UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K





(X )
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934





For the fiscal year ended June 30, 2010





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





For the transition period from                     to                      .





Commission File number    333-136492





VERIFY SMART CORP.


(Exact name of registrant as specified in its charter)





Nevada
20-5005810(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)





57Montague Street, BrooklynNY 11201(Address of principal executive offices)





(718) 855-7136(Registrant’s telephone number, including area code)





N/A(Former name, former address and former fiscal year, if changed since last report)





Securities registered pursuant to Section 12(b) of the Exchange Act:Title of each class
Name of each exchange on which registeredn/a
n/a





Securities registered pursuant to Section 12(g) of the Exchange Act:Title of  classCommon Stock, $0.001 par value





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.





Yes
[   ]
No
[X]





Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.





Yes
[   ] ]
No
[X]





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.





Yes
[X]
No
[   ]





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).





Yes
[   ]
No
[   ]





Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.





Yes
[   ]
No
[X]





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated filer
[   ]
Accelerated filer
[   ]Non-accelerated filer
[   ]
Smaller reporting company
[X](Do not check if a smaller reporting company)





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).





Yes
[X]
No
[   ]





The aggregate market value of common stock held by non-affiliates of the registrant, computed by reference to the price at which the common equity was last sold, was approximately $24,801,125 as of December 31, 2009 (the last business day of the registrant’s most recently completed second quarter), assuming solely for the purpose of this calculation that all directors, officers and more than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.





APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY


PROCEEDINGS DURING THE PAST 5 YEARS:





Indicate by check whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


Yes
[   ]
No
[   ]





APPLICABLE ONLY TO CORPORATE REGISTRANTS





Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.





52,215,000 common shares outstanding as of September 24, 2010





DOCUMENTS INCORPORATED BY REFERENCE





List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g. Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes.





none







TABLE OF CONTENTS





PART 1

PageITEM 1.
Business.
2ITEM 1A.
Risk Factors.
8ITEM 1B.
Unresolved Staff Comments.
12ITEM 2.
Properties.
12ITEM 3.
Legal Proceedings.
13ITEM 4.
(Removed and Reserved)
13PART IIITEM 5.
Market for Registrant’s Common Equity and Related Stockholder Matters
14ITEM 6
Selected Financial Date
14ITEM 7.
Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
15ITEM 7A.
Quantitative and Qualitative Disclosure about Market Risk.
17ITEM 8.
Financial Statement and Supplementary Data.
18ITEM 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
18ITEM 9A
Controls and Procedures.
18ITEM 9B
Other information
19PART IIIITEM 10.
Directors, Executive Officers and Corporate Governance
20ITEM 11.
Executive Compensation.
22ITEM 12.
Security Ownership of Certain Beneficial Owners and Management
24ITEM 13.
Certain Relationships and Related Transactions, and Director Independence
26ITEM 14
Principal Accounting Fees and Services.
27PART IVITEM 15.
Exhibits, Financial Statement Schedules
28SIGNATURES
30


1


PART 1







ITEM 1.  BUSINESS















This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.





Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.





Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.





In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to "common shares" refer to the common shares in our capital stock.





As used in this annual report, the terms "we", "us", "our company", mean Verify Smart Corp., a Nevada corporation, unless otherwise indicated.





Corporate History





The address of our principal executive office is 57Montague Street, BrooklynNY, USA. Our telephone number is (718) 855-7136.





Effective March 19, 2009, we effected a fifteen (15) for one (1) forward stock split of our authorized and issued and outstanding common stock. and the reduction of our authorized common stock As a result, our authorized capital has changed to 250,000,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares have increased from 4,000,000 shares of common stock to 60,000,000 shares of common stock.





Also effective March 19, 2009, we have changed our name from "Treasure Explorations Inc." to "Verify Smart Corp.".





The name change and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening for trading on March 24, 2009 under the new stock symbol "VSMR".





We have not been involved in any bankruptcy, receivership or similar proceeding.





Our Current Business





We were incorporated in the state of Nevada on May 31, 2006. Since our incorporation, we had been in the business of the exploration and development of a mineral property in New Westminster, Simalkameen Mining Division of British Columbia, consisting of 336 hectares included with 16 mineral title cells. Our property was without known reserves and our program was exploratory in nature. We completed the Phase 1 exploration program in our property, the results of which were not promising and did not justify further expense.


2


Because we were not successful in our exploration program, we abandoned the mineral claims and focused on the identification of suitable businesses with which to enter into a business opportunity or business combination.





Effective March 19, 2009, we effected a fifteen (15) for one (1) forward stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital has changed to 250,000,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares have increased from 4,000,000 shares of common stock to 60,000,000 shares of common stock.





Also effective March 19, 2009, we changed our name from "Treasure Explorations Inc." to "Verify Smart Corp". The change of name was approved by our directors and a majority of our shareholders.





On November 31, 2009, Tony Cinotti was appointed as a director of our company.





Our board of director now consists of Tony Cinotti.





On March 25, 2009, we entered into a joint venture agreement with Verified Capital Corp. and Verified Transactions Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention. Upon the satisfaction of customary closing conditions, we will earn a 70% interest in the joint venture.





We were required to contribute $2,000,000 by May 1, 2009, of which $250,000 will be paid to Verified Transactions Corp. as a license fee. Until such time as we have raised the $2,000,000, we will not be entitled to receive any revenue from the joint venture corporation. We were further required to contribute $3,000,000 to the joint venture by July 1, 2009, of which $500,000 will be paid to Verified Transactions Corp. as a license fee. As of the date of this report, we have not yet contributed the $2,000,000 owed to the joint venture. A joint venture corporation has not been formed, and as per the joint venture agreement we are the operator of the joint venture corporation. We have contracted the operator rights to Verified Capital Corp. as the sub-operator.





By amendment agreement of May 19, 2009, the Companies have agreed to a mutual understanding and agreement that the Joint Venture has been satisfactorily performed by our company and that we have performed the required financial obligations of Section 5.01 through both fund raising and joint venture cost sharing and accordingly, VSC's (Verify Smart Corp.’s) obligations of Section 5.01 are fully satisfied, the Joint Venture agreement is in full force and effect in good standing and VSC's (Verify Smart Corp.’s) revenue sharing right to 70% of the Joint Venture's revenue commences the date of the amendment agreement.





Pursuant to the joint venture agreement, Verified Transactions Corp. has provided to the joint venture an exclusive world-wide license to use, sell and sub-license its internet security software and all other internet business of such nature and including all future development of such business.





The term of the license is for a period of 25 years with an option to renew for an additional 25 years for a payment of $5,000,000. In consideration for the granting of the license, Verified Transactions Corp. will receive the license fees disclosed above, 10% of the revenue of the joint venture to a maximum of $1,250,000 and a 3% royalty on the gross revenue of the joint venture.





We have the right to acquire all of Verified Capital Corp.'s interest in the joint venture and all of Verified Transactions Corp.'s interest in the joint venture , excluding the royalty as set out in the joint venture agreement, at market value at the earlier of the joint venture generating $100 million in aggregate revenue per year with a minimum net margin of 25% or 5 years. Market value shall be determined by an agreed valuator or, failing agreement, we may hire a top-five chartered accountancy firm to prepare a market value report and, absent material error of standard calculation, such report shall be final.


3


Pursuant to the terms of the joint venture agreement, we have agreed to permit and have the right to tender to all shareholders and creditors of each of Verified Capital Corp. and Verified Transactions Corp. to convert their debts and shares into shares of our company on a one for one basis subject to our company raising the $2,000,000 (as set out above) and the joint venture earning gross cash flow of not less than $100,000 per week. As of June 30, 2010, the joint venture corporation has not yet been formed.





Under the license, Ralph Santos received a 10% carried equity interest in the Gateway internet business of the joint venture corporation. Mr. Santos is also a significant equity owner in Verified Transactions Corp. and Verified Capital Corp.





On March 25, 2009, we entered into a consulting agreement with Duke Enterprises LLC wherein Duke Enterprises has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 75,000 restricted common shares of our company. The 75,000 restricted shares were issued on May 19, 2009. The agreement expired on September 25, 2009.





On March 30, 2009, we entered into a consulting agreement with New Vision Consulting Corporation, wherein New Vision has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 1,000,000 restricted common shares of our company. As further compensation for services to be rendered, New Vision shall receive an additional 500,000 restricted common shares of our company. 1,000,000 shares of common stock were issued on May 19, 2009. The New Vision consulting agreement expires on September 30, 2009. On July 15, 2009, this consulting agreement was terminated.





Effective June 5, 2009, we entered into an agreement with Ellick Corporation to provide our Verify Gateway, VeriSmart Card and VerifyNgo suite of services. As part of this agreement, Ellick Corp. will provide our company with Voice Over Internet Protocol (VOIP) and Contact Centre capabilities in Manila. The agreement expires on May 15, 2010.





Effective June 11, 2009, we entered into an agreement with Crown Mutual Corporation to provide our VerifyGateway and VerifyNgo suite of services. The agreement expires on May 15, 2010.





Effective June 19, 2009, we entered into an agreement with BetED Corporation to provide our VerifyGateway and VerifyNgo suite of services. The agreement expires on May 15, 2010.





On July 14, 2009, we entered into a consulting agreement with Wei (David) Cheng wherein David Cheng has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares of our company. The 50,000 common shares were issued on August 15, 2009. The agreement expires on January 14, 2010.





On July 14, 2009, we entered into an investment purchase agreement with Black Diamond Investment Group Corp. wherein Black Diamond had agreed to purchase 500,000 common shares in consideration of the payment of $0.50 per share for an aggregate purchase price of $250,000. We issued the 500,000 common shares on August 15, 2009. These shares were issued in error. The Black Diamond agreement was with VerifySmart Corp. (BVI), a private company, and the above shares are being returned to treasury for cancellation and the correct share issuance will take place from the private company.





Effective August 14, 2009, we entered into a consulting agreement with Cohen Independent Research Group wherein Cohen Independent Research has agreed to provide certain consulting services to our company. As compensation under the agreement we have agreed to issue 1,000,000 restricted common shares of our company. The 1,000,000 common shares were issued on August 14, 2009. The agreement expires on August 14, 2011.




On September 22, 2009, the Company entered into a compensation agreement with AMG Group Inc. (“AMG”) wherein AMG has agreed to provide certain consulting services to the company. The agreement was terminated on March 31, 2010.


4


Description of the Joint Venture Business





The joint venture business will market and sell its licensed software which provides a comprehensive solution to credit card fraud by addressing the security needs of consumer clients, credit card companies, banks and merchants through instant verification that is inexpensive to implement and simple to use.





The software operates through the use of a cellular phone for secured verification of monetary transactions. The software has been developed to include debit card purchases, internet purchases, ATM, passport and mortgage verification.





We have also entered into preliminary discussions with Verified Capital Corp. wherein we would acquire either the assets or outstanding shares of common stock of Verified Capital Corp. The parties will jointly determine the optimum structure for the acquisition in order to best satisfy tax planning, regulatory and other considerations, including mutually agreed upon performance based milestones.





The acquisition contemplated by the preliminary discussions is subject to the fulfillment of certain conditions precedent, due diligence and the negotiation of a definitive agreement.





On April 3, 2009, we entered into an agreement with China Trust to launch our first credit card "VeriSmart(TM) Platinum Visa".





Under the terms of the agreement, China Trust will distribute, for pilot, 2,500 co-branded VeriSmart(TM) Platinum Visa Cards linked to our patent-pending Authentication system, VerifyNGo(TM), to serve as enterprise payroll, payout and remittance solutions affording centralized control and management of fund disbursement globally, anytime, anywhere.





On April 6, 2009, we entered into a services agreement with European hosting and infrastructure provider Prime Interactive S.R.O. The services agreement with Prime Interactive accelerates the European leg of our expansion plan and compliments our company's existing capabilities. Under the terms of the agreement Prime Interactive will be providing the following services to our company:





*    Web and Mobile Application Development


*    Data Centre infrastructure servicing Europe and located in Slovakia


*    Marketing access to a legacy worldwide customer base of 130,000


*    Marketing access to established European Financial Industry vertical




Our Products / Services





Through our interest in the joint venture, we currently offer or intend to offer the following four product lines consisting of (i) VerifyNGo, (ii) VerifyGateway, (iii) VerifyTransfer and (iv) VeriSmart Card.





Verifyngo





VerifyNGo is a comprehensive authentication system which addresses security concerns through an instant verification process. It is an easy, inexpensive and unique solution that uses a response to an individual's mobile phone as verification for a transaction. VerifyNGo address the security needs of clients, credit card companies, banks and merchants through an instant verification process.





VerifyNGo will provide secure verification for the following types of transactions:





*    debit and credit card purchases


*    internet purchases


*    ATM transactions


*    passport applications


*    credit applications


5


*    mortgage verifications


*    access to medical history


*    entry into secured areas




VerifyNGo requires no special hardware, software, upgrades or training. All that is required is for the user to have a mobile phone or PDA.





A typical VerifyNGo process occurs in the following way:





The process starts when a user performs an action which contains a certain security constraint (i.e. online purchase, website login). Once the user performs an action that contains a security constraint, a VerifyNGO authentication is triggered sending a message to the user's mobile phone or PDA.


The message options include:





*    Phone call


*    SMS detailing the action


*    One time password via SMS


*    WAP Push, opening a mobile web page





The user receives the request and authorizes the action via mobile phone or PDA. Finally, the system receives the response, determines authenticity and then grants or denies the user's access to the action.





Verifygateway





VerifyGateway is cutting-edge technology for secure and confidential online payment processing. It acts as a processing hub and intermediary between a business' website and their account provider, giving an enhanced network and superior transaction capabilities to make e-commerce reliable and seamless. It's simple, economical technology, accredited by most major banks and ensures the secure, successful delivery of billions of transactions to billions of ports worldwide.





VerifyGateway provides a system that easily accepts credit card payments from customers and instills confidence because every transaction is sent through a secured system. The system complies with privacy and security regulations globally, and allows client companies to safely manage and track funds across all borders and boundaries. This innovative technical infrastructure is unrivaled in the industry.





Business-to-business services include:





*    Processing transaction for major credit cards such as Mastercard and Visa


*    PCI-certified processing centers


*    Support for major merchant processing networks


*    Transaction reports with the necessary data to track daily activity


*    Reliable and secure business solutions





Verifytransfer





VerifyTransfer is a comprehensive remittance service allowing business clients to easily and securely send and receive money instantly, in person, online, wirelessly, or by phone.





Using VerifyGateway, VerifyTransfer covers all aspects of the process from transaction logging to retrieval.





The service offers:





*    easier remittance payments


*    faster data transmission


6


*    multiple recipient accounts


*    fast, flexible payment options


*    24 hour, 7 day/week client support


*    cutting-edge security, fraud monitoring, and reporting


*    increased accuracy and speed of contributions to member accounts


*    synchronization with sophisticated retrieval methods, including remittance on Visa cards


*    mobile to mobile money transfers (PDA's and Iphones)


*    comprehensive tracking and reporting on transactions and client accounts, providing details and  history.





Verismart Card





The VeriSmart Card is a Visa cobranded, multipurpose prepaid card designed to work optimally with VeriSmart's own secure remittance service, VerifyTransfer, or to be easily integrated with any existing remittance platform.





It can be used, worldwide, for:





*    traditional debit/credit card transactions in Visa affiliated establishments


*    payment processing between individuals and organizations (e.g.; commission and payroll  payments, accounts payable, etc.)


*    ATM transactions for Visa ATMs


*    gift cards (pre-loaded format).







Competition





Our product offerings are targeted at the rapidly evolving market for Internet security services, including network security, authentication and validation, which enable secure e-commerce and communications over wireline and wireless IP networks. The market for authentication and verification products is intensely competitive, subject to rapid change and significantly affected by new product and service introductions and other market activities of industry participants.





No assurance can be given that our competitors will not develop new technologies or enhancements to existing products or services or introduce new products and services that will offer superior price or performance features. We expect our competitors to offer new and existing products and services at prices necessary to gain or retain market share. Some of our competitors have substantial financial resources, which may enable them to withstand sustained price competition or a market downturn better than us. There can be no assurance that we will be able to compete successfully in the pricing of our products and services, or otherwise, in the future.





Government Regulation





In order to offer products that connect to payment networks, electronic payment system providers must certify their products and services with card associations, financial institutions, and payment processors, as well as comply with government and telecommunications company regulations.





Sales and Marketing





Business development encompassing sales and marketing efforts has been achieved through our network of contacts that lead to engagement with key decision makers of companies in our target market.


7


Intellectual Property





We rely primarily on a combination of copyrights, trademarks, service marks, patents, restrictions on disclosure and other methods to protect our intellectual property. We also enter into confidentiality and/or invention assignment agreements with our employees, consultants and current and potential affiliates, customers and business partners. We also generally control access to and distribution of proprietary documentation and other confidential information.





We have filed numerous patent applications with respect to certain of our technology in the U.S. Patent and Trademark Office and patent offices outside the U.S. Patents may not be awarded with respect to these applications and evenif such patents are awarded, such patents may not provide us with sufficient protection of our intellectual property.





We do not have any trademark registrations.





Employees





Our only employee is our director.





Going Concern





We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future equity financing.





Subsidiaries





We do not have any subsidiaries.





Reports to Security Holders





We are not required to deliver an annual report to our stockholders but will voluntarily send an annual report, together with our annual audited financial statements upon request. We are required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and


Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at http://www.sec.gov.





The public may read and copy any materials filed by us with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at  1-800-SEC-0330  1-800-SEC-0330 . We are an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site is http://www.sec.gov.







ITEM 1A.   RISK FACTORS







Risk Factors





An investment in our securities involves a high degree of risk.  In evaluating our business and its future expectations, an investor should consider carefully the risk factors noted below.  Any of the following risk factors,


8


if they occur, could seriously harm our business and its operations. There may be risk factors we do not know exist at this time and therefore they are not included in the risk factors listed below.   Even if they are deemed immaterial at the present time, they could develop whereby they will adversely affect our business.  Our shares are speculative by nature and therefore the risk of purchasing our share is high.   One should consider whether they can assume a loss of their entire investment.





All future investors in our shares should read this Form 10-K in its entirety including the financial statements and notes attached thereto.





Risks Relating to Our Business





Our limited operating history may not serve as an adequate basis to judge our future prospects and results of operations.





We have a limited operating history.  As such, our historical operating results may not provide a meaningful basis for evaluating our business, financial performance and prospects.  We may not be able to achieve a similar growth rate in future periods.  Accordingly, you should not rely on our results of operations for any prior periods as an indication of our future performance.  Our success is significantly dependent on meeting business objectives.  Our operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history.  We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage.  If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.





We have incurred losses in prior periods and may incur losses in the future.





We incurred net losses of $1,314,549 for the period from May 31, 2006 (inception) to June 30, 2010.  No assurance can be given that we can achieve or sustain profitability on a quarterly or annual basis in the future. Our operations are subject to the risks and competition inherent in the establishment of a business enterprise. No assurance can be given that future operations will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact on us.





We have limited funds available for operating expenses. If we do not obtain funds when needed, we will have to cease our operations.





Currently, we have limited operating capital. As of June 30, 2010, our cash available was approximately $9,728. In the foreseeable future, we expect to incur significant expenses during the development stage of our identity protection/secured transaction services business. Although during the year ended June 30, 2010, we have not raised. We may be unable to locate further sources of capital or may find that capital is not available on terms that are acceptable to us to fund our additional expenses. There is the possibility that we will run out of funds, and this may affect our operations and thus our profitability. If we cannot obtain funds when needed, we may have to cease our operations.





We depend on attracting and retaining qualified employees, the failure of which could result in a material decline in our revenues.





We are a provider of identity protection/secured transaction services. Our revenues and future growth depend on our ability to attract and retain qualified employees. This is especially crucial to our business, as these employees will generate revenue by providing the services that are the staple product that we offer. We may face difficulties in recruiting and retaining sufficient numbers of qualified employees because the market may not have enough of such personnel. In addition, we compete with other companies for qualified employees. If we are unable to retain such employees, we could face a material decline in our revenue.


9


If we fail to implement our business strategy, our business, financial condition and results of operations could be materially and adversely affected.





Our future financial performance and success are dependent in large part upon our ability to implement our business strategy successfully. We may not be able to implement our business strategy successfully or achieve the anticipated benefits of our business plan. If we are unable to do so, our long-term growth and profitability may be adversely affected. Even if we are able to implement some or all of the initiatives of our business plan successfully, our operating results may not improve to the extent we anticipate, or at all.





Our success depends on our ability to manage growth effectively. If we do not manage growth effectively, we may not be able to maintain profitability.





Even if we are successful in obtaining new business, failure to manage our growth could adversely affect our financial condition. We may experience extended periods of very rapid growth. If we are not able to manage our growth effectively, our business and financial condition could materially suffer. Our growth may significantly strain our managerial, operational and financial resources and systems. To manage our growth effectively, we will have to continue to implement and improve our operational, financial and management controls, reporting systems and procedures. In addition, we must effectively expand, train and manage our employees. We will be unable to manage our businesses effectively if we are unable to alleviate the strain on resources caused by growth in a timely and successful manner. We may not be able to manage our growth and a failure to do so could have a material adverse effect on our business.





U.S. investors may experience difficulties in attempting to enforce judgments based upon U.S. federal securities laws against us and our non-U.S. resident directors.





All of our operations and our assets are located outside the United States and some of our directors and officer are foreign citizens. As a result, it may be difficult or impossible for U.S. investors to enforce judgments of U.S. courts for civil liabilities against any of our individual directors or officers.





Our auditors have expressed substantial doubt about our ability to continue as a going concern.





Our auditors’ report on our June 30, 2010 financial statements expressed an opinion that our Company’s capital resources as of June 30, 2010 are not sufficient to sustain operations or complete our planned activities for the upcoming year unless we raise additional funds.   These conditions raise substantial doubt about our ability to continue as a going concern.   If we do not obtain additional funds there is the distinct possibility that we will no longer be a going concern and will cease operation which means any persons purchasing shares will loss their entire investment in our Company.




If we cannot continue to develop or acquire rights to new products in a timely manner, and at favorable margins, we may not be able to compete effectively.




We believe that our future success will depend, in part, upon our ability to introduce innovative design extensions for our existing products and to develop, or acquire the rights to market and distribute, new products. No assurance can be given that we will be successful in the introduction, distribution and marketing of any new products or product innovations or achieve market acceptance of such products. Our failure to develop or acquire rights to new products or to introduce such products successfully and in a timely manner, and at favorable margins, would harm our ability to successfully grow our business and could have a material adverse effect on our business, results of operations and financial condition.





If we are unable to obtain additional financing our business operations will be harmed and if we do obtain additional financing our then existing stockholders may suffer substantial dilution.





We will need to obtain additional financing in order to complete our business plan.  Obtaining additional financing will be subject to market conditions, industry trends, investor sentiment and investor acceptance of our business plan and management.  These factors may make the timing, amount, terms and conditions of additional financing unattractive or unavailable to us.  If we are not successful in obtaining financing in


10


the amount necessary to further our operations or unable to obtain financing on favorable terms, implementation of our business plan may fail or be delayed.  If we are unsuccessful in obtaining additional financing when we need it, our business may fail before we ever become profitable and our stockholders may lose their entire investment.  If we are successful in obtaining additional financing it would likely result in dilution to existing stockholders.





We are subject to new corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure to comply with existing and future requirements, could adversely affect our business.





We may face new corporate governance requirements under the Sarbanes-Oxley Act of 2002, as well as new rules and regulations subsequently adopted by the Securities and Exchange Commission and the Public Company Accounting Oversight Board.  These laws, rules and regulations continue to evolve and may become increasingly stringent in the future.  We are required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”).  Furthermore, an attestation report on our internal controls from our independent registered public accounting firm is required as part of our annual report for the fiscal year ending June 30, 2010.  We strive to continuously evaluate and improve our control structure to help ensure that we comply with Section 404 of the Sarbanes-Oxley Act.  The financial cost of compliance with these laws, rules and regulations is expected to remain substantial.  No assurance can be given that we will be able to fully comply with these laws, rules and regulations that address corporate governance, internal control reporting and similar matters.  Failure to comply with these laws, rules and regulations could materially adversely affect our reputation, financial condition and the value of our securities.





Inability of our officers and directors to devote sufficient time to the operation of the business may limit our success.





Presently, our officers and directors allocate only a portion of their time to the operation of our business. If the business requires more time for operations than anticipated or the business develops faster than anticipated, the officers and directors may not be able to devote sufficient time to the operation of the business to ensure that it continues as a going concern. This lack of sufficient time of our management may result in limited growth and success of the business.





The Company may have difficulty managing any future growth.





To implement our business objectives, we may need to grow rapidly in the future and we expect that such growth would lead to increased responsibility for both existing and new management personnel.  To help manage future growth effectively we must hire and integrate new personnel and manage expanded operations.  The growth in business, headcount and relationships with customers and other third parties is expected to place a significant strain on our management systems and resources.  Our failure to manage our future growth successfully would have a material adverse effect on the quality of our products, our ability to retain customers and key personnel and our operating results and financial condition.





Risks Relating to Our Common Shares





Trading on the OTC bulletin board may be volatile and sporadic, which could depress the market price of our common shares and make it difficult for our shareholders to resell their shares.





Our common shares are quoted on the OTC Bulletin Board service. Trading in shares quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common shares for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of the shares.


11


Our share is a penny stock. Trading of our share may be restricted by the SEC's Penny Stock Regulations which may limit a shareholder's ability to buy and sell our shares.





Our share is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the shares that are subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common shares.





FINRA sales practice requirements may also limit a shareholder's ability to buy and sell our share.





In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, or FINRA, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our share.





Trends, Risks and Uncertainties





We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common shares.











ITEM 1B.   UNRESOLVED STAFF COMMENTS













There are no unresolved staff comments at the date of this Form 10-K.





12





ITEM 2.  PROPERTIES













We do not own any real property. Our principal business office is located at 57 Montague Street, Brooklyn, NY, USA 11201.










ITEM 3. LEGAL PROCEEDINGS










Other than as set out below, our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this annual report.








ITEM 4. (REMOVED AND RESERVED)







13


PART l l










ITEM 5.  MARKET REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES










The Company is quoted on the OTCBB.  The Company has not paid any dividends on its common stock, and it does not anticipate that it will pay dividends in the foreseeable future.  As at June 30, 2010, the Company had 38 shareholders; one of these shareholders is an officers and director of the Company.





There are no warrants or rights outstanding as of the date of this Form 10-K and none have been declared since the date of inception.





No stock options have been granted since the Company’s inception.





There are no outstanding conversion privileges for our Company’s shares.








ITEM 6.  SELECTED FINANCIAL DATA











The following summary financial data was derived from our financial statements.   This information is only a summary and does not provide all the information contained in our financial statements and related notes thereto.  You should read the “Management’s Discussion and Analysis or Plan of Operations” and our financial statements and related noted included elsewhere in this Form 10-K.





Operation Statement Data





For the year

ended

June 30, 2010


May 31, 2006

(date of incorporation) to

June 30, 2010Revenue

$
-


$
-General and Administration


52,072



81,215Professional fees


51,804



95,240Management fees


681,954



1,131,376Interest Expense


(212
)


(212
)Exchange Gain (loss)


(4,722
)


(6,506
)Net Gain(loss)


(790,764
)


(1,314,549
)Weighted average shares outstanding (basic)


52,297,521Weighted average shares outstanding (diluted)


52,297,521Net loss per share (basic)

$
(0.01
)Net loss per share (diluted)

$
(0.01
)





Balance Sheet Data:





Cash

$
9,728Total assets


248,861Total liabilities


132,288Total Shareholders’ equity


116,573





Our historical results do not necessary indicate results expected for any future periods.


14





ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS


AND RESULTS OF OPERATIONS











The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended June 30, 2010 and June 30, 2009 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled "Risk Factors" beginning on page 8 of this annual report.





Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.





Liquidity and Capital Resources





We realize that we will have to raise cash in the near future to continue our operations.  If, in the future, we are unable to raise cash we might not be able to pay our creditors.





The following represents the minimum cash requirements over the next year to meet our current and future financial obligations:





Investor Relation

$
10,000Office & Administration


1,000Rent


19,000Transfer agent & Filing Fees


4,500Auditing


15,000Accounting


7,000Legal


18,000Consulting Fees


100,000Exchange


-Estimated cash required before payment of accounts payable


174,500Add:  Accounts payable as at June 30, 2010


20,289Estimated cash required over next twelve months

$
194,789





The above estimated cash requirements for the next twelve months.





Analysis of Financial Condition and Results of Operations





We have cash and cash equivalents of $9,728 as at June 30, 2010.   We are indebt to creditor in the amount of $111,999. These advances were paid the auditing, office, legal, transfer agent and filing fees payable.





During the last year we raised initial seed capital from investors and engaged the services of Holladay Stock Transfer Inc. to act as our transfer agent.   The number and price per share subscribed for was as follows after the followed split of the shares:





Number of Shares
Amount30,000,000
$   30,00022,215,000
22,21552,215,000
$ 52,215








15


Stock Option Grants





To date, we have not granted any stock options.





Warrants





We have not issued and do not have outstanding any warrants to purchase shares of our common stock.





Dividends





There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:





1.   we would not be able to pay our debts as they become due in the usual course of business; or


2.   our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.





We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.





Securities Authorized For Issuance under Equity Compensation Plans





We currently do not have any stock option or equity compensation plans or arrangements.





During the period from inception (May 31, 2006) to June 30, 2010 we have had accumulated losses of $1,314,549 which are as follows:





General & Administrative expenses

$
81,215Professional fees


95,240Management fees


1,131,376Interest Expense


(212
)Exchange loss


(6,506
)Total Losses:

$
(1,314,549
)





Our Company has no plant or significant equipment to sell and we have no intension to purchase any plant or significant equipment in the immediate future. Presently we do not have any money to buy any significant assets.




Our Limited Operating History and Working Capital Position




To meet our need for cash we will have to raise money.  Our working capital equity as at June 30, 2010 is $116,573. We cannot guarantee we will be able to raise enough money in the future to stay in business.   Whatever money we do raise will be used as working capital to meet current. If we are lucky enough to find mineralization which is economically feasible to remove it, we will attempt to raise additional money through subsequent private placements, public offering or loans.




Off-balance Sheet Arrangements




We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.




Short and long-term Trend Liabilities




We are unaware of any known trends, events or uncertainties that have or are reasonably likely to have a material impact on our business either in the long-term or long-term liquidity which have not been disclosed under the section on Risk Factors.




16


Internal and External Sources of Liquidity




There are no material internal or external sources of liquidity.




Changes in the Financial Statements and Accounting Issues




We do not know of any cause for any material change from period to period in one or more line items of our financial statements as shown in this Form 10-K.   These audited financial statements adhere with accounting principles generally accepted in the United States of America.  The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management re-evaluates its estimates and judgments.




The going concern basis of presentation assumes we will continue in operation throughout the next fiscal year and into the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business.







ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK








Market Information





There are no common shares subject to outstanding options, warrants or securities convertible into common equity of our Company.





The number of shares subject to Rule 144 is 108,000,000 post split common shares.





There are no shares being offered to the public other than indicated in our effective registration statement and no shares have been offered pursuant to an employee benefit plan or dividend reinvestment plan.





Our shares are traded on the OTCBB.  Although the OTCBB does not have any listing requirements per se, to be eligible for quotation on the OTCBB, we must remain current in our filings with the SEC; being as a minimum Forms 10-Q and 10-K.  Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their filing during that time.





In the future our common stock trading price might be volatile with wide fluctuations.  Things that could cause wide fluctuations in our trading price of our stock could be due to one of the following or a combination of several of them:





●
our variations in our operations results, either quarterly or annually;●
trading patterns and share prices in other exploration companies which our shareholders consider similar to ours;●
the exploration results on the Levuka Claim, and●
other events which we have no control over.


17


In addition, the stock market in general, and the market prices for thinly traded companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies.  These wide fluctuations may adversely affect the trading price of our shares regardless of our future performance.  In the past, following periods of volatility in the market price of a security, securities class action litigation has often been instituted against such company.  Such litigation, if instituted, whether successful or not, could result in substantial costs and a diversion of management’s attention and resources, which would have a material adverse effect on our business, results of operations and financial conditions.








ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA







The financial statements attached to this Form 10-K for the year ended June 30, 2010 have been examined by our independent accountants,Chang G. Park CPA Firm.








ITEM 9.  CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE







On August 31, 2010 Verify Smart engaged Chang G. Park CPA Firm, as its independent accountant. During the two most recent fiscal years and the interim periods preceding the engagement, the registrant has not consulted, CPA regarding any of the matters set forth in Item 304(a)(2)(i) or (ii) of Regulation S-B.








ITEM 9A – CONTROLS AND PROCEDURES







Our management, on behalf of the Company, has considered certain internal control procedures as required by the Sarbanes-Oxley (“SOX”) Section 404 A which accomplishes the following:




Internal controls are mechanisms to ensure objectives are achieved and are under the supervision of the Company’s director, being Tony Cinotti. Good controls encourage efficiency, compliance with laws and regulations, sound information, and seek to eliminate fraud and abuse.





These control procedures provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles.




Internal control is "everything that helps one achieve one's goals - or better still, to deal with the risks that stop one from achieving one's goals."




Internal controls are mechanisms that are there to help the Company manage risks to success.




Internal controls is about getting things done (performance) but also about ensuring that they are done properly (integrity) and that this can be demonstrated and reviewed (transparency and accountability).




In other words, control activities are the policies and procedures that help ensure the Company’s management directives are carried out. They help ensure that necessary actions are taken to address risks to achievement of the Company’s objectives. Control activities occur throughout the Company, at all levels and in all functions. They include a range of activities as diverse as approvals, authorizations, verifications, reconciliations, reviews of operating performance, security of assets and segregation of duties.


18


As of June 30, 2010, the management of the Company assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments.  Management concluded, during the year ended June 30, 2010, internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules.  Management realized there are deficiencies in the design or operation of the Company’s internal control that adversely affected the Company’s internal controls which management considers to be material weaknesses.





In the light of management’s review of internal control procedures as they relate to COSO and the SEC the following were identified:





●              The Company’s Audit Committee does not function as an Audit Committee should since there is a lack of independent directors on the Committee and the Board of Directors has not identified an “expert”, one who is knowledgeable about reporting and financial statements requirements, to serve on the Audit Committee.





●              The Company has limited segregation of duties which is not consistent with good internal control procedures.





●              The Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future.  This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal control.





●              There are no effective controls instituted over financial disclosure and the reporting processes.





Management feels the weaknesses identified above, being the latter three, have not had any affect on the financial results of the Company. Management will have to address the lack of independent members on the Audit Committee and identify an “expert” for the Committee to advise other members as to correct accounting and reporting procedures.





The Company and its management will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so.   By appointing independent members to the Audit Committee and using the services of an expert on the Committee will greatly improve the overall performance of the Audit Committee.   With the addition of other Board Members and staff the segregation of duties issue will be address and will no longer be a concern to management.  By having a written policy manual outlining the duties of each of the officers and staff of the Company will facilitate better internal control procedures.





Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.








ITEM 9 B – OTHER INFORMATION







There are no matters required to be reported upon under this Item.


19


PART 111








ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE







Set forth below is certain information concerning each of our directors and executive officers of our Company as at June 30, 2010:





Name and Address
Position
AgeTony Cinotti (*)
Director (1)
58





(*)
Member of the Audit Committee.





(1)
Tony Cinotti was appointed a Director on November 30, 2009.




Each of the director names above will serve until the next Annual Meeting of Stockholders or until their successors is duly elected and has qualified.  Director is elected for a one year term at the Annual General Meeting of Stockholders.   Director will hold his positions at the pleasure of the Board of Directors, absent any employment agreement, of which none currently exist or is contemplated.  There is no arrangement or understanding between any of our director or officer and any other person pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the directors of our Board of Directors. There are also no arrangements, agreements or understanding between non-management stockholders that may directly or indirectly participate in or influence the management of our affairs.





Historical Backgrounds of our director





Tony Cinotti has over 35 years experience in the Financial Industry. He began his career with Kuhn Loeb & Company managing all systems and data center operations. He continued his career with Morgan Stanley and managed Equity and Government Trading as well as Broker Commissions and Management and Planning systems. Upon leaving Morgan Stanley he founded DP Sciences Inc., which provided Management and Systems consulting to the financial community. The company was contracted to build and manage systems and data centers for various financial clients. DP Sciences was also a service organization processing over 97% of all Equity IPO's (Initial Public Offerings) for over 30 clients. Tony also owned seats on The New York Futures Exchange and was a registered Floor Broker. He was the co-inventor on two method patents for processing transactions on 3G phones. Tony has a Bachelors degree in Management from Baruch College.





Tony Cinotti was instrumental in bringing the iMobile Interactive and VerifySmart alliance to fruition. iMobile currently interfaces with almost every phone company in the world.





Our Audit Committee





On November 30, 2009 our Board of Directors appointed Tony Cinotti to our Audit Committee and on the same dated adopted an Audit Committee Charter.  Tony Cinotti cannot be considered an “audit committee financial expert” as defined in Item 407 of Sarbanes-Oxley Act of 2002.  The Audit Committee Members will have to search and find an individual who meets these requirements.   This has not occurred.


Our Audit Committee Charter requires that its members monitor the following:


●

the integrity of the financial statement of our Company;●

the compliance by our Company with legal and regulatory requirements;




20




●

the independence and performance of our Company’s external auditors;●

make regular reports to our Board of Directors;●

review the annual financial statements, independence of auditors and fees to be paid to the independent auditors; and●

report to our Board of Directors on legal, accounting and management matters.


Apart from the Audit Committee, our Company does not have any other Board committees.





Family Relationships between our Director





There is no family relationship with Tony Cinotti.





Significant Employees





We have not yet reached the stage in our business development whereby we can justify hiring additional employees other than our director who are presently doing the work that employees will be doing in the future.





Conflicts of Interest





We believe that Tony Cinotti will not be subject to conflicts of interest.  We adopted a Code of Ethics which details the responsibilities of our directors and officers.





Other Directorships





Tony Cinotti is director of any other company trading on the OTCBB or any other public market.  This might not be the case in the future but as at the date of this prospectus they are not officers or directors of any other public company.





Involvement in Certain Legal Proceedings





To the knowledge of our Company, during the past five years, none of our directors or executive officers:





(1)
has filed a petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by the court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filings, or any corporation or business association of which he was an executive officer at or within the last two year before the time of such filing;





(2)
was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);





(3)
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting, the following activities:





(i)
acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person  regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliate person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;


21


(ii)           engaging in any type of business practice; or





(iii)
engaging in any activities in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws;





(4)
was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under paragraph (3) (i) above, or to be associated with persons engaged in any such activities; or





(5)
was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated.





(6)
was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.





Promoters and Control Persons





Tony Cinotti is considered promoters of our Company, within the meaning of such terms under the Securities Act of 1933, as amended, since they were instrumental in setting up the Company, putting in the initial “seed capital” and seeking out other investors to participate in the private placement.   They are also control persons since jointly they own Nil of our issued common shares. There are no other promoters involved with our Company.










ITEM 11.      EXECUTIVE COMPENSATION







The following table sets forth the compensation paid by our Company from May 31, 2006 (date of inception) to June 30, 2010, for each of our officers and directors.   This information includes dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.   The compensation discussed addresses all compensation awarded to, earned by, or paid to named executive officers.





Summary Compensation Table





Name and

Principal Position
Year
Salary

($)
Bonus

($)
Stock

Awards

($)
Option

Awards

($)
Non-equity

Incentive Plan

Compensation

($)
Change in

Pension value and

Nonqualified

Compensation

Earnings

($)
All other

Compens-ation

($)(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)






22


Name and

Principal Position
Year
Salary

($)
Bonus

($)
Stock

Awards

($)
Option

Awards

($)
Non-equity

Incentive Plan

Compensation

($)
Change in

Pension value and

Nonqualified

Compensation

Earnings

($)
All other

Compens-ation

($)


Howard Gelfand

Former President, Chief Executive Officer and Chief Financial Officer
2007

2008

2009
-0-

-0-

-0-
-0-

-0-

-0-
-0-

-0-

-0-
-0-

-0-

-0-
-0-

-0-

-0-
-0-

-0-

-0-
-0-

-0-

-0-Manly Shore

Former President, Chief Executive Officer, Chief Financial Officer and Director
2008

2009
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-Adi Muljo

Former VP Business Development and Director
2008

2009
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-Ralph Santos

Former President, Chief Executive Officer, Chief Financial

Officer, Secretary, Treasurer and Director
2008

2009
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-Tony Cinotti

Director
2009

2010
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-
-0-

-0-





We have not paid any salaries in 2007, 2008, 2009 and 2010 to date, and we do not anticipate paying any salaries at any time during the forthcoming year.   We will not be paying salaries until we have adequate funds to do so.





Board of Directors’ Meeting





Our Director has not had an official Board of Directors’ meeting since our inception.   All authorization for any action has been done by Consent Resolutions to date.





Retirement, Post-Termination and Change of Control




We have no retirement, pension, or profit-sharing programs for the benefit of directors, officers or other future employees, nor do we have post-termination or change in control arrangements with director or anyone else, but our Board of Directors may recommend adoption of one or more such programs in the future if our cash position and operating revenues warrant it.





Employment Agreements with Executive Director





There are no employment agreements with any director of our Company.




23


Stock Option Plan




We have never established any form of stock option plan for the benefit of our directors, officers or future employees.  We do not have a long-term incentive plan nor do we have a defined benefit, pension plan, profit sharing or other retirement plan.





Bonuses and Deferred Compensation





None





Compensation Pursuant to Plans





None





Pension Table





None





Termination of Employment





There are no compensatory plans or arrangements, including payments to be received from the Company, with respect to any person named in Summary Compensation Table set out above which would in any way result in payments to any such person because of his resignation, retirement, or other termination of such person’s employment with the Company, or any change in control of the Company, or a change in the person’s responsibilities following a change in control of the Company.








ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLERS MATTERS







Security Ownership of Certain Beneficial Owners and Management





The following table sets forth, as at June 30, 2010, the zero number of shares owned beneficially by each of our director, officer and key employee, individually and as a group, and the present owners of 5% or more of our total outstanding shares.





The 21,165,000 shares are restricted securities, as defined by Rule 144 of the Rules and Regulations of the SEC promulgated under the Securities Act.  Under Rule 144, shares can be publicly sold, subject to volume restrictions and restrictions on the manner of sale, commencing six months after their acquisition.  Rule 144 provides that a person may not sell more than 1% of the total outstanding shares in any three month period and the sales must be sold either in a broker transaction or in a transaction directly with a market maker.





DESCRIPTION OF SECURITIES





Our authorized capital consists of 250,000,000 shares of common stock, par value $0.001 per share, of which 52,215,000 shares are issued and outstanding.





Name and Address of Beneficial Owner

Amount and Nature of    Beneficial Ownership

Percentage of Class (1)Tony Cinotti, Director

Nil

0%
  24
 Name and Address of Beneficial Owner

Amount and Nature of    Beneficial Ownership

Percentage of Class (1)
 Albury Investments Ltd.6%

Suite 801, 8F, Tower 1,

The Gateway,

25 Canton Road, TST, Kowloon, Hongkong

3,375,000

6%Cede & Co.

PO Box 222, Bowling Green Station

New York, NY 10274

11,770,300

23%Dartmore International Inc.

Ste 13, Oliaji Trade Centre, Francis Rachel St.

Victotia Mahe SEY

3,750,000

7%Enavest Internacional SA

200 W 400S Plaza Mayor

San Jose, COS

3,750,000

7%Executor Capital Inc.                         60 Market Square

Belize City, Belize

3,000,000

6%Medford Financial Ltd

60 Market Square

Belize City, Belize

3,100,000

6%Sierra Growth Inc.

Henville Building

Charlestown, Nevis

4,200,000

6%Strand Group Ltd.

Henville Building

Charlestown, Nevis

4,392,500

8%Stonehurst Limited

Suite 13 Oliaja Trade Centre

Fracis Rachel Street

Victoria, Seychelles

3,800,000

7%
  (1)  Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding on


June 30, 2010. As of June 30, 2010., there were 52,215,000 shares of our company's common stock issued and outstanding.





The holders of our common stock are entitled to receive dividends as may be declared by our Board of Directors; are entitled to share ratably in all of our assets available for distribution upon winding up of the affairs our Company; and are entitled to one non-cumulative vote per share on all matters on which shareholders may vote at all meetings of the shareholders.




25


The shareholders are not entitled to preference as to dividends or interest; preemptive rights to purchase in new issues of shares; preference upon liquidation; or any other special rights or preferences.





In addition, the shares of common stock are not convertible into any other securities.  There are no restrictions on dividends under any loan or other financing arrangements.





Dividend Policy





As of the date of this Form 10-K, we have not paid any cash dividends to stockholders.  The declaration of any future cash dividends, if any, will be at the discretion of the Board of Directors and will depend on our earnings, if any, capital requirements and financial position, general economic conditions and other pertinent conditions.  It is our present intention not to pay any cash dividends in the near future.





Change in Control of Our Company





We do not know of any arrangements which might result in a change in control.





Transfer Agent




We have engaged the services of Holladay Stock Transfer Inc., 2939 North 67th Place, Suite C, Scottsdale, AZ 85251, to act as transfer and registrar.





Debt Securities and Other Securities




There are no debts or other securities outstanding.







ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE







Transactions with Management and Others





Except as indicated below, there were no material transactions, or series of similar transactions, since May 31, 2006 (date of inception ) to June 30, 2010 and thereafter to the date of this Form 10-K, or any currently proposed transactions, or series of similar transactions, to which our Company was or is to be a party, in which the amount involved exceeds $120,000, and in which any director, executive officer, any security holder or related party who is known by us to own of record or beneficially more than 5% of any class of our Company's common stock, or any member of the immediate family of any of the foregoing persons, has an interest.





Indebtedness of Management





There were no material transactions, or series of similar transactions, from May 31, 2006 (date of inception) to June 30, 2010, or any currently proposed transactions, or series of similar transactions, to which our Company was or is to be a part, in which the amount involved exceeded $120,000 and in which any director or executive officer, or any security holder who is known to us to own of record or beneficially more than 5% of the common shares of our Company's capital stock, or any member of the immediate family of any of the foregoing persons, has an interest.




26


Conflicts of Interest




None of our director is a director or officer of any other company involved in the mining industry.  However, there can be no assurance such involvement in other companies in the mining industry will not occur in the future.  Such potential future involvement could create a conflict of interest.





To ensure that potential conflicts of interest are avoided or declared, the Board of Directors adopted, on May 31, 2006, a Code of Business Ethics and Control for the Board of Directors (the “Code”). Verify Smart Corp.’s Code embodies our commitment to such ethical principles and sets forth the responsibilities of Verify Smart Corp. and its director to its shareholders, employees, customers, lenders and other organizations. Our Code addresses general business ethical principles and other relevant issues.







ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES








The aggregate fees billed for the most recently completed fiscal year ended June 30, 2010 and for fiscal year ended June 30, 2009 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:





Year Ended June 30,2010


2009Audit Fees

$
20,750


$
10,000Audit Related Fees

Nil


NilTax Fees

Nil


NilAll Other Fees

Nil


NilTotal

$
20,750


$
10,000




Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.




Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.


27


PART IV





ITEM 15. EXHIBITS , FINANCIAL STATEMENTS SCHEDULES







(a)  (1)                         Financial Statements.The following financial statements are included in this report:





Title of Document
PageReport of Chang G. Park CPA Firm
31Balance Sheets as at June 30, 2010 and 2009
32Statements of Operations for the years ended June 30, 2010 and 2009 and for the period from May 31, 2006 (date of inception) to June 30, 2010
33Statements of Changes in Stockholders’ Equity for the period from May 31, 2006 (date of inception) to June 30, 2010
34




Statements of Cash Flows for the years ended June 30, 2010 and 2009 and for the period from May 31, 2006 (date of inception) to June 30, 2010
35Notes to the Financial Statements
36





(a)  (2)   Financial Statement Schedules





The following financial statement schedules are included as part of this report:





None.





(a)  (3)   Exhibits





The following exhibits are included as part of this report by reference:





3(i)

Articles of Incorporation (incorporated by reference from Verify Smart Corp.’s Registration Statement on Form 2S-2 filed on August 10, 2006)3(ii)

By-laws (incorporated by reference from Verify Smart Corp.’s Registration Statement on Form S-1 filed on July 21, 2008)3(iii)

Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on March 26, 2009)3(iv)

Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on March 26, 2009)10

Material Contracts10.1

Joint Venture Agreement among Verified Capital Corp., Verified Transactions Corp. and our company dated effective March 25, 2009 (incorporated by reference from our Current Report on Form 8-K filed on March 26, 2009)


28


10.2

Amendment Agreement to the Joint Venture Agreement dated May 19,2009, between our company, Verified Capital Corp. and Verified Transactions Corp. (incorporated by reference from our Current Report on Form 8-K filed on May 22, 2009)10.3

Consulting Agreement with Duke Enterprises LLC (incorporated by

reference from our Current Report on Form 8-K filed on May 29, 2009)10.4

Consulting Agreement with New Vision Consulting Corporation (incorporated by reference from our Current Report on Form 8-K filed on May 29, 2009)10.5

Consulting Agreement with Wei ("David") Cheng (incorporated by reference from our Current Report on Form 8-K filed on August 20, 2009)10.6

Investment Purchase Agreement with Black Diamond Investment Group Corp. (incorporated by reference from our Current Report on Form 8-K filed on September 22, 2009)10.7

Consulting Agreement with Cohen Independent Research Group (incorporated by reference from our Current Report on Form 8-K filed on September 22, 2009)10.8

Compensation Agreement with AMG Group Inc.(incorporated by reference from our Current Report on Form 8-K filed on October 2, 2009)10.9

Company issued 500,000 shares to Black Diamond Investment Group Corp.(incorporated by reference from our Current Report on Form 8-K filed on November 12, 2009)10.10

A 50/50 revenue sharing Agreement with iPay Commerce Ventures(incorporated by reference from our Current Report on Form 8-K filed on November 16, 2009)10.11

A 50/50 revenue sharing Agreement with iPay Commerce Ventures(incorporated by reference from our Current Report on Form 8-K filed on November 16, 2009)10.12

Consulting Agreement with Eileen Duperron, Kim Baker and Intentional and Purposeful Living(incorporated by reference from our Current Report on Form 8-K filed on November 23, 2009)10.13

Ssettlement and license agreement with Vinema Company Ltd.(incorporated by reference from our Current Report on Form 8-K filed on December 4, 2009)10.14

Appointing Tony Cinotti as our sole director.(incorporated by reference from our Current Report on Form 8-K filed on December 31, 2009)10.15

Clarify that the purported agreement with Vinema was not validly

(incorporated by reference from our Current Report on Form 8-K filed on February 10, 2010)31.1

Section 302 Certification - Principal Executive Officer and Principal Financial Officer (filed herewith)32.1

Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)







29








SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





VERIFY SMART CORP.Date:
September 28, 2010
By:
/s/ Tony CinottiName:
Tony CinottiTitle:
Director, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer





In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated, who constitute the entire board of directors:





Date:
September 28, 2010
By:
/s/ Tony CinottiName:
Tony CinottiTitle:
Director, Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer







30


Chang G. Park, CPA, Ph. D.

t 2667 CAMINO DEL RIO S. PLAZA B t SAN DIEGO t CALIFORNIA 92108-3707t

t TELEPHONE (858)722-5953 t FAX (858) 761-0341  t FAX (858) 764-5480

t E-MAIL changgpark@gmail.comt




Report of Independent Registered Public Accounting Firm








To the Board of Directors and Stockholders


Verify Smart Corp.




We have audited the accompanying balance sheets of Verify Smart Corp. (A Development Stage “Company”) as of June 30, 2010 and 2009 and the related statements of operations, changes in shareholders’ equity and cash flows for the years then ended and for the period from May 31, 2006 (inception) through June 30, 2010. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.




We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.





In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Verify Smart Corp. as of June 30, 2010 and 2009, and the result of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.





The financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/Chang Park


____________________


CHANG G. PARK, CPA





September 28, 2010


San Diego, CA. 92108








31





Verify Smart Corp.(Development Stage Company)Balance Sheets




As of


As ofJune 30


June 302010


2009ASSETSCurrent AssetsCash

$
9,728


$
9,733Prepaid expense- short term


212,570



413,643Total Current Assets


222,298



423,376Other AssetsPrepaid expense-long term


26,563



-Deposit


-



10,626Total Other Assets


26,563



10,626Total Assets


248,861



434,002LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesAccounts payable

$
20,289


$
8,718Loan payable


111,999



35,947Total Current Liabilities


132,288



44,665Total Liabilities


132,288



44,665Contingencies and Commitments




Stockholders' EquityCommon Stock, $0.001 par value, 250,000,000 shares authorized;52,215,000 and 61,025,000 shares issued and outstanding as of June 30, 2010 and 2009


52,215



61,025Additional Paid-in Capital


1,378,907



852,097Deficit Accumulated During the Development Stage


(1,314,549
)


(523,785
)Total Stockholders' Equity


116,573



389,337Total Liabilities and Stockholders' Equity

$
248,861


$
434,002





The accompanying notes are an integral part of these financial statements.


32





Verify Smart Corp.(Development Stage Company)Statement of Operations

June 30, 2010May31,2006Year


Year


(Inception)Ended


Ended


throughJun 30,2010


Jun 30,2009


Jun 30,2010REVENUESRevenues


-



-



-Total Revenues

$
-


$
-


$
-Operation ExpensesGeneral & Administrative expenses


52,072



16,911



81,215Professional fees


51,804



26,735



95,240Management fees


681,954



449,423



1,131,376Total operation expenses


785,830



493,069



1,307,831Gain (Loss) from operations


(785,830
)


(493,069
)


(1,307,831
)Other Income and (expenses)Interest Expense


(212
)


-



(212
)Exchange Gain (loss)


(4,722
)


(1,784
)


(6,506
)Total Other Income and (expenses)


(4,934
)


(1,784
)


(6,718
)Net Loss

$
(790,764
)

$
(494,853
)

$
(1,314,549
)Net Gain (Loss) Per Share - Basic and Diluted

$
( 0.01
)

$
(0.01
)Weighted Average Shares Outstanding


55,297,521



60,252,041





The accompanying notes are an integral part of these financial statements.


33





Verify Smart Corp.(Development Stage Company)Statements of Stockholders' EquityFrom May 31,2006 (Inception date) to June 30, 2010  Common stockShares

#


Par Value

$


Additional Paid-in

Capital

$


Deficit Accumulated
During the DevelopmentStage

$


Total

$Balance - May 31, 2006 (Date of Inception)Stock issued for cash on May 31, 2006 at $0.0003 per share


30,000,000



30,000



(20,000
)





10,000Net loss for the period






0



0



(430
)


(430
)Balance - June 30, 2006


30,000,000



30,000



(20,000
)


(430
)


9,570Stock issued for cash on October 31, 2006at $0.0013 per share


30,000,000



30,000



10,000



0



40,000Net loss for the year














(14,000
)


(14,000
)Balance - June 30, 2007


60,000,000



60,000



(10,000
)


(14,430
)


35,570Net loss for the year














(14,502
)


(14,502
)Balance - June 30, 2008


60,000,000



60,000



(10,000
)


(28,932
)


21,068Stock issued for consulting services


1,015,000



1,015



850,735







851,750Stock issued for cash on May 27, 2009 at $1.25 per share, net of share issuance costs


10,000



10



11,362







11,372Net loss for the year














(494,853
)


(494,853
)Balance - June 30, 2009


61,025,000



61,025



852,097



(523,785
)


389,337Stock issued for consulting services


1,190,000



1,190



516,810







518,000Stock cancelled


(10,000,000
)


(10,000
)


10,000







0Net loss for the year














(790,764
)


(790,764
)Balance - June 30, 2010


52,215,000



52,215



1,378,907



(1,324,549
)


116,573
  The accompanying notes are an integral part of these financial statements.


34


VERIFY SMART CORP.


(Development Stage Company)


STATEMENTS OF CASH FLOWS


June 30, 2010





For the Year Ended June 30, 2010


For the Year Ended June 30, 2009


May 31, 2006 (inception) through to June 30, 2010OPERATING ACTIVITIESNet income (loss)

$
(790,764
)

$
(494,853
)

$
(1,307,599
)Adjustments to reconcile net loss to net cash   provided by (used in) operating activities:Foreign exchange gain(loss)Stock-based compensation


692,569



448,733



1,133,957Changes in operating ActivitiesPrepaid expense


10,626



(8,626
)


-Accounts payable


11,517



8,555



20,289Net Cash Used in Operating Activities


(76,052
)


(46,191
)


(153,353
)Investing ActivitiesDeposit decrease


-



(10,626
)


-Net Cash Provide by Investment Activities:


-



(10,626
)


-Financing ActivitiesIssuance of common stock


-



12,500



52,215Share issuance costs


-



(1,128
)


(1,128
)Proceeds from loan payable


76,052



35,947



111,999Net Cash Provided by Financing Activities

$
76,052



47,319



163,086(Decrease) Increase in Cash


-



(9,498
)


9,733Cash at beginning of period


9,733



19,231



-Cash – End of Period

$
9,733


$
9,733


$
9,733Supplemental Disclosures of Cash Flow InformationCash paid during the period for:Interest

$
--


$
--


$
--Income Taxes

$
--


$
--


$
--Non-Cash investing and financing activities

Common stock issued for services

$
518,000


$
851,750


$
1,369,750





The accompanying notes are an integral part of these financial statements.


35


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS





Verify Smart Corp. (formerly Treasure Explorations Inc. (the "Company")) was incorporated under the laws of the State of Nevada on May 31, 2006. The Company was originally formed to engage in the acquisition, exploration and development of natural resource properties. Effective March 25, 2009, we entered into a joint venture agreement with Verified Capital Corp. and Verified Transactions Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention.





Effective March 19, 2009, the Company changed the name from Treasure Explorations Inc. to Verify Smart Corp.





NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





BASIS OF ACCOUNTING





These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company has elected a June 30 year-end.





BASIC EARNINGS (LOSS) PER SHARE





Earnings Per Share, which specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. The Company has adopted the provisions of ASC effective May 31, 2006 (date of inception).




Basic net incomes (loss) per share amounts are computed based on the weighted average number of shares actually outstanding.  Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes anti dilutive and then only the basic per share amounts are shown in the report.





DIVIDEND POLICY




The Company has not yet adopted a policy regarding payment of dividends.





CASH EQUIVALENTS





The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.





USE OF ESTIMATES AND ASSUMPTIONS




The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


36


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)





INCOME TAXES




Income taxes are provided in accordance with ASC 740 ACCOUNTING FOR INCOME TAXES. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.





Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.





RECENT ACCOUNTNG PRONOUNCEMENTS





In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place.  The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards.





In  February  2010,  the FASB issued  Accounting  Standards  Update  ("ASU") No.2010-09,  "Amendments to Certain Recognition and Disclosure  Requirements" ("ASU2010-09"),  which is included in the FASB Accounting Standards Codification (the "ASC") Topic 855 (Subsequent Events). ASU 2010-09 clarifies that an SEC filer is required to evaluate subsequent events through the date that the financial statements are issued.  ASU 2010-09 is effective upon the issuance of the final update and did not have a significant impact on the Company's financial statements.





The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.








NOTE 3. GOING CONCERN





The accompanying financial statements are presented on a going concern basis. The Company had limited operations during the period from May 31, 2006 (date of inception) to June 30, 2010 and generated a net loss of $1,314,549. This condition raises substantial doubt about the Company's ability to continue as a going concern. Because the Company is currently in the development stage, management believes that the company's current cash and cash equivalents of $9,728 is sufficient to cover the expenses they will incur during the next twelve months in a limited operations scenario or until they raise additional funding.





NOTE 4. LOAN PAYABLE





During the year ended June 30, 2010, the Company received a loan from an unrelated party in the amount of $111,999, non interest bearing.


37


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 5. WARRANTS AND OPTIONS





There are no warrants or options outstanding to acquire any additional shares of common stock.





NOTE 6. RELATED PARTY TRANSACTIONS





The director of the Company may, in the future, become involved in other business opportunities as they become available, they may face a conflict in selecting between the Company and their other business opportunities. The Company has not formulated a policy for the resolution of such conflicts.








NOTE 7. INCOME TAXES


As of June 30, 2009


------------------------


Deferred tax assets:


Net operating tax carryforwards                               $   178,928


Tax rate                                                                                       34%





Gross deferred tax assets                                                    60,836


Valuation allowance                                                           (60,836)


-----------


Net deferred tax assets                                                  $             0


========





Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carryforwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.





NOTE 8. NET OPERATING LOSSES





As of June 30, 2010, the Company has a net operating loss carryforwards of approximately $178,928. Net operating loss carryforwards expires twenty years from the date the loss was incurred.





NOTE 9. STOCK TRANSACTIONS




Transactions, other than employees’ stock issuance, are in accordance with ASC 718, Compensation – STOCK COMPENSATION. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees’ stock issuance are in accordance with ASC 718. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.




On May 31, 2006, the Company issued a total of 30,000,000 shares of common stock to one director for cash in the amount of $0.00033 per share for a total of $10,000.




On October 13, 2006, the Company issued a total of 30,000,000 shares of common stock to twenty seven unrelated investors for cash in the amount of $0.0013 per share for a total of $40,000.




On March 19, 2009 the Company effected a 15 for 1 forward split of its issued and outstanding share capital such that every one share of common stock issued and outstanding prior to the split was exchanged for fifteen post-split shares of common stock. The number of shares referred to in the previous paragraphs is post-split number of shares.


38


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 9. STOCK TRANSACTIONS (CONTINUED)







The Company’s post-split authorized capital increased to 250,000,000 shares of common stock with a par value of $0.001 per share. All share amounts have been retroactively adjusted for all periods presented.




On March 25, 2009, the Company issued 750,000 shares of common stock at a fair value of $0.75 per share, amounting $562,500, pursuant to a consulting agreement.




On March 30, 2009, the Company issued 100,000 shares of common stock at a fair value of $0.75 per share, amounting $75,000, pursuant to a consulting agreement.




On April 9, 2009, the Company issued 15,000 shares of common stock at a fair value of $2.05 per share, amounting $30,750, pursuant to a consulting agreement.




On May 1, 2009, the Company issued 100,000 shares of common stock at a fair value of $1.34 per share, amounting $134,000, pursuant to a consulting agreement.




On May 27, 2009, the Company issued 10,000 shares of common stock at $1.25 per share for cash proceeds of $12,500.  The Company paid finders’ fee of $1,128 (Cdn$1,250) in connection with the private placement.




On June 1, 2009, the Company issued 50,000 shares of common stock at a fair vale $1 per share, amounting $50,000, pursuant to a consulting agreement.




As of June 30, 2009 the Company had 61,025,000 shares of common stock issued and outstanding.




On July 14, 2009, the Company entered a consulting service agreement and issued 50,000 shares of restricted common stock at a fair value $0.53 per share, amounting $26,500 as compensation.




On August 14, 2009, the Company enter a consulting service agreement and issued 1,000,000 shares of common stock at a fair value $0.425 per share, amounting $425,000 as compensation.




On October 28, 2009, 10,000,000 shares of common stocks from Howard Gelfand were cancelled and returned.




On November 15, 2009, the Company enter three consulting service agreements and issued 140,000 shares of common stock at a fair value $0.475 per share, amounting $66,500 as compensation.





As of June 30, 2010 the Company had 52,215,000 shares of common stock issued and outstanding.





NOTE 10. STOCKHOLDERS' EQUITY





The stockholders' equity section of the Company contains the following classes of capital stock as of June 30, 2010: Common stock, $ 0.001 par value: 250,000,000 shares authorized; 52,215,000 shares issued and outstanding.





NOTE 11. JOINT VENTURE AGREEMENT




Effective March 25, 2009, the Company entered into a joint venture agreement with Verified Capital Corp. and Verified Transaction Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention.




Upon the satisfaction of customary closing conditions, the Company will contribute an aggregate of $5,000,000 to the joint venture corporation, payable as $2,000,000 by May 1, 2009 and $3,000,000 by July 1, 2009, for a 70% interest in the joint venture corporation.


39


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 11. JOINT VENTURE AGREEMENT (CONTINUED)




By amendment of May 19, 2009, the companies have agreed that all obligations of the Joint Venture agreement have been deemed to have occurred and the agreement is in full force in good standing. In addition to the foregoing, Verified Transactions Corp. will grant to the joint venture corporation a 25 year worldwide exclusive license to market and sell Verified Transaction Corp.’s internet security software and all other internet business of whatsoever nature and including all future developments of such business for a 25% interest in the joint venture corporation. Verified Capital Corp. will be granted a 5% interest in joint venture Corporation upon the transfer of certain assets. Upon the closing of the joint venture agreement, the Company is the operator of the joint venture corporation and will contract with Verified Capital Corp. to be the sub-operator.




As of June 30, 2010, the joint venture corporation has not yet been formed.





NOTE 12. COMMITMENTS




a)
On March 30, 2009, the Company entered into a consulting agreement with New Vision Consulting Corporation wherein New Vision has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 1,000,000 restricted shares of common stock. As further compensation for service to be rendered, New Vision shall receive an additional 500,000 restricted common shares prior to July 31, 2009. The agreement expires on September 30, 2009. On May 19, 2009, the Company issued 1,000,000 restricted shares of common stock at a fair value of $750,000 to New Vision for services to be provided over a six month period. On July 15, 2009, the consulting agreement was terminated as New Vision was unable or unwilling to perform the services. The Company asked for return the issued shares for cancellation.




b)
On June 1, 2009, the Company entered into a consulting agreement with David Karpa wherein David Karpa has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 50,000 restricted shares of common stock. The agreement expires on November 30, 2009. On June 1, 2009, the Company issued 50,000 restricted shares of common stock at a fair value of $50,000 to David Karpa for services to be provided over a six month period. As at June 30, 2010, $50,000 was recognized as consulting expense.





c)
On July 14, 2009, the Company entered into a consulting agreement with Wei Cheng wherein Wei Cheng has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 50,000 restricted shares of common stock. The agreement expires on January 14, 2010. On August 15, 2009, the Company issued 50,000 restricted shares of common stock at a fair value of $26,500 to Wei Cheng for agreeing to enter into this agreement. The Company shall also provide Cheng 50,000 shares of common stock, released in increments of 12,500 shares at the end of each 60 days period, commencement upon the agreement date. At March 31, 2010, $26,500 was recognized as consulting expense and $53,000 was canceled on June 30, 2010.




d)
On August 14, 2009, the Company entered into a consulting agreement with Cohen Independent Group (“Cohen”) wherein Cohen has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 1,000,000 restricted shares of common stock. The agreement expires on August 14, 2011. On September 14, 2009, the Company issued 1,000,000 restricted shares of common stock at a fair value of $425,000 to Cohen for services to be provided over a two year periods. As at June 30, 2010, $212,570 is included in prepaid expenses-short-term and $26,563 in prepaid expense-long-term and will be recognized over the remaining term of the consulting agreement. At June 30, 2010, $185,867 was recognized as consulting expense.


40


VERIFY SMART CORP.


(Development Stage Company)


Notes to the Financial Statements


June 30, 2010





NOTE 12. COMMITMENTS (CONTINUED)







e)
On September 22, 2009, the Company entered into a compensation agreement with AMG Group Inc. (“AMG”) wherein AMG has agreed to provide certain consulting services to the company. The agreement expires on September 22, 2011.




In consideration of the consulting services provided by AMG, the Company hereby agrees to pay AMG the compensation as follows:




i)
asset acquisition, merger, or other value acquisition or disposition (the “Event”) – the Company will pay within 30 days of closing of such an Event an amount equal to, at AMG election, 5% in cash or 10% in common stock with the stock priced at the weighted average stock price for the year, on the stated value of the Event or, failing contractual value, the fair market value of the Event;




ii)    card issuers or internet users – the Company will pay to AMG an amount of 10% of cash flow received by the Company (less direct third party costs) from bank, and any other business paying the Company based on card use or internet use of the Company’s products for the first five years and 5% thereafter for an additional five years. For the first institution of in excess of one million cards signed, the Company will pay AMG one million common shares the Company.




ii)
the Company shall pay AMG a monthly fee of $5,000 from July 1 to March 31.




On March 31, 2010, the agreement was terminated and AMG waive the payable $45,000





f)
On November 15, 2009, we entered into a consulting agreement with Eileen Duperron wherein Eileen Duperron has agreed to provide certain consulting services to the Company. As compensation under the agreement, we have agreed to issue 40,000 restricted common shares at a fair value of $19,000 of our company. The agreement expires on May 15, 2010. At June 30, 2010, $19,000 was recognized as consulting expense.





g)
On November 15, 2009, we entered into a consulting agreement with Kim Baker wherein Kim Baker has agreed to provide certain consulting services to the Company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares at a fair value of $23,750. The agreement expires on May 15, 2010. At June 30, 2010, $23,750 was recognized as consulting expense.





h)
On November 15, 2009, we entered into a consulting agreement with Intentional and Purposeful Living wherein Intentional and Purposeful Living has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares at a fair value of $23,750. The agreement expires on May 15, 2010. At June 30, 2010, $23,750 was recognized as consulting expense.


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