What changed in this filing

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Item 1. Business

2023-03-28 compared with 2022-03-14 · 429 added, 522 removed, 86 unchanged (92% of the section changed)

VerifyMe, Inc.

(“VerifyMe,” the “Company,”

“we” “us” or “our”) is a technology solutions provider specializing in products to connect brands

with consumers.

VerifyMe technologies give brand owners the ability to gather business intelligence while engaging directly with their

VerifyMe technologies also provide brand protection and supply chain functions such as counterfeit prevention, authentication,

serialization, and track and trace features for labels, packaging and products.

We are a Nevada corporation formed in 1999.

commercialize our covert luminescent pigment VerifyInk TM in 2018.

Prior to 2021 we completed the initial development stage

of our other current technologies and in 2021 we began to commercialize as a Brand Protection Solutions provider.

Our brand protection

technologies include consumer engagement capabilities, the custom printing of tamper proof secure labels, and utilization of invisible

and visible images, printed with our proprietary special composition inks comprised of a rare earth mineral.

These inks are compatible

and printed with modern digital and standard printing systems such as digital, offset, flexographic, silkscreen, gravure, inkjet and toner-based

laser printers.

The inks can be used to print both static labels on standard printing systems and variable labels utilizing digital printing

systems that include variable images, serialized codes, dynamic bar codes and dynamic QR codes that allow brand owners to engage directly

with customers.

We have developed and patented a dual-code technology that we believe can connect digital Non-Fungible Tokens (“NFTs”)

to physical products.

We have developed and patented a device that attaches to a smartphone that brand inspectors or law enforcement can

use to read our invisible ink codes into our cloud-based track and trace software that contains our patented verification technology along

with algorithms that analyze the label, package or product’s authenticity and diversion activity.

We also have a device that informs

users that our proprietary invisible ink is present, which can be used for authentication without the need for internet connectivity.

(“VerifyMe”) together

with its subsidiaries PeriShip Global, LLC (“PeriShip Global”) and Trust Codes Global Limited (“Trust Codes Global”),

(together the “Company,” “we,” “us,” or “our”), is a software driven predictive analytics

logistics provider of high-touch end-to-end logistics management, which represents most of our current revenue stream.

In addition, VerifyMe

technologies provide product traceability, brand protections services, and consumer engagement solutions.

Our operations are split into

two segments:

PeriShip Global Solutions and VerifyMe Solutions.

Through our PeriShip Global Solutions segment we provide a value-added

service for time and temperature sensitive parcel management driven by a proprietary software platform that provides predictive analytics

from key metrics such as flight-tracking, weather, and traffic, all delivered to customers via a secure portal.

The portal provides real-time

visibility into shipment transit and last-mile events, with dynamic dashboards.

All aspects of the of the shipping journey is managed

by a dedicated call center.

Using our proprietary logistics solution, we provide real-time information and analysis to mitigate supply

chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries.

our VerifyMe Solutions segment, our technologies provide unit level traceability, brand protection, unit level traceability and consumer

engagement solutions allowing brand owners to gather business intelligence, cross-sell products, monitor product diversion through the

supply chain and build brand loyalty through interaction utilizing our unique dynamic codes which are read by consumers with their smart

Further information regarding our business segments is discussed below:

Business Update

Recent Developments

To increase our global presence, we signed two new agreements to market

and sell our products.

On December 5, 2021, we signed a reseller agreement with Kimoha Entrepreneurs in the United Arab Emirates and on

December 21, 2021, we signed a new Sales Consultant agreement with The AAB in South Africa.

On March 1, 2023, the

Company entered into an Asset Purchase Agreement (the “APA”) effective as of February

28, 2023 by and among the Company, Trust Codes Global, Trust Codes Limited, a New Zealand limited liability company (“Trust Codes”)

and Signum Holdings Limited.

Pursuant to the terms of the APA Trust Codes Global agreed to purchase from Trust Codes and Trust Codes agreed

to sell to Trust Codes Global substantially all of the assets of Trust Codes and certain specified liabilities (the “Transaction”).

The Transaction closed simultaneously with the execution of the APA on March 1 , 2023.

Trust Codes Global is based in New Zealand and provides brand protection based on a digital identity assigned at the unique item level

delivered to customers through a software as a service model.

The use of unique QR codes or IoT, coupled with GS1 standards, connects

brands to consumers.

Trust Codes Global leverages advanced algorithms to protect authenticity and brand value and provides data-driven

storytelling which allows visibility of the journey for each item through the supply chain to the consumer’s hands.

We believe combining

the solutions of Trust Codes Global and PeriShip Global will allow the Company to provide a competitive advantage in the software logistics

space, securing supply chains from products manufacture all way to the point of delivery, elevating a consumer’s trust and their brand

Please refer to Note 17 – Subsequent Events – to the Audited Consolidated Financial Statements appended

to this Report and incorporated by reference into Item 8 in this Annual Report on Form 10-K.

In January 2023 we signed

a mutual sales referral agreement with The Agrarian Group.

The agreement is structured to help advance food safety and customer loyalty,

as well as increase revenue for both companies.

The food industry is a focus area for our VerifyMe Solutions segment and perishable food

has been a long-standing focus of our PeriShip Global segment.

In November 2022 we entered

into an amended five-year renewal agreement with HP Indigo to provide VerifyInk TM security ink taggants for HP Indigo digital

This amended agreement also increases the scope of cooperation, in which HP Indigo will refer opportunities for additional VerifyMe

technologies.

In September 2022 we

received an initial order for 4 million brand protection labels from a new nutraceutical client.

This was one of our largest sales to

date after implementing a new sales and marketing plan in 2021.

On July 6, 2021, we co-sponsored

the initial public offering of G3 VRM Acquisition Corp, a special purpose acquisition company, or “SPAC,” through a contribution

into G3 VRM Holdings LLC, or the “Sponsor Entity.” The closing of the IPO of 10,626,000 Units, including 626,000 Units pursuant

to the partial exercise of the underwriter’s over-allotment, generated gross proceeds of $106,260,000.

G3 VRM commenced trading

on NASDAQ under the symbol “GGGVU” and is targeting businesses with enterprise values of approximately $250 million to $500

million within the technology and business services industry.

VerifyMe, indirectly through the Sponsor Entity beneficially owns approximately

9.42% of the common stock of the SPAC.

On June 4, 2021, VerifyMe

was added to the Russell Microcap Index.

Russell indexes are widely used by investment managers and institutional investors and as benchmarks

for active investment strategies.

Approximately $9 trillion in assets are benchmarked against Russell’s US indexes.

In April 2021, VerifyMe

launched a rebranding and messaging campaign to more fully market all of our products and services

to include a new website and marketing materials.

RainbowSecure TM was renamed to VerifyInk TM and when coupled with

VerifyMe Authenticate™ and VerifyMe Track & Trace™ product lines, we believe it provides the only covert serialization

and authentication solution on HP Indigo (a division of HP, Inc.) variable digital printing systems.

Our patented smartphone authenticator

device, VerifyAuthenticator TM is capable of fluorescing, decoding, and verifying invisible VerifyInk TM printed overt

and covert codes in the field.

This product allows investigators to authenticate product quickly and efficiently throughout the distribution

chain, including warehouses, ports of entry, retail locations, and product purchased over the internet.

This technology is coupled

with a secure cloud-based track and trace software engine which allows brands and investigators to monitor the complete supply chain from

product origination to the end user utilizing geolocation mapping and intelligent programable alerts.

Brand owners access the VerifyMe

Authenticate™ and VerifyMe Track & Trace™ software through a cloud-based web portal over the Internet.

Brand owners can

then set rules of engagement, gather rich business intelligence, establish marketing programs for customer engagement and control, monitor

and protect their products’ “life cycle.”

In March 2021, we signed a sales agency agreement

with an HP Indigo’s authorized channel partner in China.

This partner is the only distributor authorized to sell and support HP

Indigo products in China, and now has an exclusive agreement to sell our technology solutions for HP Indigo products in China.

granted them a non-exclusive right to sell our other products in China.

In February 2021, we

received a purchase order for 2 million pre-printed anti-counterfeiting labels.

The labels were utilized for track and trace and brand

protection for 2 million boxes of surgical gloves, a personal protective equipment (“PPE”) necessity in fighting the ongoing

Covid-19 pandemic.

This purchase order for complete pre-printed tamper-evident labels with VerifyMe™ brand protection and consumer

engagement solution was under our strategic partnership with Renavotio (OTC:

This is a custom-designed tamper proof label containing

multiple layered technologies embedded and printed by VerifyMe.

In February 2021, we

entered into a strategic partnership with INX International Ink Company (“INX”).

INX will supply us with conventional and

ink jet inks that incorporate our VerifyInk TM marking technology for resale to

our customers.

The inks are developed and ready for market for metal container decorating, dry offset printing, gravure shrink sleeves,

and flexographic fabric printing.

The inks developed, and expected to be developed, under the supply agreement are applicable to a broad

range of uses, including aluminum beverage cans and bottles, labels and packaging for the cannabis industry, personal protective equipment,

aerospace parts, motor vehicle parts, weapons and ammunition, silicon chips and medical equipment.

In February 2021, as part of our public offering of an aggregate 1,750,000

shares of common stock, we generated aggregate gross proceeds of $9.2 million and net proceeds of $8.5 million, less underwriting discounts

and commissions and other offering expenses, including the partial exercise of the over-allotment option.

COVID-19 Pandemic

The COVID-19 pandemic

disrupted businesses and affected production and sales across a range of industries, as well as caused volatility in the financial markets,

which negatively impacted our results of operations for the year ended December 31, 2021.

The full extent of the impact of the COVID-19

pandemic on our customer demand, sales and financial performance will depend on certain developments, including, among other things, the

continued duration and spread of the outbreak, the effectiveness of vaccines against new variants, the availability of vaccines and vaccination

rates, and the impact on our customers and employees, all of which are uncertain and cannot be predicted.

Please see Item 1A, “Risk

Factors- Risks Relating to the COVID-19 Pandemic” in this Report for additional information regarding certain risks associated with

the pandemic.

The COVID-19 pandemic

has caused an increase in demand for safety products such as masks and gloves, COVID-19 test kits, medications and vaccines to treat the

virus, which we believe has further caused an increase in counterfeit products.

Our suite of technology solutions for global manufacturers,

distributors and sellers are designed to allow consumers to prove authenticity and we have proactively reached out to global manufacturers

who are seeking to provide their customers authenticity in their products.

We believe we have a dynamic management and sales team in place

with the ability to seamlessly work remotely to minimize any operational disruption.

After an approximate

one-year COVD-19 related hiatus we begun attending sales conferences and other in-person sales initiatives in September 2021.

we have been attending in-person sales events, such events are not at full capacity due to the ongoing pandemic.

Since we have recently

begun face to face sales presentations and trade shows we are experiencing a small increase in travel related costs versus the 12 months

preceding September 2021.

We expect these travel related costs to grow.

VerifyMe has continued to be aggressive in regard to sales and

marketing efforts as we have completed a new website which is generating new leads and we have expanded our sales force.

started our first social media advertising campaign.

New leads are being generated due to these actions.

We continue to work with our

sales representatives to look for alternative ways to communicate effectively and promote sales both with our customers and potential

Further, we anticipate

that as a result of the continued COVID-19 pandemic, our customers may still require that their programs be cancelled, delayed or reduced.

We will continue to work in partnership with our customers to continually assess any potential impacts and opportunities to mitigate risk.

entered into a $2 million term loan agreement and a $1 million line of credit with PNC Bank and repaid the $2 million promissory note

from the acquisition of PeriShip LLC.

In August 2022, we entered

into a multi-year contract extension with our strategic partner and largest customer of PeriShip Global to continue to provide proactive

customer service to their customers.

The term of the agreement has been extended to March 1, 2026.

Our Solutions

PeriShip Global Solutions:

Global Solutions segment specializes in predictive analytics through its proprietary software platform for optimizing delivery of time

and temperature sensitive perishable products.

We manage complex industry-specific shipping logistic processes that require critical time,

temperature control and handling to prevent spoilage and extended delivery times.

Utilizing predictive analytics from multiple data sources

including weather, traffic, flight data, major carrier feeds, and time of day data, we provide our clients an end-to-end vertical approach

for their most critical service delivery needs.

Using the IT platform, we provide real-time information and analysis to mitigate supply

chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries.

Through our proprietary PeriTrack ® customer

dashboard, we provide an integrated tool that gives our customers an in-depth look at their shipping activities and allows them access

to critical information in support of the specific needs of the supply chain stakeholders.

In addition, we provide proactive alerts to

address on-coming weather issues to make changes in scheduling to meet critical deadlines for shipments.

We offer post-delivery services

such as customized reporting for trend analysis, system performance reports, power outage maps, and other tailored reports.

PeriShip Global generates revenue from three business

service models.

Proactive Service – PeriShip Global clients pay us directly for carrier service coupled with

our proactive logistics assistance.

Direct Premium Service –PeriShip Global clients pay us directly for carrier service coupled with

our complete white-glove shipping monitoring and predictive analytics service.

This service includes the customer web portal access, weather

monitoring, temperature control, full call center support and last mile resolution.

Indirect Premium Service – Our carrier partner also offers a “white label” version

of our Premium Service to its customers and pays us a fixed contractual fee.

PeriShip Service Products:

Global Solutions segment includes the following bundled services as part of our service offerings to our customers:

PeriTrack ® :

Our proprietary

PeriTrack® customer dashboard was developed utilizing our extensive logistics operational knowledge.

This integrated web portal tool

gives our customers an in-depth look at their shipping activities and alerts based on real-time data.

The PeriTrack® dashboard was

designed to provide critical information in support of the specific needs of supply chain stakeholders and gives our customer resolution

specialists a 360° view of shipping activity.

PeriTrack® features tools tailored for shippers of perishable goods, which includes

the In-Transit Shipment Tracker.

This tool provides details on the unique shipper’s in-transit shipments, with the ability to select

and analyze data on individual shipments.

Call Center Service :

Global has assembled a team of customer resolution specialists based in the U.S.

This human intervention service team resolves shipping

problems on behalf of our customers.

The call center acts as a help desk and monitors shipping to delivery for our customers.

Pre-Transit Service :

Global helps clients prepare their products for shipments by advising clients on packaging requirements for various types of perishable

Each product type requires its own particular packaging to protect it during the shipment, and we utilize our extensive knowledge

and research to provide our customers with packaging recommendations to meet their unique needs.

Post-Delivery :

PeriShip Global

provides customized reporting for trend analysis, system performance reports, power outage maps, and many other reports to help our customers

improve their processes and customer service outcomes.

Weather/Traffic Service :

Global has full-time meteorologists on staff to monitor weather.

A package may experience a variety of weather conditions between the

origin and destination, and our team actively monitors these conditions to minimize the changes of timely and safe transit of shipments.

Similarly, traffic and construction also create unpredictable delays which our team works diligently to mitigate.

If delays or other issues

occur the PeriShip team informs clients and works with them to proactively resolve such shipment issues.

VerifyMe Solutions:

The VerifyMe Solutions

segment in traceability to connect brands with consumers through their product.

Brands can gain unit level traceability through the supply

Through VerifyMe technologies brand inspectors can authenticate product with visible and invisible unique serialized codes.

owners have the ability to gather business intelligence while engaging directly with their consumers and can receive programmable alerts

related to counterfeit products or if their products are in unexpected geographical markets.

Consumers can authenticate products with

their smart phone prior to usage and engage with the brand in unique and innovative ways.

Engagement can come in many forms such as free

giveaways, product specifications, seed to table tracking, cross-selling of products, contests, videos, and recipes.

VerifyMe Products:

VerifyMe has a custom

suite of products, that offer clients the brand protection security, anti-counterfeiting, protection from product diversion, consumer

engagement and a robust serialization, track and trace system.

These products are combined with “software as a service” or

“SAAS” which is stored in the cloud and accessed through the internet.

· VerifyMe Engage™ for consumer engagement

· VerifyMe Authenticate™ for product authentication

· VerifyMe Track & Trace™ for product supply chain control

· VerifyMe Online™ for on-line (web) brand monitoring

VerifyMe Engage™

services provide the ability for the brand owner to gather business intelligence and engage with the consumer using our authentication

test as the initial contact with the consumer.

For example, consumers can simply use their smart phone camera to scan our visible unique

codes and/or RFID/NFC chips included on products, labels and packages.

Once the consumer scans the code, an instant authenticity check

is made using algorithms stored in the cloud to determine the products authenticity on multiple factors.

This allows brands to understand

where their products are being scanned, whether they are legitimate, and form an immediate bridge for communication with the consumer.

After a product is authenticated, the brand owner can then engage with the consumer by, for example offering a gift or future discounts,

providing marketing materials, videos, product information and specifications, contest entries or cross selling other products through

the consumer engagement software.

This service allows to the brand owner to gather real-time actionable information on their customer

To date, we have derived limited revenue from VerifyMe Engage customers in the cannabis industry.

VerifyMe Authenticate™

services provide an assortment of tools through our patented products allowing brand owners to instantly authenticate a product, label

or package as genuine and or determine if a product has been fraudulently diverted and where such diversion occurred in the supply chain.

Brand owners can use our cloud-based web portal to easily order many types of serialization codes for their products, labels and packages.

Once the codes are applied to their products, brand owners can then monitor, control and protect their products during the product’s

complete life cycle through the supply chain.

Our customers use our patented invisible ink, VerifyInk TM which is combined with

a proprietary reader to easily identify counterfeit products.

Product investigators may then use our patented VerifyAuthenticator TM

technology, a device used with a smartphone and the VerifyMe app, to authenticate and decode VerifyInk TM codes.

The user attaches

this device to their smartphone, which reveals the hidden VerifyInk TM images that are then sent to our web portal in the cloud

for authentication and data submission.

We also have another device that does not require use the of a smartphone, our VerifyChecker™

which is a handheld device that is tuned to authenticate the unique frequency of our VerifyInk TM invisible ink.

The VerifyChecker™

is designed for use by customers who desire instant authentication on items without the need for an internet connection.

It is perfect

for field investigators, CBP officials, or as validation in practice such as scanning event tickets at an entry gate.

The device functionality

was upgraded in September 2021 by adding wireless connectivity to a mobile phone enabling authentication attempts to be recorded in the

cloud with geo-location, inspector’s names, and time and date stamp.

To date, we have derived limited recurring revenues from two

global brand owners who use VerifyMe Authenticate.

VerifyMe Track &

Trace™ supply chain serialization, track and trace technology utilize overt dynamic codes (QR codes or other barcode symbology),

such as our VerifyCode™, which is tied to our cloud-based authentication and track and trace system.

This technology provides brand

owners business intelligence on counterfeiting and diversion using distribution channel scans throughout the supply chain coupled with

consumer scan data.

All this data is consolidated on a system that allows brands to customize rules and parameters and establish sophisticated

alert systems allowing brands to be proactive, rather than reactive, in thwarting illicit activity.

Invisible codes can be added using

VerifyInk TM to increase brand protection security and provide inspectors a means to authenticate counterfeit or diverted product

if the visible codes have been defaced or removed.

Using information from a smartphone, our VerifyCode TM technology, can

provide authentication and data submission information.

A customer or end-user can scan codes printed on labels and packaging and send

it to the cloud where our software can verify authenticity of the product, as well as track and trace the product from production through

To date, we have derived limited revenues from the use of this technology in the personal protective equipment industry and

in the cannabis industry.

VerifyMe® Online™ includes,

through our collaboration with a strategic partner, a brand clearance and protection leader, technologies and services that better enable

customers to effectively tackle counterfeit websites, domains and e-commerce platforms, and social media sites offering or promoting counterfeit

To date, we have not derived revenue from this technology.

To optimize our security

for our customers, we are seeking to add a blockchain architecture version to our brand protection platform which currently uses a centralized

cloud-based data architecture.

Our plan is to develop the ability to connect physical products to NFTs in the blockchain.

a patented dual-code technology that we believe will facilitate this process for clients requesting this service.

We are exploring opportunities

to gain the skillsets needed either through mergers and acquisitions or through strategic partnerships with blockchain specialists that

will help us create this product.

We believe that our brand

protection security technologies, coupled with our contract with HP Indigo, can be used to enable brand owners to securely prevent counterfeiting,

prevent product diversion and authenticate labels, packaging and products and alleviate the brand owner’s liability from counterfeit

products that physically harm consumers.

Our covert technologies give brand owners the ability to control, monitor and protect their products

In cases where the brand owner may be subject to liability brought forth by counterfeit products, our tools allow the brand

owner to prove whether the product causing an issue is authentic or counterfeit.

Combined with our customer engagement product lines,

we offer a unique and comprehensive brand protection and promotion solution that can be tailored to any brand’s specifications.

At present, our strategic

partner, HP Indigo has the ability, with their Indigo 6000 series, to print our technology on a variable basis.

HP Indigo has produced

flexible packaging pouch samples, shrink sleeves samples, and tax stamp samples with our covert VerifyInk TM .

In May 2019, we

entered into a strategic partnership with INX, the third largest producer of inks in North America allowing us to successfully print our

covert VerifyInk™ on garments, metal and plastic objects, and INX is now co-marketing the new security ink to its

global clients.

We are continuing to work with our partners and INX international to develop inkjet ink for various print head, drop on

demand and continuous inkjet, that can be used independently or mounted to printing presses and finishing equipment.

We have successfully

developed VerifyInk™ for drop on demand inkjet printing and are carrying on with the development of a continuous

inkjet solution.

The specially formulated inks will enable these printing presses to print our VerifyInk TM invisible ink technology,

which includes our variable VerifyCode™ serialization, track and trace technology.

We believe VerifyInk TM is particularly

well-suited to closed and controlled environments that want to verify transactions within a specific area, as well as labels, packaging,

textiles, plastics and metal products that need authentication.

In addition to packaging and labels, our brand

protection security printing technologies can be applied to authenticate important credentials such as tax stamps, driver’s licenses,

plastics, metal, apparel, election ballots, birth certificates, immigration documents, gaming, apparel, currency, event and transportation

tickets, passports, computer software, and credit cards.

We can track and trace from production to ultimate consumption when coupled with

our proprietary brand protection software.

The Opportunity

We believe our brand protection products have

applications in many areas.

Currently, we are aggressively marketing opportunities in the following:

· Consumer Products – Counterfeit items are a significant and growing problem with all kinds of consumer-packaged

goods, especially in the luxury retail and apparel industries.

We believe our technologies are particularly suited for the cosmetics,

health and beauty and apparel industries.

We give the consumer the ability to test a products authenticity instantly with a smartphone.

We can protect brand owners from liability litigation, product diversion and lost financial sales with our consumer facing visible codes

and unique ink pigments which can be incorporated in dyes and used by manufacturers in these industries to combat counterfeiting and piracy

of actual physical goods.

Our pigments expressed as inks can also be used on packaging, as well as to track products that have been lost

in transit, whether misplaced or stolen.

suite of products that offer clients traceability and consumer engagement.

These products are combined with “software as a service”

or “SAAS” which is stored in the cloud and accessed through the internet.

VerifyMe Engage™ for consumer engagement allowing the brand owner to gather business intelligence and engage with their customers

VerifyMe Authenticate™ using rare earth-based ink taggants for instant authentication of labels, packages and products

VerifyMe Track & Trace™ for unit level traceability and supply chain control

PeriShip Global and VerifyMe Synergies:

We believe that PeriShip Global and our VerifyMe

solutions have synergistic product centric technology platforms and combined have a compelling technology offering for brand owners.

example, currently PeriShip Global ships vaccines for major pharmaceutical companies.

With the addition of VerifyMe technology, PeriShip

Global can add unit level traceability and authentication to protect clients’ vaccines from product diversion and sub-standard counterfeits.

In addition, VerifyMe’s consumer engagement solutions could give PeriShip Global food and beverage clients the ability to gather

rich business intelligence, turn “unknown consumers” into “known consumers” and build customer loyalty with engagement

functions like videos, discounts, contests, etc.

Strategic Partnerships

PeriShip Global has a direct partnership with

a major global carrier company.

This partnership includes the ability for both companies to white label each partner’s services.

In addition, PeriShip Global has data feeds directly from the carrier into our proprietary logistics optimization software which provides

shippers much more detailed information and predictive analytics on their shipment versus a standard shipping code look up which is provided

by the carrier.

VerifyMe has a contract with HP Indigo, and a

strategic partnership with INX International, the third largest producer of inks in North America.

We believe these partnerships can be

used to enable brand owners to securely prevent product diversion, engage with their consumers and authenticate labels, packaging and

products, alleviating liability from counterfeit products that harm consumers.

INX International manufactures VerifyInk™ for printing

static images for labels, packaging and products such as aluminum twist caps for the spirits industry.

INX International also successfully

created ink jet variable images containing the VerifyInk™ which can be used with flexo, silkscreen and offset printing presses.

Our security pigments are manufactured from naturally occurring inorganic rare earth materials.

There are many manufacturers of these

types of specialized pigments, and we intend to maintain multiple simultaneous relationships to ensure ample sources of supply.

we are not dependent on any principal suppliers.

We rely on third-party strategic partners to manufacture and distribute our VerifyInk TM

We provide these strategic partners with pigment mixing instructions for the specific uses of each client based on their existing

equipment and processes.

We maintain policies and procedures to monitor, track and log access to and disposition of all pigment.

Our customers

are also required to agree to and implement these policies and procedures.

In relation to our other products, such as our hand held VerifyChecker™

and VerifyAuthenticator TM Smartphone Authenticator devices, as

well as our VerifyLabel™ tamper-proof labels, we provide instructions for the design of these products and rely on our strategic

partners for manufacturing and distribution.

Global Opportunities

According to a 2023 report entitled, “Perishable

Goods Transportation Market in the US 2023-2027”, written by Infiniti research Limited, the Perishable Goods logistics market size

was $4.0 billion in 2022 and is estimated to be $4.3 billion in 2023 and is expected to grow to $5.9 billion by 2027.

That represents

a compound average market acceleration with a growth rate of approximately 8% per year.

This report is based on perishable product segments

including meat, poultry, seafood, dairy, fruits and vegetables, and bakery and confectionary.

PeriShip Global services all of these product

Currently most shipping businesses utilize the

carriers’ data platform for tracking which generally informs the shipping enterprise, and their customers, when a package is in

transit, when a package has been delivered, and some level of detail of the path which a package traveled.

We believe taking the data

feeds from a carrier and adding real-time visibility with predictive analytics and the human intervention factor of PeriShip Global’s

call center gives us a major competitive advantage against other third-party platforms that solely rely on the carrier’s data feeds.

PeriShip Global utilizes a variety of input sources beyond just the carrier’s data feed.

PeriShip Global’s proprietary “Predictive

Analytics” technology is fed real-time meteorology data, traffic and road construction data, and power grid information to help

predict issues before they happen.

If an alert is created the shipper and our call center will work to address the issue and save the

perishable product from spoiling, saving the shipper significant costs and reducing the need to replace products that are no longer viable.

PeriShip Global has two meteorologists on staff that track world-wide weather patterns to address predicted issues before they happen.

We believe the pharmaceutical and healthcare industries represent the biggest areas of opportunity and we are focusing our PeriShip Global

sales emphasis on those industries.

In addition, we believe that combining VerifyMe’s solutions into the product offering for PeriShip

Global clientele, including food and beverage and healthcare industries, gives PeriShip Global a competitive advantage to generate revenue

by enhancing PeriShip Global’s clients’ ability to grow revenue, gain business intelligence and build brand loyalty.

The current global logistics industry worldwide

is facing an economic slowdown.

We believe this represents an opportunity for PeriShip Global since major global carriers are cutting

internal staff and are reducing research and development investments.

To maintain their credibility in the market, these carriers will

need to ensure they meet their customers’ demands for time and temperature sensitive shipments, while maintaining their overheads.

We believe outsourcing this function to PeriShip Global provides the ideal solution for all parties involved.

Building logistics infrastructure is a capital-intensive

process as the investment is locked in for a considerably long period.

Due to the current economic downturn, we believe several companies

will opt to outsource their logistics services to reduce their operational costs and maintain cash flows.

The outsourcing of supply chain

logistics operations to service providers such as PeriShip Global allows companies to improve the efficiency of their businesses by focusing

their resources on core competencies.

Opportunities

We believe VerifyMe’s products have applications

in many areas.

Currently, we are aggressively marketing opportunities in the following areas:

Food and Beverage – Food safety is becoming more common as supply chains become more global and as imaging

and manufacturing technology become more accessible.

Food traceability, sustainability and carbon neutral production is becoming a significant

consideration for brand and governments.

We believe our unit level traceability and authentication solutions can help brands tell their

story about sustainability and battle against tainted or substandard foods and beverages.

Pharmaceuticals/nutraceuticals – We believe counterfeit prescription pharmaceuticals and nutraceuticals

9 unchanged sentences

We are seeking to expand our business in this market and believe that as additional pharmaceutical companies seek to comply

with the legislation, we believe our products will provide attractive alternatives to address the need for product identifiers.

· Food and Beverage – Counterfeit food threats are becoming more common as supply chains become more

global and as imaging and manufacturing technology become more accessible.

We believe our pigments and authentication tools can help in

the battle against counterfeit foods and beverages.

We are currently marketing our products in this market.

In addition, in

each of these markets, our SaaS software allows brand owners and consumers to track the products and will alert the

consumer or brand

owner of counterfeit or product diversion with 24-7 monitoring.

As each product has a unique code, this allows

consumers and brand owners to authenticate the

product in real time and link directly to the brand owner’s website for additional product information, discounts, and more.

Our Raw Material Suppliers

Our security pigments are manufactured from naturally

occurring inorganic rare earth materials.

The manufacturing process includes both chemical and mechanical elements.

In many cases, we

produce pigments that are unique to a customer or product line.

This uniqueness can be achieved through a variety of techniques, including

custom formulation or combination of our proprietary pigments and/or incorporation of other specialized taggants.

There are many manufacturers

of these types of specialized pigments, and we intend to maintain multiple simultaneous relationships to ensure ample sources of supply.

Accordingly, we are not dependent on any principal suppliers.

Manufacturing and Distribution

We rely on third-party strategic partners to manufacture

and distribute our VerifyInk TM products.

We provide these strategic partners with

pigment mixing instructions for the specific uses of each client based on their existing equipment and processes.

We maintain policies

and procedures to monitor, track and log access to and disposition of all pigment.

Our customers are also required to agree to and implement

these policies and procedures.

In relation to our other products, such our hand held VerifyChecker™

and VerifyAuthenticator TM Smartphone Authenticator devices, as

well as our VerifyLabel™ tamper-proof labels, we provide instructions for the design of these products and rely on our strategic

partners for manufacturing and distribution.

with the legislation, our products will provide attractive alternatives to address the need for product identifiers.

Consumer Products –We believe our technology solutions are particularly suited for the cosmetics, health

and beauty and apparel industries.

We give the consumer the ability to test a products authenticity instantly with a smartphone.

protect brand owners from liability litigation, product diversion and lost financial sales with our consumer facing visible codes and

unique ink pigments which can be incorporated in dyes and used by manufacturers in these industries to combat counterfeiting and piracy

of actual physical goods.

Our pigments expressed as inks can also be used on packaging, as well as to track products that have been lost

in transit, whether misplaced or stolen.

In addition, in each of these markets, our SaaS

software allows brand owners and consumers to track the products and will alert the consumer or brand owner of product diversion with

24/7 monitoring.

As each product has a unique code, this allows consumers and brand owners to authenticate the product in real time and

link directly to the brand owner’s website for additional product information, discounts, and more.

Current Economic Environment

In early September 2022, the major global carrier

company that PeriShip partners with, disclosed that a global recession could be coming based on various indicators in its business, including

the demand for packages weakening considerably in the final weeks of August 2022, a negative impact on its express delivery business due

to the weakening global economy, particularly in Asia and Europe, and a decline in the volume of freight it handles in every region around

The major global carrier stated that it expects business conditions to further weaken during its current quarter and is responding

by reducing flights, temporarily parking aircraft, trimming hours for its staff, delaying some hiring plans, laying off more than 10%

of its officers and directors, and closing ninety office locations as well as five corporate offices.

It also stated it is cutting $500

million from its capital expenditure budget for its fiscal year, which runs through May of 2023.

We have seen a softening in demand for some services

related to high-end perishable items which seem to be impacted by reduced discretionary spending by U.S.

While a recession,

whether global or more localized to the U.S., may decrease the demand for our services that are more discretionary in nature, we believe

that the internal cost cutting measures, if implemented by the major global carrier, may benefit out-sourced service providers, including

PeriShip Global.

Additionally, PeriShip Global is working with this major global carrier to address their small and medium sized

business clients, which we believe is an underserved segment and presents considerable growth opportunities for PeriShip Global.

we can provide no assurances that a decline in discretionary consumer spending will not have a negative impact on our revenues and results

of operations.

Business Combination

On March 1, 2023, we acquired, through Trust Codes

Global, the business and certain assets of Trust Codes Limited, which provides unique item level

codes for brand protection, data intelligence and consumer engagement technology with an expertise in the food and agriculture industry.

Using unique QR codes or IoT, coupled with GS1 standards, we provide brand protection based on a digital identity assigned at the unique

item level delivered to customers through a software as a service model.

Leverages advanced algorithms to protect authenticity and brand

value we provide data-driven storytelling which allows visibility of the journey for each item through the supply chain to the consumer’s

The purchase price was approximately $1,000,000, which consisted of approximately $350,000 in cash paid at closing, and 353,492

shares of restricted common stock of the Company, representing $650,000 in Stock Consideration.

The acquired Trust Codes business is included

in the VerifyMe Solutions segment and we expect the results of its operations will be included in the consolidated financial statement

beginning March 1, 2023.

Please refer to Note 17 – Subsequent Events – to the Audited Consolidated Financial Statements

appended to this Report and incorporated by reference into Item 8 in this Annual Report on Form 10-K.

On April 22, 2022, we acquired, through PeriShip

Global, the business and certain assets of PeriShip, LLC, a value-added service provider for time and temperature sensitive parcel management.

PeriShip Global provides shipping logistics services utilizing proprietary predictive analytics software and supporting call center services.

Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering

last-mile resolution for key markets, including the perishable healthcare and food industries.

The purchase price was $10.5 million which

consisted of $7.5 million in cash paid at closing, a promissory note of $2.0 million with a fixed interest rate of 6% per annum on the

unpaid principal balance, to be paid in three installments on the sixth, fifteenth, and eighteenth month anniversaries of the closing,

and 305,473 shares of restricted common stock of the Company, representing $1.0 million in stock consideration.

We expect that all of

the goodwill recorded for financial statement purposes is deductible for tax purposes.

The acquired PeriShip business is included in the

PeriShip Global Solutions segment and the results of its operations have been included in the consolidated financial statements beginning

April 22, 2022.

SPAC Investment

On July 6, 2021, we co-sponsored the initial public

offering of G3 VRM Acquisition Corp, a special purpose acquisition company, or “SPAC,” through a contribution into G3 VRM

Holdings LLC, or the “Sponsor Entity.” The closing of the IPO of 10,626,000 Units, including 626,000 Units pursuant to the

partial exercise of the underwriter’s over-allotment, generated gross proceeds of $106,260 thousand.

G3 VRM commenced trading on

NASDAQ under the symbol “GGGVU” and was targeting businesses with enterprise values of approximately $250 million to $500

million within the technology and business services industry.

VerifyMe, indirectly through the Sponsor Entity beneficially owned approximately

9.42% of the common stock of the SPAC.

The SPAC was unable to complete its initial business

combination within 12 months from the closing of the IPO and the Sponsor Entity decided not to fund the extension and did not deposit

additional funds into the trust account.

As a result, the SPAC was dissolved and liquidated in accordance with its charter.

The SPAC redeemed

100% of the public shares for cash, the rights expired worthless, and the founder shares and the private placement securities have become

In December 2022, it was determined that the costs to dissolve the SPAC were ultimately less than the remaining assets of the

SPAC and the SPAC made a distribution to the Company of $32 thousand.

The fair value of the equity investment was $0

million as of December 31, 2022, and $11.0 million as of December 31, 2021.

As of December 31, 2022, we have recognized the

impairment loss of $10,932 thousand included in Loss on equity investments in the accompanying Consolidated Statements of Operations.

Our Intellectual Property

Intellectual property is important to our business.

current patent and trademark portfolios consist of eleven granted US patents and one granted European patent validated in four countries,

seven pending US and foreign patent applications, six registered US trademarks, two EU trademark registrations, one Colombian trademark

registration, one Australian trademark registration, one Japanese trademark registration, one Mexican trademark registration, one Singaporean

trademark registration, two UK trademark registrations, and nineteen pending US and foreign trademark applications.

We have attempted to achieve sufficient flexibility

in our products and technologies to provide cost-effective solutions.

We intend to generate revenues through our custom suite of products,

providing consumer engagement, authentication, track and trace and web brand monitoring.

We are developing the ability to link digital

NFTs to physical products using our patented dual-code technology, as part of our authentication solutions.

current patent and trademark portfolios consist of eleven granted U.S.

patents and one granted European patent validated in four

countries (France, Germany, United Kingdom, and Italy), six pending U.S.

and foreign patent applications, fifteen registered U.S.

(of which seven trademarks were acquired through our wholly owned subsidiary, PeriShip Global), two EU trademark registrations, one Colombian

trademark registration, one Australian trademark registration, one Japanese trademark registration, one Mexican trademark registration,

one Singaporean trademark registration, two UK trademark registrations, and twenty-one pending US and foreign trademark applications.

While some of our granted patents are commercially

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every country.

We continue to develop new anti-counterfeiting technologies and we apply for patent protection for these technologies in

countries with the most market potential and strong patent enforcement tools.

When a new product or process is developed, we may seek

to preserve the economic benefit of the product or process by applying for a patent in each jurisdiction in which the product or process

is likely to be exploited.

We continue to develop new technologies and we apply for patent protection for these technologies in countries with the

most market potential and strong patent enforcement tools.

When a new product or process is developed, we may seek to preserve the economic

benefit of the product or process by applying for a patent in each jurisdiction in which the product or process is likely to be exploited.

The issuance of a patent

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Research and Development

Prior to 2019, we had

been involved primarily in research and development since our inception.

Through 2012, our research and development focused on pigment

technologies.

From 2012 through 2018, we allocated research and development efforts between digital and pigment technologies.

our primary focus has shifted from research and development to commercialization of our products.

Current research and development efforts

are focused on expanding our technology into new areas of implementation and to develop unique customer applications.

We spent approximately

$51 thousand and $19 thousand during the years ended December 31, 2021, and 2020, respectively, on research and development.

We are now researching the development of a complimentary

blockchain version of our brand protection cloud-based platform into a de-centralized blockchain smart contract network such as Etherum,

Cardano, VeChain, Solana, Polygon or other De-Fi blockchains to increase security and allow for the linking of digital NFTs to physical

We are in early stages of scoping this Blockchain-as-a-Service ("BaaS") platform system that we would upgrade with

our patented digital features.

Our goal for the new platform will be to provide a comprehensive blockchain platform offering product lifecycle

management, supply chain process control, data mining, consumer engagement, product certification, and process certification.

that this new blockchain network could be utilized by any sized business, to further enhance brand protection and value as well as to

possibly enable us to expand into new business models.

Traditional QR codes are an open-source technology

and are being used in various financial scams and the loading of viruses into devices who scan the codes.

VerifyMe is researching the

development of a proprietary code that runs in a closed secure cloud-based environment that scammers and virus threats cannot compromise

or penetrate.

These proprietary codes are intended to replace QR codes for clients seeking additional security for their products.

Current research and

development efforts are focused on expanding our technology into new areas of implementation and to develop unique customer applications.

We spent approximately $89 thousand and $51 thousand during the years ended December 31, 2022, and 2021, respectively, on research and

Research in our PeriShip

Global Solutions segment is currently focused on developing:

multi-carrier software support so our services can be provided to clients no matter which carrier they choose

to ship their packages;

the ability to print labels utilizing our own label printing software rather than relying on a carrier’s

print engine;

an mobile app for smart phones so our clients can access our portal from their phones rather than a personal

the imbedding of artificial intelligence into our proprietary IT portal to expand and improve our predictive

analytics capabilities;

imbedding a new temperature sensitive ink solution that will give an indication if a temperature exceeded

a certain level on packaging for vaccines, food and beverages, and other temperature sensitive packaging, that need constant cold storage

temperatures during transit;

creating revenue from our weather analytics.

Our legacy ink technology

in our VerifyMe Solution Segment is effectively complete, and we are concentrating on the marketing of our technologies.

VerifyMe continues

to monitor the market for state-of-the-art innovation and may add new products and services in the future, if we believe it would provide

a competitive market advantage and could be successfully monetized.

Sales and Marketing

The rise of e-commerce is a major opportunity

for our products and technologies.

Both brand owners and counterfeiters conduct a rapidly growing proportion of their trade online.

sites such as Amazon, Alibaba and, eBay and social media networks, including Facebook, Twitter and Instagram, have become major hubs for

counterfeits.

These e-commerce sites continue to outperform brick-and-mortar retail growth, and such performance has been accelerated

by the significant travel restrictions, mandated closures and other effects of the COVID-19 pandemic.

A virtual global marketplace provides

multiple benefits for counterfeiters.

We have identified the following factors that make it easier for counterfeiters to deceive customers

about the authenticity of the products they are buying:

· Product inspection occurs after payment and delivery;

· Counterfeiters base themselves in jurisdictions where the laws on counterfeiting are less stringent;

· Product images on a website are often all the consumer has, to view and inspect prior to the sale.

We view this is a major opportunity to address

this growing problem.

VerifyMe has developed two strategies to address the growing e-commerce counterfeiting issue.

VerifyLabel™ tamper proof labels.

This new pre-printed product is sold to large and small

brand owners who want to provide their customers with the ability to instantly authenticate their product upon receipt using their customers

own smartphone camera.

The brand owner works with us to design the label and its security features, and we manufacture the labels, through

our strategic partnerships, and sell them to the brand owner to affix to their products for their customer to authenticate.

benefit the brand owner has the ability to engage with its customer and gather business intelligence about them.

VerifyMe Online™ is another new e-commerce product

line that VerifyMe markets to brand owners.

This product is a search tool that brand owners subscribe to which reports back to the brand

owner any counterfeit websites and or counterfeit products that are found on the internet.

VerifyMe provides reports to the brand owner

and shuts down the counterfeiting sites and products by legal means.

We believe standard optical security features

such as holograms and Yellow UV Ink are still heavily used but are easily compromised and as a result have lost their effectiveness.

owners have advised us that counterfeiters are able to replicate or circumvent holograms and UV Ink technologies.

We therefore recommend

that holograms and UV Inks should only be used as decoys for more effective technologies such as VerifyInk™

Our product line has a standard optical feature

known as VerifyInk TM Security Ink Taggant.

The differentiator between our standard

ink taggant feature and existing products is that our VerifyInk TM feature can

be printed on digital presses making each label, package, or product completely unique with its own digital signature.

In addition, our

invisible code can be read into the cloud with a smartphone.

This solution is invisible to the human eye, and each code is unique and

stored in the cloud for each product, thereby preventing a counterfeiter from matching the codes to products that contain our VerifyInk TM

Our software also provides intelligent monitoring capabilities.

For example, if a counterfeit is suspected or a product is not

in the correct location (i.e.

product diversion) the brand owner is alerted by our software.

In conjunction with HP Indigo, we have modernized

VerifyInk TM by creating unique signatures in the form of invisible codes that

can be imbedded onto labels, packages and products that can be read with a smartphone into a supply chain management cloud-based software

known as VerfiyMe™ brand authentication portal.

We market directly with HP Indigo to owners of

the 6000 series and HP Indigo 7900 series digital presses as well as the label and packaging printing industry, including both traditional

and digital printers and users to address their clients’ needs for our covert serialization.

We expect those printers to market

and resell our technologies to both current and future brand owner clients.

HP Indigo has trained their international digital press salesforce

in various security printing technologies including our VerifyInk TM and visible

brand protection technologies.

HP Indigo’s salespeople have generated multiple leads on our behalf.

In 2017, we entered into a five-year

contract with HP to supply HP Indigo digital press ink canisters containing our VerifyInk TM

pigment for use by HP Indigo digital press owners who print our security feature on labels and packages for their brand owners.

Additionally,

we enter into reseller agreements with print service providers.

Pursuant to one of these agreements, a global label manufacturer began

printing our technology in July 2018 and has major brand owners as clients which can utilize our technologies to protect their product

labels and packaging from counterfeiting and product diversion.

This label printer owns and operates printers and manufacturing equipment

which can implement our technology.

This reseller also has manufacturing facilities around the globe.

In addition to the printing industry, we expect

to market directly to all brand owners who utilize labels and packaging for their products.

Brand owners can be licensed directly with

us and direct their personal printer to print their labels and packaging with our printing technologies.

The brand owner will therefore

pay their royalties directly to us based on the number of labels and packages units to which their printer applied the technology.

2019, we entered into a leasing agreement and purchase agreement with a major brand owner who is on the Forbes Top 50 Private Companies

The brand owner began printing labels that include our product in the fourth quarter of 2019 and, in 2020, we received notice that

this client plans to add additional products and three additional countries Japan, Vietnam and Taiwan.

To date, we have derived limited

revenue from this contract.

Business development and sales resources are aligned

to support existing customer accounts and new customer development.

We use social media channels, such as LinkedIn, Facebook and Twitter

as a means of marketing our services.

By staying in contact and engaging with customers, we are able to identify possible needs and look

for opportunities to expand the services we are providing.

We are currently revising the PeriShip Global website, with an on-line chat

system as well as aligning with the VerifyMe website to advertise our synergistic offerings.

We believe many of the clients of PeriShip

Global will benefit from the legacy VerifyMe business consumer engagement and food safety technologies.

We will also continue to re-establish

trade show attendance which had declined during the height of the COVID pandemic.

In lieu of building, training, and supporting

a world-wide internal sales force, we have engaged with multiple strategic partners who have existing government and brand owner relationships

in their particular geographical locations.

These strategic partnerships include both paid and commissioned sales only contract arrangements.

These strategic partners are located in the Middle East, Europe, United Kingdom, India, South Africa, United Arab Emirates, China and

a world-wide internal sales force, we have engaged with multiple strategic partners who have existing relationships in their particular

geographical locations.

For our VerifyMe Solutions segment, these strategic partners have relationships with government and brands and

include both paid and commissioned sales only contract arrangements.

They are located in the Middle East, Europe, United Kingdom, India,

South Africa, United Arab Emirates, China and Pakistan.

We plan to continue to build new strategic partnerships throughout the globe.

We have also established a network of commission

only paid consultants within the United States.

These consultants mainly focus on brand owners, and they are not constricted geographically.

We have also entered into commissioned sales contract arrangements with the global sales staff of our vendors, HP Indigo and S-One.

We have a strategic partnership with S-One pursuant

to which S-One provides us with global sales, distribution, shipping, help desk, warehousing and promotion support for our products and

employs representatives on an as needs basis to promote our products.

Under the terms of our agreement with S-One, S-One acts as a sales

and marketing contractor for our printed products and services on a global basis to mainly print service providers (“PSP”)

and assists us in fulfilling our obligations under our current and future reseller agreements with various global and domestic PSPs and

brand owners.

In addition, we have cross-selling agreements with some of our strategic partners.

We plan for our sales and marketing strategy to

include an outreach program and sales programs that tailor the product to the governmental body or merchant, as well as key partnerships

with authorities and merchants whose products or audiences can be complementary to our own.

In particular, we intend to focus on building

relationships with key partners who can deliver our products to their existing and prospective customers in target markets, i.e., commercial

printers/packagers, plastic card manufacturers and financial services intermediaries.

We entered into an agreement with OWS Capital to

market, promote and sell our security authentication technology solutions to the UAE government and companies located in the Middle East.

HP Indigo’s Experience Centers located in Tel Aviv, Israel, Singapore, Barcelona, Spain and Alpharetta, Georgia have all been trained

and outfitted with samples, including our VerifyChecker™ , and VerifyAuthenticator TM Smartphone

Authenticators, to demonstrate the technology to customers who visit the centers.

Customers can perform tests and receive hands on experience

with our technologies.

Due to the strong security background of our management

team, we have undertaken a major overhaul of our website to position us as a “one stop shop” for brand protection technologies,

and as an expert advisor to brand owners to consult with them on their brand protection issues.

Our new website launched in mid-April

In addition to the website, a new social media advertising program was launched to targeted customers.

In addition to the website and social media expansion, we have recently

signed on new salespeople from a large competitor to enhance our sales team and believe we are now well positioned to grow our revenue.

The market for protection from counterfeiting,

diversion, theft and forgery is a mature industry dominated by a number of large, well-established companies, particularly in the area

of traditional overt security technologies where repeating static produced images are commonly used.

Security printing for currency production

began in Europe over a century ago and has resulted in the establishment of old-line security printers which have branched out into brand

and product protection as well.

In North America, brand protection products, such as tamper-resistant packaging, security labels, and

anti-theft devices are readily available and utilized on a widespread basis.

In recent years, however, demand has increased for more sophisticated

overt and covert security technologies with a strong desire for technologies that can provide variable images and data.

Competitors can

be segregated into the following groups:

(I) security ink manufacturers who are generally well-established companies whose core business

is manufacturing and selling printing inks;

(ii) system integrators who have often evolved from other sectors in the printing industry,

mainly security printing manufacturers, technology providers, or packaging and label manufacturers, and who typically offer a range of

security solutions that enable them to provide a complete suite of solutions tailored to the customer’s specific needs and requirements;

(iii) system consultancy groups who offer a range of technologies from several different providers and tailor specific solutions to end-users;

(iv) traditional authentication technology providers which provide holograms and digital watermarking;

(v) product diversion tracking

providers which provide on-product and in-product tagging technologies;

and (vi) traditional security printers whose core products are

printing the world’s currencies.

We have also established a network of commission only paid consultants within the United States.

These consultants mainly focus on brand

owners, and they are not constricted geographically.

PeriShip Global has developed its own software

portal with predictive analytics for weather, traffic, power grids, and data feeds it receives from one of the world’s largest logistics

There are approximately 10 U.S.

companies that operate a similar business model, however most of these companies specialize

in a particular field such as healthcare or non-perishable building materials.

PeriShip Global is operating in all of the perishable segments.

In addition, the major carriers such as FedEx, UPS and DHL all have internal operations servicing the critical time, temperature, and

cold storage shipping segment, however we believe with the economic downturn, major carriers are seeking to outsource perishable shipping

services rather than invest additional funds to provide internal support.

The market for protection from diversion, theft

and forgery is a mature industry dominated by a number of large, well-established companies, particularly in the area of traditional overt

security technologies where repeating static produced images are commonly used.

Security printing for currency production began in Europe

over a century ago and has resulted in the establishment of old-line security printers which have branched out into brand and product

protection as well.

In North America, brand protection products, such as tamper-resistant packaging, security labels, and anti-theft devices

are readily available and utilized on a widespread basis.

In recent years, however, demand has increased for more sophisticated overt

and covert security technologies with a strong desire for technologies that can provide variable images and data.

Competitors can be segregated

into the following groups:

(i) security ink manufacturers who are generally well-established companies whose core business is manufacturing

and selling printing inks;

(ii) system integrators who have often evolved from other sectors in the printing industry, mainly security

printing manufacturers, technology providers, or packaging and label manufacturers, and who typically offer a range of security solutions

that enable them to provide a complete suite of solutions tailored to the customer’s specific needs and requirements;

consultancy groups who offer a range of technologies from several different providers and tailor specific solutions to end-users;

traditional authentication technology providers which provide holograms and digital watermarking;

(v) product diversion tracking providers

which provide on-product and in-product tagging technologies;

and (vi) traditional security printers whose core products are printing

the world’s currencies.

In general, we believe competition in our principal markets is primarily driven by product performance,

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and breadth of product line.

In 2020, new blockchain as a service (“BAAS”)

technology companies have surfaced.

These are mainly early-stage development companies that have begun to enter the marketplace using

de-centralized blockchain networks to authenticate and validate products as well as traditional supply chain management including serialization,

track and trace and internet of things (“IoT”) connectivity using codes, near field communication and RFID chips.

that converting our brand protection cloud-based platform into a de-centralized blockchain network will allow us to compete in this space

with the advantage of blending our physical technologies for an enhanced product offering.

Amazon has become a competitor with their new

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of its manufacturing process, which Amazon scans and verifies.

This differs from our covert luminescent pigment which is incorporated

in the labeling process and our invisible covert serialization and authentication solution.

Also, HP Indigo is selling a yellow ultraviolet

ink and a color changing ink as a security product at inexpensive prices that directly competes with our products.

There are a number

of providers of inexpensive ultraviolet inks in the marketplace, however, we believe these inexpensive ultraviolet inks do not provide

the level of security and safety that our products provide.

New types of security competition are also increasing, such as retail website

monitoring, brand investigations, RFID and near field communications products using low powered radio signals to connect to products.

Competition is building in the consumer engagement

market as more companies enter the space but are using mainly NFC technology imbedded into apparel.

In addition to this technology, we

have the ability to print labels on more applications including fabrics and metals.

To compete effectively, we are seeking to establish

key relationships with major digital solution equipment and distribution providers as we have done with HP Indigo.

While leveraging these

relationships, we still expect that we will need to expend significant resources in sales and marketing.

Many of our competitors have

substantially greater financial, human and other resources than we have.

As a result, we may not have sufficient resources to develop

and market our services to the market effectively.

We expect competition with our products and services to continue and intensify in the

Amazon’s solution must be used within the Amazon ecosystem.

differs from our visible unit level traceability codes and our covert luminescent pigment which may be incorporated in the labeling and

packaging process as static or variable covert codes.

Competition is building in the consumer engagement market as more companies enter

the space but are using mainly NFC technology imbedded into apparel.

In addition to this technology, we have the ability to print labels

on more applications including fabrics and metals.

Some of our competitors have substantially greater

financial, human and other resources than we have.

As a result, we may not have sufficient resources to develop and market our services

to the market effectively.

We expect competition with our products and services to continue and intensify in the future.

Major Customers/Vendors

During the year ended December 31, 2021, five

customers accounted for 95% of total sales.

During the year ended December 31, 2020, two customers accounted for 92% of total

Generally, a substantial percentage of the Company's sales has been made to a small number of customers and is typically on an

open account basis.

During the years ended December 31, 2021, and

2020, the Company purchased 100% of pigment from one vendor.

Additionally, during the years ended December 31, 2021, and 2020, the Company

purchased 100% of canisters from one vendor.

As of December 31, 2021, three customers accounted

During the year ended December 31, 2022, one customer

accounted for 13% of total revenue.

During the year ended December 31, 2021, five customers accounted for 95% of total revenue.

During the years ended December 31, 2022, one vendor accounted for

99% of transportation cost in our PeriShip Global Solutions segment.

As of December 31, 2022, two customers accounted

for 23% of total accounts receivable.

As of December 31, 2020, two customers accounted for 96% of total accounts receivable.

As of December 31, 2021, three customers accounted for 91% of total accounts receivable.

Employees and External

As of March 7, 2022,

we had seven full-time employees, one part-time employee, and several paid consultants.

Because of the nature of our business, our employees

and consultants can, and do, conduct their work for us remotely.

As of December 31,

2022, we employed approximately 50 persons and several consultants.

Of these employees, approximately 40 were employed in our PeriShip

Global operations and 8 were employed by our legacy business, VerifyMe.

Because of the nature of our business, many of our employees and

consultants can, and do, conduct their work for us remotely.

In lieu of building,

training and supporting a world-wide internal sales force, we have engaged with multiple strategic partners who have existing government

and brand owner relationships in their particular geographical locations.

These strategic partnerships include both paid and commissioned

sales only contract arrangements.

These strategic partners are located in the Middle East, Europe, United Kingdom, India, South Africa,

United Arab Emirates, China and Pakistan.

We plan to continue to build new strategic partnerships throughout the globe.

training and supporting a world-wide internal sales force for our VerifyMe legacy business, we have engaged with multiple strategic partners

who have existing government and brand owner relationships in their particular geographical locations.

These strategic partnerships include

both paid and commissioned sales only contract arrangements.

These strategic partners are located in the Middle East, Europe, United Kingdom,

India, South Africa, United Arab Emirates, Australia, New Zealand, China and Pakistan.

We plan to continue to build new strategic partnerships

throughout the globe.

We have also established

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We have also entered

into commissioned sales contract arrangements with the global sales staff of our vendors, HP Indigo and S-One.

into commissioned sales contract arrangement with our strategic partner, HP Indigo.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business