On July 29, 2025, PeriShip Global entered into (i) a UPS Digital Channel Program Agreement (the “Program Agreement”) with United Parcel Service, Inc., an Ohio corporation (“UPS Ohio”) and UPS Worldwide Forwarding, Inc., a Delaware corporation (“UPS WWF”), and (ii) a UPS Partner API Access Agreement (the “Integration Agreement” and together with the Program Agreement, the “Agreements”) with UPS Digital, Inc., (“UPS Digital” and collectively with UPS Ohio and UPS WWF, “UPS”). The Agreements provide Periship Global access to designated UPS services at promotional rates as part of a specialized logistics management services for time-sensitive and perishable shipments, including proactive monitoring, weather tracking, and issue resolution through certain UPS digital channel program applications. Pursuant to the Integration Agreement, UPS will allow Periship Global to develop Interfaces to certain UPS APIs, access UPS Access Services and the use of UPS Information (as such terms are defined in the Integration Agreement). The Agreements have a term of three years, subject to customary termination and renewal provisions.
ZenCredit Agreement
On August 8, 2025, we entered into a Master Loan Agreement and Promissory Note (the “Loan Agreement”) with ZenCredit Ventures, LLC (“ZenCredit”). Pursuant to the Loan Agreement, we agreed to loan ZenCredit up to $2 million. Pursuant to the terms of the Loan Agreement, ZenCredit will pay us regular quarterly interest payments at an annual interest rate of 16%. The term of the initial promissory note is nine months at which time all accrued principal and interest is due to us unless we elect to make an Additional Loan (as such term is defined in the Loan Agreement) subject to the terms of the Loan Agreement. On August 11, 2025, we loaned ZenCredit $2 million in exchange for a promissory note issued pursuant to the Loan Agreement.
Nasdaq Deficiency Notice
On April 3, 2025, we received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based on the closing bid price of our common stock for 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share (the “Minimum Bid Price Rule”). The Nasdaq Listing Rules provide a compliance period of 180 calendar days, or until September 30, 2025, in which to regain compliance with the Minimum Bid Price Rule. If we evidence a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, we will automatically regain compliance. If we fail to regain compliance with the Minimum Bid Price Rule, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel.
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This notification has no immediate effect on the listing of our common stock on Nasdaq. We intend to monitor the closing bid price of our common stock and consider our available options in the event the closing bid price of our common stock remains below $1 per share.
Expiration of Uplist Warrants
On June 23, 2025, the Company’s warrants listed on Nasdaq under the symbol “VRMEW” (the “Uplist Warrants”) expired pursuant to the terms of the Form of Common Stock Purchase Warrant. On June 23, 2025, Nasdaq filed a Form 25 formalizing the suspension of the Uplist Warrants.
Results of Operations
Comparison of the three months ended June 30, 2025, and 2024
The following discussion analyzes our results of operations for the three months ended June 30, 2025 and 2024.
| Revenue | Three Months Ended June 30, | |||||||
| 2025 | 2024 | |||||||
| Precision Logistics | $ | 4,493 | $ | 5,244 | ||||
| Authentication | 27 | 108 | ||||||
| Total Revenue | $ | 4,520 | $ | 5,352 | ||||
Consolidated revenue decreased $832 thousand or 16% during the second quarter of 2025 compared to the second quarter of 2024. The decrease is primarily due to a $585 thousand decrease from a discontinued contract with one customer in our Premium services, a $495 thousand decrease related to discontinued services with two customers in our Proactive services, partially offset by increased revenues from new and existing customers in the Precision Logistics segment. The decrease in revenue in our Authentication segment is primarily due to the divestiture of our Trust Codes Global business in December 2024.
| Gross Profit | Three Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | |||||||||||||||
| % of Revenue | % of Revenue | |||||||||||||||
| Precision Logistics | $ | 1,571 | 35 | % | $ | 1,997 | 38 | % | ||||||||
| Authentication | 20 | 74 | % | 93 | 86 | % | ||||||||||
| Total Gross Profit | $ | 1,591 | 35 | % | $ | 2,090 | 39 | % | ||||||||
Gross profit for the three months ended June 30, 2025, was $1,591 thousand, compared to $2,090 thousand for the three months ended June 30, 2024. The resulting gross margin was 35% for the three months ended June 30, 2025, compared to 39% for the three months ended June 30, 2024. The gross profit decrease relates primarily to the decreased Premium services revenue which has higher margins, and the Authentication decrease from the divestiture of our Trust Codes Global business in December 2024. The Proactive services gross margin percentage improved in Q2 2025 compared to Q2 2024.
Segment Management and Technology
Segment management and technology expenses decreased by $597 thousand to $920 thousand for the three months ended June 30, 2025, compared to $1,517 thousand for the three months ended June 30, 2024. The decrease relates primarily to the divestiture of Trust Codes Global in December 2024, a decrease in management wages and severance expense, and the capitalization of development expense related to internally used software in our Precision Logistics segment.
General and Administrative Expenses
General and administrative expenses decreased by $178 thousand to $716 thousand for the three months ended June 30, 2025, compared to $894 thousand for the three months ended June 30, 2024. The decrease relates primarily to a decrease in stock-based compensation from $358 thousand for the three months ended June 30, 2024 to $186 thousand for the three months ended June 30, 2025.
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Research and Development
Research and development expenses were $5 thousand for the three months ended June 30, 2025, and 2024, respectively.
Sales and Marketing
Sales and marketing expenses increased by $62 thousand to $272 thousand for the three months ended June 30, 2025, compared to $210 thousand for the three months ended June 30, 2024. The increase is primarily related to a one-time reduction in stock compensation in Precision Logistics for the three months ended June 30, 2024. This improvement was partially offset by a decrease in headcount and travel expense in the Authentication segment.
Interest Income(Expense), net
Interest income, net was $32 thousand for the three months ended June 30, 2025, compared to interest expense, net of $42 thousand for the three months ended June 30, 2024. This decrease primarily relates to the repayment of the Term Note in the first quarter of 2025, reducing the interest expense as well as the increase in interest income from the Company’s investment of proceeds from the warrants exercise in January 2025.
Net Loss
Consolidated net loss for the three months ended June 30, 2025, and 2024 was $291 thousand and $346 thousand, respectively. The decreased loss relates primarily to the improvement in loss before other expense noted above, partially offset by the fair value gain on contingent consideration for the three months ended June 2024. The resulting consolidated loss per share for the three months ended June 30, 2025, and three months ended June 30, 2024, was $0.02 and $0.03 per basic and diluted share, respectively.
Comparison of the six months ended June 30, 2025, and 2024
The following discussion analyzes our results of operations for the six months ended June 30, 2025, and 2024.
| Revenue | Six Months Ended June 30, | |||||||
| 2025 | 2024 | |||||||
| Precision Logistics | $ | 8,922 | $ | 10,858 | ||||
| Authentication | 53 | 253 | ||||||
| Total Revenue | $ | 8,975 | $ | 11,111 | ||||
Consolidated revenue decreased $2,136 thousand for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease is primarily due to the decreased demand across several of our Proactive services customers, one customer’s shift to use their cold chain strategy, and a discontinued contract with one customer in our Premium services. The decrease in revenue in our Authentication segment is primarily due to the divestiture of our Trust Codes Global business in December 2024.
| Gross Profit | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | |||||||||||||||
| % of Revenue | % of Revenue | |||||||||||||||
| Precision Logistics | $ | 3,041 | 34 | % | $ | 4,126 | 38 | % | ||||||||
| Authentication | 40 | 75 | % | 224 | 89 | % | ||||||||||
| Total Gross Profit | $ | 3,081 | 34 | % | $ | 4,350 | 39 | % | ||||||||
Gross profit for the six months ended June 30, 2025, was $3,081 thousand, compared to $4,350 thousand for the six months ended June 30, 2024. The resulting gross margin was 34% for the six months ended June 30, 2025, compared to 39% for the six months ended June 30, 2024. The gross profit decrease relates to the decrease in Premium services revenue which has higher margins than Proactive services, and the decrease in Authentication revenue from the divestiture of our Trust Codes Global business in December 2024. Our Proactive services gross margin percentage improved in 2025 compared to 2024.
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Segment Management and Technology
Segment management and technology expenses decreased by $1,014 thousand to $1,846 thousand for the six months ended June 30, 2025, compared to $2,860 thousand for the six months ended June 30, 2024. The decrease relates primarily to the divestiture of Trust Codes Global in December 2024 and gain on derecognized liability in our Authentication segment and a decrease in management wages and severance expense in our Precision Logistics segment.
General and Administrative Expenses
General and administrative expenses decreased by $443 thousand to $1,572 thousand for the six months ended June 30, 2025, compared to $2,015 thousand for the six months ended June 30, 2024. The decrease relates primarily to a decrease in stock-based compensation from $724 thousand for the six months ended June 30, 2024 to $418 thousand for the six months ended June 30, 2025.
Research and Development
Research and development expenses were $10 thousand and $60 thousand for the six months ended June 30, 2025, and 2024, respectively.
Sales and Marketing
Sales and marketing expenses decreased by $30 thousand to $568 thousand for the six months ended June 30, 2025, compared to $598 thousand for the six months ended June 30, 2024. The decrease is primarily related to a reduction in employees and consultants in our Authentication segment partially offset by an increase in employees in our Precision Logistics segment and a one-time reduction in stock compensation in 2024.
Interest Income(Expense), net
Interest income was $54 thousand for the six months ended June 30, 2025, compared to interest expense of $80 thousand for the six months ended June 30, 2024. This decrease primarily relates to the repayment of the Term Note in the first quarter of 2025 reducing interest expense as well as the increase in interest income from the Company’s investment of the proceeds from the warrants exercise in January 2025.
Net Loss
Consolidated net loss for the six months ended June 30, 2025, and 2024 was $862 thousand and $899 thousand, respectively. The decreased loss relates primarily to the improvement in loss before other expense noted above, partially offset by the fair value gain on contingent consideration for the six months ended June 30, 2024. The resulting consolidated loss per share for the six months ended June 30, 2025, and six months ended June 30, 2024, was $0.07 and $0.09 per basic and diluted share, respectively.
Liquidity and Capital Resources
Our operations provided $306 thousand of cash during the six months ended June 30, 2025, compared to $312 thousand during the comparable period in 2024.
Cash used by investing activities was $332 thousand during the six months ended June 30, 2025, compared to $191 thousand during the six months ended June 30, 2024. The increase in spend in investing activities relates primarily to increased capitalized software costs in the six months ended June 30, 2025.
Cash provided by financing activities during the six months ended June 30, 2025, was $3,270 thousand compared to cash used in financing activities during the six months ended June 30, 2024 of $313 thousand. The increased cash primarily relates to proceeds from the exercise of warrants, partially offset by the repurchase of shares under the repurchase program and repayment of the Term Note during the six months ended June 30, 2025.
On January 13, 2025, we entered into an Inducement Letter Agreement with an institutional investor and holder of existing warrants to purchase up to 1,461,896 shares of our common stock for $4.7 million in gross proceeds. The existing warrants were originally issued on April 14, 2022, with an exercise price of $3.215 per share, and became exercisable six months following issuance. Pursuant to the Inducement Letter Agreement, the holder agreed to exercise the existing warrants for cash at the exercise price of $3.215 per share in consideration for our agreement to issue a new unregistered warrant to purchase up to an aggregate of 1,461,896 shares of common stock at an exercise price of $4.00 per share. The new warrant was immediately exercisable upon issuance and has a term of five and one-half years from the issuance date.
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The Company recognized the fair value of the new warrants, calculated using the Black-Scholes option pricing model, as $3,971 thousand. The transaction was treated as an equity issuance, and the fair value of the new warrants was recorded in additional paid-in capital. Direct transaction costs totaling approximately $352 thousand, including legal fees and placement agent commissions, were also recorded as a reduction to additional paid-in capital.
On March 6, 2025, the Company entered into an ATM with Roth pursuant to which the Company may issue and sell, from time to time, shares of its common stock up to an aggregate offering price of $15.8 million. Roth acts as the sales agent and is entitled to a 3.0% commission on gross proceeds from sales under the program.
In connection with the ATM, we incurred direct legal and audit fees totaling $150 thousand. These costs have been recorded as deferred offering costs within other current assets and will be reclassified to additional paid-in capital and amortized over a period of one year once shares are issued. Deferred offering costs will be assessed for recoverability at each reporting period. If management determines that the ATM program is not probable to be utilized, the deferred costs will be expensed to general and administrative expenses.
During the six months ended June 30, 2025, and as of the date of this filing, we have not sold any shares of common stock through the ATM.
On September 22, 2022, we entered into the PNC Facility with PNC Bank, National Association. The PNC Facility includes a $1 million RLOC. The RLOC has no scheduled payments of principal until maturity, and bears interest per annum at a rate equal to the sum of Daily SOFR plus 2.85% with monthly interest payments. The RLOC is guaranteed by the Company and secured by the assets of PeriShip Global and the Company. As of June 30, 2025, $0 was outstanding on the RLOC.
The PNC Facility included a four-year Term Note for $2 million which matured in September of 2026 and required equal quarterly payments of principal and interest. The Term Note incurred interest per annum at a rate equal to the sum of Daily SOFR plus 3.1%. The PNC Facility is guaranteed by VerifyMe and secured by the assets of PeriShip Global and VerifyMe. As of January 21, 2025, the Term Note was paid in full and no future principal payments are due.
We believe that our cash and cash equivalents will fund our operations beyond the next 12 months. We may issue additional debt or equity as we grow our business which we expect to grow organically, and if the opportunity arises, through key acquisitions that will help accelerate the growth of our business.
Off-Balance Sheet Arrangements
None.
Critical Accounting Policies and Estimates
None.
Recently Adopted Accounting Pronouncements
Recently adopted accounting pronouncements are discussed in Note 1 – Summary of Significant Accounting Policies in the notes accompanying the financial statements.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. The Company’s Chief Executive Officer, our principal executive officer, and Chief Financial Officer, our principal financial officer, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2025, the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control over Financial Reporting
There have been no other changes in our internal controls over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 1A. RISK FACTORS.
For a discussion of the Company’s potential risks or uncertainties, please see “Part I—Item 1A—Risk Factors” and “Part II—Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC, and “Part I—Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein. There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent Quarterly Reports on Form 10-Q, except as noted herein.
We are not currently in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq’s listing requirements, our common stock will be delisted, which would negatively impact our common stock’s market price and liquidity and reduce our ability to raise capital.
On April 3, 2025, we received a deficiency letter from Nasdaq notifying us that, because the bid price of our common stock closed below $1.00 per share for 30 consecutive business days, we were no longer in compliance with the Nasdaq’s Minimum Bid Price Rule, which is a requirement for continued listing on Nasdaq.
We cannot assure you that we will be able to regain compliance with the Minimum Bid Price Rule and maintain compliance with Nasdaq’s other continued listing standards. Accordingly, our common stock could be delisted from Nasdaq. We and holders of our common stock could be materially adversely impacted if our common stock is delisted from Nasdaq. In particular:
| ● | we may be unable to raise equity capital on acceptable terms or at all; | |
| ● | we may lose the confidence of our business partners, which would jeopardize our ability to continue our business as currently conducted; | |
| ● | the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; | |
| ● | holders may be unable to sell or purchase our common stock when they wish to do so; | |
| ● | we may become subject to stockholder litigation; | |
| ● | we may lose the interest of institutional investors in our common stock; | |
| ● | we may lose media and analyst coverage; | |
| ● | our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and | |
| ● | we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all. |
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
On June 30, 2025, the Company issued 60,000 shares of common stock for services rendered to the Company pursuant to a Consulting Agreement between the Company and Pentant LLC, effective November 15, 2023, as amended June 30, 2024 (the “Consulting Agreement”). The securities issued pursuant to the Consulting Agreement were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.
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Share Repurchase Plan
ISSUER PURCHASES OF EQUITY SECURITIES
| Period | Total Number of Shares (or Units) Purchased | Average Price Paid per Share (or Units) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1) (In thousands) | ||||
| 04/01/2025-04/30/2025 | - | - | - | $483 | ||||
| 05/01/2025-05/31/2025 | 89,992 | $0.74 | 89,992 | $417 | ||||
| 06/01/2025-06/30/2025 | 111,494 | $0.78 | 111,494 | $330 | ||||
| Total | 201,486 | $0.76 | 201,486 | $330 |
| (1) | In December 2023, the Company’s Board of Directors approved a share repurchase program to allow the Company to spend up to $0.5 million to repurchase shares of its common stock so long as the price does not exceed $1.00 until December 14, 2024. On November 26, 2024, the Company approved an extension of the $0.5 million share repurchase program to repurchase shares of the Company’s common stock through December 31, 2025. The share repurchase program may be modified, suspended or discontinued at the discretion of the Board at any time. |
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During the three months ended June 30, 2025, no director or officer
of the Company
ITEM 6. EXHIBITS
| Exhibit No. | Description | |
| 3.1* | Amended and Restated Bylaws of VerifyMe, Inc., as amended through July 8, 2025. | |
| 31.1* | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS* | XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
*Filed herewith
**Furnished herewith
| 39 |
| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| VERIFYME, INC. | |
| Date: August 13, 2025 | By: /s/ Adam Stedham |
| Adam Stedham | |
|
Chief Executive Officer and President
(Principal Executive Officer) | |
| Date: August 13, 2025 | By: /s/ Jennifer Cola |
| Jennifer Cola | |
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting |
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Source:
FAQ
What were VerifyMe (VRME)'s revenues for Q2 2025 and the first six months of 2025?
What net loss did VerifyMe (VRME) report for Q2 2025 and year-to-date?
How much cash did VerifyMe (VRME) have at June 30, 2025 and what drove the change?
What financing and capital actions did VerifyMe (VRME) take in the period?
What debt and convertible obligations does VerifyMe (VRME) have as of June 30, 2025?
Were there any material subsequent events disclosed by VerifyMe (VRME)?
