What changed in this filing

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Item 1A. Risk Factors

2025-03-12 compared with 2024-03-29 · 250 added, 249 removed, 575 unchanged (46% of the section changed)

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partnerships, including licensing or acquiring complementary products, intellectual property rights, technologies or businesses.

in April 2022, we acquired the business of PeriShip, LLC (“PeriShip”) through our wholly owned subsidiary PeriShip Global

and in March 2023, we acquired the business of Trust Codes Limited, (“Trust Codes”) through our wholly owned subsidiary Trust

Codes Global Limited (“Trust Codes Global”).

To realize the anticipated benefits of these acquisitions, we must successfully

integrate these businesses with ours.

The integration of these businesses and any potential acquisition or strategic partnership entails

numerous risks, including:

the anticipated benefits of any potential acquisitions, we must successfully integrate those businesses with ours.

The integration of

any potential acquisition or strategic partnership entails numerous risks, including:

· increased operating expenses and cash requirements;

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inability could impair our ability to grow or obtain access to technology or products that may be important to the development of our

Failure to attract and retain management, and develop successors

for management, may damage our operations and financial results and cause our stock price to decline.

We depend, to a significant degree, on the skills, experience and efforts

of our management team, and other personnel, particularly in the management of our subsidiary PeriShip Global.

Our failure to attract,

integrate, motivate and retain existing or additional personnel in a timely fashion, and develop successors with commensurate skills and

talents, could disrupt or otherwise harm our operations and financial results.

The loss of services of certain of our management team

and key employees, an inability to attract or retain qualified personnel in the future could delay the development of and negatively impact

the operations and profitability of our business.

Our future growth will depend upon the success of our Precision

Logistics segment and future businesses we may acquire.

If we fail to effectively execute our strategy, our competitive position and financial

performance could be materially harmed.

Our future growth will depend upon the success of our Precision Logistics

segment and future businesses we may acquire.

We are currently engaged in efforts to find and acquire businesses, which is intended to

streamline operations, improve profitability and improve our overall competitiveness.

The successful execution of our strategy is subject

to significant uncertainties and may require additional capital and operational expenditures.

If we fail to execute our strategy effectively,

our ability to realize the intended benefits may be compromised.

Even if we successfully implement our strategy, we may not see the intended

results, diminishing the expected improvements to efficiency or revenue generation.

This could materially and adversely affect our competitive

position, financial performance, and brand reputation.

Our Precision Logistics segment relies on one key strategic partner

for shipping services for our customers and as a source for customers representing a substantial percentage of our revenues.

Our business is dependent, and we believe that

it will continue to depend, on our relationship with one strategic partner.

PeriShip Global partners with one major global carrier for

all its customers’ shipping needs.

While we work closely with this key strategic partner and have transportation services and pricing

agreements in place covering the shipping services they provide to our customers, such agreements are subject to termination or modification

from time to time.

If our strategic partner is unwilling or unable to supply to us the shipping services we market and sell on acceptable

terms, or at all, or otherwise elects to terminate its business relationship with us, we may not be able to obtain alternative shipping

services from other providers on acceptable terms, in a timely manner, or at all, and our business may be materially and adversely impacted.

We do not currently have any alternative shipping service suppliers from which we can obtain the shipping services we currently receive

from our strategic partner.

Establishing the necessary information technology infrastructure and business relationship with another shipping

services provider would be costly and time consuming and may ultimately not be successful or cost-effective.

Further, any increase in

the prices charged by our single strategic partner or failure to perform by our strategic partner could cause our costs to increase or

could cause us to experience short-term unavailability of shipping services on which our business relies.

In particular, delays and other shipping disruptions

at our strategic partner significantly negatively impact our business.

Our business involves the shipment of time and temperature sensitive

goods, so our customers are significantly negatively impacted by delays and other shipping disruptions that cause product loss, spoilage

and reputational harm.

An increase in delays and other shipping disruptions on the part of our strategic partner could cause our clients

to seek shipping solutions from our competitors who use alternative shipping service providers.

If these events occur, it may reduce our

profitability or may cause us to increase our prices.

In addition, any material interruptions in shipping services by this strategic partner

may result in significant cost increases and reduce sales, which could harm our business, financial condition and results of operations

and may have a material adverse impact on our business.

In addition to relying on this strategic partner

for shipping services, a significant portion of our revenue is generated through a service agreement pursuant to which this strategic

partner resells our services to its customers under a “white label” arrangement.

Under this arrangement we provide our logistics

services to our strategic partner’s customers in exchange for a pre-negotiated service fee per shipment.

Sales through our strategic

partner accounted for approximately 17% of revenue of our Precision Logistics segment for the year ended December 31, 2023.

to maintain certain minimum service level requirements related to our service with this strategic partner, it may terminate our agreement

to provide them with such service.

If our strategic partner terminates our agreement, requires us to renegotiate the terms of our existing

agreement or we are unable to renew such agreement on mutually agreeable terms, no longer makes our services available to its customers,

replaces our services with one or more competitors, develops and supplants our services for its own service offerings, or we experience

a significant reduction in business from this strategic partner, our business, financial condition and results of operations would be

materially adversely affected.

is dependent, and we believe that it will continue to depend on our relationship with one strategic partner.

PeriShip Global partners

with one major global carrier for all its customers’ shipping needs.

While we work closely with this key strategic partner and have

transportation services and pricing agreements in place covering the shipping services they provide to our customers, such agreements

are subject to termination or modification from time to time.

If our strategic partner is unwilling or unable to supply to us the shipping

services we market and sell on acceptable terms, or at all, or otherwise elects to terminate its business relationship with us, we may

not be able to obtain alternative shipping services from other providers on acceptable terms, in a timely manner, or at all, and our business

may be materially and adversely impacted.

We do not currently have any alternative shipping service suppliers from which we can obtain

the shipping services we currently receive from our strategic partner.

Establishing the necessary information technology infrastructure

and business relationship with another shipping services provider would be costly and time consuming and may ultimately not be successful

or cost-effective.

Further, any increase in the prices charged by our single strategic partner or failure to perform by our strategic

partner could cause our costs to increase or could cause us to experience short-term unavailability of shipping services on which our

business relies.

In particular,

delays and other shipping disruptions at our strategic partner significantly negatively impact our business.

Our business involves the

shipment of time and temperature sensitive goods, so our customers are significantly negatively impacted by delays and other shipping

disruptions that cause product loss, spoilage and reputational harm.

An increase in delays and other shipping disruptions on the part

of our strategic partner could cause our clients to seek shipping solutions from our competitors who use alternative shipping service

If these events occur, it may reduce our profitability or may cause us to increase our prices.

In addition, any material interruptions

in shipping services by this strategic partner may result in significant cost increases and reduce sales, which could harm our business,

financial condition and results of operations and may have a material adverse impact on our business.

to relying on this strategic partner for shipping services, a material portion of our revenue has been generated through 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 a 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.

Sales through our strategic partner accounted for approximately 16% of revenue

of our Precision Logistics segment for the year ended December 31, 2024, and 17% for the year ended December 31, 2023.

Our strategic partner

has begun to provide its own service offerings to its customers, and we expect revenue from our Premium Services in our Precision Logistics

segment will begin to decrease as we experience a reduction in business for these services.

If we fail to offset a reduction in business

for our Premium Services in our Precision Logistics segment through our ProActive Services or other service offerings, our business, financial

condition and results of operations could be materially adversely affected.

Our business is subject to seasonal trends.

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competitive, cyclical, and is expected to remain so for the foreseeable future.

The traceability and consumer engagement industry is also

highly competitive.

We face competition in all geographic markets and each industry sector in which we operate.

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· our inability to achieve expected customer retention levels or sales growth targets;

· we compete with many other transportation and logistics service providers, and companies providing traceability

and consumer engagement solutions, which has included and may include our strategic partners, some of which have greater capital resources

· we compete with many other transportation and logistics service providers, which has included and may include our strategic partners, some of which have greater capital resources

or lower cost structures than us;

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our profitability, we could be materially adversely affected.

Our future growth will depend upon the success

of our strategic partners who integrate our solutions into their product offerings .

We rely on strategic partnerships with one large logistics carrier

for our Precision Logistics segment and larger companies which integrate our technologies into their product offerings for our legacy

Authentication segment.

These strategies leave us largely dependent upon the success of our partners.

If any of our strategic partners

who include our technology in their products cease to do so, or we fail to obtain other partners who will incorporate, embed, integrate

or bundle our technology, or these partners are unsuccessful in their efforts, expanding deployment of our technology, our business and

future growth would be materially and adversely affected.

Damage to our brand image and corporate reputation could materially

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we do business, such as customer service mishaps or noncompliance with laws, could tarnish our reputation and reduce the value of our

With the increase in the use of social media outlets such as Facebook, YouTube, Instagram, LinkedIn and Twitter, adverse publicity

can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond.

Damage to our reputation and

loss of brand equity could have a material adverse effect on us, and could require additional resources to rebuild our reputation and

restore the value of our brand.

With the increase in the use of social media outlets such as Meta (f/k/a Facebook), YouTube, Instagram, LinkedIn and X (f/k/a Twitter),

adverse publicity can be disseminated quickly and broadly, making it increasingly difficult for us to effectively respond.

Damage to our

reputation and loss of brand equity could have a material adverse effect on us, and could require additional resources to rebuild our

reputation and restore the value of our brand.

The Company has significant goodwill and

other intangible assets, and future impairment of these assets could have a material adverse impact on the Company's financial results.

The Company has recorded significant goodwill

and other identifiable intangible assets on its balance sheet as a result of its acquisition of the PeriShip business in 2022 and Trust

Codes business in 2023.

A number of factors may result in impairments to goodwill and other intangible assets, including significant negative

industry or economic trends, disruptions to our business, increased competition and significant changes in the use of the assets.

the date of this Report, the Company has recorded significant goodwill and other identifiable intangible assets on its balance sheet as

a result of its acquisition of the PeriShip Global business in 2022.

A number of factors may result in impairments to goodwill and other

intangible assets, including significant negative industry or economic trends, disruptions to our business, increased competition and

significant changes in the use of the assets.

charges could adversely affect the Company's financial condition or results of operations in the periods recognized.

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support in an attempt to lower their costs.

These and other economic factors such as recessions could have an adverse effect on our business,

financial conditions and results of operations and we might be forced to lower our rates or lose customers.

In addition, changes in the United States’ or international trade policy, including

tariffs, export controls, quotas, embargoes, or sanctions, could trigger additional retaliatory actions by affected countries, resulting

in “trade wars” and further increased costs for goods transported globally, which may negatively impact our customers.

and other economic factors such as recessions could have an adverse effect on our business, financial conditions and results of operations

and we might be forced to lower our rates or lose customers.

Overall economic conditions that reduce

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Changes in U.S.

trade policy could lead to ‘trade wars’ impacting

the volume of economic activity in the United States, and as a result, shipping volumes may be materially reduced.

Such a reduction may

materially and adversely affect our business.

or international trade policy, including tariffs, export controls,

quotas, embargoes, or sanctions, could trigger additional retaliatory actions by effected countries, resulting in “trade wars”

impacting the volume of economic activity globally and in the United States, and as a result, shipping volumes may be materially reduced.

Such a reduction may materially and adversely affect our business.

Reductions in discretionary consumer

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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.

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

We have seen a softening in demand for some services

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Since our inception,

we have incurred operating losses in each year due to costs incurred in connection with research and development activities and general

and administrative expenses associated with our operations.

In addition, we have made significant expenditures on acquisitions and may

continue to complete acquisitions in the future.

We expect to continue to incur expenditures to develop and market our services and to

make acquisitions and could continue to incur operating losses and negative operating cash flow.

We may encounter unforeseen expenses,

difficulties, complications, delays and other unknown factors that may adversely affect our business.

Our ability to generate profits

will depend, in part, on our expenses and our ability to generate revenue.

Our prior losses and any future losses have had and may continue

to have an adverse effect on our working capital.

If we fail to generate revenue and become profitable, or if we are unable to fund our

continuing losses, our shareholders could lose all or part of their investments.

we have incurred operating losses each year due to costs incurred in connection with research and development activities and general and

administrative expenses associated with our operations.

In addition, we have made significant expenditures on acquisitions and may continue

to complete acquisitions in the future.

We expect to continue to incur expenditures to develop and market our services and to make acquisitions

and could continue to incur operating losses and negative operating cash flow.

We may encounter unforeseen expenses, difficulties, complications,

delays and other unknown factors that may adversely affect our business.

Our ability to generate profits will depend, in part, on our

expenses and our ability to generate revenue.

Our prior losses and any future losses have had and may continue to have an adverse effect

on our working capital.

If we fail to generate revenue and become profitable, or if we are unable to fund our continuing losses, our shareholders

could lose all or part of their investments.

Our ability to

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In addition, Sections

382 and 383 of the Code, contain rules that limit the ability of a corporation that undergoes an "ownership change" (generally,

any change in ownership of more than 50% of the corporation's stock over a three-year period) to utilize its pre-change NOLs and tax credit

carryforwards to offset future taxable income.

These rules generally operate by focusing on ownership changes involving stockholders owning

directly or indirectly 5% or more of the stock of a corporation and any change in ownership arising from a new issuance of stock by the

Generally, if an ownership change occurs, the yearly taxable income limitation on the use of NOLs and tax credit carryforwards

and certain built-in losses is equal to the product of the applicable long-term, tax-exempt rate and the value of the corporation's stock

immediately before the ownership change.

The Company completed an IRC Section 382 analysis in 2022, and determined that an ownership change

occurred sufficient to impose additional limitations on the use of NOL carryforwards.

The Company has not completed an IRC Section 382

analysis in 2023.

In the event future ownership changes are determined, we might be unable to offset our taxable income with losses, or

our tax liability with credits, before such losses and credits expire, in which event we could incur larger federal and state income tax

liabilities than we would have had we not experienced an ownership change.

382 and 383 of the Internal Revenue Code (“IRC”), contain rules that limit the ability of a corporation that undergoes an

"ownership change" (generally, any change in ownership of more than 50% of the corporation's stock over a three-year period)

to utilize its pre-change NOLs and tax credit carryforwards to offset future taxable income.

These rules generally operate by focusing

on ownership changes involving stockholders owning directly or indirectly 5% or more of the stock of a corporation and any change in ownership

arising from a new issuance of stock by the company.

Generally, if an ownership change occurs, the yearly taxable income limitation on

the use of NOLs and tax credit carryforwards and certain built-in losses is equal to the product of the applicable long-term, tax-exempt

rate and the value of the corporation's stock immediately before the ownership change.

The Company completed an IRC Section 382 analysis

in 2022 and determined that an ownership change occurred sufficient to impose additional limitations on the use of NOL carryforwards.

The Company has not completed an IRC Section 382 analysis in 2023 or 2024.

In the event future ownership changes are determined, we might

be unable to offset our taxable income with losses, or our tax liability with credits, before such losses and credits expire, in which

event we could incur larger federal and state income tax liabilities than we would have had we not experienced an ownership change.

Because our name and brand could be confused

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and www.verifyme.ng, a website offering verification services in Nigeria.

We have deleted classifications

in our Canada trademark application for the VerifyMe name, in an effort to avoid confusion with the prior-registered SecureKey trademark.

We have also attempted to contact the operators of the Nigeria website to resolve the confusion caused there but to date have been unsuccessful

in our efforts.

Further, we have registered certain trademarks and service marks in the United States and foreign jurisdictions.

aware of names and marks similar to our service marks being used from time to time by other persons.

Although we oppose any such infringement,

further or unknown unauthorized uses or other misappropriation of our trademarks or service marks may diminish the value of our brands

and adversely affect our business.

We have attempted to contact

the operators of the Nigeria website to resolve the confusion caused there but to date have been unsuccessful in our efforts.

we have registered certain trademarks and service marks in the United States and foreign jurisdictions.

We are aware of names and marks

similar to our service marks being used from time to time by other persons.

Although we oppose any such infringement, further or unknown

unauthorized uses or other misappropriation of our trademarks or service marks may diminish the value of our brands and adversely affect

our business.

If our technologies

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platform has redundancy built in, high performing and scalable.

Because many of our current and target customers

are large companies, their internal policies and resistance to change may impair our ability to successfully commercialize our products .

We may not continue to invest in our Authentication segment operations

and as a result, we may not be able to complete the development and commercialization of our Authentication segment products.

Given our planned use of capital, we may not have the ability to fund

and invest in the development and commercialization of our Authentication segment.

If we do not invest in our Authentication segment,

we may have to significantly delay, scale back or discontinue our operations and the development or commercialization of our Authentication

Segment, which could harm our results of operations.

Our Authentication segment has historically

targeted large companies and, their internal policies and resistance to change may impair our ability to successfully commercialize our

Authentication segment.

Our ability to become successful and generate

positive cash flow will be dependent upon the extent of commercialization of products using our technology.

Commercialization of new technology

products often has a very long lead time.

positive cash flow within our Authentication segment will be dependent upon the extent of commercialization of products using our technology.

Commercialization of new technology products often has a very long lead time.

This problem is exacerbated when customers are large entities.

Our current and target customers

are large entities.

These factors may adversely affect our ability to commercialize our technologies, or any products or services related

to our technologies.

Our current and target customers are large entities.

These factors may adversely affect our ability to commercialize our Authentication

technologies.

Further, we cannot assure you that commercialization will result in profitability.

Our future growth will depend upon the success

of our strategic partners who integrate our solutions into their product offerings .

We rely on strategic partnerships with one large

logistics carrier for our Precision Logistics segment and larger companies which integrate our technologies into their product offerings

for our legacy Authentication segment.

These strategies leave us largely dependent upon the success of our partners.

If any of our strategic

partners who include our technology in their products cease to do so, or we fail to obtain other partners who will incorporate, embed,

integrate or bundle our technology, or these partners are unsuccessful in their efforts, expanding deployment of our technology, our business

and future growth would be materially and adversely affected.

If we cannot manage

our growth effectively, we may not become profitable .

Businesses which grow

rapidly often have difficulty managing their growth.

If we continue to grow as rapidly as we anticipate, we will need to expand our management

by recruiting and employing experienced key employees capable of providing the necessary support.

We cannot assure you that our management

will be able to manage our growth effectively or successfully.

Our failure to meet these challenges could harm our financial condition

and ability to become profitable.

We will need to expand our sales, marketing

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results may suffer .

Our patent rights, trade secrets, copyrights,

trademarks, domain names and other product rights are critical to our success.

We strive to protect our intellectual property rights by

relying on federal, state and common law rights, as well as contractual restrictions.

We may enter into confidentiality and invention

assignment agreements with our employees and confidentiality agreements with parties with whom we conduct business to limit access to,

and disclosure and use of, our proprietary information.

However, these contractual arrangements and the other steps we have taken to protect

our intellectual property may not prevent the misappropriation of our proprietary information or deter independent development of similar

technologies by others.

We rely on intellectual property in order to maintain

a competitive advantage.

As such, we strive to protect our intellectual property rights by relying on federal, state and common law rights,

as well as contractual restrictions.

We may enter into confidentiality and invention assignment agreements with our employees and confidentiality

agreements with parties with whom we conduct business to limit access to, and disclosure and use of, our proprietary information.

these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation

of our proprietary information or deter independent development of similar technologies by others.

As management deems appropriate,

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and time-consuming and may not result in issued patents that can be effectively enforced.

The terms of our

patents may not be sufficient to effectively protect our business.

In most countries in

which we file patent applications, including the U.S., the term of an issued patent is twenty years from the earliest claimed filing date

of a non-provisional patent application in the applicable country.

With respect to any issued patents in the U.S., we may be entitled

to obtain a patent term extension or extend the patent expiration date provided we meet the applicable requirements for obtaining such

patent term extensions.

Although such extensions may be available, the life of a patent and the protection it affords is by definition

In addition, the rights granted under any issued patents may not provide us with protection or competitive advantages against

competitors with similar technology.

Furthermore, our competitors may independently develop similar technologies.

For these reasons, we

may have competition for our technologies.

Upon the expiration of our issued patents, we will not be able to assert such patent rights

against potential competitors and our business and results of operations may be adversely affected.

If we are required

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In addition, our insurance is intended to address costs associated with aspects of cyber incidents, network failures and privacy-related

concerns, may not sufficiently cover all types of losses or claims that may arise.

concerns, and may not sufficiently cover all types of losses or claims that may arise.

Evolving regulations concerning data privacy

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pass on to our customers.

In our Authentication segment (formerly VerifyMe Solutions segment), security pigments, ink canisters, labels

and bar codes are key elements in the cost of our products.

Our inability to offset material price inflation could adversely affect our

results of operations.

We rely on one global carrier for transportation services, one supplier to procure our raw materials, one strategic

partner to produce our ink canisters, and it is difficult to predict what effects shortages or price increases for the raw materials we

use to make our products may have in the future.

Our ability to manage inventory and meet delivery requirements may be constrained by

our supplier’s inability to scale production and adjust delivery during times of volatile demand.

Our inability to fill our supply

needs would jeopardize our ability to fulfill obligations under current contracts or enter new contracts to sell our products, which would,

in turn, result in reduced sales and profits, contract penalties or terminations, and damage to customer relationships.

In our Authentication segment security pigments, and ink canisters are key elements in the cost of our products.

Our inability to offset material price inflation could adversely affect our results of operations.

We rely on one global carrier for transportation

services, one supplier to procure our raw materials, one strategic partner to produce our ink canisters, and it is difficult to predict

what effects shortages or price increases for the raw materials we use to make our products may have in the future.

Our ability to manage

inventory and meet delivery requirements may be constrained by our supplier’s inability to scale production and adjust delivery

during times of volatile demand.

Our inability to fill our supply needs would jeopardize our ability to fulfill obligations under current

contracts or enter new contracts to sell our products, which would, in turn, result in reduced sales and profits, contract penalties or

terminations, and damage to customer relationships.

Our ability to become profitable is largely

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of widespread market acceptance of our solutions may harm our business, operating results and financial condition .

Rapid technological changes and frequent new product

introductions are typical in the markets we serve.

Our future success will depend in part on continuous, timely development and introduction

of new products that address evolving market requirements.

To the extent we fail to introduce new and innovative products, we may lose

any market share we have to our competitors, which may be difficult or impossible to regain.

Any inability, for technological or other

reasons, to successfully develop and introduce new products could harm our business.

Additionally, we may experience delays in the development

and introduction of products, we may be unable keep pace with the rapid rate of change in anti-counterfeiting and security products’

research, and any new products acquired or developed by us may not meet the requirements of the marketplace or achieve market acceptance.

If we are unable to develop new products to meet market demands, our business could be materially adversely affected.

Foreign Currency

Exchange Rate Risk

We operate in the US and New Zealand, which exposes

us to market risk associated with foreign currency exchange rate fluctuations.

Our foreign currency exposure primarily relates to intercompany

receivables and payables and third-party receivables and payables that are denominated in currencies other than the functional currency

of our legal entities.

Our largest foreign currency exposure is unsettled intercompany payables and receivables which are reviewed on

a regular basis.

Gains and losses from foreign currency transactions are included in “General and administrative” on our Consolidated

Statements of Operations.

Our foreign subsidiary operates in a currency

other than the United States dollar;

therefore, increases or decreases in the value of the U.S.

dollar against other major currencies

will affect our operating results and the value of our balance sheet items denominated in foreign currencies.

Our most significant exposures

to translation risk relates to functional currency assets and liabilities that are denominated in the New Zealand dollar.

in the net investment of our foreign subsidiary are reflected in "Foreign currency translation adjustments” on our Consolidated

Statements of Comprehensive Loss.

We have not used any exchange rate hedging programs to mitigate the effect of exchange rate fluctuations.

Rapid technological changes and frequent new

product introductions are typical in the markets we serve.

Our future success will depend in part on continuous, timely development and

introduction of new products that address evolving market requirements.

To the extent we fail to introduce new and innovative products,

we may lose any market share we have to our competitors, which may be difficult or impossible to regain.

Any inability, for technological

or other reasons, to successfully develop and introduce new products could harm our business.

Additionally, we may experience delays

in the development and introduction of products, we may be unable to keep pace with the rapid rate of change in anti-counterfeiting and

security products’ research, and any new products acquired or developed by us may not meet the requirements of the marketplace

or achieve market acceptance.

If we are unable to develop new products to meet market demands, our business could be materially adversely

Risks Relating to our Common Stock

Upon exercise of our outstanding options

or warrants, conversion of our Series B Convertible Preferred Stock, conversion of our Convertible debt, vesting of our restricted stock

units, and issuance of shares relating to the Trust Codes earnout, we will be obligated to issue a substantial number of additional shares

of common stock which will dilute our present shareholders .

We are obligated to issue additional shares of

our common stock in connection with our outstanding options, warrants and shares of our Series B Convertible Preferred Stock.

years ended December 31, 2023, there were approximately 8,286,000 anti-dilutive shares consisting 1,439,000 unvested performance restricted

stock units, 816,000 restricted stock units, restricted stock awards and options under the stock purchase plan, 301,000 shares issuable

upon exercise of stock options, 4,629,000 shares issuable upon exercise of warrants, 957,000 shares issuable upon conversion of convertible

debt, and 144,000 shares issuable upon conversion of preferred stock.

As of December 31, 2023, there were no shares issuable related to

the Trust Codes earnout.

The exercise, conversion or exchange of warrants or convertible securities, including for other securities, will

cause us to issue additional shares of our common stock and will dilute the percentage ownership of our shareholders.

In addition, we

have in the past, and may in the future, exchange outstanding securities for other securities on terms that are dilutive to the securities

held by other shareholders not participating in such exchange.

Upon exercise of our outstanding

options or warrants, conversion of our Series B Convertible Preferred Stock, conversion of our Convertible debt, and vesting of our

restricted stock units, we will be obligated to issue a substantial

number of additional shares of common stock which will dilute our present shareholders .

We are obligated to issue additional shares of our common stock in

connection with our outstanding options, warrants and shares of our Series B Convertible Preferred Stock.

For the years ended December

31, 2024, there were approximately 7,971,000 anti-dilutive shares consisting 1,606,000 unvested performance restricted stock units, 414,000

restricted stock units and restricted stock awards, 221,000 shares issuable upon exercise of stock options, 4,629,000 shares issuable

upon exercise of warrants, 957,000 shares issuable upon conversion of convertible debt, and 144,000 shares issuable upon conversion of

preferred stock.

The exercise, conversion or exchange of warrants or convertible securities, including for other securities, will cause

us to issue additional shares of our common stock and will dilute the percentage ownership of our shareholders.

In addition, we have in

the past, and may in the future, exchange outstanding securities for other securities on terms that are dilutive to the securities held

by other shareholders not participating in such exchange.

Offers or availability for sale of a substantial

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could discourage an acquisition of us by a third party .

In addition to certain provisions of our amended and restated articles

of incorporation, as amended, and our amended and restated by-laws, certain provisions of our outstanding warrants could make it more

difficult or expensive for a third party to acquire us.

The warrants prohibit us from engaging in certain transactions constituting “fundamental

transactions” unless, among other things, the surviving entity assumes our obligations under the warrants.

These and other provisions

of the warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you.

In addition to certain provisions of our amended and restated

articles of incorporation, as amended, and our amended and restated by-laws, certain provisions of our outstanding warrants could make

it more difficult or expensive for a third party to acquire us.

The warrants prohibit us from engaging in certain transactions constituting

“fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants.

and other provisions of the warrants could prevent or deter a third party from acquiring us even where the acquisition could be beneficial

Risks Relating to our Debt

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in the normal course of business.

The Term Note, among other things, requires high interest payments, and both the Term Note and the PNC

Facility place encumbrances on our assets, and subject us to restrictive covenants that limit our operating flexibility.

Additionally,

under the terms of the Term Note, the Company is required to make monthly loan principal payments of $41,667 per month plus interest,

through September 15, 2026.

The terms of the Term Note and the PNC Facility

have been structured in such a way that, if we default under one, we will also default under the other.

In the event of a continuing default,

our senior secured lenders would have the right to accelerate the then-outstanding amounts under each such facility and to exercise their

respective rights and remedies to collect such amounts, which would include foreclosing on collateral constituting substantially all of

our assets and the assets of our PeriShip Global subsidiary.

Any continuing default on the Term Note or the PNC Facility could result

in the outstanding principal balance under each such facility becoming immediately due and payable, which could harm our business, financial

condition and results of operations and may have a material adverse impact on our business.

We have a facility with PNC Bank National Association (the “PNC Facility”), which includes

a $1 million RLOC.

The RLOC has no scheduled payments of principal until maturity and bears interest per annum at a rate equal to the

sum of Daily SOFR plus 2.85% with monthly interest payments.

The PNC Facility place encumbrances on our assets, and subject us to

restrictive covenants that limit our operating flexibility.

In the event of a continuing default, our senior

secured lenders would have the right to accelerate the then-outstanding amounts under the PNC Facility and to exercise their respective

rights and remedies to collect such amounts, which would include foreclosing on collateral constituting substantially all of our assets

and the assets of our PeriShip Global subsidiary.

Any continuing default on the PNC Facility could result in the outstanding principal

balance under the facility becoming immediately due and payable, which could harm our business, financial condition and results of operations

and may have a material adverse impact on our business.

25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory

notes for the aggregate principal amount of $1,100 thousand.

The notes are subordinated unsecured obligations of the Company and accrue

interest at a rate of 8% per year payable semiannually in arrears.

The notes will mature on August 25, 2026, unless earlier converted or

repurchased at a conversion price of $1.15 per share of common stock.

Although we believe the majority of our investors will choose to

convert into shares, if this does not occur, this may have a material adverse impact on our cash and as a result, a material adverse impact

on our business.

As of January 21, 2025, $350 thousand was converted to common stock.

notes are subordinated unsecured obligations of the Company and accrue interest at a rate of 8% per year payable semiannually in arrears.

The notes will mature on August 25, 2026, unless earlier converted or repurchased at a conversion price of $1.15 per share of common stock.

Although we believe the majority of our investors will choose to convert into shares, if this does not occur, this may have a material

adverse impact on our cash and as a result, a material adverse impact on our business.

Our cash flows and operating results could

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collateral, and enforce their respective interests against existing collateral.

The terms of the Term Note and the PNC Facility have

been structured in such a way that, if we default under one, we will also default under the other.

In the event of a continuing default,

our senior secured lenders would have the right to accelerate the then-outstanding amounts under each such facility and to exercise their

respective rights and remedies to collect such amounts, which would include foreclosing on collateral constituting substantially all of

our assets and the assets of our PeriShip Global subsidiary As a result, a default under applicable debt covenants could have an adverse

effect on our financial condition or results of operations.

These covenants may restrict our ability to engage in transactions that we

believe would otherwise be in the best interests of our stockholders.

In the event of a continuing default, our senior secured

lenders would have the right to accelerate the then-outstanding amounts under each such facility and to exercise their respective rights

and remedies to collect such amounts, which would include foreclosing on collateral constituting substantially all of our assets and the

assets of our PeriShip Global subsidiary As a result, a default under applicable debt covenants could have an adverse effect on our financial

condition or results of operations.

These covenants may restrict our ability to engage in transactions that we believe would otherwise

be in the best interests of our stockholders.

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 1A. Risk Factors