SYS-CON MEDIA Authors: Pat Romanski, Elizabeth White, Yeshim Deniz, Gary Arora, Zakia Bouachraoui

News Feed Item

VerifyMe Reports 2017 Financial Results and Provides Corporate Overview and Business Outlook

Company turnaround well underway with several key agreements signed with major corporations, creating pathway for revenue growth during FY18

ROCHESTER, N.Y., April 17, 2018 /PRNewswire/ -- VerifyMe, Inc. (OTCQB: VRME), a technology solutions company that markets proprietary products that provide identifiers and serialization for authenticating, tracking and tracing functions for labels, packaging, products, people and financial transactions, announced Fiscal Year 2017 results and that the going concern paragraph has been removed from its audit opinion contained in its filing of Form 10-K for the year ended December 31, 2017.

VerifyMe, Inc. is a pioneer in patented physical, cyber and biometric technologies that prevent identity theft, counterfeiting and fraud. (PRNewsfoto/VerifyMe, Inc.)

"Having the going concern issue removed from our audit opinion for the first time in the company's history is a significant accomplishment further affirming VerifyMe's successful transformation to a well-funded technology service provider," noted Patrick White, Chief Executive Officer. "Having the stigma of the going concern opinion removed restores confidence, not only in our stockholders, but also in the capital markets, customers and investing public in general.  The Board is committed to maintain a solid financial foundation.  We remain absolutely focused in executing our long-term strategy to grow the Company," further remarked Mr. White.

Recent Highlights (subsequent to the end of Fiscal Year 2017)

  • Signed technology licensing agreement with a NASDAQ listed leading global label solution provider;
  • Appointed Mr. Carl E. Berg, a renowned investor and businessman to the board of directors;
  • Appointed Mr. Jay Cardwell as the Company's Chief Financial Officer;
  • Announced reseller agreement with NYSE listed Micro Focus for global product authentication software cloud services;
  • Entered into a global strategic sales, marketing and support partnership with S-One Labels & Packaging, a division of S-One Holdings Corporation;
  • Signed Technology Licensing Agreement with Intelligent RFID Packaging Solutions Provider eAgile

Fiscal Year 2017 Highlights

  • Entered into a major, global 5-year contract with HP Indigo in September 2017, which enables HP Indigo to enable its worldwide 6000 model machines to print with VerifyMe's RainbowSecure inks
  • Restructuring and recapitalization plan implemented with substantial cash invested by newly appointed members of the Company's board of directors
  • Appointment of Patrick White as President and Chief Executive Officer, former American Bank Note executive officer, Keith Goldstein as Chief Operating Officer and Sandy Fliderman as Chief Technology Officer.
  • Our financial statements are no longer subject to a 'Going Concern' opinion for the first time in seven years; due to a strengthening of the Company's current balance sheet.

Financial Highlights

  • Operating expenses lower by 24.3% compared to Fiscal Year 2016;
  • Operating losses for Fiscal Year 2017 was $2.8 million compared to $3.7 million for Fiscal Year 2016;
  • Cash balance at the end of December 2017 was $693,001 compared to $22,644 at the end of Fiscal Year 2016; (April 16th, 2018 cash position = $2.3 million)
  • Year over year Non-GAAP Adjusted EBITDA improves 38%

Management Discussion

Patrick White, President and Chief Executive Officer of VerifyMe, stated, "Fiscal 2017 was a pivotal year for the company, as we expanded our board by adding highly successful, experienced and seasoned businessmen and added new executives, including myself which improved the financial and operational structures of our organization. I am pleased to report that during Fiscal Year 2017 we were able to make significant improvements to the company's financials as we reduced our liabilities and increased our cash position.  These activities coupled with the multi-billion-dollar authentication industry opportunity has created the foundation to put the company on a growth track for years to come. The most significant accomplishment of the year was that we were able to secure a 5-year contract with HP Indigo to include our RainbowSecure ink technologies in HP Indigo's digital printing machines. This will allow HP Indigo's 6000 model owners to seamlessly incorporate authentication measures on printed labels and packaging for brand owners.  One of our biggest challenges was that HP is a global company and VerifyMe therefore needs to sell, service and support a global clientele.  This was achieved with our recently announced marketing, sales and support contract with S-One corporation.  They will market and handle all of the necessary needs of our global new client base on our behalf."

Mr. White concluded, "While we still have lots more to do, I am pleased with the accomplishments we secured in a short amount of time since I joined last summer. The HP Indigo contract has literally opened the door for VerifyMe in several instances and the proof is seen in the several key relationships we recently announced.  I am also pleased with the progress in our digital biometric development and believe the Company has a viable future ahead in the biometric "people verification" segment. Various opportunities have presented themselves and we are in the midst of filling our sales pipeline with deal flow, which is at various stages – both on the physical and digital/biometrics sides of the business. Given the deal flow we've recently achieved, we expect revenue to commence ramping up during the second half of fiscal 2018. We expect HP to begin the global product rollout later this year as well as the S-One global marketing process.  Both initiatives should enhance our product reach 10-fold.  Our business sales cycle is long, but it will be expedited with the help and support of HP and S-One.  In the coming months, investors should expect to see VerifyMe achieve a number of value-driving milestones and I look forward to sharing these developments with our shareholders as they transpire."

Printing Technology Milestones:

  • HP/S-One Global Sales and Marketing Rollout of our RainbowSecure™ Technology
  • New Licensee Announcements with Major Brand Owners and Integrators
  • First Revenue Generation

Digital Technology Milestones:

  • New Installations of VerifyMe Multi-Factor Authentication Systems
  • New Licensee Announcements with Secure Data/Financial Transaction Systems
  • First Revenue Generation

The following table presents a reconciliation of Net Loss to Adjusted EBITDA, a Non-GAAP financial measure:



Year Ended
December 31,





2017



2016







Net Loss

$

(3,123,929)


$

(1,603,185)

Interest

$

218,316


$

12,871

Amortization and Depreciation:

$

43,095


$

30,199







Stock based compensation

$

139,808



-

Fair Value of options issued in exchange for services

$

1,295,741


$

1,405,877

Fair value of restricted stock issued in exchange for services

$

66,825



-

Common stock and warrants issued for services

$

297,807


$

20,775

Loss on conversion of related party notes payable and accrued interest

$

331,912



-

Change in fair value of warrant liability


-


$

(1,407,631)

Change in fair value of embedded derivative liability


-


$

(698,303)

Amortization of deferred compensation




$

683,251

Total Adjusted EBITDA (Non-GAAP)

$

(991,836)


$

(1,599,216)

This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as a non-GAAP financial measure. 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. The non-GAAP financial measure should be viewed as supplemental to, and should not be considered as alternatives to net income, operating income, and cash flow from operating activities, liquidity or any other 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 the non-GAAP financial measure in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Our management uses and relies on Adjusted EBITDA which is a non-GAAP financial measure. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measure in planning, forecasting and analyzing future periods. Our management uses this non-GAAP financial measure in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison.  Our management recognizes that the non-GAAP financial measure has inherent limitations because of the excluded items described in the table above.

VerifyMe defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table above. VerifyMe excludes these expenses because they are non-cash or non-recurring in nature.

We have included a reconciliation of our non-GAAP financial measure to the most comparable financial measure calculated in accordance with GAAP. We believe 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.

About VerifyMe, Inc.

VerifyMe, Inc., is a technology solutions company that markets proprietary products that provide identifiers and serialization for authenticating, tracking and tracing functions for labels, packaging, products, people and financial transactions. VerifyMe's physical technology authenticates packaging, labels & documents with a suite of proprietary security inks and pigments. The company's digital technologies authenticate people by performing strong, multi-factor verification via its patented digital software platforms. To learn more, visit www.verifyme.com

Forward Looking Statements

Certain statements in this press release include forward-looking statements including statements regarding our growth track, our expected revenues, milestones, the HP Indigo global product rollout, beginning the S-One global marketing and our position in the biometric identification market. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" 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 the risk factors contained in our Form 10-K which we filed on April 16, 2018. 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.

For Licensing or other information contact:

Company: VerifyMe, Inc.
Email: [email protected]
Website:  http://www.verifyme.com

For investors contact:
Lytham Partners
Adam Lowensteiner or Robert Blum
646-829-9700 – New York
602-889-9700 - Phoenix
[email protected]

 

VerifyMe, Inc.

Balance Sheets




Year Ended




December 31, 2017



December 31, 2016
















ASSETS














CURRENT ASSETS







Cash and cash equivalents


$

693,001



$

22,644


Prepaid expenses and other current assets



18,668




9,425


Inventory



-




17,093


TOTAL CURRENT ASSETS



711,669




49,162











OTHER ASSETS









Patents and Trademarks, net of accumulated amortization of $237,331 and $194,236 as of December 31, 2017 and December 31, 2016



191,507




231,952











TOTAL ASSETS


$

903,176



$

281,114











LIABILITIES AND STOCKHOLDERS' DEFICIT


















CURRENT LIABILITIES









Accounts payable and accrued expenses


$

923,202



$

867,436


Notes payable net of discount of $0 and $60,931, as of December 31, 2017 and December 31, 2016



50,000




68,069


Common stock payable – related party



122,478






Embedded derivative liability



-




228,718


Warrant liability



-




394,744


TOTAL CURRENT LIABILITIES



1,095,680




1,558,967











STOCKHOLDERS' DEFICIT









Series A Convertible Preferred Stock, $.001 par value, 37,564,767 shares authorized; 324,778 shares issued and outstanding as of December 31, 2017 and 397,778 shares issued and outstanding as of December 31, 2016



325




398











Series B Convertible Preferred Stock, $.001 par value; 85 shares authorized; 0.92 shares issued and outstanding as of December 31, 2017 and December 31, 2016



-




-











Series C Convertible Preferred Stock, $.001 par value; 7,500,000 shares authorized, 0 shares issued and outstanding as of December 31, 2017 and 1,912,500 issued and outstanding as of December 31, 2016



-




1,913











Series D Convertible Preferred Stock, $.001 par value; 6,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2017 and 166,750 issued and outstanding as of December 31, 2016



-




167











Common stock of $.001 par value; 675,000,000 authorized; 53,873,872 and 8,681,236 issued, 53,523,332 and 8,330,696 shares outstanding as of December 31, 2017 and December 31, 2016



53,522




8,331











Additional paid in capital



56,198,126




40,469,272











Treasury stock at cost (350,540 shares at December 31, 2017 and December 31, 2016)



(113,389)




(113,389)











Accumulated deficit



(56,331,088)




(41,644,545)











STOCKHOLDERS' DEFICIT



(192,504)




(1,277,853)











TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT


$

903,176



$

281,114


 

VerifyMe, Inc.

Statements of Operations




Year Ended




December 31,
2017



December 31,
2016
















NET REVENUE







Sales


$

-



$

37,055


TOTAL NET REVENUE



-




37,055











COST OF SALES



-




24,363











GROSS PROFIT



-




12,692











OPERATING EXPENSES









General and administrative (a)



1,689,883




1,010,648


Legal and accounting



246,520




414,032


Payroll expenses (a)



767,257




1,789,303


Research and development



128,044




250,180


Sales and marketing



3,800




282,867


Total Operating expenses



2,835,504




3,747,030











LOSS BEFORE OTHER INCOME (EXPENSE)



(2,835,504)




(3,734,338)











OTHER (EXPENSE) INCOME









Interest expenses



(218,316)




(12,871)


Loss on settlement of related party notes payable



(331,912)




-


Other income



392




-


Loss on disposition of fixed assets



-




(4,981)


Change in fair value of warrants



-




3,357,149


Change in fair value of embedded derivative liability



-




698,303


Fair value of warrants in excess of consideration for convertible preferred stock



-




(1,949,517)





(549,836)




2,088,083











NET LOSS


$

(3,385,340)



$

(1,646,255)











Deemed dividend on convertible preferred shares



(596,878)




-











NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS


$

(3,982,218)



$

(1,646,255)











LOSS PER SHARE









BASIC


$

(0.14)



$

(0.24)


DILUTED


$

(0.14)



$

(0.24)











WEIGHTED AVERAGE COMMON SHARE OUTSTANDING









BASIC



28,244,361




6,860,955


DILUTED



28,244,361




6,860,955




(a)

Includes share based compensation of $1,800,181 and $1,405,877 for the years ended December 31, 2017 and 2016, respectively.

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/verifyme-reports-2017-financial-results-and-provides-corporate-overview-and-business-outlook-300631347.html

SOURCE VerifyMe, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Alan Hase is Vice President of Engineering and Chief Development Officer at Big Switch. Alan has more than 20 years of experience in the networking industry and leading global engineering teams which have delivered industry leading innovation in high end routing, security, fabric and wireless technologies. Alan joined Big Switch from Extreme Networks where he was responsible for product strategy for its secure campus switching, intelligent mobility and campus orchestration products. Prior to Ext...
In an age of borderless networks, security for the cloud and security for the corporate network can no longer be separated. Security teams are now presented with the challenge of monitoring and controlling access to these cloud environments, as they represent yet another frontier for cyber-attacks. Complete visibility has never been more important-or more difficult. Powered by AI, Darktrace's Enterprise Immune System technology is the only solution to offer real-time visibility and insight into ...
At CloudEXPO Silicon Valley, June 24-26, 2019, Digital Transformation (DX) is a major focus with expanded DevOpsSUMMIT and FinTechEXPO programs within the DXWorldEXPO agenda. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term. A total of 88% of Fortune 500 companies from a generation ago are now out of business. Only 12% still survive. Similar percentages are found throug...
Financial enterprises in New York City, London, Singapore, and other world financial capitals are embracing a new generation of smart, automated FinTech that eliminates many cumbersome, slow, and expensive intermediate processes from their businesses. Accordingly, attendees at the upcoming 23rd CloudEXPO, June 24-26, 2019 at Santa Clara Convention Center in Santa Clara, CA will find fresh new content in full new FinTech & Enterprise Blockchain track.
92% of enterprises are using the public cloud today. As a result, simply being in the cloud is no longer enough to remain competitive. The benefit of reduced costs has normalized while the market forces are demanding more innovation at faster release cycles. Enter Cloud Native! Cloud Native enables a microservices driven architecture. The shift from monolithic to microservices yields a lot of benefits - but if not done right - can quickly outweigh the benefits. The effort required in monitoring,...
As the digitization of business accelerates the move of critical applications and content to the cloud, the network has never been as critical to business success. Consuming everything ‘as-a-service' requires new levels of network automation, agility and security. Discover how Enterprises can take advantage of Digital Platforms, directly connecting to an extensive ecosystem of digital partners and flex their service at the click of a button.
In today's always-on world, customer expectations have changed. Competitive differentiation is delivered through rapid software innovations, the ability to respond to issues quickly and by releasing high-quality code with minimal interruptions. DevOps isn't some far off goal; it's methodologies and practices are a response to this demand. The demand to go faster. The demand for more uptime. The demand to innovate. In this keynote, we will cover the Nutanix Developer Stack. Built from the foundat...
Never mind that we might not know what the future holds for cryptocurrencies and how much values will fluctuate or even how the process of mining a coin could cost as much as the value of the coin itself - cryptocurrency mining is a hot industry and shows no signs of slowing down. However, energy consumption to mine cryptocurrency is one of the biggest issues facing this industry. Burning huge amounts of electricity isn't incidental to cryptocurrency, it's basically embedded in the core of "mini...
CloudEXPO has been the M&A capital for Cloud companies for more than a decade with memorable acquisition news stories which came out of CloudEXPO expo floor. DevOpsSUMMIT New York faculty member Greg Bledsoe shared his views on IBM's Red Hat acquisition live from NASDAQ floor. Acquisition news was announced during CloudEXPO New York which took place November 12-13, 2019 in New York City. Our Silicon Valley 2019 schedule will showcase 200 keynotes, sessions, general sessions, power panels, and...
The term "digital transformation" (DX) is being used by everyone for just about any company initiative that involves technology, the web, ecommerce, software, or even customer experience. While the term has certainly turned into a buzzword with a lot of hype, the transition to a more connected, digital world is real and comes with real challenges. In his opening keynote, Four Essentials To Become DX Hero Status Now, Jonathan Hoppe, Co-Founder and CTO of Total Uptime Technologies, shared that ...
Blockchain has shifted from hype to reality across many industries including Financial Services, Supply Chain, Retail, Healthcare and Government. While traditional tech and crypto organizations are generally male dominated, women have embraced blockchain technology from its inception. This is no more evident than at companies where women occupy many of the blockchain roles and leadership positions. Join this panel to hear three women in blockchain share their experience and their POV on the futu...
Concerns about security, downtime and latency, budgets, and general unfamiliarity with cloud technologies continue to create hesitation for many organizations that truly need to be developing a cloud strategy. Hybrid cloud solutions are helping to elevate those concerns by enabling the combination or orchestration of two or more platforms, including on-premise infrastructure, private clouds and/or third-party, public cloud services. This gives organizations more comfort to begin their digital tr...
In very short order, the term "Blockchain" has lost an incredible amount of meaning. With too many jumping on the bandwagon, the market is inundated with projects and use cases that miss the real potential of the technology. We have to begin removing Blockchain from the conversation and ground ourselves in the motivating principles of the technology itself; whether it is consumer privacy, data ownership, trust or even participation in the global economy, the world is faced with serious problems ...
Cloud Storage 2.0 has brought many innovations, including the availability of cloud storage services that are less expensive and much faster than previous generations of cloud storage. Cloud Storage 2.0 has also delivered new and faster methods for migrating your premises storage environment to the cloud and the concept of multi-cloud. This session will provide technical details on Cloud Storage 2.0 and the methods used to efficiently migrate from premises-to-cloud storage. This session will als...
For enterprises to maintain business competitiveness in the digital economy, IT modernization is required. And cloud, with its on-demand, elastic and scalable principles has resoundingly been identified as the infrastructure model capable of supporting fast-changing business requirements that enterprises are challenged with, as a result of our increasingly connected world. In fact, Gartner states that by 2022, 28% of enterprise IT spending will have shifted to cloud. But enterprises still must d...