# EDGAR Filing Document

**Accession Number:** 0001104038
**File Stem:** 0001214659-25-011996
**Filing Date:** 2025-8
**Character Count:** 186327
**Document Hash:** 26521ac9e80547a7b9aa8378a8ed6c2a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001214659-25-011996.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001214659-25-011996

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 69

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** VerifyMe, Inc.
- **CENTRAL INDEX KEY:** 0001104038
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
- **ORGANIZATION NAME:** 06 Technology
- **EIN:** 233023677
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39332
- **FILM NUMBER:** 251212417

**BUSINESS ADDRESS:**
- **STREET 1:** 801 INTERNATIONAL PARKWAY
- **STREET 2:** FIFTH FLOOR
- **CITY:** LAKE MARY
- **STATE:** FL
- **ZIP:** 32746
- **BUSINESS PHONE:** 585-736-9400

**MAIL ADDRESS:**
- **STREET 1:** 801 INTERNATIONAL PARKWAY
- **STREET 2:** FIFTH FLOOR
- **CITY:** LAKE MARY
- **STATE:** FL
- **ZIP:** 32746

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** LASERLOCK TECHNOLOGIES INC
- **DATE OF NAME CHANGE:** 20001004

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

<br> **FORM 10-Q**<br>

(Mark one)

⌧ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**For the quarterly period ended June 30, 2025**

OR

---

| | |
|:---|:---|
| ◻ | **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

---

**For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**Commission file number 001-39332** 

---

| |
|:---|
| **VERIFYME, INC.** |
| **(Exact Name of Registrant as Specified in Its Charter)** |

---

---

| | |
|:---|:---|
| **Nevada** | **23-3023677** |
| (State or Other Jurisdiction of<br> Incorporation or Organization) | (I.R.S. Employer<br> Identification No.) |
| **801 International Parkway, Fifth Floor**<br> **Lake Mary, FL**  | **32746** |
| (Address of Principal Executive Offices) | (Zip Code) |
| **(585) 736-9400** | **(585) 736-9400** |
| (Registrant's Telephone Number, Including Area Code) | (Registrant's Telephone Number, Including Area Code) |

---

(Former Name, Former Address and Former Fiscal year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which<br> Registered |
| Common Stock, par value $0.001 per share | VRME | The Nasdaq Capital Market |

---

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.&nbsp;&nbsp;&nbsp;&nbsp; Yes ⌧&nbsp;&nbsp;&nbsp;&nbsp; No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ⌧ No ◻

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

---

| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ◻ | Accelerated filer | ◻ |
| Non-accelerated filer | ⌧ | Smaller reporting company | ⌧ |
| Emerging growth company | ◻ |  |  |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ◻&nbsp;&nbsp;&nbsp;&nbsp; No ⌧

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 12,323,666 shares of common stock outstanding at August 6, 2025.

---

| | | |
|:---|:---|:---|
| **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** | **PART I - FINANCIAL INFORMATION** |
| ITEM 1. | [Financial Statements](#i1fs) | 4 |
| [Consolidated Balance Sheets (Unaudited)](#bs) | [Consolidated Balance Sheets (Unaudited)](#bs) | 4 |
| [Consolidated Statements of Operations (Unaudited)](#cso) | [Consolidated Statements of Operations (Unaudited)](#cso) | 6 |
| [Consolidated Statements of Comprehensive Loss (Unaudited)](#cscl) | [Consolidated Statements of Comprehensive Loss (Unaudited)](#cscl) | 7 |
| [Consolidated Statements of Cash Flows (Unaudited)](#cscf) | [Consolidated Statements of Cash Flows (Unaudited)](#cscf) | 8 |
| [Consolidated Statements of Stockholders' Equity (Unaudited)](#csse) | [Consolidated Statements of Stockholders' Equity (Unaudited)](#csse) | 10 |
| [Notes to Consolidated Financial Statements (Unaudited)](#notes) | [Notes to Consolidated Financial Statements (Unaudited)](#notes) | 12 |
| ITEM 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#managementdiscussion) | 30 |
| ITEM 3. | [Quantitative and Qualitative Disclosures about Market Risk](#quantitativeandquali) | 37 |
| ITEM 4. | [Controls and Procedures](#controlsandprod) | 37 |
| **PART II - OTHER INFORMATION** | **PART II - OTHER INFORMATION** | **PART II - OTHER INFORMATION** |
| ITEM 1. | [Legal Proceedings](#legalproceedings) | 38 |
| ITEM 1A. | [Risk Factors](#riskfactors) | 38 |
| ITEM 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#unregisteredsalesofequity) | 38 |
| ITEM 3. | [Defaults Upon Senior Securities](#defaultsuponsenior) | 39 |
| ITEM 4. | [Mine Safety Disclosures](#minissafety) | 39 |
| ITEM 5. | [Other Information](#otherinformation) | 39 |
| ITEM 6. | [Exhibits](#exhibitis) | 39 |
| [SIGNATURES](#signature) | [SIGNATURES](#signature) | 40 |

---

[**Table of Contents**](#toc)

**PART I - FINANCIAL STATEMENTS**

**ITEM 1.**

VerifyMe, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
|  | (Unaudited) |  |
| &nbsp;&nbsp;&nbsp;ASSETS |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6067 | $2823 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net of allowance for credit loss reserve, $8 and $71 as of June 30, 2025 and December 31, 2024, respectively | 1100 | 2636 |
| &nbsp;&nbsp;&nbsp;Unbilled revenue | 324 | 733 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 335 | 131 |
| &nbsp;&nbsp;&nbsp;Inventory | 41 | 39 |
| TOTAL CURRENT ASSETS | 7867 | 6362 |
| PROPERTY AND EQUIPMENT, NET | $80 | $116 |
| RIGHT OF USE ASSET | 89 | 236 |
| INTANGIBLE ASSETS, NET | 5142 | 5365 |
| GOODWILL | 3988 | 3988 |
| TOTAL ASSETS | $17166 | $16067 |
| &nbsp;&nbsp;&nbsp;LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Term note, current | $- | $500 |
| &nbsp;&nbsp;&nbsp;Accounts payable | 1559 | 2971 |
| &nbsp;&nbsp;&nbsp;Other accrued expense | 327 | 660 |
| &nbsp;&nbsp;&nbsp;Lease liability- current | 51 | 108 |
| TOTAL CURRENT LIABILITIES | 1937 | 4239 |
| LONG-TERM LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Long-term lease liability | 43 | 139 |
| &nbsp;&nbsp;&nbsp;Term note |  | 375 |
| &nbsp;&nbsp;&nbsp;Convertible note – related party | 450 | 450 |
| &nbsp;&nbsp;&nbsp;Convertible note | 300 | 650 |
| TOTAL LIABILITIES | $2730 | $5853 |
| STOCKHOLDERS' EQUITY |  |  |
| Series A Convertible Preferred Stock, $0.001 par value, 37,564,767 shares authorized; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively |  |  |
| Series B Convertible Preferred Stock, $0.001 par value; 85 shares authorized; 0.85 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively |  |  |
| Common stock, $0.001 par value; 675,000,000 shares authorized;12,734,425 and 10,829,908 shares issued, 12,323,668 and 10,539,441 shares outstanding as of June 30, 2025 and December 31, 2024, respectively | 13 | 11 |
| &nbsp;&nbsp;&nbsp;Additional paid in capital | 101392 | 96344 |

---

[**Table of Contents**](#toc)

---

| | | |
|:---|:---|:---|
| Treasury stock as cost; 410,757 and 290,467 shares at June 30, 2025 and December 31, 2024, respectively | (434) | (480) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (86535) | (85673) |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive loss |  | 12 |
| STOCKHOLDERS' EQUITY | 14436 | 10214 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $17166 | $16067 |

---

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

[**Table of Contents**](#toc)

VerifyMe, Inc.

Consolidated Statements of Operations

(Unaudited)

(In thousands, except share data)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| NET REVENUE | $4520 | $5352 | $8975 | $11111 |
| COST OF REVENUE | 2929 | 3262 | 5894 | 6761 |
| GROSS PROFIT | 1591 | 2090 | 3081 | 4350 |
| OPERATING EXPENSES |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Segment management and Technology<sup>(a)</sup> | 920 | 1517 | 1846 | 2860 |
| &nbsp;&nbsp;&nbsp;General and administrative <sup>(a)</sup> | 716 | 894 | 1572 | 2015 |
| &nbsp;&nbsp;&nbsp;Research and development | 5 | 5 | 10 | 60 |
| &nbsp;&nbsp;&nbsp;Sales and marketing <sup>(a)</sup> | 272 | 210 | 568 | 598 |
| &nbsp;&nbsp;&nbsp;Total Operating expenses | 1913 | 2626 | 3996 | 5533 |
| LOSS BEFORE OTHER INCOME (EXPENSE) | (322) | (536) | (915) | (1183) |
| OTHER (EXPENSE) INCOME |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income (expenses), net | 32 | (42) | 54 | (80) |
| &nbsp;&nbsp;&nbsp;Other expense, net | (1) |  | (1) |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration |  | 232 |  | 364 |
| TOTAL OTHER INCOME (EXPENSE), NET | 31 | 190 | 53 | 284 |
| NET LOSS | $(291) | $(346) | $(862) | $(899) |
| LOSS PER SHARE |  |  |  |  |
| &nbsp;&nbsp;&nbsp;BASIC | (0.02) | (0.03) | (0.07) | (0.09) |
| &nbsp;&nbsp;&nbsp;DILUTED | (0.02) | (0.03) | (0.07) | (0.09) |
| WEIGHTED AVERAGE COMMON SHARE OUTSTANDING |  |  |  |  |
| &nbsp;&nbsp;&nbsp;BASIC | 12643791 | 10238717 | 12469118 | 10156081 |
| &nbsp;&nbsp;&nbsp;DILUTED | 12643791 | 10238717 | 12469118 | 10156081 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp; Includes share-based compensation of $259 thousand and $592 thousand for the three and six months ended June 30, 2025, respectively, and $239 thousand and $697 thousand for the three and six months ended June 30, 2024 respectively.

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

[**Table of Contents**](#toc)

VerifyMe, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Six Months Ended | Six Months Ended |
|  | June 30, 2025 | June 30, 2024 | June 30, 2025 | June 30, 2024 |
| &nbsp;&nbsp;NET LOSS | $(291) | $(346) | $(862) | $(899) |
| &nbsp;&nbsp;Change in fair value of interest rate, Swap |  | 2 | (12) | 5 |
| &nbsp;&nbsp;Foreign currency translation adjustments |  | 18 |  | (49) |
| &nbsp;&nbsp;Total Comprehensive Loss | $(291) | $(326) | $(874) | $(943) |

---

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

[**Table of Contents**](#toc)

VerifyMe, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

---

| | | |
|:---|:---|:---|
|  | Six months ended | Six months ended |
|  | June 30, 2025 | June 30, 2024 |
| CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(862) | $(899) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts | (5) | 9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation | 86 | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of contingent consideration |  | (364) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair value of restricted stock awards and restricted stock units issued in exchange for services | 506 | 608 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss on disposal of equipment | 1 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairments |  | 13 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization and depreciation | 572 | 599 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on partial lease termination | (6) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss on foreign currency transactions |  | 30 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | 1541 | 1790 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unbilled revenue | 409 | 530 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | 13 | 15 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (216) | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, other accrued expenses and net change in operating leases | (1733) | (2155) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 306 | 312 |
| CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of patents |  | (12) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leasehold Improvements | (6) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of office equipment |  | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized software costs | (326) | (174) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (332) | (191) |
| CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from Warrants Exercise | 4348 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from SPP Plan |  | 21 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contingent consideration payments |  | (36) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax withholding payments for employee stock-based compensation in exchange for shares surrendered | (50) | (47) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in treasury shares (share repurchase program) | (153) | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of debt and line of credit | (875) | (250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) financing activities | 3270 | (313) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash |  | (3) |
| NET INCREASE(DECREASE) CASH AND CASH EQUIVALENTS | 3244 | (195) |
| CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH- BEGINNING OF PERIOD | 2823 | 3095 |
| CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH- END OF PERIOD | $6067 | $2900 |

---

[**Table of Contents**](#toc)

---

| | | |
|:---|:---|:---|
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest | $40 | $94 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income taxes | $- | $- |
| SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |
| Lease modification | $7 | $- |
| Conversion of convertible note and accrued interest | $360 | $- |
| Change in fair value of interest rate, swap | $12 | $5 |

---

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

[**Table of Contents**](#toc)

VerifyMe, Inc.

Consolidated Statements of Stockholders' Equity

(Unaudited)

(In thousands, except share data)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | | | | | | | | |
|  | Convertible | Convertible | Convertible | Convertible | | | | | | | | |
|  | Preferred | Preferred | Preferred | Preferred | Common | Common | | Treasury | Treasury | | | |
|  | Stock | Stock | Stock | Stock | Stock | Stock | | Stock | Stock | | | |
|  | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount |<br><br>Additional<br>Paid-In<br>Capital | Number of<br>Shares |<br>Amount |<br><br>Accumulated Other<br>Comprehensive<br>Loss |<br><br>Accumulated<br>Deficit |<br><br><br>Total |
| Balance at March 31, 2024 |  |  | 0.85 |  | 10176603 | 10 | 95438 | 308462 | (589) | (66) | (82402) | 12391 |
| Restricted stock awards |  |  |  |  | 140000 | 1 | 127 |  |  |  |  | 128 |
| Restricted Stock Units, net of shares withheld for employee tax |  |  |  |  | 38095 |  | (103) | (38095) | 125 |  |  | 22 |
| Common stock issued for services |  |  |  |  | 30000 |  | 42 |  |  |  |  | 42 |
| Accumulated Other Comprehensive Income |  |  |  |  |  |  |  |  |  | 20 |  | 20 |
| Net loss |  |  | - |  | - | - | - | - | - | - | (346) | (346) |
| Balance at June 30, 2024 |  |  | 0.85 |  | 10384698 | 11 | 95504 | 270367 | (464) | (46) | (82748) | 12257 |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | | | | | | | | |
|  | Convertible | Convertible | Convertible | Convertible | | | | | | | | |
|  | Preferred | Preferred | Preferred | Preferred | Common | Common | | Treasury | Treasury | | | |
|  | Stock | Stock | Stock | Stock | Stock | Stock | | Stock | Stock | | | |
|  | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount |<br><br>Additional<br>Paid-In<br>Capital | Number of<br>Shares |<br>Amount |<br><br>Accumulated Other<br>Comprehensive<br>Loss |<br><br>Accumulated<br>Deficit |<br><br><br>Total |
| Balance at March 31, 2025 |  |  | 0.85 |  | 12414772 | 13 | 101225 | 251120 | (351) |  | (86244) | 14643 |
| Restricted stock awards |  |  |  |  |  |  | 41 |  |  |  |  | 41 |
| Restricted stock units, net of shares withheld for employee tax |  |  |  |  | 50382 |  | 81 | (41849) | 70 |  |  | 151 |
| Common stock issued for services |  |  |  |  | 60000 |  | 45 |  |  |  |  | 45 |
| Repurchase of Common Stock |  |  |  |  | (201486) |  |  | 201486 | (153) |  |  | (153) |
| Net loss |  |  | - |  | - | - | - | - | - |  | (291) | (291) |
| Balance at June 30, 2025 |  |  | 0.85 |  | 12323668 | 13 | 101392 | 410757 | (434) |  | (86535) | 14436 |

---

[**Table of Contents**](#toc)

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | | | | | | | | |
|  | Convertible | Convertible | Convertible | Convertible | | | | | | | | |
|  | Preferred | Preferred | Preferred | Preferred | Common | Common | | Treasury | Treasury | | | |
|  | Stock | Stock | Stock | Stock | Stock | Stock | | Stock | Stock | | | |
|  | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount |<br><br>Additional<br>Paid-In<br>Capital | Number of<br>Shares |<br>Amount |<br><br>Accumulated Other<br>Comprehensive<br>Loss |<br><br>Accumulated<br>Deficit |<br><br><br>Total |
| Balance at December 31, 2023 |  |  | 0.85 |  | 10123964 | 10 | 95031 | 329351 | (659) | (2) | (81849) | 12531 |
| Restricted stock awards |  |  |  |  | 140000 | 1 | 275 |  |  |  |  | 276 |
| Restricted stock units, net of shares withheld for employee tax |  |  |  |  | 39845 |  | 160 | (38095) | 125 |  |  | 285 |
| Common stock issued in relation to Stock Purchase Plan |  |  |  |  | 21889 |  | (46) | (21889) | 71 |  |  | 25 |
| Common stock issued for services |  |  |  |  | 60000 |  | 84 |  |  |  |  | 84 |
| Repurchase of Common Stock |  |  |  |  | (1000) |  |  | 1000 | (1) |  |  | (1) |
| Accumulated other comprehensive loss |  |  |  |  |  |  |  |  |  | (44) |  | (44) |
| Net loss |  |  | - |  | - | - | - | - | - | - | (899) | (899) |
| Balance at June 30, 2024 |  |  | 0.85 |  | 10384698 | 11 | 95504 | 270367 | (464) | (46) | (82748) | 12257 |

---

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | Series A | Series A | Series B | Series B | | | | | | | | |
|  | Convertible | Convertible | Convertible | Convertible | | | | | | | | |
|  | Preferred | Preferred | Preferred | Preferred | Common | Common | | Treasury | Treasury | | | |
|  | Stock | Stock | Stock | Stock | Stock | Stock | | Stock | Stock | | | |
|  | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount | Number of<br>Shares |<br>Amount |<br><br>Additional<br>Paid-In<br>Capital | Number of<br>Shares |<br>Amount |<br><br>Accumulated Other<br>Comprehensive<br>Loss |<br><br>Accumulated<br>Deficit |<br><br><br>Total |
| Balance at December 31, 2024 |  |  | 0.85 |  | 10539441 | 11 | 96344 | 290467 | (480) | 12 | (85673) | 10214 |
| Warrants exercise |  |  |  |  | 1461896 | 2 | 4346 |  |  |  |  | 4348 |
| Convertible note |  |  |  |  | 313520 |  | 285 | (22359) | 75 |  |  | 360 |
| Restricted stock awards |  |  |  |  |  |  | 96 |  |  |  |  | 96 |
| Restricted stock units, net of shares withheld for employee tax |  |  |  |  | 90297 |  | 235 | (58837) | 124 |  |  | 359 |
| Common stock issued for services |  |  |  |  | 120000 |  | 86 |  |  |  |  | 86 |
| Repurchase of Common Stock |  |  |  |  | (201486) |  |  | 201486 | (153) |  |  | (153) |
| Accumulated other comprehensive loss |  |  |  |  |  |  |  |  |  | (12) |  | (12) |
| Net loss |  |  | - |  | - | - | - | - | - | - | (862) | (862) |
| Balance at June 30, 2025 |  |  | 0.85 |  | 12323668 | 13 | 101392 | 410757 | (434) | - | (86535) | 14436 |

---

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

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VerifyMe, Inc.

Notes to the Consolidated Financial Statements (unaudited)

**NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 ****

***<u>Nature of the Business</u>***

VerifyMe, Inc. ("VerifyMe," "we," "us," "our," or the "Company") was incorporated in the State of Nevada on November 10, 1999. VerifyMe, is based in Lake Mary, Florida and its common stock, par value $0.001 per share is traded on The Nasdaq Capital Market ("Nasdaq") under the trading symbol "VRME".

The Company is a logistics company that specializes in time and temperature sensitive products, as well as providing brand protection and enhancement solutions. The Company operates a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global, LLC ("PeriShip Global") which accounts for nearly all VerifyMe revenue, and an Authentication segment. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to deter counterfeit activities. Further information regarding our business segments is discussed below. The Company's activities are subject to significant risks and uncertainties. See the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in this report.

***<u>Reclassifications</u>***

Certain amounts presented for the three and six months ended June 30, 2024, reflect reclassifications made to conform to the presentation in our current reporting period. These reclassifications had no effect on the previously reported net loss.

 ****

***<u>Basis of Presentation</u>***

The accompanying unaudited interim consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiary PeriShip Global. All significant intercompany balances and transactions have been eliminated upon consolidation. The consolidated financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC") on March 12, 2025. The accompanying Interim Statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three and six months ended June 30, 2025, are not necessarily indicative of the results to be expected for the year ending December 31, 2025, or for any future interim periods.

***<u>Segment Reporting</u>***

 ****

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method by which to allocate resources and assess performance. The Company has two reportable segments, namely, (i) Precision Logistics and (ii) Authentication. See Note 11 Segment Reporting, for further discussion of the Company's segment reporting structure.

 ****

***<u>Use of Estimates</u>***

The preparation of financial statements in conformity with U.S. GAAP 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 these estimates.

***<u>Recent Accounting Pronouncements</u>***

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires disclosure of disaggregated income taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for the Company's annual periods beginning January 1, 2025, with early adoption permitted. The Company is currently evaluating the potential effect that the updated standard will have on their financial statement disclosures.

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Notes to the Consolidated Financial Statements (unaudited)

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Topic 220). This standard requires disclosure of specific information about costs and expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the potential effect that the updated standard will have on their financial statement disclosures.

***<u>Fair Value of Financial Instruments</u>***

The Company's financial instruments consist of accounts receivable, unbilled revenue, accounts payable, notes payable and accrued expenses, equity investments, and long-term derivatives. The carrying value of accounts receivable, unbilled revenue, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable approximates fair value based on rates and other terms currently available to the Company for similar debt instruments.

The Company follows FASB Accounting Standard Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures, and applies it to all assets and liabilities that are being measured and reported on a fair value basis. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

The level in the fair value within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.

The following table presents the Company's financial instruments that are measured and recorded at fair value on the Company's balance sheets on a recurring basis, and their level within the fair value hierarchy as of June 30, 2025 and December 31, 2024.

Amounts in Thousands ('000)

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| | |
|:---|:---|
|  | Derivative Asset<br>(Level 2) |
| Balance as of December 31, 2024 | 12 |
| Termination of SWAP, recognized in other comprehensive loss | (12) |
| Balance at June 30, 2025 | $- |

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***<u>Revenue Recognition</u>***

The Company accounts for revenues according to ASC Topic 606, *Revenue from Contracts with Customers* which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers.

The Company applies the following five steps, separated by reportable segments, in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements.

&nbsp;&nbsp;&nbsp;&nbsp;· identify the contract with a customer;

&nbsp;&nbsp;&nbsp;&nbsp;· identify the performance obligations in the contract;

&nbsp;&nbsp;&nbsp;&nbsp;· determine the transaction price;

&nbsp;&nbsp;&nbsp;&nbsp;· allocate the transaction price to performance obligations in the contract; and

&nbsp;&nbsp;&nbsp;&nbsp;· recognize revenue as the performance obligation is satisfied.

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Notes to the Consolidated Financial Statements (unaudited)

The Company generally considers completion of an agreement, or Statement of Work ("SOW") and/or purchase order as a customer contract, provided collection is considered probable. For more detailed information about reportable segments, see Note 11 – Segment reporting.

 

*Precision Logistics*

Our Precision Logistics segment consists of two service lines, Proactive and Premium. Under our Proactive service line, clients pay us directly for carrier service coupled with our proactive logistics service. Terms typically range 7 days and no longer than 30 days. The Company has determined it is the principal and recognizes shipment fees in gross revenue. Under our Premium service line, we provide complete white-glove shipping monitoring and predictive analytics services. This service includes customer web portal access, weather monitoring, temperature control, full-service center support and last mile resolution. Payment terms are typically 30 - 45 days.

Under both service lines in our Precision Logistics segment, our performance obligation is met, and revenue is recognized when the packages are delivered. The transaction fees consist of fixed consideration made up of amounts contractually billed to the customer. There are no variable considerations in the transaction fee, in either service line.

*Authentication*

 

Our Authentication segment primarily consists of anti-counterfeit and brand protection. Terms typically range between 30 and 60 days. Our performance obligation is met, and revenue is recognized when our products are shipped or delivered depending on the specific agreement with the customer. The transaction fee is made up of fixed consideration based on the related purchase order or agreement.

***<u>Goodwill</u>***

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Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC Topic 350, Intangibles-Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment test. The assessment considers factors such as, but not limited to, macroeconomic conditions, data showing other companies in the industry and our share price. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price.

***<u>Basic and Diluted Net Loss per Share of Common Stock</u>***

The Company follows ASC Topic 260, Earnings Per Share, when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. Because the Company reported a net loss for each of the periods presented, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same.

For the three and six months ended June 30, 2025, and 2024, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company's losses during the periods presented. For the three and six months ended June 30, 2025, there were approximately 4,037,000 anti-dilutive shares consisting of 1,322,000 unvested performance restricted stock units, 224,000 restricted stock units and restricted stock awards, 140,000 shares issuable upon exercise of stock options, 1,555,000 shares issuable upon exercise of warrants, 652,000 shares issuable upon conversion of convertible debt, and 144,000 shares issuable upon conversion of preferred stock. For the three and six months ended June 30, 2024, there were approximately 8,208,000 anti-dilutive shares consisting of 2,177,000 unvested performance restricted stock units, restricted stock units, and restricted stock awards, 301,000 shares issuable upon exercise of stock options, 4,629,000 shares issuable upon exercise of warrants, 957,000 shares issuable upon conversion of convertible debt, and 144,000 shares issuable upon conversion of preferred stock.

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Notes to the Consolidated Financial Statements (unaudited)

***<u>Stock-Based Compensation</u>***

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We account for stock-based compensation under the provisions of ASC Topic 718, Compensation—Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes model. The assumptions used in the Black-Scholes option pricing model include risk-free interest rates, expected volatility and expected life of the stock options. Changes in these assumptions can materially affect estimates of fair value stock-based compensation, and the compensation expense recorded in future periods. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line method. We recognize forfeitures as they occur with a reduction in compensation expense in the period of forfeiture. For performance restricted stock units ("RSU") with stock price appreciation targets (see Note 6 – Stock Options, Restricted Stock and Warrants), we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU's contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the performance period and there is no ongoing adjustment or reversal based on actual achievement during the period.

We account for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees.

All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if we had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured, and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service is completed.

**NOTE 2 – REVENUE**

***<u>Revenue by Category</u>***

The following series of tables present our revenue disaggregated by various categories (dollars in thousands).

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Precision Logistics** | **Precision Logistics** | **Authentication** | **Authentication** | **Consolidated** | **Consolidated** |
| <u>Revenue</u> | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** |
|  | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
| Proactive services | $3829 | $3945 | $- | $- | $3829 | $3945 |
| Premium services | 664 | 1299 |  |  | 664 | 1299 |
| Brand protection services | - | - | 27 | 108 | 27 | 108 |
|  | $4493 | $5244 | $27 | $108 | $4520 | $5352 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Precision Logistics** | **Precision Logistics** | **Authentication** | **Authentication** | **Consolidated** | **Consolidated** |
| <u>Revenue</u> | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 |
| Proactive services | $7523 | $8170 | $- | $- | $7523 | $8170 |
| Premium services | 1399 | 2688 |  |  | 1399 | 2688 |
| Brand protection services | - | - | 53 | 253 | 53 | 253 |
|  | $8922 | $10858 | $53 | $253 | $8975 | $11111 |

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Notes to the Consolidated Financial Statements (unaudited)

***<u>Contract Balances</u>***

The timing of revenue recognition, billings and cash collections results in unbilled revenue (contract assets) and deferred revenue (contract liabilities) on the consolidated balance sheets. Amounts charged to our clients become billable according to the contract terms, which usually consider the delivery completion. Unbilled amounts will generally be billed and collected within 30 days but typically no longer than 60 days. When we advance bill clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within twelve months. These assets and liabilities are reported on the consolidated balance sheets on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the six-month period ended June 30, 2025, were not materially impacted by any other factors.

Applying the practical expedient in ASC Topic 606, we recognize the incremental costs of obtaining contracts (i.e. sales commissions) as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. As of June 30, 2025, we did not have any capitalized sales commissions.

For all periods presented, contract liabilities were not significant.

The following table provides information about contract assets from contracts with customers:

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| | | |
|:---|:---|:---|
|  | **Contract Asset** | **Contract Asset** |
|  | **June 30,** | **June 30,** |
| ***In Thousands*** | **2025** | **2024** |
| Beginning balance, January 1 | $733 | $1282 |
| &nbsp;&nbsp;&nbsp;Contract asset additions | 3290 | 4329 |
| &nbsp;&nbsp;&nbsp;Reclassification to accounts receivable, billed to customers | (3699) | (4860) |
| Ending balance, June 30 <sup>(1)</sup> | $324 | $751 |

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______________

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Included within "Unbilled revenue" on the accompanying Consolidated Balance sheets.

**NOTE 3 – BUSINESS COMBINATIONS**

On December 8, 2024, the Company sold Trust Codes Global pursuant to a Share Sale Agreement with a related party, Paul Ryan, former Executive Vice President of the Authentication Segment and employee of Trust Codes Global Limited. This divestiture did not qualify as a discontinued operation. The purchase price per the agreement was $1 NZD. We recognized a loss of $0.1 million on the sale of the business. Through his purchase, Mr. Ryan assumed the remaining cash balance in the bank accounts of $0.1 million and all continuing obligations and liabilities of Trust Codes Global Limited. The Trust Codes Global business was part of the Authentication segment.

**NOTE 4 – INTANGIBLE ASSETS AND GOODWILL**

*<u>Goodwill</u>*

 

Goodwill represents costs in excess of values assigned to the underlying net assets of acquired businesses. Intangible assets acquired are recorded at estimated fair value. Goodwill is deemed to have an indefinite life and is not amortized but is tested for impairment annually, and at any time when events suggest an impairment more likely than not has occurred. We test goodwill at the reporting unit level.

ASC Topic 350, "*Intangibles - Goodwill and Other"* ("ASC Topic 350"), permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment test. Under ASC Topic 350, an entity is not required to perform a quantitative goodwill impairment test for a reporting unit if it is more likely than not that its fair value is greater than its carrying amount. A reporting unit is an operating segment, or one level below an operating segment, as defined by U.S. GAAP.

 

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present.

 

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Notes to the Consolidated Financial Statements (unaudited)

 

Each of our two reportable segments represents an operating segment under ASC Topic 280, *Segment Reporting*. We test our goodwill at the reporting unit level, or one level below an operating segment, under ASC Topic 350, "*Intangibles - Goodwill and Other"*. We determined that we have two reporting units for purposes of goodwill impairment testing, which represent our two reportable business segments, as discussed below.

 

Changes in the carrying amount of goodwill by reportable business segment for the six months ended June 30, 2025, were as follows (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Authentication** | **Precision Logistics** | **Total** |
| **<u>Net book value at</u>** |  |  |  |
| **January 1, 2025** | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3988 | $3988 |
| **2025 Activity** |  |  |  |
| **Net book value at** | - | - | - |
| **June 30, 2025** | $- | $3988 | $3988 |

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*<u>Intangible Assets Subject to Amortization</u>*

Our intangible assets include amounts recognized in connection with patents and trademarks, capitalized software and acquisitions, including customer relationships, tradenames, developed technology and non-compete agreements. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives.

Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| **June 30, 2025** | Gross<br> Carrying<br> Amount | Accumulated<br> Amortization | Net Carrying Amount | Weighted <br> Average<br> Remaining<br> Useful <br> Life (Years) |
| Patents and Trademarks | $1112 | $(273) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;839 | 10 |
| Customer Relationships | 1839 | (587) | 1252 | 7 |
| Developed Technology | 3143 | (1673) | 1470 | 3 |
| Internally Used Software | 1738 | (327) | 1411 | 5 |
| Non-Compete Agreement | 191 | (122) | 69 | 2 |
| Deferred Implementation | 135 | (34) | 101 | 7 |
| Total Intangible Assets | $8158 | $(3016) | $5142 |  |
| **December 31, 2024** |  |  |  |  |
| Patents and Trademarks | $1112 | $(230) | $882 | 10 |
| Customer Relationships | 1839 | (495) | 1344 | 7 |
| Developed Technology | 3143 | (1411) | 1732 | 3 |
| Internally Used Software | 1418 | (207) | 1211 | 7 |
| Non-Compete Agreement | 191 | (103) | 88 | 2 |
| Deferred Implementation | 135 | (27) | 108 | 8 |
| Total Intangible Assets | $7838 | $(2473) | $5365 |  |

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Notes to the Consolidated Financial Statements (unaudited)

Amortization expense for intangible assets was $548 thousand and $540 thousand for the six months ended June 30, 2025, and 2024, respectively. During the six months ended June 30, 2024, the Company impaired certain assets related to its Patents by $13 thousand, to bring the gross carrying amount related to these assets to zero, as these technologies are no longer in use.

*Patents and Trademarks*

As of June 30, 2025, our current patent and trademark portfolios consist of six granted U.S. patents and one granted European patents, two pending foreign patent applications and several foreign trademarks.

The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows (in thousands):

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| | |
|:---|:---|
| **Fiscal Year ending December 31,** | |
| 2025 (six months remaining) | $567 |
| 2026 | 1099 |
| 2027 | 1072 |
| 2028 | 696 |
| 2029 | 537 |
| Thereafter | 1171 |
| Total | $5142 |

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**NOTE 5 – STOCKHOLDERS' EQUITY**

The Company expensed $41 thousand and $96 thousand related to restricted stock awards for the three and six months ended June 30, 2025, respectively. The Company expensed $127 thousand and $275 thousand related to restricted stock awards for the three and six months ended June 30, 2024, respectively.

The Company expensed $173 thousand and $410 thousand related to restricted stock units for the three and six months ended June 30, 2025, respectively. The Company expensed $69 thousand and $333 thousand related to restricted stock units for the three and six months ended June 30, 2024, respectively.

On August 25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory notes for the aggregate principal amount of $1,100 thousand. As of January 21, 2025, $350 thousand was converted to 313,520 shares of common stock, of which 22,359 were issued from treasury.

On January 2, 2025, the Company issued 39,915 shares of common stock, of which 16,988 were issued from treasury, upon vesting of 61,011 restricted stock units, net of 21,096 shares withheld for taxes related to stock grants on July 20, 2023 and July 1, 2024.

On March 31, 2025, the Company issued 60,000 shares of restricted common stock, vesting immediately with a value of $41 thousand, for consulting services. On June 30, 2025, the Company issued an additional 60,000 shares of restricted common stock, vesting immediately with a value of $45 thousand, for consulting services.

On April 1, 2025, the Company issued 5,792 shares of common stock upon vesting of 7,000 restricted stock units, net of 1,208 shares withheld for taxes related to a stock grant on September 1, 2024.

On June 19, 2025, the Company issued 41,849 shares of common stock from treasury, upon vesting of 68,027 restricted stock units, net of 26,178 shares withheld for taxes related to a stock grant on June 19, 2023.

On June 30, 2025, the Company issued 2,741 shares of common, upon vesting of 4,000 restricted stock units, net of 1,259 shares withheld for taxes related to a stock grant on January 1, 2025.

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Notes to the Consolidated Financial Statements (unaudited)

***Non-Qualified Stock Purchase Plan***

 ****

On June 10, 2021, the stockholders of the Company approved a non-qualified stock purchase plan (the "2021 Plan"). The 2021 Plan provides eligible participants, including employees, directors and consultants of the Company, the opportunity to purchase shares of the Company's common stock thereby increasing their interest in the Company's continued success. The maximum number of common stock reserved and available for issuance under the 2021 Plan is 500,000 shares. The purchase price of shares of common stock acquired pursuant to the exercise of an option will be the lesser of 85% of the fair market value of a share (a) on the enrollment date, and (b) on the exercise date. The 2021 Plan is not intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The Company applied ASC Topic 718, Compensation-Stock Compensation and estimated the fair value using the Black-Scholes model, as the 2021 Plan is considered compensatory. In relation to the 2021 Plan the Company expensed $0 thousand for the three and six months ended June 30, 2025, respectively. During the three and six months ended June 30, 2024 the company expensed $0 and $4 thousand, respectively. During the six months ended June 30, 2025 and 2024, the Company received $0 thousand and $21 thousand, respectively, in proceeds related to the 2021 Plan. The Company has currently suspended new offering periods under the 2021 Plan.

 ****

***Shares Held in Treasury***

As of June 30, 2025, and December 31, 2024, the Company had 410,757 and 290,467 shares, respectively, held in treasury with a value of approximately $434 thousand and $480 thousand, respectively.

On February 29, 2024, seven participants exercised their option under the Company's non-qualified stock purchase plan, and as a result, 21,889 shares were issued from treasury, with an exercise price of $0.97 per share.

***Shares Repurchase Program***

In December 2023, the Company's Board of Directors approved a share repurchase program to allow the Company to spend up to $0.5 million to repurchase shares of its common stock so long as the price does not exceed $1.00 until December 14, 2024. On November 26, 2024, the Company approved an extension of the $0.5 million share repurchase program to repurchase shares of the Company's common stock through December 31, 2025. The share repurchase program may be modified, suspended or discontinued at the discretion of the Board at any time. During the six months ended June 30, 2025, the Company repurchased 201,486 shares for $153 thousand under the Company's current plan.

**NOTE 6 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS**

On November 14, 2017, the Executive Committee of the Company's Board of Directors adopted the 2017 Equity Incentive Plan (the "2017 Plan") which covered the potential issuance of 260,000 shares of common stock. The 2017 Plan provided that directors, officers, employees, and consultants of the Company were eligible to receive equity incentives under the 2017 Plan at the discretion of the Board or the Board's Compensation Committee.

On August 10, 2020, the Company's Board of Directors adopted the 2020 Equity Incentive Plan (the "2020 Plan") and on September 30, 2020, the Company's stockholders approved the 2020 Plan, which authorizes the potential issuance of up to 1,069,110 shares of common stock. Upon effectiveness of the 2020 Plan the 2017 Plan was terminated. Shares of common stock underlying existing awards under the 2017 Plan may become available for issuance pursuant to the terms of the 2020 Plan under certain circumstances. Employees and non-employee directors of the Company or its affiliates, and other individuals who perform services for the Company or any of its affiliates, are eligible to receive awards under the 2020 Plan at the discretion of the Board of Directors or the Board's Compensation Committee.

On March 28, 2022, the Company's Board of Directors adopted the First Amendment to the 2020 Plan and on June 9, 2022, the Company's stockholders approved the First Amendment to the 2020 Plan, which increased the shares authorized for potential issuance under the 2020 Plan to 2,069,100 shares of common stock and extended the term of the 2020 Plan to June 9, 2023. On April 17, 2023, the Company's Board of Directors adopted the Second Amendment to the 2020 Plan and on June 6, 2023, the Company's stockholders approved the Second Amendment to the 2020 Plan, which increased the shares authorized for potential issuance under the 2020 Plan to 3,069,110 shares of common stock and extended the term of the 2020 Plan to June 6, 2033, and increased the annual cap on director compensation by $50 thousand. On March 18, 2024, the Company's Board of Directors adopted the Third Amendment to the 2020 Plan, which on June 4, 2024, was approved by the Company's stockholders, which increased the shares authorized for potential issuance under the 2020 Plan to 4,069,100 shares of common stock and extended the term of the 2020 Plan to June 4, 2034.

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Notes to the Consolidated Financial Statements (unaudited)

The 2020 Plan, as amended, is administered by the Compensation Committee which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.

In connection with incentive stock options, the exercise price of each option may not be less than 100% of the fair market value of the common stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100 thousand, and the options in excess of $100 thousand shall be deemed to be non-qualified stock options, including prices, duration, transferability and limitations on exercise. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 1,000,000.

The Company has issued non-qualified stock options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management's best estimates and involve inherent uncertainties and judgements.

***<u>Stock Options</u>***

The following table summarizes the activities for the Company's stock options as of June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** |
|  | <br>**Number of**<br>**Shares** | <br>**Weighted-**<br>**Average**<br>**Exercise Price** | **Weighted -**<br>**Average**<br>**Remaining**<br>**Contractual**<br>**Term**<br>**(in years)** | <br>**Aggregate**<br>**Intrinsic**<br>**Value**<br>**(in thousands)<sup>(1)</sup>** |
| Balance as of December 31, 2024 | 221000 | $3.57 | 0.4 | $- |
| Granted |  |  |  |  |
| Forfeited/Cancelled/Expired | (81000) | 3.70 |  |  |
| Balance as of June 30, 2025 | 140000 | $3.50 | 0.1 | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exercisable as of June 30, 2025 | 140000 | $3.50 | 0.1 | $- |

---

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
awards and the quoted price of the Company's common stock for options that were in-the-money at each respective period.

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Notes to the Consolidated Financial Statements (unaudited)

As of June 30, 2025, the Company had no unvested stock options.

During the six months ended June 30, 2025, and 2024, the Company expensed $0 thousand, with respect to options.

As of June 30, 2025, there was $0 unrecognized compensation cost related to outstanding stock options.

**Restricted Stock Awards and Restricted Stock Units**

The following table summarizes the unvested restricted stock awards as of June 30, 2025:

---

| | | |
|:---|:---|:---|
|  |<br>**Number of**<br>**Award Shares** | **Weighted -**<br>**Average**<br>**Grant**<br>**Date Fair Value** |
| Unvested at December 31, 2024 | 140000 | $&nbsp;&nbsp;&nbsp;1.60 |
| Granted |  |  |
| Vested | (140000) | 1.60 |
| Balance at June 30, 2025 | - | $- |

---

As of June 30, 2025, total unrecognized share-based compensation cost related to unvested restricted stock awards is $0 thousand.

The following table summarizes the unvested restricted stock units as of June 30, 2025:

---

| | | |
|:---|:---|:---|
|  |<br>**Number of**<br>**Unit Shares** | **Weighted -**<br>**Average**<br>**Grant**<br>**Date Fair Value** |
| Unvested at December 31, 2024 | 273736 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.38 |
| Granted | 110773 | 1.52 |
| Vested | (155038) | 1.44 |
| Forfeited | (5000) | 1.37 |
| Balance at June 30, 2025 | 224471 | $1.41 |

---

As of June 30, 2025, total unrecognized share-based compensation cost related to unvested time-based restricted stock units was $259 thousand, which is expected to be recognized over a weighted-average period of less than one year.

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Notes to the Consolidated Financial Statements (unaudited)

The following table summarizes the unvested performance-based restricted stock units as of June 30, 2025:

---

| | | |
|:---|:---|:---|
|  |<br>**Number of**<br>**Unit Shares** | **Weighted -**<br>**Average**<br>**Number of**<br>**Unit Shares** |
| Unvested at December 31, 2024 | 1606660 | $1.37 |
| Granted |  |  |
| Forfeited/Cancelled | (285069) | 2.40 |
| Balance at June 30, 2025 | 1321591 | $1.15 |

---

For restricted stock units with stock price appreciation targets, we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the restricted stock unit's contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value of each grant was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the derived service period and there is no ongoing adjustment or reversal based on actual achievement during the period.

As of June 30, 2025, total unrecognized share-based compensation cost related to unvested performance based restricted stock units was $513 thousand, which is expected to be recognized over a weighted-average period of less than a year.

***<u>Warrants</u>***

The following table summarizes the activities for the Company's warrants as of June 30, 2025:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Warrant Shares** | **Weighted-**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted -**<br> **Average**<br> **Remaining**<br> **Contractual**<br> **Term**<br> **(in years)** | **Aggregate**<br> **Intrinsic**<br> **Value**<br> **(in thousands)<sup>(1)</sup>** |
| Balance as of December 31, 2024 | 4628586 | 4.13 | 1.2 |  |
| Granted | 1461896 | 4.00 |  |  |
| Exercised | (1461896) | 3.22 |  |  |
| Expired | (3073379) | 4.60 |  |  |
| Balance as of June 30, 2025 | 1555207 | $3.95 | 4.9 |  |
| Exercisable as of June 30, 2025 | 1555207 | $3.95 | 4.9 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
warrants and the closing stock price of $0.75 for our common stock on June 30, 2025.

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Notes to the Consolidated Financial Statements (unaudited)

On January 13, 2025, the Company entered into a warrant inducement agreement with an institutional investor and holder of existing warrants to purchase up to 1,461,896 shares of our common stock. The existing warrants were originally issued on April 14, 2022, with an exercise price of $3.215 per share and became exercisable six months following issuance. The net proceeds from the warrant exercise was $4.3 million. In exchange for the investor's exercise of the existing warrants, the Company issued new warrants to purchase an equal number of shares at an exercise price of $4.00 per share. The new warrants were immediately exercisable and have a contractual term of five and one-half years from the issuance date.

The Company recognized the fair value of the new warrants using the Black-Scholes option pricing model. The fair value of the new warrants were estimated at $3,971 thousand. The transaction was treated as an equity issuance, and the fair value of the new warrants was recorded in additional paid-in capital. Direct transaction costs totaling approximately $352 thousand, including legal fees and placement agent commissions, were also recorded as a reduction to additional paid-in capital.

On June 23, 2025, the Company's warrants listed on Nasdaq under the symbol "VRMEW" (the "Uplist Warrants") expired pursuant to the terms of the Form of Common Stock Purchase Warrant. On June 23, 2025, Nasdaq filed a Form 25 formalizing the suspension of the Uplist Warrants.

The following table presents the assumptions used to estimate the fair value of the new warrants on January 13, 2025:

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| | |
|:---|:---|
|  | January 13, 2025 |
| Risk free interest rate | 4.34% |
| Expected life | 2.75 years |
| Expected volatility | 171% |
| Expected dividend |  |

---

***At-the-Market Equity Offering Program***

On March 6, 2025, the Company entered into an At-The-Market Sales Agreement ("ATM") with Roth Capital Partners, LLC ("Roth"), pursuant to which the Company may issue and sell, from time to time, shares of its common stock up to an aggregate offering price of $15.8 million. Roth acts as the Company's sales agent and is entitled to a 3.0% commission on gross proceeds from sales under the program.

In connection with the ATM program, the Company incurred direct legal and audit fees totaling $150 thousand. These costs have been recorded as deferred offering costs within other current assets and will be reclassified to additional paid-in capital on a pro-rata basis as shares are issued. Deferred offering costs will be assessed for recoverability at each reporting period. If management determines that the ATM program is not probable to be utilized, the deferred costs will be expensed to general and administrative expenses.

During the three and six months ended June 30, 2025, and as of the date of this filing, we have not sold any shares of common stock through the ATM.

**NOTE 7—DEBT**

PeriShip Global is a party to a debt facility with PNC Bank, National Association (the "PNC Facility"). The PNC Facility includes a $1 million revolving line of credit (the "RLOC"). The RLOC has no scheduled payments of principal until maturity, and bears interest per annum at a rate equal to the sum of Daily SOFR plus 2.85% with monthly interest payments. The PNC Facility also included a four-year term note (the "Term Note") for $2 million which matured in September of 2026 and required equal quarterly payments of principal and interest. The Term Note incurred interest per annum at a rate equal to the sum of Daily SOFR plus 3.1%. On January 21, 2025, the Term Note was paid in full and no future principal payments are due. The PNC Facility is guaranteed by VerifyMe and secured by the assets of PeriShip Global and VerifyMe.

The PNC Facility includes a number of affirmative and restrictive covenants applicable to PeriShip Global, including, among others, a financial covenant to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 at the end of each fiscal year, affirmative covenants regarding delivery of financial statements, payment of taxes, and establishing primary depository accounts with PNC Bank, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. PeriShip Global is also restricted from paying dividends or making other distributions or payments on its capital stock if an event of default (as defined in the PNC Facility) has occurred or would occur upon such declaration of dividend. On August 14, 2024, the Company signed a waiver and amendment which provided a waiver for a certain event of default and extended the line of credit to September 30, 2025. On February 28, 2025, we received a waiver as of December 31, 2024 for certain events of default. PeriShip Global was in compliance with all affirmative and restrictive covenants under the PNC Facility at June 30, 2025.

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Notes to the Consolidated Financial Statements (unaudited)

As of January 21, 2025, the Term Note balance of $875 thousand was paid in full and no future principal payments are due.

As of June 30, 2025, $0 was outstanding on the RLOC.

Effective October 17, 2022, the Company entered into an interest rate swap agreement, with a notional amount of $1,958 thousand, effectively fixing the interest rate on the Company's outstanding debt at 7.602%. The Company had designated the intertest rate swap, expiring September 2026, as a cash flow hedge and have applied hedge accounting. The fair value of the derivative asset and liability associated with the interest rate swap are not significant. As of January 21, 2025, we terminated our interest rate swap agreement and $12 thousand was reclassified from accumulated other comprehensive loss.

*<u>Convertible Debt</u>*

On August 25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory notes for the aggregate principal amount of $1,100 thousand of which $475 thousand was purchased by related parties including certain members of management and the Board of Directors. As of June 30, 2025 and December 31, 2024, $450 thousand was held by related parties after one member of management left the Company. The notes are subordinated unsecured obligations of the Company and accrue interest at a rate of 8% per year payable semiannually in arrears on February 25 and August 25 of each year, beginning on February 25, 2024. The notes will mature on August 25, 2026, unless earlier converted or repurchased at a conversion price of $1.15 per share of common stock. The Company may not redeem the notes prior to the maturity date. For the six months ended June 30, 2025 and June 30, 2024, interest expense related to the convertible debt was $30 thousand and $44 thousand, respectively. As of January 21, 2025, $350 thousand was converted to common stock, none of which was related parties. As of June 30, 2025 and December 31, 2024, the amount outstanding on the convertible debt was $750 thousand and $1,100 thousand, respectively and included in Convertible note and Convertible note related party on the accompanying Consolidated Balance Sheets.

**NOTE 8—INCOME TAXES**

There are no taxes payable as of June 30, 2025, or December 31, 2024.

Some of the federal tax carry forwards will expire at various dates through 2037. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that time. We are currently using an effective income tax rate of 21% for our projected available net operating loss carry-forward. No tax benefit has been recognized in the six months ending June 30, 2025, due to the uncertainty surrounding the realizability of the benefit. As of June 30, 2025, the Company had no unrecognized tax benefits.

Utilization of the net operating losses (NOL) carryforwards may be subject to a substantial annual limitation as required by Section 382 of the IRC, due to ownership changes of the company that could occur in the future, as well as similar state provisions. In general, an "ownership change" as defined by Section 382 results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income.

In accordance with FASB ASC 740 "*Income Taxes*", valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all, of the deferred tax assets may or will not be realized. The Company did not utilize any NOL deductions for the six months ended June 30, 2025.

**NOTE 9– LEASES**

The Company accounts for its leases under Accounting Standard Codification ("ASC") Topic 842, *"Leases"*. The Company determines at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Our current long-term leases include an option to extend the term of the lease prior to the end of the initial term. It is not reasonably certain that we will exercise the option and have not included the impact of the option in the lease term for purposes of determining total future lease payments. As our lease agreement does not explicitly state the discount rate implicit in the lease, we use our promissory note borrowing rate to calculate the present value of future payments.

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Notes to the Consolidated Financial Statements (unaudited)

In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred.

We have operating leases for office facilities. We do not have any finance leases.

Lease expenses are included in Segment management and technology expenses on the accompanying Consolidated Statements of Operations. The components of lease expense were as follows (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | Three months ended June 30, | Three months ended June 30, | Six months ended June 30, | Six months ended June 30, |
|  | 2025 | 2024 | 2025 | 2024 |
| Operating lease cost | $13 | $48 | $39 | $95 |
| Short-term lease cost | 4 | 4 | 8 | 9 |
| Total lease costs | $17 | $52 | $47 | $104 |

---

Supplemental information related to leases was as follows (dollars in thousands):

---

| | | |
|:---|:---|:---|
|  | June 30, 2025 | December 31, 2024 |
| Operating Lease right-of-use asset | $&nbsp;&nbsp;&nbsp;89 | $&nbsp;&nbsp;&nbsp;236 |
| Current portion of operating lease liabilities | $51 | $108 |
| Non-current portion of operating lease liabilities | 43 | 139 |
| Total operating lease liabilities | $94 | $247 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $39 | $126 |
| Right-of-use assets obtained in exchange for operating lease liabilities | $- | $- |
| Weighted-average remaining lease term for operating leases (years) | 1.8 | 2.3 |
| Weighted average discount rate for operating leases | 7.4% | 6.0% |

---

The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our consolidated balance sheets as of June 30, 2025 (in thousands):

---

| | |
|:---|:---|
| Year ending December 31, |  |
| 2025 (Excluding six months ended June 30, 2025) | $27 |
| 2026 | 55 |
| 2027 | 19 |
| Total future lease payments | 101 |
| Less: imputed interest | (7) |
| Present value of future lease payments | 94 |
| Less: current portion of lease liabilities | (51) |
| Long-term lease liabilities | $43 |

---

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Notes to the Consolidated Financial Statements (unaudited)

**NOTE 10– CONCENTRATIONS**

For the three months ended June 30, 2025, one customer represented 11% of revenues and one customer represented 22% of revenues for the three months ended June 30, 2024. For the six months ended June 30, 2025, one customer represented 13% of revenues and one customer represented 22% of revenues for the six months ended June 30, 2024.

During the three and six months ended June 30, 2025, one vendor accounted for 99% of transportation cost, in our Precision Logistics segment.

As of June 30, 2025, two customers made up 26% of accounts receivable, net. As of December 31, 2024, two customers made up 36% of accounts receivable.

**NOTE 11 – SEGMENT REPORTING**

As of June 30, 2025, we operated through two reportable business segments: (i) Precision Logistics and (ii) Authentication. The Chief Executive Officer is the chief operating decision maker ("CODM"). These segments reflect the way the CODM evaluates the Company's business performance and allocates resources. The CODM assesses performance by using revenue, gross margin, operating expenses and net earnings. These metrics are analyzed by reviewing budget and forecast versus actual and prior year versus current year reporting. The various income performance measures are reviewed to ensure proper pricing strategies, effective cost controls and cash management across the organization. Reported revenue includes only the revenue generated by sales to external customers.

**Precision Logistics:** This segment offers a value-added service provider for time and temperature sensitive parcel management. Through logistics management from a sophisticated IT platform with proprietary databases, package and flight-tracking software, weather, traffic, as well as dynamic dashboards with real-time visibility into shipment transit and last-mile events that are managed by a service center we provide our clients an end-to-end vertical approach for their most critical service delivery needs. Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries.

**Authentication:** This segment specializes in anti-counterfeit and brand protection.

We do not allocate the following items to the segments: general & administrative expenses and other income (expense).

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Notes to the Consolidated Financial Statements (unaudited)

The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated loss before income tax expense (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended | Three Months Ended |
|  | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, |
|  | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 |
|  | Precision Logistics | Authentication | Consolidated | Precision Logistics | Authentication | Consolidated |
| NET REVENUE | $4493 | $27 | $4520 | $5244 | $108 | $5352 |
| COST OF REVENUE | 2922 | 7 | 2929 | 3247 | 15 | 3262 |
| GROSS PROFIT | 1571 | 20 | 1591 | 1997 | 93 | 2090 |
| OPERATING EXPENSES |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Management and technology | 557 | 9 | 566 | 795 | 296 | 1091 |
| &nbsp;&nbsp;&nbsp;Research and development |  | 5 | 5 |  | 5 | 5 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 247 | 1 | 248 | 239 | 97 | 336 |
| &nbsp;&nbsp;&nbsp;Other Segment Items | 378 |  | 378 | 251 | 49 | 300 |
| &nbsp;&nbsp;&nbsp;Total Segment expenses | 1182 | 15 | 1197 | 1285 | 447 | 1732 |
| &nbsp;&nbsp;&nbsp;Segment Income | $389 | $5 | $394 | $713 | $(355) | $358 |
| &nbsp;&nbsp;&nbsp;General and Administrative |  |  | (716) |  |  | (894) |
| &nbsp;&nbsp;&nbsp;Other Income (Expense) |  |  | 31 |  |  | 190 |
| NET LOSS |  |  | $(291) |  |  | $(346) |

---

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Notes to the Consolidated Financial Statements (unaudited)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | Six Months Ended | Six Months Ended | Six Months Ended | Six Months Ended | Six Months Ended | Six Months Ended |
|  | June 30, | June 30, | June 30, | June 30, | June 30, | June 30, |
|  | 2025 | 2025 | 2025 | 2024 | 2024 | 2024 |
|  | Precision Logistics | Authentication | Consolidated | Precision Logistics | Authentication | Consolidated |
| NET REVENUE | $8922 | $53 | $8975 | $10858 | $253 | $11111 |
| COST OF REVENUE | 5881 | 13 | 5894 | 6732 | 29 | 6761 |
| GROSS PROFIT | 3041 | 40 | 3081 | 4126 | 224 | 4350 |
| OPERATING EXPENSES |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Management and technology | 1153 | 37 | 1190 | 1573 | 515 | 2088 |
| &nbsp;&nbsp;&nbsp;Research and development |  | 10 | 10 |  | 60 | 60 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 515 | 3 | 518 | 422 | 261 | 683 |
| &nbsp;&nbsp;&nbsp;Other Segment Items | 806 | (100) | 706 | 588 | 99 | 687 |
| &nbsp;&nbsp;&nbsp;Total Segment expenses | 2474 | (50) | 2424 | 2583 | 935 | 3518 |
| &nbsp;&nbsp;&nbsp;Segment Income | $567 | $90 | $657 | $1543 | $(711) | $832 |
| &nbsp;&nbsp;&nbsp;General and Administrative |  |  | (1572) |  |  | (2015) |
| &nbsp;&nbsp;&nbsp;Other Income (Expense) |  |  | 53 |  |  | 284 |
| NET LOSS |  |  | $(862) |  |  | $(899) |

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Notes to the Consolidated Financial Statements (unaudited)

**NOTE 12 – SUBSEQUENT EVENTS**

<u>*ZenCredit Agreement*</u>

On August 8, 2025, we entered into a Master Loan Agreement and Promissory Note (the "Loan Agreement") with ZenCredit Ventures, LLC ("ZenCredit"). Pursuant to the Loan Agreement, we agreed to loan ZenCredit up to $2 million. Pursuant to the terms of the Loan Agreement, ZenCredit will pay us regular quarterly interest payments at an annual interest rate of 16%. The term of the initial promissory note is nine months at which time all accrued principal and interest is due to us unless we elect to make an Additional Loan (as such term is defined in the Loan Agreement) subject to the terms of the Loan Agreement. On August 11, 2025, we loaned ZenCredit $2 million in exchange for a promissory note issued pursuant to the Loan Agreement.

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.**

The information in this Management's Discussion and Analysis should be read in conjunction with the accompanying unaudited consolidated financial statements and notes.

**Cautionary Note Regarding Forward-Looking Statements**

This report includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. The words "believe," "may," "estimate," "continue," "intended," "plan," "could," "target," "potential," "will," "would," "expect" and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements.

Our actual results and financial condition may differ materially from those expressed or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.

For a further list and description of various risks, relevant factors and uncertainties that could cause future results or events to differ materially from those expressed or implied in our forward-looking statements, see the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections in this report, our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and our other filings with the Securities and Exchange Commission (the "SEC"). All forward-looking statements in this report are made only as of the date hereof or as indicated and represent our views as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise, except as required by law.

**Overview**

VerifyMe, Inc. ("VerifyMe," the "Company," "we," "us," or "our"), is a logistics company that specializes in time and temperature sensitive products, as well as providing brand protection and enhancement solutions. We operate a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global and accounts for nearly all VerifyMe revenue, and an Authentication segment. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to deter counterfeit and diversion activities. Further information regarding our business segments is discussed below:

**Precision Logistics:** The Precision Logistics segment specializes in predictive analytics for optimizing delivery of time and temperature sensitive perishable products. We manage complex industry-specific shipping logistic processes that require critical time, temperature control and handling to prevent spoilage and delayed delivery times and brand impairment. Utilizing predictive analytics from multiple data sources including flight-tracking, weather, traffic, major carrier feeds, and time of day data, we provide our clients an end-to-end vertical approach for their most critical service delivery needs. Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, as well as delivering last-mile resolution for key markets, including the perishable healthcare and food industries.

Through our proprietary PeriTrack® customer dashboard, we provide an integrated tool that gives our customers an in-depth look at their shipping activities and allows them access to critical information in support of the specific needs of the supply chain stakeholders. We offer post-delivery services such as customized reporting for trend analysis, system performance reports, power outage maps, and other tailored reports.

Precision Logistics generates revenue from two business service models.

&nbsp;&nbsp;&nbsp;&nbsp;· **ProActive Service** – clients pay us directly for carrier service coupled with our proactive
logistics assistance.

&nbsp;&nbsp;&nbsp;&nbsp;· **Premium Service** – clients pay us directly or through our carrier partner for our complete
white-glove shipping monitoring and predictive analytics service. This service includes customer web portal access, weather monitoring,
temperature control, full-service center support and last mile resolution.

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**Products:** The Precision Logistics segment includes the following bundled services as part of our service offerings to our customers:

&nbsp;&nbsp;&nbsp;&nbsp;· **PeriTrack®**: Our proprietary PeriTrack® customer dashboard was developed utilizing our extensive
logistics operational knowledge. This integrated web portal tool gives our customers an in-depth look at their shipping activities based
on real-time data. The PeriTrack® dashboard was designed to provide critical information in support of the specific needs of supply
chain stakeholders and gives our customer resolution specialists a 360° view of shipping activity. PeriTrack® features tools tailored
for shippers of perishable goods, which includes the In-Transit Shipment Tracker. This tool provides details on the unique shipper's
in-transit shipments, with the ability to select and analyze data on individual shipments.

&nbsp;&nbsp;&nbsp;&nbsp;· **Service Center**: We have assembled a team of customer resolution specialists based in the U.S. This
service team resolves shipping problems on behalf of our customers. The service center acts as a help desk and monitors shipping to delivery
for our customers.

&nbsp;&nbsp;&nbsp;&nbsp;· **Pre-Transit Service**: We help clients prepare their products for shipments by advising clients on
packaging requirements for various types of perishable products. Each product type requires its own particular packaging to protect it
during shipment, and we utilize our extensive knowledge and research to provide our customers with packaging recommendations to meet their
unique needs.

&nbsp;&nbsp;&nbsp;&nbsp;· **Post-Delivery**: We provide customized reporting for trend analysis, system performance reports,
power outage maps, and many other reports to help our customers improve their processes and customer service outcomes.

&nbsp;&nbsp;&nbsp;&nbsp;· **Weather/Traffic Service**: We have full-time meteorologists on staff to monitor weather. A package
may experience a variety of weather conditions between the origin and destination, and our team actively monitors these conditions to
maximize the number of timely and safely transmitted shipments. Similarly, traffic and construction also create unpredictable delays which
our team works diligently to mitigate. If delays or other issues occur, we inform clients and work with them to proactively resolve such
shipment issues.

**Authentication**: The Authentication segment specializes in anti-counterfeit and brand protection. This is critical in the current landscape of increased counterfeit activity and customer expectations. VerifyMe has patented technologies that address the needs of brands.

**<u>Opportunities</u>**

Traditionally, most shipping businesses utilize the carrier's data platform for tracking which generally informs the shipping enterprise, and their customers, when a package is in transit, when a package has been delivered, and some level of detail of the path which a package traveled. We believe taking the data feeds from a carrier and adding real-time visibility with predictive analytics and the human intervention factor of our service center gives us a competitive advantage against other third-party platforms that solely rely on the carrier's data feeds. We utilize a variety of input sources beyond the carrier's data feed. Our proprietary "Predictive Analytics" technology is fed real-time meteorology data, traffic and road construction data, and power grid information to help predict issues before they happen. If an alert is created the shipper and our service center will work to address the issue and save the perishable product from spoiling, saving the shipper significant costs and reducing the need to replace products that are no longer viable. We have meteorologists on staff that track world-wide weather patterns to address predicted issues before they happen. We believe the company has two significant areas of opportunity. First, our services are specifically designed to address the needs of small and medium size agriculture, food and beverage companies. Second, the pharmaceutical and healthcare industries represent significant opportunities due to the enhanced tracking and customer service associated with distribution of these products. We are focusing our sales emphasis on those industries.

Building logistics infrastructure is a capital-intensive process as the investment is locked in for a considerably long period. Due to the current economic environment, and our cost competitive offering, we believe companies may opt to outsource their precision logistics services to reduce their operational costs. The outsourcing of supply chain related and other logistics operations to service providers such as ours allows companies to improve the efficiency of their businesses by focusing their resources on core competencies. We believe outsourcing this function to our Precision Logistics segment provides the ideal solution for all parties involved.

**Partnerships:**

Precision Logistics has a direct partnership with a major global carrier company and has data feeds directly from the carrier into our proprietary logistics optimization software which provides shippers much more detailed information and predictive analytics on their shipment versus a standard shipping code look up which is provided by the carrier. In addition to relying on this strategic partner for shipping services we have a service agreement pursuant to which this strategic partner resells our services to its customers under a "white label" arrangement, which we refer to as our Premium service. Under this arrangement we provide our logistics services to our strategic partner's customers in exchange for a pre-negotiated service fee per shipment. Our strategic partner has begun to provide its own service offerings to its customers and while we will continue to offer our Premium services, we expect our partner will prefer to offer their solution to customers as the primary recommendation and our solution will be offered as a secondary solution. This does not affect our Proactive services, and we expect to see growth under that service offering as we focus on providing Proactive services to customers directly.

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Our Authentication segment has a contract with HP Indigo, and a strategic partnership with INX, the third largest producer of inks in North America. We believe these partnerships can be used to enable brand owners to securely prevent counterfeiting.

**Current Economic Environment**

In response to market conditions and lower demand some carriers have implemented strategies to address a potential global recession. The major carrier that PeriShip Global partners with laid out steps it has taken to significantly reduce permanent costs by the end of its 2025 fiscal year in response to these market conditions and lower demand. In mid-December 2024, the carrier forecasted flat revenue year over year for 2025.

We have seen a softening in demand for some services related to high-end perishable items which seem to be impacted by reduced discretionary spending by U.S. consumers. While a recession, whether global or more localized to the U.S., may decrease the demand for our services that are more discretionary in nature, we believe that the internal cost cutting measures, if implemented by the major global carrier, may benefit out-sourced service providers. We are working with this major global carrier to address their small and medium-sized business clients, which we believe is an underserved market and presents growth opportunities for our Precision Logistics segment. However, the U.S. presidential administration has imposed tariffs on goods imported into the U.S. In response, several foreign governments have imposed new tariffs on certain goods imported from the U.S. and additional retaliatory measures against U.S. goods are expected. These or additional changes in U.S. or international trade policy, along with continued uncertainty surrounding such policies, could lead to further weakened business conditions. We can provide no assurances that a decline in discretionary consumer spending will not have a negative impact on our revenues and results of operations.

**Seasonality**

We experience seasonal fluctuations in our net revenues from sales in our Precision Logistics segment. Revenues from sales are generally higher in the fourth quarter than in other quarters due to increased holiday shipments. The seasonality of our business may cause fluctuations in our quarterly operating results.

**Recent Developments**

*<u>UPS Agreements</u>*

On July 29, 2025, PeriShip Global entered into (i) a UPS Digital Channel Program Agreement (the "Program Agreement") with United Parcel Service, Inc., an Ohio corporation ("UPS Ohio") and UPS Worldwide Forwarding, Inc., a Delaware corporation ("UPS WWF"), and (ii) a UPS Partner API Access Agreement (the "Integration Agreement" and together with the Program Agreement, the "Agreements") with UPS Digital, Inc., ("UPS Digital" and collectively with UPS Ohio and UPS WWF, "UPS"). The Agreements provide Periship Global access to designated UPS services at promotional rates as part of a specialized logistics management services for time-sensitive and perishable shipments, including proactive monitoring, weather tracking, and issue resolution through certain UPS digital channel program applications. Pursuant to the Integration Agreement, UPS will allow Periship Global to develop Interfaces to certain UPS APIs, access UPS Access Services and the use of UPS Information (as such terms are defined in the Integration Agreement). The Agreements have a term of three years, subject to customary termination and renewal provisions.

*<u>ZenCredit Agreement</u>*

On August 8, 2025, we entered into a Master Loan Agreement and Promissory Note (the "Loan Agreement") with ZenCredit Ventures, LLC ("ZenCredit"). Pursuant to the Loan Agreement, we agreed to loan ZenCredit up to $2 million. Pursuant to the terms of the Loan Agreement, ZenCredit will pay us regular quarterly interest payments at an annual interest rate of 16%. The term of the initial promissory note is nine months at which time all accrued principal and interest is due to us unless we elect to make an Additional Loan (as such term is defined in the Loan Agreement) subject to the terms of the Loan Agreement. On August 11, 2025, we loaned ZenCredit $2 million in exchange for a promissory note issued pursuant to the Loan Agreement.

*<u>Nasdaq Deficiency Notice</u>*

On April 3, 2025, we received a letter from the Listing Qualifications Staff of The Nasdaq Stock Market LLC ("Nasdaq") indicating that, based on the closing bid price of our common stock for 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share (the "Minimum Bid Price Rule"). The Nasdaq Listing Rules provide a compliance period of 180 calendar days, or until September 30, 2025, in which to regain compliance with the Minimum Bid Price Rule. If we evidence a closing bid price of at least $1 per share for a minimum of 10 consecutive business days during the 180-day compliance period, we will automatically regain compliance. If we fail to regain compliance with the Minimum Bid Price Rule, Nasdaq will provide notice that our common stock will be subject to delisting. We would then be entitled to appeal that determination to a Nasdaq hearings panel.

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This notification has no immediate effect on the listing of our common stock on Nasdaq. We intend to monitor the closing bid price of our common stock and consider our available options in the event the closing bid price of our common stock remains below $1 per share.

*<u>Expiration of Uplist Warrants</u>*

On June 23, 2025, the Company's warrants listed on Nasdaq under the symbol "VRMEW" (the "Uplist Warrants") expired pursuant to the terms of the Form of Common Stock Purchase Warrant. On June 23, 2025, Nasdaq filed a Form 25 formalizing the suspension of the Uplist Warrants.

**Results of Operations**

**Comparison of the three months ended June 30, 2025, and 2024**

The following discussion analyzes our results of operations for the three months ended June 30, 2025 and 2024.

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| | | |
|:---|:---|:---|
| <u>Revenue</u> | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** |
|  | 2025 | 2024 |
| Precision Logistics | $4493 | $5244 |
| Authentication | 27 | 108 |
| Total Revenue | $4520 | $5352 |

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Consolidated revenue decreased $832 thousand or 16% during the second quarter of 2025 compared to the second quarter of 2024. The decrease is primarily due to a $585 thousand decrease from a discontinued contract with one customer in our Premium services, a $495 thousand decrease related to discontinued services with two customers in our Proactive services, partially offset by increased revenues from new and existing customers in the Precision Logistics segment. The decrease in revenue in our Authentication segment is primarily due to the divestiture of our Trust Codes Global business in December 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| <u>Gross Profit</u> | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** | **Three Months Ended<br> June 30,** |
|  | 2025 | 2025 | 2024 | 2024 |
|  |  | % of Revenue |  | % of Revenue |
| Precision Logistics | $1571 | 35% | $1997 | 38% |
| Authentication | 20 | 74% | 93 | 86% |
| Total Gross Profit | $1591 | 35% | $2090 | 39% |

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Gross profit for the three months ended June 30, 2025, was $1,591 thousand, compared to $2,090 thousand for the three months ended June 30, 2024. The resulting gross margin was 35% for the three months ended June 30, 2025, compared to 39% for the three months ended June 30, 2024. The gross profit decrease relates primarily to the decreased Premium services revenue which has higher margins, and the Authentication decrease from the divestiture of our Trust Codes Global business in December 2024. The Proactive services gross margin percentage improved in Q2 2025 compared to Q2 2024.

*<u>Segment Management and Technology</u>*

Segment management and technology expenses decreased by $597 thousand to $920 thousand for the three months ended June 30, 2025, compared to $1,517 thousand for the three months ended June 30, 2024. The decrease relates primarily to the divestiture of Trust Codes Global in December 2024, a decrease in management wages and severance expense, and the capitalization of development expense related to internally used software in our Precision Logistics segment.

 

*<u>General and Administrative Expenses</u>*

General and administrative expenses decreased by $178 thousand to $716 thousand for the three months ended June 30, 2025, compared to $894 thousand for the three months ended June 30, 2024. The decrease relates primarily to a decrease in stock-based compensation from $358 thousand for the three months ended June 30, 2024 to $186 thousand for the three months ended June 30, 2025.

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*<u>Research and Development</u>*

Research and development expenses were $5 thousand for the three months ended June 30, 2025, and 2024, respectively.

*<u>Sales and Marketing</u>*

Sales and marketing expenses increased by $62 thousand to $272 thousand for the three months ended June 30, 2025, compared to $210 thousand for the three months ended June 30, 2024. The increase is primarily related to a one-time reduction in stock compensation in Precision Logistics for the three months ended June 30, 2024. This improvement was partially offset by a decrease in headcount and travel expense in the Authentication segment.

*<u>Interest Income(Expense), net</u>*

 

Interest income, net was $32 thousand for the three months ended June 30, 2025, compared to interest expense, net of $42 thousand for the three months ended June 30, 2024. This decrease primarily relates to the repayment of the Term Note in the first quarter of 2025, reducing the interest expense as well as the increase in interest income from the Company's investment of proceeds from the warrants exercise in January 2025.

*<u>Net Loss</u>*

Consolidated net loss for the three months ended June 30, 2025, and 2024 was $291 thousand and $346 thousand, respectively. The decreased loss relates primarily to the improvement in loss before other expense noted above, partially offset by the fair value gain on contingent consideration for the three months ended June 2024. The resulting consolidated loss per share for the three months ended June 30, 2025, and three months ended June 30, 2024, was $0.02 and $0.03 per basic and diluted share, respectively.

**Comparison of the six months ended June 30, 2025, and 2024**

The following discussion analyzes our results of operations for the six months ended June 30, 2025, and 2024.

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| | | |
|:---|:---|:---|
| <u>Revenue</u> | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | 2025 | 2024 |
| Precision Logistics | $8922 | $10858 |
| Authentication | 53 | 253 |
| Total Revenue | $8975 | $11111 |

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Consolidated revenue decreased $2,136 thousand for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The decrease is primarily due to the decreased demand across several of our Proactive services customers, one customer's shift to use their cold chain strategy, and a discontinued contract with one customer in our Premium services. The decrease in revenue in our Authentication segment is primarily due to the divestiture of our Trust Codes Global business in December 2024.

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| | | | | |
|:---|:---|:---|:---|:---|
| <u>Gross Profit</u> | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** | **Six Months Ended<br> June 30,** |
|  | 2025 | 2025 | 2024 | 2024 |
|  |  | % of Revenue |  | % of Revenue |
| Precision Logistics | $3041 | 34% | $4126 | 38% |
| Authentication | 40 | 75% | 224 | 89% |
| Total Gross Profit | $3081 | 34% | $4350 | 39% |

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Gross profit for the six months ended June 30, 2025, was $3,081 thousand, compared to $4,350 thousand for the six months ended June 30, 2024. The resulting gross margin was 34% for the six months ended June 30, 2025, compared to 39% for the six months ended June 30, 2024. The gross profit decrease relates to the decrease in Premium services revenue which has higher margins than Proactive services, and the decrease in Authentication revenue from the divestiture of our Trust Codes Global business in December 2024. Our Proactive services gross margin percentage improved in 2025 compared to 2024.

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*<u>Segment Management and Technology</u>*

 

Segment management and technology expenses decreased by $1,014 thousand to $1,846 thousand for the six months ended June 30, 2025, compared to $2,860 thousand for the six months ended June 30, 2024. The decrease relates primarily to the divestiture of Trust Codes Global in December 2024 and gain on derecognized liability in our Authentication segment and a decrease in management wages and severance expense in our Precision Logistics segment.

*<u>General and Administrative Expenses</u>*

General and administrative expenses decreased by $443 thousand to $1,572 thousand for the six months ended June 30, 2025, compared to $2,015 thousand for the six months ended June 30, 2024. The decrease relates primarily to a decrease in stock-based compensation from $724 thousand for the six months ended June 30, 2024 to $418 thousand for the six months ended June 30, 2025.

*<u>Research and Development</u>*

Research and development expenses were $10 thousand and $60 thousand for the six months ended June 30, 2025, and 2024, respectively.

*<u>Sales and Marketing</u>*

Sales and marketing expenses decreased by $30 thousand to $568 thousand for the six months ended June 30, 2025, compared to $598 thousand for the six months ended June 30, 2024. The decrease is primarily related to a reduction in employees and consultants in our Authentication segment partially offset by an increase in employees in our Precision Logistics segment and a one-time reduction in stock compensation in 2024.

*<u>Interest Income(Expense), net</u>*

 

Interest income was $54 thousand for the six months ended June 30, 2025, compared to interest expense of $80 thousand for the six months ended June 30, 2024. This decrease primarily relates to the repayment of the Term Note in the first quarter of 2025 reducing interest expense as well as the increase in interest income from the Company's investment of the proceeds from the warrants exercise in January 2025.

*<u>Net Loss</u>*

Consolidated net loss for the six months ended June 30, 2025, and 2024 was $862 thousand and $899 thousand, respectively. The decreased loss relates primarily to the improvement in loss before other expense noted above, partially offset by the fair value gain on contingent consideration for the six months ended June 30, 2024. The resulting consolidated loss per share for the six months ended June 30, 2025, and six months ended June 30, 2024, was $0.07 and $0.09 per basic and diluted share, respectively.

**Liquidity and Capital Resources**

Our operations provided $306 thousand of cash during the six months ended June 30, 2025, compared to $312 thousand during the comparable period in 2024.

Cash used by investing activities was $332 thousand during the six months ended June 30, 2025, compared to $191 thousand during the six months ended June 30, 2024. The increase in spend in investing activities relates primarily to increased capitalized software costs in the six months ended June 30, 2025.

Cash provided by financing activities during the six months ended June 30, 2025, was $3,270 thousand compared to cash used in financing activities during the six months ended June 30, 2024 of $313 thousand. The increased cash primarily relates to proceeds from the exercise of warrants, partially offset by the repurchase of shares under the repurchase program and repayment of the Term Note during the six months ended June 30, 2025.

On January 13, 2025, we entered into an Inducement Letter Agreement with an institutional investor and holder of existing warrants to purchase up to 1,461,896 shares of our common stock for $4.7 million in gross proceeds. The existing warrants were originally issued on April 14, 2022, with an exercise price of $3.215 per share, and became exercisable six months following issuance. Pursuant to the Inducement Letter Agreement, the holder agreed to exercise the existing warrants for cash at the exercise price of $3.215 per share in consideration for our agreement to issue a new unregistered warrant to purchase up to an aggregate of 1,461,896 shares of common stock at an exercise price of $4.00 per share. The new warrant was immediately exercisable upon issuance and has a term of five and one-half years from the issuance date.

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The Company recognized the fair value of the new warrants, calculated using the Black-Scholes option pricing model, as $3,971 thousand. The transaction was treated as an equity issuance, and the fair value of the new warrants was recorded in additional paid-in capital. Direct transaction costs totaling approximately $352 thousand, including legal fees and placement agent commissions, were also recorded as a reduction to additional paid-in capital.

On March 6, 2025, the Company entered into an ATM with Roth pursuant to which the Company may issue and sell, from time to time, shares of its common stock up to an aggregate offering price of $15.8 million. Roth acts as the sales agent and is entitled to a 3.0% commission on gross proceeds from sales under the program.

In connection with the ATM, we incurred direct legal and audit fees totaling $150 thousand. These costs have been recorded as deferred offering costs within other current assets and will be reclassified to additional paid-in capital and amortized over a period of one year once shares are issued. Deferred offering costs will be assessed for recoverability at each reporting period. If management determines that the ATM program is not probable to be utilized, the deferred costs will be expensed to general and administrative expenses.

During the six months ended June 30, 2025, and as of the date of this filing, we have not sold any shares of common stock through the ATM.

On September 22, 2022, we entered into the PNC Facility with PNC Bank, National Association. The PNC Facility includes a $1 million RLOC. The RLOC has no scheduled payments of principal until maturity, and bears interest per annum at a rate equal to the sum of Daily SOFR plus 2.85% with monthly interest payments. The RLOC is guaranteed by the Company and secured by the assets of PeriShip Global and the Company. As of June 30, 2025, $0 was outstanding on the RLOC.

The PNC Facility included a four-year Term Note for $2 million which matured in September of 2026 and required equal quarterly payments of principal and interest. The Term Note incurred interest per annum at a rate equal to the sum of Daily SOFR plus 3.1%. The PNC Facility is guaranteed by VerifyMe and secured by the assets of PeriShip Global and VerifyMe. As of January 21, 2025, the Term Note was paid in full and no future principal payments are due.

We believe that our cash and cash equivalents will fund our operations beyond the next 12 months. We may issue additional debt or equity as we grow our business which we expect to grow organically, and if the opportunity arises, through key acquisitions that will help accelerate the growth of our business.

**Off-Balance Sheet Arrangements**

None.

**Critical Accounting Policies and Estimates**

None.

**<u>Recently Adopted Accounting Pronouncements</u>** 

Recently adopted accounting pronouncements are discussed in Note 1 – Summary of Significant Accounting Policies in the notes accompanying the financial statements.

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**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.**

Not Applicable.

**ITEM 4. CONTROLS AND PROCEDURES.**

**(a) Evaluation of Disclosure Controls and Procedures**

Our disclosure controls and procedures are designed to ensure information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. The Company's Chief Executive Officer, our principal executive officer, and Chief Financial Officer, our principal financial officer, have evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of June 30, 2025, the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2025, our disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

**(b) Changes in Internal Control over Financial Reporting**

There have been no other changes in our internal controls over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the three months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS.**

None.

**ITEM 1A. RISK FACTORS.** 

For a discussion of the Company's potential risks or uncertainties, please see "Part I—Item 1A—Risk Factors" and "Part II—Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC, and "Part I—Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations" herein. There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent Quarterly Reports on Form 10-Q, except as noted herein.

***We are not currently in compliance with the Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq's listing requirements, our common stock will be delisted, which would negatively impact our common stock's market price and liquidity and reduce our ability to raise capital.***

 ****

On April 3, 2025, we received a deficiency letter from Nasdaq notifying us that, because the bid price of our common stock closed below $1.00 per share for 30 consecutive business days, we were no longer in compliance with the Nasdaq's Minimum Bid Price Rule, which is a requirement for continued listing on Nasdaq.

We cannot assure you that we will be able to regain compliance with the Minimum Bid Price Rule and maintain compliance with Nasdaq's other continued listing standards. Accordingly, our common stock could be delisted from Nasdaq. We and holders of our common stock could be materially adversely impacted if our common stock is delisted from Nasdaq. In particular:

● we may be unable to raise equity capital on acceptable terms or at all;

● we may lose the confidence of our business partners, which would jeopardize our ability to continue our business as currently conducted;

● the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;

● holders may be unable to sell or purchase our common stock when they wish to do so;

● we may become subject to stockholder litigation;

● we may lose the interest of institutional investors in our common stock;

● we may lose media and analyst coverage;

● our common stock could be considered a "penny stock," which would likely limit the level of trading activity in the secondary market for our common stock; and

● we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

On June 30, 2025, the Company issued 60,000 shares of common stock for services rendered to the Company pursuant to a Consulting Agreement between the Company and Pentant LLC, effective November 15, 2023, as amended June 30, 2024 (the "Consulting Agreement"). The securities issued pursuant to the Consulting Agreement were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.

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**Share Repurchase Plan**

**ISSUER PURCHASES OF EQUITY SECURITIES**

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| | | | | |
|:---|:---|:---|:---|:---|
| **Period** | **Total Number of Shares <br> (or Units) Purchased** | **Average Price Paid per <br> Share (or Units)** | **Total Number of Shares <br> Purchased as Part of <br> Publicly Announced Plans <br> or Programs<sup>(1)</sup>** | **Approximate Dollar Value of Shares that <br> May Yet Be Purchased Under the Plans <br> or Programs<sup>(1)</sup> <br> (In thousands)** |
| 04/01/2025-04/30/2025 |  |  |  | $483 |
| 05/01/2025-05/31/2025 | 89992 | $0.74 | 89992 | $417 |
| 06/01/2025-06/30/2025 | 111494 | $0.78 | 111494 | $330 |
| Total | 201486 | $0.76 | 201486 | $330 |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) In December 2023, the Company's Board of Directors approved a share repurchase program to allow
the Company to spend up to $0.5 million to repurchase shares of its common stock so long as the price does not exceed $1.00 until December
14, 2024. On November 26, 2024, the Company approved an extension of the $0.5 million share repurchase program to repurchase shares of
the Company's common stock through December 31, 2025. The share repurchase program may be modified, suspended or discontinued at
the discretion of the Board at any time.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES.**

None.

**ITEM 4. MINE SAFETY DISCLOSURES.**

Not applicable.

**ITEM 5. OTHER INFORMATION.**

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**ITEM 6. EXHIBITS**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 3.1\* | [Amended and Restated Bylaws of VerifyMe, Inc., as amended through July 8, 2025.](ex3_1.htm) |
| 31.1\* | [Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31_1.htm) |
| 31.2\* | [Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31_2.htm) |
| 32.1\*\* | [Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32_1.htm) |
| 101.INS\* | XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |

---

\*Filed herewith

\*\*Furnished herewith

[**Table of Contents**](#toc)

**SIGNATURE**S

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.

---

| | |
|:---|:---|
|  | **VERIFYME, INC.** |
| Date: August 13, 2025 | <u>By: /s/ Adam Stedham</u> |
|  | Adam Stedham |
|  | Chief Executive Officer<br> and President<br>(Principal Executive Officer) |
| Date: August 13, 2025 | <u>By: /s/ Jennifer Cola</u> |
|  | Jennifer Cola |
|  | Chief Financial Officer<br> (Principal Financial Officer and Principal Accounting<br> Officer) |

---

## Exhibit 3.1

**Exhibit 3.1**

**AMENDED AND RESTATED**

**BYLAWS**

**OF**

**VERIFYME, INC. CORPORATION**

**I. REFERENCES TO CERTAIN TERMS AND CONSTRUCTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.01. <u>Certain References</u>. Any reference herein made to law shall be deemed to refer to the law of the State of Nevada, including any applicable provision of Chapter 78 of Title 7 of the Nevada Revised Statutes, or any successor statutes, as from time to time amended and in effect (sometimes referred to herein as the "<u>Nevada General Corporation Law</u>"). Any reference herein made to the Company's Articles shall be deemed to refer to its Articles of Incorporation and all amendments thereto as at any given time on file with the Nevada Secretary of State (any reference herein to that office being intended to include any successor to the incorporating and related functions being performed by that office at the date of the initial adoption of these Bylaws). Except as otherwise required by law, the term "stockholder" as used herein shall mean one who is a holder of record of shares of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.02. <u>Seniority</u>. The law and the Articles (in that order of precedence) shall in all respects be considered senior and superior to these Bylaws, with any inconsistency to be resolved in favor of the law and such Articles (in that order of precedence), and with these Bylaws to be deemed automatically amended from time to time to eliminate any such inconsistency which may then exist.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.03. <u>Computation of Time</u>. The time during which an act is required to be done, including the time for the giving of any required notice herein, shall be computed by excluding the first day or hour, as the case may be, and including the last day or hour.

**II. OFFICES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.01. <u>Principal Office</u>. The principal office or place of business of the Company in the State of Nevada shall be the registered office of the Company in the State of Nevada. The Company may change its registered office from time to time in accordance with the relevant provisions of the Nevada General Corporation Law. The Company may have such other offices, either within or without the State of Nevada, as the Board of Directors may designate or as the business of the Company may require from time to time.

**III. STOCKHOLDERS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.01. <u>Annual Stockholders Meeting</u>. An annual meeting of the stockholders shall be held on such date, at such time and place, either within or without the State of Nevada, as shall be fixed by the Board of Directors and stated in the notice of the meeting, at which meetings the stockholders shall elect members of the Board of Directors and transact such other business as may properly come before the meeting. The Board of Directors may, in its sole discretion and in compliance with applicable laws, determine that an annual meeting of stockholders shall not be held at any physical place, but instead may be held solely by means of remote communication equipment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.02. <u>Special Stockholders Meetings</u>. Subject to the rights of the holder of any series of preferred stock of the Company, unless otherwise prescribed by law or by the Articles, special meetings of the stockholders, for any purpose, may be called only by the Chief Executive Officer, the Chairman of the Board of Directors, or the President of the Company, and shall be called by the Chief Executive Officer, the President, or the Secretary of the Company upon a written request signed by a majority of members of the Board of Directors (whether or not there exists any vacancy in previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption). Any business to be transacted at a special meeting of stockholders must be confined to the purposes stated in the notice of the stockholders' meeting and to such additional matters as the Chairman of the meeting may rule to be relevant to such purposes. The Board of Directors shall designate the place for any meeting of stockholders, and if no designation is made, the stockholders' meeting shall take place at the principal office of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.03. <u>Notice of Stockholders Meetings</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Required Notice</u>. Except as otherwise allowed or required by law, written notice stating the place, day and hour of any annual or special stockholders meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting by or at the direction of the person or persons calling the meeting, to each stockholder entitled to vote at such meeting and to any other stockholder entitled to receive notice of the meeting by law or the Articles. Such notice may be given either personally or by sending a copy thereof through the mail, by private delivery service (including overnight courier), or by email transmission, charges prepaid, to each stockholder at his or her address as it appears on the records of the Company. If the notice is sent by mail, or by private delivery service, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or private delivery service for transmission to such person. If the notice is sent by email, and the Company is subject to the proxy rules of the Securities Exchange Commission, it shall comply with the rules regarding email delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Adjourned Meeting</u>. If any stockholders meeting is adjourned to a different date, time, or place, notice need not be given of the new date, time, and place, if the new date, time, and place are announced at the meeting at which the adjournment is taken. But if the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, then notice of the adjourned meeting shall be given to each stockholder of record entitled to such notice pursuant to Section 3.03(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Waiver of Notice</u>. Any stockholder may waive notice of a meeting (or any notice of any other action required to be given by the Nevada General Corporation Law, the Company's Articles, or these Bylaws), at any time before, during, or after the meeting or other action, by a writing signed by the stockholder entitled to the notice. Each such waiver shall be delivered to the Company for inclusion in the minutes or filing with the corporate records. Attendance of a stockholder at a meeting shall constitute a waiver of notice of the meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Contents of Notice</u>. The notice of each special stockholders meeting shall include a description of the purpose or purposes for which the meeting is called. Except as required by law or the Company's Articles, the notice of an annual stockholders meeting need not include a description of the purpose or purposes for which the meeting is called.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.04. <u>Fixing of Record Date</u>. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or in order to make a determination of stockholders for any other proper purpose, unless a period of more than 60 days or a period of less than 10 days is prescribed or fixed in the articles of incorporation, the directors may prescribe a period not exceeding 60 days before any meeting of the stockholders during which no transfer of stock on the books of the corporation may be made, or may fix, in advance, a record date not more than 60 or less than 10 days before the date of any such meeting as the date as of which stockholders entitled to notice of and to vote at such meetings must be determined. Only stockholders of record on that date are entitled to notice or to vote at such a meeting. If a record date is not fixed, the record date is at the close of business on the day before the day on which the first notice is given or, if notice is waived, at the close of business on the day before the meeting is held. In the case of determining stockholders entitled to consent to corporate action in writing without a meeting (which entitlement shall be limited as set forth in Section 3.15), the record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. In the case of determining stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the record date shall be not more than sixty (60) days prior to such action. If no record date is so fixed by the Board of Directors, the record date for the determination of stockholders shall be as provided in the Nevada General Corporation Law.

When a determination of stockholders entitled to notice of or to vote at any meeting of stockholders has been made as provided in this Section 3.04, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.05. <u>Stockholder Quorum and Voting Requirements</u>. Unless otherwise provided in the Articles, these Bylaws or as required by law:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) 33 1/3% of the shares entitled to vote, present in person or represented by proxy, shall constitute a quorum at a meeting of stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in all matters other than the election of directors, the affirmative vote of the majority of shares voting for or against the subject matter shall be at the act of the stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) a nominee for director shall be elected by a plurality of the votes cast at any meeting of stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) where a separate vote by a class or classes is required, a majority of the outstanding shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter and the affirmative vote of the majority of shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class.

Except as provided below, voting shall be by ballot on any question as to which a ballot vote is demanded prior to the time the voting begins by any person entitled to vote on such question; otherwise, a voice vote shall suffice. Unless otherwise provided in the Articles, all elections of directors shall be by written ballot. No ballot or change of vote shall be accepted after the polls have been declared closed following the ending of the announced time for voting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.06. <u>Proxies</u>. At any meeting of the stockholders, any stockholder may be represented and vote by a proxy or proxies appointed by an instrument in writing. In the event that any such instrument in writing shall designate two (2) or more persons to act as proxies, a majority of such persons present at the meeting, or, if only one shall be present, then that one shall have and may exercise all of the powers conferred by such written instrument upon all the persons so designated unless the instrument shall otherwise provide. No such proxy shall be valid after the expiration of six (6) months from the date of its execution, unless coupled with an interest or unless the person executing it specifies therein the length of time for which it is to continue in force, which in no case shall exceed seven (7) years from the date of its execution. Subject to the above, any proxy duly executed is not revoked and continues in full force and effect until an instrument revoking it or a duly executed proxy bearing a later date is filed with the Secretary of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.07. <u>Voting of Shares</u>. Unless otherwise provided in the Articles or the Nevada General Corporation Law, each outstanding share entitled to vote shall be entitled to one (1) vote upon each matter submitted to a vote at a meeting of stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.08. <u>Election Inspectors</u>. The Board of Directors, in advance of any meeting of the stockholders, may appoint an election inspector or inspectors to act at such meeting (and at any adjournment thereof). If an election inspector or inspectors are not so appointed, the chairman of the meeting may, or upon request of any person entitled to vote at the meeting will, make such appointment. If any person appointed as an inspector fails to appear or to act, a substitute may be appointed by the chairman of the meeting. If appointed, the election inspector or inspectors (acting through a majority of them if there be more than one) shall determine the number of shares outstanding, the authenticity, validity, and effect of proxies, the credentials of persons purporting to be stockholders or persons named or referred to in proxies, and the number of shares represented at the meeting in person and by proxy; shall receive and count votes, ballots, and consents and announce the results thereof; shall hear and determine all challenges and questions pertaining to proxies and voting; and, in general, shall perform such acts as may be proper to conduct elections and voting with complete fairness to all stockholders. No such election inspector need be a stockholder of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.09. <u>Organization and Conduct of Meetings</u>. Each meeting of the stockholders shall be called to order and thereafter chaired by the Chairman of the Board of Directors if there is one, or, if not, or if the Chairman of the Board of Directors is absent or so requests, then by the Chief Executive Officer or President, or if both the Chairman of the Board of Directors and the Chief Executive Officer or President are unavailable, then by such other officer of the Company or such stockholder as may be appointed by the Board of Directors. The Company's Secretary or in his or her absence, an Assistant Secretary shall act as secretary of each meeting of the stockholders. If neither the Secretary nor an Assistant Secretary is in attendance, the chairman of the meeting may appoint any person (whether a stockholder or not) to act as secretary for the meeting. After calling a meeting to order, the chairman thereof may require the registration of all stockholders intending to vote in person and the filing of all proxies with the election inspector or inspectors, if one or more have been appointed (or, if not, with the secretary of the meeting). After the announced time for such filing of proxies has ended, no further proxies or changes, substitutions, or revocations of proxies shall be accepted. If directors are to be elected, a tabulation of the proxies so filed will, if any person entitled to vote in such election so requests, be announced at the meeting (or adjournment thereof) prior to the closing of the election polls. Absent a showing of bad faith on his or her part, the chairman of a meeting will, among other things, have absolute authority to fix the period of time allowed for the registration of stockholders and the filing of proxies, to determine the order of business to be conducted at such meeting, and to establish reasonable rules for expediting the business of the meeting and preserving the orderly conduct thereof (including any informal, or question and answer portions thereof).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.10. <u>Stockholder Approval or Ratification</u>. The Board of Directors may submit any contract or act for approval or ratification of the stockholders at a duly constituted meeting of the stockholders. Except as otherwise determined by law, a ratification or validation of a corporate act is conclusive in the absence of actual fraud in the transaction. Ratification or validation must not be the exclusive means by which a corporate act may be ratified or validated and shall not be construed to limit the authority of the board of directors, the stockholders or the corporation to effect any lawful means of ratification or validation of a corporate act or correction of a record.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.11. <u>Informalities and Irregularities</u>. All informalities or irregularities in any call or notice of a meeting of the stockholders or in the areas of credentials, proxies, quorums, voting, and similar matters, shall be deemed waived if no objection is made at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.12. <u>Nomination of Directors</u>. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the Board of Directors may be made at any annual meeting of stockholders, or at any special meeting of the stockholders called for the purpose of electing one or more directors pursuant to Section 78.345 of the Nevada General Corporation Law: (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof); or (b) by any stockholder of the Company who, (i) is a stockholder of record on the date of the giving of the notice provided for in this Section 3.13 and on the record date for the determination of stockholders entitled to vote at such annual meeting, and (ii) who complies with the notice procedures set forth in this Section 3.13.

In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Company, as prescribed below.

No person shall be elected to the Board of Directors of the Company at an annual meeting of the stockholders unless, with respect to a person nominated by a stockholder of the Company, a written notice of nomination of such person by the stockholder was received by the Secretary of the Company not earlier than one hundred and twenty (120) days and not later than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting; <u>provided</u>, <u>however</u>, that in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs; and, in the case of a special meeting of the stockholders called for the purpose of electing directors pursuant to Section 78.345 of the Nevada General Corporation Law, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. In no event shall the public announcement of an adjournment or postponement of a meeting of stockholders commence a new time period for the giving of a stockholder's notice as described above.

To be in proper written form, a stockholder's notice to the Secretary must set forth: (a) as to each person whom the stockholder proposes to nominate for election as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by the person, and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and regulations promulgated thereunder; and (b) as to the stockholder giving the notice, (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice, and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected and the Company may require any proposed nominee to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company.

No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 3.13. If the chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

Notwithstanding compliance with the foregoing provisions, the Board of Directors shall not be obligated to include information as to any stockholder nominee for director in any proxy statement or other communication sent to stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.13. <u>Business at Stockholder Meetings</u>. No business may be transacted at an annual or special meeting of stockholders other than business that is: (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof); (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof); or (c) in the case of an annual meeting, otherwise properly brought before the meeting by any stockholder of the Company, (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 3.14 and on the record date for the determination of stockholders entitled to vote at such meeting, and (ii) who complies with the notice procedures set forth in this Section 3.14.

In addition to any other applicable requirements of law or the Articles, for business to be properly brought before an annual meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Company. To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Company not earlier than one hundred and twenty (120) days and not later than ninety (90) days prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that the annual meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the meeting was made, whichever first occurs. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholder's notice as described above.

To be in proper written form, a stockholder's notice to the Secretary with respect to any proposal (not involving the nomination of directors, which shall be brought in accordance with Article III, Section 3.13 of these Bylaws) to be brought before the annual meeting must set forth as to each such proposal: (a) the text of the proposal to be presented (including the text of any resolutions to be proposed for consideration by the stockholders), together with a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (b) the name and record address of such stockholder; (c) the class or series and number of shares of capital stock of the Company that are owned beneficially or of record by such stockholder; (d) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (e) a representation that such stockholder intends to appear in person or by proxy at the meeting to bring such business before the meeting.

No business may be conducted at an annual or special meeting of stockholders except business brought before the meeting in accordance with the procedures set forth in this Section 3.14, provided, however, that, once business has been properly brought before the meeting in accordance with such procedures, nothing in this Section 3.14 shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an annual or special meeting determines that business was not properly brought before such meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.14 <u>No Action by Written Consent</u>. If and so long as the Company shall be registered as a public company pursuant to the Exchange Act and subject to the reporting requirements of Section 12 of said Act, all action by holders of the Company's outstanding voting securities shall be taken at an annual or special meeting of the stockholders following notice as provided by law or in the Bylaws and stockholders of the Company shall not have the power to act by means of written consent.

**IV. BOARD OF DIRECTORS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.01. <u>General Powers</u>. The business and affairs of the Company shall be managed by or under the direction of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.02. <u>Number, Tenure, and Qualification of Directors</u>. The number of directors which shall constitute the full Board of Directors of the Company shall not be fewer than three (3) nor more than nine (9). The number of directors in office from time to time shall be within the limits specified above, except as prescribed initially in the Articles and thereafter as prescribed from time to time by resolution adopted by either the stockholders or by the Board of Directors. The Board of Directors shall have the power to increase or decrease its size within the aforesaid limits. Each director elected shall hold office for the term for which such director is elected and until such director's successor is elected and qualified or until such director's earlier death, resignation or removal. In accordance with the Company's Articles, at each annual meeting of stockholders, directors shall be elected for a term of office expiring at the next annual meeting of stockholders, or until such director's earlier death, resignation or removal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.03. <u>Regular Meetings of the Board of Directors</u>. A regular annual meeting of the Board of Directors is to be held as soon as practicable after the adjournment of each annual meeting of the stockholders, either at the place of the stockholders meeting or at such other place as the directors elected at the stockholders meeting may have been informed of at or prior to the time of their election. Additional regular meetings may be held at regular intervals at such places and at such times as the Board of Directors may determine.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.04. <u>Special Meetings of the Board of Directors</u>. Special meetings of the Board of Directors may be held whenever and wherever called for by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or the number of directors that would be required to constitute a quorum.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.05. <u>Notice of, and Waiver of Notice for, Directors Meetings</u>. No notice need be given of regular meetings of the Board of Directors. Notice of the time and place (but not necessarily the purpose or all of the purposes) of any special meeting shall be given to each director in person or by telephone or email. Notice to any director of any such special meeting shall be deemed given sufficiently in advance when: (a), if given by mail, the same is deposited in the United States mail at least four (4) days before the meeting date, with postage thereon prepaid; (b), if given by email, the same is transmitted at least 24 hours prior to the convening of the meeting; or (c), if personally delivered (including by overnight courier), the same is handed, or the substance thereof is communicated telephonically or electronically to the director or to an adult member of his or her office staff or household, at least 24 hours prior to the convening of the meeting. Any director may waive notice of any meeting and any adjournment thereof at any time before, during, or after it is held, as provided by law. Except as provided in the next sentence below, the waiver must be in writing, signed by the director entitled to the notice, and filed with the minutes or corporate records. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.06. <u>Director Quorum</u>. A majority of the total number of directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, unless the Articles requires a greater number. If there are less than three directors in office, the directors shall have the power to fill vacancies on the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.07. <u>Directors, Manner of Acting</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless the Articles or these Bylaws require a greater percentage and except as otherwise required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any or all directors may participate in a regular or special meeting by, or conduct the meeting through the use of, conference telephone or similar communications equipment by means of which all persons participating in the meeting may hear each other, in which case any required notice of such meeting may generally describe the arrangements (rather than or in addition to the place) for the holding thereof. A director participating in a meeting by this means is deemed to be present in person at the meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) A director who is present at a meeting of the Board of Directors or a committee of the Board of Directors when corporate action is taken is deemed to have assented to the action taken unless, (i) the director objects at the beginning of the meeting (or promptly upon his or her arrival) to holding it or transacting business at the meeting, or (ii) his or her dissent or abstention from the action taken is entered in the minutes of the meeting, The right of dissent or abstention is not available to a director who votes in favor of the action taken.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.08. <u>Director Action Without a Meeting</u>. Any action required or permitted to be taken by the Board of Directors at a meeting may be taken without a meeting if the action is taken by unanimous written consent of the Board of Directors as evidenced by one (1) or more written consents describing the action taken, signed, either manually or electronically including email consent, by each director and filed with the minutes or proceedings of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.09. <u>Removal of Directors by Stockholders</u>. Except as limited by the Articles or by law, a director may be removed by the stockholders only at an annual meeting of stockholders or at a special meeting of stockholders called for such purpose and otherwise in conformity with these Bylaws, and only by the affirmative vote of the holders of two-thirds of the voting power of all the shares entitled to vote at such meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.10. <u>Board of Director Vacancies</u>. Unless the Articles provide otherwise and except as otherwise provided by law, any vacancy or newly created directorship may be filled by a majority of the directors then in office (whether or not a quorum), or by a sole remaining director. Any director so chosen shall hold office for the unexpired portion of the term of the class of directors in which the new directorship was created or the vacancy occurred and until his or her successor shall have been elected and shall have been elected and qualified or until any such director's earlier death, resignation or removal.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11. <u>Director Compensation</u>. Unless otherwise provided in the Articles, by resolution of the Board of Directors, each director may be paid his or her expenses, if any, of attendance at each meeting of the Board of Directors or any committee thereof, and may be paid a stated fee for service as director or a fixed sum for attendance at each meeting of the Board of Directors or any committee thereof, or both. No such payment shall preclude any director from serving the Company in any capacity and receiving compensation therefor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12. <u>Director Committees</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Creation of Committees</u>. The Board of Directors may create one (1) or more committees and appoint members of the Board of Directors to serve on them. Except where a greater number is required by any applicable rules of a National Securities Exchange, each committee shall have one (1) or more members, who serve at the pleasure of the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Selection of Members</u>. The creation of a committee and appointment of members to it shall be approved by a majority of the directors in office when the action is taken. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Required Procedures</u>. Sections 4.03 through 4.08 of this Article IV, which govern meetings, action without meetings, notice and waiver of notice, and quorum and voting requirements of the Board of Directors, apply to committees and their members.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Authority</u>. Unless limited by the Articles and except to the extent limited by law, each committee may exercise those aspects of the authority of the Board of Directors which the Board of Directors confers upon such committee in the resolution creating the committee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13. <u>Director Resignations</u>. Any director or committee member may resign from his or her office at any time by written notice delivered to the Company as required by law. Any such resignation shall be effective upon its receipt unless some later time is therein fixed, and then from that time. The acceptance of a resignation shall not be required to make it effective.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14. <u>Interested Directors</u>. No contract or transaction between the Company and one or more of its directors or officers, or between the Company and any other company, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because such director's vote is counted for such purpose if: (a) the material facts as to such director's relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (b) the material facts as to such director's relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (c) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the stockholders. Interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

**V. OFFICERS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.01. <u>Executive Officers; Election; Qualifications; Term Of Office; Resignation; Removal; Vacancies</u>. The Board of Directors shall elect a Chief Executive Officer, a President, Chief Financial Officer, a Treasurer and a Secretary. The Board of Directors may also choose one or more executive officers, Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. Each such officer shall hold office until the first meeting of the Board of Directors after the annual meeting of stockholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Company. The Board of Directors may remove any officer with or without cause at any time, but such removal shall be without prejudice to the contractual rights of such officer, if any, with the Company. Any number of offices may be held by the same person. Any vacancy occurring in any office of the Company by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.02. <u>Duties</u>. The officers of this Company shall have and perform the powers and duties usually pertaining to their respective offices, the powers and duties prescribed by these bylaws, any additional powers and duties as may from time to time be prescribed by the Board of Directors and such other duties as delegated by the Chief Executive Officer including the following:

The Chief Executive Officer shall have general and active management of the business and affairs of the Company subject to the directions of the Board of Directors.

The President, if any, shall be the Chief Operating Officer and is responsible for the day-to-day activities of the Company and for the development, design, operation and improvement of its operations. He shall also perform such duties as are conferred upon him by the Chief Executive Officer of the Company and as may be prescribed by the Board of Directors.

The Chief Financial Officer shall keep correct and complete records of account, showing accurately at all times the financial condition of the Company and be primarily responsible for all filings with the Securities and Exchange Commission. He shall furnish at meetings of the Board of Directors, or whenever requested, a statement of the financial condition of the Company and shall perform such other duties as may be prescribed by the Board of Directors. In the absence of a resolution of the Board of Directors appointing a different officer, the Chief Financial Officer shall act when the Chief Executive Officer is unavailable.

The Secretary shall have custody of and maintain all of the corporate records except the financial records, shall record the minutes of all meetings of the shareholders and whenever else required by the Board of Directors and shall perform such other duties as may be prescribed by the Board of Directors.

The Treasurer shall be the legal custodian of all monies, notes, securities and other valuables that may from time to time come into the possession of the Company. He shall immediately deposit all funds of the Company coming into his hands in some reliable bank or other depositary to be designated by the Board of Directors and shall keep this bank account in the name of the Company.

**VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.01. <u>Certificates for Shares</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Content</u>. Certificates representing shares of the Company shall, at a minimum, state on their face the name of the issuing company and that it is formed under the laws of the State of Nevada, the name of the person to whom issued, and the number and class of shares and the designation of the series, if any, the certificate represents. Such certificates shall be signed (either manually or by facsimile to the extent allowable by law) by any of the Chairman of the Board of Directors (if any), the Chief Executive Officer, the President, or any Vice-President and by the Secretary or any assistant secretary or the Treasurer or any assistant treasurer of the Company, and may be sealed with a corporate seal or a facsimile thereof. Each certificate for shares shall be consecutively numbered or otherwise identified and shall exhibit such information as may be required by law. If a supply of unissued certificates bearing the facsimile signature of a person remains when that person ceases to hold the office of the Company indicated on such certificates or ceases to be the transfer agent or registrar of the Company, they may still be issued by the Company and countersigned, registered, issued, and delivered by the Company's transfer agent and/or registrar thereafter, as though such person had continued to hold the office indicated on such certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Legend as to Class or Series</u>. If the Company is authorized to issue different classes of shares or different series within a class, the powers, designations, preferences, and relative, participating, optional, or other special rights applicable to each class or series and the qualifications, limitations, or restrictions of such preference and/or rights shall be set forth in full or summarized on the front or back of each certificate as required by law. Alternatively, each certificate may state on its front or back that the Company shall furnish a stockholder this information on request and without charge.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Stockholder List</u>. The name and address of the person to whom shares are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Lost Certificates</u>. In the event of the loss, theft, or destruction of any certificate representing shares of the Company or of any predecessor company, the Company may issue (or, in the case of any such shares as to which a transfer agent and/or registrar have been appointed, may direct such transfer agent and/or registrar to countersign, register, and issue) a new certificate, and cause the same to be delivered to the registered owner of the shares represented thereby; provided that such owner shall have submitted such evidence showing the circumstances of the alleged loss, theft, or destruction, and his, her, or its ownership of the certificate, as the Company considers satisfactory, together with any other facts that the Company considers pertinent; and further provided that, if so required by the Company, the owner shall provide a bond or other indemnity in form and amount satisfactory to the Company (and to its transfer agent and/or registrar, if applicable).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.02. <u>Registration of the Transfer of Shares</u>. Transfers of shares of stock of the Company shall be made only on the stock transfer books of the Company by the holder of record thereof or by his or her legal representative or attorney in fact, who shall furnish proper evidence of authority to transfer to the Secretary, or a transfer agent, and upon surrender of the certificate or certificates for such shares properly endorsed and payment of all taxes thereon. The person in whose name shares of stock stand on the books of the Company shall be deemed the owner thereof for all purposes as regards the Company.

The Board of Directors may make such rules and regulations as it may deem expedient, not inconsistent with these Bylaws, concerning the issue, transfer and registration of certificates for stock of the Company. The Board of Directors may appoint, or authorize any officer or officers or any committee to appoint, one or more transfer clerks or one or more transfer agents and one or more registrars, and may require all certificates for stock to bear the signature or signatures of any of them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.03. <u>Shares Without Certificates</u>. The Board of Directors may authorize the issuance of uncertificated shares by the Company and may prescribe procedures for the issuance and registration of transfer thereof and with respect to such other matters as the Board of Directors shall deem necessary or appropriate.

**VII. DIVIDENDS AND DISTRIBUTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.01. <u>Distributions</u>. Subject to such restrictions or requirements as may be imposed by applicable law or the Company's Articles or as may otherwise be binding upon the Company, the Board of Directors may from time to time declare, and the Company may pay or make, dividends or other distributions to its stockholders.

**VIII. CORPORATE SEAL**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.01. <u>Corporate Seal</u>. The Board of Directors may provide for a corporate seal of the Company that shall have inscribed thereon any designation including the name of the Company, Nevada as the state of incorporation, the year of incorporation, and the words "Company Seal."

**IX. AMENDMENTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.01. <u>Amendments</u>. These Bylaws may be repealed, altered or amended, or new bylaws may be adopted by the affirmative vote of a majority of the Board of Directors. These Bylaws may also be repealed, altered or amended, or new bylaws may be adopted by the affirmative vote of a majority of the combined voting stock of the outstanding capital stock of the Company.

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

I, Adam Stedham, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of VerifyMe, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2025

---

| |
|:---|
| /s/ Adam Stedham |
| Adam Stedham<br> Chief Executive Officer and President<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

I, Jennifer Cola, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this quarterly report on Form 10-Q of VerifyMe, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 13, 2025

---

| |
|:---|
| /s/ Jennifer Cola |
| Jennifer Cola<br> Chief Financial Officer<br> (Principal Financial Officer and Principal Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,**

 **AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of VerifyMe, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof, I, Adam Stedham, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the quarterly report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

---

| |
|:---|
| /s/ Adam Stedham |
| Adam Stedham<br> Chief Executive Officer and President<br> (Principal Executive Officer) |

---

Date: August 13, 2025

In connection with the quarterly report of VerifyMe, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof, I, Jennifer Cola, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The information contained in the quarterly report fairly presents, in all material respects, the financial
condition and results of operations of the Company.

---

| |
|:---|
| /s/ Jennifer Cola |
| Jennifer Cola <br> Chief Financial Officer<br> (Principal Financial Officer and Principal Accounting Officer) |

---

Date: August 13, 2025

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to VerifyMe, Inc. and will be retained by VerifyMe, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.