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| Name | Symbol | Market | Type |
|---|---|---|---|
| VerifyMe Inc | NASDAQ:VRMEW | NASDAQ | Equity Warrant |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.11 | 0.07 | 0.37 | 4 | 21:08:02 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| Date of Report (Date of earliest event reported): | |
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant’s telephone number, including area code: |
||
_____________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 Capital Market | ||||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| 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. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On November 12, 2024, VerifyMe, Inc. (the “Company”) issued a press release announcing its financial results for its three and nine months ended September 30, 2024. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
| Item 2.05 | Costs Associated With Exit or Disposal Activities. |
On November 8, 2024, the Board of Directors approved closing the Trust Codes Global Limited (“TCGL”) business by the end of November 2024, unless the Company can find a purchaser for the TCGL business prior to the end of November 2024. The Company recorded an aggregate charge associated with decision to sell or close the TCGL business of approximately $1.8 million in the third quarter of 2024 consisting of an intangible asset impairment charge of $901 thousand and a goodwill impairment charge of $1,351 thousand, partially offset by a gain in contingent consideration of $475 thousand. Cash expenditures related to the closing of the TCGL business, if it is not sold, are not expected to be material and are likely to be less than $50,000.
| Item 2.06 | Material Impairments. |
The disclosure included under Item 2.05 is incorporated by reference into this Item 2.06.
| Item 7.01 | Regulation FD Disclosure. |
On November 12, 2024, the Company posted slides to the Investor section of its website that will accompany the Company’s earnings conference call and webcast at 11:00 a.m. Eastern Time on November 12, 2024. The slides are attached to this Form 8-K as Exhibit 99.2.
The information furnished pursuant to this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under such section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. | Description | |
|
99.1 |
||
| 99.2 | Slides for the November 12, 2024, Earnings Conference Call and Webcast. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Forward-Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the meaning established by the Private Securities Litigation Reform Act of 1995, which are identified by words such as "expected," "estimated," "likely, " and other similar words, expressions, and formulations, regarding the timing and scope of a sale or closing of the TCGL business, and the amount and timing of the related charges and cash expenditures associated with a sale or closing of the TCGL business. Many factors could affect the actual results of a sale or closing of the TCGL business and variances from the Company's current expectations regarding such factors could cause actual results to differ materially from those expressed in these forward-looking statements. A detailed discussion of risks and uncertainties that could cause the Company's actual results to differ materially from these forward-looking statements is included in the documents that the Company files with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K. These forward-looking statements speak only as of the date of this Report on Form 8-K, and the Company does not undertake any obligation to revise or update such statements, whether as a result of new information, future events, or otherwise.
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 hereunto duly authorized.
| VerifyMe, Inc. | |||
| Date: November 12, 2024 |
/s/ Adam Stedham |
||
| Name: | Adam Stedham | ||
| Title: | Chief Executive Officer and President | ||
Exhibit 99.1
VerifyMe Reports Third Quarter 2024 Financial Results
| · | Quarterly revenue of $5.4 million in Q3 2024, compared to $5.6 million in Q3 2023 |
| · | Gross Profit of $1.9 million or 35% in Q3 2024, compared to $2.0 million or 37% in Q3 2023 |
| · | Net loss of ($2.4) million in Q3 2024, including $1.8M of one-time adjustments, compared to a net loss of ($0.9) million in Q3 2023 |
| · | Adjusted EBITDA(1) of $0.2 million in Q3 2024, compared to Adjusted EBITDA of $0.2 million in Q3 2023 |
Lake Mary, FL – November 12, 2024 – PRNewswire — VerifyMe, Inc. (NASDAQ: VRME) together with its subsidiaries, Trust Codes Global Limited (“Trust Codes Global”) and PeriShip Global LLC (“PeriShip Global”), (together “VerifyMe,” “we,” “our,” or the “Company”) provides brand owners time and temperature sensitive logistics, supply chain traceability, authentication, anti-counterfeiting, and data-rich brand enhancement services, announced today the Company’s financial results for its third quarter ended September 30, 2024 (“Q3 2024”).
Adam Stedham, VerifyMe’s CEO and President stated, “The Company reported third quarter positive adjusted EBITDA and continues to project a positive adjusted EBITDA for the full year of 2024.(2) This quarter represents our fifth quarter of positive adjusted EBITDA, and we are committed to continuing this path. As previously stated, we believe the Proactive services within Precision Logistics represent a significant opportunity for organic growth and cashflow creation. We dedicated additional sales investment within this segment, and I am pleased with the organic growth and profit improvement of our Proactive services. However, the lack of success across initiatives within the code portion of our Authentication Segment has continued into Q3. We believe the best path for creating shareholder value is to discontinue the codes portion of the Authentication Segment, including no longer pursuing the opportunity with Amazon Transparency, due to the significant investment required. We will redirect that investment into Precision Logistics, ink or other strategic growth options. We believe that maximizing our investment in this area creates the best opportunity to enable meaningful value for our shareholders.”
__________
(1) Adjusted EBITDA is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures" below for information about this non-GAAP measure. A reconciliation to the most directly comparable GAAP measure, net loss, is included as a schedule to this release.
(2) Projections are based on Company estimates as of November 12, 2024, and are provided solely for illustrative purposes. Actual results may vary. The Company undertakes no obligation to update this information. For forward-looking Adjusted EBITDA, a reconciliation to its nearest GAAP measure, net income (loss) is unavailable on a forward -looking basis without unreasonable effort due to the components of the GAAP-measure that are indeterminable as of the date of this press release.
| 1 |
Key Financial Highlights for Q3 2024:
| · | Quarterly consolidated revenue of $5.4 million in Q3 2024, compared to $5.6 million for the three months ended September 30, 2023 (“Q3 2023”) |
| · | Gross profit of $1.9 million or 35% in Q3 2024, compared to $2.0 million or 37% in Q3 2023 |
| · | Net loss of ($2.4) million or ($0.23) per diluted share in Q3 2024 including $1.8M of one-time adjustments, compared to a net loss of ($0.9) million or ($0.09) per diluted share in Q3 2023 |
| · | Adjusted EBITDA(1) of $0.2 million in Q3 2024, compared to Adjusted EBITDA of $0.2 million in Q3 2023 |
| · | Cash of $2.6 million as of September 30, 2024 |
Financial Results for the Three Months Ended September 30, 2024:
Revenue in Q3 2024 was $5.4 million, compared to $5.6 million in Q3 2023. Revenue for the quarter decreased by $0.2 thousand. The growth in the Authentication segment has not materialized, and while the growth in the Precision Logistics segment Proactive services increased, this was more than offset by the previously disclosed discontinued contract with one customer in our Premium services . The Proactive services revenue grew 9% in Q3 2024 compared to Q3 2023. The Precision Logistics segment accounted for 98% of the revenue for the quarter.
Gross profit in Q3 2024 was $1.9 million, compared to $2.0 million in Q3 2023. The resulting gross margin percentage was 35% for the three months ended September 30, 2024, compared to 37% for the three months ended September 30, 2023. The decrease in gross margin was principally due to the discontinued contract in Premium services in the Precision Logistics segment which has higher margins. The Proactive services revenue gross margin percentage improved in Q3 2024 compared to Q3 2023.
Operating loss in Q3 2024 was ($2.9) million, compared to ($0.9) million in Q3 2023. The increased loss primarily relates to $2.3 million of goodwill and intangible asset impairments in the Authentication segment in Q3 2024.
Our net loss in Q3 2024 was ($2.4) million, compared to net loss of ($0.9) million in Q3 2023. The resulting loss per diluted share in Q3 2024 was ($0.23), compared to loss per diluted share of ($0.09) in Q3 2023. The increased loss primarily relates to the $2.3 million goodwill and intangible asset impairment in the Authentication segment partially offset by a $0.5 million gain on change in fair value of contingent consideration.
Adjusted EBITDA in Q3 2024 and Q3 2023 was $0.2 million. Adjusted EBITDA is a non-GAAP financial measure. Please see “Use of Non-GAAP Financial Measures” for a discussion of this non-GAAP measure. A reconciliation to the most directly comparable GAAP measure, net loss is included as a schedule to this release.
Adam Stedham, VerifyMe’s CEO and President stated, “The Company reported a year-to-date Adjusted EBITDA at the end of the third quarter 2024 that exceeds our whole year 2023 Adjusted EBITDA. We are pleased with the meaningful growth in Adjusted EBITDA and believe we have a path for Adjusted EBITDA growth in 2025 compared to 2024. Our decision to discontinue pursuing the codes element of our Authentication Segment is a surprising change of strategy, but after careful consideration, I believe it will contribute to further growth in Adjusted EBITDA and importantly shareholder value. We have engaged with bankers and advisors regarding strategic growth opportunities, and we are encouraged by the opportunities we see so far.”
| 2 |
At September 30, 2024, VerifyMe had a $2.6 million cash balance and $2.1 million in working capital.
At September 30, 2024, VerifyMe had 10,715,065 shares issued and 10,444,698 shares outstanding.
Earnings Call
The Company has scheduled an earnings conference call and webcast for 11:00 a.m. ET on Tuesday November 12, 2024. Prepared remarks regarding the company's financial and operational results will be followed by a question and answer period with VerifyMe's executive team. The conference call may be accessed via webcast at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=Bf7qeSnH or by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614 internationally, and requesting the “VerifyMe Call.” The presentation slides broadcast via the webcast will also be available on the Investors section of the VerifyMe website the morning of the call. Participants must be logged in via telephone to submit a question to management during the call. Participants may optionally pre-register for the conference call and webcast at: https://dpregister.com/sreg/10193901/fdcff0b732.
The webcast and presentation will be archived on the Investors section of VerifyMe’s website and will remain available for 90 days.
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME), together with its subsidiaries, PeriShip Global and Trust Codes Global, is a traceability and customer support services provider using specialized software and process technology. The company operates a Precision Logistics Segment and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions. VerifyMe serves customers worldwide. To learn more, visit https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “continues,” “project,” “will,” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include our engagement in future acquisitions or strategic partnerships that increase our capital requirements or cause us to incur debt or assume contingent liabilities, our reliance on one key strategic partner for shipping services in our Precision Logistics segment, competition including by our key strategic partner, seasonal trends in our business, severe climate conditions, the highly competitive nature of the industry in which we operate, our brand image and corporate reputation, impairments related to our goodwill and other intangible assets, economic and other factors such as recessions, downturns in the economy, inflation, global uncertainty and instability, the effects of pandemics, changes in United States social, political, and regulatory conditions and/or a disruption of financial markets, reduced freight volumes due to economic conditions, reduced discretionary spending in a recessionary environment, global supply-chain delays or shortages, fluctuations in labor costs, raw materials, and changes in the availability of key suppliers, our history of losses, our ability to use our net operating losses to offset future taxable income, the confusion of our name brand with other brands, the ability of our technology to work as anticipated and to successfully provide analytics logistics management, the ability of our strategic partners to integrate our solutions into their product offerings, our ability to manage our growth effectively, our ability to successfully develop and expand our sales and marketing capabilities, risks related to doing business outside of the U.S., intellectual property litigation, our ability to successfully develop, implement, maintain, upgrade, enhance, and protect our information technology systems, our reliance on third-party information technology service providers, our ability to respond to evolving laws related to information technology such as privacy laws, our ability to retain key management personnel, our ability to work with partners in selling our technologies to businesses, production difficulties, our inability to enter into contracts and arrangements with future partners, our ability to acquire new customers, issues which may affect the reluctance of large companies to change their purchasing of products, acceptance of our technologies and the efficiency of our authenticators in the field, our ability to comply with the continued listing standards of the Nasdaq Capital Market, and our ability to timely pay amounts due and comply with the covenants under our debt facilities. These risk factors and uncertainties include those more fully described in VerifyMe’s Annual Report and Quarterly Reports filed with the Securities and Exchange Commission, including under the heading entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. Any forward-looking statement made by us herein speaks only as of the date on which it is made. 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 any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
| 3 |
Use of Non-GAAP Financial Measures
This press release includes both financial measures in accordance with U.S. generally accepted accounting principles (“GAAP”), as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to and should not be considered as alternatives to any other GAAP financial measures. They may not be indicative of the historical operating results of VerifyMe nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.
VerifyMe’s management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. The Company believes that both management and shareholders benefit from referring to EBITDA and Adjusted EBITDA in planning, forecasting and analyzing future periods. Additionally, the Company believes Adjusted EBITDA is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company’s core operating performance. In particular, with regard to our comparison of Adjusted EBITDA for the three and nine months ended September 30, 2024, to the three and nine months ended September 30, 2023, we believe is useful to investors in understanding the results of operations. The Company’s management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. The Company’s management recognizes that EBITDA and Adjusted EBITDA, as non-GAAP financial measures, have inherent limitations because of the described excluded items.
The Company defines EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization. Adjusted EBITDA represents EBITDA plus non-cash stock compensation expense, severance expense, unrealized (gain) loss on equity investment, impairments, change in fair value of contingent consideration and one-time professional expenses for acquisitions. VerifyMe believes EBITDA and Adjusted EBITDA are important measures of VerifyMe’s operating performance because they allow management, investors and analysts to evaluate and assess VerifyMe’s core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.
| 4 |
A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in a schedule to this press release. The Company believes that providing the non-GAAP financial measure, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules as the presentation here may not be comparable to other similarly titled measures of other companies.
For Other Information Contact:
Company: VerifyMe, Inc.
Email: IR@verifyme.com
| 5 |
VerifyMe, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
| As of | ||||||||
| September 30, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents including restricted cash | $ | 2,610 | $ | 3,095 | ||||
| Accounts receivable, net of allowance for credit loss reserve, $117 and $165 as of September 30, 2024 and December 31, 2023, respectively | 1,200 | 3,017 | ||||||
| Unbilled revenue | 786 | 1,282 | ||||||
| Prepaid expenses and other current assets | 205 | 254 | ||||||
| Inventory | 19 | 38 | ||||||
| TOTAL CURRENT ASSETS | 4,820 | 7,686 | ||||||
| PROPERTY AND EQUIPMENT, NET | $ | 159 | $ | 240 | ||||
| RIGHT OF USE ASSET | 339 | 468 | ||||||
| INTANGIBLE ASSETS, NET | 5,523 | 6,927 | ||||||
| GOODWILL | 3,988 | 5,384 | ||||||
| TOTAL ASSETS | $ | 14,829 | $ | 20,705 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Term note, current | $ | 500 | $ | 500 | ||||
| Accounts payable | 1,622 | 3,310 | ||||||
| Other accrued expense | 455 | 988 | ||||||
| Lease liability- current | 166 | 170 | ||||||
| Contingent liability- current | 22 | 173 | ||||||
| TOTAL CURRENT LIABILITIES | 2,765 | 5,141 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Contingent liability, non-current | $ | - | $ | 751 | ||||
| Long-term lease liability | 184 | 307 | ||||||
| Term note | 500 | 875 | ||||||
| Convertible Note – related party | 450 | 475 | ||||||
| Convertible Note | 650 | 625 | ||||||
| TOTAL LIABILITIES | $ | 4,549 | $ | 8,174 | ||||
| STOCKHOLDERS' EQUITY | ||||||||
| Series A Convertible Preferred Stock, $.001 par value, 37,564,767 shares authorized; 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | - | - | ||||||
| Series B Convertible Preferred Stock, $.001 par value; 85 shares authorized; 0.85 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively | - | - | ||||||
| 6 |
| Common stock, $0.001 par value; 675,000,000 authorized; 10,715,065 and 10,453,315 issued, 10,444,698 and 10,123,964 shares outstanding as of September 30, 2024 and December 31, 2023, respectively | 11 | 10 | ||||||
| Additional paid in capital | 95,991 | 95,031 | ||||||
| Treasury stock at cost; 270,367 and 329,351 shares at September 30, 2024 and December 31, 2023, respectively | (464 | ) | (659 | ) | ||||
| Accumulated deficit | (85,172 | ) | (81,849 | ) | ||||
| Accumulated other comprehensive loss | (86 | ) | (2 | ) | ||||
| STOCKHOLDERS' EQUITY | 10,280 | 12,531 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 14,829 | $ | 20,705 |
| 7 |
VerifyMe, Inc.
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share data)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||||||||||||
| NET REVENUE | $ | 5,435 | $ | 5,604 | $ | 16,546 | $ | 16,600 | ||||||||
| COST OF REVENUE(a) | 3,540 | 3,558 | 10,301 | 11,447 | ||||||||||||
| GROSS PROFIT | 1,895 | 2,046 | 6,245 | 5,153 | ||||||||||||
| OPERATING EXPENSES | ||||||||||||||||
| Segment management and Technology(a) | 1,329 | 1,341 | 4,189 | 3,697 | ||||||||||||
| General and administrative (a) | 778 | 1,178 | 2,780 | 3,393 | ||||||||||||
| Research and development | 5 | 5 | 65 | 23 | ||||||||||||
| Sales and marketing (a) | 401 | 377 | 999 | 1,403 | ||||||||||||
| Goodwill and Intangible asset impairment | 2,252 | - | 2,265 | 34 | ||||||||||||
| Total Operating expenses | 4,765 | 2,901 | 10,298 | 8,550 | ||||||||||||
| LOSS BEFORE OTHER INCOME (EXPENSE) | (2,870 | ) | (855 | ) | (4,053 | ) | (3,397 | ) | ||||||||
| OTHER (EXPENSE) INCOME | ||||||||||||||||
| Interest expenses, net | (29 | ) | (39 | ) | (109 | ) | (127 | ) | ||||||||
| Unrealized loss on equity investment | - | - | - | (2 | ) | |||||||||||
| Change in fair value of contingent consideration | 475 | (36 | ) | 839 | 136 | |||||||||||
| Other expense, net | - | - | - | (2 | ) | |||||||||||
| TOTAL OTHER INCOME (EXPENSE), NET | 446 | (75 | ) | 730 | 5 | |||||||||||
| NET LOSS | $ | (2,424 | ) | $ | (930 | ) | $ | (3,323 | ) | $ | (3,392 | ) | ||||
| LOSS PER SHARE | ||||||||||||||||
| BASIC | (0.23 | ) | (0.09 | ) | (0.32 | ) | (0.35 | ) | ||||||||
| DILUTED | (0.23 | ) | (0.09 | ) | (0.32 | ) | (0.35 | ) | ||||||||
| WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | ||||||||||||||||
| BASIC | 10,603,747 | 9,879,202 | 10,306,392 | 9,732,619 | ||||||||||||
| DILUTED | 10,603,747 | 9,879,202 | 10,306,392 | 9,732,619 | ||||||||||||
| (a) | Includes share-based compensation of $486 thousand and $1,183 thousand for the three and nine months ended September 30, 2024, respectively, and $498 thousand and $1,099 thousand for the three and nine months ended September 30, 2023, respectively. |
| 8 |
VerifyMe, Inc.
Consolidated EBITDA and Adjusted EBITDA Reconciliation
Table (Unaudited)
(In thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net Loss (GAAP) | $ | (2,424 | ) | $ | (930 | ) | $ | (3,323 | ) | $ | (3,392 | ) | ||||
| Interest expense, net | 29 | 39 | 109 | 127 | ||||||||||||
| Amortization and depreciation | 306 | 295 | 905 | 835 | ||||||||||||
| Total EBITDA (Non-GAAP) | (2,089 | ) | (596 | ) | (2,309 | ) | (2,430 | ) | ||||||||
| Adjustments: | ||||||||||||||||
| Stock based compensation | 85 | 5 | 174 | 46 | ||||||||||||
| Fair value of restricted stock and restricted stock units issued in exchange for services | 401 | 484 | 1,009 | 932 | ||||||||||||
| Severance | - | 247 | 141 | 579 | ||||||||||||
| Unrealized loss on equity investment | - | - | - | 2 | ||||||||||||
| Change in fair value of contingent consideration | (475 | ) | 36 | (839 | ) | (136 | ) | |||||||||
| Impairments | 2,252 | - | 2,265 | 34 | ||||||||||||
| One-time professional expenses for acquisitions | - | - | - | 278 | ||||||||||||
| Total Adjusted EBITDA (Non-GAAP) | $ | 174 | $ | 176 | $ | 441 | $ | (695 | ) | |||||||
9
Exhibit 99.2
Protect your brand. Grow your business. Third Quarter 2024 Investor Conference Call November 12, 2024 www.VerifyMe.com NASDAQ:VRME 1
Agenda NASDAQ:VRME 01 Welcome & Introductions Operations and Strategic Update Financial Review Q&A Closing Remarks 02 03 www.VerifyMe.com 04 05 2
Forward Looking Statements 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 developments, strategy, projected costs, prospects, plans, objectives of management and future operations, future revenue, and expected market growth of VerifyMe, Inc . together with its wholly owned subsidiaries PeriShip Global LLC and Trust Codes Global Limited, (“VerifyMe,” the “Company,” “we,” or “us”) that may constitute “forward - looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 . The words “believe,” “continues,” “project,” "will," and similar expressions, as they relate to us, are intended to identify forward - looking statements . We have based these forward - looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs . Important factors that could cause actual results to differ from those in the forward - looking statements include our engagement in future acquisitions or strategic partnerships that increase our capital requirements or cause us to incur debt or assume contingent liabilities, our reliance on one key strategic partner for shipping services in our Precision Logistics segment, competition including by our key strategic partner, seasonal trends in our business, severe climate conditions, the highly competitive nature of the industry in which we operate, our brand image and corporate reputation, impairments related to our goodwill and other intangible assets, economic and other factors such as recessions, downturns in the economy, inflation, global uncertainty and instability, the effects of pandemics, changes in United States social, political, and regulatory conditions and/or a disruption of financial markets, reduced freight volumes due to economic conditions, reduced discretionary spending in a recessionary environment, global supply - chain delays or shortages, fluctuations in labor costs, raw materials, and changes in the availability of key suppliers, our history of losses, our ability to use our net operating losses to offset future taxable income, the confusion of our name brand with other brands, the ability of our technology to work as anticipated and to successfully provide analytics logistics management, the ability of our strategic partners to integrate our solutions into their product offerings, our ability to manage our growth effectively, our ability to successfully develop and expand our sales and marketing capabilities, risks related to doing business outside of the U . S . , intellectual property litigation, our ability to successfully develop, implement, maintain, upgrade, enhance, and protect our information technology systems, our reliance on third - party information technology service providers, our ability to respond to evolving laws related to information technology such as privacy laws, our ability to retain key management personnel, our ability to work with partners in selling our technologies to businesses, production difficulties, our inability to enter into contracts and arrangements with future partners, our ability to acquire new customers, issues which may affect the reluctance of large companies to change their purchasing of products, acceptance of our technologies and the efficiency of our authenticators in the field, our ability to comply with the continued listing standards of the Nasdaq Capital Market, and our ability to timely pay amounts due and comply with the covenants under our debt facilities . More detailed information about these factors may be found in the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10 - K for the year ended December 31 , 2023 , and subsequent Quarterly Reports on Form 10 - Q . The statements made herein speak only as of the date of this presentation . The Company’s actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward - looking statements . The Company undertakes no obligation to update or revise its forward - looking statements to reflect events or circumstances after the date of this presentation, except as required by law . Market data and industry information used herein are based on our management's knowledge of the industry and the good faith estimates of management . We also relied, to the extent available, upon managements review of independent industry surveys, forecasts and publications and other publicly available information prepared by a number of third - party sources . All of the market data and industry information used herein involves a number of assumptions and limitations which we believe to be reasonable, and you are cautioned not to give undue weight to such estimates . Although we believe that these sources are reliable, we cannot guarantee the accuracy or completeness of this information, and we have not independently verified this information . Projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate are subject to a high degree of uncertainty and risk due to a variety of factors, including those described, above . These and other factors could cause results to differ materially from those expressed in our estimates and beliefs and in the estimates prepared by independent parties . Non - GAAP Financial Measures This presentation includes non - GAAP financial information . This non - GAAP information is in addition to, not a substitute for or superior to, measures of financial performance or liquidity determined in accordance with GAAP . The Securities and Exchange Commission‘s Regulation G applies to any public disclosure or release of material information that includes a non - GAAP financial measure and requires : (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non - GAAP financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP . The required presentations and reconciliations are contained in this presentation and can also be found at our website at www . verifyme . com 3 www.VerifyMe.com NASDAQ:VRME
Welcome Adam Stedham Chief Executive Officer and President www.VerifyMe.com NASDAQ:VRME – Remarks – Future Outlook 4
Overall Performance 1 • Anticipate YoY 2024 revenue slightly below 2023 (2) • Anticipate YoY 2024 gross profit and gross margin above 2023 (2) • Anticipate YoY 2024 adjusted EBITDA (1) above 2023 (2) • Q3 2024 is 5 th consecutive quarter of positive adjusted EBITDA Capital • Total cash net of debt end of September 2024 $0.5M vs $0.6M end of December 2023 • Anticipate will be net cashflow neutral in 2024 (2) • Continuing to review all capital options Precision Logistics Segment • Increased customers in proactive business line by 6% YTD September 2024 vs 2023 • Shipments to existing customer in proactive business line down 4% YTD September 2024 vs 2023 • Continued Increases in proposal activity since fully staffing salesforce 3 2 Strategic Snapshot 5 www.VerifyMe.com 4 Authentication Segment • $0.1M Revenue in Q3 2024 and 2023 • $0.4M Revenue YTD September 2024 vs $0.5M YTD September 2023 • YTD ink sales $0.1M (23% YTD revenue) • Operating loss YTD $1.0M vs $1.1M in 2023 (excluding impairments) (1) The term Adjusted EBITDA is a non - GAAP financial measure that the Company believes is useful to investors in evaluating its resu lts. Adjusted EBITDA represents EBITDA (net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization) plus non - cash stock compensation expense, severance expense, unreal ized (loss) on equity investment, impairments, change in fair value of contingent consideration and one - time professional expenses for acquisitions. For a reconciliation of this non - GAAP financial measure to th e most comparable GAAP equivalent, net loss, see the Non - GAAP Reconciliation along with related footnotes, in the Appendix to this presentation. (2) Projections are based on Company estimates as of November 12, 2024, and are provided solely for illustrative purposes. Actua l r esults may vary. The company undertakes no obligation to update this information. For forward - looking Adjusted EBITDA, a reconciliation to the nearest GAAP measure, net income (loss) is unavailable on a forward - lo oking basis without unreasonable effort due to the component of GAAP - measure that are indeterminable as of the date of this presentation
Financials www.VerifyMe.com NASDAQ:VRME – Q3 2024 Financial Highlights – Balance Sheet 6
Q3 Financial Highlights Revenue • Growth of $0.4M or 9% in Proactive Services • Decline related to previously announced discontinued contract in premium services, and lack of Authentication segment growth $5.4M Net Loss Improvement of $0.2M before goodwill and intangible impairment and change in fair value of contingent consideration ($0.4M) $3.1M Gross Profit • Continue to show improvements in Proactive Services margin % • Improvement offset by decline from previously announced discontinued higher margin premium contract • Lack of higher margin Authentication segment growth $1.9M 35% compared to 37% in Q3 2023 (1) The term Adjusted EBITDA is a non - GAAP financial measure that the Company believes is useful to investors in evaluating its results. Adjusted EBITDA represents EBITDA (net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization) plus non - cash stock compensation expense, severance expense, unreal ized (gain) loss on equity investment, impairments, change in fair value of contingent consideration and one - time professional expenses for acquisitions. For a reconciliation of this non - GAAP financial measure to th e most comparable GAAP equivalent, net loss, see the Non - GAAP Reconciliation along with related footnotes, in the Appendix to this presentation. 7 www.VerifyMe.com ($2.4M) $0.2M Adjusted EBITDA (1) Improvement of $1.1M year to date September 2024 vs year to date September 2023 3%
December 31, 2023 September 30, 2024 (Unaudited) Assets $3,095 $2,610 Cash and cash equivalents 4,299 12,311 1,986 9,511 Accounts receivable and unbilled revenue Intangible assets & Goodwill 1,000 722 Other assets $20,705 $14,829 Total Assets $4,641 500 $2,265 500 Current Liabilities Accounts payable, accrued exp, current lease exp and contingent consideration Current portion of debt 1,975 1,058 1,600 184 Non - Current Liabilities Long term portion of debt & Convertible Note Other long term liabilities $8,174 $4,549 Total Liabilities $12,531 $10,280 Total Stockholders’ Equity $20,705 $14,829 Total Liabilities and Stockholders’ Balance Sheet ($ in thousan ds ) www.VerifyMe.com 8
9 Q & A 9 NASDAQ:VRME www.VerifyMe.com Confidential Property of VerifyMe
10 www.VerifyMe.com Confidential Property of VerifyMe NASDAQ:VRME Appendix
11 www.VerifyMe.com Non - GAAP Reconciliation This presentation includes both financial measures in accordance with U . S . generally accepted accounting principles (“GAAP”), as well as non - GAAP financial measures . Generally, a non - GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP . Non - GAAP financial measures should be viewed as supplemental to and should not be considered as alternatives to any other GAAP financial measures . They may not be indicative of the historical operating results of VerifyMe nor are they intended to be predictive of potential future results . Investors should not consider non - GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP . VerifyMe’s management uses and relies on EBITDA and Adjusted EBITDA, which are non - GAAP financial measures . The Company believes that both management and shareholders benefit from referring to EBITDA and Adjusted EBITDA in planning, forecasting and analyzing future periods . Additionally, the Company believes Adjusted EBIDTA is useful to investors to evaluate its results because it excludes certain items that are not directly related to the Company’s core operating performance . In particular, with regard to our comparison of Adjusted EBITDA for the three and nine months ended September 30 , 2024 , to the three and nine months ended September 30 , 2023 , we believe that certain charges make a comparison of net loss less useful to investors than a comparison of Adjusted EBITDA in understanding the results of operations . The Company’s management uses these non - GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period - to - period comparison . The Company’s management recognizes that EBITDA and Adjusted EBITDA, as non - GAAP financial measures, have inherent limitations because of the described excluded items . The Company defines EBITDA as net income (loss) before interest expense, income tax expense (benefit), and depreciation and amortization . Adjusted EBITDA represents EBITDA plus non - cash stock compensation expense, severance expense, unrealized (gain) loss on equity investment, impairments, change in fair value of contingent consideration and one - time professional expenses for acquisitions . VerifyMe believes EBITDA and Adjusted EBITDA are important measures of VerifyMe’s operating performance because they allow management, investors and analysts to evaluate and assess VerifyMe’s core operating results from period - to - period after removing the impact of items of a non - operational nature that affect comparability . A reconciliation of EBITDA and Adjusted EBITDA to the most comparable financial measure, net loss, calculated in accordance with GAAP is included in the table on the next slide . The Company believes that providing the non - GAAP financial measure, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies . In making any comparisons to other companies, investors need to be aware that companies use different non - GAAP measures to evaluate their financial performance . Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules as the presentation here may not be comparable to other similarly titled measures of other companies .
12 www.VerifyMe.com Non - GAAP Reconciliation – EBITDA and Adjusted EBITDA (In Thousands)
Protect your brand. Grow your business. US Headquarters 801 International Parkway Fifth Floor Lake Mary, FL 32746 +1 585 736 9400 info@ verifyme.com 13
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