Cover
Cover - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 23, 2023 | Jun. 30, 2022 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
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 | 801 International Parkway | ||
Entity Address, Address Line Two | Fifth Floor | ||
Entity Address, City or Town | Lake Mary | ||
Entity Address, State or Province | FL | ||
Entity Address, Postal Zip Code | 32746 | ||
City Area Code | (585) | ||
Local Phone Number | 736-9400 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
Entity Public Float | $ 14,839,432 | ||
Entity Common Stock, Shares Outstanding | 9,361,772 | ||
Documents Incorporated by Reference [Text Block] | Portions of VerifyMe, Inc.’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with its 2023 annual meeting of stockholders are incorporated by reference into Part III Items 10, 11, 12, 13 and 14 of this Annual Report on Form 10-K. | ||
Auditor Firm ID | 206 | ||
Auditor Name | MaloneBailey, LLP | ||
Auditor Location | Houston, Texas | ||
Common Stock, par value $0.001 per share | |||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | VRME | ||
Security Exchange Name | NASDAQ | ||
Warrants to Purchase Common Stock | |||
Title of 12(b) Security | Warrants to Purchase Common Stock | ||
Trading Symbol | VRMEW | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS | ||
Cash and cash equivalents, including restricted cash | $ 3,411 | $ 9,422 |
Accounts receivable, net of allowance for credit loss reserve, $37 and $0 as of December 31, 2022 and December 31, 2021, respectively | 4,448 | 297 |
Unbilled revenue | 1,185 | |
Prepaid expenses and other current assets | 333 | 240 |
Inventory | 81 | 52 |
TOTAL CURRENT ASSETS | 9,458 | 10,011 |
INVESTMENTS | ||
Equity Investment | 10,964 | |
PROPERTY AND EQUIPMENT, NET | 292 | 204 |
RIGHT OF USE ASSET | 469 | |
INTANGIBLE ASSETS, NET | 6,412 | 509 |
GOODWILL | 3,988 | |
DEFERRED IMPLEMENTATION COSTS | 133 | |
TOTAL ASSETS | 20,752 | 21,688 |
CURRENT LIABILITIES | ||
Current portion of debt | 500 | |
Accounts payable | 3,912 | 341 |
Other accrued expense | 902 | 109 |
Lease liability- current | 115 | |
TOTAL CURRENT LIABILITIES | 5,429 | 450 |
LONG-TERM LIABILITIES | ||
Long-term lease liability | 359 | |
Long-term derivative liability | 3 | 71 |
Term note | 1,375 | |
TOTAL LIABILITIES | 7,166 | 521 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 675,000,000 authorized; 9,341,002 and 7,420,633 issued, 8,951,035 and 7,196,677 shares outstanding as of December 31, 2022 and December 31, 2021, respectively | 10 | 7 |
Additional paid in capital | 92,987 | 86,059 |
Treasury stock as cost; 389,967 and 223,956 shares at December 31, 2022 and December 31, 2021, respectively | (949) | (838) |
Accumulated deficit | (78,459) | (64,061) |
Accumulated other comprehensive loss | (3) | |
STOCKHOLDERS' EQUITY | 13,586 | 21,167 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 20,752 | 21,688 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts and Financing Receivable, Allowance for Credit Loss | $ 37 | $ 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 675,000,000 | |
Common Stock, Shares, Issued | 9,341,002 | 7,420,633 |
Common Stock, Shares, Outstanding | 8,951,035 | 7,196,677 |
[custom:TreasuryStocksShare-0] | 389,967 | 223,956 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 37,564,767 | |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 85 | |
Preferred Stock, Shares Outstanding | 0.85 | 0.85 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Income Statement [Abstract] | |||
NET REVENUE | $ 19,576 | $ 867 | |
COST OF REVENUE | 13,088 | 268 | |
GROSS PROFIT | 6,488 | 599 | |
OPERATING EXPENSES | |||
General and administrative | [1] | 8,428 | 4,216 |
Research and development | 89 | 51 | |
Sales and marketing | [1] | 1,718 | 1,163 |
Total operating expenses | 10,235 | 5,430 | |
LOSS BEFORE OTHER INCOME (EXPENSE) | (3,747) | (4,831) | |
OTHER INCOME (EXPENSE) | |||
Interest income (expenses), net | (88) | 2 | |
Loss on equity investment | (10,932) | ||
Unrealized gain on equity investment | 12 | 8,371 | |
Other income, net | 31 | ||
Gain on extinguishment of debt | 326 | ||
Payroll protection program debt forgiveness | 70 | ||
TOTAL OTHER INCOME (EXPENSE), NET | (10,651) | 8,443 | |
NET (LOSS)/ INCOME | $ (14,398) | $ 3,612 | |
EARNINGS / (LOSS) PER SHARE | |||
BASIC | $ (1.70) | $ 0.51 | |
DILUTED | $ (1.70) | $ 0.49 | |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||
BASIC | 8,466,075 | 7,110,907 | |
DILUTED | 8,466,075 | 7,383,364 | |
[1]Includes share-based compensation of $1,468 thousand for the year ended December 31, 2022, and $1,716 thousand for the year ended December 31, 2021. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | ||
NET (LOSS)/INCOME | $ (14,398) | $ 3,612 |
Change in fair value of interest rate, swap | (3) | |
TOTAL COMPREHENSIVE (LOSS)/INCOME | $ (14,401) | $ 3,612 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (Loss) Income | $ (14,398) | $ 3,612 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Allowance for bad debt | 37 | |
Stock based compensation | 145 | 151 |
Fair value of options in exchange for services | 85 | |
Fair value of restricted stock awards issued in exchange for services | 239 | 784 |
Fair value of restricted stock units issued in exchange for services | 1,084 | 696 |
Payroll Protection Program Debt Forgiveness | (70) | |
Loss on equity investment | 10,932 | |
Unrealized gain on equity investment | (12) | (8,371) |
Gain on extinguishment of debt | (326) | |
Amortization and depreciation | 770 | 117 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,352) | (354) |
Unbilled revenue | (1,185) | |
Inventory | (29) | 2 |
Prepaid expenses and other current assets | (77) | 25 |
Accounts payable, other accrued expenses and net change in operating leases | 3,621 | 69 |
Net cash used in operating activities | (2,551) | (3,254) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of patents | (40) | (95) |
Purchase of equipment for lease | (45) | |
Purchase of equity investment | (2,593) | |
Purchase of office equipment | (12) | |
Acquisition of PeriShip | (7,500) | |
Equity received from SPAC Equity Investment | 32 | |
Deferred implementation costs | (140) | |
Capitalized software costs | (236) | (106) |
Net cash used in investing activities | (7,884) | (2,851) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from public offering of securities | 4,528 | 8,447 |
Proceeds from issuance of notes payable | 2,000 | (3) |
Proceeds from exercise of pre-funded warrant | 1 | |
Proceeds from SPP Plan | 102 | |
Tax withholding payments for employee stock-based compensation in exchange for shares surrendered | (34) | (131) |
Increase in treasury shares (share repurchase program) | (291) | (725) |
Repayment of Debt | (1,882) | |
Net cash provided by financing activities | 4,424 | 7,588 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (6,011) | 1,483 |
CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH – BEGINNING OF PERIOD | 9,422 | 7,939 |
CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH - END OF PERIOD | 3,411 | 9,422 |
Cash paid during the period for: | ||
Interest | 33 | |
Income taxes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Initial recognition of right-of-use asset and lease liability during the period | 552 | |
Change in fair value of interest rate, swap | $ (3) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stocks [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 6 | $ 76,099 | $ (113) | $ (67,673) | $ 8,319 | |||
Beginning balance, 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 | 654 | 654 | ||||||
Restricted stock awards, net of shares withheld for employee tax, shares | 56,971 | |||||||
Restricted Stock Units | 696 | 696 | ||||||
Stock Purchase Plan | 40 | 40 | ||||||
Common stock issued for services | 39 | 39 | ||||||
Common stock issued for services, shares | 9,774 | |||||||
Common stock issued in relation to public offering of securities | $ 1 | 8,446 | 8,447 | |||||
Common stock issued in relation to public offering of securities, shares | 1,750,000 | |||||||
Repurchase of Common Stock | $ (725) | (725) | ||||||
Repurchase of Common Stock, shares | (216,945) | 216,945 | ||||||
Net loss | 3,612 | 3,612 | ||||||
Ending balance, value at Dec. 31, 2021 | $ 7 | 86,059 | $ (838) | (64,061) | 21,167 | |||
Ending balance, shares at Dec. 31, 2021 | 0.85 | 7,196,677 | 223,956 | |||||
Restricted stock awards, net of shares withheld for employee tax | 205 | 205 | ||||||
Restricted stock awards, net of shares withheld for employee tax, shares | 29,688 | |||||||
Restricted Stock Units | 1,084 | 1,084 | ||||||
Stock Purchase Plan | 121 | 121 | ||||||
Common stock issued in relation to Stock Purchase Plan | (78) | $ 180 | 102 | |||||
Common stock issued in relation to Stock Purchase Plan, shares | 53,895 | (53,895) | ||||||
Common stock issued in relation to private placement | $ 2 | 4,526 | 4,528 | |||||
Common stock issued in relation to private placement, shares | 880,208 | |||||||
Common stock issued for services | 96 | 96 | ||||||
Common stock issued for services, shares | 30,000 | |||||||
Common stock issued in relation to Acquisition | 974 | 974 | ||||||
Common stock issued in relation to Acquisition, shares | 305,473 | |||||||
Exercise of Pre-funded Warrants | $ 1 | 1 | ||||||
Exercise of Pre-funded Warrants, shares | 675,000 | |||||||
Accumulated other comprehensive loss | (3) | (3) | ||||||
Repurchase of Common Stock | $ (291) | (291) | ||||||
Repurchase of Common Stock, shares | (219,906) | 219,906 | ||||||
Net loss | (14,398) | (14,398) | ||||||
Ending balance, value at Dec. 31, 2022 | $ 10 | $ 92,987 | $ (949) | $ (3) | $ (78,459) | $ 13,586 | ||
Ending balance, shares at Dec. 31, 2022 | 0.85 | 8,951,035 | 389,967 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of the Business VerifyMe, Inc. (“VerifyMe”) was incorporated in the State of Nevada on November 10, 1999. VerifyMe, together with its subsidiaries, including PeriShip Global LLC (“PeriShip Global”) and Trust Codes Global Limited (“Trust Codes Global”), (together the “Company,” “we,” “us,” or “our”) is based in Lake Mary, Florida and its common stock, par value $ 0.001 VerifyMe, through PeriShip Global, is a software driven predictive analytics logistics provider of high-touch, end-to-end logistics management, which represents most of our current revenue stream. In addition, VerifyMe technologies provide product traceability, brand protections services, and consumer engagement solutions. Our operations are split into two segments: PeriShip Global Solutions and VerifyMe Solutions, which includes Trust Codes Global. Through our PeriShip Global Solutions segment we provide a value-added service for time and temperature sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as flight-tracking, weather, and traffic, all delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events, with dynamic dashboards. All aspects of the of the shipping journey is managed by a dedicated call center. Using our proprietary logistics solution, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries. Through our VerifyMe Solutions segment, our technologies provide unit level traceability, brand protection, and consumer engagement solutions allowing brand owners to gather business intelligence, cross-sell products, monitor product diversion through the supply chain and build brand loyalty through interaction utilizing our unique dynamic codes which are read by consumers with their smart phones. The Company’s activities are subject to significant risks and uncertainties. See the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report. Basis of Presentation The accompanying consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiary PeriShip Global. All significant intercompany balances and transactions have been eliminated upon consolidation. The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method by which to allocate resources and assess performance. The Company has two reportable segments, namely, (i) PeriShip Global Solutions and (ii) VerifyMe Solutions. See Note 16 Segment Reporting, for further discussion of the Company’s segment reporting structure. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments Fair Value of Financial Instruments The Company’s financial instruments consist of accounts receivable, unbilled revenue, accounts payable, notes payable and accrued expenses, equity investments, and long-term derivative liabilities. The carrying value of accounts receivable, unbilled revenue, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable approximates fair value based on rates and other terms currently available to the Company for similar debt instruments. 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. The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2022 and December 31, 2021. Amounts in Thousands ('000) Schedule of fair value assets measured on recurring basis Short Term Investment Equity Investment Derivative Liability Derivative Liability (Level 1) (Level 3) (Level 2) (Level 3) Balance as of December 31, 2021 $ 88 10,964 - (71 ) Realized loss on fair value recognized in other (expense)/income - (10,932 ) - - Distribution from Sponsor Entity - (32 ) - - - - Unrealized gain on fair value recognized in other (expense)/income 12 - - - Realized gain on fair value recognized in share-based compensation - - 71 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss (3 ) - - - Balance at December 31, 2022 $ 100 $ - $ (3 ) $ - Variable Interest Entity The Company determined that G3 VRM Acquisition Corp. (NASDAQ: GGGVU) (the “SPAC”, see Note 2 – Equity Investments), a Delaware corporation and special purpose acquisition company, was a variable interest entity (“VIE”) in which the Company had a variable interest but was 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 impacted 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 was not the primary beneficiary of the VIE and as such, did not consolidate the SPAC. The Company reassessed 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. The SPAC was unable to complete its initial business combination within 12 months from the closing of the IPO, and the Sponsor Entity made the decision not to fund the extension and did not deposit additional funds into the trust account. As a result, the SPAC was dissolved, and liquidated according to its charter. The SPAC redeemed 100% of the public shares for cash, the rights have expired worthless, and the founder shares and the private placement securities have become worthless. 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 Note 2 –Equity Investments) and its equity security under short term investment on the balance sheets, as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrealized gain on equity investment include unrealized gain of the fair value of the equity investments and loss on equity investment includes realized loss on equity investments on the accompanying Consolidated Statements of Operations. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment test. The assessment considers factors such as, but not limited to, macroeconomic conditions, data showing other companies in the industry and our share price. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price. Business Combinations The Company applies the provisions of Accounting Standard Codification (“ASC”) Topic 805, Business Combinations, in the accounting for business acquisitions. ASC 805 requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statements of Operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets where applicable. Although the Company believes the assumptions and estimates made have been reasonable and appropriate, they are based in part on information obtained from management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. Basic and Diluted Net Loss 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. Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and certificates of deposit and commercial paper with original maturities of 90 days or less to be cash or cash equivalents. As of December 31, 2022, the Company held $ 63 Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, such allowances may be required. The Company recognized $ 37 0 Concentration of Credit Risk Involving Cash and Cash Equivalents The Company’s cash and cash equivalents are held at various financial institutions. At times, the Company’s deposits may exceed Federal Deposit Insurance Corporation (FDIC) coverage limits which are currently set at $ 250,000 Inventory Inventory principally consists of canisters and pigments and is stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Equipment for Lease Equipment for lease principally consists of costs associated with the development, certification and production of the VerifyChecker™ and the VerifyAuthenticator TM automatically renewable leases cancellable by either party by written notice provided 90 days in advance. 5 Capitalized Software Costs incurred in connection with the development of software related to our proprietary proactive end-to-end logistics management products are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 “Hosting Arrangements and Internally Used Software.” 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 development costs begins once the product is available to the market. Capitalized software development costs are amortized over the estimated life of the related product, generally six years, using the straight-line method. The Company will evaluate its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Long-Lived Assets The Company evaluates the recoverability of its long-lived assets in accordance with ASC 360 “Property, Plant, and Equipment.” The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset, undiscounted and without interest or independent appraisals. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Derivative Instruments The Company evaluates its equity investments, long-term derivative liabilities, preferred stock, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguish by Liabilities from Equity” (FASB ASC 480), and FASB ASC 815, “Derivatives and Hedging” (“FASB ASC 815”). The result of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at each balance sheet date and recorded as a liability. The change in fair value is recorded in the Consolidated Statement of Operations as a component of other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified as liabilities at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements. These reclassifications had no effect on the previously reported net income (loss). 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 year ended December 31, 2022, over 90% of the Company’s revenues primarily consisted of revenue related to our logistics management for time and temperature sensitive packages generated by our subsidiary PeriShip Global. During the year ended December 31, 2021, the Company’s revenue primarily consisted of VerifyInk TM Income Taxes The Company follows FASB ASC 740, “Income Taxes,” when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Tax years from 2003 remain subject to examination by major tax jurisdictions due the carryforward of unutilized NOLs. Stock-Based Compensation We account for stock-based compensation under the provisions of FASB ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes model. The assumptions used in the Black-Scholes option pricing model include risk-free interest rates, expected volatility and expected life of the stock options. Changes in these assumptions can materially affect estimates of fair value stock-based compensation, and the compensation expense recorded in future periods. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line method. We recognize forfeitures as they occur with a reduction in compensation expense in the period of forfeiture. For performance restricted stock units with stock price appreciation targets (see Note 10 – Stock Options, Restricted Stock and Warrants), we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the performance period and there is no ongoing adjustment or reversal based on actual achievement during the period. We account for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if we had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured, and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service completed. Advertising Costs Advertising costs are expensed as incurred. Advertising costs were $ 60 51 Research and Development Costs In accordance with FASB ASC 730, research and development costs are expensed when incurred. Research and development costs for the years ended December 31, 2022, and 2021 were $ 89 51 Basic and Diluted Earnings (Loss) 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. Because the Company reported a net loss for the year ended December 31, 2022, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY INVESTMENTS | NOTE 2 – EQUITY INVESTMENTS On February 26, 2021, the Company formed VMEA Holdings Inc. (the “Sponsor Entity”), a Delaware corporation that was the founder of G3 VRM Acquisition Corp. (the “SPAC”) that was 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. 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 10,626,000 626,000 569,410 516,280 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. The SPAC was unable to complete its initial business combination within 12 months from the closing of the IPO and the Sponsor Entity decided not to fund the extension and did not deposit additional funds into the trust account. As a result, the SPAC was dissolved and liquidated in accordance with its charter. The SPAC redeemed 100% of the public shares for cash on July 19, 2022, the rights expired worthless, and the founder shares and private placement securities became worthless. The SPAC was dissolved on July 29, 2022, and no distributions were made to the Sponsors. In December 2022, it was determined that the costs to dissolve the SPAC were ultimately less than the remaining assets of the SPAC and the SPAC made a distribution to the Company of $32 thousand. The fair value of the equity investment was $ 0 11.0 10,932 In December 2021, the Company acquired 8,841 10 10.00 12 100 88 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 3 – REVENUE Revenue by Category The following table presents our revenue disaggregated by various categories (dollars in thousands). Schedule of disaggregation of revenue VerifyMe PeriShip Global Consolidated Revenue Year Ended Year Ended Year Ended 2022 2021 2022 2021 2022 2021 Proactive services $ - - $ 15,202 - $ 15,202 $ - Premium services - - 2,988 - 2,988 - Brand protection services 1,386 867 - - 1,386 867 $ 1,386 $ 867 $ 18,190 $ - $ 19,576 $ 867 Contract Balances The timing of revenue recognition, billings and cash collections results in unbilled revenue (contract assets) and deferred revenue (contract liabilities) on the consolidated balance sheets. Amounts charged to our clients become billable according to the contract terms, which usually consider the delivery completion. Unbilled amounts will generally be billed and collected within 30 days but typically no longer than 60 days. When we advance bill clients prior to the work being performed, generally, such amounts will be earned and recognized in revenue within the 30 days. These assets and liabilities are reported on the consolidated balance sheet on a contract-by-contract basis at the end of each reporting period. Changes in the contract asset and liability balances during the year ended December 31, 2022, were not materially impacted by any other factors. Applying the practical expedient in ASC Topic 606, we recognize the incremental costs of obtaining contracts (i.e. sales commissions) as an expense when incurred if the amortization period of the assets that we otherwise would have recognized is one year or less. As of December 31, 2022, we did not have any capitalized sales commissions. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | NOTE 4 – BUSINESS COMBINATION PeriShip LLC On April 22, 2022, we acquired, through PeriShip Global, the business and certain assets of PeriShip, LLC (“PeriShip”), a value-added service provider for time and temperature sensitive parcel management. PeriShip Global provides shipping logistics services utilizing proprietary predictive analytics software and supporting call center services. Using our proprietary software platform, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries. The purchase price was $ 10.5 7.5 2.0 6 305,473 On September 22, 2022, the Company entered into an agreement with the owner of PeriShip, LLC to resolve certain disputes among the parties, reduce the principal and interest on the promissory note, repay the amended promissory note in full, and repurchased 61,000 326 The following table summarizes the purchase price allocation for the acquisition (dollars in thousands). Schedule of business acquisitions Cash 7,500 Promissory note 2,000 Stock (issuance of 305,473 shares of common stock) (1) 974 Total purchase price 10,474 Amortization Period Purchase price allocation: Accounts receivable, net 836 Prepaid expenses 5 Developed Technology 3,143 6 Trade Names/Trademarks 1,111 13 Customer Relationships 1,839 10 Non-Compete Agreement 191 5 Property and Equipment, net 193 Goodwill 3,988 Accounts payable and other accrued expenses (832 ) 10,474 (1) Stock issued was calculated based on the 15 days prior to April 22, 2022, volume-weighted average price (“VWAP”) calculated at $3.2736. Unaudited Pro forma Financial Information The following unaudited proforma financial information presents the combined results of operations of the Company and gives effect to the acquisition discussed above for the years ended December 31, 2022, and 2021, as if the acquisition had occurred as of the beginning of the first period presented instead of on April 22, 2022. The pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the results of operations that would have been realized if the acquisition had been completed on January 1, 2021, nor does it purport to project the results of operations of the combined company in future periods. The pro forma financial information does not give effect to any anticipated integration costs related to the acquired company during the periods presented. The below table summarizes proforma financial information for the Company, and the acquired PeriShip business, assuming the acquisition date of PeriShip occurred on January 1, 2021 (dollars in thousands): Schedule of financial information Years Ended Description 2022 2021 Revenues $ 25,397 $ 29,500 Net Income (loss) $ (14,298 ) $ 5,465 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 5 – INTANGIBLE ASSETS AND GOODWILL Goodwill Goodwill represents costs in excess of values assigned to the underlying net assets of acquired businesses. Intangible assets acquired are recorded at estimated fair value. Goodwill is deemed to have an indefinite life and is not amortized but is tested for impairment annually, and at any time when events suggest an impairment more likely than not has occurred. We test goodwill at the reporting unit level. ASC Topic 350, Intangibles - Goodwill and Other Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions and determination of appropriate market comparables. We base our fair value estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The timing and frequency of our goodwill impairment tests are based on an ongoing assessment of events and circumstances that would indicate a possible impairment. We will continue to monitor our goodwill and intangible assets for impairment and conduct formal tests when impairment indicators are present. Each of our two reportable segments represents an operating segment under ASC Topic 280, Segment Reporting Intangibles - Goodwill and Other For the year ended December 31, 2021, there were no goodwill activities. Changes in the carrying amount of goodwill by reportable business segment for the year ended December 31, 2022, were as follows (in thousands): Schedule of goodwill by reportable business segment VerifyMe PeriShip Global Total Net book value at January 1, 2022 $ - $ - $ - 2022 Activity Acquisition - 3,988 3,988 Net book value at December 31, 2022 $ - $ 3,988 $ 3,988 Intangible Assets Subject to Amortization Our intangible assets include amounts recognized in connection with patents and trademarks, capitalized software and acquisitions, including customer relationships, tradenames, developed technology and non-compete agreements. Intangible assets are initially valued at fair market value using generally accepted valuation methods appropriate for the type of intangible asset. Amortization is recognized on a straight-line basis over the estimated useful life of the intangible assets. Intangible assets with definite lives are reviewed for impairment if indicators of impairment arise. Except for goodwill, we do not have any intangible assets with indefinite useful lives. Intangible assets with finite lives are subject to amortization over their estimated useful lives. The primary assets included in this category and their respective balances were as follows (in thousands): Schedule of intangible assets subject to amortization December 31, 2022 Gross Carrying Accumulated Net Carrying Patents and Trademarks $ 1,858 $ (445 ) $ 1,413 Capitalized Software 206 (91 ) 115 Customer Relationships 1,839 (133 ) 1,706 Developed Technology 3,143 (360 ) 2,783 Internally Used Software 236 (4 ) 232 Non-Compete Agreement 191 (28 ) 163 $ 7,473 $ (1,061 ) $ 6,412 December 31, 2021 Patents and Trademarks $ 707 $ (354 ) $ 353 Capitalized Software 206 (50 ) 156 $ 913 $ (404 ) $ 509 Amortization expense for intangible assets was $ 657 64 Patents and Trademarks As of December 31, 2022, the current patent and trademark portfolios consist of eleven granted U.S. patents and one granted European patent validated in four countries (France, Germany, United Kingdom, and Italy), six pending U.S. and foreign patent applications, fifteen registered U.S. trademarks (of which seven trademarks were acquired through our wholly owned subsidiary, PeriShip Global), two EU trademark registrations, one Colombian trademark registration, one Australian trademark registration, one Japanese trademark registration, one Mexican trademark registration, one Singaporean trademark registration, two UK trademark registrations, and twenty-one pending US and foreign trademark applications. The Company expects to record amortization expense of intangible assets over the next 5 years and thereafter as follows (in thousands): Schedule of Finite-Lived Intangible Assets, Future Amortization Expense Fiscal Year ending December 31, 2023 $ 1,057 2024 877 2025 857 2026 842 2027 836 Thereafter 1,943 Total $ 6,412 As of December 31, 2022, our intangible assets with definite lives had a weighted average remaining useful life of 8.4 years. We have no amortizable intangible assets with indefinite useful lives. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6 – INCOME TAXES The reconciliation of income tax expense computed at the U.S. federal statutory rate to the income tax provision for the years ended December 31, 2022, and 2021 is as follows (in thousands) Schedule of reconciliation of federal statutory tax rate Year Ended December 31, US 2022 2021 Income (loss) before income taxes $ (14,400 ) $ (3,612 ) Taxes under statutory US tax rates (3,024 ) 759 Increase (decrease) in taxes resulting from: Increase (decrease) in valuation allowance (1,188 ) (6,149 ) Change in State tax rate (57 ) - All other 5,045 5,204 State taxes (776 ) 186 Income tax expense $ - $ - The decrease in the Company's net valuation allowance was due primarily to a realized loss in our equity investment (See Note 2-Equity Investment), and to net operating losses which will expire unutilized due to limitations resulting from application of Section 382 of the Internal Revenue Code of 1986, as amended (“IRC”). Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following (in thousands): Schedule of deferred tax assets and liabilities December 31, 2022 2021 US Net operating loss carryforwards $ 6,495 $ 5,208 Restricted Stock (RSA’s, RSU’s) 503 180 Stock Options 562 678 Stock Purchase Plan (SPP) 8 - Depreciation (71 ) (33 ) Intangibles 22 9 Acquisition Transaction Costs 110 - Capitalized Research and Development 17 - Unrealized Gain on Investment (1 ) (2,188 ) Bad Debt 9 - Dividend Income (2 ) - Gross deferred tax assets $ 7,652 $ 3,854 Less valuation allowance (7,652 ) (3,854 ) Total deferred tax assets $ - $ - Deferred tax liabilities: Total deferred tax liabilities - - Net deferred tax assets / (liabilities) $ - $ - Utilization of the net operating losses (NOL) carryforwards may be subject to a substantial annual limitation as required by Section 382 of the IRC, due to ownership change of the company that could occur in the future, as well as similar state provisions. In general, an “ownership change” as defined by Section 382 results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income. In 2022, the Company completed the IRC Section 382 analysis, and determined that an ownership change occurred sufficient to impose additional limitations on the use of NOL carryforwards. For the year ended December 31, 2022, Federal and state NOLs of $ 23.1 0 26.6% 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 $ 7.7 The Company applied the "more-likely-than-not" recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in no The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had no accrual for interest and penalties on the balance sheets and has no The Company is subject to taxation in the United States and various state jurisdictions. The Company’s tax years from 2003 are subject to examination by the United States and state taxing authorities due to the carryforward of unutilized NOLs. There are no |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7— DEBT On April 22, 2022, the Company issued a $ 2.0 6% The Company accounted for the early extinguishment of debt in accordance with ASC 405-20 - Extinguishment of Liabilities 326 Contemporaneously, the Company entered into a new debt facility with PNC Bank, National Association (the “PNC Facility”). The PNC Facility includes a $1 million revolving line of credit (the “RLOC”) with a term of one-year, expiring in September 2023. The RLOC has no scheduled payments of principal until maturity, and bears interest per annum at a rate equal to the sum of Daily SOFR plus 2.85% with monthly interest payments. The PNC Facility also includes a four-year term note (the “Term Note”) for $2 million which matures in September of 2026 and requires equal quarterly payments of principal and interest. The Term Note incurs interest per annum at a rate equal to the sum of Daily SOFR plus 3.1%. The RLOC and Term Note are guaranteed by the Company and secured by the assets of PeriShip Global and the Company. The PNC Facility includes a number of affirmative and restrictive covenants applicable to PeriShip Global, including, among others, a financial covenant to maintain a fixed charge coverage ratio of at least 1.10 to 1.00 at the end of each fiscal year, affirmative covenants regarding delivery of financial statements, payment of taxes, and establishing primary depository accounts with PNC Bank, and restrictive covenants regarding dispositions of property, acquisitions, incurrence of additional indebtedness or liens, investments and transactions with affiliates. PeriShip Global is also restricted from paying dividends or making other distributions or payments on its capital stock if an event of default (as defined in the PNC Facility) has occurred or would occur upon such declaration of dividend. PeriShip Global was in compliance with all affirmative and restrictive covenants under the PNC Facility at December 31, 2022. Effective October 17, 2022, the Company entered into an interest rate swap agreement, with a notional amount of $ 1,958 7.602% As of December 31, 2022, our short-term debt outstanding under the Term Note was $ 0.5 1.4 No amounts were drawn on the RLOC as of December 31, 2022. On May 17, 2020, the Company entered into a paycheck protection program term note for $ 72 May 17, 2022 1.00% 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 Consolidated Statements of Operations. The forgiveness recognized during the year ended December 31, 2021, included principal of $ 69 1 3 |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
CONVERTIBLE PREFERRED STOCK | NOTE 8 – CONVERTIBLE PREFERRED STOCK The Company is authorized to issue Series A Convertible Preferred Stock, par value of $0 .001 .001 no 0.85 144,444 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY The Company expensed $ 239 784 The Company expensed $ 1,084 696 During the year ended December 31, 2022, and 2021, the Company issued 30,000 9,774 96 39 On August 11, 2022, we received an exercise notice to exercise 675,000 0.001 675 675,000 On April 22, 2022, 305,473 On April 15, 2022, the Company withheld and retired 750 shares of common stock in order to satisfy U.S. payroll tax withholding obligations on restricted stock awards held by our Chief Financial Officer. On April 12, 2022, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with a selling stockholder and certain directors, providing for the issuance and sale to purchasers therein of an aggregate of 880,208 shares of our common stock, pre-funded warrants to purchase up to 675,000 shares of our common stock, and warrants to purchase up to 1,555,208 shares of our common stock, for gross proceeds to us of approximately $5.0 million and net proceeds of $4.6 million. The pre-funded warrant is exercisable immediately and shall terminate when fully exercised and has an exercise price of $0.001 per share. The pre-funded warrant was exercised in full on August 11, 2022. The warrants will be exercisable for a period of five years commencing six months from the date of issuance and have an exercise price of $3.215 per share. Both the pre-funded warrants and warrants contain price adjustment provisions which may, under certain circumstances, reduce the applicable exercise price. The transaction closed on April 14, 2022. On March 29, 2022, the Company withheld and retired 8,870 shares of common stock in order to satisfy U.S. payroll tax withholding obligations on restricted stock awards held by our Chief Executive Officer. 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 is 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”). The Company applied FASB ASC 718, “Compensation-Stock Compensation” and estimated the fair value using the Black-Scholes model, as the plan is considered compensatory. In relation to the non-qualified stock purchase plan the Company expensed $ 122 40 Shares Held in Treasury As of December 31, 2022, and December 31, 2021, the Company had 389,967 223,956 949 838 On February 28, 2022, five participants exercised their option under the Company’s non-qualified stock purchase plan, and as a result, 25,000 2.69 On August 31, 2022, four participants exercised their option under the Company’s non-qualified stock purchase plan, and as a result, 28,895 1.20 On September 22, 2022, the Company paid $1.8 million of the $2.0 million principal amount promissory note issued to the seller in connection with the PeriShip acquisition, inclusive of the Company redeeming 61,000 shares of its common stock from the seller, pursuant to an agreement with the seller, see Note 4. Shares Repurchase Program 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. Effective July 1, 2022, the Company’s Board of Directors terminated the existing share repurchase program and approved a new share repurchase program to replace the existing program due to expire on August 16, 2022, to allow the Company to spend up to $ 1.5 |
STOCK OPTIONS, RESTRICTED STOCK
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | NOTE 10– 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”) which 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). The aggregate fair market value (determined at the time of the grant) of stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100 thousand, and the options in excess of $100 thousand shall be deemed to be non-qualified stock options, including prices, duration, transferability and limitations on exercise. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 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. 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. Stock Options Schedule of stock options 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 December 31, 2021 465,471 4.38 Exercisable as of December 31, 2021 465,471 $ 4.38 3.2 $ 47 Granted - - Forfeited/Cancelled/Expired (128,000 ) 3.74 Balance as of December 31, 2022 337,471 4.63 Exercisable as of December 31, 2022 337,471 $ 4.63 2.4 $ - (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. As of December 31, 2022, and 2021, the Company had no unvested stock options. The following table summarizes the activities for the Company’s unvested stock options for the year ended December 31, 2022, and 2021: Schedule of Unvested Options Unvested Options Weighted - Average Number of Grant Unvested Options Date Exercise Price Balance at December 31, 2020 10,000 $ 9.75 Granted - - Vested (10,000 ) 9.75 Balance at December 31, 2021 - - Granted - - Vested - - Balance at December 31, 2022 - $ - During the year ended December 31, 2022, and 2021, the Company expensed $ 0 85 As of December 31, 2022, and 2021, there was $ 0 Restricted Stock Awards and Restricted Stock Units The following table summarizes the unvested restricted stock awards as of December 31, 2022 and 2021: Schedule of unvested restricted stock awards Unvested Restricted Stock Awards Weighted - Average Number of Grant Award Shares Date Fair Value Balance at December 31, 2020 267,500 3,80 Granted 89,284 4,32 Vested (312,142 ) 3.87 Balance at December 31, 2021 44,642 4.31 Granted 39,308 3.18 Vested (42,142 ) 4.32 Balance at December 31, 2022 41,808 $ 3.24 As of December 31, 2022, and 2021, total unrecognized share-based compensation cost related to unvested restricted stock awards was $ 2 115 0.02 The following table summarizes the unvested restricted stock units as of December 31, 2022 and 2021: Schedule of unvested restricted stock units Unvested Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2020 - - Granted 208,010 4.05 Vested (21,000 ) 3.44 Unvested at December 31, 2021 187,010 4.11 Granted 418,041 2.14 Vested (191,425 ) 4.07 Balance at December 31, 2022 $ 413,626 $ 2.14 As of December 31, 2022, and 2021, total unrecognized share-based compensation cost related to unvested restricted stock units was $ 284 146 1.02 For RSUs with stock price appreciation targets, we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value of each grant was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the derived service period and there is no ongoing adjustment or reversal based on actual achievement during the period. The following table summarizes the unvested performance restricted stock units as of December 31, 2022. There were no performance restricted stock units prior to the year 2022.: Schedule of unvested performance restricted stock units Unvested Performance Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2021 - - Granted 432,326 2.95 Vested - - Balance at December 31, 2022 $ 432,326 $ 2.95 As of December 31, 2022, total unrecognized share-based compensation cost related to unvested restricted stock units was $ 947 2.23 Warrants The following table summarizes the activities for the Company’s warrants for the year ended December 31, 2022 and 2021: Schedule of warrants outstanding Warrants Outstanding (Excluding Pre-Funded Warrants) Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in thousands) (1) Balance at December 31, 2020 3,779,243 $ 5.89 Granted - - Expired - - Balance at December 31, 2021 3,779,243 5.89 Granted 1,590,150 3.22 Expired (265,938 ) 19.21 Balance at December 31, 2022 5,103,455 $ 4.34 3.0 Exercisable at December 31, 2022 5,103,455 $ 4.34 3.0 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.16 for our common stock on December 31, 2022. For the year ended December 31, 2022, and 2021, the Company granted 34,942 warrants and 0 warrants to warrant holders pursuant to anti-dilution provisions, 1,555,208 warrants and 0 warrants in conjunction with the Securities Purchase Agreement, respectively (see Note 9 – Stockholders’ Equity). As the fair value of the warrants granted would have had a net zero impact to equity (increasing additional paid in capital and offering costs for the same amount), the Company did not break out or complete a separate valuation of the warrants granted in association with either capital raise. Pre-funded Warrants On April 14, 2022, in connection with our Securities Purchase Agreement (see Note 9 – Stockholders’ Equity), the Company issued 675,000 pre-funded warrants to purchase up to an aggregate of 675,000 shares of common stock at a purchase price of $3.214 per pre-funded warrant, which represented the per share public offering price for the common stock less the $0.001 per share exercise price for each pre-funded warrant. In August 2022, 675,000 pre-funded warrants with an exercise price of $ 0.001 675,000 |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS / (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | NOTE 11— EARNINGS (LOSS) PER SHARE Basic earnings/(loss) per share (EPS) is computed by dividing net income/(loss) 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, restricted stock awards 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): Schedule of basic and diluted earnings/(loss) per share Years Ended December 31, 2022 2021 Numerator: Net Income/(Loss) $ (14,398) $ 3,612 Denominator: Weighted average shares of common stock – basic 8,466,075 7,110,907 Effect of dilutive securities Preferred Stock - 144,444 Stock Options - 48,212 Warrants - 23 Stock Purchase Plan - 2,362 Restricted Stock Units & Restricted Stock Awards - 77,416 Weighted average shares of common 8,466,075 7,383,364 (Loss)/Earnings per share Basic $ (1.70) $ 0.51 Diluted $ (1.70) $ 0.49 The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted (loss)/earnings per share: Schedule of anti-dilutiv e earnings per share Years Ended 2022 2021 Anti-dilutive instruments excluded from computation of diluted net income/(loss) per share: Preferred Stock 144,444 - Stock Options 337,471 177,334 Warrants 5,103,455 3,779,048 Stock purchase plan 57,245 - Restricted Stock Units and Restricted Stock Awards 887,760 13,196 |
LONG TERM DERIVATIVE LIABILITY
LONG TERM DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2022 | |
Long Term Derivative Liability | |
LONG TERM DERIVATIVE LIABILITY | NOTE 12— LONG TERM DERIVATIVE LIABILITY On April 7, 2022, the Company granted two directors 11,250 restricted stock units each (“SPAC RSUs”) with respect to the common stock, $0.0001 par value per share, of G3 VRM Acquisition Corp. The SPAC RSUs were to vest upon the initial business combination of the SPAC (see Note 2 – Equity Investments) subject to continuous service to the Company through the vesting date. Each vested SPAC RSU represented the right to receive the value of one share of stock in G3 VRM Acquisition Corp., which would have been paid to the director as soon as practicable after the fifteen-month anniversary of the vesting date. On September 17, 2021, the Company granted two directors SPAC RSUs with respect to the common stock, $ 0.0001 98 In June 2022, the Sponsor Entity decided not to fund the extension for the time that the SPAC had to complete its initial business combination. As a result, the SPAC was dissolved and liquidated in accordance with its charter and under ASC 815, and the derivative instrument was terminated. As a result, the SPAC RSUs were forfeited. For the year ended December 31, 2022, the Company has recorded the effect of termination to reduce the fair value and recorded a credit to share-based compensation expense of $71 thousand in relation to these awards. The fair value of the derivative liability was $ 0 71 Effective October 17, 2022, the Company entered into an interest rate swap agreement (see Note 7 – Debt for details). The fair value of the derivative liability associated with the interest rate swap was $3 thousand as of December 31, 2022, and $0 as of December 31, 2021. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2022 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 13 – EMPLOYEE BENEFIT PLAN We offer the VRME Retirement Savings Plan (the “Plan”) to our employees. Eligible employees can elect to participate in the Plan, as soon as administratively feasible after enrollment. The Plan permits pre-tax contributions to the Plan by participants pursuant to Section 401(k) of the Internal Revenue Code (IRC). We make matching contributions at our discretion. In 2022 and 2021 we contributed a value of approximately $ 103 10 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
LEASES | NOTE 14 – LEASES The Company accounts for its leases under Accounting Standard Codification (“ASC”) Topic 842, Leases. The Company determines at its inception whether an arrangement that provides us control over the use of an asset is a lease. We recognize at lease commencement a right-of-use (ROU) asset and lease liability based on the present value of the future lease payments over the lease term. We have elected not to recognize a ROU asset and lease liability for leases with terms of 12 months or less. Our current long-term lease includes an option to extend the term of the lease prior to the end of the initial term. It is not reasonably certain that we will exercise the option and have not included the impact of the option in the lease term for purposes of determining total future lease payments. As our lease agreement does not explicitly state the discount rate implicit in the lease, we use our promissory note borrowing rate to calculate the present value of future payments. In addition to the base rent, real estate leases typically contain provisions for common-area maintenance and other similar services, which are considered non-lease components for accounting purposes. For our real estate leases, we apply a practical expedient to include these non-lease components in calculating the ROU asset and lease liability. For all other types of leases, non-lease components are excluded from our ROU assets and lease liabilities and expensed as incurred. We have operating leases for office facilities. We do not have any finance leases. Lease expense is included in General & Administrative Expenses on the accompanying Consolidated Statements of Operations. The components of lease expense were as follows (in thousands): Schedule of components of lease expense Years ended December 31, 2022 2021 Operating lease cost $ 85 $ - Short-term lease cost 18 14 Total lease costs $ 103 $ 14 Supplemental information related to leases was as follows (dollars in thousands): Schedule of supplemental information related to leases December 31, 2022 December 31, 2021 Operating Lease right-of-use asset $ 469 $ - Current portion of operating lease liabilities $ 115 $ - Non-current portion of operating lease liabilities $ 359 $ - Total operating lease liabilities $ 474 $ - Cash paid for amounts included in the measurement of operating lease liabilities $ 80 $ - Right-of-use assets obtained in exchange for operating lease liabilities $ 552 $ - Weighted-average remaining lease term for operating leases (years) 4.3 Weighted average discount rate for operating leases 6.0 % The following is a reconciliation of future undiscounted cash flows to the operating lease liabilities on our consolidated balance sheets as of December 31, 2022 (in thousands): Schedule of operating lease liabilities maturities Year ended December 31, 2023 $ 122 2024 126 2025 130 2026 134 Thereafter 45 Total future lease payments 557 Less: imputed interest (83 ) Present value of future lease payments 474 Less: current portion of lease liabilities (115 ) Long-term lease liabilities $ 359 |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 15 – CONCENTRATIONS During the year ended December 31, 2022, one customer represented 13% 95% As of December 31, 2022, two customers made up 23% 91% During the year ended December 31, 2022, one vendor accounted for 99% |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16 – SEGMENT REPORTING As of December 31, 2022, we operated through two reportable business segments: (i) PeriShip Global Solutions and (ii) VerifyMe Solutions. PeriShip Global Solutions: VerifyMe Solutions We do not allocate the following items to the segments: general and administrative expenses, research and development expense, sales and marketing expenses, and other income (expense). The following table sets forth the revenue and operating results attributable to each reportable segment and includes a reconciliation of segment revenue to consolidated revenue and operating results to consolidated loss before income tax expense (in thousands): Schedule of segment reporting information Years Ended 2022 2021 Revenue PeriShip Global Solutions $ 18,190 $ - VerifyMe Solutions 1,386 867 Total Revenue $ 19,576 $ 867 Gross Profit PeriShip Global Solutions $ 5,505 $ - VerifyMe Solutions 983 599 Total Gross Profit 6,488 599 General and administrative 8,428 4,216 Research and development 89 51 Sales and marketing 1,718 1,163 LOSS BEFORE OTHER (EXPENSE) INCOME (3,747 ) (4,831 ) OTHER (EXPENSE) INCOME (10,651 ) 8,443 NET (LOSS) INCOME $ (14,398 ) $ 3,612 Additional information relating to our business segments is as follows (in thousands): Identifiable assets: Years Ended 2022 2021 PeriShip Global Solutions $ 17,302 $ - VerifyMe Solutions 3,450 21,688 Total Assets $ 20,752 $ 21,688 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS On March 1, 2023, the Company entered into an Asset Purchase Agreement (the “APA”) effective as of February 28, 2023 (the “Effective Date”) by and among the Company, Trust Codes Global, Trust Codes Limited, a New Zealand limited liability company (“Trust Codes” or “Seller”) and Signum Holdings Limited (“Seller’s Parent”). Pursuant to the terms of the APA Trust Codes Global agreed to purchase from Trust Codes and Trust Codes agreed to sell to Trust Codes Global substantially all of the assets of Trust Codes and certain specified liabilities (the “Transaction”). The Transaction closed simultaneously with the execution of the APA on , 2023 (the “Closing”). The total consideration paid to the Seller at Closing in connection with the Transaction was approximately $ 1,000,000 350,000 353,492 1.84 650,000 Under the APA, during the five-year period ending on the fifth anniversary of the Effective Date, Trust Codes Global shall pay the Seller quarterly cash earnout payments equal to 18% of the gross margin earned on existing customers and the Company shall issue to the Seller annual equity earnout payments of restricted shares of the Company’s common stock equal to 20% of gross margin earned on new customers during the applicable 12 month period divided by the VWAP for the 30-day period The APA is structured to comply with the shareholder approval requirements of the Nasdaq listing rules and contains a blocker provision which prevents the Seller from receiving any equity earnout shares should such earnout shares, in connection with the Stock Consideration, cause the Seller to beneficially own more than 19.99% of the voting securities of the Company. The APA contains customary confidentiality and indemnification provisions and customary representations, warranties and covenants by the parties for transactions of this type and also contains a five-year non-compete and non-solicitation provision applicable to the Seller, Seller’s Parent, and each of their affiliates, in favor of the Company and Trust Codes Global. On February 28, 2023, fourteen participants exercised their option under the Company’s non-qualified stock purchase plan, and as a result, 57,245 1.19 Effective March 15, 2023, the Company’s Chief Executive Officer, Patrick White, resigned as an officer and director of the Company. Scott Greenberg, the Company’s executive chairman of the Board, was appointed as Interim Chief Executive Officer. In connection with his resignation, Mr. White will receive payments totaling $159 thousand. In addition the Company awarded him 111,364 equal to 70% of his annual base salary, each such unit representing the contingent right to receive one share of the Company’s common stock, par value $0.001 per share, subject to the terms of the Company’s 2020 Plan. These restricted stock units, except as otherwise provided in the award agreement, In connection with his appointment as Interim Chief Executive Officer, 56,819 100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Nature of the Business | Nature of the Business VerifyMe, Inc. (“VerifyMe”) was incorporated in the State of Nevada on November 10, 1999. VerifyMe, together with its subsidiaries, including PeriShip Global LLC (“PeriShip Global”) and Trust Codes Global Limited (“Trust Codes Global”), (together the “Company,” “we,” “us,” or “our”) is based in Lake Mary, Florida and its common stock, par value $ 0.001 VerifyMe, through PeriShip Global, is a software driven predictive analytics logistics provider of high-touch, end-to-end logistics management, which represents most of our current revenue stream. In addition, VerifyMe technologies provide product traceability, brand protections services, and consumer engagement solutions. Our operations are split into two segments: PeriShip Global Solutions and VerifyMe Solutions, which includes Trust Codes Global. Through our PeriShip Global Solutions segment we provide a value-added service for time and temperature sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as flight-tracking, weather, and traffic, all delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events, with dynamic dashboards. All aspects of the of the shipping journey is managed by a dedicated call center. Using our proprietary logistics solution, we provide real-time information and analysis to mitigate supply chain flow interruption, delivering last-mile resolution for key markets, including the perishable healthcare and food industries. Through our VerifyMe Solutions segment, our technologies provide unit level traceability, brand protection, and consumer engagement solutions allowing brand owners to gather business intelligence, cross-sell products, monitor product diversion through the supply chain and build brand loyalty through interaction utilizing our unique dynamic codes which are read by consumers with their smart phones. The Company’s activities are subject to significant risks and uncertainties. See the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections in this report. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiary PeriShip Global. All significant intercompany balances and transactions have been eliminated upon consolidation. The consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding the method by which to allocate resources and assess performance. The Company has two reportable segments, namely, (i) PeriShip Global Solutions and (ii) VerifyMe Solutions. See Note 16 Segment Reporting, for further discussion of the Company’s segment reporting structure. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of accounts receivable, unbilled revenue, accounts payable, notes payable and accrued expenses, equity investments, and long-term derivative liabilities. The carrying value of accounts receivable, unbilled revenue, accounts payable and accrued expenses approximate their fair value because of their short maturities. The Company believes the carrying amount of its notes payable approximates fair value based on rates and other terms currently available to the Company for similar debt instruments. 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. The following table presents the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2022 and December 31, 2021. Amounts in Thousands ('000) Schedule of fair value assets measured on recurring basis Short Term Investment Equity Investment Derivative Liability Derivative Liability (Level 1) (Level 3) (Level 2) (Level 3) Balance as of December 31, 2021 $ 88 10,964 - (71 ) Realized loss on fair value recognized in other (expense)/income - (10,932 ) - - Distribution from Sponsor Entity - (32 ) - - - - Unrealized gain on fair value recognized in other (expense)/income 12 - - - Realized gain on fair value recognized in share-based compensation - - 71 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss (3 ) - - - Balance at December 31, 2022 $ 100 $ - $ (3 ) $ - |
Variable Interest Entity | Variable Interest Entity The Company determined that G3 VRM Acquisition Corp. (NASDAQ: GGGVU) (the “SPAC”, see Note 2 – Equity Investments), a Delaware corporation and special purpose acquisition company, was a variable interest entity (“VIE”) in which the Company had a variable interest but was 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 impacted 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 was not the primary beneficiary of the VIE and as such, did not consolidate the SPAC. The Company reassessed 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. The SPAC was unable to complete its initial business combination within 12 months from the closing of the IPO, and the Sponsor Entity made the decision not to fund the extension and did not deposit additional funds into the trust account. As a result, the SPAC was dissolved, and liquidated according to its charter. The SPAC redeemed 100% of the public shares for cash, the rights have expired worthless, and the founder shares and the private placement securities have become worthless. |
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 Note 2 –Equity Investments) and its equity security under short term investment on the balance sheets, as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrealized gain on equity investment include unrealized gain of the fair value of the equity investments and loss on equity investment includes realized loss on equity investments on the accompanying Consolidated Statements of Operations. |
Goodwill | Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assessed qualitative factors to determine whether it was necessary to perform the quantitative goodwill impairment test. The assessment considers factors such as, but not limited to, macroeconomic conditions, data showing other companies in the industry and our share price. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price. |
Business Combinations | Business Combinations The Company applies the provisions of Accounting Standard Codification (“ASC”) Topic 805, Business Combinations, in the accounting for business acquisitions. ASC 805 requires the Company to recognize separately from goodwill the assets acquired and the liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the identifiable assets acquired and the liabilities assumed. While the Company uses its best estimates and assumptions to accurately apply preliminary value to assets acquired and liabilities assumed at the acquisition date, where applicable, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments in the current period, rather than a revision to a prior period. Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statements of Operations. Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, including estimates for intangible assets where applicable. Although the Company believes the assumptions and estimates made have been reasonable and appropriate, they are based in part on information obtained from management of the acquired companies and are inherently uncertain. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results. |
Basic and Diluted Net Loss per Share of Common Stock | Basic and Diluted Net Loss 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of reporting cash flows, the Company considers all cash accounts, which are not subject to withdrawal restrictions or penalties, and certificates of deposit and commercial paper with original maturities of 90 days or less to be cash or cash equivalents. As of December 31, 2022, the Company held $ 63 |
Accounts Receivable | Accounts Receivable Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. Bad debts expense or write offs of receivables are determined on the basis of loss experience, known and inherent risks in the receivable portfolio and current economic conditions. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to make payments, such allowances may be required. The Company recognized $ 37 0 |
Concentration of Credit Risk Involving Cash and Cash Equivalents | Concentration of Credit Risk Involving Cash and Cash Equivalents The Company’s cash and cash equivalents are held at various financial institutions. At times, the Company’s deposits may exceed Federal Deposit Insurance Corporation (FDIC) coverage limits which are currently set at $ 250,000 |
Inventory | Inventory Inventory principally consists of canisters and pigments and is stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. |
Equipment for Lease | Equipment for Lease Equipment for lease principally consists of costs associated with the development, certification and production of the VerifyChecker™ and the VerifyAuthenticator TM automatically renewable leases cancellable by either party by written notice provided 90 days in advance. 5 |
Capitalized Software | Capitalized Software Costs incurred in connection with the development of software related to our proprietary proactive end-to-end logistics management products are accounted for in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350 “Hosting Arrangements and Internally Used Software.” 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 development costs begins once the product is available to the market. Capitalized software development costs are amortized over the estimated life of the related product, generally six years, using the straight-line method. The Company will evaluate its software assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. |
Long-Lived Assets | Long-Lived Assets The Company evaluates the recoverability of its long-lived assets in accordance with ASC 360 “Property, Plant, and Equipment.” The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets are measured by a comparison of the carrying amount of an asset to future cash flows expected to be generated by the asset, undiscounted and without interest or independent appraisals. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the assets. |
Derivative Instruments | Derivative Instruments The Company evaluates its equity investments, long-term derivative liabilities, preferred stock, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguish by Liabilities from Equity” (FASB ASC 480), and FASB ASC 815, “Derivatives and Hedging” (“FASB ASC 815”). The result of this accounting treatment is that the fair value of the embedded derivative, if required to be bifurcated, is marked-to-market at each balance sheet date and recorded as a liability. The change in fair value is recorded in the Consolidated Statement of Operations as a component of other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified as liabilities at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument is expected within 12 months of the balance sheet date. |
Reclassifications | Reclassifications Certain accounts in the prior year financial statements have been reclassified for comparative purposes to conform to the presentation in the current year financial statements. These reclassifications had no effect on the previously reported net income (loss). |
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 year ended December 31, 2022, over 90% of the Company’s revenues primarily consisted of revenue related to our logistics management for time and temperature sensitive packages generated by our subsidiary PeriShip Global. During the year ended December 31, 2021, the Company’s revenue primarily consisted of VerifyInk TM |
Income Taxes | Income Taxes The Company follows FASB ASC 740, “Income Taxes,” when accounting for income taxes, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed annually for temporary differences between the financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Tax years from 2003 remain subject to examination by major tax jurisdictions due the carryforward of unutilized NOLs. |
Stock-Based Compensation | Stock-Based Compensation We account for stock-based compensation under the provisions of FASB ASC 718, “Compensation—Stock Compensation”, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes model. The assumptions used in the Black-Scholes option pricing model include risk-free interest rates, expected volatility and expected life of the stock options. Changes in these assumptions can materially affect estimates of fair value stock-based compensation, and the compensation expense recorded in future periods. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line method. We recognize forfeitures as they occur with a reduction in compensation expense in the period of forfeiture. For performance restricted stock units with stock price appreciation targets (see Note 10 – Stock Options, Restricted Stock and Warrants), we applied a lattice approach that incorporated a Monte Carlo simulation, which involved random iterations that took different future price paths over the RSU’s contractual life based on the appropriate probability distributions (which are based on commonly applied Black Scholes inputs). The fair value was determined by taking the average of the grant date fair values under each Monte Carlo simulation trial. We recognize compensation expense on a straight-line basis over the performance period and there is no ongoing adjustment or reversal based on actual achievement during the period. We account for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if we had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured, and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service completed. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising costs were $ 60 51 |
Research and Development Costs | Research and Development Costs In accordance with FASB ASC 730, research and development costs are expensed when incurred. Research and development costs for the years ended December 31, 2022, and 2021 were $ 89 51 |
Basic and Diluted Earnings (Loss) per Share of Common Stock | Basic and Diluted Earnings (Loss) 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. Because the Company reported a net loss for the year ended December 31, 2022, common stock equivalents, including preferred stock, stock options and warrants were anti-dilutive; therefore, the amounts reported for basic and diluted loss per share were the same. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of fair value assets measured on recurring basis | Schedule of fair value assets measured on recurring basis Short Term Investment Equity Investment Derivative Liability Derivative Liability (Level 1) (Level 3) (Level 2) (Level 3) Balance as of December 31, 2021 $ 88 10,964 - (71 ) Realized loss on fair value recognized in other (expense)/income - (10,932 ) - - Distribution from Sponsor Entity - (32 ) - - - - Unrealized gain on fair value recognized in other (expense)/income 12 - - - Realized gain on fair value recognized in share-based compensation - - 71 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss (3 ) - - - Balance at December 31, 2022 $ 100 $ - $ (3 ) $ - |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Schedule of disaggregation of revenue VerifyMe PeriShip Global Consolidated Revenue Year Ended Year Ended Year Ended 2022 2021 2022 2021 2022 2021 Proactive services $ - - $ 15,202 - $ 15,202 $ - Premium services - - 2,988 - 2,988 - Brand protection services 1,386 867 - - 1,386 867 $ 1,386 $ 867 $ 18,190 $ - $ 19,576 $ 867 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of business acquisitions | Schedule of business acquisitions Cash 7,500 Promissory note 2,000 Stock (issuance of 305,473 shares of common stock) (1) 974 Total purchase price 10,474 Amortization Period Purchase price allocation: Accounts receivable, net 836 Prepaid expenses 5 Developed Technology 3,143 6 Trade Names/Trademarks 1,111 13 Customer Relationships 1,839 10 Non-Compete Agreement 191 5 Property and Equipment, net 193 Goodwill 3,988 Accounts payable and other accrued expenses (832 ) 10,474 (1) Stock issued was calculated based on the 15 days prior to April 22, 2022, volume-weighted average price (“VWAP”) calculated at $3.2736. |
Schedule of financial information | Schedule of financial information Years Ended Description 2022 2021 Revenues $ 25,397 $ 29,500 Net Income (loss) $ (14,298 ) $ 5,465 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by reportable business segment | Schedule of goodwill by reportable business segment VerifyMe PeriShip Global Total Net book value at January 1, 2022 $ - $ - $ - 2022 Activity Acquisition - 3,988 3,988 Net book value at December 31, 2022 $ - $ 3,988 $ 3,988 |
Schedule of intangible assets subject to amortization | Schedule of intangible assets subject to amortization December 31, 2022 Gross Carrying Accumulated Net Carrying Patents and Trademarks $ 1,858 $ (445 ) $ 1,413 Capitalized Software 206 (91 ) 115 Customer Relationships 1,839 (133 ) 1,706 Developed Technology 3,143 (360 ) 2,783 Internally Used Software 236 (4 ) 232 Non-Compete Agreement 191 (28 ) 163 $ 7,473 $ (1,061 ) $ 6,412 December 31, 2021 Patents and Trademarks $ 707 $ (354 ) $ 353 Capitalized Software 206 (50 ) 156 $ 913 $ (404 ) $ 509 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Schedule of Finite-Lived Intangible Assets, Future Amortization Expense Fiscal Year ending December 31, 2023 $ 1,057 2024 877 2025 857 2026 842 2027 836 Thereafter 1,943 Total $ 6,412 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation of federal statutory tax rate | Schedule of reconciliation of federal statutory tax rate Year Ended December 31, US 2022 2021 Income (loss) before income taxes $ (14,400 ) $ (3,612 ) Taxes under statutory US tax rates (3,024 ) 759 Increase (decrease) in taxes resulting from: Increase (decrease) in valuation allowance (1,188 ) (6,149 ) Change in State tax rate (57 ) - All other 5,045 5,204 State taxes (776 ) 186 Income tax expense $ - $ - |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities December 31, 2022 2021 US Net operating loss carryforwards $ 6,495 $ 5,208 Restricted Stock (RSA’s, RSU’s) 503 180 Stock Options 562 678 Stock Purchase Plan (SPP) 8 - Depreciation (71 ) (33 ) Intangibles 22 9 Acquisition Transaction Costs 110 - Capitalized Research and Development 17 - Unrealized Gain on Investment (1 ) (2,188 ) Bad Debt 9 - Dividend Income (2 ) - Gross deferred tax assets $ 7,652 $ 3,854 Less valuation allowance (7,652 ) (3,854 ) Total deferred tax assets $ - $ - Deferred tax liabilities: Total deferred tax liabilities - - Net deferred tax assets / (liabilities) $ - $ - |
STOCK OPTIONS, RESTRICTED STO_2
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of stock options | Schedule of stock options 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 December 31, 2021 465,471 4.38 Exercisable as of December 31, 2021 465,471 $ 4.38 3.2 $ 47 Granted - - Forfeited/Cancelled/Expired (128,000 ) 3.74 Balance as of December 31, 2022 337,471 4.63 Exercisable as of December 31, 2022 337,471 $ 4.63 2.4 $ - (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 Unvested Options | Schedule of Unvested Options Unvested Options Weighted - Average Number of Grant Unvested Options Date Exercise Price Balance at December 31, 2020 10,000 $ 9.75 Granted - - Vested (10,000 ) 9.75 Balance at December 31, 2021 - - Granted - - Vested - - Balance at December 31, 2022 - $ - |
Schedule of unvested restricted stock awards | Schedule of unvested restricted stock awards Unvested Restricted Stock Awards Weighted - Average Number of Grant Award Shares Date Fair Value Balance at December 31, 2020 267,500 3,80 Granted 89,284 4,32 Vested (312,142 ) 3.87 Balance at December 31, 2021 44,642 4.31 Granted 39,308 3.18 Vested (42,142 ) 4.32 Balance at December 31, 2022 41,808 $ 3.24 |
Schedule of unvested restricted stock units | Schedule of unvested restricted stock units Unvested Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2020 - - Granted 208,010 4.05 Vested (21,000 ) 3.44 Unvested at December 31, 2021 187,010 4.11 Granted 418,041 2.14 Vested (191,425 ) 4.07 Balance at December 31, 2022 $ 413,626 $ 2.14 |
Schedule of unvested performance restricted stock units | Schedule of unvested performance restricted stock units Unvested Performance Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2021 - - Granted 432,326 2.95 Vested - - Balance at December 31, 2022 $ 432,326 $ 2.95 |
Schedule of warrants outstanding | Schedule of warrants outstanding Warrants Outstanding (Excluding Pre-Funded Warrants) Number of Weighted- Average Exercise Price Weighted - Average Remaining Contractual Term in years) Aggregate Intrinsic Value (in thousands) (1) Balance at December 31, 2020 3,779,243 $ 5.89 Granted - - Expired - - Balance at December 31, 2021 3,779,243 5.89 Granted 1,590,150 3.22 Expired (265,938 ) 19.21 Balance at December 31, 2022 5,103,455 $ 4.34 3.0 Exercisable at December 31, 2022 5,103,455 $ 4.34 3.0 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.16 for our common stock on December 31, 2022. |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS / (LOSS) PER SHARE | |
Schedule of basic and diluted earnings/(loss) per share | Schedule of basic and diluted earnings/(loss) per share Years Ended December 31, 2022 2021 Numerator: Net Income/(Loss) $ (14,398) $ 3,612 Denominator: Weighted average shares of common stock – basic 8,466,075 7,110,907 Effect of dilutive securities Preferred Stock - 144,444 Stock Options - 48,212 Warrants - 23 Stock Purchase Plan - 2,362 Restricted Stock Units & Restricted Stock Awards - 77,416 Weighted average shares of common 8,466,075 7,383,364 (Loss)/Earnings per share Basic $ (1.70) $ 0.51 Diluted $ (1.70) $ 0.49 |
Schedule of anti-dilutiv e earnings per share | Schedule of anti-dilutiv e earnings per share Years Ended 2022 2021 Anti-dilutive instruments excluded from computation of diluted net income/(loss) per share: Preferred Stock 144,444 - Stock Options 337,471 177,334 Warrants 5,103,455 3,779,048 Stock purchase plan 57,245 - Restricted Stock Units and Restricted Stock Awards 887,760 13,196 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases | |
Schedule of components of lease expense | Schedule of components of lease expense Years ended December 31, 2022 2021 Operating lease cost $ 85 $ - Short-term lease cost 18 14 Total lease costs $ 103 $ 14 |
Schedule of supplemental information related to leases | Schedule of supplemental information related to leases December 31, 2022 December 31, 2021 Operating Lease right-of-use asset $ 469 $ - Current portion of operating lease liabilities $ 115 $ - Non-current portion of operating lease liabilities $ 359 $ - Total operating lease liabilities $ 474 $ - Cash paid for amounts included in the measurement of operating lease liabilities $ 80 $ - Right-of-use assets obtained in exchange for operating lease liabilities $ 552 $ - Weighted-average remaining lease term for operating leases (years) 4.3 Weighted average discount rate for operating leases 6.0 % |
Schedule of operating lease liabilities maturities | Schedule of operating lease liabilities maturities Year ended December 31, 2023 $ 122 2024 126 2025 130 2026 134 Thereafter 45 Total future lease payments 557 Less: imputed interest (83 ) Present value of future lease payments 474 Less: current portion of lease liabilities (115 ) Long-term lease liabilities $ 359 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Schedule of segment reporting information Years Ended 2022 2021 Revenue PeriShip Global Solutions $ 18,190 $ - VerifyMe Solutions 1,386 867 Total Revenue $ 19,576 $ 867 Gross Profit PeriShip Global Solutions $ 5,505 $ - VerifyMe Solutions 983 599 Total Gross Profit 6,488 599 General and administrative 8,428 4,216 Research and development 89 51 Sales and marketing 1,718 1,163 LOSS BEFORE OTHER (EXPENSE) INCOME (3,747 ) (4,831 ) OTHER (EXPENSE) INCOME (10,651 ) 8,443 NET (LOSS) INCOME $ (14,398 ) $ 3,612 Additional information relating to our business segments is as follows (in thousands): Identifiable assets: Years Ended 2022 2021 PeriShip Global Solutions $ 17,302 $ - VerifyMe Solutions 3,450 21,688 Total Assets $ 20,752 $ 21,688 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Equity Investment | $ 10,964 | |
Derivative Liability at beginning | 71 | |
Derivative Liability at end | 3 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Short Term Investment at beginning | 88 | |
Unrealized gain on fair value recognized in other (expense)/income | 12 | |
Short-Term Investments at end | 100 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Equity Investment | $ 10,964 | |
Derivative Liability at beginning | (71) | |
Realized loss on fair value recognized in other (expense)/income | (10,932) | |
Distribution from Sponsor Entity | (32) | |
Change in fair value to interest rate, SWAP, recognized in other comprehensive loss | 71 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Change in fair value to interest rate, SWAP, recognized in other comprehensive loss | (3) | |
Derivative Liability at end | $ (3) |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Cash | $ 63,000 | |
Allowance for doubtful accounts | 37,000 | $ 0 |
FDIC insured limit | 250,000 | |
Advertising cost | 60,000 | 51,000 |
Research and development costs | $ 89,000 | $ 51,000 |
Equipment For Lease [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Description of lease terms | automatically renewable leases cancellable by either party by written notice provided 90 days in advance. | |
Maturity terms of lease | 5 years |
EQUITY INVESTMENTS (Details Nar
EQUITY INVESTMENTS (Details Narrative) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jul. 06, 2021 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares | Apr. 12, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity Securities, FV-NI, Cost | $ 0 | $ 11,000 | ||
Equity Securities, FV-NI, Unrealized Loss | 10,932 | |||
Equity investments fair value | 12 | |||
Fair value of equity investment | $ 100 | 88 | ||
Series D Preferred Stock [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Cumulative convertible preferred stock value | $ 8,841 | |||
Cumulative convertible preferred stock ratio | 0.10 | |||
Cumulative convertible preferred stock price | $ / shares | $ 10 | |||
IPO [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 10,626,000 | |||
Over-Allotment Option [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 626,000 | |||
Private Placement [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 569,410 | |||
Private Placement [Member] | G V R M Holdings L L Cand Maxim Partners L L C [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Sale of Stock, Consideration Received on Transaction | $ 5,694 | |||
Private Placement [Member] | Beneficial Owner [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 229,228 | |||
Sale of Stock, Consideration Received on Transaction | $ 2,581 | |||
Sponsor Entity [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 516,280 | |||
Maxim Partners L L C [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | shares | 53,130 | |||
Co Sponsor [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 44.40% | |||
G V R M Holdings L L C [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 9.42% |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 19,576 | $ 867 |
Proactive Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 15,202 | |
Premium Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,988 | |
Brand Protection Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,386 | 867 |
Parent Company [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,386 | 867 |
Parent Company [Member] | Proactive Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | ||
Parent Company [Member] | Premium Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | ||
Parent Company [Member] | Brand Protection Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,386 | 867 |
Subsidiaries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 18,190 | |
Subsidiaries [Member] | Proactive Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 15,202 | |
Subsidiaries [Member] | Premium Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,988 | |
Subsidiaries [Member] | Brand Protection Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands | Apr. 22, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||
Cash | $ 63 | |||
Goodwill | $ 3,988 | |||
Developed Technology Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization Period | 6 years | |||
Trademarks [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization Period | 13 years | |||
Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization Period | 10 years | |||
Noncompete Agreements [Member] | ||||
Business Acquisition [Line Items] | ||||
Amortization Period | 5 years | |||
Peri Ship [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 7,500 | |||
Promissory note | 2,000 | |||
Stock (issuance of 305,473 shares of restricted common stock) | [1] | 974 | ||
Total purchase price | 10,474 | |||
Accounts receivable, net | 836 | |||
Prepaid expenses | 5 | |||
Property and Equipment, net | 193 | |||
Goodwill | 3,988 | |||
Accounts payable and other accrued expenses | (832) | |||
Peri Ship [Member] | Developed Technology Rights [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets | 3,143 | |||
Peri Ship [Member] | Trademarks [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets | 1,111 | |||
Peri Ship [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets | 1,839 | |||
Peri Ship [Member] | Noncompete Agreements [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible Assets | 191 | |||
Business Combination [Member] | ||||
Business Acquisition [Line Items] | ||||
Total purchase price | $ 10,474 | |||
[1]Stock issued was calculated based on the 15 days prior to April 22, 2022, volume-weighted average price (“VWAP”) calculated at $3.2736. |
BUSINESS COMBINATION (Details 1
BUSINESS COMBINATION (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | ||
Revenues | $ 25,397 | $ 29,500 |
Net Income (loss) | $ (14,298) | $ 5,465 |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 22, 2022 | Apr. 22, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Sep. 22, 2022 | |
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 7,500 | ||||
Common stock shares, issued | 305,473 | 305,473 | 9,341,002 | 7,420,633 | |
Gain on extinguishment of debt | $ 326 | ||||
Business Combination [Member] | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 10,500 | ||||
Promissory note | $ 2,000 | ||||
Investment Interest Rate | 6% | 6% | |||
Gain on extinguishment of debt | $ 326 | ||||
Business Combination [Member] | Restricted Stock [Member] | |||||
Business Acquisition [Line Items] | |||||
Common stock shares, issued | 305,473 | 305,473 | 61,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Beginning balance | |
Acquisition | 3,988 |
Ending balance | 3,988 |
Parent Company [Member] | |
Beginning balance | |
Acquisition | |
Ending balance | |
Subsidiaries [Member] | |
Beginning balance | |
Acquisition | 3,988 |
Ending balance | $ 3,988 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,473 | $ 913 |
Accumulated Amortization | (1,061) | (404) |
Net Carrying Amount | 6,412 | 509 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,858 | 707 |
Accumulated Amortization | (445) | (354) |
Net Carrying Amount | 1,413 | 353 |
Capitalized Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 206 | 206 |
Accumulated Amortization | (91) | (50) |
Net Carrying Amount | 115 | $ 156 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,839 | |
Accumulated Amortization | (133) | |
Net Carrying Amount | 1,706 | |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,143 | |
Accumulated Amortization | (360) | |
Net Carrying Amount | 2,783 | |
Internally Used Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 236 | |
Accumulated Amortization | (4) | |
Net Carrying Amount | 232 | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 191 | |
Accumulated Amortization | (28) | |
Net Carrying Amount | $ 163 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 1,057 | |
2024 | 877 | |
2025 | 857 | |
2026 | 842 | |
2027 | 836 | |
Thereafter | 1,943 | |
Total | $ 6,412 | $ 509 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 657 | $ 64 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income (loss) before income taxes | $ (14,400) | $ (3,612) |
Taxes under statutory US tax rates | (3,024) | 759 |
Increase (decrease) in taxes resulting from: | ||
Increase (decrease) in valuation allowance | (1,188) | (6,149) |
Change in State tax rate | (57) | |
All other | 5,045 | 5,204 |
State taxes | (776) | 186 |
Income tax expense |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 6,495 | $ 5,208 |
Restricted Stock (RSA’s, RSU’s) | 503 | 180 |
Stock Options | 562 | 678 |
Stock Purchase Plan (SPP) | 8 | |
Depreciation | (71) | (33) |
Intangibles | 22 | 9 |
Acquisition Transaction Costs | 110 | |
Capitalized Research and Development | 17 | |
Unrealized Gain on Investment | (1) | (2,188) |
Bad Debt | 9 | |
Dividend Income | (2) | |
Gross deferred tax assets | 7,652 | 3,854 |
Less valuation allowance | (7,652) | (3,854) |
Total deferred tax assets | ||
Deferred tax liabilities: | ||
Total deferred tax liabilities | ||
Net deferred tax assets / (liabilities) |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Description of ownership change | Utilization of the net operating losses (NOL) carryforwards may be subject to a substantial annual limitation as required by Section 382 of the IRC, due to ownership change of the company that could occur in the future, as well as similar state provisions. In general, an “ownership change” as defined by Section 382 results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. These ownership changes may limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income. | |
Effective income tax rate | 26.60% | |
Deferred tax assets valuation allowance | $ 7,700 | |
Unrecognized tax benefits | 0 | $ 0 |
Accrual for interest and penalties | 0 | 0 |
Taxes payable | 0 | $ 0 |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | 23,100 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Operating Loss Carryforwards | $ 0 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 22, 2022 | May 17, 2020 | Oct. 17, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||||
Gain (Loss) on Extinguishment of Debt | $ 326 | ||||
Notional amount | $ 1,958 | ||||
Interest rate | 7.602% | ||||
Short term debt outstanding | 500 | ||||
Long-term debt outstanding | $ 1,400 | ||||
Loan forgiveness | 69 | ||||
Interest payable | 1 | ||||
Repayments of loan payable | $ 3 | ||||
Paycheck Protection Program Term Note [Member] | P N C Bank N A [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt outstanding | $ 72 | ||||
Maturity date | May 17, 2022 | ||||
Interest rate | 1% | ||||
Promissory Note [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Unsecured promissory note | $ 2,000 | ||||
Intrest rate | 6% |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Series A Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible Preferred Stock, outstanding | 0 | 0 |
Series B Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible Preferred Stock, outstanding | 0.85 | 0.85 |
Number of shares converted | 144,444 | 144,444 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Aug. 11, 2022 | Nov. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2022 | Apr. 22, 2022 | Feb. 28, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Restricted stock/restricted stock units, expense | $ 239 | $ 784 | |||||
Restricted stock/restricted stock award, expense | 1,084 | 696 | |||||
Stock-based compensation expense | $ 96 | $ 39 | |||||
Prefunded warrants | 675,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.001 | ||||||
Stock Issued During Period, Value, Other | $ 675 | ||||||
Stock Issued During Period, Shares, Other | 675,000 | ||||||
Common stock issued | 9,341,002 | 7,420,633 | 305,473 | ||||
Non-Qualified Stock Purchase Plan expenses | $ 122 | $ 40 | |||||
Treasury stock share | 389,967 | 223,956 | |||||
Treasury stock value | $ 949 | $ 838 | |||||
Non-qualified stock purchase plan | 28,895 | 25,000 | |||||
Non-qualified stock purchase exercise price | $ 1.20 | $ 2.69 | |||||
Share repurchase program | $ 1,500 | ||||||
Common Stock [Member] | |||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||
Stock issued for services | 30,000 | 9,774 |
STOCK OPTIONS, RESTRICTED STO_3
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details) - Share-Based Payment Arrangement, Option [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Balance at ending | 465,471 | 473,771 | |
Weighted Average Exercise Price, Balance at ending | $ 4.38 | $ 4.48 | |
Granted | |||
Weighted Average Exercise Price, Granted | |||
Forfeited/Cancelled/Expired | (128,000) | (8,300) | |
Weighted Average Exercise Price, Forfeited/Cancelled/Expired | $ 3.74 | $ 9.72 | |
Vested and Exercisable at ending | 337,471 | 465,471 | |
Weighted Average Exercise Price, Exercisable at ending | $ 4.63 | $ 4.38 | |
Weighted Average Remaining Contractual Term, Exercisable at ending | 2 years 4 months 24 days | 3 years 2 months 12 days | |
Vested and Exercisable at ending | [1] | $ 47 | |
Balance at ending | 337,471 | 465,471 | |
Weighted Average Exercise Price, Balance at ending | $ 4.63 | $ 4.38 | |
[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. |
STOCK OPTIONS, RESTRICTED STO_4
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 1) - Nonvested Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Balance at ending | 10,000 | |
Balance at ending | $ 9.75 | |
Granted | ||
Granted | ||
Vested | (10,000) | |
Vested | $ 9.75 | |
Balance at ending | ||
Balance at ending |
STOCK OPTIONS, RESTRICTED STO_5
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 2) - Restricted Stock [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Balance at beginning | 44,642 | 267,500 |
Weighted - Average Grant Date Fair Value, Balance at beginning | $ 4.31 | $ 3.80 |
Granted | 39,308 | 89,284 |
Weighted - Average Grant Date Fair Value, Granted | $ 3.18 | $ 4.32 |
Vested | (42,142) | (312,142) |
Weighted - Average Grant Date Fair Value, Vested | $ 4.32 | $ 3.87 |
Balance at ending | 41,808 | 44,642 |
Weighted - Average Grant Date Fair Value, Balance at ending | $ 3.24 | $ 4.31 |
STOCK OPTIONS, RESTRICTED STO_6
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 3) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Balance at beginning | 187,010 | |
Weighted - Average Grant Date Fair Value, Balance at beginning | $ 4.11 | |
Granted | 418,041 | 208,010 |
Weighted - Average Grant Date Fair Value, Granted | $ 2.14 | $ 4.05 |
Vested | (191,425) | (21,000) |
Weighted - Average Grant Date Fair Value, Vested | $ 4.07 | $ 3.44 |
Balance at ending | 413,626 | 187,010 |
Weighted - Average Grant Date Fair Value, Balance at ending | $ 2.14 | $ 4.11 |
STOCK OPTIONS, RESTRICTED STO_7
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 4) - Unvested Performance Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Balance at beginning | shares | |
Weighted - Average Grant Date Fair Value, Balance at beginning | $ / shares | |
Granted | shares | 432,326 |
Weighted - Average Grant Date Fair Value, Granted | $ / shares | $ 2.95 |
Vested | shares | |
Weighted - Average Grant Date Fair Value, Vested | $ / shares | |
Balance at ending | shares | 432,326 |
Weighted - Average Grant Date Fair Value, Balance at ending | $ / shares | $ 2.95 |
STOCK OPTIONS, RESTRICTED STO_8
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 5) - $ / shares | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Aug. 11, 2022 | ||
Net Investment Income [Line Items] | ||||
Number of warrants outstanding, beginning balance | 3,779,243 | 3,779,243 | ||
Weighted average exercise price, beginning balance | $ 5.89 | $ 5.89 | ||
Number of warrants outstanding, granted | 1,590,150 | |||
Weighted average exercise price, granted | $ 3.22 | |||
Number of warrants outstanding, expired | (265,938) | |||
Weighted average exercise price, expired | $ 19.21 | |||
Number of warrants outstanding, ending Balance | 5,103,455 | 3,779,243 | ||
Weighted average exercise price, ending balance | $ 4.34 | $ 5.89 | ||
Weighted average remaining contractual terms | 3 years | |||
Number of warrants outstanding, exercisable | 5,103,455 | |||
Weighted average exercise price, exercisable | $ 4.34 | |||
Weighted average remaining contractual terms, exercisable | 3 years | |||
Exercise price (in dollars per share) | $ 0.001 | |||
Warrant [Member] | ||||
Net Investment Income [Line Items] | ||||
Exercise price (in dollars per share) | [1] | |||
[1]The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.16 for our common stock on December 31, 2022. |
STOCK OPTIONS, RESTRICTED STO_9
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||||
Aug. 10, 2020 | Nov. 14, 2017 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 11, 2022 | Apr. 14, 2022 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | ||||||||
Per share public offering price(in dollars per share) | $ 0.001 | |||||||
Director And Officer [Member] | Debentures 2022 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Per share public offering price(in dollars per share) | $ 0.001 | |||||||
Director And Officer [Member] | Debentures2020 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Stock Issued During Period, Shares, Issued for Services | 675,000 | |||||||
Equity Incentive Plan2017 [Member] | Board of Directors Chairman [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Stock issued during period shares new issues | 1,069,110 | 260,000 | ||||||
Issued Under The2020 Plan [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Incentive stock options granted | 1,000,000 | |||||||
Plan2019 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Stock or Unit Option Plan Expense | $ 0 | $ 85 | ||||||
Unrecognized compensation cost | $ 0 | 0 | ||||||
Stock Options Restricted Stockand Unitsand Other Stockbased Awards [Member] | Omnibus Equity Compensation Plan2013 [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Number of shares authorized to grand awards | 400,000 | |||||||
Incentive Stock Options [Member] | ||||||||
Class of Warrant or Right [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). The aggregate fair market value (determined at the time of the grant) of stock with respect to which incentive stock options are exercisable for the first time by any individual during any calendar year (under all plans of the Company and its affiliates) shall not exceed $100 thousand, and the options in excess of $100 thousand shall be deemed to be non-qualified stock options, including prices, duration, transferability and limitations on exercise. The maximum number of shares of common stock that may be issued under the 2020 Plan pursuant to incentive stock options may not exceed, in the aggregate, 1,000,000. | |||||||
Restricted Stock [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Unvested restricted stock awards | $ 2 | 115 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 7 days | |||||||
Restricted Stock Units [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Unvested restricted stock awards | $ 284 | $ 146 | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 1 year 7 days | |||||||
Nonvested Stock Options [Member] | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Incentive stock options granted | ||||||||
Unvested restricted stock awards | $ 947 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 2 years 2 months 23 days |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | ||
NET (LOSS)/INCOME | $ (14,398) | $ 3,612 |
Denominator: | ||
Weighted average shares of common stock – basic | 8,466,075 | 7,110,907 |
Effect of dilutive securities | ||
Preferred Stock | 144,444 | |
Stock Options | 48,212 | |
Warrants | 23 | |
Stock Purchase Plan | 2,362 | |
Restricted Stock Units & Restricted Stock Awards | 77,416 | |
Weighted average shares of common stock – diluted | 8,466,075 | 7,383,364 |
(Loss)/Earnings per share | ||
Basic | $ (1.70) | $ 0.51 |
Diluted | $ (1.70) | $ 0.49 |
EARNINGS (LOSS) PER SHARE (De_2
EARNINGS (LOSS) PER SHARE (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 144,444 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 337,471 | 177,334 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 5,103,455 | 3,779,048 |
Stock Purchase Plan [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 57,245 | |
Restricted Stock Units And Restricted Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 887,760 | 13,196 |
LONG TERM DERIVATIVE LIABILITY
LONG TERM DERIVATIVE LIABILITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Sep. 17, 2021 | Dec. 31, 2022 | Apr. 07, 2022 | Dec. 31, 2021 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | ||
Fair value of the derivative liability | $ 0 | $ 71 | ||
Long term debt description | The fair value of the derivative liability associated with the interest rate swap was $3 thousand as of December 31, 2022, and $0 as of December 31, 2021. | |||
G 3 V R M [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||
Director [Member] | ||||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | ||||
Grant fair value | $ 98 |
EMPLOYEE BENEFIT PLAN (Details
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | ||
Contributions | $ 103 | $ 10 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Operating lease cost | $ 85 | |
Short-term lease cost | 18 | 14 |
Total lease costs | $ 103 | $ 14 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
Operating Lease right-of-use asset | $ 469 | |
Current portion of operating lease liabilities | 115 | |
Non-current portion of operating lease liabilities | 359 | |
Total operating lease liabilities | 474 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 80 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 552 | |
Weighted-average remaining lease term for operating leases (years) | 4 years 3 months 18 days | |
Weighted average discount rate for operating leases | 6% |
LEASES (Details 2)
LEASES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Leases | ||
2023 | $ 122 | |
2024 | 126 | |
2025 | 130 | |
2026 | 134 | |
Thereafter | 45 | |
Total future lease payments | 557 | |
Less: imputed interest | (83) | |
Present value of future lease payments | 474 | |
Less: current portion of lease liabilities | (115) | |
Long-term lease liabilities | $ 359 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 13% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Five Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 95% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 91% | |
Transportation Cost [Member] | Product Concentration Risk [Member] | One Vendor [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 99% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | ||
Revenues | $ 19,576 | $ 867 | |
Gross Profit | 6,488 | 599 | |
General and administrative | [1] | 8,428 | 4,216 |
Research and development | 89 | 51 | |
Sales and marketing | [1] | 1,718 | 1,163 |
LOSS BEFORE OTHER INCOME (EXPENSE) | (3,747) | (4,831) | |
OTHER INCOME (EXPENSE) | (10,651) | 8,443 | |
NET (LOSS)/INCOME | (14,398) | 3,612 | |
Total Assets | 20,752 | 21,688 | |
Subsidiaries [Member] | |||
Revenues | 18,190 | ||
Gross Profit | 5,505 | ||
Total Assets | 17,302 | ||
Parent Company [Member] | |||
Revenues | 1,386 | 867 | |
Gross Profit | 983 | 599 | |
Total Assets | $ 3,450 | $ 21,688 | |
[1]Includes share-based compensation of $1,468 thousand for the year ended December 31, 2022, and $1,716 thousand for the year ended December 31, 2021. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||
Mar. 15, 2023 | Mar. 01, 2023 | Feb. 28, 2023 | |
Subsequent Event [Line Items] | |||
Total consideration paid | $ 1,000 | ||
Cash Consideration | $ 350 | ||
Restricted common stock issued | 353,492 | ||
Share price | $ 1.84 | ||
Stock consideration | $ 650 | ||
Nonqualified Stock Purchase Plan [Member] | |||
Subsequent Event [Line Items] | |||
Stock option exercised | 57,245 | ||
Exercise Price | $ 1.19 | ||
N 2020 Plan [Member] | Former Chief Executive Officer [Member] | |||
Subsequent Event [Line Items] | |||
Restricted stock awarded | 111,364 | ||
N 2020 Plan [Member] | Greenberg [Member] | |||
Subsequent Event [Line Items] | |||
Restricted stock awarded | 56,819 | ||
Grant date value | $ 100 |