VRMEW VerifyMe Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported):

December 8, 2024

 

VerifyMe, Inc.

(Exact name of registrant as specified in its charter)

 

Nevada		001-39332				23-3023677
(State or other jurisdiction of incorporation)		(Commission File Number)				(IRS Employer Identification No.)
801 International Parkway, Fifth Floor, Lake Mary, Florida						32746
(Address of principal executive offices)						(Zip Code)
Registrant’s telephone number, including area code:				(585) 736-9400

_____________________

(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
Common Stock, par value $0.001 per share		VRME		The Nasdaq Capital Market
Warrants to Purchase Common Stock		VRMEW		The Nasdaq Capital Market

 

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 2.01

Completion of Acquisition or Disposition of Assets.

 

On December 8, 2024, VerifyMe, Inc. (the “Company”) and Paul Ryan (the "Buyer"), who previously served as Executive Vice President, Authentication Segment, and was employed by Trust Codes Global Limited, a wholly-owned subsidiary of the Company, entered into a Share Sale Agreement (the "Agreement") whereby the Company sold 100% of its equity interest in Trust Codes Global Limited in exchange for aggregate cash consideration of approximately NZD $1. Through his purchase, the Buyer assumed all continuing obligations and liabilities of Trust Codes Global Limited.

 

Item 9.01

Financial Statements and Exhibits.

 

(b) Pro Forma Financial Information.

 

The following unaudited pro forma financial information of the Company is filed as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference:

 

·

Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2023 and the nine months ended September 30, 2024.

 

In accordance with Rule 11-02(b) of Regulation S-X, the Company is omitting a pro forma balance sheet due to the limited number of pro forma adjustments required. A narrative description of the pro forma effects of the sale of Trust Codes Global Limited on the Company’s unaudited consolidated balance sheet as of September 30, 2024 is provided in Note 2 of the notes to the unaudited pro forma consolidated financial statements.

 

(d)     Exhibits.

 

Exhibit No.	Description
99.1	Unaudited Pro Forma Consolidated Financial Statements
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

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: December 12, 2024	By:	/s/ Adam Stedham
		Adam Stedham
		Chief Executive Officer and
		President

 

 

 

 

 

 

Exhibit 99.1

 

Unaudited Pro Forma Consolidated Financial Information

 

On December 8, 2024, VerifyMe, Inc. (the “Company”) and Paul Ryan (the "Buyer"), who previously served as Executive Vice President, Authentication Segment, and was employed by Trust Codes Global Limited, a wholly-owned subsidiary of the Company, entered into a Share Sale Agreement (the "Agreement") whereby the Company sold 100% of its equity interest in Trust Codes Global Limited in exchange for aggregate cash consideration of approximately NZD $1. Through his purchase, the Buyer assumed all continuing obligations and liabilities of Trust Codes Global Limited.

 

The accompanying unaudited pro forma financial information should be read in conjunction with our historical consolidated financial statements and the accompanying notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the "SEC") on March 29, 2024, and Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 12, 2024.

 

The below unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 have been prepared giving effect to the sale of Trust Codes Global Limited as if the transaction had occurred on January 1, 2023. In accordance with Rule 11-02(b) of Regulation S-X, the Company is omitting a pro forma balance sheet due to the limited number of pro forma adjustments required. A narrative description of the pro forma effects of the sale of Trust Codes Global Limited on the Company’s unaudited consolidated balance sheet as of September 30, 2024 is provided in Note 2 of the notes to the unaudited pro forma consolidated financial statements.

 

The unaudited pro forma consolidated financial statements are prepared in accordance with Article 11 of Regulation S-X. The pro forma adjustments are described in the accompanying notes and are based upon information and assumptions available at the time of the filing of this report on Form 8-K.

 

The unaudited pro forma financial information is based on financial statements prepared in accordance with U.S. generally accepted accounting principles, which are subject to change and interpretation. The unaudited pro forma consolidated financial statements were based on and derived from our historical consolidated financial statements, adjusted for those amounts which were determined to be directly attributable to the sale of Trust Codes Global Limited, factually supportable, and with respect to the unaudited pro forma consolidated statements of operations, expected to have a continuing impact on our consolidated results. Actual adjustments, however, may differ materially from the information presented. Pro forma adjustments do not include allocations of corporate costs, as those are not directly attributable to the sale of Trust Codes Global Limited. In addition, the unaudited pro forma financial information is based upon available information and assumptions that management considers to be reasonable, and such assumptions have been made solely for purposes of developing such unaudited pro forma financial information for illustrative purposes in compliance with the disclosure requirements of the SEC. The unaudited pro forma financial information is not necessarily indicative of what the financial position or income statement results would have actually been had the sale of Trust Codes Global Limited occurred on the dates indicated. As a result of the factors above, these unaudited pro forma consolidated financial statements should not be considered to be indicative of our future consolidated financial performance or results.

 

 

VERIFYME, INC.

Unaudited Pro Forma Consolidated Statement of Operations

(in thousands except for per share amounts)

For the Year Ended December 31, 2023

 

		Historical (unaudited)
										Pro Forma				Pro Forma
		VerifyMe, Inc (Consolidated)		(a)		Trust Codes Global				Adjustments				Consolidated
REVENUE		$	25,313			$	314			$	-			$	24,999
COST OF SALES			17,287				28				-				17,259
GROSS PROFIT			8,026				286				-				7,740
OPERATING EXPENSES
Management and technology			4,997				824				-				4,173
General and administrative (a)			4,516				3				278	(b)			4,235
Research and development			107				68				-				39
Sales and marketing (a)			1,644				145				-				1,499
Goodwill and Intangible asset impairment Authentication			90				-				-				90
Total Operating expenses			11,354				1,040				278				10,036
LOSS BEFORE OTHER INCOME (EXPENSE)			(3,328	)			(754	)			(278	)			(2,296	)
OTHER (EXPENSE) INCOME
Interest income (Expense)			(161	)			-				-				(161	)
Loss on equity investment			(100	)			-				-				(100	)
Change in fair value of contingent consideration			201				-				201	(c)			(0	)
Other (expense) income, net			(2	)			-				-				(2	)
TOTAL OTHER INCOME (EXPENSE), NET			(62	)			-				201				(263	)
NET INCOME			(3,390	)			(754	)			(77	)			(2,559	)
EARNINGS/(LOSS) PER SHARE
BASIC		$	(0.35	)										$	(0.26	)
DILUTED		$	(0.35	)										$	(0.26	)
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING
BASIC			9,766,469												9,766,469
DILUTED			9,766,469												9,766,469

 

 

VERIFYME, INC.

EBITDA and Adjusted EBITDA Reconciliation Table (Unaudited)

(in thousands)

For the Year Ended December 31, 2023

 

		Historical (unaudited)
										Pro Forma				Pro Forma
		VerifyMe, Inc (Consolidated)		(a)		Trust Codes Global				Adjustments				Consolidated
Net Income (Loss) GAAP			(3,390	)			(754	)			(77	)			(2,559	)
Interest expense, net			161				-				-				161
Amortization and depreciation			1,134				67				-				1,067
Total EBITDA (Non-GAAP)			(2,095	)			(687	)			(77	)			(1,331	)
Change in fair value of contingent consideration			200				-				-				200
Fair value of restricted stock and restricted stock units issued in exchange for services			1,354				-				-				1,354
Severance expense			590				-				-				590
Realized loss on equity investment			100				-				-				100
Change in fair value of contingent consideration			(201	)			-				(201	)(c)			-
Impairments			190				-				-				190
One-time professional expenses for acquisitions			278				-				278	(b)			-
Total Adjusted EBITDA (Non-GAAP)			416				(687	)			-				1,103

 

 

VERIFYME, INC.

Unaudited Pro Forma Consolidated Statement of Operations

(in thousands except for per share amounts)

For the Nine Months Ended September 30, 2024

 

		Historical (unaudited)
										Pro Forma				Pro Forma
		VerifyMe, Inc (Consolidated)		(a)		Trust Codes Global				Adjustments				Consolidated
REVENUE		$	16,546			$	241			$	-			$	16,305
COST OF SALES			10,301				5				-				10,296
GROSS PROFIT			6,245				236				-				6,009
OPERATING EXPENSES
Management and technology			4,189				780				-				3,409
General and administrative (a)			2,780				7				-				2,773
Research and development			65				50				-				15
Sales and marketing (a)			999				105				-				894
Goodwill and Intangible asset impairment Authentication			2,265				-				1,919	(d)			346
Total Operating expenses			10,298				942				1,919				7,437
LOSS BEFORE OTHER INCOME (EXPENSE)			(4,053	)			(706	)			(1,919	)			(1,428	)
OTHER (EXPENSE) INCOME
Interest income (Expense)			(109	)			-				-				(109	)
Loss on equity investment			-				-				-				-
Change in fair value of contingent consideration			839				-				839	(c)			-
Other (expense) income, net			-				-				-				-
TOTAL OTHER INCOME (EXPENSE), NET			730				-				839				(109	)
NET INCOME			(3,323	)			(706	)			(1,079	)			(1,537	)
EARNINGS/(LOSS) PER SHARE
BASIC		$	(0.32	)										$	(0.15	)
DILUTED		$	(0.32	)										$	(0.15	)
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING
BASIC			10,306,392												10,306,392
DILUTED			10,306,392												10,306,392

 

 

VERIFYME, INC.

EBITDA and Adjusted EBITDA Reconciliation Table (Unaudited)

(in thousands)

For the Nine Months Ended September 30, 2024

 

		Historical (unaudited)
										Pro Forma				Pro Forma
		VerifyMe, Inc (Consolidated)		(a)		Trust Codes Global				Adjustments				Consolidated
Net Income (Loss) GAAP			(3,323	)			(706	)			(1,079	)			(1,537	)
Interest expense, net			109				-				-				109
Amortization and depreciation			905				61				-				844
Total EBITDA (Non-GAAP)			(2,309	)			(645	)			(1,079	)			(584	)
Change in fair value of contingent consideration			174				-				-				174
Fair value of restricted stock and restricted stock units issued in exchange for services			1,009				28				-				981
Severance expense			141				-				-				141
Change in fair value of contingent consideration			(839	)			-				(839	)(c)			0.47
Impairments			2,265				-				1,919	(d)			346
Total Adjusted EBITDA (Non-GAAP)			441				(617	)			-				1,059

 

 

VerifyMe, Inc.

Notes to Unaudited Pro Forma Combined Financial Statement

 

Note 1 - Basis of Presentation

 

The unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2024 and the year ended December 31, 2023 give effect to the sale of Trust Codes Global Limited (“TCGL”) as if it were completed on January 1, 2023.

 

The pro forma financial statements have been derived from the historical consolidated financial statements of the Company. The historical consolidated financial statements have been adjusted in the pro forma financial statements to give effect to pro forma events that are (i) directly attributable to the sale of TCGL, (ii) factually supportable and (iii) with respect to the unaudited pro forma consolidated statements of operations, expected to have a continuing impact on the Company's consolidated operating results.

 

Note 2 - Pro Forma Adjustments

 

A limited number of pro forma adjustments are required to illustrate the effects of the sale of TCGL on our balance sheet as of September 30, 2024. The following narrative description is furnished in lieu of a pro forma balance sheet. Assuming the Company has sold TCGL on January 1, 2023:

 

·

As of September 30, 2024, current assets (cash and cash equivalent, accounts receivable net of allowance for credit losses, unbilled revenue and prepaid expenses) and total assets (property and equipment, net and right of use asset) for VerifyMe, Inc. would have been reduced by $0.1 million and $0.2 million respectively.

·

As of September 30, 2024 total liabilities (accounts payable, other accrued expenses, lease liability current and long term and contingent liability current) would have been reduced by $0.2 million.

 

The following is a summary of the pro forma adjustments reflected in the unaudited pro forma consolidated financial statements based on preliminary estimates, which may change as additional information is obtained:

 

(a) Reflects the Company's consolidated statement of operations for the years end December 31, 2023, as contained in the financial statements presented in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the "SEC") on March 29, 2024, and the Company's consolidated statement of operations as of September 30, 2024, as contained in the financial statements presented in the Company's Quarterly Report on Form 10-Q for the period ended September 30, 2024, filed with the SEC on November 12, 2024. The amounts presented in the pro forma statements reflect reclassifications to conform to our current presentation in our current reporting period.

 

(b) Represents one-time professional fees from acquisition separate from ongoing operating costs.

(c) Represents the change in fair value of contingent consideration from acquisition separate from ongoing operating costs.

(d) Represents goodwill and intangible asset impairments separate from ongoing operating costs.

 

 

 

 

 

 

v3.24.3

Cover	Dec. 08, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 08, 2024
Entity File Number	001-39332
Entity Registrant Name	VerifyMe, Inc.
Entity Central Index Key	0001104038
Entity Tax Identification Number	23-3023677
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	801 International Parkway
Entity Address, Address Line Two	Fifth Floor
Entity Address, City or Town	Lake Mary
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32746
City Area Code	(585)
Local Phone Number	736-9400
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock, par value $0.001 per share
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	VRME
Security Exchange Name	NASDAQ
Warrants to Purchase Common Stock
Title of 12(b) Security	Warrants to Purchase Common Stock
Trading Symbol	VRMEW
Security Exchange Name	NASDAQ

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