VerifyMe(US:VRME)2025-11-14 21:31Revenue Performance - For the three months ended September 30, 2025, the Precision Logistics segment generated revenue of $4,973,000, a decrease of 6.2% compared to $5,303,000 for the same period in 2024[55]. - The Premium services within the Precision Logistics segment saw revenue decline from $886,000 in Q3 2024 to $809,000 in Q3 2025, representing a decrease of 8.7%[55]. - For the nine months ended September 30, 2025, total revenue was $14,008,000, down from $16,546,000 in the same period of 2024, indicating a decline of 15.4%[55]. - The Proactive services revenue for the nine months ended September 30, 2025, was $11,687,000, compared to $12,587,000 in 2024, reflecting a decrease of 7.1%[55]. - The Authentication segment contributed $113,000 in revenue for the nine months ended September 30, 2025, down from $385,000 in the same period of 2024[55]. - For the three months ended September 30, 2025, the consolidated net revenue was $5,435,000, a decrease of 10.5% compared to $5,303,000 for the same period in 2024[142]. - For the nine months ended September 30, 2025, the consolidated net revenue was $16,546,000, a decrease of 6.5% from $17,688,000 in the same period of 2024[144]. Expenses and Losses - The net loss for the three months ended September 30, 2025, was $2,424,000, compared to a net loss of $3,356,000 for the same period in 2024, representing a 27.7% improvement[142]. - The net loss for the nine months ended September 30, 2025, was $3,323,000, compared to a net loss of $4,218,000 for the same period in 2024, indicating a 21.2% improvement[144]. - Total segment expenses for the three months ended September 30, 2025, were $3,987,000, compared to $4,836,000 in the same period of 2024, indicating a reduction of 17.5%[142]. - The total segment expenses for the nine months ended September 30, 2025, were $7,518,000, compared to $7,260,000 in the same period of 2024, reflecting an increase of 3.6%[144]. Impairments and Amortization - The company recorded a goodwill impairment charge of $1,062 thousand for the Precision Logistics segment during the three and nine months ended September 30, 2025, reducing the net book value to $2,926 thousand[66]. - An intangible asset impairment charge of $2,788 thousand was recorded during the three and nine months ended September 30, 2025, indicating that the carrying value of long-lived assets exceeded their estimated fair values[73]. - Amortization expense for intangible assets was $271 thousand for the three months ended September 30, 2025, and $819 thousand for the nine months ended September 30, 2025[77]. - The company expects to record amortization expense of $137 thousand in the remaining three months of 2025 and a total of $2,317 thousand over the next five years[78]. Share-Based Compensation - The total unrecognized share-based compensation cost related to unvested performance-based restricted stock units was $199 thousand, expected to be recognized over a weighted-average period of less than a year[106]. - The Company granted 110,773 restricted stock units with a grant date fair value of $1.52, while 155,038 units vested and 20,334 units were forfeited as of September 30, 2025[103]. - The Company had a total of 209,137 unvested restricted stock units with an average grant date fair value of $1.39 as of September 30, 2025[103]. - The Company issued 60,000 shares of restricted common stock valued at $41 thousand for consulting services on March 31, 2025, and an additional 60,000 shares valued at $45 thousand on September 30, 2025[83]. - The company expensed $92 thousand related to restricted stock units for the three months ended September 30, 2025[80]. Financial Position and Debt - As of September 30, 2025, the contract asset balance was $381 thousand, down from $786 thousand in 2024, with additions of $4,967 thousand and reclassifications to accounts receivable of $(5,319) thousand during the period[60]. - As of September 30, 2025, the Company had $0 outstanding on the revolving line of credit (RLOC) of $1 million[120]. - The Company entered into a Convertible Note Purchase Agreement for $1.1 million, with $400 thousand held by related parties as of September 30, 2025[122]. - For the nine months ended September 30, 2025, interest expense related to the convertible debt was $46 thousand, down from $66 thousand for the same period in 2024[122]. - The Company has a Master Loan Agreement with ZenCredit Ventures for up to $2 million at an annual interest rate of 16%, with $2 million loaned as of August 11, 2025[123]. - The PNC Facility includes 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[117]. - The Company had no taxes payable as of September 30, 2025, or December 31, 2024[124]. Operational Insights - The Company operates two reportable segments: Precision Logistics and Authentication, with the former accounting for nearly all of the revenue[28]. - The Company utilizes a proprietary software platform for predictive analytics in its Precision Logistics segment, enhancing service delivery and customer experience[28]. - One customer represented 12% of revenues for the nine months ended September 30, 2025, compared to 19% for the same period in 2024[134]. - One vendor accounted for 99% of transportation costs in the Precision Logistics segment during the three and nine months ended September 30, 2025[135]. - The company recognized a loss of $0.1 million on the sale of Trust Codes Global, which was sold for $1 NZD[61]. Stock and Shareholder Actions - As of September 30, 2025, the Company had 481,448 shares held in treasury valued at approximately $502 thousand, compared to 290,467 shares valued at $480 thousand as of December 31, 2024[88]. - The Company repurchased 272,177 shares for $221 thousand during the nine months ended September 30, 2025, under a share repurchase program approved in December 2023[89]. - As of September 30, 2025, there were no outstanding stock options, with a balance of 221,000 options as of December 31, 2024, all of which were forfeited or cancelled[97][99]. - The Company had 1,555,207 warrants outstanding as of September 30, 2025, with an average exercise price of $3.95, following the exercise of 1,461,896 warrants at an exercise price of $3.22[107]. - The Company has not sold any shares of common stock through the At-the-Market Sales Agreement, which has an aggregate offering price of $15.8 million[113][115]. Other Notable Events - The Company is currently evaluating the potential effects of new accounting standards on its financial statement disclosures, including ASU 2023-09 and ASU 2024-03[33][35]. - The company issued 70,000 restricted stock awards on October 9, 2025, vesting on October 9, 2026, to two members of the Board of Directors[146]. - After the third quarter ended September 30, 2025, the company discontinued one foreign patent application and abandoned one US and one European patent due to lack of planned use[146].