Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 08, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39332 | |
Entity Registrant Name | VERIFYME, INC. | |
Entity Central Index Key | 0001104038 | |
Entity Tax Identification Number | 23-3023677 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | Clinton Square, 75 S. Clinton Ave | |
Entity Address, Address Line Two | Suite 510 | |
Entity Address, City or Town | Rochester | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 14604 | |
City Area Code | (585) | |
Local Phone Number | 736-9400 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | VRME | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Number of common stock shares outstanding | 7,297,270 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 10,630 | $ 7,939 |
Accounts Receivable | 319 | 31 |
Prepaid expenses and other current assets | 111 | 177 |
Inventory | 48 | 54 |
TOTAL CURRENT ASSETS | 11,108 | 8,201 |
INVESTMENTS | ||
Equity Investment | 10,806 | |
PROPERTY AND EQUIPMENT | ||
Equipment for lease, net of accumulated amortization of $88 and $50 as of September 30, 2021 and December 31, 2020, respectively | 207 | 200 |
Office Equipment, net of accumulated amortization of $1 and $0 as of September 30, 2021 and December 31, 2020, respectively | 8 | |
INTANGIBLE ASSETS | ||
Patents and Trademarks, net of accumulated amortization of $345 and $320 as of September 30, 2021 and December 31, 2020, respectively | 328 | 293 |
Capitalized Software Costs, net of accumulated amortization of $40 and $20 as of September 30, 2021 and December 31, 2020, respectively | 143 | 80 |
TOTAL ASSETS | 22,600 | 8,774 |
CURRENT LIABILITIES | ||
Accounts payable and other accrued expenses | 434 | 383 |
TOTAL CURRENT LIABILITIES | 434 | 383 |
NON-CURRENT LIABILITIES | ||
Term Note | 72 | |
Other Long Term Liabilities | 9 | |
TOTAL LIABILITIES | 443 | 455 |
STOCKHOLDERS' EQUITY | ||
Common stock, $.001 par value; 675,000,000 authorized; 7,440,546 and 5,603,888 issued, 7,296,183 and 5,596,877 shares outstanding as of September 30, 2021 and December 31, 2020, respectively | 7 | 6 |
Additional paid in capital | 85,784 | 76,099 |
Treasury stock as cost; 144,363 and 7,011 shares as of September 30, 2021 and December 31, 2020, respectively | (577) | (113) |
Accumulated deficit | (63,057) | (67,673) |
STOCKHOLDERS' EQUITY | 22,157 | 8,319 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 22,600 | 8,774 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible Preferred Stock | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible Preferred Stock |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Accumulated amortization, equipment for Lease | $ 88 | $ 50 |
Accumulated amortization, office equipment | 1 | 0 |
Accumulated amortization, patent and trademarks | 345 | 320 |
Accumulated amortization, capitalized software costs | $ 40 | $ 20 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 675,000,000 | 675,000,000 |
Common stock, issued | 7,440,546 | 5,603,888 |
Common stock, outstanding | 7,296,183 | 5,596,877 |
Treasury stock, shares | 144,363 | 7,011 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 37,564,767 | 37,564,767 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 85 | 85 |
Preferred stock, issued | 0.85 | 0.85 |
Preferred stock, outstanding | 0.85 | 0.85 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
NET REVENUE | |||||
Sales | $ 300,000 | $ 101,000 | $ 612,000 | $ 268,000 | |
COST OF SALES | 114,000 | 19,000 | 183,000 | 49,000 | |
GROSS PROFIT | 186,000 | 82,000 | 429,000 | 219,000 | |
OPERATING EXPENSES | |||||
General and administrative (a) | [1] | 636,000 | 550,000 | 2,320,000 | 1,520,000 |
Legal and accounting | 74,000 | 98,000 | 288,000 | 235,000 | |
Corporate payroll expenses (a) | [1] | 194,000 | 117,000 | 621,000 | 436,000 |
Research and development | 8,000 | 7,000 | 25,000 | 7,000 | |
Sales and marketing (a) | [1] | 299,000 | 293,000 | 843,000 | 415,000 |
Total Operating expenses | 1,211,000 | 1,065,000 | 4,097,000 | 2,613,000 | |
LOSS BEFORE OTHER INCOME (EXPENSE) | (1,025,000) | (983,000) | (3,668,000) | (2,394,000) | |
OTHER INCOME (EXPENSE), NET | |||||
Interest income (expenses), net | 1,000 | 1,000 | (2,054,000) | ||
Fair value gain on equity investment | 8,214,000 | 8,214,000 | |||
Loss on extinguishment of debt | (280,000) | ||||
Payroll Protection Program Debt Forgiveness | 70,000 | ||||
Income tax expense | (1,000) | 0 | (1,000) | 0 | |
TOTAL OTHER INCOME (EXPENSE), NET | 8,214,000 | 8,284,000 | (2,334,000) | ||
NET INCOME/(LOSS) | $ 7,189,000 | $ (983,000) | $ 4,616,000 | $ (4,728,000) | |
EARNINGS/(LOSS) PER SHARE | |||||
BASIC | $ 0.99 | $ (0.18) | $ 0.65 | $ (1.38) | |
DILUTED | $ 0.95 | $ (0.18) | $ 0.63 | $ (1.38) | |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||||
BASIC | 7,290,975 | 5,488,111 | 7,078,046 | 3,436,805 | |
DILUTED | 7,570,985 | 5,488,111 | 7,335,268 | 3,436,805 | |
[1] | Includes share-based compensation of $ 372 1,379 311 thousand 1,000 |
Statements of Operations (Una_2
Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Stock-based compensation | $ 372 | $ 311 | $ 1,379 | $ 1,000 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income/(loss) | $ 4,616 | $ (4,728) |
Adjustments to reconcile net income/(loss) to net cash used in operating activities: | ||
Stock based compensation | 44 | 62 |
Fair value of options in exchange for services | 85 | 643 |
Fair value of restricted stock awards issued in exchange for services | 739 | 241 |
Fair value of restricted stock units issued in exchange for services | 511 | |
Fair value of warrants in exchange for services | 54 | |
Payroll Protection Program Debt Forgiveness | (70) | |
Fair value gain on equity investment | (8,214) | |
Loss on Extinguishment of Debt | 281 | |
Amortization of debt discount | 1,992 | |
Common stock issued for interest expense | 61 | |
Amortization and depreciation | 84 | 70 |
Changes in operating assets and liabilities: | ||
Accounts Receivable | (288) | (22) |
Inventory | 5 | (18) |
Prepaid expenses and other current assets | 66 | (50) |
Accounts payable and accrued expenses | 54 | 120 |
Net cash used in operating activities | (2,368) | (1,294) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Patents | (60) | (52) |
Purchase of Equipment for lease | (45) | (23) |
Purchase of equity investment | (2,593) | |
Purchase of Office Equipment | (8) | |
Capitalized Software Costs | (84) | |
Net cash used in investing activities | (2,790) | (75) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from public offering of securities | 8,447 | 9,023 |
Proceeds from issuance of notes payable | 72 | |
Repayments of notes payable | (3) | |
Repayment of bridge financing and early redemption fee | (750) | |
Proceeds from convertible debt, net of costs | 1,747 | |
Tax withholding payments for employee stock-based compensation in exchange for shares surrendered | (131) | |
Repurchase Shares | (464) | |
Net cash provided by financing activities | 7,849 | 10,092 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 2,691 | 8,723 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 7,939 | 253 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 10,630 | 8,976 |
Cash paid during the period for: | ||
Interest | 1 | |
Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Common Stock issued in relation to conversion of 2020 Debentures and warrant cancellation | 1,992 | |
Relative fair value of common stock issued in connection with 2020 Debentures | 34 | |
Relative fair value of warrants issued in connection with 2020 Debentures | 1,063 | |
Beneficial conversion feature in connection with 2020 Debentures | 650 | |
Common stock issued to settle accrued payroll | $ 119 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity (Deficit)(Unaudited) - USD ($) $ in Thousands | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 2 | $ 61,815 | $ (113) | $ (61,771) | $ (67) | ||
Balance at beginning, shares at Dec. 31, 2019 | 0.85 | 2,232,112 | 7,011 | ||||
Fair value of stock options | 642 | 642 | |||||
Restricted stock awards, net of shares withheld for employee tax | 360 | 360 | |||||
Restricted stock awards, net of shares withheld for employee tax (in shares) | 267,500 | ||||||
Fair value of warrants issued for services | 54 | 54 | |||||
Common stock issued for services | 30 | 30 | |||||
Common stock issued in connection with 2020 Debentures | 66 | 66 | |||||
Common stock issued in connection with 2020 Debentures (in shares) | 19,208 | ||||||
Beneficial conversion feature in connection with 2020 Debentures | 650 | 650 | |||||
Warrants issued in connection with 2020 Debentures | 1,063 | 1,063 | |||||
Common Stock in relation to conversion of 2020 Debentures and interest expense and cancellation of warrants | $ 1 | 2,052 | 2,053 | ||||
Common Stock in relation to Conversion of 2020 Debentures and interest expense and cancellation of warrants (in shares) | 816,713 | ||||||
Cancellation of common stock (in shares) | (19,401) | ||||||
Common stock issued for services (in shares) | 6,596 | ||||||
Common stock issued in relation to public offering of securities | $ 3 | 9,020 | 9,023 | ||||
Common stock in relation to public offering of securities (in shares) | 2,254,801 | ||||||
Net gain | (4,728) | (4,728) | |||||
Ending balance, value at Sep. 30, 2020 | $ 6 | 75,752 | $ (113) | (66,499) | 9,146 | ||
Balance at ending, shares at Sep. 30, 2020 | 0.85 | 5,577,529 | 7,011 | ||||
Beginning balance, value at Jun. 30, 2020 | $ 5 | 75,442 | $ (113) | (65,516) | 9,818 | ||
Balance at beginning, shares at Jun. 30, 2020 | 0.85 | 5,343,380 | 7,011 | ||||
Fair value of stock options | 157 | 157 | |||||
Restricted stock awards, net of shares withheld for employee tax | 142 | 142 | |||||
Restricted stock awards, net of shares withheld for employee tax (in shares) | 230,000 | ||||||
Common stock issued for services | 12 | 12 | |||||
Common stock issued for services (in shares) | 3,261 | ||||||
Common stock issued in relation to public offering of securities | $ 1 | (1) | |||||
Common stock in relation to public offering of securities (in shares) | 888 | ||||||
Net gain | (983) | (983) | |||||
Ending balance, value at Sep. 30, 2020 | $ 6 | 75,752 | $ (113) | (66,499) | 9,146 | ||
Balance at ending, shares at Sep. 30, 2020 | 0.85 | 5,577,529 | 7,011 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 6 | 76,099 | $ (113) | (67,673) | 8,319 | ||
Balance at beginning, shares at Dec. 31, 2020 | 0.85 | 5,596,877 | 7,011 | ||||
Fair value of stock options | 85 | 85 | |||||
Restricted stock awards, net of shares withheld for employee tax | 608 | $ 608 | |||||
Restricted stock awards, net of shares withheld for employee tax (in shares) | 56,971 | 8,687 | |||||
Restricted Stock Units | 511 | $ 511 | |||||
Restricted Stock Units (in shares) | 21,000 | ||||||
Common stock issued for services | 35 | 35 | |||||
Repurchase of Common Stock (in shares) | (137,352) | 137,352 | |||||
Repurchase of Common Stock | $ (464) | (464) | |||||
Common stock issued for services (in shares) | 8,687 | ||||||
Common stock issued in relation to public offering of securities | $ 1 | 8,446 | 8,447 | ||||
Common stock in relation to public offering of securities (in shares) | 1,750,000 | ||||||
Net gain | 4,616 | 4,616 | |||||
Ending balance, value at Sep. 30, 2021 | $ 7 | 85,784 | $ (577) | (63,057) | 22,157 | ||
Balance at ending, shares at Sep. 30, 2021 | 0.85 | 7,296,183 | 144,363 | ||||
Beginning balance, value at Jun. 30, 2021 | $ 7 | 85,495 | $ (341) | (70,246) | 14,915 | ||
Balance at beginning, shares at Jun. 30, 2021 | 0.85 | 7,360,478 | 74,527 | ||||
Restricted stock awards, net of shares withheld for employee tax | 43 | 43 | |||||
Restricted stock awards, net of shares withheld for employee tax (in shares) | (18,720) | ||||||
Restricted Stock Units | 234 | 234 | |||||
Restricted Stock Units (in shares) | 21,000 | ||||||
Common stock issued for services | 12 | 12 | |||||
Repurchase of Common Stock (in shares) | (69,836) | 69,836 | |||||
Repurchase of Common Stock | $ (236) | (236) | |||||
Common stock issued for services (in shares) | 3,261 | ||||||
Net gain | 7,189 | 7,189 | |||||
Ending balance, value at Sep. 30, 2021 | $ 7 | $ 85,784 | $ (577) | $ (63,057) | $ 22,157 | ||
Balance at ending, shares at Sep. 30, 2021 | 0.85 | 7,296,183 | 144,363 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business VerifyMe, Inc. (“VerifyMe,” the “Company,” “we,” “us,” or “our”) was incorporated in the State of Nevada on November 10, 1999. The Company is based in Rochester, New York and its common stock, par value $ 0.001 The Company is a technology solutions provider specializing in products to connect brands with consumers. VerifyMe technologies give brand owners the ability to gather business intelligence while engaging directly with their consumers. VerifyMe technologies also provide brand protection and supply chain functions such as counterfeit prevention, authentication, serialization, and track and trace features for labels, packaging and products. Until 2018, the Company primarily engaged in the research and development of its technologies. The Company’s activities are subject to significant risks and uncertainties, including its ability to successfully commercialize its technologies and the need to further develop the Company’s intellectual property. Reclassifications Certain amounts presented for the three and nine months ended September 30, 2021 reflect reclassifications made to conform to the presentation in our current reporting period. Basis of Presentation The accompanying unaudited interim financial statements (the “Interim Statements”) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission (the “SEC”) on March 25, 2021. The accompanying Interim Statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Fair Value of Financial Instruments The Company’s financial instruments consist of accounts receivable, accounts payable and accrued expenses, equity investments, and other long-term liabilities. The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures,” and applies it to all assets and liabilities that are being measured and reported on a fair value basis. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs that are not corroborated by market data The level in the fair value within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Variable Interest Entity The Company has determined that G3 VRM Acquisition Corp., (the “SPAC”, see FN 2 – Equity Investment), is a variable interest entity (“VIE”) in which the Company has a variable interest but is not the primary beneficiary. Making the determination as to whether a VIE should be consolidated requires judgement in assessing if the Company is the primary beneficiary. To make this determination, the Company evaluated its power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the SPAC. The Company concluded that it is not the primary beneficiary of the VIE and as such, does not consolidate the SPAC. The Company reassess its evaluation of whether an entity is a VIE and if it continues to be a VIE, whether the Company is the primary beneficiary of the VIE, on an ongoing basis based on the current facts and circumstances surrounding the entity. Equity Investments When the Company does not have a controlling financial interest in an entity but can exert influence over the entity’s operations and financial policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing the fair value option available under applicable generally accepted accounting policies. The Company has elected the fair value option for its equity investment in the SPAC (see FN2 – Equity Investment) as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrecognized gains or losses of the fair value of the equity investment are included in Other Income (Expense), Net on the accompanying Statement of Operations. Revenue Recognition The Company accounts for revenues according to Accounting Standards Codification (“ASC”) Topic 606, “ Revenue from Contracts with Customers” The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to performance obligations in the contract; and · recognize revenue as the performance obligation is satisfied. During the three and nine months ended September 30, 2021, the Company’s revenues primarily consisted of revenue generated from printing labels and through our product authentication technology, as well as our customer engagement technology. Basic and Diluted Net Income per Share of Common Stock The Company follows Financial Accounting Standards Board (“FASB”) ASC 260, “Earnings Per Share,” when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. |
EQUITY INVESTMENT
EQUITY INVESTMENT | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY INVESTMENT | NOTE 2 – EQUITY INVESTMENT On February 26, 2021, the Company formed VMEA Holdings Inc. (the “Sponsor Entity”), a Delaware corporation and wholly owned subsidiary of the Company, that owns G3 VRM Acquisition Corp. (NASDAQ: GGGVU) (the “SPAC”), a Delaware corporation and special purpose acquisition company being co-sponsored by the Company. The SPAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. While it may pursue an initial business combination target in any business, industry or geographical location, it intends to focus its search on target businesses with enterprise values of approximately $250 million to $500 million within the technology and business services industry. On April 12, 2021, the Sponsor Entity converted to a Delaware limited liability company, changed its name to “G3 VRM Holdings LLC” and a co-sponsor was added as a member of the Sponsor Entity resulting in an equity interest of 44.40 On July 6, 2021, the SPAC consummated the IPO of 10,626,000 units (the “Units”), including 626,000 106,260 569,410 516,280 53,130 5,694 229,228 2,581 9.42 As a result of ceasing to have a controlling financial interest in the Sponsor Entity on April 12, 2021, the Company accounted for the Sponsor Entity as an equity investment and has elected the fair value option resulting in a fair value gain of $8,214 thousand for the nine months ended September 30, 2021 included in Fair value gain on equity investment, in the accompanying Statement of Operations. The fair value of the equity investment is classified as Level 3 in the fair value hierarchy as the calculation is dependent upon company specific adjustments to the observable trading price of the SPAC’s public units and shares, and related risk of forfeiture should no business combination occur. If the SPAC is unable to complete its initial business combination within 12 months from the closing of the IPO (or 15 or 18 months from the closing of the IPO, should the Company and the co-sponsor extend the period of time to consummate a business combination by depositing additional funds into the trust account as described in more detail in IPO prospectus), the SPAC will redeem 100% of the public shares for cash, the rights will expire worthless, and the founder shares and the private placement securities will be worthless. Even if the SPAC is able to complete a business combination within the allotted time, if the combined company is unable to maintain adequate results from operations, then our investment in the SPAC could lose value and may ultimately become worthless. There can be no assurance that the SPAC will complete a business combination within the allotted time or that any such business combination will be successful. The following table presents summary financial information of the Sponsor Entity. Such summary information has been provided herein based upon the individual significance of the equity investment to the financial information of the Company. Amounts in Thousands ('000) September 30, 2021 December 31, 2020 Current Assets $ 1,371 $ - Non-current assets 107,855 - Current Liabilities 3,719 - Mezzanine Equity 107,854 - Stockholders' Deficit (2,347 ) - Amounts in Thousands ('000) Nine Months Ended 2021 2020 Operating Loss (274 ) - Net Loss (273 ) - |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 3 – PROPERTY AND EQUIPMENT Equipment for Lease During the nine months ended September 30, 2021 and 2020, the Company capitalized $ 45 74 (including a $ 51 TM five years Depreciation expense for Equipment for lease was $ 11 38 30, 2021, respectfully, and $ 11 34 30, 2020, respectively, and is Office Equipment During the nine months ended September 30, 2021 and 2020, the Company capitalized $ 8 0 three years 1 0 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 4 – INTANGIBLE ASSETS Patents and Trademarks As of September 30, 2021, the current patent and trademark portfolios consist of eleven four six two one one one one one seventeen issued patents expire between the years 2022 and 2039 straight-line basis 17 19 During the nine months ended 30, 2021 and 2020, the Company capitalized $ 60 52 9 7 30, 2021 and 2020, respectively, and $ 25 20 30, 2021 and 2020, respectively and included in general and administrative expense in the accompanying Statement of Operations. Capitalized Software Costs incurred in connection with the development of software related to our proprietary digital products are accounted for in accordance with FASB ASC 985 “Costs of Software to Be Sold, Leased or Marketed.” Costs incurred prior to the establishment of technological feasibility are charged to research and development expense. Software development costs are capitalized after a product is determined to be technologically feasible and is in the process of being developed for market. Amortization of capitalized software costs begins once the product is available to the market. Capitalized software costs are amortized over the estimated life of the related product, generally five years 84 0 Amortization expense for capitalized software was $ 8 5 30, 2021 and 2020, respectively, and $ 20 15 30, 2021 and 2020, respectively, |
TERM NOTE
TERM NOTE | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Term Note Abstract | |
TERM NOTE | NOTE 5 – TERM NOTE On May 17, 2020, the Company entered into a paycheck protection program term note for $ 72 May 17, 2022 1.00 72 The Company applied for and was notified in June 2021 that $69 thousand in eligible payroll expenditures as described in the CARES Act, has been forgiven. Loan forgiveness is reflected in Other Income (Expense), Net in the accompanying Statements of Operations. The forgiveness recognized during the nine months ended September 30, 2021, included principal of $ 69 1 3 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY The Company expensed $ 117 739 142 241 During the nine months ended 30, 2021, the Company issued 8,687 35 On September 17, 2021 the Company approved restricted stock units for three non-employee directors for an aggregate of 63,000 217 Effective January 1, 2021, the Company approved restricted stock units or restricted stock awards, for each non-employee director, with a grant date fair value equal to $ 100 25 a total of 145,010 The Company expensed $ 234 511 30, 2021. There was no 30, 2020. In August 2021, upon vesting of the restricted stock awards held by our Chief Executive Officer, the Company withheld and retired 18,720 On April 16, 2021, upon vesting of the restricted stock awards held by our Chief Executive Officer, the Company withheld and retired 12,843 Effective April 15, 2021, Norman Gardner, our former Chairman of the board of directors retired from the board of directors. Mr. Gardner was awarded 69,284 300 December 21, 2026 40,000 On April 15, 2021, the board of directors granted the Company’s Chief Financial Officer, an award of 5,000 21 750 In April 2021, the Company granted an employee an award of 5,000 21 two-year Effective March 1, 2021, the Company amended and restated the Consulting Agreement it has with its Chief Operating Officer. The amended and restated agreement provides among other things, an annual fee of $214,400, a commission of 2% on all gross sales above $500 thousand, the issuance of 10,000 restricted stock awards and the extension of the expiration date for options previously granted to him to the five-year anniversary of the agreement’s effective date. 80,000 he Company applied FASB ASC 718, “Compensation—Stock Compensation,” modification accounting and expensed a change in fair value of $ 75 On February 9, 2021, the Company entered into an underwriting agreement with Maxim Group LLC (“Maxim”), as the representative of several underwriters pursuant to which the Company agreed to issue and sell to the underwriters in an underwritten public offering an aggregate of 1,650,000 5.30 8.7 8.1 In connection with the public offering that closed on February 12, 2021, the Company granted Maxim a 45-day option to purchase up to 247,500 shares of common stock to cover over-allotments, if any. On February 19, 2021 Maxim partially exercised its over-allotment option to purchase 100,000 shares of common stock for gross proceeds of $530 thousand and net proceeds of $493 thousand, less underwriting discounts and commissions. On August 5, 2020, the Company issued restricted stock awards for an aggregate of 230,000 shares of restricted common stock to the Company’s directors in consideration of their years of service to the Company that vest in full one-year from the date of grant, subject to the respective director’s continued service as member of the Board of Directors on the vesting date. During the nine months ended September 30, 2020, $133 thousand was expensed related to these services. On June 17, 2020, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Maxim Group LLC, as representative of the underwriters (the “Representative”), for an underwritten public offering (the “Offering”) of an 2,173,913 4.60 June 22, 2020 10.0 30,000 888 3,614 Of the 2,173,913 Units purchased in the Offering, 17,800 Units were purchased by two directors of the Company. Pursuant to the Underwriting Agreement, the Company agreed to issue to the Representative, as a portion of the underwriting compensation payable to the Representative, warrants to purchase up to a total of 173,913 5.06 three In connection to the closing of the Offering and the related automatic conversion of the 2020 Debentures (as defined below) the Company issued 637,513 shares of common stock related to the principal amount outstanding of $1,992 thousand and interest expense of $61 thousand and issued 179,200 In May 2020, the Company rescinded and cancelled an aggregate of 19,401 shares of common stock that the Company had approved for issuance but were not yet issued and outstanding shares. On April 16, 2020, the Company granted its Chief Executive Officer, Patrick White, a restricted stock award of 37,500 150 one On March 6, 2020, the Company completed the offering of senior secured convertible debentures (the “2020 Debentures”) and warrants and raised $ 1,992 19,208 Non-Qualified Stock Purchase Plan On June 10, 2021, the stockholders of the Company approved a non-qualified stock purchase plan (the “2021 Plan”). The 2021 Plan provides eligible participants, including employees, directors and consultants of the Company, the opportunity to purchase shares of the Company’s common stock thereby increasing their interest in the Company’s continued success. The maximum numbers of common stock reserved and available for issuance under the 2021 Plan will be 500,000 shares. The purchase price of shares of common stock acquired pursuant to the exercise of an option will be the lesser of 85% of the fair market value of a share (a) on the enrollment date, and (b) on the exercise date. The 2021 Plan is not intended to qualify as an employee stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”). As of September 30, 2021, eight participants have elected to participate in the 2021 Plan and unless a participant withdraws from an offering, his or her option for the purchase of shares of common stock will be automatically exercised on February 28, 2022, the exercise date of the offering. Shares Held in Treasury As of September 30, 2021 and December 31, 2020, the Company had 144,363 7,011 577 113 In November 2020, the Company’s Board of Directors approved a share repurchase program for up to $1.5 million of the Company’s common stock until August 16, 2021. On August 12, 2021, the Company’s Board of Directors extended the share repurchase program to expire on August 16, 2022. All other terms and conditions remained the same. During the three months ended September 30, 2021 the Company repurchased 69,836 shares of common stock at an average price of $3.38 for approximately $236 thousand pursuant to the Share Repurchase Plan. During the nine months ended September 30, 2021 the Company repurchased 137,352 shares of common stock at an average price of $3.38 for approximately $464 thousand pursuant to the Share Repurchase Plan. |
STOCK OPTIONS, RESTRICTED STOCK
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | NOTE 7 – STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS During 2013, the Company adopted the 2013 Omnibus Equity Compensation Plan (the “2013 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 up to an aggregate of 400,000 On November 14, 2017, the Executive Committee of the Company’s Board of Directors adopted the 2017 Equity Incentive Plan (the “2017 Plan”) that covered the potential issuance of 260,000 On August 10, 2020, the Company’s Board of Directors adopted the 2020 Equity Incentive Plan (the “2020 Plan”), subject to stockholder approval, which authorizes the potential issuance of up to 1,069,110 The 2020 Plan is administered by the 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). 1,000,000 The Company has issued non-qualified stock options pursuant to contractual agreements with non-employees. Options granted under the agreements are expensed when the related service or product is provided. On April 15, 2021, Norman Gardner agreed to cancel options to purchase 8,300 December 21, 2026 No stock options were granted during the nine months ended September 30, 2021. 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 judgements. Schedule of stock option activity Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in thousands) (1) Balance as of December 31, 2020 473,771 $ 4.48 Granted - - Forfeited/Cancelled/Expired (8,300) 9.72 Balance as of September 30, 2021 465,471 $ 4.38 Exercisable as of September 30, 2021 465,471 $ 4.38 3.4 $ 56 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. The following table summarizes the activities for the Company’s unvested stock options for the nine months ended 30, 2021 Schedule of summary for the activities of unvested stock options Unvested Options Weighted - Average Number of Unvested Grant Date Options Exercise Price Balance as of December 31, 2020 10,000 $ 9.75 Vested (10,000 ) 9.75 Balance as of September 30, 2021 - $ - During the three and nine months ended September 30, 2021 the Company expensed $ 0 85 158 643 As of September 30, 2021, there was $ 0 The following table summarizes the activities for the Company’s warrants for the nine months ended 30, 2021 Schedule of warrant activity Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in thousands) (1) Balance as of December 31, 2020 3,779,243 $ 5.89 Granted - - Balance as of September 30, 2021 3,779,243 $ 5.89 3.3 Exercisable as of September 30, 2021 3,779,243 $ 5.89 3.3 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $ 3.40 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 8— INCOME TAXES During the three and nine months ended September 30, 2021 the Company had $ 1 0 In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance of approximately $8.1 million at September 30, 2021. The Company did not utilize any NOL deductions for the nine months ended September 30, 2021. |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | NOTE 9— EARNINGS (LOSS) PER SHARE Earnings (Loss) Per Share Basic earnings per share (EPS) is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. The dilutive common stock equivalent shares consist of preferred stock, stock options, warrants and restricted stock units computed under the treasury stock method, using the average market price during the period. The following table sets forth the computation of basic and diluted earnings/(loss) per share (in thousands, except share and per share data): (Unaudited) (Unaudited) 2021 2020 2021 2020 Numerator: Net Income/(Loss) $ 7,189 $ (983 ) $ 4,616 $ (4,728 ) Denominator: Weighted average shares of common 7,290,975 5,488,111 7,078,046 3,436,805 Effect of dilutive securities Preferred Stock 144,444 - 144,444 - Stock Options 32,795 - 58,618 - Warrants 12 - 30 - Stock Purchase Plan 2,687 - 896 - Restricted Stock Units & Restricted Stock Awards 100,072 - 53,234 - Weighted average shares of common 7,570,985 5,488,111 7,335,268 3,436,805 Net Earnings (Loss) per share Basic $ 0.99 $ (0.18 ) $ 0.65 $ (1.38 ) Diluted $ 0.95 $ (0.18 ) $ 0.63 $ (1.38 ) The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted earnings per share: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Anti-dilutive instruments excluded from Preferred Stock - 144,444 - 144,444 Stock Options 91,471 473,771 94,621 473,771 Warrants 3,778,983 3,779,246 3,778,983 3,779,246 Restricted Stock Units 5,935 - 5,935 - |
CONCENTRATIONS
CONCENTRATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 10– CONCENTRATIONS Revenue For the three and nine months ended September 30, 2021, four and five customers represented 97 95 Accounts Receivable As of September 30, 2021, four customers represented 90 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS In October 2021, the Company issued 1,087 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Nature of the Business | Nature of the Business VerifyMe, Inc. (“VerifyMe,” the “Company,” “we,” “us,” or “our”) was incorporated in the State of Nevada on November 10, 1999. The Company is based in Rochester, New York and its common stock, par value $ 0.001 The Company is a technology solutions provider specializing in products to connect brands with consumers. VerifyMe technologies give brand owners the ability to gather business intelligence while engaging directly with their consumers. VerifyMe technologies also provide brand protection and supply chain functions such as counterfeit prevention, authentication, serialization, and track and trace features for labels, packaging and products. Until 2018, the Company primarily engaged in the research and development of its technologies. The Company’s activities are subject to significant risks and uncertainties, including its ability to successfully commercialize its technologies and the need to further develop the Company’s intellectual property. |
Reclassifications | Reclassifications Certain amounts presented for the three and nine months ended September 30, 2021 reflect reclassifications made to conform to the presentation in our current reporting period. |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim financial statements (the “Interim Statements”) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements are not included herein. The Interim Statements should be read in conjunction with the financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the Securities and Exchange Commission (the “SEC”) on March 25, 2021. The accompanying Interim Statements are unaudited; however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of accounts receivable, accounts payable and accrued expenses, equity investments, and other long-term liabilities. The carrying value of accounts receivable, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures,” and applies it to all assets and liabilities that are being measured and reported on a fair value basis. The statement requires that assets and liabilities carried at fair value will be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs that are not corroborated by market data The level in the fair value within which a fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. |
Variable Interest Entity | Variable Interest Entity The Company has determined that G3 VRM Acquisition Corp., (the “SPAC”, see FN 2 – Equity Investment), is a variable interest entity (“VIE”) in which the Company has a variable interest but is not the primary beneficiary. Making the determination as to whether a VIE should be consolidated requires judgement in assessing if the Company is the primary beneficiary. To make this determination, the Company evaluated its power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the SPAC. The Company concluded that it is not the primary beneficiary of the VIE and as such, does not consolidate the SPAC. The Company reassess its evaluation of whether an entity is a VIE and if it continues to be a VIE, whether the Company is the primary beneficiary of the VIE, on an ongoing basis based on the current facts and circumstances surrounding the entity. |
Equity Investments | Equity Investments When the Company does not have a controlling financial interest in an entity but can exert influence over the entity’s operations and financial policies, the investment is accounted for either (i) under the equity method of accounting or (ii) at fair value by electing the fair value option available under applicable generally accepted accounting policies. The Company has elected the fair value option for its equity investment in the SPAC (see FN2 – Equity Investment) as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrecognized gains or losses of the fair value of the equity investment are included in Other Income (Expense), Net on the accompanying Statement of Operations. |
Revenue Recognition | Revenue Recognition The Company accounts for revenues according to Accounting Standards Codification (“ASC”) Topic 606, “ Revenue from Contracts with Customers” The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: · identify the contract with a customer; · identify the performance obligations in the contract; · determine the transaction price; · allocate the transaction price to performance obligations in the contract; and · recognize revenue as the performance obligation is satisfied. During the three and nine months ended September 30, 2021, the Company’s revenues primarily consisted of revenue generated from printing labels and through our product authentication technology, as well as our customer engagement technology. |
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”) ASC 260, “Earnings Per Share,” when reporting earnings per share resulting in the presentation of basic and diluted earnings per share. |
EQUITY INVESTMENT (Tables)
EQUITY INVESTMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
The following table presents summary financial information of the Sponsor Entity. Such summary information has been provided herein based upon the individual significance of the equity investment to the financial information of the Company. | The following table presents summary financial information of the Sponsor Entity. Such summary information has been provided herein based upon the individual significance of the equity investment to the financial information of the Company. Amounts in Thousands ('000) September 30, 2021 December 31, 2020 Current Assets $ 1,371 $ - Non-current assets 107,855 - Current Liabilities 3,719 - Mezzanine Equity 107,854 - Stockholders' Deficit (2,347 ) - Amounts in Thousands ('000) Nine Months Ended 2021 2020 Operating Loss (274 ) - Net Loss (273 ) - |
STOCK OPTIONS, RESTRICTED STO_2
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of stock option activity | 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 judgements. Schedule of stock option activity Options Outstanding Weighted - Average Remaining Aggregate Weighted- Contractual Intrinsic Number of Average Term Value Shares Exercise Price (in years) (in thousands) (1) Balance as of December 31, 2020 473,771 $ 4.48 Granted - - Forfeited/Cancelled/Expired (8,300) 9.72 Balance as of September 30, 2021 465,471 $ 4.38 Exercisable as of September 30, 2021 465,471 $ 4.38 3.4 $ 56 (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. |
Schedule of summary for the activities of unvested stock options | The following table summarizes the activities for the Company’s unvested stock options for the nine months ended 30, 2021 Schedule of summary for the activities of unvested stock options Unvested Options Weighted - Average Number of Unvested Grant Date Options Exercise Price Balance as of December 31, 2020 10,000 $ 9.75 Vested (10,000 ) 9.75 Balance as of September 30, 2021 - $ - |
Schedule of warrant activity | The following table summarizes the activities for the Company’s warrants for the nine months ended 30, 2021 Schedule of warrant activity Warrants Outstanding Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in thousands) (1) Balance as of December 31, 2020 3,779,243 $ 5.89 Granted - - Balance as of September 30, 2021 3,779,243 $ 5.89 3.3 Exercisable as of September 30, 2021 3,779,243 $ 5.89 3.3 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $ 3.40 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
The following table sets forth the computation of basic and diluted earnings/(loss) per share (in thousands, except share and per share data): | The following table sets forth the computation of basic and diluted earnings/(loss) per share (in thousands, except share and per share data): (Unaudited) (Unaudited) 2021 2020 2021 2020 Numerator: Net Income/(Loss) $ 7,189 $ (983 ) $ 4,616 $ (4,728 ) Denominator: Weighted average shares of common 7,290,975 5,488,111 7,078,046 3,436,805 Effect of dilutive securities Preferred Stock 144,444 - 144,444 - Stock Options 32,795 - 58,618 - Warrants 12 - 30 - Stock Purchase Plan 2,687 - 896 - Restricted Stock Units & Restricted Stock Awards 100,072 - 53,234 - Weighted average shares of common 7,570,985 5,488,111 7,335,268 3,436,805 Net Earnings (Loss) per share Basic $ 0.99 $ (0.18 ) $ 0.65 $ (1.38 ) Diluted $ 0.95 $ (0.18 ) $ 0.63 $ (1.38 ) |
The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted earnings per share: | The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted earnings per share: Three Months Ended Nine Months Ended 2021 2020 2021 2020 Anti-dilutive instruments excluded from Preferred Stock - 144,444 - 144,444 Stock Options 91,471 473,771 94,621 473,771 Warrants 3,778,983 3,779,246 3,778,983 3,779,246 Restricted Stock Units 5,935 - 5,935 - |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
The following table presents su
The following table presents summary financial information of the Sponsor Entity. Such summary information has been provided herein based upon the individual significance of the equity investment to the financial information of the Company. (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Subsidiary, Sale of Stock [Line Items] | ||||||||
Current Assets | $ 11,108 | $ 11,108 | $ 8,201 | |||||
Current Liabilities | 434 | 434 | 383 | |||||
Stockholders' Deficit | 22,157 | $ 9,146 | 22,157 | $ 9,146 | $ 14,915 | 8,319 | $ 9,818 | $ (67) |
Operating Loss | (1,025) | (983) | (3,668) | (2,394) | ||||
Net Loss | 7,189 | $ (983) | 4,616 | (4,728) | ||||
Sponsor Entity [Member] | ||||||||
Subsidiary, Sale of Stock [Line Items] | ||||||||
Current Assets | 1,371 | 1,371 | ||||||
Non-current assets | 107,855 | 107,855 | ||||||
Current Liabilities | 3,719 | 3,719 | ||||||
Mezzanine Equity | 107,854 | 107,854 | ||||||
Stockholders' Deficit | $ (2,347) | (2,347) | ||||||
Operating Loss | (274) | |||||||
Net Loss | $ (273) |
EQUITY INVESTMENT (Details Narr
EQUITY INVESTMENT (Details Narrative) - USD ($) | Jul. 06, 2021 | Apr. 13, 2021 |
Over-Allotment Option [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Number of Shares Issued in Transaction | 626,000 | |
Sale of Stock, Consideration Received on Transaction | $ 106,260 | |
Private Placement [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Consideration Received on Transaction | 569,410,000 | |
Private Placement [Member] | G V R M Holdings L L Cand Maxim Partners L L C [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Consideration Received on Transaction | $ 5,694,000 | |
Private Placement [Member] | Beneficial Owner [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Number of Shares Issued in Transaction | 229,228,000 | |
Sale of Stock, Consideration Received on Transaction | $ 2,581,000 | |
Sponsor Entity [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Consideration Received on Transaction | 516,280,000 | |
Maxim Partners L L C [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Sale of Stock, Consideration Received on Transaction | $ 53,130,000 | |
Co Sponsor [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Percentage of equity interest | 44.40% | |
G V R M Holdings L L C [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Percentage of equity interest | 9.42% |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Capitalized amount | $ 45 | $ 74 | $ 45 | $ 74 | |
Deposit | $ 51 | ||||
Equipment for lease, useful life | 5 years | ||||
Capitalized amount | 45 | 74 | $ 45 | 74 | |
Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation | 11 | 11 | 38 | 34 | |
Office Equipment [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Capitalized amount | 8 | 0 | $ 8 | 0 | |
Equipment for lease, useful life | 3 years | ||||
Depreciation | 1 | 0 | $ 1 | 0 | |
Capitalized amount | $ 8 | $ 0 | $ 8 | $ 0 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized patent costs and trademarks | $ 84 | $ 0 | ||
Amortization expense | $ 8 | $ 5 | $ 20 | 15 |
Patents [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Description of expire | issued patents expire between the years 2022 and 2039 | |||
Amortization method | straight-line basis | |||
Patents [Member] | Minimum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated lives of intangible assets | 17 years | |||
Patents [Member] | Maximum [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated lives of intangible assets | 19 years | |||
Patents And Trademark [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized patent costs and trademarks | $ 60 | 52 | ||
Amortization expense | $ 9 | $ 7 | $ 25 | $ 20 |
Capitalized Software [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Estimated lives of intangible assets | 5 years |
TERM NOTE (Details Narrative)
TERM NOTE (Details Narrative) - USD ($) $ in Thousands | May 17, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Short-term Debt [Line Items] | |||
Loan forgiveness | $ 69 | ||
Interest payable | 1 | ||
Repayments of loan payable | 3 | ||
Paycheck Protection Program Term Note [Member] | |||
Short-term Debt [Line Items] | |||
Long term liabilities | $ 72 | ||
Paycheck Protection Program Term Note [Member] | P N C Bank N A [Member] | |||
Short-term Debt [Line Items] | |||
Principal value | $ 72 | ||
Maturity date | May 17, 2022 | ||
Interest rate | 1.00% |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | Sep. 17, 2021 | Apr. 16, 2021 | Apr. 15, 2021 | Mar. 01, 2021 | Feb. 12, 2021 | Feb. 09, 2021 | Jan. 02, 2021 | Jun. 17, 2020 | Jun. 17, 2020 | Apr. 16, 2020 | Aug. 31, 2021 | Apr. 30, 2021 | Apr. 15, 2021 | Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 06, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 63,000 | $ 234 | $ 142 | $ 511 | $ 241 | |||||||||||||||
Restricted stock units issued | 8,687 | |||||||||||||||||||
Fair value of shares issued | $ 98 | $ 12,000 | $ 12,000 | $ 35,000 | 30,000 | |||||||||||||||
Number of options granted | ||||||||||||||||||||
Proceeds from issuance public offering | $ 8,447,000 | $ 9,023,000 | ||||||||||||||||||
Number of common stock issued | 7,440,546 | 7,440,546 | 5,603,888 | |||||||||||||||||
Treasury Stock Share | 144,363 | 144,363 | 7,011 | |||||||||||||||||
Treasury Stock Value | $ 577 | $ 577 | $ 113 | |||||||||||||||||
Warrants 2020 [Member] | Debentures 2020 [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Gross proceeds from the sale | $ 1,992 | |||||||||||||||||||
Underwriting Agreement [Member] | Representatives Warrants [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of warrant issued | 173,913 | 173,913 | ||||||||||||||||||
Cashless exercise of warrants | $ 5.06 | $ 5.06 | ||||||||||||||||||
Warrant term | 3 years | 3 years | ||||||||||||||||||
Underwriting Agreement [Member] | Warrants 2020 [Member] | Debentures 2020 [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of common stock issued | 179,200 | 179,200 | ||||||||||||||||||
Underwriting Agreement [Member] | Maxim Group L L C [Member] | IPO [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of units issued in transaction | 1,650,000 | 2,173,913 | ||||||||||||||||||
Public offering price (in diollars per share) | $ 5.30 | $ 4.60 | $ 4.60 | |||||||||||||||||
Proceeds from issuance public offering | $ 8,700 | $ 10,000 | ||||||||||||||||||
Net proceeds from over-allotment option less underwriting discounts and commissions | $ 8,100 | |||||||||||||||||||
Description of closing price of common shares | In connection with the public offering that closed on February 12, 2021, the Company granted Maxim a 45-day option to purchase up to 247,500 shares of common stock to cover over-allotments, if any. On February 19, 2021 Maxim partially exercised its over-allotment option to purchase 100,000 shares of common stock for gross proceeds of $530 thousand and net proceeds of $493 thousand, less underwriting discounts and commissions. | |||||||||||||||||||
Sale of Stock, Transaction Date | Jun. 22, 2020 | |||||||||||||||||||
Number of shares issued for services | 30,000 | |||||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Withheld shares of common stock tax obligation | 12,843 | 18,720 | ||||||||||||||||||
Chief Financial Officer [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 21 | |||||||||||||||||||
Withheld shares of common stock tax obligation | 750 | |||||||||||||||||||
Restricted stock awards granted | 5,000 | |||||||||||||||||||
Employee [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 21 | |||||||||||||||||||
Restricted stock awards granted | 5,000 | |||||||||||||||||||
Restricted stock awards vesting period | 2 years | |||||||||||||||||||
Chief Operating Officer [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of options granted | 80,000 | |||||||||||||||||||
Change in fair value | $ 75 | |||||||||||||||||||
Chief Operating Officer [Member] | Consulting Agreement [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Description of amended and restated | The amended and restated agreement provides among other things, an annual fee of $214,400, a commission of 2% on all gross sales above $500 thousand, the issuance of 10,000 restricted stock awards and the extension of the expiration date for options previously granted to him to the five-year anniversary of the agreement’s effective date. | |||||||||||||||||||
Restricted Stock [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Fair value of shares issued | $ 100 | $ 25 | ||||||||||||||||||
Description of units transaction | a total of 145,010 restricted stock units were issued to five non-employee directors for a fair value of $625 thousand, vesting one year from the date of issuance. | |||||||||||||||||||
Restricted Stock [Member] | Director [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock units issued | 145,010 | |||||||||||||||||||
Restricted Stock [Member] | Chief Executive Officer [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock awards granted | 37,500 | |||||||||||||||||||
Restricted stock awards vesting period | 1 year | |||||||||||||||||||
Deferred salary | $ 150 | |||||||||||||||||||
Restricted stock/Restricted stock units, Expense | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 234 | $ 511 | ||||||||||||||||||
Restricted stock/Restricted stock units, Expense | Private Placement [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Number of common stock issued | 19,208 | 19,208 | ||||||||||||||||||
Restricted stock/Restricted stock units, Expense | Board of Directors Chairman [Member] | Norman Gardner [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 300 | |||||||||||||||||||
Restricted stock awards granted | 69,284 | |||||||||||||||||||
Expire date | Dec. 21, 2026 | |||||||||||||||||||
Additionally accelerated vesting shares | 40,000 | |||||||||||||||||||
Common Stock [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Restricted stock/Restricted stock units, Expense | $ 35 | |||||||||||||||||||
Restricted stock units issued | (18,720) | 230,000 | 56,971 | 267,500 | ||||||||||||||||
Fair value of shares issued | ||||||||||||||||||||
Number of shares issued for services | 3,261 | 3,261 | 8,687 | 6,596 | ||||||||||||||||
Common Stock [Member] | Underwriting Agreement [Member] | Maxim Group L L C [Member] | IPO [Member] | ||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
Fair value of shares issued | $ 3,614 | |||||||||||||||||||
Number of shares issued for services | 888 |
Schedule of stock option activi
Schedule of stock option activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)$ / sharesshares | ||
Equity [Abstract] | ||
Balance as of December 31, 2020 | shares | 473,771 | |
Balance as of December 31, 2020 | $ / shares | $ 4.48 | |
Granted | shares | ||
Granted | $ / shares | ||
Forfeited/Cancelled/Expired | shares | (8,300) | |
Forfeited/Cancelled/Expired | $ / shares | $ 9.72 | |
Balance as of September 30, 2021 | shares | 465,471 | |
Balance as of September 30, 2021 | $ / shares | $ 4.38 | |
Exercisable at ending | shares | shares | 465,471 | |
Exercisable as of September 30, 2021 | $ / shares | $ 4.38 | |
Exercisable as of September 30, 2021 | 3 years 4 months 24 days | |
Exercisable as of September 30, 2021 | $ | $ 56 | [1] |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. |
Schedule of summary for the act
Schedule of summary for the activities of unvested stock options (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Equity [Abstract] | |
Balance as of December 31, 2020 | shares | 10,000 |
Balance as of September 30, 2021 | $ / shares | $ 9.75 |
Vested | shares | (10,000) |
Vested | $ / shares | $ 9.75 |
Balance as of September 30, 2021 | shares | |
Balance as of September 30, 2021 | $ / shares |
Schedule of warrant activity (D
Schedule of warrant activity (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($)$ / sharesshares | ||
Net Investment Income [Line Items] | ||
Balance as of December 31, 2020 | shares | 3,779,243 | |
Balance as of December 31, 2020 | $ 5.89 | |
Granted | shares | ||
Granted | ||
Balance as of September 30, 2021 | shares | 3,779,243 | |
Balance as of September 30, 2021 | $ 5.89 | |
Balance as of September 30, 2021 | 3 years 3 months 18 days | |
Exercisable as of September 30, 2021 | shares | 3,779,243 | |
Exercisable as of September 30, 2021 | $ 5.89 | |
Exercisable as of September 30, 2021 | 3 years 3 months 18 days | |
Exercisable as of September 30, 2021 | $ | [1] | |
Warrant [Member] | ||
Net Investment Income [Line Items] | ||
Exercise price (in dollars per share) | $ 3.40 | |
[1] | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $ 3.40 |
STOCK OPTIONS, RESTRICTED STO_3
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details Narrative) - USD ($) | Aug. 10, 2020 | Nov. 14, 2017 | Apr. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Incentive stock options granted | ||||||||
Unrecognized compensation cost | $ 0 | |||||||
Norman Gardner [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Cancel options to purchase | 8,300 | |||||||
Expiration date | Dec. 21, 2026 | |||||||
Incentive Stock Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price, description | 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). | |||||||
Options [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Option, expense | $ 0 | $ 158 | $ 85 | $ 643 | ||||
Omnibus Equity Compensation Plan 2013 [Member] | Stock Options Restricted Stockand Unitsand Other Stockbased Awards [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares authorized to grand awards | 400,000 | |||||||
Equity Incentive Plan 2017 [Member] | Board of Directors Chairman [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of common shares issued | 1,069,110 | 260,000 | ||||||
Issued Under The 2020 Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Incentive stock options granted | 1,000,000 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ (1,000) | $ 0 | $ (1,000) | $ 0 |
The following table sets forth
The following table sets forth the computation of basic and diluted earnings/(loss) per share (in thousands, except share and per share data): (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
NET INCOME/(LOSS) | $ 7,189 | $ (983) | $ 4,616 | $ (4,728) |
Denominator: | ||||
Weighted average shares of common stock – basic | 7,290,975 | 5,488,111 | 7,078,046 | 3,436,805 |
Effect of dilutive securities | ||||
Preferred Stock | 144,444 | 144,444 | ||
Stock Options | 32,795 | 58,618 | ||
Warrants | 12 | 30 | ||
Stock Purchase Plan | 2,687 | 896 | ||
Restricted Stock Units & Restricted Stock Awards | 100,072 | 53,234 | ||
Weighted average shares of common stock – diluted | 7,570,985 | 5,488,111 | 7,335,268 | 3,436,805 |
Net Earnings (Loss) per share | ||||
Basic | $ 0.99 | $ (0.18) | $ 0.65 | $ (1.38) |
Diluted | $ 0.95 | $ (0.18) | $ 0.63 | $ (1.38) |
The following table represents
The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted earnings per share: (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Preferred Stock | 144,444 | 144,444 | ||
Stock Options | 91,471 | 473,771 | 94,621 | 473,771 |
Warrants | 3,778,983 | 3,779,246 | 3,778,983 | 3,779,246 |
Restricted Stock Units | 5,935 | 5,935 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Four Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 97.00% | |
Five Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 95.00% | |
Two Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 90.00% |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 1 Months Ended |
Oct. 31, 2021shares | |
Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Number of restricted stock issued | 1,087 |