VerifyMe Pivots to Logistics, Eyes Merger with Open World

TL;DR

**VRME is essentially being acquired by Open World, diluting current shareholders to a mere 10% stake in a risky, transformative bet on specialized logistics.**

AI Summary

VerifyMe, Inc. (VRME) is undergoing a significant transformation, shifting its focus almost entirely to its Precision Logistics segment, which generated nearly all of its revenue for the fiscal year ended December 31, 2025. This segment specializes in time and temperature-sensitive product logistics, leveraging a proprietary software platform for predictive analytics and real-time visibility. The company ceased providing ProActive services to its prior carrier partner in September 2025 and Premium services in February 2026, transitioning to a new Strategic Partner for ProActive services in September 2025 and expecting to broadly offer Premium and Direct Premium services with this new partner in Q2 2026. A major development is the proposed merger with Open World Ltd., announced on January 2, 2026, and formalized on February 11, 2026. Post-merger, VerifyMe's pre-Closing stockholders are expected to retain approximately 10% of the combined entity, with Open World holders receiving about 90%. The Authentication segment is no longer actively pursuing new business, only servicing existing customers. The merger is subject to several conditions, including SEC and Nasdaq approvals, and VerifyMe maintaining at least $1 million in Closing Net Cash.

Why It Matters

This 10-K reveals VerifyMe's strategic pivot away from its Authentication segment, concentrating resources on its Precision Logistics business, which is critical for investors to understand its future revenue streams. The proposed merger with Open World Ltd. is a transformative event, effectively making current VRME shareholders minority owners (10%) of the combined entity, significantly diluting their stake. This could impact employee morale and customer relationships as the company integrates new leadership and potentially new operational structures. For the broader market, this merger signifies consolidation in specialized logistics and potentially a new player in the public markets if Open World's business is substantial, warranting close observation for competitive dynamics.

Risk Assessment

Risk Level: high — The risk level is high due to the proposed merger with Open World Ltd., which will result in VerifyMe's pre-Closing stockholders retaining only approximately 10% of the post-Closing aggregate number of shares. This significant dilution, coupled with the company's status as a 'shell company' as indicated by the checkmark on the cover, and the cessation of services with a prior carrier partner in September 2025 and February 2026, introduces substantial operational and integration risks.

Analyst Insight

Investors should carefully evaluate the terms of the Open World merger, particularly the significant dilution to existing shareholders and the financial health of Open World, which is not detailed in this filing. Given the 'shell company' status and the 90% ownership transfer, existing VRME shareholders should consider if their investment thesis still holds or if exiting their position before the merger's completion is prudent.

Revenue Breakdown

Key Numbers

• 10% — Post-Merger Ownership for VerifyMe Stockholders (Significantly dilutes existing shareholders, who will collectively retain approximately 10% of the post-Closing aggregate number of shares of common stock.)
• 90% — Post-Merger Ownership for Open World Holders (Open World ordinary shares and SAFEs holders will receive approximately 90% of the post-Closing aggregate number of shares of common stock.)
• $7,959,516 — Market Value of Non-Affiliate Voting Stock (As of June 30, 2025, indicating a relatively small market capitalization for VerifyMe.)
• September 2025 — Cessation of ProActive Services (VerifyMe ceased providing ProActive services to its prior carrier partner, impacting revenue streams.)
• February 2026 — Cessation of Premium Services (VerifyMe ceased providing Premium services to its prior carrier partner, further shifting its business model.)
• $1 million — Minimum Closing Net Cash (A condition for Open World to proceed with the merger, highlighting VerifyMe's financial position.)
• $300,000 — Adam Stedham's Annual Base Salary (Expected salary for the President of Precision Logistics post-merger, indicating executive compensation structure.)

Key Players & Entities

• VerifyMe, Inc. (company) — Registrant and merging entity
• Open World Ltd. (company) — Merging entity, expected to own 90% of combined company
• PeriShip Global LLC (company) — Subsidiary of VerifyMe, part of Precision Logistics segment
• Adam Stedham (person) — Current CEO and President, expected to become President of Precision Logistics post-merger
• Jennifer Cola (person) — Expected to enter into an employment agreement post-merger
• Nasdaq Capital Market (regulator) — Exchange where VRME common stock is registered
• SEC (regulator) — Securities and Exchange Commission, requiring filing of Form S-4
• $7,959,516 (dollar_amount) — Aggregate market value of voting stock held by non-affiliates as of June 30, 2025
• 13,119,065 (dollar_amount) — Shares of common stock outstanding as of March 23, 2026
• $1 million (dollar_amount) — Minimum Closing Net Cash required for Open World's merger obligations

FAQ

Risk Factors

• Dependence on Precision Logistics Segment [high — operational]: The company's revenue is almost entirely generated by its Precision Logistics segment. Any disruption or decline in this segment's performance, such as the cessation of services to a prior carrier partner, could materially impact the company's financial results.
• Merger Closing Conditions [high — financial]: The proposed merger with Open World Ltd. is contingent on VerifyMe maintaining at least $1 million in Closing Net Cash. Failure to meet this threshold could jeopardize the merger and its associated benefits.
• SEC and Nasdaq Approval for Merger [medium — regulatory]: The merger with Open World Ltd. requires approval from the SEC and Nasdaq. Delays or failure to obtain these approvals could prevent the transaction from closing.
• Dilution from Merger [high — market]: Post-merger, VerifyMe's pre-Closing stockholders are expected to retain only approximately 10% of the combined entity, while Open World holders will receive about 90%. This represents significant dilution for existing VerifyMe shareholders.
• Transition of Service Partners [medium — operational]: VerifyMe ceased providing ProActive services to its prior carrier partner in September 2025 and Premium services in February 2026. The transition to a new Strategic Partner for ProActive services and the expected broad offering of Premium and Direct Premium services in Q2 2026 introduces operational risks.

Industry Context

The logistics industry, particularly for time and temperature-sensitive products, is highly competitive and relies heavily on technology for efficiency and visibility. Companies leverage predictive analytics, real-time tracking, and robust software platforms to mitigate risks like spoilage and delays. The increasing demand for cold chain logistics in healthcare and food sectors drives innovation in specialized services.

Regulatory Implications

VerifyMe's proposed merger with Open World Ltd. is subject to regulatory approvals from the SEC and Nasdaq. Any delays or adverse decisions in these processes could impact the transaction's completion and the company's strategic direction. Compliance with data security and privacy regulations is also crucial for its logistics platform.

What Investors Should Do

1. Monitor Merger Progress
2. Assess Precision Logistics Performance
3. Evaluate Dilution Impact
4. Scrutinize Financial Health

Key Dates

• 2025-09-01: Cessation of ProActive Services to Prior Partner — Marks a significant shift in VerifyMe's service delivery model and revenue streams.
• 2026-01-02: Announcement of Proposed Merger with Open World Ltd. — Indicates a major strategic direction change and potential for significant shareholder dilution.
• 2026-02-11: Formalization of Merger Agreement with Open World Ltd. — Confirms the terms of the merger, including the significant ownership split post-closing.
• 2026-02-01: Cessation of Premium Services to Prior Partner — Further reduces reliance on the previous business model and necessitates successful integration with new partners.
• 2026-01-01: Expected Broad Offering of Premium and Direct Premium Services with New Partner — Represents a key milestone for the Precision Logistics segment's future revenue generation under the new partnership.

Glossary

Precision Logistics

A business segment specializing in optimizing the delivery of time and temperature-sensitive perishable products using predictive analytics and real-time visibility. (This segment generates nearly all of VerifyMe's revenue and is the core focus of the company's operations.)

Authentication

A business segment providing brand protection and enhancement solutions, including technologies to deter counterfeit and diversion activities. (This segment is no longer a focus for new business development, with operations limited to servicing existing customers.)

ProActive Service

A service model where clients pay VerifyMe directly for carrier services combined with proactive logistics assistance. (VerifyMe has ceased providing this service to its prior carrier partner and is transitioning to new arrangements.)

Premium Services

Services where clients use their own transportation rates, with VerifyMe providing monitoring, predictive analytics, or exception management, charged either directly by the carrier ('white label') or by VerifyMe ('Direct Premium'). (VerifyMe has ceased providing these services to its prior partner and plans to broadly offer them with a new partner in Q2 2026.)

PeriTrack

VerifyMe's proprietary customer dashboard that provides customers with detailed insights into their shipping activities and supply chain data. (This platform is a key component of the Precision Logistics segment, offering real-time visibility and reporting.)

SAFE

Simple Agreement for Future Equity. A type of agreement often used by startups to raise capital, where investors provide funds in exchange for stock at a later date, typically during a qualified financing round. (Mentioned in the context of Open World Ltd. holders receiving approximately 90% of the post-closing shares, indicating a potential funding structure for Open World.)

Year-Over-Year Comparison

The current filing indicates a significant strategic pivot, with the Precision Logistics segment now accounting for nearly all revenue, while the Authentication segment is de-emphasized. The cessation of services to a prior carrier partner in late 2025 and early 2026 signifies a shift in operational strategy. A major development is the proposed merger with Open World Ltd., which will result in substantial dilution for existing shareholders. New risks related to merger approvals and meeting closing cash conditions have emerged.

Key Financial Figures

• $0.001 — ch registered Common Stock, par value $0.001 per share VRME The Nasdaq Capital M
• $1 m — n the Merger Agreement, of no less than $1 million, and (ii) our common stock having
• $300,000 — m will receive an annual base salary of $300,000 and be eligible for an annual bonus for
• $180,000 — a will receive an annual base salary of $180,000 and be eligible for an annual bonus for
• $15.8 million — ck up to an aggregate offering price of $15.8 million (the "ATM Program"). On February 11, 2
• $483 — ugh the ATM Program for net proceeds of $483 thousand, after deducting $15 thousand
• $15 thousand — ceeds of $483 thousand, after deducting $15 thousand in offering costs. ZenCredit Agreement
• $2 million — ment, we agreed to loan ZenCredit up to $2 million. Pursuant to the terms of the Loan Agre

Filing Documents

• vm32026110k.htm (10-K) — 1606KB
• ex4_2.htm (EX-4.2) — 14KB
• ex10_29.htm (EX-10.29) — 8KB
• ex21_1.htm (EX-21.1) — 3KB
• ex23.htm (EX-23) — 2KB
• ex31_1.htm (EX-31.1) — 8KB
• ex31_2.htm (EX-31.2) — 8KB
• ex32_1.htm (EX-32.1) — 7KB
• pnc_logo.jpg (GRAPHIC) — 7KB
• 0001214659-26-004051.txt ( ) — 7973KB
• vrme-20251231.xsd (EX-101.SCH) — 60KB
• vrme-20251231_cal.xml (EX-101.CAL) — 74KB
• vrme-20251231_def.xml (EX-101.DEF) — 230KB
• vrme-20251231_lab.xml (EX-101.LAB) — 458KB
• vrme-20251231_pre.xml (EX-101.PRE) — 381KB
• vm32026110k_htm.xml (XML) — 1244KB

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 8 Item 1B. Unresolved Staff Comments 27 Item 1C. Cybersecurity 27 Item 2.

Properties

Properties 27 Item 3.

Legal Proceedings

Legal Proceedings 28 Item 4. Mine Safety Disclosures 28 PART II Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities 29 Item 6. [Reserved] 29 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 39 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 39 Item 9A.

Controls and Procedures

Controls and Procedures 39 Item 9B. Other Information 39 Item 9C. Disclosure Regarding Foreign Jurisdictions that prevent Inspection 39 PART III Item 10. Directors, Executive Officers and Corporate Governance 40 Item 11.

Executive Compensation

Executive Compensation 45 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 50 Item 13. Certain Relationships and Related Transactions, and Director Independence 53 Item 14. Principal Accountant Fees and Services 53 PART IV Item 15. Exhibits and Financial Statement Schedules 54 Item 16. Form 10-K Summary 56 Table of Contents Cautionary Note Regarding Forward-Looking Statements This Annual Report on Form 10-K ("Report") includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. The words "believe," "may," "estimate," "continue," "currently," "establishing," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions are intended to identify forward-looking statements. All statements other than statements of historical facts contained in this Report, including among others, our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. Our actual results and financial condition may differ materially from those expressed or implied in such forward-looking statements. Therefore, you should not rely on any of these forward-looking the forward-looking statements include, but are not limited to, those factors set forth under Item 1A - Risk Factors and those other risks and uncertainties detailed in our periodic reports and registration statements filed with the Securities and Exchange Commission ("SEC"). We caution that these risk factors may not be exhaustive. All forward-looking statements in this Report are made only as of the date hereof or as indica

BUSINESS

ITEM 1. BUSINESS. Overview VerifyMe, Inc. ("VerifyMe," the "Company," "we," "us," or "our"), is a logistics company that specializes in time and temperature sensitive products, as well as providing brand protection and enhancement solutions. We operate a Precision Logistics segment which includes the operations of our subsidiary PeriShip Global LLC ("PeriShip Global")and accounts for nearly all VerifyMe revenue, and an Authentication segment. Through our Precision Logistics segment, we provide 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 are supported by a service center. Through our Authentication segment our technologies enable brand owners to deter counterfeit and diversion activities. Further information regarding our business segments is discussed below: Precision Logistics: The Precision Logistics segment specializes in predictive analytics for optimizing delivery of time and temperature sensitive perishable products. We manage complex industry-specific shipping logistic processes that require critical time, temperature control and handling to prevent spoilage and delayed delivery times and brand impairment. Utilizing predictive analytics from multiple data sources including flight-tracking, weather, traffic, major carrier feeds, and time of day data, we provide our clients an end-to-end vertical approach for their most critical service delivery needs. Using our proprietary IT platform, we provide real-time information and analysis to mitigate supply chain flow interruption, as well as delivering last-mile resolution for key markets, including the perishable healthcare and food industries. Through our proprietary PeriTrack customer dashboard,

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View this 10-K filing on SEC EDGAR