VerifyMe (VRME) 10-Q 22 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 22, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Trading Symbol	VRME
Entity Registrant Name	VerifyMe, Inc.
Entity Central Index Key	1,104,038
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		7,712,604

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Jun. 30, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 216,510	$ 4,152
Accounts receivable	11,705
Inventory	42,401	28,687
TOTAL CURRENT ASSETS	270,616	32,839
PROPERTY AND EQUIPMENT
Capital equipment, net of accumulated depreciation of $232,198 and $230,621 as of June 30, 2016 and December 31, 2015	6,261	7,838
OTHER ASSETS
Deposits		37,197
Patents and Trademark, net of accumulated amortization of $180,565 and $166,894 as of June 30, 2016 and December 31, 2015	245,623	259,294
TOTAL OTHER ASSETS	245,623	296,491
TOTAL ASSETS	522,500	337,168
CURRENT LIABILITIES
Accounts payable and accrued expenses	692,503	652,973
Note payable	50,000	50,000
Embedded derivative liability	183,000
Warrant liability	249,494	1,802,375
TOTAL CURRENT LIABILITIES	1,174,997	2,505,348
CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, $ .001 par value; 675,000,000 shares authorized; 8,051,133 and 6,327,570 shares issued, 7,712,604 and 5,977,030 shares outstanding at June 30, 2016 and December 31, 2015	7,713	5,977
Additional paid in capital	39,897,504	39,779,414
Treasury stock, at cost (350,540 shares at June 30, 2016 and December 31, 2015)	(113,389)	(113,389)
Deferred compensation	(525,538)	(1,842,334)
Accumulated deficit	(39,921,238)	(39,998,290)
STOCKHOLDERS' DEFICIT	(652,497)	(2,168,180)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	522,500	337,168
Series A Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock	413	442
STOCKHOLDERS' DEFICIT	413	442
Series B Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock
STOCKHOLDERS' DEFICIT
Series C Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Convertible Preferred Stock	2,038
STOCKHOLDERS' DEFICIT	$ 2,038

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Accumulated depreciation on capital equipment	$ 232,198	$ 230,621
Accumulated amortization, patent and trademarks	$ 180,565	$ 166,894
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	675,000,000	675,000,000
Common stock, shares issued	8,051,133	6,327,570
Common stock, shares outstanding	7,712,604	5,977,030
Treasury stock, shares	350,540	350,540
Series A Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	37,564,767	75,000,000
Preferred stock, shares issued	412,498	441,938
Preferred stock, shares outstanding	412,498	441,938
Series B Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	85	85
Preferred stock, shares issued	0.97	1
Preferred stock, shares outstanding	0.97	1
Series C Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	7,500,000	7,500,000
Preferred stock, shares issued	2,037,500	0
Preferred stock, shares outstanding	2,037,500	0

Condensed Statements of Operati

Condensed Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
NET REVENUES
Sales	$ 11,705	$ 62,125	$ 11,705	$ 62,125
Royalties		6,250		12,500
TOTAL NET REVENUE	11,705	68,375	11,705	74,625
COST OF SALES	5,910	36,079	5,910	36,079
GROSS PROFIT	5,795	32,296	5,795	38,546
OPERATING EXPENSES
General and administrative	87,325	80,129	205,083	164,030
Legal and accounting	117,582	217,322	232,927	228,435
Payroll expenses	683,737	119,235	1,311,660	290,139
Research and development	167,846	2,016,000	257,181	2,136,386
Sales and marketing	146,443	319	211,774	23,127
Total operating expenses	1,202,933	2,433,005	2,218,625	2,842,117
LOSS BEFORE OTHER INCOME	(1,197,138)	(2,400,709)	(2,212,830)	(2,803,571)
OTHER INCOME (EXPENSE)
Interest expense	(1,000)	(24,904)	(2,000)	(55,154)
Gain on extinguishment of debt		351,918		351,918
Change in fair value of warrants	1,589,524	1,117,369	3,320,457	1,286,845
Change in fair value of embedded derivative liability	1,202,000		739,000
Fair value of warrants in excess of consideration for convertible preferred stock			(1,767,575)
TOTAL OTHER INCOME (EXPENSE)	2,790,524	1,444,383	2,289,882	1,583,609
NET INCOME (LOSS)	$ 1,593,386	$ (956,326)	$ 77,052	$ (1,219,962)
INCOME (LOSS) PER SHARE
BASIC	$ 0.24	$ (0.24)	$ 0.01	$ (0.32)
DILUTED	$ 0.06	$ (0.24)	$ 0	$ (0.32)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC	6,572,673	3,934,451	5,913,418	3,777,685
DILUTED	26,106,185	3,934,451	25,420,372	3,777,685

Condensed Statement of Changes

Condensed Statement of Changes in Stockholders' Deficit - 6 months ended Jun. 30, 2016 - USD ($)	Common Stock [Member]Series A Preferred Stock [Member]	Common Stock [Member]Series B Preferred Stock [Member]	Common Stock [Member]Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]Series A Preferred Stock [Member]	Additional Paid-in Capital [Member]Series B Preferred Stock [Member]	Additional Paid-in Capital [Member]Series C Preferred Stock [Member]	Additional Paid-in Capital [Member]	Treasury Stock [Member]Series A Preferred Stock [Member]	Treasury Stock [Member]Series B Preferred Stock [Member]	Treasury Stock [Member]Series C Preferred Stock [Member]	Treasury Stock [Member]	Deferred Compensation [Member]Series A Preferred Stock [Member]	Deferred Compensation [Member]Series B Preferred Stock [Member]	Deferred Compensation [Member]Series C Preferred Stock [Member]	Deferred Compensation [Member]	Accumulated Deficit [Member]	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Series C Preferred Stock [Member]	Total
Balance at Dec. 31, 2015				$ 5,977				$ 39,779,414				$ (113,389)				$ (1,842,334)	$ (39,998,290)	$ 442			$ (2,168,180)
Balance (in shares) at Dec. 31, 2015				5,977,030														441,938	1
Conversion of Convertible Preferred Stock	$ 589	$ 292	$ 1,050		$ (560)	$ (292)												$ (29)		$ (1,050)
Conversion of Convertible Preferred Stock (in shares)	588,800	291,780	1,050,000															(29,440)	(0.03)	(1,050,000)
Effect of Convertible Preferred Stock on embedded derivative liability					$ 313,000																313,000
Sale of stock							$ 1,231,912													$ 3,088	1,235,000
Sale of stock (in shares)																				3,087,500
Stock issuance costs								(17,500)													(17,500)
Deemed dividend distribution								(1,235,000)													(1,235,000)
Issuance of stock for services				$ 33				20,742													20,775
Issuance of stock for services (in shares)				32,983
Issuance of restricted stock for services				$ 40				960								89,000					90,000
Issuance of restricted stock for services (in shares)				40,000
Forfeiture of restricted stock units				$ (268)				(917,732)								637,500					(280,500)
Forfeiture of restricted stock units (in shares)				(267,989)
Fair value of stock options and warrants								812,935													812,935
Decrease in fair value of restricted stock units								(90,375)								90,375
Amortization of deferred compensation																499,921					499,921
Net income																	77,052				77,052
Balance at Jun. 30, 2016				$ 7,713				$ 39,897,504				$ (113,389)				$ (525,538)	$ (39,921,238)	$ 413		$ 2,038	$ (652,497)
Balance (in shares) at Jun. 30, 2016				7,712,604														412,498	0.97	2,037,500

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 77,052	$ (1,219,962)
Adjustments to reconcile net loss to net cash used in operating activities
Gain on conversion of debt		(351,918)
Fair value of options issued in exchange for services	812,935	34,093
Fair value of restricted stock issued for services	90,000
Common stock issued for services	20,775
Accretion of discount on notes payable		10,447
Change in fair value of warrant liability	(1,552,882)	(1,286,845)
Change in fair value of embedded derivative liability	(739,000)
Amortization and depreciation	15,248	42,943
Reversal of expense from forfeiture of restricted common stock	(280,500)
Amortization of deferred compensation	499,921	6,198
(Increase) decrease in assets
Accounts receivable	(11,705)	(62,125)
Inventory	(13,714)	22,784
Prepaid expenses		2,402
Increase (decrease) in liabilities
Accounts payable and accrued expenses	76,728	2,273,138
Deferred revenue		(12,500)
Net cash used in operating activities	(1,005,142)	(541,345)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of patents		(100)
Net cash used in investing activities		(100)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of notes payable		159,542
Stock issuance costs	(17,500)
Proceeds from sale of common stock		50,000
Net cash provided by financing activities	1,217,500	1,488,043
NET INCREASE IN CASH AND CASH EQUIVALENTS	212,358	946,698
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD	4,152	63,956
CASH AND CASH EQUIVALENTS - END OF PERIOD	216,510	1,010,654
Interest
Income taxes
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Cashless exercise of warrants		2
Issuance of Series A Convertible Preferred Stock for deferred compensation		35,000
Issuance of Series A Convertible Preferred Stock for stockholder notes payable and accrued interest		136,813
Issuance of Series B Convertible Preferred Stock for accrued expenses		6,500,000
Conversion of warrants associated with notes payable		1,867,417
Warrants converted to common stock		40,000
Issuance of common stock for notes payable and accrued interest		801,697
Common stock issued for deferred compensation		446,250
Security deposit offset against accounts payable	37,197
Forgiveness of stockholder compensation		175,285
Accretion of discount on preferred stock as deemed dividend distribution	1,235,000
Revaluation of restricted stock units between additional paid in capital and deferred compensation	90,375
Forfeited restricted common stock	637,500
Revaluation of embedded derivative liability upon conversion of Series C Convertible Preferred Stock	313,000
Series A Preferred Stock [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Convertible Preferred Stock		1,278,501
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Convertible Preferred Stock converted to common stock	589	633,333
Issuance of common stock for notes payable and accrued interest	(29)
Series B Preferred Stock [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Convertible Preferred Stock converted to common stock	292
Issuance of common stock for notes payable and accrued interest
Series C Preferred Stock [Member]
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of Convertible Preferred Stock	1,235,000
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Convertible Preferred Stock converted to common stock	1,050
Issuance of common stock for notes payable and accrued interest	$ (1,050)

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business References such as “we”, “our”, “us”, and the “Company” used herein mean VerifyMe, Inc., a Nevada corporation. On July 14, 2015, LaserLock Technologies, Inc. changed its name to VerifyMe, Inc., effective July 23, 2015. The Company was incorporated in the State of Nevada on November 10, 1999. The Company is based in New York, New York and its common stock, par value $0.001 per share (the “Common Stock”), is traded on the over-the-counter market and quoted on the OTCQB, organized by the OTC Markets Group, Inc., and the OTC Bulletin Board under the ticker symbol “VRME.” The Company is a technology pioneer in the anti-counterfeiting industry. This broad market encompasses counterfeiting of physical and material goods and products, as well as counterfeiting of identity in digital transactions. The Company delivers security solutions for identification and authentication of people, products and packaging in a variety of applications in the security field for both digital and physical transactions. The products can be used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials, as well as comprehensive authentication security software to secure physical and logical access to facilities, computer networks, internet sites and mobile applications. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding to operationalize the Company’s current technology. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the SEC. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Basic and Diluted Net Income per Share of Common Stock The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share,” when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. Basic net income per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted net income per common share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e., the exercise prices of the outstanding stock options were greater than the market price of the Common Stock. Anti-dilutive Common Stock equivalents, which were excluded from the calculation of number of dilutive Common Stock equivalents, amounted to 6,856,805 shares for the three and six months ended June 30, 2016. Recently Adopted Accounting Pronouncements Effective January 1, 2016, the Company adopted FASB Accounting Standards Update (“ASU”) 2014-16, “ Derivatives and Hedging (Topic 815) Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity”, Recently Issued Accounting Pronouncements Not Yet Adopted As of June 30, 2016, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements through 2017.

MANAGEMENT PLANS

MANAGEMENT PLANS	6 Months Ended
	Jun. 30, 2016
MANAGEMENT PLANS [Abstract]
MANAGEMENT PLANS	NOTE 2 – MANAGEMENT PLANS The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred significant losses and experienced negative cash flow from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company does not believe that its existing cash resources will be sufficient to sustain operations during the next twelve months. The Company currently needs to generate revenue in order to sustain its operations. In the event that the Company cannot generate sufficient revenue to sustain its operations, the Company will need to reduce expenses or obtain financing through the sale of debt and/or equity securities. The issuance of additional equity would result in dilution to existing stockholders. If the Company is unable to obtain additional funds when they are needed or if such funds cannot be obtained on terms acceptable to the Company, the Company may be unable to execute upon the business plan or pay costs and expenses as they are incurred, which could have a material adverse effect on the business, financial condition and results of operations. If sufficient revenues are not generated to sustain operations or additional funding cannot be obtained in the short term, the Company will need to reduce monthly expenditures to a level that will enable the Company to continue until such funds can be obtained. Successful completion of the Company’s development program, and the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to fulfill its development activities and achieving a level of sales adequate to support the Company’s cost structure. However, there can be no assurances that the Company will be able to secure additional equity investment or achieve an adequate sales level.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 3 – INCOME TAXES Income tax expense was $0 for the three and six months ended June 30, 2016. As of January 1, 2016, the Company had no unrecognized tax benefits, and accordingly, the Company did not recognize interest or penalties during 2015 related to unrecognized tax benefits. There has been no change in unrecognized tax benefits during the three and six months ended June 30, 2016, and there was no accrual for uncertain tax positions as of June 30, 2016. Tax years from 2012 through 2015 remain subject to examination by major tax jurisdictions. There is no income tax benefit for the losses for the three and six months ended June 30, 2016, since management has determined that the realization of the net tax deferred asset is not assured and has created a valuation allowance for the entire amount of such benefits. The Company had income for the three and six months ended June 30, 2016; however, due to tax adjustments, there was no taxable income.

EMBEDDED DERIVATIVE LIABILITY

EMBEDDED DERIVATIVE LIABILITY	6 Months Ended
	Jun. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
EMBEDDED DERIVATIVE LIABILITY	NOTE 4 – EMBEDDED DERIVATIVE LIABILITY The conversion feature of the 0% Series C Convertible Preferred Stock (“Series C”) “ Derivatives and Hedging” In addition, the embedded derivative liability must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. Series C shareholders converted 1,050,000 shares into 1,050,000 common shares during the second quarter of 2016. As a result, the embedded derivative liability associated with those shares was adjusted to the fair value ($313,000) and the associated liability was eliminated against additional paid in capital. As of June 30, 2016, the fair value of the embedded derivative liability was $183,000. For the three and six months end June 30, 2016, the Company realized income of $1,202,000 and $739,000 relative to the embedded derivative liability.

WARRANT LIABILITY

WARRANT LIABILITY	6 Months Ended
	Jun. 30, 2016
Warrants and Rights Note Disclosure [Abstract]
WARRANT LIABILITY	NOTE 5 – WARRANT LIABILITY On December 31, 2012, the Company entered into an Investment Agreement, a Technology and Service Agreement, a Patent and Technology License Agreement and an Asset Purchase Agreement (collectively, the “VFM Agreements”) with VerifyMe, Inc. – Texas (“VFM”) on the same date entered into a Technology and Service Agreement with Zaah Technologies, Inc. (collectively with the VFM Agreements, the “Agreements”). The Agreements contemplate warrant issuances by the Company for the purchase of common stock. Warrants exercisable for 627,451 shares of common stock associated with these Agreements are subject to anti-dilution adjustments outlined in the Agreements. In accordance with FASB ASC 815, the warrants were classified as a liability in the total amount of $2.4 million at December 31, 2012. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of June 30, 2016 and December 2015, the fair value of the warrant liability was $16,419 and $1,020,632, respectively. The 392,157 warrants associated with the Company’s Series A Convertible Preferred Stock were also classified as a liability since they were subject to anti-dilutive adjustments outlined in the warrant agreement and valued at a fair market value of $2,995,791 at January 31, 2013. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of June 30, 2016 and December 31, 2015, the fair value of the warrants was $10,529 and $626,317. On January 1, 2014, the Company issued warrants to purchase 74,697 shares of Common Stock as consideration for technology received from VFM under the VFM Patent and Technology License Agreement dated December 31, 2012. The warrants are exercisable at $0.10 per share. The warrants are subject to anti-dilution adjustments outlined in the VFM Patent and Technology Agreement. In accordance with FASB ASC 815, the warrants were classified as a liability with an initial fair value of $444,000, which was immediately expensed as research and development costs. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of June 30, 2016, and December 31, 2015, the fair value of the warrant liability was $2,982 and $147,524, respectively. Warrants to purchase 3,529 shares of Common Stock associated with the notes payable incurred on August 5, 2014, were revalued and at June 30, 2016 and December 31, 2015, the fair value of those warrants was $184 and $7,902. In conjunction with the issuance of Series C, the Company issued warrants to purchase 3,087,500 shares of the Company’s Common Stock. The warrants are subject to anti-dilution adjustments outlined in the warrant agreement. In accordance with FASB ASC 815 and ASU 2014-16, the warrants were classified as a liability with an initial fair value of $1,767,576, which was immediately expensed. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of June 30, 2016, the fair value of the warrant liability was $219,380.

CONVERTIBLE PREFERRED STOCK

CONVERTIBLE PREFERRED STOCK	6 Months Ended
	Jun. 30, 2016
CONVERTIBLE PREFERRED STOCK [Abstract]
CONVERTIBLE PREFERRED STOCK	NOTE 6 – CONVERTIBLE PREFERRED STOCK Subscription Agreement The Company entered into a Subscription Agreement with VFM on January 31, 2013 (the “Subscription Agreement”). Under the terms of the Subscription Agreement, VFM subscribed to purchase 392,157 shares of Series A Convertible Preferred Stock post 85-for-1 reverse stock split and a warrant to purchase 392,157 shares of Common Stock post 85-for-1 reverse stock split at an exercise price of $10.20 per share, for $1 million. Series A Convertible Preferred Stock On March 10, 2016, 14,720 shares of Series A Convertible Preferred Stock were converted into 294,400 shares of the Company’s Common Stock. On June 1, 2016, 14,720 shares of Series A Convertible Preferred Stock were converted into 294,400 shares of the Company’s Common Stock. Series B Convertible Preferred Stock On May 26, 2015, the Company amended its Amended and Restated Articles of Incorporation dated December 19, 2003 to establish the Series B Convertible Preferred Stock and authorized 1 share (85 shares pre-reverse stock split). The par value of the Series B Convertible Preferred Stock is $0.001 and they are convertible currently at 8,496,732:1. These shares were issued to settle the $6.5 million of licensing fees due and the associated warrants as part of the Company’s recapitalization transaction in July 2015. On March 17, 2016, 0.03 shares of Series B Convertible Preferred Stock were converted into 291,780 shares of the Company’s common stock. Series C Convertible Preferred Stock On February 9, 2016, the Company issued 2,587,500 shares of Series C, par value $0.001 per share, at a purchase price of $0.40 per share with gross proceeds to the Company of $1,035,000. In connection with the sale of the Series C, the Company issued to the purchasers warrants to purchase in the aggregate 2,587,500 shares of the Company’s common stock at an exercise price of $0.40 per share. Further, as a part of the same offering, on February 29, 2016, the Company issued 500,000 shares of Series C, at a purchase price of $0.40 per share with gross proceeds to the Company of $200,000. In connection with the sale of the Series C, the Company issued to the purchasers warrants to purchase in the aggregate 500,000 shares of the Company’s common stock at an exercise price of $0.40 per share. Each share of Series C is convertible into one share of common stock. The Series C provides for certain adjustments that may be made to the exercise price and the number of shares issuable upon exercise due to future corporate events or otherwise, including, for a proscribed period of time, upon the issuance of securities at a price that is less than the exercise price of the Series C. In addition, the Company incurred stock issuance costs of $17,500 related to the issuance of Series C. The Company entered into a Registration Rights Agreement with each of the purchasers of the Series C pursuant to which the Company agreed to file a registration statement with the SEC covering the resale of the common stock underlying the Series C, as well as the shares of common stock that are issuable upon exercise of the warrants. The registration statement was filed in April 2016 and declared effective on April 29, 2016. On May 2, 2016, 572,000 shares of Series C were converted into 572,000 shares of the Company’s Common Stock. On May 3, 2016, 125,000 shares of Series C were converted into 125,000 shares of the Company’s Common Stock. On May 5, 2016, 353,000 shares of Series C were converted into 353,000 shares of the Company’s Common Stock.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS Derivative Liabilities For purposes of determining whether certain instruments are derivatives for accounting treatment, the Company follows the accounting standard that provides guidance for determining whether an equity-linked financial instrument, or embedded feature, is indexed to an entity’s own stock. The standard applies to any freestanding financial instruments or embedded features that have the characteristics of a derivative, and to any freestanding financial instruments that are potentially settled in an entity’s own common stock. Liabilities measured at fair value on a recurring basis are summarized as follows: Level 1 Level 2 Level 3 Total Embedded derivative liability related to beneficial conversion option $ - $ - $ 183,000 $ 183,000 Derivative liability related to fair value of warrants - - 249,494 249,494 Total $ - $ - $ 432,494 $ 432,494 The following table details the approximate fair value measurements within the fair value hierarchy of the Company’s derivative liabilities using Level 3 inputs: Total Balance at January 1, 2016 $ 1,802,375 Series C embedded derivative fair value, February, 2016 1,235,000 Effect of conversion of Series C on embedded derivative liability (313,000 ) Series C warrant liability fair value, February, 2016 1,767,576 Change in fair value of derivative liabilities (4,059,457 ) Balance at June 30, 2016 $ 432,494 The Company has no assets that are measured at fair value on a recurring basis. There were no assets or liabilities measured at fair value on a non-recurring basis during the six months ended June 30, 2016. As of June 30, 2016, the beneficial conversion feature of Series C was treated as an embedded derivative liability and changes in the fair value were recognized in earnings. Because the fair value of the warrants issued in conjunction with Series C was in excess of the proceeds of Series C, the effective conversion price of the Series C is $0. The Series C shares are convertible into shares of the Company’s Common Stock, which did trade in an active securities market, therefore the embedded derivative liability was valued using the following market based inputs: Closing trade price of Common Stock $ 0.09 Effective Series A Preferred Stock Conversion price - Intrinsic value of conversion option per share $ 0.09 As of June 30, 2016, the Company’s outstanding warrants were treated as derivative liabilities and changes in the fair value were recognized in earnings. These warrants did not trade in an active securities market, and as such, the Company estimated the fair value of these warrants using the Black-Scholes option pricing model and the following assumptions: June 30, 2016 Annual Dividend Yield 0.0% Expected Life (Years) 1.5 - 3.0 Risk-Free Interest Rate 0.33% - 0.41% Expected volatility was based primarily on historical volatility. Historical volatility was computed using daily pricing observations for recent periods. The Company believes this method produced an estimate that was representative of the Company’s expectations of future volatility over the expected term of these warrants. The Company had no reason to believe future volatility over the expected remaining life of these warrants was likely to differ materially from historical volatility. The expected life was based on the remaining contractual term of the warrants. The risk-free rate was based on the U.S. Treasury rate that corresponded to the expected term of the warrants.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 8 – STOCKHOLDERS’ EQUITY A restricted stock unit (“RSU”) is an award of common shares that is subject to certain restrictions during a specified period. RSU awards are independent of option grants and are generally subject to forfeiture if employment terminates prior to the release of the restrictions. The grantee cannot transfer the shares before the restricted shares vest. Shares of nonvested restricted stock have the same voting rights as common stock, are entitled to receive dividends and other distributions thereon and are considered to be currently issued and outstanding. The Company’s restricted stock awards vest over a period of one year. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares at the date of grant, straight-line over the period, during which the restrictions lapse. For these purposes, the fair market value of the restricted stock is determined based on the closing price of the Company’s common stock on the grant date. On June 11, 2015, the Company issued 525,000 RSUs (44,625,000 units pre-reverse stock split) to two officers of the Company. The RSUs were valued at the closing stock price of $0.01 on June 11, 2015, at $446,250, fair value. These RSUs are being expensed over the vesting terms. The former Chief Executive Officer (“CEO”) resigned on April 27, 2016 and holds 300,000 of the issued 525,000 RSUs above. As part of his severance package the RSUs will continue to vest and will not expire, therefore since there is no further obligation on the part of the former CEO, the Company expensed immediately the remaining unamortized portion of the RSUs in the amount of $187,708. On July 9, 2015, the Company hired a Chief Operating Officer (“COO”). The COO received 225,000 RSUs (19,125,000 units pre-reverse stock split), vesting over a three-year period, with one-third vesting the first year and one-twelfth vesting ratably on a quarterly basis thereafter. The RSUs were valued at fair value of $918,000 based on the closing stock price of $4.08 on July 9, 2015. The COO resigned on May 31, 2016 and as a result the Company reversed the expense related to the RSUs during the six months ended June 30, 2016 in the amount of $280,500. In addition, the value of the RSUs included in deferred compensation in the amount of $637,500 was reclassified to additional paid in capital. On August 10, 2015, the Company agreed to issue the Chief Financial Officer (“CFO”) 20,000 RSUs vesting over six months and 100,000 RSUs vesting annually over three years. The RSUs were valued at a fair value of $692,400 based on the closing stock price of $5.77 per share on August 10, 2015. For the three and six months ended June 30, 2016 the Company expensed $106,730 and $309,421 and for the three and six months ended June 30, 2015, the Company expensed $6,198 related to the RSUs. On October 1, 2015, the Company agreed to issue 100,000 RSUs to a consultant for services. Of the 100,000 RSUs, 60,000 were issued upon execution of the agreement, 20,000 shares were to be issued on January 1, 2016 and 20,000 shares were to be issued on April 1, 2016. The RSUs were originally valued at $195,000. The Company issued the remaining 40,000 shares in April 2016 and expensed $90,000 and $124,750 for the three and six months ended June 30, 2016 relative to these RSUs. On October 7, 2015, the Company agreed to pay $15,000 to a consultant/stockholder as well as an additional $35,000 based on certain milestones being met. Additionally, as of August 1, 2015 the Company agreed to issue the individual 30,000 RSUs originally valued at $165,000 in quarterly installments on November 1, 2015, February 1, 2016, May 1, 2016 and August 1, 2016, which began vesting on August 1, 2015. The agreement was terminated on April 29, 2016. The Company expensed $5,500 and $18,563 for the three and six months ended June 30, 2016 relative to these RSUs. Further the individual was to receive a 2% to 5% commission on company sales while this agreement is in effect; however no commissions were earned during April 2016 or the three months ended March 31, 2016. In addition, the remaining value of the RSUs included in deferred compensation in the amount of $2,750 was reclassified to additional paid in capital as a result of the termination of the agreement. On February 8, 2016, the Company issued 23,500 shares of Common Stock to a consultant for assistance in raising capital. The shares were valued at 15,275 based on the closing stock price of the Company’s stock price on February 8, 2016 of $0.65 per share. On May 24, 2016, the Company issued 9,483 shares of Common Stock to a consultant as a finder’s fee for an employee. The shares were value at $5,500 based on the closing stock price of the Company’s common stock on March 11, 2016 per the agreement. On May 1, 2016, the Company issued warrants to purchase 100,000 shares of common stock at an exercise price of $0.01 per share, with a term of five years, to the Chief Executive Officer, which vest immediately. The fair value of warrants issued was $49,885. These warrants were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 204.0%, risk-free interest rate of 1.28% and expected life of five years. The options were expensed immediately. In accordance with FASB ASC 505-50, “Equity – Equity-Based Payments to Non-Employees,” restricted stock with performance conditions should be revalued based on the modification accounting methodology described in FASB ASC 718-20, “Compensation—Stock Compensation—Awards Classified as Equity.” There were no outstanding equity-based payments to non-employees as of June 30, 2016.

STOCK OPTIONS

STOCK OPTIONS	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONS	NOTE 9 – STOCK OPTIONS During 1999, the Board of Directors (“Board”) of the Company adopted, with the approval of the stockholders, a stock option plan. In 2000, the Board superseded that plan and created a new stock option plan, pursuant to which the Board was authorized to grant options to purchase up to 1.5 million shares of Common Stock (the “2000 Plan”). On December 17, 2003, the Board, with approval of the stockholders, superseded the 2000 Plan and created the 2003 Stock Option Plan (the “2003 Plan”). Under the 2003 Plan the Company is authorized to grant options to purchase up to 18,000,000 shares of Common Stock to the Company’s employees, officers, directors, consultants, and other agents and advisors. The Plan is intended to permit stock options granted to employees under the Plan to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended (“Incentive Stock Options”). All options granted under the 2003 Plan, which are not intended to qualify as Incentive Stock Options, are deemed to be non-qualified options (“Non-Statutory Stock Options”). As of June 30, 2016, options to purchase 298,530 shares of Common Stock have been issued and are unexercised, and 4,067,631 shares are available for grants under the 2003 Plan. During 2013, our Board adopted a new omnibus incentive compensation plan that was ratified by the shareholders at the 2013 annual meeting, (the “2013 Plan”) which serves as the successor incentive compensation plan to the 2003 Plan. Under the 2013 Plan, the Company is authorized to grant awards of stock options, restricted stock, restricted stock units and other stock-based awards of up to an aggregate of 20,000,000 shares of Common Stock. The 2013 Plan is intended to permit stock options granted to employees under the 2013 Plan to qualify as incentive stock options. All options granted under the 2013 Plan, which are not intended to qualify as Incentive Stock Options, are deemed to be Non-Statutory Stock Options. As of June 30, 2016, under the 2013 Plan grants of restricted stock and options to purchase 535,000 shares of Common Stock have been issued and are unvested or unexercised, and 19,465,000 shares of Common Stock remain available for grants under the 2013 Plan. The 2013 Plan is administered by a committee of the Board (“Compensation Committee”) which determines the persons to whom awards will be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan. In connection with Incentive Stock Options, the exercise price of each option may not be less than 100% of the fair market value of the Common Stock on the date of the grant (or 110% of the fair market value in the case of a grantee holding more than 10% of the outstanding stock of the Company). The aggregate fair market value (determined at the time of the grant) of stock for which an employee may exercise Incentive Stock Options under all plans of the company shall not exceed $1,000,000 per calendar year. If any employee shall have the right to exercise any options in excess of $100,000 during any calendar year, the options in excess of $100,000 shall be deemed to be Non-Statutory Stock Options, including prices, duration, transferability and limitations on exercise. The Company issued Non-Statutory Stock Options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions. The Company uses the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value represent management’s best estimates and involve inherent uncertainties and judgments. On June 11, 2015, the Company issued options to purchase an aggregate of 1,225,000 shares of the Company’s Common Stock (104,125,000 shares of Common Stock pre-reverse split stock) at an exercise price of $0.85 per share, with a term of five years, to three employees and two members of the Board. The fair value of options issued was $993,083. These options were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 176.6%, risk-free interest rate of 1.74% to 1.75% and expected option life of five years. The options are being expensed over the vesting terms for the employees and over the board members’ remaining service terms as that is shorter than the vesting terms. On February 29, 2016, the Company issued options to purchase an aggregate of 100,000 shares of the Company’s common stock at an exercise price of $0.57 per share, with a term of five years, to the Chairman of the Board. The fair value of options issued was $53,731. These options were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 202.9%, risk-free interest rate of 1.22% and expected option life of five years. The options are being expensed over the Board Chairman’s remaining service terms as that is shorter than the vesting terms. On March 10, 2016, the Company issued options to purchase 150,000 shares of the Company’s Common Stock at an exercise price of $0.56 per share, with a term of five years, to an employee. The fair value of options issued was $82,113. These options were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 202.9%, risk-free interest rate of 1.45% and expected option life of five years. The options are being expensed over the vesting terms for the employee. On March 24, 2016, the Company issued options to purchase 50,000 shares of Common Stock at an exercise price of $0.43 per share, with a term of five years, to a consultant, which vest immediately. The fair value of options issued was $21,068. These options were valued using the Black-Scholes option pricing model to calculate the grant-date fair value of the options, with the following assumptions: no dividend yield, expected volatility of 203.1%, risk-free interest rate of 1.39% and expected option life of five years. The options were expensed immediately. For the three and six months ended June 30, 2016 the Company expensed $427,223 and $763,050 and for the three and six months ended June 30, 2015, the Company expensed $88,928 and $34,093 with respect to the options. Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in 000's) (1) Balance December 31, 2015 2,157,353 $ 1.80 5.0 Expired/Cancelled (431,250 ) $ 0.58 Granted 300,000 $ 0.55 5.0 Balance June 30, 2016 2,026,103 $ 1.80 4.6 $ - Exercisable at June 30, 2016 1,126,102 $ 1.92 5.0 $ - Exercisable at June 30, 2016 and expected to vest thereafter 2,026,103 $ 1.80 4.5 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.09 for our Common Stock on June 30, 2016. As of June 30, 2016 there was $1,038,621 of unrecognized compensation cost related to outstanding stock options. This amount is expected to be recognized over a weighted-average period of 2.2 years. To the extent the actual forfeiture rate is different from what the Company has estimated, stock-based compensation related to these awards will be different from the Company’s expectations. The difference between the stock options exercisable at June 30, 2016 and the stock options exercisable and expected to vest relates to management’s estimate of options expected to vest in the future. The following table summarizes the activities for our warrants for the six months ended June 30, 2016: Warrants Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price in years) (in 000's) (1) Balance December 31, 2015 1,414,893 $ 9.67 4.8 Expired (2,941 ) $ 0.85 Granted 3,187,500 $ 0.39 Balance June 30, 2016 4,599,452 $ 3.24 3.2 $ 8 Exercisable at June 30, 2016 4,599,452 $ 3.24 3.2 $ 8 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.09 for our Common Stock on June 30, 2016. All warrants were vested on the date of grant. For the three and six months ended June 30, 2016, the Company expensed $49,885 relative to the warrants in addition to previous income or expense related to the warrant liability and for the three and six months ended June 30, 2015, the Company expensed $0 relative to the warrants in addition to previous income or expense related to the warrant liability.

OPERATING LEASES

OPERATING LEASES	6 Months Ended
	Jun. 30, 2016
Leases [Abstract]
OPERATING LEASES	NOTE 10 – OPERATING LEASES For the three and six months ended June 30, 2016, total rent expense under leases amounted to $1,500 and $11,835. For the three and six months ended June 30, 2015, total rent expense under leases amounted to $12,642 and $32,011. As of June 30, 2016, the Company was not obligated under any non-cancelable operating lease arrangements.

RELATED PARTIES

RELATED PARTIES	6 Months Ended
	Jun. 30, 2016
Related Parties
RELATED PARTIES	NOTE 11 – RELATED PARTIES As of June 30, 2016, the Company owed a Board member $1,313 for expenses, the CFO $22,909 for services rendered and the former CEO $56,667 under his severance package. All of these amounts are included in accounts payable.

SUMMARY OF SIGNIFICANT ACCOUN18

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Nature of the Business	Nature of the Business References such as “we”, “our”, “us”, and the “Company” used herein mean VerifyMe, Inc., a Nevada corporation. On July 14, 2015, LaserLock Technologies, Inc. changed its name to VerifyMe, Inc., effective July 23, 2015. The Company was incorporated in the State of Nevada on November 10, 1999. The Company is based in New York, New York and its common stock, par value $0.001 per share (the “Common Stock”), is traded on the over-the-counter market and quoted on the OTCQB, organized by the OTC Markets Group, Inc., and the OTC Bulletin Board under the ticker symbol “VRME.” The Company is a technology pioneer in the anti-counterfeiting industry. This broad market encompasses counterfeiting of physical and material goods and products, as well as counterfeiting of identity in digital transactions. The Company delivers security solutions for identification and authentication of people, products and packaging in a variety of applications in the security field for both digital and physical transactions. The products can be used to manage and issue secure credentials, including national IDs, passports, driver licenses and access control credentials, as well as comprehensive authentication security software to secure physical and logical access to facilities, computer networks, internet sites and mobile applications. The Company’s activities are subject to significant risks and uncertainties, including the need to secure additional funding to operationalize the Company’s current technology.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The accompanying unaudited financial statements should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the SEC. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.
Basic and Diluted Net Income per Share of Common Stock	Basic and Diluted Net Income per Share of Common Stock The Company follows Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 260, “Earnings Per Share,” when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. Basic net income per common share is based on the weighted average number of shares outstanding during the periods presented. Diluted net income per common share is computed using the weighted average number of common shares plus dilutive common share equivalents outstanding during the period. Potential common shares that would have the effect of increasing diluted earnings per share are considered to be anti-dilutive, i.e., the exercise prices of the outstanding stock options were greater than the market price of the Common Stock. Anti-dilutive Common Stock equivalents, which were excluded from the calculation of number of dilutive Common Stock equivalents, amounted to 6,856,805 shares for the three and six months ended June 30, 2016.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements Effective January 1, 2016, the Company adopted FASB Accounting Standards Update (“ASU”) 2014-16, “ Derivatives and Hedging (Topic 815) Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity”,
Recently Issued Accounting Pronouncements Not Yet Adopted	Recently Issued Accounting Pronouncements Not Yet Adopted As of June 30, 2016, there are no recently issued accounting standards not yet adopted which would have a material effect on the Company’s financial statements through 2017.

FAIR VALUE OF FINANCIAL INSTR19

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Liabilities Measured at Fair Value on a Recurring Basis	Level 1 Level 2 Level 3 Total Embedded derivative liability related to beneficial conversion option $ - $ - $ 183,000 $ 183,000 Derivative liability related to fair value of warrants - - 249,494 249,494 Total $ - $ - $ 432,494 $ 432,494
Fair Value Measurements within Fair Value Hierarchy of Derivative Liabilities Using Level 3 Inputs	Total Balance at January 1, 2016 $ 1,802,375 Series C embedded derivative fair value, February, 2016 1,235,000 Effect of conversion of Series C on embedded derivative liability (313,000 ) Series C warrant liability fair value, February, 2016 1,767,576 Change in fair value of derivative liabilities (4,059,457 ) Balance at June 30, 2016 $ 432,494
Schedule of market based inputs used in valuation of embedded derivative liability	Closing trade price of Common Stock $ 0.09 Effective Series A Preferred Stock Conversion price - Intrinsic value of conversion option per share $ 0.09
Schedule of Common Stock Purchase Warrants Valuation Assumptions	June 30, 2016 Annual Dividend Yield 0.0% Expected Life (Years) 1.5 - 3.0 Risk-Free Interest Rate 0.33% - 0.41%

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)	6 Months Ended
	Jun. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of the activities for stock options	Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in 000's) (1) Balance December 31, 2015 2,157,353 $ 1.80 5.0 Expired/Cancelled (431,250 ) $ 0.58 Granted 300,000 $ 0.55 5.0 Balance June 30, 2016 2,026,103 $ 1.80 4.6 $ - Exercisable at June 30, 2016 1,126,102 $ 1.92 5.0 $ - Exercisable at June 30, 2016 and expected to vest thereafter 2,026,103 $ 1.80 4.5 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.09 for our Common Stock on June 30, 2016.
Summary of the activities for warrants	Warrants Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price in years) (in 000's) (1) Balance December 31, 2015 1,414,893 $ 9.67 4.8 Expired (2,941 ) $ 0.85 Granted 3,187,500 $ 0.39 Balance June 30, 2016 4,599,452 $ 3.24 3.2 $ 8 Exercisable at June 30, 2016 4,599,452 $ 3.24 3.2 $ 8 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.09 for our Common Stock on June 30, 2016.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Anti-dilutive common stock equivalents, excluded from the calculation of earnings per share	6,856,805	6,856,805

INCOME TAXES (Details)

INCOME TAXES (Details)	3 Months Ended	6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2016USD ($)
Income Tax Disclosure [Abstract]
Income Tax Expense (Benefit)	$ 0	$ 0
Unrecognized tax benefits	0	0
Interest or penalties related to unrecognized tax benefits		0
Change in unrecognized tax benefits	0	0
Accrual for uncertain tax positions	$ 0	$ 0

EMBEDDED DERIVATIVE LIABILITY (

EMBEDDED DERIVATIVE LIABILITY (Details) - USD ($)	1 Months Ended				3 Months Ended		6 Months Ended
	May 05, 2016	May 03, 2016	May 02, 2016	Feb. 29, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Beneficial conversion feature at a combined fair market value				$ 1,235,000
Deemed dividend distribution							$ 1,235,000
Fair value of the embedded derivative liability					$ 183,000		183,000
Effect of Convertible Preferred Stock on embedded derivative liability							313,000
Change in fair value of embedded derivative liability					$ 1,202,000		$ 739,000
Series C Preferred Stock [Member]
Dividend rate percentage							0.00%
Conversion of Convertible Preferred Stock (in shares)	353,000	125,000	572,000				(1,050,000)
Series C Preferred Stock [Member] | Common Stock [Member]
Conversion of Convertible Preferred Stock (in shares)							1,050,000

WARRANT LIABILITY (Details)

WARRANT LIABILITY (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 31, 2014	Jun. 30, 2016	Feb. 29, 2016	Feb. 09, 2016	Dec. 31, 2015	Aug. 05, 2014	Jan. 02, 2014	Jan. 31, 2013	Dec. 31, 2012
Series C Preferred Stock [Member]
Major Agreements [Line Items]
Number of common stock shares purchased under warrants (in shares)		3,087,500	500,000	2,587,500
Fair value of warrant liability		$ 219,380
Initial fair value of warrant expensed		1,767,576
Exercise price			$ 0.40	$ 0.40
Series A Preferred Stock [Member]
Major Agreements [Line Items]
Number of common stock shares purchased under warrants (in shares)								392,157
Fair value of warrant liability		10,529			$ 626,317			$ 2,995,791
Notes Payable [Member] | Debt Instrument Date Five August 2014 [Member]
Major Agreements [Line Items]
Number of common stock shares purchased under warrants (in shares)						3,529
Fair value of warrant liability		184			7,902
Verify Me [Member] | Research and Development Expense [Member] | Agreements [Member]
Major Agreements [Line Items]
Initial fair value of warrant expensed	$ 444,000
Verify Me [Member] | Warrants Issued on January 1, 2014 [Member]
Major Agreements [Line Items]
Fair value of warrant liability		$ 2,982			147,524
Number of warrants issued							74,697
Exercise price							$ 0.10
Zaah Technologies [Member] | Agreements [Member]
Major Agreements [Line Items]
Warrant liability									$ 2,400,000
Number of common stock shares purchased under warrants (in shares)		627,451
Fair value of warrant liability		$ 16,419			$ 1,020,632

CONVERTIBLE PREFERRED STOCK (De

CONVERTIBLE PREFERRED STOCK (Details) - USD ($)	Mar. 17, 2016	Mar. 10, 2016	Feb. 29, 2016	Feb. 09, 2016	Jun. 01, 2016	May 05, 2016	May 03, 2016	May 02, 2016	Jan. 31, 2013	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Class of Stock [Line Items]
Stock issuance costs										$ 17,500
Verify Me [Member] | Subscription Agreement [Member] | Common Stock [Member]
Class of Stock [Line Items]
Exercise price									$ 10.20
Value of shares issued									$ 1,000,000
Verify Me [Member] | Subscription Agreement [Member] | Pre Reverse Stock Split [Member] | Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Number of preferred stock purchased									392,157
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Conversion of Stock, Shares Converted	0.03
Conversion of shares of preferred stock to common stock, shares	291,780									(0.03)
Preferred stock, par value										$ 0.001		$ 0.001
Preferred stock, shares authorized										85		85
Conversion of preferred stock, shares										8,496,732
Licensing fees settled										$ 6,500,000
Series B Preferred Stock [Member] | Common Stock [Member]
Class of Stock [Line Items]
Conversion of shares of preferred stock to common stock, shares										291,780
Series B Preferred Stock [Member] | Pre Reverse Stock Split [Member]
Class of Stock [Line Items]
Preferred stock, shares authorized										1
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Conversion of Stock, Shares Converted		14,720			14,720
Conversion of shares of preferred stock to common stock, shares		294,400			294,400					(29,440)
Preferred stock, par value										$ 0.001		$ 0.001
Preferred stock, shares authorized										37,564,767		75,000,000
Proceeds from sale of Series C Convertible Preferred Stock											1,278,501
Number of common stock called by warrants (in shares)									392,157
Series A Preferred Stock [Member] | Common Stock [Member]
Class of Stock [Line Items]
Conversion of shares of preferred stock to common stock, shares										588,800
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Conversion of Stock, Shares Converted						353,000	125,000	572,000
Conversion of shares of preferred stock to common stock, shares						353,000	125,000	572,000		(1,050,000)
Shares of convertible preferred stock issued			500,000	2,587,500
Preferred stock, par value				$ 0.001						$ 0.001		$ 0.001
Preferred stock, shares authorized										7,500,000		7,500,000
Proceeds from sale of Series C Convertible Preferred Stock			$ 200,000	$ 1,035,000						$ 1,235,000
Number of common stock called by warrants (in shares)			500,000	2,587,500						3,087,500
Purchase price (in dollars per share)			$ 0.40	$ 0.40
Exercise price			$ 0.40	$ 0.40
Number of preferred stock purchased										3,087,500
Series C Preferred Stock [Member] | Common Stock [Member]
Class of Stock [Line Items]
Conversion of shares of preferred stock to common stock, shares										1,050,000
Number of preferred stock purchased

FAIR VALUE OF FINANCIAL INSTR26

FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring [Member]	Jun. 30, 2016USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability related to beneficial conversion option	$ 183,000
Derivative liability related to fair value of warrants	249,494
Total	432,494
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability related to beneficial conversion option
Derivative liability related to fair value of warrants
Total
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability related to beneficial conversion option
Derivative liability related to fair value of warrants
Total
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded derivative liability related to beneficial conversion option	183,000
Derivative liability related to fair value of warrants	249,494
Total	$ 432,494

FAIR VALUE OF FINANCIAL INSTR27

FAIR VALUE OF FINANCIAL INSTRUMENTS (Fair Value Measurements within Fair Value Hierarchy of Derivative Liabilities Using Level 3 Inputs) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Beginning balance	$ 1,802,375
Series C embedded derivative fair value, February, 2016	1,235,000
Effect of conversion of Series C on embedded derivative liability	(313,000)
Series C warrant liability fair value, February, 2016	1,767,576
Change in fair value of derivative liabilities	(4,059,457)
Ending balance	$ 432,494

FAIR VALUE OF FINANCIAL INSTR28

FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Market Based Inputs used in Valuation of Embedded Derivative Liability) (Details) - $ / shares	Jun. 30, 2016	Feb. 08, 2016
Fair Value Disclosures [Abstract]
Closing trade price of Common Stock	$ 0.09	$ 0.65
Effective Series A Preferred Stock Conversion price
Intrinsic value of conversion option per share	$ 0.09

FAIR VALUE OF FINANCIAL INSTR29

FAIR VALUE OF FINANCIAL INSTRUMENTS (Schedule of Common Stock Purchase Warrants Valuation Assumptions) (Details) - Warrant [Member]	6 Months Ended
	Jun. 30, 2016
Fair Value, Option, Quantitative Disclosures [Line Items]
Annual Dividend Yield	0.00%
Minimum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Expected Life (Years)	1 year 6 months
Risk-Free Interest Rate	0.33%
Maximum [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Expected Life (Years)	3 years
Risk-Free Interest Rate	0.41%

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - USD ($)

Aug. 01, 2016

Mar. 24, 2016

Feb. 29, 2016

Feb. 08, 2016

Oct. 07, 2015

Oct. 01, 2015

May 24, 2016

May 01, 2016

Apr. 30, 2016

Apr. 27, 2016

Aug. 10, 2015

Jul. 09, 2015

Jun. 11, 2015

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Stockholders Equity Note [Line Items]

Issuance of shares for services (in shares)

23,500

Worth of common stock to be paid

$ 15,275

$ 20,775

Closing stock price per share

$ 0.65

$ 0.09

$ 0.09

Common stock, proceeds from sales

$ 50,000

Restricted stock units fair value

[1]

$ 8,000

8,000

Award, compensation payment

$ 15,000

Award, additional compensation payment

$ 35,000

Restricted stock units issued, value

90,000

Forfeiture of restricted stock units

$ (280,500)

Maximum [Member]

Stockholders Equity Note [Line Items]

Commission on sales, percentage

5.00%

Minimum [Member]

Stockholders Equity Note [Line Items]

Commission on sales, percentage

2.00%

Restricted Stock Units (RSUs) [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

30,000

Restricted stock units, Expense

106,730

$ 6,198

$ 309,421

$ 6,198

Vesting period

1 year

Restricted stock units issued, value

$ 165,000

Restricted Stock Units (RSUs) [Member] | Officer [Member]

Stockholders Equity Note [Line Items]

Closing stock price per share

$ 0.01

Restricted stock units issued

525,000

Restricted stock units fair value

$ 446,250

Restricted Stock Units (RSUs) [Member] | Officer [Member] | Pre Reverse Stock Split [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

44,625,000

Restricted Stock Units (RSUs) [Member] | Chief Executive Officer [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

300,000

Restricted stock units, Expense

$ 187,708

Restricted Stock Units (RSUs) [Member] | Chief Operating Officer [Member]

Stockholders Equity Note [Line Items]

Closing stock price per share

$ 4.08

Restricted stock units issued

225,000

Restricted stock units fair value

$ 918,000

Restricted stock units, Expense

$ (280,500)

Vesting period

3 years

Forfeiture of restricted stock units

637,500

Restricted Stock Units (RSUs) [Member] | Chief Operating Officer [Member] | Pre Reverse Stock Split [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

19,125,000

Restricted Stock Units (RSUs) [Member] | Chief Financial Officer [Member]

Stockholders Equity Note [Line Items]

Closing stock price per share

$ 5.77

Restricted stock units fair value

$ 692,400

Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche One [Member] | Chief Financial Officer [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

20,000

Vesting period

6 months

Restricted Stock Units (RSUs) [Member] | Share-based Compensation Award, Tranche Two [Member] | Chief Financial Officer [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

100,000

Vesting period

3 years

Restricted Stock Units (RSUs) [Member] | Consultant [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

100,000

9,483

40,000

Restricted stock units fair value

$ 195,000

$ 5,500

Restricted stock units, Expense

90,000

124,750

Restricted Stock Units (RSUs) [Member] | Consultant [Member] | Share-based Compensation Award, Tranche Three [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

20,000

Restricted Stock Units (RSUs) [Member] | Consultant [Member] | Share-based Compensation Award, Tranche One [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

60,000

Restricted Stock Units (RSUs) [Member] | Consultant [Member] | Share-based Compensation Award, Tranche Two [Member]

Stockholders Equity Note [Line Items]

Restricted stock units issued

20,000

Restricted Stock Units (RSUs) [Member] | Consultant/Stockholder [Member]

Stockholders Equity Note [Line Items]

Restricted stock units, Expense

$ 5,500

18,563

Forfeiture of restricted stock units

$ 2,750

Employee Stock Option [Member]

Stockholders Equity Note [Line Items]

Number of options issued

300,000

Granted, exercise price

$ 0.55

Employee Stock Option [Member] | Consultant [Member]

Stockholders Equity Note [Line Items]

Number of options issued

50,000

Granted, exercise price

$ 0.43

Expected term

5 years

Dividend yield

0.00%

Expected volatility

203.10%

Risk-free interest rate

1.39%

Employee Stock Option [Member] | Board of Directors Chairman [Member]

Stockholders Equity Note [Line Items]

Number of options issued

100,000

Granted, exercise price

$ 0.57

Expected term

5 years

Dividend yield

0.00%

Expected volatility

202.90%

Risk-free interest rate

1.22%

Warrant [Member] | Chief Executive Officer [Member]

Stockholders Equity Note [Line Items]

Number of options issued

100,000

Granted, exercise price

$ 0.01

Expected term

5 years

Dividend yield

0.00%

Expected volatility

204.00%

Risk-free interest rate

1.28%

Share-based compensation

$ 49,885

[1]

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.09 for our Common Stock on June 30, 2016.

STOCK OPTIONS (Narrative) (Deta

STOCK OPTIONS (Narrative) (Details) - USD ($)

Mar. 24, 2016

Mar. 10, 2016

Feb. 29, 2016

May 01, 2016

Apr. 27, 2016

Jun. 11, 2015

Jun. 30, 2016

Jun. 30, 2015

Jun. 30, 2016

Jun. 30, 2015

Feb. 08, 2016

Dec. 31, 2013

Dec. 17, 2003

Dec. 31, 2000

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Closing stock price per share

$ 0.09

$ 0.09

$ 0.65

Employee Stock Option [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

300,000

Exercise price of options issued

$ 0.55

Option, expense

$ 427,223

$ 88,928

$ 763,050

$ 34,093

Unrecognized compensation cost related to outstanding stock options

$ 1,038,621

$ 1,038,621

Unrecognized compensation cost related to stock options, period of recognition

2 years 2 months 12 days

Maximum percentage of outstanding stock

100.00%

Maximum aggregate fair market value

$ 1,000,000

Maximum fair value of options per employee

$ 100,000

Employee Stock Option [Member] | Stock Option 2003 Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of shares authorized to be granted under plan

4,067,631

4,067,631

18,000,000

Number of common shares that can be purchased through equity awards that have been issued, unvested or unexercised

298,530

298,530

Employee Stock Option [Member] | Stock Option 2000 Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of shares authorized to be granted under plan

1,500,000

Employee Stock Option [Member] | Employee [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

150,000

Exercise price of options issued

$ 0.56

Expected option life (in years)

5 years

Fair value of option issued expensed immediately

$ 82,113

Dividend yield

0.00%

Expected volatility

202.90%

Risk free interest rate

1.45%

Expected Life (Years)

5 years

Employee Stock Option [Member] | Employees and Board Members [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

1,225,000

Exercise price of options issued

$ 0.85

Dividend yield

0.00%

Expected volatility

176.60%

Expected Life (Years)

5 years

Fair value of options

$ 993,083

Employee Stock Option [Member] | Employees and Board Members [Member] | Minimum [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Risk free interest rate

1.74%

Employee Stock Option [Member] | Employees and Board Members [Member] | Maximum [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Risk free interest rate

1.75%

Employee Stock Option [Member] | Employees and Board Members [Member] | Pre Reverse Stock Split [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

104,125,000

Employee Stock Option [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Option, expense

$ 298,377

Employee Stock Option [Member] | Majority Shareholder [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Maximum percentage of outstanding stock

110.00%

Employee Stock Option [Member] | Consultant [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

50,000

Exercise price of options issued

$ 0.43

Expected option life (in years)

5 years

Fair value of option issued expensed immediately

$ 21,068

Dividend yield

0.00%

Expected volatility

203.10%

Risk free interest rate

1.39%

Expected Life (Years)

5 years

Employee Stock Option [Member] | Board of Directors Chairman [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

100,000

Exercise price of options issued

$ 0.57

Expected option life (in years)

5 years

Fair value of option issued expensed immediately

$ 53,731

Dividend yield

0.00%

Expected volatility

202.90%

Risk free interest rate

1.22%

Expected Life (Years)

5 years

Stock Compensation Plan [Member] | Stock Option 2013 Plan [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of shares authorized to be granted under plan

20,000,000

Number of common shares that can be purchased through equity awards that have been issued, unvested or unexercised

535,000

535,000

Number of options available to be issued

19,465,000

19,465,000

Warrant [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Option, expense

$ 49,885

$ 0

$ 49,885

$ 0

Warrant [Member] | Chief Executive Officer [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Number of options issued

100,000

Exercise price of options issued

$ 0.01

Dividend yield

0.00%

Expected volatility

204.00%

Risk free interest rate

1.28%

Expected Life (Years)

5 years

Fair value of options

$ 49,885

STOCK OPTIONS (Summary of Activ

STOCK OPTIONS (Summary of Activities for Stock Options) (Details) - Employee Stock Option [Member] - USD ($)		6 Months Ended	12 Months Ended
		Jun. 30, 2016	Dec. 31, 2015
Number of Shares
Balance, beginning		2,157,353
Expired/Cancelled		(431,250)
Granted		300,000
Balance, ending		2,026,103	2,157,353
Exercisable at June 30, 2016		1,126,102
Exercisable at June 30, 2016 and expected to vest thereafter		2,026,103
Weighted Average Exercise Price
Balance, beginning		$ 1.80
Expired/Cancelled		0.58
Granted		0.55
Balance, ending		1.80	$ 1.80
Exercisable at June 30, 2016		1.92
Exercisable at June 30, 2016 and expected to vest thereafter		$ 1.80
Weighted Average Remaining Contractual Term
Outstanding		4 years 7 months 6 days	5 years
Granted		5 years
Exercisable at June 30, 2016		5 years
Exercisable at June 30, 2016 and expected to vest thereafter		4 years 6 months
Aggregate Intrinsic Value
Balance June 30, 2016	[1]
Exercisable at June 30, 2016	[1]
Exercisable at June 30, 2016 and expected to vest thereafter	[1]
[1]	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $0.09 for our Common Stock on June 30, 2016.

STOCK OPTIONS (Summary of Act33

STOCK OPTIONS (Summary of Activities for Warrants) (Details) - USD ($)		6 Months Ended	12 Months Ended
		Jun. 30, 2016	Dec. 31, 2015
Number of Shares
Balance, beginning		1,414,893
Expired		(2,941)
Granted		3,187,500
Balance, ending		4,599,452	1,414,893
Exercisable at June 30, 2016		4,599,452
Weighted Average Exercise Price
Balance, beginning		$ 9.67
Expired		0.85
Granted		0.39
Balance, ending		3.24	$ 9.67
Exercisable at June 30, 2016		$ 3.24
Weighted- Average Remaining Contractual Term
Outstanding		3 years 2 months 12 days	4 years 9 months 18 days
Exercisable at June 30, 2016		3 years 2 months 12 days
Aggregate Intrinsic Value
Balance June 30, 2016	[1]	$ 8,000
Exercisable at June 30, 2016	[1]	$ 8,000
[1]	The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $0.09 for our Common Stock on June 30, 2016.

OPERATING LEASES (Details)

OPERATING LEASES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Leases [Abstract]
Total rent expense under leases	$ 1,500	$ 12,642	$ 11,835	$ 32,011

RELATED PARTIES (Details)

RELATED PARTIES (Details)	Jun. 30, 2016USD ($)
Board of Directors Chairman [Member]
Due to related parties	$ 1,313
Chief Financial Officer [Member]
Due to related parties	22,909
Chief Executive Officer [Member]
Due to related parties	$ 56,667