VerifyMe(VRME) - 2019 Q2 - Quarterly Report

Revenue Performance - Revenue for the three months ended June 30, 2019, was $40,479, a significant increase from $6,799 for the same period in 2018, primarily from security printing for a large global brand owner[88] - For the six months ended June 30, 2019, revenue reached $86,933, compared to $6,799 for the same period in 2018, with three customers accounting for 100% of revenues[97] Expenses - General and administrative expenses decreased by $107,565 to $418,195 for the three months ended June 30, 2019, from $525,760 in 2018, due to reduced non-cash charges[89] - Research and development expenses dropped to $2,608 for the three months ended June 30, 2019, from $16,233 in 2018, as product development neared completion[92] - Sales and marketing expenses surged to $109,158 for the three months ended June 30, 2019, from just $25 in 2018, reflecting increased trade show participation and hiring of a VP[93] - Legal and accounting fees decreased by $95,435 to $68,335 for the three months ended June 30, 2019, from $163,770 in 2018, primarily due to reduced attorney fees[90] - Payroll expenses increased to $101,786 for the three months ended June 30, 2019, up by $1,983 from $99,803 in 2018, attributed to non-cash stock-based compensation[91] Net Loss - Net loss for the three months ended June 30, 2019, decreased by $129,539 to $665,656 from $795,195 in 2018, mainly due to lower non-cash share-based compensation[94] Cash Flow - Cash used in operations was $1,013,238 for the six months ended June 30, 2019, down from $1,623,303 in the same period in 2018, largely due to a $500,000 payment related to a prior settlement[105] - Cash provided by financing activities for the six months ended June 30, 2019, was nil, compared to $3,247,428 for the same period in 2018[108] - As of August 9, 2019, the company had cash resources of approximately $450,000, a decrease from the December 31, 2018 cash balance, primarily due to $0.2 million spent on manufacturing and deployment[109] - The company estimates it has sufficient cash to support operations through the third quarter of 2019, but cannot assure successful capital raising efforts[109] - The company has no commitments from investors as of the report date, and any future capital raising may involve dilutive convertible debt[109] Revenue Recognition and Controls - The company’s revenue recognition follows ASC Topic 606, which outlines principles for reporting revenue from contracts with customers[114] - The company’s disclosure controls and procedures were deemed ineffective as of June 30, 2019, impacting timely reporting and decision-making[123] - There have been no changes in internal control over financial reporting that materially affected the company during the fiscal quarter covered by the report[124] Technology Commercialization - The company is in the process of commercializing several technologies, including VeriPAS™ and SecureLight+, which have received patent approvals in various European nations[82][83]