UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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

For the transition period from to

Commission file number 001-39332

VERIFYME, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		23-3023677
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

Clinton Square, 75 S. Clinton Ave, Suite 510 Rochester, NY		14604
(Address of Principal Executive Offices)		(Zip Code)

(585) 736-9400
(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

Registered

Common Stock, par value $0.001 per share

VRME

The Nasdaq Capital Market

Warrants to Purchase Common Stock

VRMEW

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. Yes x No o

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 x No o

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	o	Accelerated filer	o

Non-accelerated filer	x	Smaller reporting company	x

Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 8,467,046 shares of common stock outstanding at May 6, 2022.

PART I - FINANCIAL INFORMATION

ITEM 1.	Financial Statements	4
Balance Sheets (Unaudited)		4
Statements of Operations (Unaudited)		5
Statements of Cash Flows (Unaudited)		6
Statements of Stockholders' Equity (Unaudited)		7
Notes to Financial Statements (Unaudited)		8
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	24
ITEM 4.	Controls and Procedures	24

PART II - OTHER INFORMATION
ITEM 1.	Legal Proceedings	25
ITEM 1A.	Risk Factors	25
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
ITEM 3.	Defaults Upon Senior Securities	26
ITEM 4.	Mine Safety Disclosures	26
ITEM 5.	Other Information	26
ITEM 6.	Exhibits	27
SIGNATURES		28


	As of
	March 31, 2022			December 31, 2021
ASSETS	(Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	8,433		$	9,422
Accounts Receivable		150			297
Prepaid expenses and other current assets		250			152
Short Term Investment		143			88
Inventory		78			52
TOTAL CURRENT ASSETS		9,054			10,011

INVESTMENTS
Equity Investment		11,162			10,964

PROPERTY AND EQUIPMENT
Equipment for lease, net of accumulated amortization of $117 and $102 as of March 31, 2022 and December 31, 2021, respectively		178			193
Office Equipment, net of accumulated amortization of $2 and $1 as of March 31, 2022 and December 31, 2021, respectively		10			11

INTANGIBLE ASSETS
Patents and Trademarks, net of accumulated amortization of $363 and $354 as of March 31, 2022 and December 31, 2021, respectively		368			353
Capitalized Software Costs, net of accumulated amortization of $60 and $50 as of March 31, 2022 and December 31, 2021, respectively		146			156
TOTAL ASSETS	$	20,918		$	21,688

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable and other accrued expenses	$	609		$	450
TOTAL CURRENT LIABILITIES		609			450

LONG-TERM LIABILITIES
Long Term Derivative Liability	$	126		$	71

TOTAL LIABILITIES	$	735		$	521

STOCKHOLDERS' EQUITY
Series A Convertible Preferred Stock, $.001 par value, 37,564,767 shares
authorized; 0 shares issued and outstanding as of March 31, 2022 and
0 shares issued and outstanding as of December 31, 2021		-			-

Series B Convertible Preferred Stock, $.001 par value; 85 shares
authorized; 0.85 shares issued and outstanding as of March 31, 2022 and		-			-
December 31, 2021, respectively

Common stock, $.001 par value; 675,000,000 authorized; 7,451,071 and 7,420,633 issued, 7,252,115 and 7,196,677 shares outstanding as of March 31, 2022 and December 31, 2021, respectively		7			7

Additional paid in capital		86,387			86,059

Treasury stock as cost; 198,956 and 223,956 shares at March 31, 2022 and December 31, 2021, respectively		(756	)		(838	)

Accumulated deficit		(65,455	)		(64,061	)

STOCKHOLDERS' EQUITY		20,183			21,167

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	20,918		$	21,688


	Three Months Ended
	March 31, 2022			March 31, 2021
NET REVENUE
Sales	$	161		$	188

COST OF SALES		38			43
GROSS PROFIT		123			145

OPERATING EXPENSES
General and administrative ^(a)		1,465			1,108
Research and development		9			5
Sales and marketing ^(a)		299			247
Total Operating expenses		1,773			1,360

LOSS BEFORE OTHER INCOME		(1,650	)		(1,215	)

OTHER INCOME, NET
Interest income, net		1			-
Fair value gain on equity investments		252			-
Other Income		3			-
TOTAL OTHER INCOME, NET		256			-

NET LOSS	$	(1,394	)	$	(1,215	)

LOSS PER SHARE
BASIC	$	(0.19	)	$	(0.19	)
DILUTED	$	(0.19	)	$	(0.19	)

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING
BASIC		7,179,395			6,561,222
DILUTED		7,179,395			6,561,222


	Series A				Series B
	Convertible				Convertible
	Preferred				Preferred				Common						Treasury
	Stock				Stock				Stock				Additional		Stock
	Number of				Number of				Number of				Paid-In		Number of					Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Shares		Amount			Deficit			Total

Balance at December 31, 2020		-		-		0.85		-		5,596,877		6		76,099		7,011		(113	)		(67,673	)		8,319
Fair value of stock options		-		-		-		-		-		-		85		-		-			-			85
Restricted stock awards		-		-		-		-		10,000		-		215		-		-			-			215
Restricted Stock Units		-		-		-		-		-		-		128		-		-			-			128
Common stock issued for services		-		-		-		-		2,165		-		10		-		-			-			10
Common stock issued for services related to Public Offering		-		-		-		-		1,750,000		1		8,446		-		-			-			8,447
Net loss		-		-		-		-		-		-		-		-		-			(1,215	)		(1,215	)
Balance at March 31, 2021		-		-		0.85		-		7,359,042		7		84,983		7,011		(113	)		(68,888	)		15,989

Amounts in Thousands ('000)
December 31, 2021:
	Amount ($)			Level 1 ($)		Level 2 ($)		Level 3 ($)
Short Term Investment		88			88		-		-
Equity Investment		10,964			-		-		10,964
Derivative Liability		(71	)		-		-		(71	)
March 31, 2022:
		Amount ($)			Level 1 ($)		Level 2 ($)		Level 3 ($)
Short Term Investment		143			143		-		-
Equity Investment		11,162			-		-		11,162
Derivative Liability		(126	)		-		-		(126	)


	Amounts in Thousands ('000)
	March 31, 2022		December 31, 2021
Total Assets	$	108,642	$	109,043
Total Liabilities		3,749		3,730
Mezzanine Equity and Stockholders' Deficit		104,893		105,313


	Amounts in Thousands ('000)
	Three Months Ended March 31,
	2022		2021
Operating Loss		430		-
Net Loss		420		-

		Options Outstanding
						Weighted -
						Average
						Remaining		Aggregate
				Weighted-		Contractual		Intrinsic
	Number of			Average		Term		Value
	Shares			Exercise Price		(in years)		(in thousands)⁽¹⁾
Balance as of December 31, 2021		465,471		$	4.38

Granted		-			-

Forfeited/Cancelled/Expired		(28,000	)		4.60

Balance as of March 31, 2022		437,471		$	4.37

Exercisable as of March 31, 2022		437,471		$	4.37		2.5	$	55

	Unvested Restricted Stock Awards
				Weighted -
				Average
	Number of			Grant
	Shares			Date Fair Value

Unvested at December 31, 2021		44,642			4.31

Granted		39,308			3.18

Vested		(37,142	)		4.33

Balance March 31, 2022		46,808		$	3.34

	Unvested Restricted Stock Units
				Weighted -
				Average
	Number of			Grant
	Shares			Date Fair Value
Unvested at December 31, 2021		187,010			4.11

Granted		157,232			3.18

Vested		(145,010	)		4.31

Balance March 31, 2022	$	199,232		$	3.60

	Unvested Performance Restricted Stock Units
			Weighted -
			Average
	Number of		Grant
	Shares		Date Fair Value
Unvested at December 31, 2021		-		-

Granted		178,282		2.95

Vested		-		-

Balance March 31, 2022	$	178,282	$	2.95

	Warrants Outstanding
	Number of Shares		Weighted- Average Exercise Price		Weighted - Average Remaining Contractual Term in years)		Aggregate Intrinsic Value (in thousands)⁽¹⁾
Balance as of December 31, 2021		3,779,243	$	5.89

Granted		-		-

Exercised		-		-

Balance as of March 31, 2022		3,779,243	$	5.89		2.8

Exercisable as of March 31, 2022		3,779,243	$	5.89		2.8	$	-

Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Units)	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs⁽¹⁾ (In thousands)
01/01/2022-01/31/2022	-	-	-	$775
02/01/2022-02/28/2022	-	-	-	$775
03/01/2022-03/31/2022	-	-	-	$775
Total	-	-	-	$775

Exhibit No.		Description
10.1		Employment Agreement with Patrick White, dated February 15, 2022 (incorporated herein by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K file on February 22, 2022)
10.2		Employment Agreement with Keith Goldstein, dated February 15, 2022 (incorporated herein by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K file on February 22, 2022)
10.3		Employment Agreement with Margaret Gezerlis, dated February 15, 2022 (incorporated herein by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K file on February 22, 2022)
10.4		Employment Agreement with Nancy Meyers, dated February 15, 2022 (incorporated herein by reference from Exhibit 10.4 to the Company’s Current Report on Form 8-K file on February 22, 2022)
31.1*		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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).

	VERIFYME, INC.

Date: May 11, 2022	By: /s/ Patrick White
	Patrick White
	Chief Executive Officer (Principal Executive Officer)

Date: May 11, 2022	By: /s/ Margaret Gezerlis
	Margaret Gezerlis
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

SEC Form 10-Q filed by VerifyMe Inc.