VerifyMe, Inc. (NASDAQ:VRME) is among the hidden penny stocks to buy now. According to a recent press release and SEC filing, Dr. Arthur Laffer has resigned as a director of VerifyMe, Inc. (NASDAQ:VRME) on Wednesday, effective immediately. This resignation isn’t linked to any disagreement with the company concerning its functions, rules, or practices. David Edmonds will now serve as a member of the audit committee, effective Friday. During the latest earnings call, the leadership expressed confidence in t ...

Core Insights - VerifyMe, Inc. is transitioning its Proactive services customers from FedEx to a new shipping partner effective September 24, 2025, aiming to provide cost savings during the peak holiday season while maintaining service quality [2][3] Company Overview - VerifyMe, Inc. operates in the logistics and supply chain sector, focusing on time and temperature-sensitive products, offering services such as traceability, authentication, and anti-counterfeiting [3] Service Changes - The top 5% of customers in PeriShip's Precision Logistics business account for over 60% of Proactive services revenue, with an average customer relationship tenure exceeding 7 years [2] - The company expects the new shipping partnership to enhance customer savings and service continuity during the holiday season [2] Financial Context - The transition to a new shipping partner is not anticipated to affect the Premium services provided to existing FedEx customers [2]

PART I - FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, comprehensive loss, cash flows, and stockholders' equity, along with detailed notes explaining significant accounting policies, revenue recognition, business combinations, intangible assets, equity, debt, income taxes, leases, concentrations, segment reporting, and subsequent events [Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) Consolidated Balance Sheets (Unaudited) (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :----------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Cash and cash equivalents | $6,067 | $2,823 | +$3,244 | | Accounts receivable, net | $1,100 | $2,636 | -$1,536 | | Total Current Assets | $7,867 | $6,362 | +$1,505 | | Total Assets | $17,166 | $16,067 | +$1,099 | | Term note, current | $- | $500 | -$500 | | Accounts payable | $1,559 | $2,971 | -$1,412 | | Total Current Liabilities | $1,937 | $4,239 | -$2,302 | | Total Liabilities | $2,730 | $5,853 | -$3,123 | | Total Stockholders' Equity | $14,436 | $10,214 | +$4,222 | [Consolidated Statements of Operations (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) Consolidated Statements of Operations (Unaudited) (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Net Revenue | $4,520 | $5,352 | -15.5% | $8,975 | $11,111 | -19.3% | | Cost of Revenue | $2,929 | $3,262 | -10.2% | $5,894 | $6,761 | -12.8% | | Gross Profit | $1,591 | $2,090 | -23.9% | $3,081 | $4,350 | -29.2% | | Total Operating Expenses | $1,913 | $2,626 | -27.2% | $3,996 | $5,533 | -27.8% | | Net Loss | $(291) | $(346) | -15.9% | $(862) | $(899) | -4.1% | | Basic/Diluted EPS | $(0.02) | $(0.03) | -33.3% | $(0.07) | $(0.09) | -22.2% | [Consolidated Statements of Comprehensive Loss (Unaudited)](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%20(Unaudited)) Consolidated Statements of Comprehensive Loss (Unaudited) (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net Loss | $(291) | $(346) | $(862) | $(899) | | Change in fair value of interest rate, Swap | $- | $2 | $(12) | $5 | | Foreign currency translation adjustments | $- | $18 | $- | $(49) | | Total Comprehensive Loss | $(291) | $(326) | $(874) | $(943) | [Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Consolidated Statements of Cash Flows (Unaudited) (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $306 | $312 | | Net cash used in investing activities | $(332) | $(191) | | Net cash provided by (used in) financing activities | $3,270 | $(313) | | Net increase (decrease) in cash and cash equivalents | $3,244 | $(195) | | Cash and cash equivalents, end of period | $6,067 | $2,900 | - Proceeds from Warrants Exercise contributed **$4,348 thousand** to financing activities in the six months ended June 30, 2025[22](index=22&type=chunk) - Repayment of debt and line of credit amounted to **$875 thousand** in the six months ended June 30, 2025[22](index=22&type=chunk) [Consolidated Statements of Stockholders' Equity (Unaudited)](index=10&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20(Unaudited)) Consolidated Statements of Stockholders' Equity (Unaudited) (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Common stock | $13 | $11 | | Additional paid in capital | $101,392 | $96,344 | | Treasury stock | $(434) | $(480) | | Accumulated deficit | $(86,535) | $(85,673) | | Total Stockholders' Equity | $14,436 | $10,214 | - Warrants exercise contributed **$4,348 thousand** to additional paid-in capital[27](index=27&type=chunk) - Convertible note conversion added **$360 thousand** to total equity[27](index=27&type=chunk) - The company repurchased **201,486 shares** for **$153 thousand** during the six months ended June 30, 2025[26](index=26&type=chunk)[27](index=27&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) [NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%201%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - VerifyMe, Inc. is a logistics company specializing in time and temperature sensitive products and brand protection solutions, operating through Precision Logistics and Authentication segments[31](index=31&type=chunk)[150](index=150&type=chunk) - Precision Logistics, through its subsidiary PeriShip Global, accounts for nearly all of VerifyMe's revenue[31](index=31&type=chunk)[150](index=150&type=chunk) - The Company is evaluating the potential effects of new accounting standards ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for annual periods beginning **January 1, 2025**, and **December 15, 2026**, respectively[36](index=36&type=chunk)[38](index=38&type=chunk) [NOTE 2 – REVENUE](index=15&type=section&id=NOTE%202%20%E2%80%93%20REVENUE) Revenue (in thousands) | Revenue (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (%) | | :--------------------- | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Precision Logistics | $4,493 | $5,244 | -14.3% | $8,922 | $10,858 | -17.8% | | Proactive services | $3,829 | $3,945 | -2.9% | $7,523 | $8,170 | -7.9% | | Premium services | $664 | $1,299 | -48.9% | $1,399 | $2,688 | -47.9% | | Authentication | $27 | $108 | -75.0% | $53 | $253 | -79.0% | | Total Revenue | $4,520 | $5,352 | -15.5% | $8,975 | $11,111 | -19.3% | - The decrease in Authentication segment revenue is primarily due to the divestiture of the Trust Codes Global business in **December 2024**[169](index=169&type=chunk)[178](index=178&type=chunk) - Unbilled revenue (contract assets) decreased from **$733 thousand** at January 1, 2025, to **$324 thousand** at June 30, 2025[63](index=63&type=chunk) [NOTE 3 – BUSINESS COMBINATIONS](index=16&type=section&id=NOTE%203%20%E2%80%93%20BUSINESS%20COMBINATIONS) - VerifyMe divested its Trust Codes Global business (Authentication segment) on **December 8, 2024**, for **$1 NZD**, resulting in a **$0.1 million loss**[64](index=64&type=chunk) [NOTE 4 – INTANGIBLE ASSETS AND GOODWILL](index=16&type=section&id=NOTE%204%20%E2%80%93%20INTANGIBLE%20ASSETS%20AND%20GOODWILL) Intangible Assets and Goodwill (in thousands) | Asset Category (in thousands) | June 30, 2025 (Net Carrying Amount) | December 31, 2024 (Net Carrying Amount) | | :---------------------------- | :---------------------------------- | :-------------------------------------- | | Goodwill | $3,988 | $3,988 | | Patents and Trademarks | $839 | $882 | | Customer Relationships | $1,252 | $1,344 | | Developed Technology | $1,470 | $1,732 | | Internally Used Software | $1,411 | $1,211 | | Non-Compete Agreement | $69 | $88 | | Deferred Implementation | $101 | $108 | | Total Intangible Assets, Net | $5,142 | $5,365 | - Amortization expense for intangible assets was **$548 thousand** for the six months ended June 30, 2025[75](index=75&type=chunk) - The Company expects to record **$567 thousand** in amortization expense for the remaining six months of 2025[77](index=77&type=chunk) [NOTE 5 – STOCKHOLDERS' EQUITY](index=18&type=section&id=NOTE%205%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) - The Company expensed **$96 thousand** for restricted stock awards and **$410 thousand** for restricted stock units for the six months ended June 30, 2025[78](index=78&type=chunk)[79](index=79&type=chunk) - **$350 thousand** of convertible notes were converted into **313,520 shares** of common stock as of January 21, 2025[80](index=80&type=chunk) - The Company repurchased **201,486 shares** for **$153 thousand** under its share repurchase program during the six months ended June 30, 2025[88](index=88&type=chunk)[214](index=214&type=chunk) - As of June 30, 2025, **410,757 shares** were held in treasury, valued at approximately **$434 thousand**[87](index=87&type=chunk) [NOTE 6 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS](index=19&type=section&id=NOTE%206%20%E2%80%93%20STOCK%20OPTIONS%2C%20RESTRICTED%20STOCK%20AND%20WARRANTS) Equity Instrument Details | Equity Instrument | June 30, 2025 (Number of Shares/Units) | Weighted-Average Exercise Price / Grant Date Fair Value | Unrecognized Compensation Cost (in thousands) | | :---------------- | :------------------------------------- | :------------------------------------------------------ | :-------------------------------------------- | | Stock Options Outstanding | 140,000 | $3.50 | $0 | | Unvested Restricted Stock Awards | 0 | $- | $0 | | Unvested Time-Based Restricted Stock Units | 224,471 | $1.41 | $259 | | Unvested Performance-Based Restricted Stock Units | 1,321,591 | $1.15 | $513 | | Warrants Outstanding | 1,555,207 | $3.95 | N/A | - On January 13, 2025, the Company entered into a warrant inducement agreement, resulting in **$4.3 million** net proceeds from warrant exercises and the issuance of new warrants to purchase **1,461,896 shares** at **$4.00 per share**[109](index=109&type=chunk)[110](index=110&type=chunk) - The fair value of the new warrants was estimated at **$3,971 thousand** and recorded in additional paid-in capital[110](index=110&type=chunk) - The Company entered into an At-The-Market Sales Agreement (ATM) on **March 6, 2025**, to sell up to **$15.8 million** of common stock, but no shares have been sold through the ATM as of June 30, 2025[113](index=113&type=chunk)[115](index=115&type=chunk) [NOTE 7—DEBT](index=23&type=section&id=NOTE%207%E2%80%94DEBT) - The Term Note balance of **$875 thousand** was paid in full on **January 21, 2025**[119](index=119&type=chunk) - The revolving line of credit (RLOC) had **$0 outstanding** as of June 30, 2025[120](index=120&type=chunk) - The interest rate swap agreement was terminated on **January 21, 2025**, with **$12 thousand** reclassified from accumulated other comprehensive loss[121](index=121&type=chunk) - Convertible debt outstanding was **$750 thousand** as of June 30, 2025, including **$450 thousand** held by related parties[122](index=122&type=chunk) [NOTE 8—INCOME TAXES](index=24&type=section&id=NOTE%208%E2%80%94INCOME%20TAXES) - No taxes payable as of June 30, 2025, or December 31, 2024[123](index=123&type=chunk) - No tax benefit recognized for the six months ended June 30, 2025, due to uncertainty of realizing deferred tax assets, with a valuation allowance in place[124](index=124&type=chunk)[126](index=126&type=chunk) - Utilization of net operating loss (NOL) carryforwards may be limited by Section 382 of the IRC due to potential ownership changes[125](index=125&type=chunk) [NOTE 9– LEASES](index=24&type=section&id=NOTE%209%E2%80%93%20LEASES) Lease Metrics (in thousands) | Lease Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Operating Lease right-of-use asset | $89 | $236 | | Total operating lease liabilities | $94 | $247 | | Cash paid for operating lease liabilities | $39 | $126 | | Weighted-average remaining lease term (years) | 1.8 | 2.3 | | Weighted average discount rate | 7.4% | 6.0% | - Total lease costs for the six months ended June 30, 2025, were **$47 thousand**, compared to **$104 thousand** in the prior year[130](index=130&type=chunk) [NOTE 10– CONCENTRATIONS](index=26&type=section&id=NOTE%2010%E2%80%93%20CONCENTRATIONS) - One customer accounted for **13% of revenues** for the six months ended June 30, 2025[132](index=132&type=chunk) - One vendor accounted for **99% of transportation costs** in the Precision Logistics segment for the three and six months ended June 30, 2025[132](index=132&type=chunk) - Two customers comprised **26% of accounts receivable, net**, as of June 30, 2025[133](index=133&type=chunk) [NOTE 11 – SEGMENT REPORTING](index=26&type=section&id=NOTE%2011%20%E2%80%93%20SEGMENT%20REPORTING) Segment Reporting (in thousands) | Metric (in thousands) | Precision Logistics (6 Months Ended June 30, 2025) | Authentication (6 Months Ended June 30, 2025) | Precision Logistics (6 Months Ended June 30, 2024) | Authentication (6 Months Ended June 30, 2024) | | :-------------------- | :------------------------------------------------- | :-------------------------------------------- | :------------------------------------------------- | :-------------------------------------------- | | Net Revenue | $8,922 | $53 | $10,858 | $253 | | Cost of Revenue | $5,881 | $13 | $6,732 | $29 | | Gross Profit | $3,041 | $40 | $4,126 | $224 | | Total Segment Expenses | $2,474 | $(50) | $2,583 | $935 | | Segment Income | $567 | $90 | $1,543 | $(711) | - Precision Logistics segment offers value-added services for time and temperature sensitive parcel management, utilizing a proprietary IT platform for predictive analytics and real-time visibility[135](index=135&type=chunk)[150](index=150&type=chunk) - Authentication segment specializes in anti-counterfeit and brand protection[136](index=136&type=chunk)[153](index=153&type=chunk) [NOTE 12 – SUBSEQUENT EVENTS](index=29&type=section&id=NOTE%2012%20%E2%80%93%20SUBSEQUENT%20EVENTS) - On **August 8, 2025**, VerifyMe entered a loan agreement with ZenCredit Ventures, LLC, to loan up to **$2 million** at **16% annual interest**[144](index=144&type=chunk) - An initial loan of **$2 million** was disbursed to ZenCredit on **August 11, 2025**[144](index=144&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews VerifyMe's business, market opportunities, financial performance, liquidity, and capital resources for the periods ended June 30, 2025 [Overview](index=30&type=section&id=Overview) - VerifyMe operates two segments: Precision Logistics (majority revenue, sensitive parcel management with predictive analytics) and Authentication (anti-counterfeit and brand protection)[150](index=150&type=chunk) - Precision Logistics offers "ProActive Service" (carrier service + proactive logistics) and "Premium Service" (white-glove monitoring, predictive analytics, web portal, service center)[152](index=152&type=chunk) - The PeriTrack® customer dashboard provides real-time data, in-depth shipping activity insights, and tools for perishable goods shippers[151](index=151&type=chunk)[157](index=157&type=chunk) [Opportunities](index=31&type=section&id=Opportunities) - Proprietary "Predictive Analytics" technology, integrating real-time meteorology, traffic, and power grid data, provides a competitive advantage by predicting and mitigating shipping issues[154](index=154&type=chunk) - Significant growth opportunities exist in small and medium-sized agriculture, food and beverage companies, and the pharmaceutical and healthcare industries[154](index=154&type=chunk) - The current economic environment may encourage companies to outsource precision logistics services, benefiting VerifyMe's cost-competitive offerings[155](index=155&type=chunk) [Partnerships](index=31&type=section&id=Partnerships) - Precision Logistics has a direct partnership with a major global carrier, providing data feeds for its proprietary logistics optimization software[156](index=156&type=chunk) - The strategic partner is shifting to offer its own solutions, potentially impacting VerifyMe's "Premium service" but not "Proactive services," where direct customer focus is expected to drive growth[156](index=156&type=chunk) - The Authentication segment has a contract with HP Indigo and a strategic partnership with INX for anti-counterfeit solutions[159](index=159&type=chunk) [Current Economic Environment](index=33&type=section&id=Current%20Economic%20Environment) - Softening demand for high-end perishable items is observed due to reduced discretionary spending[161](index=161&type=chunk) - Cost-cutting measures by major global carriers could benefit outsourced service providers, creating growth opportunities for VerifyMe's Precision Logistics segment, particularly with small and medium-sized businesses[161](index=161&type=chunk) - Changes in U.S. or international trade policy, including tariffs, could further weaken business conditions[161](index=161&type=chunk) [Seasonality](index=33&type=section&id=Seasonality) - Net revenues from the Precision Logistics segment are generally higher in the **fourth quarter** due to increased holiday shipments[162](index=162&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) - PeriShip Global signed agreements with UPS on **July 29, 2025**, for digital channel program access and API integration, offering promotional rates for time-sensitive and perishable shipments[163](index=163&type=chunk) - On **August 11, 2025**, VerifyMe loaned **$2 million** to ZenCredit Ventures, LLC, under a Master Loan Agreement with a **16% annual interest rate**[164](index=164&type=chunk) - The Company received a Nasdaq deficiency notice on **April 3, 2025**, for failing to meet the **$1 minimum bid price rule**, with a compliance period until **September 30, 2025**[165](index=165&type=chunk) - The Company's Uplist Warrants (VRMEW) expired on **June 23, 2025**, and Nasdaq formalized their suspension[167](index=167&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) [Comparison of the three months ended June 30, 2025, and 2024](index=34&type=section&id=Comparison%20of%20the%20three%20months%20ended%20June%2030%2C%202025%2C%20and%202024) Financial Performance (Q2 2025 vs Q2 2024, in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Total Revenue | $4,520 | $5,352 | $(832) | -15.5% | | Gross Profit | $1,591 | $2,090 | $(499) | -23.9% | | Gross Margin | 35% | 39% | -4% pts | | | Segment Management and Technology Expenses | $920 | $1,517 | $(597) | -39.4% | | General and Administrative Expenses | $716 | $894 | $(178) | -19.9% | | Sales and Marketing Expenses | $272 | $210 | $62 | +29.5% | | Interest Income (Expense), net | $32 | $(42) | $74 | N/A | | Net Loss | $(291) | $(346) | $55 | -15.9% | | Basic/Diluted EPS | $(0.02) | $(0.03) | $0.01 | -33.3% | - Revenue decrease attributed to **$585 thousand** from a discontinued Premium services contract and **$495 thousand** from two discontinued Proactive services customers[169](index=169&type=chunk) - Gross profit decrease is linked to lower Premium services revenue (higher margins) and the divestiture of Trust Codes Global[170](index=170&type=chunk) [Comparison of the six months ended June 30, 2025, and 2024](index=35&type=section&id=Comparison%20of%20the%20six%20months%20ended%20June%2030%2C%202025%2C%20and%202024) Financial Performance (H1 2025 vs H1 2024, in thousands) | Metric (in thousands) | H1 2025 | H1 2024 | Change ($) | Change (%) | | :-------------------- | :------ | :------ | :--------- | :--------- | | Total Revenue | $8,975 | $11,111 | $(2,136) | -19.2% | | Gross Profit | $3,081 | $4,350 | $(1,269) | -29.2% | | Gross Margin | 34% | 39% | -5% pts | | | Segment Management and Technology Expenses | $1,846 | $2,860 | $(1,014) | -35.5% | | General and Administrative Expenses | $1,572 | $2,015 | $(443) | -22.0% | | Sales and Marketing Expenses | $568 | $598 | $(30) | -5.0% | | Interest Income (Expense), net | $54 | $(80) | $134 | N/A | | Net Loss | $(862) | $(899) | $37 | -4.1% | | Basic/Diluted EPS | $(0.07) | $(0.09) | $0.02 | -22.2% | - Revenue decrease attributed to decreased demand in Proactive services, a customer's shift to their own cold chain strategy, and a discontinued Premium services contract[178](index=178&type=chunk) - Gross profit decrease is linked to lower Premium services revenue (higher margins) and the divestiture of Trust Codes Global[179](index=179&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) - Net cash provided by operating activities was **$306 thousand** for the six months ended June 30, 2025[186](index=186&type=chunk) - Net cash used in investing activities increased to **$332 thousand**, mainly due to increased capitalized software costs[186](index=186&type=chunk) - Net cash provided by financing activities was **$3,270 thousand**, primarily from **$4.7 million** in gross proceeds from warrant exercises, partially offset by share repurchases and debt repayment[187](index=187&type=chunk)[188](index=188&type=chunk) - The Company believes its cash and cash equivalents will fund operations beyond the next **12 months** and may pursue additional debt or equity for organic growth and acquisitions[195](index=195&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has no off-balance sheet arrangements[196](index=196&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No critical accounting policies and estimates were discussed in this section[197](index=197&type=chunk) [Recently Adopted Accounting Pronouncements](index=37&type=section&id=Recently%20Adopted%20Accounting%20Pronouncements) - Recently adopted accounting pronouncements are detailed in Note 1 – Summary of Significant Accounting Policies[198](index=198&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that it is "Not Applicable," indicating no material market risk disclosures for the period - The Company has no material quantitative and qualitative disclosures about market risk for the period[199](index=199&type=chunk) [ITEM 4. Controls and Procedures](index=38&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that disclosure controls and procedures were effective as of **June 30, 2025**[200](index=200&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[201](index=201&type=chunk) PART II - OTHER INFORMATION [ITEM 1. Legal Proceedings](index=39&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company reported no legal proceedings for the period - There are no legal proceedings to report[204](index=204&type=chunk) [ITEM 1A. Risk Factors](index=39&type=section&id=ITEM%201A.%20Risk%20Factors) The Company disclosed a new risk factor related to its non-compliance with Nasdaq's minimum bid price rule, which could lead to delisting and negatively impact its stock and ability to raise capital - The Company is not in compliance with Nasdaq's Minimum Bid Price Rule (**$1 per share**) as of **April 3, 2025**, risking delisting[206](index=206&type=chunk) - Potential delisting could negatively impact common stock market price and liquidity, reduce capital raising ability, and lead to loss of business partner confidence and institutional investor interest[207](index=207&type=chunk)[208](index=208&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports on the issuance of common stock for consulting services under an unregistered exemption and details the Company's share repurchase program activities during the quarter - On **June 30, 2025**, **60,000 common shares** were issued for consulting services under a Section 4(a)(2) exemption[207](index=207&type=chunk) Share Repurchase Program (in thousands) | Period | Total Shares Purchased | Average Price Paid per Share | Total Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (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 | - The share repurchase program, extended through **December 31, 2025**, allows for repurchases up to **$0.5 million** at prices not exceeding **$1.00 per share**[214](index=214&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=40&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities for the period - There were no defaults upon senior securities[210](index=210&type=chunk) [ITEM 4. Mine Safety Disclosures](index=40&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - This item is not applicable to the Company[211](index=211&type=chunk) [ITEM 5. Other Information](index=40&type=section&id=ITEM%205.%20Other%20Information) No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the three months ended June 30, 2025 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q2 2025[212](index=212&type=chunk) [ITEM 6. Exhibits](index=40&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the 10-Q report, including amended bylaws, certifications, and XBRL documents - The exhibits include amended bylaws, CEO/CFO certifications (Sarbanes-Oxley Act), and XBRL instance and taxonomy documents[213](index=213&type=chunk) SIGNATURES - The report was signed by Adam Stedham, CEO and President, and Jennifer Cola, CFO, on **August 13, 2025**[217](index=217&type=chunk)

Financial Data and Key Metrics Changes - The second quarter revenue was $4,500,000, a decrease of $900,000 from $5,400,000 in the prior year, primarily due to discontinued contracts in premium services and losses from two customers in proactive services [11] - Gross profit decreased by $500,000 to $1,600,000, with a gross margin of 35% compared to 39% in the previous year [11] - Operating expenses were reduced to $1,900,000 from $2,600,000, contributing to a net loss of $290,000, an improvement from a net loss of $350,000 in the prior year [12] - Adjusted EBITDA improved to $300,000 from $200,000, reflecting cost reduction efforts [13] - Cash balance increased to $6,100,000, up $3,300,000 from $2,800,000 at the end of 2024 [13] Business Line Data and Key Metrics Changes - Revenue from periship decreased approximately 14% compared to the second quarter of the previous year, largely due to the loss of large customers in 2024 [4] - New customer sales and expanded revenues from existing customers partially offset the decline in periship revenue [5] - The company has successfully reduced operating expenses by approximately 27% compared to 2024 [5] Market Data and Key Metrics Changes - The company has established relationships with two freight carriers that dominate the non-U.S. Postal Service partial shipments market in the U.S., enhancing its service capabilities [7] - The integration of technology with these new freight carriers is expected to take a couple of months, with material impacts anticipated in 2026 [21] Company Strategy and Development Direction - The primary focus for 2025 is on organic growth through expanding revenues with directly contracted periship customers [6] - The company is also evaluating transformative and tuck-in acquisitions while maintaining a disciplined approach to capital allocation [9][24] - A treasury strategy has been adopted to improve interest income from available cash, aiming to increase annualized interest income from approximately 4% to over 8% [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate positive cash flow and maintain a strong balance sheet, which positions the company for meaningful shareholder returns [15] - The anticipated growth from new customer relationships and improved operational efficiencies is expected to contribute to future revenue growth [6][15] Other Important Information - The company purchased 201,000 shares of its stock during the quarter at a cost of $153,000, with $330,000 remaining under the share repurchase program [12] - The company has $1,000,000 available under its line of credit with no outstanding borrowings [14] Q&A Session Summary Question: What was the authentication revenue in the quarter? - The authentication revenue was $27,000 [18][19] Question: What is the growth rate excluding the impact of lost business on periship? - It is difficult to quantify precisely, but the impact is expected to be a single-digit percentage one way or the other [19] Question: When can the impact of the new carrier be expected? - The integration will take a couple of months, and significant changes are not expected until 2026 due to seasonal shipping constraints [21] Question: What are the capital allocation priorities moving forward? - The focus is on transforming periship and evaluating potential acquisitions, with a careful approach to ensure meaningful returns for shareholders [22][24]

NASDAQ:VRME Protect your brand. Grow your business. Second Quarter 2025 Investor Conference Call August 13, 2025 01 Welcome & Introductions Operations and Strategic Update 02 Financial Review 03 Q&A 04 Closing Remarks 05 Forward Looking Statements NASDAQ:VRME In addition to historical information, this presentation contains statements relating to revenue opportunities, anticipated revenue, profitability of the combined company, future business, financial performance, future catalysts and future events or de ...

Core Insights - VerifyMe, Inc. reported a quarterly loss of $0.02 per share, better than the Zacks Consensus Estimate of a loss of $0.06, representing an earnings surprise of +66.67% [1] - The company posted revenues of $4.52 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 5.61%, but down from $5.35 million year-over-year [2] - VerifyMe shares have declined approximately 38% year-to-date, contrasting with the S&P 500's gain of 9.6% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $4.89 million, and for the current fiscal year, it is -$0.17 on revenues of $20.52 million [7] - The estimate revisions trend for VerifyMe was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which VerifyMe belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Full Truck Alliance Co. Ltd., another company in the same industry, is expected to report quarterly earnings of $0.16 per share, reflecting a year-over-year increase of +23.1% [9]

[Executive Summary and Key Highlights](index=1&type=section&id=Executive%20Summary%20and%20Key%20Highlights) VerifyMe's Q2 2025 revenue declined to $4.5 million, but adjusted EBITDA improved, net loss narrowed, and strategic acquisitions are planned for 2026 growth - CEO Adam Stedham highlighted **positive year-to-date adjusted EBITDA growth**, **positive cash generation in Q2 2025**, and a new partnership with a major US parcel carrier, while actively seeking strategic acquisitions and preparing for organic revenue growth and margin expansion in 2026[4](index=4&type=chunk) Q2 2025 Key Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $4.5 million | $5.4 million | -16.7% | | Gross Profit | $1.6 million | $2.1 million | -23.8% | | Gross Margin | 35% | 39% | -4 p.p. | | Net Loss | ($0.29) million | ($0.34) million | Improved | | Adjusted EBITDA | $0.3 million | $0.2 million | +50.0% | | Cash from Operations | $0.7 million | $0.4 million | +75.0% | | Cash Balance (as of June 30) | $6.1 million | N/A | N/A | [Detailed Financial Performance Analysis](index=2&type=section&id=Detailed%20Financial%20Performance%20Analysis) Q2 2025 revenue declined $0.9 million from contract losses, gross margin fell to 35%, but operating loss improved to ($0.3) million, narrowing net loss per share to ($0.02) - Revenue decreased by **$0.9 million**, primarily from a **$0.6 million** loss in Premium services and a **$0.5 million** decrease in Proactive services, partially offset by Precision Logistics growth[7](index=7&type=chunk) - Gross margin decreased from **39% to 35%** year-over-year, mainly due to the loss of a higher-margin Premium services contract, though Proactive services' gross margin percentage improved[8](index=8&type=chunk) - Operating loss narrowed to **($0.3) million** from **($0.5) million** in Q2 2024, driven by reduced operating expenses, cost-cutting in Precision Logistics, and Trust Codes divestiture[9](index=9&type=chunk) - Net loss improved to **($0.29) million**, or **($0.02) per share**, in Q2 2025, from **($0.34) million**, or **($0.03) per share**, in Q2 2024[10](index=10&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents unaudited consolidated financial statements for June 30, 2025, including Balance Sheets, Statements of Operations, and non-GAAP reconciliations [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) VerifyMe's balance sheet strengthened by June 30, 2025, with cash doubling to $6.1 million, liabilities halving to $2.7 million, and equity rising to $14.4 million Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,067 | $2,823 | | Total Current Assets | $7,867 | $6,362 | | Total Assets | $17,166 | $16,067 | | Total Current Liabilities | $1,937 | $4,239 | | Total Liabilities | $2,730 | $5,853 | | Stockholders' Equity | $14,436 | $10,214 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 net revenue was $4.5 million, with a net loss of ($0.29) million, improving from Q2 2024 due to reduced operating expenses from $2.6 million to $1.9 million Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $4,520 | $5,352 | $8,975 | $11,111 | | Gross Profit | $1,591 | $2,090 | $3,081 | $4,350 | | Total Operating Expenses | $1,913 | $2,626 | $3,996 | $5,533 | | Net Loss | $(291) | $(346) | $(862) | $(899) | | Loss Per Share (Basic & Diluted) | $(0.02) | $(0.03) | $(0.07) | $(0.09) | [Non-GAAP Reconciliation: EBITDA & Adjusted EBITDA](index=8&type=section&id=Non-GAAP%20Reconciliation%3A%20EBITDA%20%26%20Adjusted%20EBITDA) Q2 2025 GAAP Net Loss of ($0.29) million reconciled to non-GAAP Adjusted EBITDA of $0.27 million, an increase from Q2 2024, with six-month Adjusted EBITDA flat Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss (GAAP) | $(291) | $(346) | $(862) | $(899) | | EBITDA (Non-GAAP) | $(37) | $(4) | $(344) | $(220) | | Total Adjustments | $307 | $157 | $614 | $487 | | **Adjusted EBITDA (Non-GAAP)** | **$270** | **$153** | **$270** | **$267** | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides administrative and legal information, including earnings call details, company overview, forward-looking statements, and non-GAAP financial measure definitions [Earnings Call Information](index=3&type=section&id=Earnings%20Call%20Information) VerifyMe will host an earnings conference call and webcast on August 13, 2025, at 11:00 a.m. ET to discuss financial results, with replay available - An earnings conference call is scheduled for **11:00 a.m. ET on Wednesday, August 13, 2025**, accessible via webcast or telephone[14](index=14&type=chunk) [Forward-Looking Statements and Non-GAAP Measures](index=3&type=section&id=Forward-Looking%20Statements%20and%20Non-GAAP%20Measures) The report contains forward-looking statements subject to SEC filing risks, and explains non-GAAP measures like EBITDA and Adjusted EBITDA for core operating performance evaluation - The release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, as described in SEC filings[17](index=17&type=chunk) - The company uses non-GAAP measures like EBITDA and Adjusted EBITDA to aid in planning, forecasting, and analyzing core operating performance by excluding specific non-operational expenses[19](index=19&type=chunk)[20](index=20&type=chunk)

Core Viewpoint - VerifyMe, Inc. reported a decrease in revenue for Q2 2025 compared to Q2 2024, primarily due to discontinued contracts, but showed positive adjusted EBITDA growth and cash generation [2][4][10]. Financial Performance - Revenue for Q2 2025 was $4.5 million, down from $5.4 million in Q2 2024, a decrease of $0.9 million [4][10]. - Gross profit in Q2 2025 was $1.6 million, resulting in a gross margin of 35%, compared to $2.1 million and 39% in Q2 2024 [5][10]. - Operating loss was ($0.3) million in Q2 2025, an improvement from ($0.5) million in Q2 2024, attributed to reduced operating expenses [6][10]. - Net loss for Q2 2025 was ($0.29) million, or ($0.02) per share, compared to a net loss of ($0.34) million, or ($0.03) per share in Q2 2024 [7][10]. - Adjusted EBITDA for Q2 2025 was $0.3 million, up from $0.2 million in Q2 2024 [8][10]. Cash Position - As of June 30, 2025, the company had a cash balance of $6.1 million, with cash provided by operations amounting to $0.7 million in Q2 2025, compared to $0.4 million in Q2 2024 [8][10]. Strategic Outlook - The CEO expressed optimism regarding year-to-date adjusted EBITDA growth over 2024, positive cash generation, and a new partnership with a major parcel carrier in the US, while also indicating plans for strategic acquisitions and organic revenue growth in 2026 [2].

Core Viewpoint - VerifyMe, Inc. is set to release its financial results for the first quarter ended June 30, 2025, on August 13, 2025, and will host an investor conference call and webcast on the same day [1]. Group 1: Financial Results Announcement - The financial results will be released on August 13, 2025, for the first quarter ended June 30, 2025 [1]. - An investor conference call and webcast is scheduled for 11:00 a.m. Eastern Time on the same day [1]. Group 2: Accessing the Conference Call - The conference call can be accessed via a webcast link or by calling designated phone numbers for US and international participants [2]. - Presentation slides will be available on the Investors section of the VerifyMe website on the morning of the call [2]. Group 3: Company Overview - VerifyMe, Inc. specializes in logistics for time and temperature-sensitive products, as well as brand protection and enhancement solutions [3].

Financial Performance - VerifyMe's Q1 2025 revenue decreased by 22.6% compared to Q1 2024[13] - Precision Logistics proactive services revenue was 12.6% lower in Q1 2025 compared to Q1 2024[13] - Precision Logistics premium services revenue was 47.1% lower in Q1 2025 compared to Q1 2024, due to a single account insourcing[13] - Q1 2025 net loss was ($0.4M), flat year over year[16] - Q1 2025 Adjusted EBITDA was $0[16] - Gross profit was $1.5M with a 33% margin[16] Financial Position - Cash and cash equivalents were $5.7M at the end of Q1 2025[13, 19] - Convertible note outstanding principal was $0.8M at the end of Q1 2025[13] - Q1 2025 Operating Expenses decreased 28.3% compared to Q1 2024[13] Strategic Initiatives - VerifyMe is continuing efforts to expand revenue with directly contracted PeriShip customers[13] - The company is continuing to optimize its direct customer marketing and sales approach[13] - VerifyMe is in continued conversations with both transformative and tuck-in potential acquisitions[13]