What changed in this filing

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Item 1. Business

2025-03-12 compared with 2024-03-29 · 85 added, 247 removed, 175 unchanged (65% of the section changed)

VerifyMe, Inc.

(“VerifyMe”) together

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

Global”), (together the “Company,” “we,” “us,” or “our”), is a traceability and

customer support services provider using specialized software and process technology.

The company operates a Precision Logistics Segment

and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level

traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions.

Through our Precision

Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides

predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to

customers via a secure portal.

The portal provides real-time visibility into shipment transit and last-mile events which is supported

by a service center.

Through our Authentication segment our technologies enable brand owners to gather business intelligence through the

supply chain, cross-sell products, detect counterfeit activities, monitor product diversion, and build brand loyalty utilizing our unique

dynamic codes which are read by consumers with their smart phones.

Further information regarding our business segments is discussed below:

(“VerifyMe,” the “Company,”

“we,” “us,” or “our”), is a specialized logistics company that specializes in time and temperature

sensitive products, as well as providing brand protection and enhancement solutions.

operate a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global, LLC (“PeriShip Global”)

and accounts for nearly all VerifyMe revenue, and an Authentication segment.

Through our Precision Logistics segment, we provide a value-added

service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics

such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal.

provides real-time visibility into shipment transit and last-mile events which is supported by a service center.

Through our Authentication

segment our technologies enable brand owners to deter counterfeit activities.

Precision Logistics:

The Precision Logistics

(formerly PeriShip Global Solutions) segment specializes in predictive analytics 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 extreme delivery times and brand impairment.

Utilizing predictive analytics from multiple data sources

including flight-tracking, weather, traffic, 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 our proprietary IT platform, we provide real-time information and analysis

to mitigate supply chain flow interruption, as well as delivering last-mile resolution for key markets, including the perishable healthcare

and food industries.

The Precision Logistics segment specializes in predictive analytics for optimizing delivery of time and temperature sensitive perishable

We manage complex industry-specific shipping logistic processes that require critical time, temperature control and handling

to prevent spoilage and brand impairment.

Utilizing predictive analytics from multiple data sources including flight-tracking, weather,

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

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

Through our proprietary PeriTrack ® customer

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Authentication :

The Authentication (formerly

VerifyMe Solutions) segment specializes in traceability to connect brands with consumers through their product.

This is critical in the

current landscape of increased regulations, as well as increased counterfeit activity and product diversion.

The ability to detect fraud

or abnormal behavior while tracing an item’s journey from production through to the consumer’s hands provides consumers and

brands the assurance they require.

VerifyMe has custom software, patented technologies, and a cloud environment that combines machine

learning and data science to meet the needs of consumers and brands.

In addition, the personalized consumer experience with the brand

creates a connection that increases brand perception and loyalty.

We have a custom suite of products

that offer clients traceability and brand solutions.

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 brand enhancement allowing the brand owner to gather business intelligence and engage with customers

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

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

The Authentication segment specializes in anti-counterfeit and brand

This is critical in the current landscape of increased counterfeit activity and customer expectations.

VerifyMe has patented

technologies that address the needs of brands.

Opportunities

Precision Logistics:

Traditionally,

most shipping businesses utilize the carrier’s data platform for tracking which generally informs the shipping enterprise, and their

Traditionally, most

shipping businesses utilize the carrier’s 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.

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We are focusing our sales emphasis on those industries.

we believe that combining our authentication solutions into the product offering for Precision Logistics clientele, gives our Precision

Logistics segment a competitive advantage to generate revenue by enhancing clients’ ability to grow revenue, gain business intelligence

and build brand loyalty.

logistics industry is facing an economic

We believe this represents an opportunity since major global carriers are cutting internal staff.

These carriers are looking

for lower cost alternatives to service their customers as well as partners that can help the carrier increase revenues.

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 our Precision Logistics segment provides the ideal

solution for all parties involved.

Building logistics infrastructure is a capital-intensive

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Due to the current economic environment, and our cost competitive

offering, we believe companies will opt to outsource their precision logistics services to reduce their operational costs.

offering, we believe companies may opt to outsource their precision logistics services to reduce their operational costs.

The outsourcing

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their businesses by focusing their resources on core competencies.

We believe outsourcing this function to our Precision Logistics segment

provides the ideal solution for all parties involved.

Authentication:

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in our Authentication segment have applications in many areas.

Currently, we are aggressively marketing opportunities in the following

· Agriculture, 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

are a growing problem, widely recognized as a public health risk and a serious concern to public health officials, private companies,

and consumers.

Counterfeiting can apply to both branded and generic products and counterfeit pharmaceuticals may include products with

the correct ingredients but fake packaging, with the wrong ingredients, without active ingredients or with insufficient active ingredients.

The United States enacted legislation requiring the implementation of a comprehensive system designed to combat counterfeit, diluted or

falsely labelled pharmaceuticals, referred to as serialization or electronic pedigree (e-Pedigree).

Our consumer facing visible codes

and unique pigments embedded in the ink of a unique serialized barcode can provide a layered security foundation for a customer solution

in this market.

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

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 product’s 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.

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.

We believe that Precision Logistics

and Authentication segments have synergistic product centric technology platforms and combined have a compelling technology offering for

brand owners.

For example, currently our Precision Logistics segment ships vaccines for major pharmaceutical companies.

With the addition

of our Authentication technology, we can add unit level traceability and authentication to protect clients’ vaccines from product

diversion and sub-standard counterfeits.

In addition, our Authentication segment brand enhancement solutions could give the Precision

Logistics food and beverage clients the ability to gather rich business intelligence and build customer loyalty with engagement functions

like videos, discounts, contests, recipes, etc.

Currently, we are marketing opportunities in the areas of preventing counterfeit

and protecting customer brands.

Partnerships:

Precision Logistics 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, Precision Logistics 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.

a major global carrier company and 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.

In addition to relying on this strategic partner for shipping services we have a service agreement pursuant

to which this strategic partner resells our services to its customers under a “white label” arrangement, which we refer to

as our Premium service.

Under this arrangement we provide our logistics services to our strategic partner’s customers in exchange

for a pre-negotiated service fee per shipment.

Our strategic partner has begun to provide its own service offerings to its customers and

while we will continue to offer our Premium services, we expect our partner will prefer to offer their solution to customers as the primary

recommendation and our solution will be offered as a secondary solution.

This does not affect our Proactive services, and we expect to

see growth under that service offering as we focus on providing Proactive services to customers directly.

Our Authentication segment has a contract with

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We believe these partnerships can

be used to enable brand owners to securely prevent counterfeiting, prevent product diversion and authenticate labels, packaging and products

alleviating liability from counterfeit products that harm consumers.

be used to enable brand owners to securely prevent counterfeiting.

Current Economic Environment

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market conditions and lower demand.

In June 2023, the major carrier stated that due to ongoing demand its plans to ground 29 more aircraft

In June 2023, the major carrier stated that due to ongoing demand, it plans to ground 29 more aircraft

in its fiscal year that started in June 2024.

In mid-December 2023, the carrier forecasted a low single digit percentage decline in revenue

year over year for 2024.

We have seen a softening in demand for some services

related to high-end perishable items and cannabis products 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

We are working with this major global carrier to address their small and medium-sized business clients, which we believe is

an underserved market and presents considerable growth opportunities for our Precision Logistics segment.

However, 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 Combinations

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

Global, the business and certain assets of Trust Codes, a company specializing in brand protection,

anti-counterfeiting and consumer engagement technology with an expertise in the food and agriculture industry.

Trust Codes Global uses

unique QR codes or IoT, coupled with GS1 standards to deliver cloud-based brand protection based on a unique per-item digital identity

to protect brand and product authenticity, increase data visualization of a product through the end-to-end supply chain and creates a

data driven engine to inform and educate consumers of the product.

The purchase price was approximately $1.0 million which consisted of

approximately $0.36 million in cash paid at closing, and 353,492 shares of restricted common stock of the Company, representing $0.65

million in stock consideration.

In addition, the purchase agreement requires consideration contingent upon the achievement of earnings

targets during a five-year period subsequent to the closing of the acquisition.

The earn-out consideration estimated at $1.1 million at

the acquisition date, however the maximum amount of the payment is unlimited.

Trust Codes Global is included in the Authentication segment

and the results of its operations are included in the consolidated financial statement beginning March 1, 2023.

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 service center

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.

that all of the goodwill recorded for financial statement purposes is deductible for tax purposes.

The acquired PeriShip Global business

is included in the Precision Logistics segment and the results of its operations have been included in the consolidated financial statements

beginning April 22, 2022.

In mid-December 2024, the carrier forecasted flat revenue year over year for 2025.

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.

We are working with this

major global carrier to address their small and medium-sized business clients, which we believe is an underserved market and presents

growth opportunities for our Precision Logistics segment.

However, 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.

On December 8, 2024, we sold our Trust Codes Global business pursuant

to a Share Sale Agreement with Paul Ryan, former Executive Vice President of the Authentication Segment and employee of Trust Codes Global

The purchase price per the agreement was $1 NZD.

We recognized a loss of $0.1 million on the sale of the business.

year ended December 31, 2024, $0.1 million was reclassified from accumulated other comprehensive loss into earnings and is included

in general and administrative in our consolidated statements of operations.

We experience seasonal fluctuations

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patents and two granted European patents,

one validated in four countries (France, Germany, United Kingdom, and Italy), and the second patent validated in three countries (France,

Germany, and United Kingdom), three pending U.S.

and foreign patent applications, twenty-six registered U.S.

trademarks (of which nineteen

are in the name of VerifyMe, Inc., and 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, seven NZ trademark registration (of which

six are in the name of Trust Codes Limited and/or Trust Codes Global Limited), one OAPI (African Intellectual Property Organization) trademark

registration (in the name of Trust Codes Global Limited), and two pending US and foreign trademark applications.

two pending foreign patent applications, twenty-one registered U.S.

trademarks and several foreign trademarks.

The Company abandoned

two patents during the year ended December 31, 2023.

one patent during the year ended December 31, 2024.

While some of our granted patents are commercially

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date and any adjustment under 35 U.S.C.

It is cost prohibitive to register patents in

every country.

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

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 $107 thousand and $89 thousand during the years ended December 31, 2023, and 2022, respectively, on research and

Research in our Precision

Logistics segment is currently focused on developing:

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

print engine;

· the imbedding of machine learning into our proprietary IT portal to expand and improve our predictive

analytics capabilities;

· creating revenue from our weather analytics.

Research in our Authentication

segment is currently focused on developing new innovative solutions, and enhancement of our existing solutions to counterfeiting and

traceability so that we continue to expand what we believe is our long-term competitive advantage:

· Novel new algorithms to combat counterfeit methods more effectively, including expanding the use of machine

learning techniques to better identify counterfeit behaviors;

· Improvement and enhancement of our smart production systems integration suite and its connection with

critical expert partners;

· New methods to verify and validate customers who onboard, including using deep learning models to validate

both identity and claims;

· Further development of our web app augmented reality/mixed reality capability, leveraging our unique technology

in this area which we acquired with Trust Codes;

· New methods to detect and validate VerifyInk™ on customer packing to help expand the market for

the VerifyInk™ product, and in line with our dual factor related patents.

VerifyMe continues to

monitor the market for state-of-the-art innovation and may either develop, partner to deploy or seek to acquire new technologies, products

and services in the future, if we believe it would provide a competitive market advantage and could be successfully monetized.

Research and development

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

approximately $70 thousand and $107 thousand during the years ended December 31, 2024, and 2023, respectively, on research and development.

We continue to monitor

the market for state-of-the-art innovation and may either develop, partner to deploy or seek to acquire new technologies, products and

services in the future, if we believe it would provide a competitive market advantage and could be successfully monetized.

Sales and Marketing

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to support existing customer accounts and new customer development.

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

We use social media channels, such as LinkedIn, and Meta (f/k/a Facebook)

as a means of marketing our services.

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We are currently revising and optimizing our websites to improve customer engagement

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 participate in 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 continue to have strategic partners who have existing relationships in their particular geographical

For our Authentication segment, these strategic partners have relationships with government and brands and include both paid

and commissioned sales only contract arrangements.

PeriShip Global has developed its own software

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field such as healthcare or non-perishable building materials.

PeriShip Global is operating in all of the perishable segments.

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.

Our Precision Logistics segment operates 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.

The market for protection from diversion, theft

and forgery is a highly fragmented industry that includes smaller companies as well as a number of large, well-established companies.

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.

In general, we believe competition in our principal markets is primarily

driven by product performance, features and liability;

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

ease of implementation, technology effectiveness, digital instant verification;

new laws and regulations;

product innovation and timing of new product introductions;

ability to develop, maintain and protect proprietary

products and technologies;

product innovation and timing

of new product introductions;

ability to develop, maintain and protect proprietary products and technologies;

sales and distribution capabilities;

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applications support;

breadth of product line.

Amazon has an anti-counterfeit service with their

“Project Zero” brand protection system utilizing their “Transparency” serialization product.

Amazon’s product

serialization service provides a unique code for every unit that is manufactured, and the brand puts these codes on its products as part

of its manufacturing process, which Amazon scans and verifies.

Our traceability and authentication solutions are interoperable with Amazon’s

Transparency solutions.

While Amazon’s customers could use our solution when using Amazon, they would not be required to in order

to use Amazon’s Transparency solutions.

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

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.

and breadth of product line.

Some of our competitors have substantially greater

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represented 16% of revenues and one customer represented 17% of revenues for the year ended December 31, 2023.

As of December 31, 2023, three customers made

up 47% of accounts receivable.

As of December 31, 2022, two customers accounted for 23% of total accounts receivable.

As of December 31, 2024, two customers made up

36% of accounts receivable.

As of December 31, 2023, three customers accounted for 47% of total accounts receivable.

During the year ended December 31, 2024, and December

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As of December 31, 2024, we employed approximately

fifty persons and eight consultants.

Of these employees, approximately forty were employed in our Precision Logistics operations and 10

forty persons and four consultants.

Of these employees, approximately forty were employed in our Precision Logistics operations and four

were employed by our Authentication operations.

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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