VerifyMe, Inc. Annual Report - How They Did This Year

I’ve put together this guide to help you understand VerifyMe, Inc.’s performance over the past year. My goal is to break down complex filings into plain English so you can decide if this company fits your investment goals.

1. What does this company do?

VerifyMe is a logistics provider that generated $21.4 million in annual revenue. Its primary focus is the "Precision Logistics" segment, which specializes in shipping high-value, temperature-sensitive goods like medicine and perishable food. The company utilizes its PeriTrack software to monitor these shipments in real time. While the company previously sold anti-counterfeiting labels, that business has been deprioritized and now accounts for less than 5% of total revenue.

2. Major changes: The Open World Merger

The company is currently undergoing a significant structural shift through a merger agreement with Open World Ltd.

• The New Structure: If the deal closes, VerifyMe will become a subsidiary of Open World. Current VerifyMe shareholders would own approximately 10% of the combined company, while Open World shareholders would hold 90%. This reverse merger is intended to provide VerifyMe with access to Open World’s larger shipping infrastructure.
• Leadership Shakeup: Upon completion of the deal, most of VerifyMe’s board will resign. CEO Adam Stedham will transition to the role of President of the Precision Logistics division, shifting his focus from corporate governance to managing the core shipping operations.

3. Financial health and risks

VerifyMe is in a fragile transition period. Here are the key factors impacting their financial stability:

• The "Carrier" Problem: The company relies heavily on third-party shipping carriers. After losing its "preferred shipper" status with FedEx in September 2025, VerifyMe signed a three-year contract with a new partner. This transition contributed to a 14% drop in "ProActive" service revenue during the Q4 holiday season.
• Cash and Loans: In August 2025, the company issued a $2 million loan to ZenCredit at a 16% interest rate, maturing in May 2026. The recovery of these funds is a critical component of the company’s cash position heading into the merger.
• Concentration Risk: The business is highly dependent on a single vendor, which accounted for 89% of the company’s total costs in 2025. Any disruption in this relationship would significantly impact the company's ability to fulfill orders.
• Economic Headwinds: Inflation and a 6% decline in consumer spending have dampened demand for the premium shipping services that drive VerifyMe’s revenue.
• Research & Development: To preserve cash, the company has scaled back innovation, with R&D spending dropping from $70,000 in 2024 to $20,000 in 2025.

4. Future outlook

The company is currently in "merger mode." The business is undergoing a complete transformation, balancing the integration of a new shipping partner with the pending Open World deal. Investors should monitor the upcoming shareholder vote and the status of SEC approval, as these are required to finalize the merger.

Note: The company reported a $3.2 million loss for the year, reflecting the costs associated with these ongoing operational changes.

Investor Takeaway: VerifyMe is a company in the middle of a high-stakes pivot. The investment case hinges on whether the merger with Open World can successfully stabilize the company's infrastructure and whether the company can navigate its current cash constraints and vendor dependencies. Before making a decision, consider if you are comfortable with the risks associated with a company that is currently operating at a loss while undergoing a major structural reorganization.