Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 18, 2024 | Jun. 30, 2023 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
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 | $ 11,984,934 | ||
Entity Common Stock, Shares Outstanding | 10,144,853 | ||
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 2024 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. | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
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, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents including restricted cash | $ 3,095 | $ 3,411 |
Accounts receivable, net of allowance for credit loss reserve, $165 and $37 as of December 31, 2023 and December 31, 2022, respectively | 3,017 | 4,448 |
Unbilled revenue | 1,282 | 1,185 |
Prepaid expenses and other current assets | 254 | 333 |
Inventory | 38 | 81 |
TOTAL CURRENT ASSETS | 7,686 | 9,458 |
PROPERTY AND EQUIPMENT, NET | 240 | 292 |
RIGHT OF USE ASSET | 468 | 469 |
INTANGIBLE ASSETS, NET | 6,927 | 6,545 |
GOODWILL | 5,384 | 3,988 |
TOTAL ASSETS | 20,705 | 20,752 |
CURRENT LIABILITIES | ||
Term note, current | 500 | 500 |
Accounts payable | 3,310 | 3,912 |
Other accrued expense | 988 | 902 |
Lease liability- current | 170 | 115 |
Contingent liability-current | 173 | |
TOTAL CURRENT LIABILITIES | 5,141 | 5,429 |
LONG-TERM LIABILITIES | ||
Contingent liability, non-current | 751 | |
Long-term lease liability | 307 | 359 |
Long-term derivative liability | 3 | |
Term note | 875 | 1,375 |
Convertible note – related party | 475 | |
Convertible note | 625 | |
TOTAL LIABILITIES | 8,174 | 7,166 |
STOCKHOLDERS' EQUITY | ||
Common stock, $0.001 par value; 675,000,000 shares authorized;10,453,315 and 9,341,002 shares issued, 10,123,964 and 8,951,035 shares outstanding as of December 31, 2023 and December 31, 2022, respectively | 10 | 10 |
Additional paid in capital | 95,031 | 92,987 |
Treasury stock as cost; 329,351 and 389,967 shares at December 31, 2023 and December 31, 2022, respectively | (659) | (949) |
Accumulated deficit | (81,849) | (78,459) |
Accumulated other comprehensive loss | (2) | (3) |
STOCKHOLDERS' EQUITY | 12,531 | 13,586 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 20,705 | 20,752 |
Series A Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock | ||
Series B Preferred Stock [Member] | ||
STOCKHOLDERS' EQUITY | ||
Convertible preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts and Financing Receivable, Allowance for Credit Loss | $ 165 | $ 37 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 675,000,000 | 675,000,000 |
Common Stock, Shares, Issued | 10,453,315 | 9,341,002 |
Common Stock, Shares, Outstanding | 10,123,964 | 8,951,035 |
Treasury Stocks, Shares | 329,351 | 389,967 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 37,564,767 | 37,564,767 |
Preferred Stock, Shares issued | 0 | 0 |
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 | 85 |
Preferred Stock, Shares issued | 0.85 | 0.85 |
Preferred Stock, Shares Outstanding | 0.85 | 0.85 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Income Statement [Abstract] | |||
NET REVENUE | $ 25,313 | $ 19,576 | |
COST OF REVENUE | 16,310 | 13,088 | |
GROSS PROFIT | 9,003 | 6,488 | |
OPERATING EXPENSES | |||
General and administrative | [1] | 10,586 | 8,428 |
Research and development | 107 | 89 | |
Sales and marketing | [1] | 1,638 | 1,718 |
Total Operating expenses | 12,331 | 10,235 | |
LOSS BEFORE OTHER INCOME (EXPENSE) | (3,328) | (3,747) | |
OTHER (EXPENSE) INCOME | |||
Interest expenses, net | (161) | (88) | |
Unrealized gain on equity investment | 12 | ||
Change in fair value of contingent consideration | 201 | ||
Loss on equity investment | (100) | (10,932) | |
Other (expense) income, net | (2) | 31 | |
Gain on extinguishment of debt | 326 | ||
TOTAL OTHER EXPENSE, NET | (62) | (10,651) | |
NET LOSS | $ (3,390) | $ (14,398) | |
LOSS PER SHARE | |||
BASIC | $ (0.35) | $ (1.70) | |
DILUTED | $ (0.35) | $ (1.70) | |
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING | |||
BASIC | 9,766,469 | 8,466,075 | |
DILUTED | 9,766,469 | 8,466,075 | |
[1]Includes share-based compensation of $1,675 thousand for the year ended December 31, 2023, and $1,468 thousand for the year ended December 31, 2022. |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Statement [Abstract] | ||
NET LOSS | $ (3,390) | $ (14,398) |
Change in fair value of interest rate, swap | 7 | (3) |
Foreign currency translation adjustments | (6) | |
TOTAL COMPREHENSIVE LOSS | $ (3,389) | $ (14,401) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,390) | $ (14,398) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Allowance for bad debt | 139 | 37 |
Stock based compensation | 200 | 145 |
Loss on equity investment | 100 | 10,932 |
Change in fair value of contingent consideration | (201) | |
Fair value of restricted stock awards and restricted stock units issued in exchange for services | 1,475 | 1,323 |
Loss on disposal of equipment | 2 | |
Impairments | 190 | |
Unrealized gain on equity investment | (12) | |
Gain on extinguishment of debt | (326) | |
Amortization and depreciation | 1,134 | 770 |
Unrealized gain on foreign currency transactions | (25) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,295 | (3,352) |
Unbilled revenue | (96) | (1,185) |
Inventory | (57) | (29) |
Prepaid expenses and other current assets | 9 | (77) |
Accounts payable, other accrued expenses and net change in operating leases | (531) | 3,621 |
Net cash provided by (used) in operating activities | 244 | (2,551) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Equity received from SPAC equity investment | 32 | |
Purchase of patents | (62) | (40) |
Leasehold improvements | (8) | |
Purchase of office equipment | (27) | |
Cash paid in business combination | (363) | (7,500) |
Deferred implementation costs | (58) | (140) |
Capitalized software costs | (677) | (236) |
Net cash used in investing activities | (1,195) | (7,884) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from public offering of securities | 4,528 | |
Proceeds from line of credit | 1,800 | |
Proceeds from convertible debt | 1,100 | |
Proceeds from issuance of note payable | 2,000 | |
Exercise of pre-funded warrants | 1 | |
Proceeds from SPP Plan | 80 | 102 |
Tax withholding payments for employee stock-based compensation in exchange for shares surrendered | (36) | (34) |
Increase in treasury shares (share repurchase program) | (10) | (291) |
Repayment of debt and line of credit | (2,300) | (1,882) |
Net cash provided by financing activities | 634 | 4,424 |
Effect of exchange rate changes on cash | 1 | |
CASH EQUIVALENTS INCLUDING RESTRICTED CASH | (316) | (6,011) |
CASH AND CASH EQUIVALENTS INCLUDING RESTRICTED CASH- BEGINNING OF PERIOD | 3,411 | 9,422 |
CASH AND CASH EQUIVALENTS INCLUDNG RESTRICTED CASH - END OF PERIOD | 3,095 | 3,411 |
Cash paid during the period for: | ||
Interest | 165 | 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 | $ 7 | $ (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, 2021 | $ 7 | $ 86,059 | $ (838) | $ (64,061) | $ 21,167 | |||
Beginning 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, net of shares withheld for employee tax | 1,084 | 1,084 | ||||||
Restricted Stock Units, net of shares withheld for employee tax, shares | ||||||||
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 | |||||||
Repurchase of Common Stock | $ (291) | (291) | ||||||
Repurchase of Common Stock, shares | (219,906) | 219,906 | ||||||
Exercise of Pre-funded Warrants | $ 1 | 1 | ||||||
Exercise of Pre-funded Warrants, shares | 675,000 | |||||||
Accumulated other comprehensive Loss | (3) | (3) | ||||||
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 | |||||
Restricted stock awards, net of shares withheld for employee tax | 468 | 468 | ||||||
Restricted stock awards, net of shares withheld for employee tax, shares | 499,444 | |||||||
Restricted Stock Units, net of shares withheld for employee tax | 970 | 970 | ||||||
Restricted Stock Units, net of shares withheld for employee tax, shares | 123,989 | |||||||
Common stock issued in relation to Stock Purchase Plan | (77) | $ 211 | 134 | |||||
Common stock issued in relation to Stock Purchase Plan, shares | 70,047 | (61,302) | ||||||
Common stock issued for services | 147 | 147 | ||||||
Common stock issued for services, shares | 133,654 | |||||||
Common stock issued in relation to Acquisition | 625 | 625 | ||||||
Common stock issued in relation to Acquisition, shares | 353,492 | |||||||
Repurchase of Common Stock | $ (10) | (10) | ||||||
Repurchase of Common Stock, shares | (6,201) | 6,201 | ||||||
Treasury stock retired | (89) | $ 89 | ||||||
Treasury stock retired, shares | (5,515) | |||||||
Cancellation of Common stock | ||||||||
Cancellation of Common stock, shares | (1,496) | |||||||
Accumulated other comprehensive Loss | 1 | 1 | ||||||
Net loss | (3,390) | (3,390) | ||||||
Ending balance, value at Dec. 31, 2023 | $ 10 | $ 95,031 | $ (659) | $ (2) | $ (81,849) | $ 12,531 | ||
Ending balance, shares at Dec. 31, 2023 | 0.85 | 10,123,964 | 329,351 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) Attributable to Parent | $ (3,390) | $ (14,398) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
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 The company operates a Precision Logistics Segment and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to gather business intelligence through the supply chain, cross-sell products, detect counterfeit activities, monitor product diversion, and build brand loyalty utilizing our unique dynamic codes which are read by consumers with their smart phones. Further information regarding our business segments is discussed below: 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. Reclassifications Certain amounts presented for the year ended December 31, 2022, reflect reclassifications made to conform to the presentation in our current reporting period. These reclassifications had no effect on the previously reported net loss. Basis of Presentation The accompanying consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiaries PeriShip Global and Trust Codes 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”). 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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and disclosures. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers 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, 2023 and December 31, 2022. Amounts in Thousands ('000) Schedule of fair value assets measured on recurring basis Short Term Investment Derivative Asset Contingent Consideration (Level 1) (Level 2) (Level 3) Balance as of December 31, 2022 $ 100 (3 ) - Loss on fair value recognized in other income (expense) (100 ) - - Contingent consideration at issuance - - (1,125 ) Change in fair value of contingent consideration - - 201 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss - 7 - Balance at December 31, 2023 $ - $ 4 $ (924 ) 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. 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) Precision Logistics (formerly PeriShip Global) and (ii) Authentication (formerly VerifyMe Solutions). See Note 16 Segment Reporting, for further discussion of the Company’s segment reporting structure. 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. Because the Company reported a net loss for each of the periods presented, 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. For the year ended December 31, 2023, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the years presented. For the year ended December 31, 2023, there were approximately 8,286,000 1,439,000 816,000 301,000 4,629,000 957,000 144,000 Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows (dollars in thousands): Schedule of restricted cash As of December 31, 2023 December 31,2022 Cash and cash equivalents $ 3,032 $ 3,348 Restricted cash 63 63 Total cash and cash equivalents including restricted cash $ 3,095 $ 3,411 The Company classifies cash and cash equivalents that are restricted from operating use for the next twelve months as restricted cash. As of December 31, 2023, and December 31, 2022, the Company held $ 63 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 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 $ 139 37 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 security under prepaid expenses and other current assets on the Consolidated Balance Sheets, as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrecognized gain or loss of the fair value of the equity investments are included in Other income (expense) on the accompanying Consolidated Statements of Operations. 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. 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. During the year ended December 31, 2023, the Company impaired $ 100 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. 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. 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 an asset or 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 assets, 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 assets or liabilities at the fair value of the instrument on the reclassification date. Derivative instrument as assets or 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. Foreign Currency Translation The functional currency of our New Zealand operations is the local currency, New Zealand dollar (NZD). The translation of the foreign currency into U. S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted average exchange rates prevailing during the year. The unrealized gains and losses resulting from such translation are included as a component of comprehensive income. Translation gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “General and administrative” on our Consolidated Statements of Operations. The unrealized foreign currency transaction losses for the years ended December 31, 2023 and December 31, 2022, were $ 5 0 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, separated by reportable segments, in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements. For more detailed information about reportable segments, see Note 16 – Segment reporting. · 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. The Company generally considers completion of an agreement, or Statement of Work (“SOW”) and/or purchase order as a customer contract, provided collection is considered probable. Precision Logistics Our Precision Logistics segment consists of two service lines, Proactive and Premium. Under our Proactive service line, clients pay us directly for carrier service coupled with our proactive logistics service. Terms typically range 7 days and no longer than 30 days. The Company has determined it is the principal and recognizes shipment fees in gross revenue. Under our Premium service line, we provide complete white-glove shipping monitoring and predictive analytics services. This service includes customer web portal access, weather monitoring, temperature control, full service center support and last mile resolution. Payment terms are typically 30 - 45 days. Under both service lines in our Precision Logistics segment, our performance obligation is met, and revenue is recognized, when the packages are delivered. The transaction fees consist of fixed consideration made up of amounts contractually billed to the customer. There are no variable considerations in the transaction fee, in either service line. Authentication Our Authentication segment primarily consists of our brand protection service line which consists of a custom suite of products that offer clients traceability and brand solutions. Terms typically range between 30 and 90 days. Our performance obligation is met, and revenue is recognized, when our products are shipped or delivered depending on the specific agreement with the customer. The transaction fee is made up of fixed consideration based on the related purchase order or agreement. Warranties and other variable considerations are analyzed by the Company, in terms of historical warranties, current economic trends, and changes in customer demand, and have been determined to be insignificant in the twelve months ended December 31, 2023. 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 $ 39 60 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, 2023, and 2022 were $ 107 89 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 2004 remain subject to examination by major tax jurisdictions due the carryforward of unutilized NOLs. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY INVESTMENTS | NOTE 2 – EQUITY INVESTMENTS In December 2021, the Company acquired 8,841 10% 10.00 88,410 100 0 100 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 10,932 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 3 – REVENUE Revenue by Category The following series of tables present our revenue disaggregated by various categories (dollars in thousands). Schedule of disaggregation of revenue Authentication Precision Logistics Consolidated Revenue Year Ended Year Ended Year Ended 2023 2022 2023 2022 2023 2022 Proactive services $ - $ - $ 19,879 $ 15,202 (a) $ 19,879 $ 15,202 Premium services - - 4,773 2,988 (a) 4,773 2,988 Brand protection services 661 1,386 - - 661 1,386 $ 661 $ 1,386 $ 24,652 $ 18,190 $ 25,313 $ 19,576 (a) Revenue is our Precision Logistics Segment in 2022 includes revenue since the acquisition date of our PeriShip Global business, on April 22, 2022. 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 twelve months. These assets and liabilities are reported on the consolidated balance sheets 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, 2023, 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, 2023, we did not have any capitalized sales commissions. For all periods presented, contract liabilities were not significant. The following table provides information about contract assets from contracts with customers: Schedule of contract assets Contract Asset December 31, In Thousands 2023 2022 Beginning balance, January 1 $ 1,185 $ - Contract asset additions 3,598 2,502 Reclassification to accounts receivable, billed to customers (3,501 ) (1,317 ) Ending balance (1) $ 1,282 $ 1,185 ______________ (1) Included within "Unbilled revenue" on the accompanying Consolidated Balance sheets. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | NOTE 4 – BUSINESS COMBINATION Trust Codes Global Limited On March 1, 2023, we acquired, through Trust Codes Global, the business and certain assets of Trust Codes Limited (“Trust Codes”), specializing in brand protection, anti-counterfeiting, and consumer engagement technology with an expertise in the food and agriculture industry. Trust Codes Global uses unique QR codes or IoT, coupled with GS1 standards to deliver cloud-based brand protection based on a unique per-item digital identity to protect brand and product authenticity, increase data visualization of a product through the end to end supply chain, and creates a data-drive engine to inform and educate consumers of the product. The Company accounted for the transaction as an acquisition of a business under ASC 805 – Business Combination. The purchase price was approximately $ 1.0 0.36 353,492 0.65 1.1 278 314 The following table summarizes the purchase price allocation for the acquisition (dollars in thousands). Schedule of business acquisitions Cash $ 363 Fair value of contingent consideration 1,125 Stock (issuance of 353,492 shares of common stock) (a) 625 Total purchase price $ 2,113 Amortization Period Purchase price allocation: Prepaid expenses $ 25 Property and Equipment, net 18 ROU Asset 171 Developed Technology 485 8 Trade Names/Trademarks 148 18 Customer Relationships 68 10 Goodwill 1,383 Accounts payable and other accrued expenses (14 ) Current lease liability (63 ) Long term lease liability (108 ) $ 2,113 (a) Stock issued was calculated based on the 15 day volume-weighted average price (“VWAP”) through February 28, 2023 calculated at $1.8388. Contingent Consideration ASC Topic 805 requires that contingent consideration to be recognized at fair value on the acquisition date and be re-measured each reporting period with subsequent adjustments recognized in the consolidated statement of operations. We estimate the fair value of contingent consideration liabilities using an appropriate valuation methodology, typically either an income-based approach or a simulation model, such as the Monte Carlo model, depending on the structure of the contingent consideration arrangement. Contingent consideration is valued using significant inputs that are not observable in the market which are defined as Level 3 inputs pursuant to fair value measurement accounting. We believe our estimates and assumptions are reasonable; however, there is significant judgment involved. At each reporting date, the contingent consideration obligation is revalued to estimated fair value, and changes in fair value subsequent to the acquisitions are reflected in income or expense in the consolidated statements of operations, and could cause a material impact to, and volatility in, our results. Changes in the fair value of contingent consideration obligations may result from changes in discount periods and rates and changes in the timing and amount of revenue and/or earnings projections. As of December 31, 2023, contingent consideration presented as current liability totaled $ 173 751 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 allocation for the acquisition 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, 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, 2022, 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, 2022 (dollars in thousands): Schedule of financial information Description 2022 Revenues $ 25,397 Net Income (loss) $ (14,298 ) |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Dec. 31, 2023 | |
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 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 Changes in the carrying amount of goodwill by reportable business segment for the year ended December 31, 2023, were as follows (in thousands): Schedule of goodwill by reportable business segment Authentication Precision Logistics Total Net book value at January 1, 2023 $ - $ 3,988 $ 3,988 2023 Activity Acquisition of Trust Codes Global 1,383 - 1,383 Foreign currency translation 13 - 13 Net book value at December 31, 2023 $ 1,396 $ 3,988 $ 5,384 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, 2023 Gross Accumulated Net Carrying Amount Weighted Patents and Trademarks $ 2,002 $ (564 ) $ 1,438 13 Capitalized Software 161 (109 ) 52 2 Customer Relationships 1,908 (317 ) 1,591 9 Developed Technology 3,632 (938 ) 2,694 5 Internally Used Software 914 (62 ) 852 6 Non-Compete Agreement 191 (65 ) 126 3 Deferred Implementation 198 (24 ) 174 9 Total Intangible Assets $ 9,006 $ (2,079 ) $ 6,927 December 31, 2022 Patents and Trademarks $ 1,858 $ (445 ) $ 1,413 13 Capitalized Software 206 (91 ) 115 3 Customer Relationships 1,839 (133 ) 1,706 9 Developed Technology 3,143 (360 ) 2,783 5 Internally Used Software 236 (4 ) 232 6 Non-Compete Agreement 191 (28 ) 163 4 Deferred Implementation 140 (7 ) 133 10 Total Intangible Assets $ 7,613 $ (1,068 ) $ 6,545 Amortization expense for intangible assets was $ 1,030 657 90 Patents and Trademarks As of December 31, 2023, our current patent and trademark portfolios consist of nine granted U.S. patents and two granted European patents, one validated in four countries (France, Germany, United Kingdom, and Italy), and the second patent validated in three countries (France, Germany, and United Kingdom), three pending U.S. and foreign patent applications, twenty-six registered U.S. trademarks (of which nineteen are in the name of VerifyMe, Inc., and 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, seven NZ trademark registration (of which six are in the name of Trust Codes Limited and/or Trust Codes Global Limited), one OAPI (African Intellectual Property Organization) trademark registration (in the name of Trust Codes Global Limited), and two pending US and foreign trademark applications. The Company abandoned two patents during the year ended December 31, 2023. 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, 2024 $ 1,134 2025 1,109 2026 1,105 2027 1,070 2028 695 Thereafter 1,814 Total $ 6,927 As of December 31, 2023, our intangible assets with definite lives had a weighted average remaining useful life of 8 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023, and 2022 is as follows (in thousands) Schedule of reconciliation of federal statutory tax rate Year Ended December 31, US 2023 2022 Loss before income taxes Domestic $ (2,612 ) $ (14,400 ) Foreign (777 ) - Total loss before income taxes (3,389 ) (14,400 ) Taxes under statutory US tax rates (712 ) (3,024 ) Increase (decrease) in taxes resulting from: Foreign taxes and rate differential (53 ) - Increase (decrease) in valuation allowance 642 (1,188 ) Change in State tax rate (25 ) (57 ) Prior period true up 267 5,045 State taxes (119 ) (776 ) Income tax expense $ - $ - The increase in the valuation allowance during the year ended December 31, 2023 was due primarily to the increase in our net operating losses which may not be utilized in the future. The decrease in the Company's net valuation allowance in the year ended December 31, 2022 was due primarily to a realized loss in our equity investment (See Note 2-Equity Investments), 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, 2023 2022 US Net operating loss carryforwards $ 6,318 $ 6,495 Restricted stock (RSA’s, RSU’s) 613 503 Stock options 527 562 Stock Purchase Plan (SPP) 2 8 Depreciation (45 ) (71 ) Intangibles (27 ) 22 Acquisition transaction costs 172 110 Capitalized research and development (1 ) 17 Unrealized gain on investment 2 (1 ) Bad debt 42 9 Capital loss carryforward 680 Accruals & other 11 Dividend income (2 ) Gross deferred tax assets $ 8,294 $ 7,652 Less valuation allowance (8,294 ) (7,652 ) Total deferred tax assets $ - $ - Deferred tax liabilities: Total deferred tax liabilities - - Net deferred tax assets / (liabilities) $ - $ - In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets may not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon these factors, Management has placed a full valuation allowance against all deferred tax assets, including net operating loss carryforwards, due to the uncertainty of future profitability. As of December 31, 2023, the Company has net operating loss carryforwards of $ 22.7 23.1 0 The Company completed the IRC Section 382 analysis, in 2022, and determined that an ownership change occurred sufficient to impose additional limitations on the use of NOL carryforwards. The Company has not completed the IRC Section 382 analysis in 2023 and is not aware of any indicators that may impose additional limitations on the use of NOL carryforwards. 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. No tax benefit has been reported in the December 31, 2023, due to the uncertainty surrounding the realizability of the benefit. Uncertain Tax Positions As of December 31, 2023, and 2022 we had no uncertain tax positions reflected on our balance sheet. The Company files income tax returns in U.S. federal, state and local jurisdictions, and in one non-U.S. jurisdiction, and is subject to audit by tax authorities in those jurisdictions. The Company’s tax years from 2004 are subject to examination by the United States and state taxing authorities due to the carryforward of unutilized NOLs. The Tax Cuts and Jobs Act of 2017 imposes a mandatory repatriation tax on certain unremitted foreign earnings and provides a 100% deduction to domestic corporations for certain dividends received from foreign corporations after Dec. 31, 2017. Therefore, we do not expect future dividends, if any, from the earnings of our foreign subsidiary to result in U.S. federal income taxes. Deferred tax liabilities arising from the difference between the financial reporting and income tax bases inherent in our foreign subsidiary, referred to as outside basis differences, have not been provided for U.S. income tax purposes because we do not intend to sell, liquidate or otherwise trigger the recognition of U.S. taxable income with regard to our investment in this foreign subsidiary. Determining the amount of U.S. deferred tax liabilities associated with outside basis differences is not practicable at this time. In accordance with FASB ASC 740 “Income Taxes”, valuation allowances are provided against deferred tax assets, if based on the weight of available evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or all of the deferred tax assets on its balance sheet and has established a valuation allowance of approximately $ 8.3 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 recognized $ 2 0 There are no |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 7— DEBT PNC Facility PeriShip Global is a party to a debt facility with PNC Bank, National Association (the “PNC Facility”). The PNC Facility includes a $1 million revolving line of credit (the “RLOC”). 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 VerifyMe and secured by the assets of PeriShip Global and VerifyMe. 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. On November 3, 2023, PeriShip Global entered into a waiver and amendment to loan documents and received a waiver for certain events of default and entered into an amended and restated loan agreement with PNC effective October 31, 2023, which provided amendments to a number of affirmative and restrictive covenants applicable to PeriShip Global and extended the RLOC to September 30, 2024. As of December 31, 2023, our short-term debt outstanding under the Term Note was $ 500 875 500 As of December 31, 2022, our short-term debt outstanding under the Term Note was $ 0.5 1.4 During the year ended December 31, 2023, $ 1,800 1,800 0 Effective October 17, 2022, the Company entered into an interest rate swap agreement, with a notional amount of $ 1,958 7.602% 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 Convertible Debt On August 25, 2023, the Company entered into a Convertible Note Purchase Agreement with certain investors for the sale of convertible promissory notes for the aggregate principal amount of $ 1,100 475 purchased by related parties including certain members of management and the Board of Directors. The notes are subordinated unsecured obligations of the Company and accrue interest at a rate of 8% per year payable semiannually in arrears on February 25 and August 25 of each year, beginning on February 25, 2024. The notes will mature on August 25, 2026, unless earlier converted or repurchased at a conversion price of $1.15 per share of common stock. The Company may not redeem the notes prior to the maturity date. For the year ended December 31, 2023, interest expense related to the convertible debt was $ 31 1,100 |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2023 | |
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 0.001 no 0.85 144,444 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY The Company expensed $ 477 239 The Company expensed $ 998 1,084 On November 2, 2023 the Company issued 56,272 72,329 On September 20, 2023, the Company issued 15,965 22,807 6,842 On July 31, 2023, the Company issued 14,000 20,000 6,000 On April 22, 2023, 750 2,500 On March 31, 2023, the Company issued 1,750 2,500 750 On February 28, 2023, 353,492 On December 31, 2023, the Company issued 133,654 147 During the year ended December 31, 2023, the Company retired 5,515 1,496 During the year ended December 31, 2023, the Company issued 50,002 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 number 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 2021 Plan is considered compensatory. In relation to the 2021 Plan the Company expensed $ 53 122 80 102 Shares Held in Treasury As of December 31, 2023, and December 31, 2022, the Company had 329,351 389,967 659 949 On August 31, 2023, six participants exercised their option under the Company’s 2021 Plan, and as a result, 12,802 0.96 On February 28, 2023, fourteen participants exercised their option under the Company’s 2021 Plan, and as a result, 57,245 48,500 1.19 Shares Repurchase Program Effective July 1, 2022, the Company’s Board of Directors approved a share repurchase program to allow the Company to spend up to $ 1.5 6,201 10 In December 2023, the Company’s Board of Directors approved a new share repurchase program to allow the Company to spend up to $0.5 million to repurchase shares of its common stock so long as the price does not exceed $1.00 until December 14, 2024. During the year ended December 31, 2023, the Company did not repurchase shares of common stock under the Company’s current program. |
STOCK OPTIONS, RESTRICTED STOCK
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS | 12 Months Ended |
Dec. 31, 2023 | |
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 On March 28, 2022, the Company’s Board of Directors adopted the First Amendment to the 2020 Plan, subject to stockholder approval, which increased the shares authorized for potential issuance under the 2020 Plan to 2,069,100 3,069,110 The 2020 Plan, as amended, 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 The following table summarizes the activities for the Company’s stock options as of December 31, 2023, and 2022: 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, 2021 465,471 $ 4.38 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 $ - Granted - - Forfeited/Cancelled/Expired (36,000 ) 5.17 Balance as of December 31, 2023 301,471 4.56 Exercisable as of December 31, 2023 301,471 $ 4.56 1.2 $ - (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, 2023, and 2022, the Company had no unvested stock options. During the year ended December 31, 2023, and 2022, the Company expensed $ 0 As of December 31, 2023, and 2022, there was $ 0 Restricted Stock Awards and Restricted Stock Units The following table summarizes the unvested restricted stock awards as of December 31, 2023 and 2022: Schedule of unvested options Weighted - Average Number of Grant Award Shares Date Fair Value Unvested 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 Granted 506,194 1.45 Vested (131,333 ) 2.06 Balance at December 31, 2023 416,669 $ 1.44 As of December 31, 2023, and 2022, total unrecognized share-based compensation cost related to unvested restricted stock awards was $ 260 2 0.44 The following table summarizes the unvested restricted stock units as of December 31, 2023 and 2022: Schedule of unvested restricted stock awards Unvested Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2021 187,010 4.11 Granted 418,041 2.14 Vested (191,425 ) 4.07 Unvested at December 31, 2022 413,626 2.14 Granted 272,941 1.35 Vested (294,261 ) 2.51 Forfeited/Cancelled (21,053 ) 1.20 Balance at December 31, 2023 $ 371,253 $ 1.32 As of December 31, 2023, and 2022, total unrecognized share-based compensation cost related to unvested restricted stock units was $ 301 284 1.39 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, 2023 and 2022: Schedule of unvested 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 Granted 1,156,591 1.16 Vested - - Forfeited/Cancelled (150,157 ) 2.95 Balance at December 31, 2023 1,438,760 $ 1.51 As of December 31, 2023, and December 31, 2022 total unrecognized share-based compensation cost related to unvested restricted stock units was $ 1,778 947 1.75 Warrants The following table summarizes the activities for the Company’s warrants for the year ended December 31, 2023 and 2022: 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, 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 Granted - - Expired (474,869 ) 6.34 Balance at December 31, 2023 4,628,586 4.13 2.3 Exercisable at December 31, 2023 4,628,586 4.13 2.3 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.12 for our common stock on December 31, 2023. For the year ended December 31, 2023, and 2022, the Company granted 0 warrants and 34,942 warrants to warrant holders pursuant to anti-dilution provisions, 0 warrants and 1,555,208 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, 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 0.001 |
LOSS PER SHARE
LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2023 | |
LOSS PER SHARE | |
LOSS PER SHARE | NOTE 11— LOSS PER SHARE Basic loss per share (EPS) is computed by dividing net 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 loss per share (in thousands, except share and per share data): Schedule of basic and diluted earnings/(loss) per share Years Ended December 31, 2023 2022 Numerator: Net loss: $ (3,390 ) $ (14,398 ) Denominator: Weighted average shares of common stock – basic 9,766,469 8,466,075 Loss per share: Basic $ (0.35 ) $ (1.70 ) Diluted $ (0.35 ) $ (1.70 ) The following table represents the weighted average number of anti-dilutive instruments excluded from the computation of diluted loss per share: Schedule of anti-dilutiv e earnings per share Years Ended 2023 2022 Anti-dilutive instruments excluded from computation of diluted net loss per share: Preferred Stock 144,444 144,444 Stock Options 301,471 337,471 Warrants 4,628,586 5,103,455 Stock purchase plan 28,065 57,245 Convertible note 956,527 - Restricted Stock Units and Restricted Stock Awards 2,226,682 887,760 |
LONG TERM DERIVATIVE LIABILITY
LONG TERM DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2023 | |
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 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 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 13 – EMPLOYEE BENEFIT PLAN We offer the VRME Retirement Savings Plan (the “Plan”) to our employees located in the United States of America. 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). The Company makes the matching contributions at our discretion. In the years ended December 31, 2023, and December 31, 2022, the Company contributed a value of approximately $ 137 103 New Zealand has a statutory retirement savings scheme, Kiwisaver, in which New Zealand employees may participate. The Company makes the required by law contributions equal to three percent of each employee’s salary. During the year ended December 31, 2023, the Company contributed $ 10 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
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 leases include 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, 2023 2022 Operating lease cost $ 182 $ 85 Short-term lease cost 28 18 Total lease costs $ 210 $ 103 Supplemental information related to leases was as follows (dollars in thousands): Schedule of supplemental information related to leases December 31, 2023 December 31, 2022 Operating Lease right-of-use asset $ 468 $ 469 Current portion of operating lease liabilities 170 115 Non-current portion of operating lease liabilities 307 359 Total operating lease liabilities $ 477 $ 474 Cash paid for amounts included in the measurement of operating lease liabilities $ 177 $ 80 Right-of-use assets obtained in exchange for operating lease liabilities $ - $ 552 Weighted-average remaining lease term for operating leases (years) 3.0 4.3 Weighted average discount rate for operating leases 6.4 % 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, 2023 (in thousands): Schedule of operating lease liabilities maturities Year ended December 31, 2024 $ 191 2025 195 2026 139 2027 45 Thereafter - Total future lease payments 570 Less: imputed interest (93 ) Present value of future lease payments 477 Less: current portion of lease liabilities (170 ) Long-term lease liabilities $ 307 |
CONCENTRATIONS
CONCENTRATIONS | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | NOTE 15 – CONCENTRATIONS During the year ended December 31, 2023, one customer represented 17% 13% As of December 31, 2023, three customers made up 47% 23% During the year ended December 31, 2023, and December 31, 2022, one vendor accounted for 99% |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16 – SEGMENT REPORTING As of December 31, 2023, we operated through two reportable business segments: (i) Precision Logistics (formerly PeriShip Global Solutions) and (ii) Authentication (formerly VerifyMe Solutions). Precision Logistics: Authentication: 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 2023 2022 Revenue Precision Logistics $ 24,652 $ 18,190 Authentication 661 1,386 Total Revenue $ 25,313 $ 19,576 Gross Profit Precision Logistics $ 8,475 $ 5,505 Authentication 528 983 Total Gross Profit 9,003 6,488 General and administrative 10,586 8,428 Research and development 107 89 Sales and marketing 1,638 1,718 LOSS BEFORE OTHER EXPENSE, NET (3,328 ) (3,747 ) TOTAL OTHER EXPENSE, NET (62 ) (10,651 ) NET LOSS $ (3,390 ) $ (14,398 ) Additional information relating to our business segments is as follows (in thousands): Identifiable assets: Years Ended 2023 2022 Precision Logistics $ 16,637 $ 17,302 Authentication 4,068 3,450 Total Assets $ 20,705 $ 20,752 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS On February 17, 2024 we repurchased 1,000 On February 29, 2024, seven participants exercised their option under the Company’s 2021 Plan, and as a result, 21,889 0.97 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
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 The company operates a Precision Logistics Segment and an Authentication Segment to provide specialized logistics for time-and-temperature sensitive products, as well as item level traceability, anti-diversion and anti-counterfeit protection, brand protection and enhancement technology solutions. Through our Precision Logistics segment, we provide a value-added service for sensitive parcel management driven by a proprietary software platform that provides predictive analytics from key metrics such as pre-shipment weather analysis, flight-tracking, sort volumes, and traffic, delivered to customers via a secure portal. The portal provides real-time visibility into shipment transit and last-mile events which is supported by a service center. Through our Authentication segment our technologies enable brand owners to gather business intelligence through the supply chain, cross-sell products, detect counterfeit activities, monitor product diversion, and build brand loyalty utilizing our unique dynamic codes which are read by consumers with their smart phones. Further information regarding our business segments is discussed below: 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. |
Reclassifications | Reclassifications Certain amounts presented for the year ended December 31, 2022, reflect reclassifications made to conform to the presentation in our current reporting period. These reclassifications had no effect on the previously reported net loss. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of VerifyMe and its wholly owned subsidiaries PeriShip Global and Trust Codes 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”). |
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 November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. The Company is currently evaluating the impact of adoption of this standard on its consolidated financial statements and disclosures. In October 2021, the FASB issued Accounting Standards Update No. 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers |
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, 2023 and December 31, 2022. Amounts in Thousands ('000) Schedule of fair value assets measured on recurring basis Short Term Investment Derivative Asset Contingent Consideration (Level 1) (Level 2) (Level 3) Balance as of December 31, 2022 $ 100 (3 ) - Loss on fair value recognized in other income (expense) (100 ) - - Contingent consideration at issuance - - (1,125 ) Change in fair value of contingent consideration - - 201 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss - 7 - Balance at December 31, 2023 $ - $ 4 $ (924 ) |
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. |
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) Precision Logistics (formerly PeriShip Global) and (ii) Authentication (formerly VerifyMe Solutions). See Note 16 Segment Reporting, for further discussion of the Company’s segment reporting structure. |
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. Because the Company reported a net loss for each of the periods presented, 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. For the year ended December 31, 2023, there were shares potentially issuable, that could dilute basic earnings per share in the future that were excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company’s losses during the years presented. For the year ended December 31, 2023, there were approximately 8,286,000 1,439,000 816,000 301,000 4,629,000 957,000 144,000 |
Restricted Cash | Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts in the consolidated statements of cash flows (dollars in thousands): Schedule of restricted cash As of December 31, 2023 December 31,2022 Cash and cash equivalents $ 3,032 $ 3,348 Restricted cash 63 63 Total cash and cash equivalents including restricted cash $ 3,095 $ 3,411 The Company classifies cash and cash equivalents that are restricted from operating use for the next twelve months as restricted cash. As of December 31, 2023, and December 31, 2022, the Company held $ 63 |
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 |
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 $ 139 37 |
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 security under prepaid expenses and other current assets on the Consolidated Balance Sheets, as it has determined the fair value best reflects the economic performance of the equity investment. Changes in unrecognized gain or loss of the fair value of the equity investments are included in Other income (expense) on the accompanying Consolidated Statements of Operations. |
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. 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. During the year ended December 31, 2023, the Company impaired $ 100 |
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. |
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. |
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 an asset or 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 assets, 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 assets or liabilities at the fair value of the instrument on the reclassification date. Derivative instrument as assets or 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. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of our New Zealand operations is the local currency, New Zealand dollar (NZD). The translation of the foreign currency into U. S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date and for revenue and expense accounts using the weighted average exchange rates prevailing during the year. The unrealized gains and losses resulting from such translation are included as a component of comprehensive income. Translation gains and losses arising from currency exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in “General and administrative” on our Consolidated Statements of Operations. The unrealized foreign currency transaction losses for the years ended December 31, 2023 and December 31, 2022, were $ 5 0 |
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, separated by reportable segments, in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements. For more detailed information about reportable segments, see Note 16 – Segment reporting. · 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. The Company generally considers completion of an agreement, or Statement of Work (“SOW”) and/or purchase order as a customer contract, provided collection is considered probable. Precision Logistics Our Precision Logistics segment consists of two service lines, Proactive and Premium. Under our Proactive service line, clients pay us directly for carrier service coupled with our proactive logistics service. Terms typically range 7 days and no longer than 30 days. The Company has determined it is the principal and recognizes shipment fees in gross revenue. Under our Premium service line, we provide complete white-glove shipping monitoring and predictive analytics services. This service includes customer web portal access, weather monitoring, temperature control, full service center support and last mile resolution. Payment terms are typically 30 - 45 days. Under both service lines in our Precision Logistics segment, our performance obligation is met, and revenue is recognized, when the packages are delivered. The transaction fees consist of fixed consideration made up of amounts contractually billed to the customer. There are no variable considerations in the transaction fee, in either service line. Authentication Our Authentication segment primarily consists of our brand protection service line which consists of a custom suite of products that offer clients traceability and brand solutions. Terms typically range between 30 and 90 days. Our performance obligation is met, and revenue is recognized, when our products are shipped or delivered depending on the specific agreement with the customer. The transaction fee is made up of fixed consideration based on the related purchase order or agreement. Warranties and other variable considerations are analyzed by the Company, in terms of historical warranties, current economic trends, and changes in customer demand, and have been determined to be insignificant in the twelve months ended December 31, 2023. |
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 $ 39 60 |
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, 2023, and 2022 were $ 107 89 |
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 2004 remain subject to examination by major tax jurisdictions due the carryforward of unutilized NOLs. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of fair value assets measured on recurring basis | Schedule of fair value assets measured on recurring basis Short Term Investment Derivative Asset Contingent Consideration (Level 1) (Level 2) (Level 3) Balance as of December 31, 2022 $ 100 (3 ) - Loss on fair value recognized in other income (expense) (100 ) - - Contingent consideration at issuance - - (1,125 ) Change in fair value of contingent consideration - - 201 Change in fair value to interest rate, SWAP, recognized in other comprehensive loss - 7 - Balance at December 31, 2023 $ - $ 4 $ (924 ) |
Schedule of restricted cash | Schedule of restricted cash As of December 31, 2023 December 31,2022 Cash and cash equivalents $ 3,032 $ 3,348 Restricted cash 63 63 Total cash and cash equivalents including restricted cash $ 3,095 $ 3,411 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | Schedule of disaggregation of revenue Authentication Precision Logistics Consolidated Revenue Year Ended Year Ended Year Ended 2023 2022 2023 2022 2023 2022 Proactive services $ - $ - $ 19,879 $ 15,202 (a) $ 19,879 $ 15,202 Premium services - - 4,773 2,988 (a) 4,773 2,988 Brand protection services 661 1,386 - - 661 1,386 $ 661 $ 1,386 $ 24,652 $ 18,190 $ 25,313 $ 19,576 (a) Revenue is our Precision Logistics Segment in 2022 includes revenue since the acquisition date of our PeriShip Global business, on April 22, 2022. |
Schedule of contract assets | Schedule of contract assets Contract Asset December 31, In Thousands 2023 2022 Beginning balance, January 1 $ 1,185 $ - Contract asset additions 3,598 2,502 Reclassification to accounts receivable, billed to customers (3,501 ) (1,317 ) Ending balance (1) $ 1,282 $ 1,185 ______________ (1) Included within "Unbilled revenue" on the accompanying Consolidated Balance sheets. |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Acquisition [Line Items] | |
Schedule of financial information | Schedule of financial information Description 2022 Revenues $ 25,397 Net Income (loss) $ (14,298 ) |
Trust Codes Global Limited [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation for the acquisition | Schedule of business acquisitions Cash $ 363 Fair value of contingent consideration 1,125 Stock (issuance of 353,492 shares of common stock) (a) 625 Total purchase price $ 2,113 Amortization Period Purchase price allocation: Prepaid expenses $ 25 Property and Equipment, net 18 ROU Asset 171 Developed Technology 485 8 Trade Names/Trademarks 148 18 Customer Relationships 68 10 Goodwill 1,383 Accounts payable and other accrued expenses (14 ) Current lease liability (63 ) Long term lease liability (108 ) $ 2,113 (a) Stock issued was calculated based on the 15 day volume-weighted average price (“VWAP”) through February 28, 2023 calculated at $1.8388. |
Peri Ship LLC [Member] | |
Business Acquisition [Line Items] | |
Schedule of allocation for the acquisition | Schedule of allocation for the acquisition 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. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by reportable business segment | Schedule of goodwill by reportable business segment Authentication Precision Logistics Total Net book value at January 1, 2023 $ - $ 3,988 $ 3,988 2023 Activity Acquisition of Trust Codes Global 1,383 - 1,383 Foreign currency translation 13 - 13 Net book value at December 31, 2023 $ 1,396 $ 3,988 $ 5,384 |
Schedule of intangible assets subject to amortization | Schedule of intangible assets subject to amortization December 31, 2023 Gross Accumulated Net Carrying Amount Weighted Patents and Trademarks $ 2,002 $ (564 ) $ 1,438 13 Capitalized Software 161 (109 ) 52 2 Customer Relationships 1,908 (317 ) 1,591 9 Developed Technology 3,632 (938 ) 2,694 5 Internally Used Software 914 (62 ) 852 6 Non-Compete Agreement 191 (65 ) 126 3 Deferred Implementation 198 (24 ) 174 9 Total Intangible Assets $ 9,006 $ (2,079 ) $ 6,927 December 31, 2022 Patents and Trademarks $ 1,858 $ (445 ) $ 1,413 13 Capitalized Software 206 (91 ) 115 3 Customer Relationships 1,839 (133 ) 1,706 9 Developed Technology 3,143 (360 ) 2,783 5 Internally Used Software 236 (4 ) 232 6 Non-Compete Agreement 191 (28 ) 163 4 Deferred Implementation 140 (7 ) 133 10 Total Intangible Assets $ 7,613 $ (1,068 ) $ 6,545 |
Schedule of finite-lived intangible assets, future amortization expense | Schedule of finite-lived intangible assets, future amortization expense Fiscal Year ending December 31, 2024 $ 1,134 2025 1,109 2026 1,105 2027 1,070 2028 695 Thereafter 1,814 Total $ 6,927 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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 2023 2022 Loss before income taxes Domestic $ (2,612 ) $ (14,400 ) Foreign (777 ) - Total loss before income taxes (3,389 ) (14,400 ) Taxes under statutory US tax rates (712 ) (3,024 ) Increase (decrease) in taxes resulting from: Foreign taxes and rate differential (53 ) - Increase (decrease) in valuation allowance 642 (1,188 ) Change in State tax rate (25 ) (57 ) Prior period true up 267 5,045 State taxes (119 ) (776 ) Income tax expense $ - $ - |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities December 31, 2023 2022 US Net operating loss carryforwards $ 6,318 $ 6,495 Restricted stock (RSA’s, RSU’s) 613 503 Stock options 527 562 Stock Purchase Plan (SPP) 2 8 Depreciation (45 ) (71 ) Intangibles (27 ) 22 Acquisition transaction costs 172 110 Capitalized research and development (1 ) 17 Unrealized gain on investment 2 (1 ) Bad debt 42 9 Capital loss carryforward 680 Accruals & other 11 Dividend income (2 ) Gross deferred tax assets $ 8,294 $ 7,652 Less valuation allowance (8,294 ) (7,652 ) 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, 2023 | |
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, 2021 465,471 $ 4.38 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 $ - Granted - - Forfeited/Cancelled/Expired (36,000 ) 5.17 Balance as of December 31, 2023 301,471 4.56 Exercisable as of December 31, 2023 301,471 $ 4.56 1.2 $ - (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 Weighted - Average Number of Grant Award Shares Date Fair Value Unvested 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 Granted 506,194 1.45 Vested (131,333 ) 2.06 Balance at December 31, 2023 416,669 $ 1.44 |
Schedule of unvested restricted stock awards | Schedule of unvested restricted stock awards Unvested Restricted Stock Units Weighted - Average Number of Grant Unit Shares Date Fair Value Unvested at December 31, 2021 187,010 4.11 Granted 418,041 2.14 Vested (191,425 ) 4.07 Unvested at December 31, 2022 413,626 2.14 Granted 272,941 1.35 Vested (294,261 ) 2.51 Forfeited/Cancelled (21,053 ) 1.20 Balance at December 31, 2023 $ 371,253 $ 1.32 |
Schedule of unvested restricted stock units | Schedule of unvested 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 Granted 1,156,591 1.16 Vested - - Forfeited/Cancelled (150,157 ) 2.95 Balance at December 31, 2023 1,438,760 $ 1.51 |
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, 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 Granted - - Expired (474,869 ) 6.34 Balance at December 31, 2023 4,628,586 4.13 2.3 Exercisable at December 31, 2023 4,628,586 4.13 2.3 $ - (1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying warrants and the closing stock price of $1.12 for our common stock on December 31, 2023. |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
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, 2023 2022 Numerator: Net loss: $ (3,390 ) $ (14,398 ) Denominator: Weighted average shares of common stock – basic 9,766,469 8,466,075 Loss per share: Basic $ (0.35 ) $ (1.70 ) Diluted $ (0.35 ) $ (1.70 ) |
Schedule of anti-dilutiv e earnings per share | Schedule of anti-dilutiv e earnings per share Years Ended 2023 2022 Anti-dilutive instruments excluded from computation of diluted net loss per share: Preferred Stock 144,444 144,444 Stock Options 301,471 337,471 Warrants 4,628,586 5,103,455 Stock purchase plan 28,065 57,245 Convertible note 956,527 - Restricted Stock Units and Restricted Stock Awards 2,226,682 887,760 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Schedule of components of lease expense | Schedule of components of lease expense Years ended December 31, 2023 2022 Operating lease cost $ 182 $ 85 Short-term lease cost 28 18 Total lease costs $ 210 $ 103 |
Schedule of supplemental information related to leases | Schedule of supplemental information related to leases December 31, 2023 December 31, 2022 Operating Lease right-of-use asset $ 468 $ 469 Current portion of operating lease liabilities 170 115 Non-current portion of operating lease liabilities 307 359 Total operating lease liabilities $ 477 $ 474 Cash paid for amounts included in the measurement of operating lease liabilities $ 177 $ 80 Right-of-use assets obtained in exchange for operating lease liabilities $ - $ 552 Weighted-average remaining lease term for operating leases (years) 3.0 4.3 Weighted average discount rate for operating leases 6.4 % 6.0 % |
Schedule of operating lease liabilities maturities | Schedule of operating lease liabilities maturities Year ended December 31, 2024 $ 191 2025 195 2026 139 2027 45 Thereafter - Total future lease payments 570 Less: imputed interest (93 ) Present value of future lease payments 477 Less: current portion of lease liabilities (170 ) Long-term lease liabilities $ 307 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Schedule of segment reporting information Years Ended 2023 2022 Revenue Precision Logistics $ 24,652 $ 18,190 Authentication 661 1,386 Total Revenue $ 25,313 $ 19,576 Gross Profit Precision Logistics $ 8,475 $ 5,505 Authentication 528 983 Total Gross Profit 9,003 6,488 General and administrative 10,586 8,428 Research and development 107 89 Sales and marketing 1,638 1,718 LOSS BEFORE OTHER EXPENSE, NET (3,328 ) (3,747 ) TOTAL OTHER EXPENSE, NET (62 ) (10,651 ) NET LOSS $ (3,390 ) $ (14,398 ) Additional information relating to our business segments is as follows (in thousands): Identifiable assets: Years Ended 2023 2022 Precision Logistics $ 16,637 $ 17,302 Authentication 4,068 3,450 Total Assets $ 20,705 $ 20,752 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liability at beginning | $ 3 | |
Change in fair value of contingent consideration | 201 | |
Derivative Liability at end | 3 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Short Term Investment at beginning | 100 | |
Loss on fair value recognized in other income (expense) | (100) | |
Short-Term Investments at end | 100 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative Liability at beginning | (3) | |
Change in fair value to interest rate, SWAP, recognized in other comprehensive loss | 7 | |
Derivative Liability at end | 4 | (3) |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Contingent Consideration at beginning | ||
Contingent consideration at issuance | (1,125) | |
Change in fair value of contingent consideration | 201 | |
Contingent Consideration at end | $ (924) |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 3,032 | $ 3,348 | |
Restricted cash | 63 | 63 | |
Total cash and cash equivalents including restricted cash | $ 3,095 | $ 3,411 | $ 9,422 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Anti-dilutive shares | 8,286,000 | |
Restricted Cash | $ 63 | $ 63 |
FDIC insured limit | 250 | |
Allowance for doubtful accounts | 139 | 37 |
Inventory write-down | 100 | |
Unrealized foreign currency transaction losses | 5 | 0 |
Advertising cost | 39 | 60 |
Research and development costs | $ 107 | $ 89 |
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 | |
Unvested Performance Restricted Stock Units [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 1,439,000 | |
Restricted Stock Units (RSUs) [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 816,000 | |
Equity Option [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 301,000 | |
Warrants [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 4,629,000 | |
Convetible Debt [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 957,000 | |
Preferred Stocks [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Anti-dilutive shares | 144,000 |
EQUITY INVESTMENTS (Details Nar
EQUITY INVESTMENTS (Details Narrative) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jul. 06, 2021 USD ($) shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) $ / shares shares | Apr. 12, 2021 | |
Schedule of Equity Method Investments [Line Items] | ||||
Loss on equity investment | $ | $ 100 | |||
Fair value of equity investment | $ | $ 0 | $ 100 | ||
Equity Securities, FV-NI, Unrealized Loss | $ | $ 10,932 | |||
IPO [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 10,626,000 | |||
Over-Allotment Option [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 626,000 | |||
Private Placement [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 569,410 | |||
Private Placement [Member] | GVRM Holdings LLC and Maxim Partners LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds fro sale of stock | $ | $ 5,694 | |||
Private Placement [Member] | Beneficial Owner [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 229,228 | |||
Proceeds fro sale of stock | $ | $ 2,581 | |||
Sponsor Entity [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 516,280 | |||
Maxim Partners L L C [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of units issued in transaction | 53,130 | |||
Co Sponsor [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 44.40% | |||
GVRM Holdings LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity Method Investment, Ownership Percentage | 9.42% | |||
Series D Preferred Stock [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Cumulative convertible preferred stock shares | 8,841 | |||
Cumulative convertible preferred stock ratio | 0.10 | |||
Cumulative convertible preferred stock price | $ / shares | $ 10 | |||
Cumulative convertible preferred stock value | $ | $ 88,410 |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 25,313 | $ 19,576 | |
Proactive Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 19,879 | 15,202 | |
Premium Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4,773 | 2,988 | |
Brand Protection Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 661 | 1,386 | |
Authentication [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 661 | 1,386 | |
Authentication [Member] | Proactive Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | |||
Authentication [Member] | Premium Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | |||
Authentication [Member] | Brand Protection Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 661 | 1,386 | |
Precision Logistics [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 24,652 | 18,190 | |
Precision Logistics [Member] | Proactive Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 19,879 | 15,202 | [1] |
Precision Logistics [Member] | Premium Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4,773 | 2,988 | [1] |
Precision Logistics [Member] | Brand Protection Services [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | |||
[1]Revenue is our Precision Logistics Segment in 2022 includes revenue since the acquisition date of our PeriShip Global business, on April 22, 2022. |
REVENUE (Details 1)
REVENUE (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | |||
Revenue from Contract with Customer [Abstract] | ||||
Beginning balance | $ 1,185 | [1] | ||
Contract asset additions | 3,598 | 2,502 | ||
Reclassification to accounts receivable, billed to customers | (3,501) | (1,317) | ||
Ending balance | [1] | $ 1,282 | $ 1,185 | |
[1]Included within "Unbilled revenue" on the accompanying Consolidated Balance sheets. |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands | Mar. 01, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 01, 2022 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 5,384 | $ 3,988 | |||
Trust Codes Global Limited [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 363 | ||||
Fair value of contingent consideration | 1,125 | ||||
Stock (issuance of 353,492 shares of restricted common stock) | [1] | 625 | |||
Total purchase price | 2,113 | ||||
Prepaid expenses | 25 | ||||
Property and Equipment, net | 18 | ||||
ROU Asset | 171 | ||||
Goodwill | 1,383 | ||||
Accounts payable and other accrued expenses | (14) | ||||
Current lease liability | (63) | ||||
Long term lease liability | (108) | ||||
Total purchase price allocation | 2,113 | $ 10,474 | |||
Trust Codes Global Limited [Member] | Developed Technology Rights [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible Assets | $ 485 | ||||
Amortization Period | 8 years | ||||
Trust Codes Global Limited [Member] | Trademarks [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible Assets | $ 148 | ||||
Amortization Period | 18 years | ||||
Trust Codes Global Limited [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible Assets | $ 68 | ||||
Amortization Period | 10 years | ||||
[1]Stock issued was calculated based on the 15 day volume-weighted average price (“VWAP”) through February 28, 2023 calculated at $1.8388. |
BUSINESS COMBINATION (Details 1
BUSINESS COMBINATION (Details 1) - USD ($) $ in Thousands | Mar. 01, 2023 | Apr. 22, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Mar. 01, 2022 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 5,384 | $ 3,988 | ||||
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 | |||||
Amortization Period | 6 years | |||||
Peri Ship [Member] | Trademarks [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | $ 1,111 | |||||
Amortization Period | 13 years | |||||
Peri Ship [Member] | Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | $ 1,839 | |||||
Amortization Period | 10 years | |||||
Peri Ship [Member] | Noncompete Agreements [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | $ 191 | |||||
Amortization Period | 5 years | |||||
Trust Codes Global Limited [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 363 | |||||
Stock (issuance of 305,473 shares of restricted common stock) | [2] | 625 | ||||
Total purchase price | 2,113 | |||||
Prepaid expenses | 25 | |||||
Property and Equipment, net | 18 | |||||
Goodwill | 1,383 | |||||
Accounts payable and other accrued expenses | (14) | |||||
Total purchase price allocation | 2,113 | $ 10,474 | ||||
Trust Codes Global Limited [Member] | Developed Technology Rights [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | 485 | |||||
Trust Codes Global Limited [Member] | Trademarks [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | 148 | |||||
Trust Codes Global Limited [Member] | Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Intangible Assets | $ 68 | |||||
[1]Stock issued was calculated based on the 15 days prior to April 22, 2022, volume-weighted average price (“VWAP”) calculated at $3.2736.[2]Stock issued was calculated based on the 15 day volume-weighted average price (“VWAP”) through February 28, 2023 calculated at $1.8388. |
BUSINESS COMBINATION (Details 2
BUSINESS COMBINATION (Details 2) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Business Combination and Asset Acquisition [Abstract] | |
Revenues | $ 25,397 |
Net Income (loss) | $ (14,298) |
BUSINESS COMBINATION (Details N
BUSINESS COMBINATION (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 01, 2023 | Apr. 22, 2022 | Apr. 22, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 22, 2022 | |
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 360 | $ 7,500 | ||||
Common stock shares, issued | 10,453,315 | 9,341,002 | ||||
Earn-out consideration | 1,100 | |||||
Revenue from acquisitions | $ 314 | |||||
Current liability | 173 | |||||
Long term contingent consideration | 751 | |||||
Gain on extinguishment of debt | $ 326 | |||||
Business Combination [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price | 1,000 | $ 10,500 | ||||
Acquisition related costs | $ 278 | |||||
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 | 353,492 | 305,473 | 305,473 | 61,000 | ||
Stock consideration amount | $ 650 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Beginning balance | $ 3,988 |
Acquisition of Trust Codes Global | 1,383 |
Foreign currency translation | 13 |
Ending balance | 5,384 |
Authentication [Member] | |
Beginning balance | |
Acquisition of Trust Codes Global | 1,383 |
Foreign currency translation | 13 |
Ending balance | 1,396 |
Precision Logistics [Member] | |
Beginning balance | 3,988 |
Acquisition of Trust Codes Global | |
Foreign currency translation | |
Ending balance | $ 3,988 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 9,006 | $ 7,613 |
Accumulated Amortization | (2,079) | (1,068) |
Net Carrying Amount | 6,927 | 6,545 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 2,002 | 1,858 |
Accumulated Amortization | (564) | (445) |
Net Carrying Amount | $ 1,438 | $ 1,413 |
Weighted average useful life (years) | 13 years | 13 years |
Capitalized Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 161 | $ 206 |
Accumulated Amortization | (109) | (91) |
Net Carrying Amount | $ 52 | $ 115 |
Weighted average useful life (years) | 2 years | 3 years |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,908 | $ 1,839 |
Accumulated Amortization | (317) | (133) |
Net Carrying Amount | $ 1,591 | $ 1,706 |
Weighted average useful life (years) | 9 years | 9 years |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 3,632 | $ 3,143 |
Accumulated Amortization | (938) | (360) |
Net Carrying Amount | $ 2,694 | $ 2,783 |
Weighted average useful life (years) | 5 years | 5 years |
Internally Used Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 914 | $ 236 |
Accumulated Amortization | (62) | (4) |
Net Carrying Amount | $ 852 | $ 232 |
Weighted average useful life (years) | 6 years | 6 years |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 191 | $ 191 |
Accumulated Amortization | (65) | (28) |
Net Carrying Amount | $ 126 | $ 163 |
Weighted average useful life (years) | 3 years | 4 years |
Deferred Implementation [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 198 | $ 140 |
Accumulated Amortization | (24) | (7) |
Net Carrying Amount | $ 174 | $ 133 |
Weighted average useful life (years) | 9 years | 10 years |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details 2) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 1,134 | |
2025 | 1,109 | |
2026 | 1,105 | |
2027 | 1,070 | |
2028 | 695 | |
Thereafter | 1,814 | |
Total | $ 6,927 | $ 6,545 |
INTANGIBLE ASSETS AND GOODWIL_5
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 1,030 | $ 657 |
Developed Technology Rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible asset impairment | $ 90 | |
Weighted average remaining useful life | 5 years | 5 years |
Finite-Lived Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average remaining useful life | 8 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loss before income taxes | ||
Domestic | $ (2,612) | $ (14,400) |
Foreign | (777) | |
Total loss before income taxes | (3,389) | (14,400) |
Taxes under statutory US tax rates | (712) | (3,024) |
Increase (decrease) in taxes resulting from: | ||
Foreign taxes and rate differential | (53) | |
Increase (decrease) in valuation allowance | 642 | (1,188) |
Change in State tax rate | (25) | (57) |
Prior period true up | 267 | 5,045 |
State taxes | (119) | (776) |
Income tax expense |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 6,318 | $ 6,495 |
Restricted stock (RSA’s, RSU’s) | 613 | 503 |
Stock options | 527 | 562 |
Stock Purchase Plan (SPP) | 2 | 8 |
Depreciation | (45) | (71) |
Intangibles | (27) | 22 |
Acquisition transaction costs | 172 | 110 |
Capitalized research and development | (1) | 17 |
Unrealized gain on investment | 2 | (1) |
Bad debt | 42 | 9 |
Capital loss carryforward | 680 | |
Accruals & other | 11 | |
Dividend income | (2) | |
Gross deferred tax assets | 8,294 | 7,652 |
Less valuation allowance | (8,294) | (7,652) |
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, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 22,700 | |
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. | |
Deferred tax assets valuation allowance | $ 8,300 | |
Unrecognized tax benefits | 0 | $ 0 |
Accrual for interest and penalties | 2 | 0 |
Taxes payable | $ 0 | 0 |
Foreign Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 23,100 | |
Domestic Tax Authority [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 0 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 22, 2022 | Aug. 25, 2023 | Oct. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||||
Short term debt outstanding | $ 500 | $ 500 | |||
Long-term debt outstanding | 875 | 1,400 | |||
Repayment of debt | 2,300 | 1,882 | |||
Drawn from RLOC | 1,800 | ||||
Repay to RLOC | 1,800 | ||||
Outstanding on RLOC | 0 | ||||
Notional amount | $ 1,958 | ||||
Interest rate | 7.602% | ||||
Gain on extinguishment of debt | $ 326 | ||||
Principal amount | $ 1,100 | ||||
Convertible promissory notes purchased by related party | $ 475 | ||||
Interest expense | 31 | ||||
Convertible debt | 1,100 | ||||
Promissory Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Unsecured promissory note | $ 2 | ||||
Intrest rate | 6% | ||||
Term Note [Member] | |||||
Debt Instrument [Line Items] | |||||
Repayment of debt | $ 500 |
CONVERTIBLE PREFERRED STOCK (De
CONVERTIBLE PREFERRED STOCK (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
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 | |||||||||
Nov. 02, 2023 | Sep. 20, 2023 | Jul. 31, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Apr. 22, 2022 | Nov. 30, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 31, 2023 | Feb. 28, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Restricted stock/restricted stock units, expense | $ 477 | $ 239 | |||||||||
Restricted stock/restricted stock award, expense | $ 998 | 1,084 | |||||||||
Stock retired | 5,515 | ||||||||||
Stock issued for services value | $ 147 | 96 | |||||||||
Share forfeited or cancelled | 1,496 | ||||||||||
Non-qualified stock purchase plan expenses | $ 53 | 122 | |||||||||
Proceeds from SPP Plan | $ 80 | $ 102 | |||||||||
Treasury stock share | 329,351 | 389,967 | |||||||||
Treasury stock value | $ 659 | $ 949 | |||||||||
Share repurchase program | $ 1,500 | ||||||||||
Repurchased shares of common stock | 6,201 | ||||||||||
Repurchased shares of common stock, amount | $ 10 | ||||||||||
Share repurchase program description | In December 2023, the Company’s Board of Directors approved a new share repurchase program to allow the Company to spend up to $0.5 million to repurchase shares of its common stock so long as the price does not exceed $1.00 until December 14, 2024. During the year ended December 31, 2023, the Company did not repurchase shares of common stock under the Company’s current program. | ||||||||||
2021 Plan [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Treasury stock share | 48,500 | ||||||||||
Non-qualified stock purchase plan | 12,802 | 57,245 | |||||||||
Non-qualified stock purchase exercise price | $ 0.96 | $ 1.19 | |||||||||
Former Director [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, other | 50,002 | ||||||||||
Trust Codes Global Limited [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, other | 353,492 | ||||||||||
Restricted Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, other | 72,329 | 22,807 | 20,000 | 2,500 | |||||||
Stock retired | 2,500 | ||||||||||
Restricted Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued for services | 133,654 | ||||||||||
Stock issued for services value | $ 147 | ||||||||||
Common Stock [Member] | |||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Stock issued during period, shares, other | 56,272 | 15,965 | 14,000 | 1,750 | |||||||
Shares withheld for tax withholding obligation | 6,842 | 6,000 | 750 | ||||||||
Stock retired | 750 | ||||||||||
Stock issued for services | 133,654 | 30,000 | |||||||||
Stock issued for services value |
STOCK OPTIONS, RESTRICTED STO_3
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details) - Share-Based Payment Arrangement, Option [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Balance at beginning | 337,471 | 465,471 | |
Weighted Average Exercise Price, Balance at beginning | $ 4.63 | $ 4.38 | |
Granted | |||
Weighted Average Exercise Price, Granted | |||
Forfeited/Cancelled/Expired | (36,000) | (128,000) | |
Weighted Average Exercise Price, Forfeited/Cancelled/Expired | $ 5.17 | $ 3.74 | |
Vested and Exercisable at ending | 337,471 | ||
Weighted Average Exercise Price, Exercisable at ending | $ 4.63 | ||
Weighted Average Remaining Contractual Term, Exercisable at ending | 1 year 2 months 12 days | 2 years 4 months 24 days | |
Aggregate Intrinsic Value | [1] | ||
Vested and Exercisable at ending | 301,471 | ||
Weighted Average Exercise Price, Exercisable at ending | $ 4.56 | ||
[1]The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock for options that were in-the-money at each respective period. |
STOCK OPTIONS, RESTRICTED STO_4
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 1) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of award shares at beginning | 41,808 | 44,642 |
Weighted average grant date fair value at beginning | $ 3.24 | $ 4.31 |
Number of award shares Granted | 506,194 | 39,308 |
Weighted average grant date fair value Granted | $ 1.45 | $ 3.18 |
Number of award shares Vested | (131,333) | (42,142) |
Weighted average grant date fair value Vested | $ 2.06 | $ 4.32 |
Number of award shares at ending | 416,669 | 41,808 |
Weighted average grant date fair value at ending | $ 1.44 | $ 3.24 |
STOCK OPTIONS, RESTRICTED STO_5
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 2) - Restricted Stock Units [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Balance at beginning | 413,626 | 187,010 |
Weighted - Average Grant Date Fair Value, Balance at beginning | $ 2.14 | $ 4.11 |
Granted | 272,941 | 418,041 |
Weighted - Average Grant Date Fair Value, Granted | $ 1.35 | $ 2.14 |
Vested | (294,261) | (191,425) |
Weighted - Average Grant Date Fair Value, Vested | $ 2.51 | $ 4.07 |
Forfeited/Cancelled | (21,053) | |
Weighted - Average Grant Date Fair Value, Forfeited/Cancelled | $ 1.20 | |
Balance at ending | 371,253 | 413,626 |
Weighted - Average Grant Date Fair Value, Balance at ending | $ 1.32 | $ 2.14 |
STOCK OPTIONS, RESTRICTED STO_6
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 3) - Unvested Performance Restricted Stock Units [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Balance at beginning | 432,326 | |
Weighted - Average Grant Date Fair Value, Balance at beginning | $ 2.95 | |
Granted | 1,156,591 | 432,326 |
Weighted - Average Grant Date Fair Value, Granted | $ 1.16 | $ 2.95 |
Vested | ||
Weighted - Average Grant Date Fair Value, Vested | ||
Forfeited/Cancelled | (150,157) | |
Weighted - Average Grant Date Fair Value, Forfeited/Cancelled | $ 2.95 | |
Balance at ending | 1,438,760 | 432,326 |
Weighted - Average Grant Date Fair Value, Balance at ending | $ 1.51 | $ 2.95 |
STOCK OPTIONS, RESTRICTED STO_7
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details 4) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Schedule of Investments [Line Items] | |||
Number of warrants outstanding, beginning balance | 5,103,455 | 3,779,243 | |
Weighted average exercise price, beginning balance | $ 4.34 | $ 5.89 | |
Number of warrants outstanding, granted | 1,590,150 | ||
Weighted average exercise price, granted | $ 3.22 | ||
Number of warrants outstanding, expired | (474,869) | (265,938) | |
Weighted average exercise price, expired | $ 6.34 | $ 19.21 | |
Number of warrants outstanding, ending Balance | 4,628,586 | 5,103,455 | |
Weighted average exercise price, ending balance | $ 4.13 | $ 4.34 | |
Weighted average remaining contractual terms | 2 years 3 months 18 days | ||
Number of warrants outstanding, exercisable | 4,628,586 | ||
Weighted average exercise price, exercisable | $ 4.13 | ||
Weighted average remaining contractual terms, exercisable | 2 years 3 months 18 days | ||
Warrant [Member] | |||
Schedule of Investments [Line Items] | |||
Exercise price | [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 $1.12 for our common stock on December 31, 2023. |
STOCK OPTIONS, RESTRICTED STO_8
STOCK OPTIONS, RESTRICTED STOCK AND WARRANTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||
Jun. 09, 2022 | Aug. 10, 2020 | Nov. 14, 2017 | Mar. 28, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2020 | Apr. 14, 2022 | Dec. 31, 2013 | |
Director And Officer [Member] | Debentures 2022 [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Stock Issued During Period, Shares, Issued for Services | 675,000 | ||||||||
Per share public offering price(in dollars per share) | $ 0.001 | ||||||||
Equity Incentive Plan 2017 [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 | |||||||
Equity Incentive Plan 2020 [Member] | Board of Directors Chairman [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Stock issued during period shares new issues | 3,069,110 | 2,069,100 | |||||||
Issued Under The 2020 Plan [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Incentive stock options granted | 1,000,000 | ||||||||
Plan 2019 [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Stock or Unit Option Plan Expense | $ 0 | $ 0 | |||||||
Unrecognized compensation cost | $ 0 | 0 | |||||||
Stock Options Restricted Stockand Unitsand Other Stockbased Awards [Member] | Omnibus Equity Compensation Plan 2013 [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 | $ 260 | $ 2 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 5 months 8 days | ||||||||
Restricted Stock Units [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Incentive stock options granted | 506,194 | 39,308 | |||||||
Unvested restricted stock awards | $ 301 | $ 284 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 1 year 4 months 20 days | ||||||||
Nonvested Stock Options [Member] | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Unvested restricted stock awards | $ 1,778 | $ 947 | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 1 year 9 months |
LOSS PER SHARE (Details)
LOSS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||
Net loss: | $ (3,390) | $ (14,398) |
Denominator: | ||
Weighted average shares of common stock – basic | 9,766,469 | 8,466,075 |
Loss per share: | ||
Basic | $ (0.35) | $ (1.70) |
Diluted | $ (0.35) | $ (1.70) |
LOSS PER SHARE (Details 1)
LOSS PER SHARE (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 8,286,000 | |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 144,444 | 144,444 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 301,471 | 337,471 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 4,628,586 | 5,103,455 |
Stock Purchase Plan [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 28,065 | 57,245 |
Convertible Note [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 956,527 | |
Restricted Stock Units And Restricted Stock Awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive shares | 2,226,682 | 887,760 |
LONG TERM DERIVATIVE LIABILITY
LONG TERM DERIVATIVE LIABILITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Apr. 07, 2022 |
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 | ||
G3VRM [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 |
EMPLOYEE BENEFIT PLAN (Details
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Contributions | $ 137 | $ 103 |
NEW ZEALAND | ||
Contributions | $ 10 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases | ||
Operating lease cost | $ 182 | $ 85 |
Short-term lease cost | 28 | 18 |
Total lease costs | $ 210 | $ 103 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Operating Lease right-of-use asset | $ 468 | $ 469 |
Current portion of operating lease liabilities | 170 | 115 |
Non-current portion of operating lease liabilities | 307 | 359 |
Total operating lease liabilities | 477 | 474 |
Cash paid for amounts included in the measurement of operating lease liabilities | 177 | 80 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 552 | |
Weighted-average remaining lease term for operating leases (years) | 3 years | 4 years 3 months 18 days |
Weighted average discount rate for operating leases | 6.40% | 6% |
LEASES (Details 2)
LEASES (Details 2) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
2024 | $ 191 | |
2025 | 195 | |
2026 | 139 | |
2027 | 45 | |
Thereafter | ||
Total future lease payments | 570 | |
Less: imputed interest | (93) | |
Present value of future lease payments | 477 | |
Less: current portion of lease liabilities | (170) | $ (115) |
Long-term lease liabilities | $ 307 | $ 359 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 17% | 13% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 47% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 23% | |
Transportation Cost [Member] | Product Concentration Risk [Member] | One Vendor [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 99% | 99% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | ||
Revenues | $ 25,313 | $ 19,576 | |
Gross Profit | 9,003 | 6,488 | |
General and administrative | [1] | 10,586 | 8,428 |
Research and development | 107 | 89 | |
Sales and marketing | [1] | 1,638 | 1,718 |
LOSS BEFORE OTHER EXPENSE, NET | (3,328) | (3,747) | |
TOTAL OTHER EXPENSE, NET | (62) | (10,651) | |
NET LOSS | (3,390) | (14,398) | |
Total Assets | 20,705 | 20,752 | |
Precision Logistics [Member] | |||
Revenues | 24,652 | 18,190 | |
Gross Profit | 8,475 | 5,505 | |
Total Assets | 4,068 | 3,450 | |
Authentication [Member] | |||
Revenues | 661 | 1,386 | |
Gross Profit | 528 | 983 | |
Total Assets | $ 16,637 | $ 17,302 | |
[1]Includes share-based compensation of $1,675 thousand for the year ended December 31, 2023, and $1,468 thousand for the year ended December 31, 2022. |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - $ / shares | 1 Months Ended | |
Feb. 29, 2024 | Feb. 17, 2024 | |
Subsequent Event [Line Items] | ||
Share repurchase | 1,000 | |
2021 Plan [Member] | Seven Participants [Member] | ||
Subsequent Event [Line Items] | ||
Stock option exercised | 21,889 | |
Exercise Price | $ 0.97 |