DEF 14A 1 s427210def14a.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.)

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VerifyMe, Inc.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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VERIFYME, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 10, 2021

The annual meeting of stockholders (the “Annual Meeting”) of VerifyMe, Inc. will be held on Thursday, June 10, 2021 at 10:00 a.m., Eastern Time. The Annual Meeting will be conducted as a virtual meeting of stockholders by means of a live webcast. We believe that hosting a virtual meeting will enable greater stockholder participation from any location, especially in light of the ongoing pandemic. You will be able to participate in the virtual annual meeting, vote your shares and submit questions during the annual meeting via the internet by visiting www.virtualshareholdermeeting.com/VRME2021. There will not be a physical meeting location and you will not be able to attend the Annual Meeting in person. As always, we encourage you to vote your shares prior to the meeting.

The Annual Meeting is being held for the following purposes, which are more fully described in the accompanying proxy statement:

to elect six directors;

to approve, on an advisory basis, the compensation of our named executive officers (“say-on-pay”);

to approve the Company’s 2021 Stock Purchase Plan;

to ratify the appointment of MaloneBailey, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and

to transact such other business as may properly come before the Annual Meeting or at any adjournment of the meeting.

Our board of directors has fixed the close of business on April 21, 2021 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and at any adjournment of the Annual Meeting.

We are following the Securities and Exchange Commission’s “e-proxy” rules that allow public companies to furnish proxy materials to stockholders over the internet. The “e-proxy” rules remove the requirement for public companies to automatically send stockholders a full, printed copy of proxy materials and allow them instead to deliver to their stockholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) and to provide online access to the documents. The Notice of Internet Availability provides instructions on how to view our proxy materials for the Annual Meeting on the internet and vote, and request a printed copy of the proxy materials. These “e-proxy” rules allow us to provide you with the information you need, while lowering the cost of delivery and reducing the environmental impact of our Annual Meeting.

	By Order of the Board of Directors


	Patrick White President and Chief Executive Officer

Rochester, New York

April 28, 2021

Your Vote is Important. Whether or not you expect to attend the Annual Meeting, we hope you will vote as soon as possible. You may vote by the internet, by telephone, or, if you requested and received paper copies of the proxy materials by mail, by mailing a proxy card or voting instruction form. We encourage you to vote using the internet, as it is the most cost-effective way to vote. Even if you have voted by internet, telephone or proxy card, you may still vote via the internet if you attend the virtual meeting. If you own your shares through a broker we encourage you to follow the instructions provided by your broker about how to vote. Unless you provide your broker with voting instructions, your broker may not vote your shares on non-discretionary items such on the proposal to elect the six director nominees, the proposal for say-on-pay or the proposal for the 2021 stock purchase plan.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL STOCKHOLDERS MEETING TO BE HELD ON JUNE 10, 2021

Our proxy statement and Annual Report to Stockholders are available online at www.proxyvote.com

TABLE OF CONTENTS

PROXY STATEMENT	1
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING	1
PROPOSAL ONE: ELECTION OF DIRECTORS	8
MANAGEMENT AND EXECUTIVE OFFICERS	15
EXECUTIVE COMPENSATION	16
DIRECTOR COMPENSATION	19
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS	21
PROPOSAL TWO: TO APPROVE, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY”);	23
PROPOSAL THREE: TO APPROVE THE COMPANY’S 2021 STOCK PURCHASE PLAN;	24
PROPOSAL FOUR: RATIFICATION OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	29
REPORT OF THE AUDIT COMMITTEE	30
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	31
OTHER MATTERS	32
APPENDIX A: VERIFYME, INC. 2021 STOCK PURCHASE PLAN	A-1

Proposal	Description	Vote Required
One	Election of the six directors	Plurality of the votes of the shares cast at the Annual Meeting

Two	To approve, on an advisory basis, of the compensation of our named executive officers (“say-on-pay”)	Affirmative vote of a majority of the shares cast on the proposal

Three	To approve the Company’s 2021 Stock Purchase Plan	Affirmative vote of a majority of the shares cast on the proposal

Four	To ratify the appointment of MaloneBailey, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021	Affirmative vote of a majority of the shares cast on the proposal

Chris Gardner
Age: 67

Director since: May 2019		Board Committee: Nominating and Corporate Governance (Chair)
Mr. Gardner is an international best-selling author and award-winning film producer. Mr. Gardner was a Senior Advisor to Wisdom Tree Investments, Inc. (NASDAQ:WETF), an exchange-traded fund, from June 2018 to June 2020. From October 2010 until April 2016, he was the Ambassador of Happyness for AARP, a nonprofit organization dedicated to empowering Americans age 50 and older. Mr. Gardner established the institutional brokerage firm of Gardner Rich and Company in 1989 that closed in December 2012.

Experience and Qualifications		`
Mr. Gardner’s entrepreneurial experience and network of relationships which we believe are valuable assets to the Company and its growth give him the qualifications, skills and financial expertise to serve on our board of directors.

Marshall Geller
Age: 82

Director since: July 2017		Board Committee: Audit; Nominating and Corporate Governance; Executive; Mergers & Acquisitions (Chair)
Mr. Geller has been a director and a member of the audit committee of GP Strategies Corporation (NYSE:GPX) since 2002. Mr. Geller was a director of Wright Investors’ Service Holdings Inc. (OTCMKT:WISH), formerly National Patent Development Corporation, from January 2015 until October 2018. He is also currently a Director of Easy Smart Pay, a public-private partnership of the California State Association of Counties Finance Corporation. Mr. Geller formerly served as a director of California Pizza Kitchen, Inc., (formerly Nasdaq:CPKI) from 2008 until 2011, and Hexcel Corporation (NYSE:HXL) from 1994 until 2003. Mr. Geller was a founder of St. Cloud Capital, a Los Angeles based private equity fund, and Senior Investment Advisor from December 2001 until September 2017. He has spent more than 50 years in corporate finance and investment banking, including 21 years as a Senior Managing Partner of Bear, Stearns & Co., with oversight of all operations in Los Angeles, San Francisco, Chicago, Hong Kong and the Far East. Mr. Geller is currently on the Board of Directors of UCLA Health System and on the Board of Governors of Cedars Sinai Medical Center, Los Angeles. Mr. Geller also serves on the Dean’s Advisory Council for the College of Business & Economics at California State University, Los Angeles.

Experience and Qualifications
Mr. Geller’s financial and business experience, including as a managing partner of a private equity fund, and his many years of experience and expertise as an investor in and adviser to companies in various sectors as well as his experience with serving on the boards of directors of other public and private corporations give him the qualifications, skills and financial expertise to serve on our board of directors.

Howard Goldberg
Age: 75		Lead Independent Director

Director since: July 2017		Board Committee: Audit; Compensation; Nominating and Corporate Governance; Executive; Mergers & Acquisition
Mr. Goldberg has served as our Lead Independent director during 2020, having served from time to time in that capacity. From 2003 through 2005, Mr. Goldberg served as a part-time consultant to Laser Lock Technologies, Inc., the predecessor to VerifyMe, and provided consulting service to us again from 2016 through December 2017. Mr. Goldberg has been a private investor in both real estate and start-up companies and has provided consulting services to start-up companies since 1999. From 1994 through 1998, Mr. Goldberg served as President, CEO and board member of Player’s International, a publicly traded company in the gaming business prior to its sale to Harrah’s Entertainment Inc. Mr. Goldberg served on the Board of Directors and Audit Committee of Imall Inc., a publicly traded company that provided on-line shopping prior to its sale to Excite-at-Home. Mr. Goldberg served as a member of the Board of Directors and the Audit Committee of the Shelbourne Entities from August 2002 until their liquidation in April 2004. Mr. Goldberg served as a member of the Board of Trustees of Winthrop Realty Trust, a publicly traded real estate investment trust, from December 2003 to August 2016 when Winthrop’s assets were transferred to a liquidating trust. Mr. Goldberg was a member of Winthrop’s Audit Committee and Nominating and Corporate Governance Committee and was its lead independent trustee. Mr. Goldberg served as a trustee for Winthrop Realty Liquidating Trust until December 2019 when it was finally liquidated. Mr. Goldberg was a director of New York REIT, Inc. from March 2017 until October 2018, when it converted to a limited liability company called New York REIT LLC. Since October 2018, Mr. Goldberg has been a manager of New York REIT LLC. Mr. Goldberg has a law degree from New York University and was previously the managing partner of a New Jersey law firm where he specialized in gaming regulatory law and real estate from 1970 through 1994.

Experience and Qualifications
Mr. Goldberg’s experience as a director of other public companies and his legal expertise give him the qualifications, skills and financial expertise to serve on our board of directors.

Scott Greenberg
Age: 64		Chairman of the Board

Director since: November 2019		Board Committee: Executive; Audit (Chair); Compensation; Mergers & Acquisitions
Mr. Greenberg has served as the Chairman of the Board of Directors of GP Strategies Corporation (NYSE:GPX) since August 2018. He previously served as Chief Executive Officer of GP Strategies from April 2005 until July 2020. He was also the President of GP Strategies from 2001 to 2006, Chief Financial Officer from 1989 until 2005, Executive Vice President from 1998 to 2001, Vice President from 1985 to 1998, and held various other positions with GP Strategies since 1981. Mr. Greenberg was also a Director of Wright Investors’ Service Holdings, Inc. (OTCMKT:WISH), formerly National Patent Development Corporation, from 2004 to 2015.

Experience and Qualifications
Mr. Greenberg’s significant experience and expertise in management, acquisitions and strategic planning, as well as many years of finance and related transactional experience give him the qualifications, skills and financial expertise to serve on our board of directors.

Arthur Laffer
Age: 80

Director since: March 2019		Board Committee: Compensation (Chair)
Dr. Laffer is the founder and chairman of Laffer Associates, an institutional economic research and consulting firm. Dr. Laffer has served as a director of NexPoint Residential Trust Inc. (NYSE:NXRT) since May 2015 and NexPoint Real Estate Finance Inc. (NYSE:NREF) since February 2020. He was a director of EVO Transportation & Energy Services, Inc. (OTCPINK:EVOA) from August 2018 to December 2019 and the GEE Group Inc. (NYSE American:JOB) from January 2015 to March 2020. Dr. Laffer’s economic acumen and influence in triggering a world-wide tax-cutting movement in the 1980s have earned him the distinction in many publications as “The Father of Supply-Side Economics.” Dr. Laffer was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). Dr. Laffer also advised Prime Minister Margaret Thatcher on fiscal policy in the UK during the 1980s. In the early 1970s, Dr. Laffer was the first to hold the title of Chief Economist at the Office of Management and Budget under George Shultz. Additionally, Dr. Laffer served as Charles B. Thornton Professor of Business Economics at the University of Southern California and as Associate Professor of Business Economics at the University of Chicago. In June 2019, Dr. Laffer received the Presidential Medal of Freedom.

Experience and Qualifications
Dr. Laffer’s expertise in economics and his experience as a director of multiple companies give him the qualifications, skills and financial expertise to serve on our board of directors.

Patrick White
Age: 68

Director since: July 2017
Mr. White has served as our President and Chief Executive Officer since August 2017. Mr. White founded Document Security Systems, Inc. (NYSE:DSS), a technology company, serving as its Chief Executive Officer and director from August 2002 until December 2012 and as its business consultant from 2012 to March 2015. He has been a director of Box Score Brands, Inc. (formerly, U-Vend, Inc.) since 2009. Mr. White was a Financial Adviser for the Monroe County Government from April 2016 until May 2017. Mr. White worked as an independent consultant from March 2015 until March 2016. Mr. White was a consultant to the Company from June 2017 through August 2017, when he was appointed President and Chief Executive Officer.

Experience and Qualifications
Mr. White’s prior experience as the chief executive officer of a public company gives him the qualifications and skills to serve on our board of directors

Committee Name	Number of Meetings Held	Committee Members
Audit	4	Mr. Geller Mr. Goldberg Mr. Greenberg ⁽¹⁾
Compensation	4	Mr. C. Gardner ⁽²⁾ Mr. Geller ⁽²⁾ Mr. Goldberg	Mr. Greenberg Mr. Laffer ⁽¹⁾
Nominating and Corporate Governance Committee	1	Mr. C. Gardner ⁽¹⁾ Mr. Geller Mr. Goldberg
Executive	1	Mr. Greenberg ⁽¹⁾ Mr. Goldberg	Mr. Geller
Mergers & Acquisitions Committee	2	Mr. Geller ⁽¹⁾ Mr. Greenberg	Mr. Goldberg

Name and Principal Position	Year	Salary ($)			Stock Awards ($) ⁽¹⁾			Option Awards ($) ⁽¹⁾			All Other Compensation ($) ⁽²⁾		Total Compensation ($)
Patrick White	2020		186,629	⁽³⁾		375,600	⁽³⁾		90,563	⁽⁵⁾		14,400		667,192
CEO	2019		200,000	⁽³⁾		--	⁽⁴⁾		89,075			14,400		303,475

Keith Goldstein ⁽⁶⁾	2020		174,000			17,750			78,283			14,400		284,433
Acting COO	2019		170,000			--			163,286			14,400		347,686

Margaret Gezerlis	2020		138,640			17,750			13,716			12,000		182,106
CFO	2019		84,000			--			27,280			12,000		123,280

	(1)		Represents the grant date fair value of the stock award and option award, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 718, “Compensation – Stock-based Compensation,” or ASC 718. The assumptions used in calculating the grant date fair value of the option awards are set forth in Note 1 of the financial statements to our Form 10-K for the year ended December 31, 2020.

	(2)		The amounts shown in this column reflect amounts paid by us to or on behalf of each named executive officer for medical insurance reimbursement.

	(3)		Pursuant to Mr. White’s Employment Agreement and Amendments to the Employment Agreement, $50,000 of his annual salary was deferred for each year of the three-year term beginning August 15, 2017, for a total deferred salary of $150,000. In lieu of a cash payment the Company issued Restricted Stock awards to Mr. White in the amount equal to his total deferred compensation. See “Employment and Consulting Agreements with Named Executive Officers” below. Includes the aggregate grant date fair value of the restricted stock awards granted to Mr. White for his service as a CEO, and in lieu of his deferred annual salary, calculated in accordance with ASC 718. The assumptions used in calculating the grant date fair value of the restricted stock awards are set forth in Note 1 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

	(4)		Previously reported 2019 figures reflected expenses based on the vesting schedule of the award and have been adjusted to reflect the aggregate grant date fair value of the restricted stock awards at the date of grant.

	(5)		Represents the change in fair value by applying FASB ASC 718 “Compensation—Stock Compensation” modification accounting for a three-year extension on the expiration for 140,000 options previously granted to Mr. White, now expiring August 15, 2025. All other terms with respect to the options remained the same.

	Option Awards				Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)
Patrick White	140,000	-	3.50	8/15/2025	97,500	351,000
	10,000	-	7.00	8/14/2025	-	-
Keith Goldstein	20,000⁽¹⁾	-	10.51	3/1/2023	-	-
	40,000⁽¹⁾	-	2.00	8/31/2022	-	-
	20,000⁽¹⁾	10,000⁽¹⁾	9.75	4/5/2024	-	-
Margaret Gezerlis	4,000	-	3.5	1/7/2025	-	-
	2,000	-	16.05	11/15/2023	-	-

Name	Stock Options ($)	Stock Awards ($)⁽¹⁾⁽²⁾	All Other Compensation ($)	Total Compensation ($)
Norman Gardner	63,349⁽³⁾	150,400	167,595⁽⁴⁾	381,344
Howard Goldberg	94,477	131,600	-	226,077
Marshall Geller	84,112	150,400	-	234,512
Dr. Arthur Laffer	80,392	56,400	-	136,792
Christopher Gardner	68,580	56,400	-	124,980
Scott Greenberg	34,290	94,000	-	128,290

(1)	Amounts reported represent the aggregate grant date fair value of awards granted without regards to forfeitures granted to the independent members of our board of directors during 2020, computed in accordance with ASC 718. This amount does not reflect the actual economic value realized by the director. The assumptions used in calculating the grant date fair value of the option awards are set forth in Note 1 to our audited financial statements for the year ended December 31, 2020.

(2)	Represents the aggregate grant date fair value of the restricted stock awards granted in 2020 annually.

(3)	Represents the change in fair value by applying FASB ASC 718 “Compensation—Stock Compensation” modification accounting for a three-year extension on the expiration for 90,000 options previously granted to Mr. Gardner, now expiring June 28, 2025. All other terms with respect to the options remained the same.

(4)	Prior to his retirement on April, 15, 2021, Mr. Gardner received a monthly consulting fee of $12,500 and was reimbursed up to $1,000 a month for health insurance and other medical expenses.

Name		Aggregate Number of Unexercised Option Awards Outstanding at December 31, 2020
Norman Gardner		98,300⁽¹⁾
Chris Gardner		20,000⁽²⁾
Marshall Geller		23,000⁽³⁾
Howard Goldberg		25,000⁽⁴⁾
Scott Greenberg		10,000⁽²⁾
Arthur Laffer		23,000⁽⁵⁾

Beneficial Owner	Amount of Beneficial Ownership of Common Stock ⁽¹⁾	Percent of Common Stock Beneficially Owned ⁽¹⁾
Named Executive Officers:
Patrick White	237,657⁽²⁾	3.14%
Sandy Fliderman	68,728⁽³⁾	*
Keith Goldstein	95,000⁽⁴⁾	1.27%
Margaret Gezerlis	15,250⁽⁵⁾	*
Directors:
Chris Gardner	76,818⁽⁶⁾	1.03%
Marshall Geller	308,782⁽⁷⁾	4.15%
Howard Goldberg	146,136⁽⁸⁾	1.96%
Scott Greenberg	54,606⁽⁹⁾	*
Arthur Laffer	131,921⁽¹⁰⁾	1.77%
All current directors and executive officers as a group (9 persons)	1,134,898	14.08%


	(1)	Based on 7,420,811 shares of common stock issued and outstanding as of April 21, 2021. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. A person is deemed to be the beneficial owner of securities that can be acquired by such person within 60 days whether upon the exercise of options or warrants. Unless otherwise indicated in the footnotes to this table, we believe that each of the stockholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them. This table does not include any unvested stock options or warrants except for those vesting within 60 days. As for the 5% stockholders, we are relying upon reports filed by each 5% stockholder with the SEC.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders ⁽¹⁾	265,300	$4.98	1,071,961
Equity compensation plans not approved by security holders ⁽²⁾	208,471	3.11	-
Total	473,771	4.48	1,071,961

	Fiscal Year 2020		Fiscal Year 2019
Audit Fees ⁽¹⁾	$	79,400	$	57,000
Tax Fees ⁽²⁾		4,500		5,000
All Other Fees ⁽³⁾		56,689		8,640
Total	$	140,589	$	70,640

	By Order of the Board of Directors

	Patrick White
	President and Chief Executive Officer

Rochester, New York
April 28, 2021

	D52200-P55380	KEEP THIS PORTION FOR YOUR RECORDS
		DETACH AND RETURN THIS PORTION ONLY

SEC Form DEF 14A filed by VerifyMe, Inc.