What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-03-31 compared with 2025-03-12 · 358 added, 187 removed, 73 unchanged (88% of the section changed)

1 unchanged sentence

(“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.

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

as well as providing brand protection and enhancement solutions.

We 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

Through our Precision Logistics segment, we provide 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 are supported by a service center.

Through our Authentication segment our technologies enable brand owners to deter counterfeit

and diversion activities.

Further information regarding our business segments is discussed below:

Precision Logistics:

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.

The Precision Logistics

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 delayed

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

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

7 unchanged sentences

logistics assistance.

· Premium Service – clients pay us directly or through our carrier partner for our complete

white-glove shipping monitoring and predictive analytics service.

This service includes customer web portal access, weather monitoring,

temperature control, full-service center support and last mile resolution.

· Premium Services – clients use our shipping monitoring,

predictive analytics, or exception management services.

Shippers use their own transportation rates, provided and charged directly by

their carrier, with our added services charged (i) directly by the carrier, under a “white label”

arrangement, which we refer to as our Premium service, or (ii) by us, which we refer to as our Direct Premium service.

These services

include customer web portal access, weather monitoring, temperature control, full-service center support and last mile resolution.

As discussed in the section “Partnerships”

below, we ceased providing ProActive services to our prior carrier partner in September 2025.

In February 2026, we ceased providing Premium

services to our prior carrier partner.

While we no longer provide ProActive and Premium services to our prior carrier partner we can and

continue to provide Direct Premium services to our customers who use our prior carrier partner for their shipping needs.

Beginning in September 2025, we began providing

ProActive services to our new Strategic Partner.

We are currently establishing the ability to offer our Premium

services to our Strategic Partner.

We expect to begin broadly offering Premium and Direct Premium services to customers of our new Strategic

Partner in the second quarter of 2026.

The Precision Logistics segment

1 unchanged sentence

· 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

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.

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 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.

· Service Center :

21 unchanged sentences

Authentication :

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.

The Authentication segment

specializes in anti-counterfeit and brand protection.

We are not actively pursuing business in the Authentication segment but continue

to service existing customers.

Recent Developments

Merger Agreement

On January 2, 2026, we entered into a letter agreement

(the “LOI”) with Open World Ltd., a Cayman Islands exempted company (“Open World”), regarding a proposed merger

On February 11, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with VRME Subsidiary

Corp., a Nevada corporation and our wholly owned subsidiary (the “Merger Sub”) and Open World.

Upon the terms and subject

to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will merge with and into Open World, Merger Sub will

cease to exist and Open World will become our wholly-owned subsidiary (the “Merger”).

At the effective time of the Merger

(the “Effective Time”), (i) each holder of ordinary shares of Open World outstanding immediately prior to the Effective Time

(excluding holders of Excluding Shares and Dissenting Shares, as defined in the Merger Agreement) will be entitled to receive the number

of shares of our common stock, based on the Exchange Ratio as defined in the Merger Agreement (the “Exchange Ratio”), (ii)

each investor in Open World Simple Agreements for Future Equity (“Open World SAFEs”) outstanding immediately prior to the

Effective Time will be entitled to receive a right to a number of shares of our common stock based on the Exchange Ratio and (iii) any

outstanding option to purchase shares of Open World shall be converted into an option to purchase the number of shares of our common stock

based on the Exchange Ratio.

Immediately following the closing of the Merger

(the “Closing”), our pre-Closing stockholders are expected to collectively retain approximately 10% of the post-Closing aggregate

number of shares of our common stock and holders of Open World ordinary shares and Open World SAFEs will receive as merger consideration

newly issued shares of our common stock representing approximately 90% of the post-Closing aggregate number of shares of our common stock.

The Merger Agreement contains customary representations,

warranties and covenants, including, among others, (i) covenants requiring each of us and Open World to conduct its business in the ordinary

course during the period between the execution of the Merger Agreement and the Closing or earlier termination of the Merger Agreement,

subject to certain exceptions, (ii) covenants prohibiting us and Open World from engaging in certain kinds of transactions during such

period (without the prior written consent of the other), and (iii) a covenant restricting us and Open World from activities relating to

the soliciting, initiating, encouraging, inducing or facilitating the communication, making, submission or announcement of any alternative

acquisition proposals or inquiries.

The Merger Agreement also requires us, in cooperation

with the Open World, to prepare and file with the SEC a registration statement on Form S-4 that will contain a proxy statement relating

to a Company stockholder meeting to be held in connection with the Merger (the “Registration Statement”) and pursuant to which

our shares of common stock will be registered under the Securities Act of 1933, as amended (the “Securities Act”), to be issued

by virtue of the Merger and the contemplated transactions thereunder.

We shall use its reasonable best efforts to (i) cause the Registration

Statement to comply with applicable rules and regulations promulgated by the SEC, (ii) cause the Registration Statement to become effective

as promptly as practicable, and (iii) keep the Registration Statement effective as long as is necessary to consummate the Merger and the

contemplated transactions thereunder.

In addition, under the Merger Agreement, the parties agreed to other customary provisions including

(i) obtaining requisite stockholder approval to consummate the Merger and the contemplated transactions thereunder, (ii) obtaining regulatory

approvals from relevant governmental authorities, (iii) indemnifying our directors and officers for a period of six years following the

Closing, (iv) completing certain disclosure obligations required by the SEC and listing requirements promulgated by the Nasdaq Capital

Market (“Nasdaq”), (v) electing or appointing to the positions of officers and directors of Company and the surviving corporation

certain persons designated by Open World, and (vi) executing employment agreements between us and Adam Stedham and Jennifer Cola.

Pursuant to Merger Agreement, we have also agreed

to enter into a Registration Rights Agreement and an Exchange Agent Agreement in forms reasonably acceptable to us and Open World at Closing.

Closing of the Merger is subject to various customary

closing conditions.

Each party’s obligations to effect the Merger and otherwise consummate the contemplated transactions thereunder

are conditioned upon (i) the effectiveness of the Registration Statement on Form S-4, (ii) expiration or termination of applicable regulatory

waiting periods, (iii) no restraints from any governmental authority preventing the consummation of the contemplated transactions under

the Merger Agreement, (iv) us and Open World obtaining the respective requisite stockholder votes to consummate the transactions contemplated

by the Merger Agreement, (v) us causing our PeriShip subsidiary to terminate its current credit facility, (vi) us effectuating a reverse

stock split upon the request of Open World, (vii) Nasdaq’s approval of our Nasdaq listing application for the post-Merger entity,

(viii) receipt of written approval of the Merger by the Cayman Islands Trade and Business Licensing Board, and (ix) execution of the Registration

Rights Agreement.

Our and Merger Sub’s obligations to effect the Merger and otherwise consummate the contemplated transactions thereunder

are further conditioned upon customary closing conditions.

Open World’s obligations to effect the Merger and otherwise consummate

the contemplated transactions thereunder are further conditioned upon customary closing conditions as well as (i) us having Closing Net

Cash, as defined in the Merger Agreement, of no less than $1 million, and (ii) our common stock having not been delisted from Nasdaq.

In connection with and subject to the Closing

of the Merger, outstanding time-based and performance-based restricted stock awards and restricted stock units held by certain of our

employees and directors at Closing will accelerate and vest, regardless of any performance conditions, at the Effective Time.

At the Closing of the Merger, pursuant to the

Merger Agreement, each of David Edmonds, Marshall Geller, Howard Goldberg, and Adam Stedham are expected to resign as directors of our

board of directors (our “Board of Directors”).

The foregoing description of the Merger Agreement

does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the full text of the Merger Agreement.

Stockholder Support Agreements

In connection with the Merger Agreement, certain

of our stockholders representing approximately 14% or more of the voting power in the aggregate of our common stock, including our directors

and officers (the “Supporting Stockholders”), executed Stockholder Support Agreements (the “Support Agreements”),

pursuant to which they agreed to vote their shares of our common stock, including any shares of our capital stock or other equity securities

that they purchase or with respect to which they otherwise acquire sole or shared voting power (including any proxy) (the “Support

Agreement Shares”) after the execution of Support Agreement and prior to its expiration pursuant to its terms, in favor of the issuance

of our common stock in accordance with Nasdaq Listing Rule 5635 (the “Issuance Proposal”), (ii) any matter that could reasonably

be expected to facilitate the Issuance Proposal, (iii) against any other proposed action, agreement, transaction or other matter that

is intended to, or would reasonably be expected to, impede, interfere with, delay, postpone, discourage or adversely affect the approval

or consummation of the Issuance Proposal or the consummation of any or all of the other transactions contemplated by the Merger Agreement;

and (iv) to approve any proposal to adjourn or postpone the meeting to a later date, if there are not sufficient votes for the approval

of the Issuance Proposal on the date on which such meeting is held.

The Support Agreements also contain restrictions

on transfer of Support Agreement Shares held by the Supporting Stockholders.

The Support Agreements will terminate upon the earliest to

occur of the following events:

(a) the effective time of the approval of the Issuance Proposal, (b) the termination of the Merger Agreement

in accordance with its terms or (c) upon mutual written agreement of the parties to the Support Agreements.

The foregoing description

of the Support Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the full

text of the form of Support Agreement.

Amended and Restated Employment Agreement

with Adam Stedham

In connection with the Merger Agreement, on February

11, 2026, we entered into an Amended and Restated Employment Agreement with Adam Stedham, effective as of the Effective Time of the Merger.

As of the Effective Time, and subject to the Closing of the Merger, Mr.

Stedham is expected to resign as a director, Chief Executive Officer

and President to become the President of Precision Logistics (the “Stedham Employment Agreement”).

Stedham’s expected

resignation as our director, Chief Executive Officer and President is not the result of any disagreement with us on any matter relating

to our operations, policies or practices.

Pursuant to the Stedham Employment Agreement,

should it become effective, Mr.

Stedham will receive an annual base salary of $300,000 and be eligible for an annual bonus for each calendar

year, with a potential up to 50% of his base salary based on performance goals set by the Board of Directors each year.

Stedham shall

be eligible to receive equity-based compensation award(s), as determined by the Board of Directors (or a subcommittee thereof), from time

The Stedham Employment Agreement is for an initial

term of one year and will thereafter be “at-will”, and may be terminated by either party during the initial term.

If terminated

Stedham for good reason, or by us without cause prior to the 6-month anniversary of the Effective Time, then Mr.

Stedham shall

be entitled to an amount equal to his Base Salary that would have otherwise been paid until the conclusion of the initial term.

qualifying termination occurs after the 6-month anniversary of the Effective Time, then Mr.

Stedham shall be entitled to an amount equal

to six (6) months of his Base Salary.

Employment Agreement with Jennifer Cola

In connection with the Merger Agreement, on February

11, 2026, we entered into an Employment Agreement with Jennifer Cola, effective as of the Effective Time.

As of the Effective Time, and

subject to the Closing of the Merger, Ms.

Cola is expected to continue in her position as our Chief Financial Officer (the “Cola

Employment Agreement”).

Pursuant to the Cola Employment Agreement, should

it become effective, Ms.

Cola will receive an annual base salary of $180,000 and be eligible for an annual bonus for each calendar year

ending during the employment period, with a potential up to 50% of her base salary based on performance goals set by the Board of Directors

Cola shall be eligible to receive equity-based compensation award(s), as determined by the Board of Directors (or a subcommittee

thereof), from time to time.

In addition, in connection with and subject to entering into the Cola Employment Agreement, the Compensation

Committee of the Board of Directors approved the grant on the Effective Time of 130,000 restricted stock awards under our 2020 equity

incentive plan, which shall vest on the Effective Time.

The Cola Employment Agreement is for an initial

term of one year and will thereafter be “at-will”, and may be terminated by either party during the initial term.

If terminated

Cola for good reason, or by us without cause prior to the 6-month anniversary of the Effective Time, then Ms.

Cola shall be entitled

to an amount equal to her Base Salary that would have otherwise been paid until the conclusion of the initial term.

If the qualifying

termination occurs after the 6-month anniversary of the Effective Time, then Ms.

Cola shall be entitled to an amount equal to six (6)

months of her Base Salary.

Jennifer Cola Severance Period

In connection with the Merger, on February 11,

2026, the Board of Directors approved the grant of a severance period for Ms.

Cola effective immediately and which will expire upon the

Effective Time of the Merger (the “Severance Period”), whereby Ms.

Cola will receive a continuation of her base salary and

benefits for a period of six months if she is terminated without cause during the Severance Period.

Termination of ATM Sales Agreement

As previously disclosed, on March 6, 2025, we

entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Sales Agent”),

pursuant to which we could issue and sell, from time to time, shares of our common stock up to an aggregate offering price of $15.8 million

(the “ATM Program”).

On February 11, 2026, we provided the Sales Agent

written notice of its decision to terminate the ATM Program and pursuant to Section 12(b) of the Sales Agreement, the ATM Program and

Sales Agreement terminated on February 16, 2026.

During the year ended December 31, 2025, and through

the termination of the ATM Program, we sold 628,432 shares of common stock through the ATM Program for net proceeds of $483 thousand,

after deducting $15 thousand in offering costs.

ZenCredit Agreement

On August 8, 2025, we entered into a Master Loan

Agreement and Promissory Note (the “Loan Agreement”) with ZenCredit Ventures, LLC (“ZenCredit”).

Pursuant to the

Loan Agreement, we agreed to loan ZenCredit up to $2 million.

Pursuant to the terms of the Loan Agreement, ZenCredit will pay us regular

quarterly interest payments at an annual interest rate of 16%.

The term of the initial promissory note is nine months at which time all

accrued principal and interest is due to us subject to the terms of the Loan Agreement.

On August 11, 2025, we loaned ZenCredit $2 million

in exchange for a promissory note issued pursuant to the Loan Agreement that matures on May 11, 2026.

Opportunities

4 unchanged sentences

We believe taking the data feeds from a carrier and adding real-time visibility with predictive analytics and the human intervention factor

of our service center gives us a competitive advantage against other third-party platforms that solely rely on the carrier’s data

We utilize a variety of input sources beyond the carrier’s data feed.

of our service center agents give us a competitive advantage against other third-party platforms that solely rely on the carrier’s

We utilize a variety of input sources beyond the carrier’s data feeds.

Our proprietary “Predictive Analytics”

technology is fed real-time meteorology data, traffic and road construction data, and power grid information to help predict issues before

If an alert is created the shipper and our service 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.

We have meteorologists

on staff that track world-wide weather patterns to address predicted issues before they happen.

We believe the company has two significant

areas of opportunity.

First, our services are specifically designed to address the needs of small and medium size agriculture, food and

beverage companies.

Second, the pharmaceutical and healthcare industries represent significant opportunities due to the enhanced tracking

and customer service associated with distribution of these products.

We are focusing our sales emphasis on those industries.

If an alert is created the shipper and our service center agents work to address the issue, saving the perishable product

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

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

We believe the company

has two significant areas of opportunity.

First, our services are specifically designed to address the needs of small and medium –sized

health care, agriculture, food and beverage companies.

Second, the pharmaceutical and healthcare industries represent significant opportunities

due to the enhanced tracking and customer service associated with distribution of these products.

We are focusing our sales emphasis on

those industries and discovering other industries that need a “high touch”, “white-glove” exception management

Building logistics infrastructure is a capital-intensive

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

Due to the current economic environment, and our cost competitive

Due to the current economic environment, and our competitive cost

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

The outsourcing

of supply chain related and other logistics operations to service providers such as ours allows companies to improve the efficiency of

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.

of supply chain related operations to service providers such as ours allows companies to improve the efficiency of 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:

We believe the products

in our Authentication segment have applications in many areas.

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

and protecting customer brands.

We are not actively pursuing

business in the Authentication segment but continue to service existing customers.

Partnerships:

Precision Logistics has a direct partnership with

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

HP Indigo, and a strategic partnership with INX, the third largest producer of inks in North America.

We believe these partnerships can

be used to enable brand owners to securely prevent counterfeiting.

On August 26, 2025, FedEx Corporation, our “prior

carrier partner”, notified providers, including PeriShip Global, that it would be providing preferred shipping services through

its own internal platform and that the providers would no longer be approved as FedEx preferred shippers effective September 24, 2025.

As such, PeriShip Global is no longer a preferred shipper for our prior carrier partner and our

Precision Logistics segment ceased providing ProActive services to our prior carrier partner’s customers in September 2025.

to provide Premium services to our prior carrier partner until we ceased providing Premium services in February 2026.

no longer provide ProActive and Premium services to our prior carrier partner we can and continue to provide Direct Premium services to

our customers who use our prior carrier partner for their shipping needs.

24, 2025, we began offering ProActive services to the customers of an alternative Preferred Shipping Partner.

are currently establishing the ability to offer our Premium services to our Strategic Partner.

We expect to begin broadly offering Premium

and Direct Premium services to customers of our new Strategic Partner in the second quarter of 2026.

On July 29, 2025, PeriShip Global entered into

(i) a Digital Channel Program Agreement (the “Program Agreement”) and (ii) a Partner API Access Agreement (the “Integration

Agreement” and together with the Program Agreement, the “Agreements”) with an alternative Preferred Shipping Partner

(our “Strategic Partner”).

The Agreements provide PeriShip Global access to designated Strategic Partner services at promotional

rates as part of a specialized logistics management service offering for time-sensitive and perishable shipments, including proactive

monitoring, weather tracking, and issue resolution through certain digital channel program applications.

Pursuant to the Integration Agreement,

PeriShip Global will be permitted to develop Interfaces to certain Strategic Partner APIs, Access Services and Information (as such terms

are defined in the Integration Agreement).

The Agreements have a term of three years, subject to customary termination and renewal provisions.

Current Economic Environment

In response to market conditions and lower demand

some carriers have implemented strategies to address a potential global recession.

In April 2023, the major carrier that PeriShip Global

partners with laid out steps it was taking to slash $4 billion in permanent costs by the end of its 2025 fiscal year in response to these

market conditions and lower demand.

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 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 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.

In response to uncertainty

in the global market and lower demand some carriers have implemented strategies to address a potential global recession.

Additional changes

or international trade policy, along with continued uncertainty surrounding such policies, could lead to further weakened business

Additionally, inflation and uncertainty and instability in the global economy and geopolitical events such as a war in Iran

and unrest in areas of the world that are dependent upon fuel production can negatively affect transportation costs and further reduce

consumer spending leading to fewer goods being transported globally.

We can provide no assurances that a decline in discretionary consumer

spending for these or any reasons will not have a negative impact on our revenues and results of operations.

We experience seasonal fluctuations

2 unchanged sentences

in other quarters due to increased holiday shipments.

While the fourth quarter is historically our highest revenue quarter, revenues from

ProActive services declined in the quarter ended December 31, 2025 as compared to the quarter ended December 31, 2024 due to the previously

disclosed loss of our prior carrier partner as a shipping supplier integrating our service offerings, and larger shippers not wanting

to change shipping suppliers during the peak season.

The seasonality of our business may cause fluctuations in our quarterly operating

Our Intellectual Property

Intellectual property is important to our business.

of December 31, 2024, our current patent and trademark portfolios consist of nine granted U.S.

patents and two granted European patents,

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

trademarks and several foreign trademarks.

The Company abandoned

one patent during the year ended December 31, 2024.

While some of our granted patents are commercially

ready, we believe that others may have commercial application in the future but will require additional capital and/or a strategic partner

in order to reach the potential markets.

All of our patents are related to the inventions described above.

Our registered patents expire

between the years 2025 and 2043.

The expiration date of a pending application that matures into a registration depends upon the issuance

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

The issuance of a patent

is considered prima facie evidence of validity.

The granting of a patent does not prevent a third party from seeking a judicial

determination that the patent is invalid.

Such challenges to the validity of a patent are not uncommon and can be successful.

be no assurance that a challenge will not be filed to one or more of our patents, if granted, and that if filed, such a challenge will

not be successful.

As of December 31, 2025, our current patent and

trademark portfolios consist of six granted U.S.

patents and one pending foreign patent application and several foreign trademarks.

The Company abandoned four patents during the year ended December 31, 2025.

Our registered patents expire between the years

2027 and 2036.

The expiration date of a pending application that matures into a registration depends upon the issuance date and any adjustment

under 35 U.S.C.

The issuance of a patent is considered prima facie evidence of validity.

The granting of a patent does not

prevent a third party from seeking a judicial determination that the patent is invalid.

Such challenges to the validity of a patent are

common and can be successful.

There can be no assurance that a challenge will not be filed to one or more of our patents, if granted,

and that if filed, such a challenge will not be successful.

We have trademarked the VerifyMe TM brand

in the United States and have registered and pending applications with respect to our brand internationally.

However, our name and brand

could be confused with brands that have similar names, including but not limited to Verified.Me, a service offered to Canadians by SecureKey

Technologies Inc.

We are aware of names and marks similar to our service marks being used from time to time by other persons that could

result in confusion and may diminish the value of our brands and adversely affect our business.

See Item 1A “Risk Factors”

for additional information regarding the risk of confusion of our name with other brands and other intellectual property risks.

Research and Development

in the United States and internationally.

However, our name and brand could be confused with brands that have similar names, including

but not limited to Verified.Me, a service offered to Canadians by SecureKey Technologies Inc.

We are aware of names and marks similar

to our service marks being used from time to time by other persons that could result in confusion and may diminish the value of our brands

and adversely affect our business.

See Item 1A “Risk Factors” for additional information regarding the risk of confusion of

our name with other brands and other intellectual property risks.

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

Research and development efforts were focused

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

We spent approximately $20 thousand

and $70 thousand during the years ended December 31, 2025, and 2024, respectively, on research and development.

We do not expect to continue research and development

efforts for the foreseeable future but will continue to evaluate the need and appropriate use of research and development efforts as they

relate to our business and service offerings .

Sales and Marketing Strategy

Business development and sales resources are aligned

to support existing customer accounts and new customer development.

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

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 and optimizing our websites to improve customer engagement

We will also continue to participate in trade show attendance which had declined during the height of the COVID pandemic.

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 other 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.

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.

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;

to support existing customer accounts and have been aligned to support new customer development.

From time to time, we use social media

channels and attend trade shows 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 will also continue to participate in trade

show opportunities where the segment aligns with our core strategy or areas in which we are looking to expand our reach.

In general, we believe competition in our principal

markets is primarily driven by product performance and features;

ease of implementation;

technology effectiveness;

product innovation

and timing of new product introductions;

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

sales and distribution capabilities;

sales and distribution

capabilities;

technical support and service;

brand loyalty;

applications support;

and breadth of product line.

and applications support.

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 carriers.

are other 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.

Our Precision Logistics segment operates in all of the perishable and time-sensitive segments.

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

storage shipping segment.

Some of our competitors have substantially greater

4 unchanged sentences

Major Customers/Vendors

During the year ended December 31, 2024, one customer

For the year ended December 31, 2025, one customer

represented 13% of revenues and one customer represented 16% of revenues for the year ended December 31, 2024.

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

31, 2023, one vendor accounted for 99% of transportation costs, in our Precision Logistics segment.

Employees and External

For the year ended December 31, 2025, two customers

made up 50% of accounts receivable.

For the year ended December 31, 2024, two customers accounted for 36% of total accounts receivable.

For the year ended December 31, 2025, one vendor

accounted for 89% of transportation costs.

For the year ended December 31, 2024, one vendor accounted for 99% of transportation costs,

in our Precision Logistics segment.

Employees and External Sales Force

As of December 31, 2025, we employed approximately

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.

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

do, conduct their work for us remotely.

We have also entered

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

thirty (30) persons and contracted with one (1) consultant.

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

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

Available Information

We make available free

of charge on our website, www.verifyme.com, all materials that we file electronically with the Securities and Exchange Commission (“SEC”),

including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports,

filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

as soon as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

We have not incorporated

by reference into this Report the information included, or that can be accessed through, our website and you should not consider it to

be part of this Report.

The SEC maintains an

Internet website, www.sec.gov that contains reports, proxy and information statements and other information that we file electronically

with the SEC.

We make available free of charge on our website,

www.verifyme.com, all materials that we file electronically with the Securities and Exchange Commission (“SEC”), including

our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports, filed or

furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon

as reasonably practicable after electronically filing such materials with, or furnishing them to, the SEC.

We have not incorporated by

reference into this Report the information included, or that can be accessed through, our website and you should not consider it to be

part of this Report.

The SEC maintains an Internet website, www.sec.gov

that contains reports, proxy and information statements and other information that we file electronically with the SEC.

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