- Quarterly revenue of $5.4
million in Q2 2024, compared to $5.3
million in Q2 2023
- Gross Profit of $2.1 million
or 39% in Q2 2024, compared to $1.6
million or 30% in Q2 2023, an increase of 32%
- Net loss of ($0.3) million in
Q2 2024, compared to a net loss of ($0.9)
million in Q2 2023
- Adjusted EBITDA(1) of $0.2
million in Q2 2024, compared to Adjusted EBITDA loss of
($0.4) million in Q2 2023
LAKE
MARY, Fla., Aug. 13,
2024 /PRNewswire/ -- VerifyMe, Inc. (NASDAQ: VRME)
together with its subsidiaries, Trust Codes Global Limited ("Trust
Codes Global") and PeriShip Global LLC ("PeriShip Global"),
(together "VerifyMe," "we," "our," or the "Company") provides brand
owners time and temperature sensitive logistics, supply chain
traceability, authentication, anti-counterfeiting, and data-rich
brand enhancement services, announced today the Company's financial
results for its second quarter ended June
30, 2024 ("Q2 2024").
Adam Stedham, VerifyMe's CEO and President stated, "The
Company reported second quarter positive adjusted EBITDA and
continues to project a positive adjusted EBITDA for the full year
of 2024.(2) We continue to believe the regulatory
environment impacting VerifyMe and the overall authentication
industry can significantly enhance our long-term prospects. In
addition, we have made significant progress towards formalizing an
agreement of our desired relationship with Amazon. Although the
length and time commitment of this process has been larger than
anticipated, we look forward to updating shareholders further in
the near future."
Key Financial Highlights for Q2 2024:
- Quarterly consolidated revenue of $5.4
million in Q2 2024, compared to $5.3
million for the three months ended June 30, 2023 ("Q2 2023")
- Gross profit of $2.1 million or
39% in Q2 2024, compared to $1.6
million or 30% in Q2 2023
- Net loss of ($0.3) million or
($0.03) per diluted share in Q2 2024,
compared to a net loss of ($0.9)
million or ($0.09) per diluted
share in Q2 2023
- Adjusted EBITDA(1) of $0.2 million in Q2 2024, compared to Adjusted
EBITDA loss of ($0.4) million in Q2
2023
- Cash of $2.9 million as of
June 30, 2024
__________
(1) Adjusted EBITDA is
a non-GAAP financial measure. See "Use of Non-GAAP Financial
Measures" below for information about this non-GAAP measure. A
reconciliation to the most directly comparable GAAP measure, net
loss, is included as a schedule to this release.
|
(2) Projections are
based on Company estimates as of August 13, 2024, and are provided
solely for illustrative purposes. Actual results may vary. The
Company undertakes no obligation to update this information. For
forward-looking Adjusted EBITDA, a reconciliation to its nearest
GAAP measure, net income (loss) is unavailable on a forward
-looking basis without unreasonable effort due to the components of
the GAAP-measure that are indeterminable as of the date of this
press release.
|
Financial Results for the Three Months Ended June 30, 2024:
Revenue in Q2 2024 was $5.4
million, compared to $5.3
million in Q2 2023. Revenue for the quarter remained flat in
our Precision Logistics segment and Authentication segment. The
Precision Logistics segment accounted for 98% of the revenue for
the quarter.
Gross profit in Q2 2024 was $2.1
million, compared to $1.6
million in Q2 2023. The resulting gross margin percentage
was 39% for the three months ended June 30,
2024, compared to 30% for the three months ended
June 30, 2023. The increase in gross
margin was principally due to process improvements and increased
premium services revenue in the Precision Logistics segment which
has higher margins.
Operating loss in Q2 2024 was ($0.5)
million, compared to ($1.0)
million in Q2 2023. The improvement is primarily due to
increased gross profit.
Our net loss in Q2 2024 was ($0.3)
million, compared to net loss of ($0.9) million in Q2 2023. The resulting loss per
diluted share in Q2 2024 was ($0.03),
compared to loss per diluted share of ($0.09) in Q2 2023.
Adjusted EBITDA in Q2 2024 was $0.2
million, an increase of $0.6
million, compared to an adjusted EBITDA loss of ($0.4) million in Q2 2023. Adjusted EBITDA is a
non-GAAP financial measure. Please see "Use of Non-GAAP Financial
Measures" for a discussion of this non-GAAP measure. A
reconciliation to the most directly comparable GAAP measure, net
loss is included as a schedule to this release.
At June 30, 2024, VerifyMe had a
$2.9 million cash balance and
$2.2 million in working capital.
At June 30, 2024, VerifyMe had
10,655,065 shares issued and 10,384,698 shares outstanding.
Earnings Call
The Company has scheduled an earnings conference call and
webcast for 11:00 a.m. ET on Tuesday
August 13, 2024. Prepared remarks regarding the company's
financial and operational results will be followed by a question
and answer period with VerifyMe's executive team. The
conference call may be accessed via webcast at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=yGVd0i6O or
by calling +1 (844) 282-4569 within the US, or +1 (412) 317-5614
internationally, and requesting the "VerifyMe Call." The
presentation slides broadcast via the webcast will also be
available on the Investors section of the VerifyMe website the
morning of the call. Participants must be logged in via telephone
to submit a question to management during the call. Participants
may optionally pre-register for the conference call and webcast
at: https://dpregister.com/sreg/10191314/fd2b3ba86c.
The webcast and presentation will be archived on the Investors
section of VerifyMe's website and will remain available for 90
days.
About VerifyMe, Inc.
VerifyMe, Inc. (NASDAQ: VRME),
together with its subsidiaries, PeriShip Global and Trust Codes
Global, is a traceability and customer support services provider
using specialized software and process technology. The company
operates a Precision Logistics Segment and an Authentication
Segment to provide specialized logistics for
time-and-temperature sensitive products, as well as item level
traceability, anti-diversion and anti-counterfeit protection, brand
protection and enhancement technology solutions. VerifyMe serves
customers worldwide. To learn more, visit
https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking
Statements
This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. The words "believe," "may," "will," "continues," "can,"
"project," and similar expressions, as they relate to us, are
intended to identify forward-looking statements. We have based
these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition, results
of operations, business strategy and financial needs. Important
factors that could cause actual results to differ from those in the
forward-looking statements include our engagement in future
acquisitions or strategic partnerships that increase our capital
requirements or cause us to incur debt or assume contingent
liabilities, our reliance on one key strategic partner for shipping
services in our Precision Logistics segment, competition including
by our key strategic partner, seasonal trends in our business,
severe climate conditions, the highly competitive nature of the
industry in which we operate, our brand image and corporate
reputation, impairments related to our goodwill and other
intangible assets, economic and other factors such as recessions,
downturns in the economy, inflation, global uncertainty and
instability, the effects of pandemics, changes in United States social, political, and
regulatory conditions and/or a disruption of financial markets,
reduced freight volumes due to economic conditions, reduced
discretionary spending in a recessionary environment, global
supply-chain delays or shortages, fluctuations in labor costs, raw
materials, and changes in the availability of key suppliers, our
history of losses, our ability to use our net operating losses to
offset future taxable income, the confusion of our name brand with
other brands, the ability of our technology to work as anticipated
and to successfully provide analytics logistics management, the
ability of our strategic partners to integrate our solutions into
their product offerings, our ability to manage our growth
effectively, our ability to successfully develop and expand our
sales and marketing capabilities, risks related to doing business
outside of the U.S., intellectual property litigation, our ability
to successfully develop, implement, maintain, upgrade, enhance, and
protect our information technology systems, our reliance on
third-party information technology service providers, our ability
to respond to evolving laws related to information technology such
as privacy laws, our ability to retain key management personnel,
our ability to work with partners in selling our technologies to
businesses, production difficulties, our inability to enter into
contracts and arrangements with future partners, our ability to
acquire new customers, issues which may affect the reluctance of
large companies to change their purchasing of products, acceptance
of our technologies and the efficiency of our authenticators in the
field, our ability to comply with the continued listing standards
of the Nasdaq Capital Market, and our ability to timely pay amounts
due and comply with the covenants under our debt facilities. These
risk factors and uncertainties include those more fully described
in VerifyMe's Annual Report and Quarterly Reports filed with the
Securities and Exchange Commission, including under the heading
entitled "Risk Factors." Should one or more of these risks or
uncertainties materialize, or should any of our underlying
assumptions prove incorrect, actual results may vary materially
from those currently anticipated. Any forward-looking statement
made by us herein speaks only as of the date on which it is made.
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 any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
Use of Non-GAAP Financial Measures
This press release
includes both financial measures in accordance with U.S. generally
accepted accounting principles ("GAAP"), as well as non-GAAP
financial measures. Generally, a non-GAAP financial measure is a
numerical measure of a company's performance, financial position or
cash flows that either excludes or includes amounts that are not
normally included or excluded in the most directly comparable
measure calculated and presented in accordance with GAAP. Non-GAAP
financial measures should be viewed as supplemental to and should
not be considered as alternatives to any other GAAP financial
measures. They may not be indicative of the historical operating
results of VerifyMe nor are they intended to be predictive of
potential future results. Investors should not consider non-GAAP
financial measures in isolation or as substitutes for performance
measures calculated in accordance with GAAP.
VerifyMe's management uses and relies on EBITDA and Adjusted
EBITDA, which are non-GAAP financial measures. The Company believes
that both management and shareholders benefit from referring to
EBITDA and Adjusted EBITDA in planning, forecasting and analyzing
future periods. Additionally, the Company believes Adjusted EBITDA
is useful to investors to evaluate its results because it excludes
certain items that are not directly related to the Company's core
operating performance. In particular, with regard to our comparison
of Adjusted EBITDA for the three and six months ended June 30, 2024, to the three and six months ended
June 30, 2023, we believe is useful
to investors in understanding the results of operations. The
Company's management uses these non-GAAP financial measures in
evaluating its financial and operational decision making and as a
means to evaluate period-to-period comparison. The Company's
management recognizes that EBITDA and Adjusted EBITDA, as non-GAAP
financial measures, have inherent limitations because of the
described excluded items.
The Company defines EBITDA as net income (loss) before interest
expense, income tax expense (benefit), and depreciation and
amortization. Adjusted EBITDA represents EBITDA plus non-cash stock
compensation expense, severance expense, unrealized (gain) loss on
equity investment, impairments, change in fair value of contingent
consideration and one-time professional expenses for acquisitions.
VerifyMe believes EBITDA and Adjusted EBITDA are important measures
of VerifyMe's operating performance because they allow management,
investors and analysts to evaluate and assess VerifyMe's core
operating results from period-to-period after removing the impact
of items of a non-operational nature that affect comparability.
A reconciliation of EBITDA and Adjusted EBITDA to the most
comparable financial measure, net loss, calculated in accordance
with GAAP is included in a schedule to this press release. The
Company believes that providing the non-GAAP financial measure,
together with the reconciliation to GAAP, helps investors make
comparisons between VerifyMe and other companies. In making any
comparisons to other companies, investors need to be aware that
companies use different non-GAAP measures to evaluate their
financial performance. Investors should pay close attention to the
specific definition being used and to the reconciliation between
such measure and the corresponding GAAP measure provided by each
company under applicable SEC rules as the presentation here may not
be comparable to other similarly titled measures of other
companies.
Consolidated Balance
Sheets
|
|
(In thousands, except
share data)
|
|
|
|
|
|
As of
|
|
|
|
June 30,
2024
|
|
|
December 31,
2023
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents including restricted cash
|
|
$
|
2,900
|
|
|
$
|
3,095
|
|
Accounts receivable,
net of allowance for credit loss reserve, $156 and $165 as
of June 30, 2024 and December 31, 2023, respectively
|
|
|
1,214
|
|
|
|
3,017
|
|
Unbilled
revenue
|
|
|
751
|
|
|
|
1,282
|
|
Prepaid expenses and
other current assets
|
|
|
210
|
|
|
|
254
|
|
Inventory
|
|
|
23
|
|
|
|
38
|
|
TOTAL CURRENT
ASSETS
|
|
|
5,098
|
|
|
|
7,686
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
$
|
184
|
|
|
$
|
240
|
|
|
|
|
|
|
|
|
|
|
RIGHT OF USE
ASSET
|
|
|
378
|
|
|
|
468
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
|
|
6,539
|
|
|
|
6,927
|
|
|
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
5,334
|
|
|
|
5,384
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
17,533
|
|
|
$
|
20,705
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Term note,
current
|
|
$
|
500
|
|
|
$
|
500
|
|
Accounts
payable
|
|
|
1,331
|
|
|
|
3,310
|
|
Other accrued
expense
|
|
|
808
|
|
|
|
988
|
|
Lease liability-
current
|
|
|
165
|
|
|
|
170
|
|
Contingent liability-
current
|
|
|
123
|
|
|
|
173
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
2,927
|
|
|
|
5,141
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
Contingent liability,
non-current
|
|
$
|
401
|
|
|
$
|
751
|
|
Long-term lease
liability
|
|
|
223
|
|
|
|
307
|
|
Term note
|
|
|
625
|
|
|
|
875
|
|
Convertible Note –
related party
|
|
|
475
|
|
|
|
475
|
|
Convertible
Note
|
|
|
625
|
|
|
|
625
|
|
TOTAL
LIABILITIES
|
|
$
|
5,276
|
|
|
$
|
8,174
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Series A Convertible
Preferred Stock, $.001 par value, 37,564,767 shares
authorized; 0 shares issued and outstanding as of June 30, 2024 and
December
31, 2023, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Series B Convertible
Preferred Stock, $.001 par value; 85 shares authorized;
0.85 shares issued and outstanding as of June 30, 2024 and December
31, 2023,
respectively
|
|
|
-
|
|
|
|
-
|
|
Common
stock, $0.001 par value; 675,000,000 authorized; 10,655,065
and 10,453,315
issued, 10,384,698 and 10,123,964 shares outstanding as of June 30,
2024 and December
31, 2023, respectively
|
|
|
11
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Additional paid in
capital
|
|
|
95,504
|
|
|
|
95,031
|
|
|
|
|
|
|
|
|
|
|
Treasury stock at cost;
270,367 and 329,351 shares at June 30, 2024 and December 31,
2023, respectively
|
|
|
(464)
|
|
|
|
(659)
|
|
|
|
|
|
|
|
|
|
|
Accumulated
deficit
|
|
|
(82,748)
|
|
|
|
(81,849)
|
|
|
|
|
|
|
|
|
|
|
Accumulated other
comprehensive loss
|
|
|
(46)
|
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
12,257
|
|
|
|
12,531
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
17,533
|
|
|
$
|
20,705
|
|
VerifyMe,
Inc.
|
|
Consolidated Statements
of Operations
|
|
(Unaudited)
|
|
(In thousands, except
share data)
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
|
June 30,
2024
|
|
|
June 30,
2023
|
|
|
June 30,
2024
|
|
|
June 30,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET REVENUE
|
|
$
|
5,352
|
|
|
$
|
5,335
|
|
|
$
|
11,111
|
|
|
$
|
10,996
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE(a)
|
|
|
3,262
|
|
|
|
3,749
|
|
|
|
6,761
|
|
|
|
7,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
2,090
|
|
|
|
1,586
|
|
|
|
4,350
|
|
|
|
3,107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment management
and
Technology(a)
|
|
|
1,517
|
|
|
|
1,251
|
|
|
|
2,860
|
|
|
|
2,356
|
|
General and
administrative (a)
|
|
|
894
|
|
|
|
836
|
|
|
|
2,015
|
|
|
|
2,249
|
|
Research and
development
|
|
|
5
|
|
|
|
10
|
|
|
|
60
|
|
|
|
18
|
|
Sales and marketing
(a)
|
|
|
210
|
|
|
|
527
|
|
|
|
598
|
|
|
|
1,026
|
|
Total Operating
expenses
|
|
|
2,626
|
|
|
|
2,624
|
|
|
|
5,533
|
|
|
|
5,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE OTHER
INCOME
(EXPENSE)
|
|
|
(536)
|
|
|
|
(1,038)
|
|
|
|
(1,183)
|
|
|
|
(2,542)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses,
net
|
|
|
(42)
|
|
|
|
(46)
|
|
|
|
(80)
|
|
|
|
(88)
|
|
Unrealized gain (loss)
on equity
investment
|
|
|
-
|
|
|
|
30
|
|
|
|
-
|
|
|
|
(2)
|
|
Change in fair value
of
contingent consideration
|
|
|
232
|
|
|
|
172
|
|
|
|
364
|
|
|
|
172
|
|
Other expense,
net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2)
|
|
TOTAL OTHER INCOME
(EXPENSE), NET
|
|
|
190
|
|
|
|
156
|
|
|
|
284
|
|
|
|
80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(346)
|
|
|
$
|
(882)
|
|
|
$
|
(899)
|
|
|
$
|
(2,462)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER
SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
(0.03)
|
|
|
|
(0.09)
|
|
|
|
(0.09)
|
|
|
|
(0.26)
|
|
DILUTED
|
|
|
(0.03)
|
|
|
|
(0.09)
|
|
|
|
(0.09)
|
|
|
|
(0.26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
COMMON SHARE
OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
10,238,717
|
|
|
|
9,765,452
|
|
|
|
10,156,081
|
|
|
|
9,614,183
|
|
DILUTED
|
|
|
10,238,717
|
|
|
|
9,765,452
|
|
|
|
10,156,081
|
|
|
|
9,614,183
|
|
|
|
(a)
|
Includes share-based
compensation of $239 thousand and $697 thousand for the three and
six months ended June 30, 2024,
respectively, and $315 thousand and $601 thousand for the three and
six months ended June 30, 2023 respectively.
|
VerifyMe,
Inc.
|
Consolidated EBITDA and
Adjusted EBITDA Reconciliation Table (Unaudited)
|
(In
thousands)
|
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
|
|
2023
|
|
|
|
2024
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
(GAAP)
|
|
$
|
(346)
|
|
|
$
|
(882)
|
|
|
$
|
(899)
|
|
|
$
|
(2,462)
|
Interest expense,
net
|
|
|
42
|
|
|
|
46
|
|
|
|
80
|
|
|
|
88
|
Amortization and
depreciation
|
|
|
300
|
|
|
|
258
|
|
|
|
599
|
|
|
|
540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
(Non-GAAP)
|
|
|
(4)
|
|
|
|
(578)
|
|
|
|
(220)
|
|
|
|
(1,834)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
|
43
|
|
|
|
19
|
|
|
|
89
|
|
|
|
41
|
Fair value of
restricted stock and restricted stock units issued in exchange
for services
|
|
|
196
|
|
|
|
296
|
|
|
|
608
|
|
|
|
448
|
Severance
|
|
|
141
|
|
|
|
29
|
|
|
|
141
|
|
|
|
332
|
Unrealized (gain) loss
on equity investment
|
|
|
-
|
|
|
|
(30)
|
|
|
|
-
|
|
|
|
2
|
Change in fair value of
contingent consideration
|
|
|
(232)
|
|
|
|
(172)
|
|
|
|
(364)
|
|
|
|
(172)
|
Impairments
|
|
|
9
|
|
|
|
34
|
|
|
|
13
|
|
|
|
34
|
One-time professional
expenses for acquisitions
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted
EBITDA (Non-GAAP)
|
|
$
|
153
|
|
|
$
|
(402)
|
|
|
$
|
267
|
|
|
$
|
(871)
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/verifyme-reports-second-quarter-2024-financial-results-302220249.html
SOURCE VerifyMe, Inc.