- Quarterly revenue of $5.7
million in Q1 2023, compared to $0.2
million in Q1 2022
- Net loss of $1.6 million in Q1
2023, compared to a net loss of $1.4
million in Q1 2022
- Adjusted EBITDA(1) of ($0.5) million in Q1 2023, compared to
($1.1) million in Q1 2022
- Cash of $3.1 million as of
March 31, 2023
LAKE
MARY, Fla., May 11, 2023
/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 and
monitoring, authentication, and data-rich consumer engagement
services, announced today the Company's financial results for its
first quarter ended March 31, 2023
("Q1 2023").
Key Financial Highlights for Q1 2023:
- Quarterly consolidated revenue of $5.7
million for the three months ended March 31, 2023, an increase of 3,416% compared to
$0.2 million for the three months
ended March 31, 2022, primarily
attributable to the acquisition of the PeriShip Global business in
April 2022
- Gross profit of $1.8 million or
31% for the three months ended March 31,
2023, compared to $0.1 million
or 76% for the three months ended March 31,
2022
- Net loss of $1.6 million or
($0.17) per diluted share for the
three months ended March 31, 2023,
compared to a net loss of $1.4
million or ($0.19) per diluted
share for the three months ended March 31,
2022
- Adjusted net loss per diluted share(1) of
($0.11) and ($0.17), for the three months ended March 31, 2023, and March
31, 2022, respectively after adjusting for severance expense
and acquisition-related costs
- Adjusted EBITDA(1) of ($0.5) million in Q1 2023, compared to
($1.1) million in Q1 2022
- Cash of $3.1 million as of
March 31, 2023
(1)
|
Adjusted net loss per
diluted share and EBITDA are non-GAAP financial measures. See "Use
of Non-GAAP Financial Measures" below for information about these
non-GAAP measures. A reconciliation to the most directly comparable
GAAP measure, net income (loss), and net loss per diluted share
respectively are included as a schedule to this release.
|
Scott Greenberg, VerifyMe's
Interim CEO and Executive Chairman stated, "While our results
continue to improve with the addition of our acquisitions, we have
begun to combine our sales and marketing efforts of our legacy
technology with PeriShip Global and Trust Codes Global which we
believe will enhance our performance and provide an improved
overall technology solution. The business is historically seasonal
with the first and second quarters having lower revenue. We
believe when accounting for this seasonality and the changes we
have made, we are still projecting to meet our goals for 2023."
Recent Business Highlights
- Began integrating sales force and marketing campaign of our
legacy technology with PeriShip Global and Trust Codes Global
- Addressed the Codex Committee on Food Import and Export
Inspection and Certification Systems (CCFICS) alongside a member of
the FDA to discuss traceability, the impact of GS1 digital link and
the commercial and strategic advantages of supply chain
transparency
- Development and deployment of PeriShip Global's operational
portal mobile App to enhance customer accessibility and visibility
of real time shipments in transit
Financial Results for the Three Months Ended March 31, 2023:
Revenue for the three months ended March
31, 2023, was $5.7 million, a
3,416% increase as compared to $0.2
million for the three months ended March 31, 2022. The increase in revenue was
primarily attributable to the acquisition of the PeriShip Global
business in April 2022, which
accounted for 96% of the revenue for the quarter.
Gross profit for the three months ended March 31, 2023, was $1.8
million, compared to $0.1
million for the three months ended March 31, 2022. The resulting gross margin
percentage was 31% for the three months ended March 31, 2023, compared to 76% for the three
months ended March 31, 2022,
principally due to the lower margins of PeriShip Global.
Operating loss for the three months ended March 31, 2023, was $1.5
million, a decrease of $0.2
million compared to $1.7
million for the three months ended March 31, 2022. The decreased loss is primarily
related to the increased gross profit attributable to the
acquisition of PeriShip Global, partially offset by the additional
operating expenses from the acquisition of PeriShip Global, the
acquisition costs of the Trust Codes Global business as well as
severance expense of approximately $0.3
million.
Our net loss for the three months ended March 31, 2023, was $1.6
million, compared to $1.4
million for the three months ended March 31, 2022. The resulting loss per share for
the three months ended March 31,
2023, was ($0.17) per diluted
share, compared to ($0.19) for
the three months ended March 31,
2022. After accounting for special items, which are
set forth in the Non-GAAP Reconciliation – Adjusted EPS below,
Adjusted EPS was ($0.11) for the
first quarter of 2023 compared to ($0.17) for the first quarter of 2022.
Adjusted EBITDA for the three months ended March 31, 2023, was ($0.5)
million, an improvement of $0.6
million, compared to ($1.1)
million for the three months ended March 31, 2022. 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 March 31, 2023, VerifyMe had a
$3.1 million cash balance and
$2.1 million in working capital.
At March 31, 2023, VerifyMe had
9,696,989 shares issued and 9,348,914 shares outstanding.
Earnings Call
The Company has scheduled an earnings
conference call and webcast for 11:00 a.m. ET on Thursday May 11, 2023. 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=JHi3fIjP 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/10178804/f96850b0f8.
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 software driven logistics provider of high-touch,
end-to-end logistics management. We provide logistics management
from a sophisticated IT platform with proprietary databases,
package and flight-tracking software, weather, and flight status
monitoring systems, as well as dynamic dashboards with real-time
visibility into shipment transit and last-mile events. In addition,
VerifyMe and Trust Codes Global provide brand protection and
consumer engagement solutions allowing brand owners to gather
business intelligence. To learn more, visit
https://www.verifyme.com.
Cautionary Note Regarding Forward-Looking
Statements
This release contains forward-looking statements
regarding revenue opportunities, recurring revenue,
commercialization efforts, our sales pipeline and opportunities,
and the acquisition of the business and assets of PeriShip, LLC and
Trust Codes Global Limited. The words "believe," "may,"
"anticipate," "intend," "should," "plan," "could," "continue,"
"potential," "to be," "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 our engagement
in future acquisitions or strategic partnerships that increase our
capital requirements or cause us to incur debt or assume contingent
liabilities, the successful integration of our acquisitions
(including the assets of PeriShip Global and Trust Codes Global),
our reliance on one key strategic partner for shipping services in
our PeriShip Global Solutions 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, our ability to manage our growth
effectively, the small number of customers that account for our
revenue, 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, risks related to deriving revenue from some
clients in the cannabis industry, 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. 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 (loss) gain on
equity investment 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.
Adjusted Net Loss per Diluted Share ("Adjusted EPS"), which is a
non-GAAP financial measure, is defined as loss per diluted share
excluding severance expense and one-time professional expenses for
acquisitions. Management uses Adjusted EPS to assess total Company
operating performance on a consistent basis. We believe that
this non-GAAP financial measure, when considered together with our
GAAP financial results, provides management and investors with an
additional understanding of our business operating results,
including underlying trends.
A reconciliation of EBITDA, Adjusted EBITDA and Adjusted EPS to
the most comparable financial measure, net income (loss),
calculated in accordance with GAAP is included in a schedule to
this press release. The Company believes that providing the
non-GAAP financial measures, 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.
VerifyMe, Inc.
Consolidated
Balance Sheets
(In thousands, except share data)
|
|
|
|
As of
|
|
|
March 31,
2023
|
|
|
December 31,
2022
|
|
ASSETS
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, including restricted cash
|
|
$
|
3,085
|
|
|
$
|
3,411
|
|
Accounts receivable,
net of allowance for credit loss reserve, $33 and $37 as of March
31, 2023 and December 31, 2022, respectively
|
|
|
1,703
|
|
|
|
4,448
|
|
Unbilled
revenue
|
|
|
697
|
|
|
|
1,185
|
|
Prepaid expenses and
other current assets
|
|
|
367
|
|
|
|
333
|
|
Inventory
|
|
|
54
|
|
|
|
81
|
|
TOTAL CURRENT
ASSETS
|
|
|
5,906
|
|
|
|
9,458
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT,
NET
|
|
$
|
292
|
|
|
|
292
|
|
|
|
|
|
|
|
|
|
|
RIGHT OF USE
ASSET
|
|
|
603
|
|
|
|
469
|
|
|
|
|
|
|
|
|
|
|
INTANGIBLE ASSETS,
NET
|
|
|
7,079
|
|
|
|
6,412
|
|
|
|
|
|
|
|
|
|
|
GOODWILL
|
|
|
5,371
|
|
|
|
3,988
|
|
|
|
|
|
|
|
|
|
|
DEFERRED IMPLEMENTATION
COSTS
|
|
|
160
|
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
$
|
19,411
|
|
|
$
|
20,752
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Current portion of
debt
|
|
$
|
1,000
|
|
|
$
|
500
|
|
Accounts
payable
|
|
|
1,578
|
|
|
|
3,912
|
|
Other accrued
expense
|
|
|
891
|
|
|
|
902
|
|
Lease liability-
current
|
|
|
167
|
|
|
|
115
|
|
Contingent
liability-short term
|
|
|
173
|
|
|
|
-
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
3,809
|
|
|
|
5,429
|
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
Contingent
liability-long term
|
|
$
|
952
|
|
|
$
|
-
|
|
Long-term lease
liability
|
|
|
434
|
|
|
|
359
|
|
Long-term derivative
liability
|
|
|
4
|
|
|
|
3
|
|
Term note
|
|
|
1,250
|
|
|
|
1,375
|
|
TOTAL
LIABILITIES
|
|
$
|
6,449
|
|
|
$
|
7,166
|
|
|
|
|
|
|
|
|
|
|
Series A Convertible
Preferred Stock, $.001 par value, 37,564,767 shares authorized; 0
shares issued and outstanding as of March 31, 2023 and December 31,
2022, respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Series B Convertible
Preferred Stock, $.001 par value; 85 shares authorized; 0.85 shares
issued and outstanding as of March 31, 2023 and December 31, 2022,
respectively
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.001 par value; 675,000,000 authorized; 9,696,989 and
9,341,002 issued, 9,348,914 and 8,951,035 shares outstanding
as of March 31, 2023 and December 31, 2022, respectively
|
|
|
10
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Additional paid in
capital
|
|
|
93,790
|
|
|
|
92,987
|
|
|
|
|
|
|
|
|
|
|
Treasury stock as cost;
348,075 and 389,967 shares at March 31, 2023 and December 31, 2022,
respectively
|
|
|
(793)
|
|
|
|
(949)
|
|
|
|
|
|
|
|
|
|
|
Accumulated other
comprehensive loss
|
|
|
(6)
|
|
|
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Accumulated
deficit
|
|
|
(80,039)
|
|
|
|
(78,459)
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
12,962
|
|
|
|
13,586
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
19,411
|
|
|
$
|
20,752
|
|
VerifyMe,
Inc.
Consolidated
Statements of Operations
(Unaudited)
(In thousands, except share data)
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2023
|
|
|
March 31,
2022
|
|
|
|
|
|
|
|
|
|
|
NET REVENUE
|
|
$
|
5,661
|
|
|
$
|
161
|
|
|
|
|
|
|
|
|
|
|
COST OF
REVENUE
|
|
|
3,907
|
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT
|
|
|
1,754
|
|
|
|
123
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
General and
administrative (a)
|
|
|
2,756
|
|
|
|
1,465
|
|
Research and
development
|
|
|
8
|
|
|
|
9
|
|
Sales and marketing
(a)
|
|
|
494
|
|
|
|
299
|
|
Total Operating
expenses
|
|
|
3,258
|
|
|
|
1,773
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE OTHER
(EXPENSE) INCOME
|
|
|
(1,504)
|
|
|
|
(1,650)
|
|
|
|
|
|
|
|
|
|
|
OTHER (EXPENSE)
INCOME
|
|
|
|
|
|
|
|
|
Interest (expense)
income, net
|
|
|
(42)
|
|
|
|
1
|
|
Unrealized (loss) gain
on equity investment
|
|
|
(32)
|
|
|
|
252
|
|
Other (expense) income,
net
|
|
|
(2)
|
|
|
|
3
|
|
TOTAL OTHER INCOME
(EXPENSE), NET
|
|
|
(76)
|
|
|
|
256
|
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$
|
(1,580)
|
|
|
$
|
(1,394)
|
|
LOSS PER
SHARE
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
(0.17)
|
|
|
|
(0.19)
|
|
DILUTED
|
|
|
(0.17)
|
|
|
|
(0.19)
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE COMMON
SHARE OUTSTANDING
|
|
|
|
|
|
|
|
|
BASIC
|
|
|
9,332,553
|
|
|
|
7,179,395
|
|
DILUTED
|
|
|
9,332,553
|
|
|
|
7,179,395
|
|
|
|
(a)
|
Includes share-based
compensation of $286 thousand for the three months ended March 31,
2023, and $429 thousand for the three months ended March 31,
2022.
|
VerifyMe, Inc.
Consolidated
EBITDA and Adjusted EBITDA Reconciliation Table (Unaudited)
(In thousands)
|
|
|
|
|
|
Three Months
Ended
March 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Net loss
(GAAP)
|
|
|
|
$
|
(1,580)
|
|
|
$
|
(1,394)
|
Interest expense
(income), net
|
|
|
|
|
42
|
|
|
|
(1)
|
Amortization and
depreciation
|
|
|
|
|
282
|
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
Total EBITDA
(Non-GAAP)
|
|
|
|
|
(1,256)
|
|
|
|
(1,360)
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based
compensation
|
|
|
|
|
22
|
|
|
|
87
|
Fair value of
restricted stock and restricted stock units issued in exchange for
services
|
|
|
|
|
152
|
|
|
|
342
|
Severance
expense
|
|
|
|
|
303
|
|
|
|
-
|
Unrealized loss (gain)
on equity investment
|
|
|
|
|
32
|
|
|
|
(252)
|
One-time professional
expenses for acquisitions
|
|
|
|
|
278
|
|
|
|
125
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted
EBITDA (Non-GAAP)
|
|
|
|
$
|
(469)
|
|
|
$
|
(1,058)
|
Consolidated
EPS and Adjusted EPS Reconciliation
Table
(Unaudited)
|
|
|
Three
Months Ended
March 31
|
|
|
|
|
|
2023
|
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
Loss per share
(GAAP)
|
|
|
|
$
|
(0.17)
|
|
|
$
|
(0.19)
|
Severance expense, per
share
|
|
|
|
|
0.03
|
|
|
|
-
|
One-time professional
expenses for acquisitions, per share
|
|
|
|
|
0.03
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
|
Total Adjusted EPS
(Non-GAAP)
|
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.17)
|
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SOURCE VerifyMe, Inc.