Company turnaround well underway with several key agreements signed with major corporations, creating pathway for revenue growth during FY18
Announces Removal of Auditor's "Going Concern" Opinion from Its 2017 Form 10-K
Non-GAAP Adjusted EBITDA Improves 38%
ROCHESTER, N.Y., April 17, 2018 -- VerifyMe, Inc. (OTCQB: VRME), a technology solutions company that markets proprietary products that provide identifiers and serialization for authenticating, tracking and tracing functions for labels, packaging, products, people and financial transactions, announced Fiscal Year 2017 results and that the going concern paragraph has been removed from its audit opinion contained in its filing of Form 10-K for the year ended December 31, 2017.
"Having the going concern issue removed from our audit opinion for the first time in the company's history is a significant accomplishment further affirming VerifyMe's successful transformation to a well-funded technology service provider," noted Patrick White, Chief Executive Officer. "Having the stigma of the going concern opinion removed restores confidence, not only in our stockholders, but also in the capital markets, customers and investing public in general. The Board is committed to maintain a solid financial foundation. We remain absolutely focused in executing our long-term strategy to grow the Company," further remarked Mr. White.
Recent Highlights (subsequent to the end of Fiscal Year 2017)
- Signed technology licensing agreement with a NASDAQ listed leading global label solution provider;
- Appointed Mr. Carl E. Berg, a renowned investor and businessman to the board of directors;
- Appointed Mr. Jay Cardwell as the Company's Chief Financial Officer;
- Announced reseller agreement with NYSE listed Micro Focus for global product authentication software cloud services;
- Entered into a global strategic sales, marketing and support partnership with S-One Labels & Packaging, a division of S-One Holdings Corporation;
- Signed Technology Licensing Agreement with Intelligent RFID Packaging Solutions Provider eAgile
Fiscal Year 2017 Highlights
- Entered into a major, global 5-year contract with HP Indigo in September 2017, which enables HP Indigo to enable its worldwide 6000 model machines to print with VerifyMe's RainbowSecure™ inks
- Restructuring and recapitalization plan implemented with substantial cash invested by newly appointed members of the Company's board of directors
- Appointment of Patrick White as President and Chief Executive Officer, former American Bank Note executive officer, Keith Goldstein as Chief Operating Officer and Sandy Fliderman as Chief Technology Officer.
- Our financial statements are no longer subject to a 'Going Concern' opinion for the first time in seven years; due to a strengthening of the Company's current balance sheet.
- Operating expenses lower by 24.3% compared to Fiscal Year 2016;
- Operating losses for Fiscal Year 2017 was $2.8 million compared to $3.7 million for Fiscal Year 2016;
- Cash balance at the end of December 2017 was $693,001 compared to $22,644 at the end of Fiscal Year 2016; (April 16th, 2018 cash position = $2.3 million)
- Year over year Non-GAAP Adjusted EBITDA improves 38%
Patrick White, President and Chief Executive Officer of VerifyMe, stated, "Fiscal 2017 was a pivotal year for the company, as we expanded our board by adding highly successful, experienced and seasoned businessmen and added new executives, including myself which improved the financial and operational structures of our organization. I am pleased to report that during Fiscal Year 2017 we were able to make significant improvements to the company's financials as we reduced our liabilities and increased our cash position. These activities coupled with the multi-billion-dollar authentication industry opportunity has created the foundation to put the company on a growth track for years to come. The most significant accomplishment of the year was that we were able to secure a 5-year contract with HP Indigo to include our RainbowSecure ink technologies in HP Indigo's digital printing machines. This will allow HP Indigo's 6000 model owners to seamlessly incorporate authentication measures on printed labels and packaging for brand owners. One of our biggest challenges was that HP is a global company and VerifyMe therefore needs to sell, service and support a global clientele. This was achieved with our recently announced marketing, sales and support contract with S-One corporation. They will market and handle all of the necessary needs of our global new client base on our behalf."
Mr. White concluded, "While we still have lots more to do, I am pleased with the accomplishments we secured in a short amount of time since I joined last summer. The HP Indigo contract has literally opened the door for VerifyMe in several instances and the proof is seen in the several key relationships we recently announced. I am also pleased with the progress in our digital biometric development and believe the Company has a viable future ahead in the biometric "people verification" segment. Various opportunities have presented themselves and we are in the midst of filling our sales pipeline with deal flow, which is at various stages – both on the physical and digital/biometrics sides of the business. Given the deal flow we've recently achieved, we expect revenue to commence ramping up during the second half of fiscal 2018. We expect HP to begin the global product rollout later this year as well as the S-One global marketing process. Both initiatives should enhance our product reach 10-fold. Our business sales cycle is long, but it will be expedited with the help and support of HP and S-One. In the coming months, investors should expect to see VerifyMe achieve a number of value-driving milestones and I look forward to sharing these developments with our shareholders as they transpire."
Printing Technology Milestones:
- HP/S-One Global Sales and Marketing Rollout of our RainbowSecure™ Technology
- New Licensee Announcements with Major Brand Owners and Integrators
- First Revenue Generation
Digital Technology Milestones:
- New Installations of VerifyMe Multi-Factor Authentication Systems
- New Licensee Announcements with Secure Data/Financial Transaction Systems
- First Revenue Generation
The following table presents a reconciliation of Net Loss to Adjusted EBITDA, a Non-GAAP financial measure:
This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. The non-GAAP financial measure should be viewed as supplemental to, and should not be considered as alternatives to net income, operating income, and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of VerifyMe nor are they intended to be predictive of potential future results. Investors should not consider the non-GAAP financial measure in isolation or as substitutes for performance measures calculated in accordance with GAAP.
Our management uses and relies on Adjusted EBITDA which is a non-GAAP financial measure. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measure in planning, forecasting and analyzing future periods. Our management uses this non-GAAP financial measure in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. Our management recognizes that the non-GAAP financial measure has inherent limitations because of the excluded items described in the table above.
VerifyMe defines Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table above. VerifyMe excludes these expenses because they are non-cash or non-recurring in nature.
We have included a reconciliation of our non-GAAP financial measure to the most comparable financial measure calculated in accordance with GAAP. We believe that providing the non-GAAP financial measure, together with the reconciliation to GAAP, helps investors make comparisons between VerifyMe and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.
About VerifyMe, Inc.
VerifyMe, Inc., is a technology solutions company that markets proprietary products that provide identifiers and serialization for authenticating, tracking and tracing functions for labels, packaging, products, people and financial transactions. VerifyMe's physical technology authenticates packaging, labels & documents with a suite of proprietary security inks and pigments. The company's digital technologies authenticate people by performing strong, multi-factor verification via its patented digital software platforms. To learn more, visit www.verifyme.com
Forward Looking Statements
Certain statements in this press release include forward-looking statements including statements regarding our growth track, our expected revenues, milestones, the HP Indigo global product rollout, beginning the S-One global marketing and our position in the biometric identification market. The words "believe," "may," "estimate," "continue," "anticipate," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.
Important factors that could cause actual results to differ from those in the forward-looking statements include the risk factors contained in our Form 10-K which we filed on April 16, 2018. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
For Licensing or other information contact:
Company: VerifyMe, Inc.
For investors contact:
Adam Lowensteiner or Robert Blum
646-829-9700 – New York
602-889-9700 - Phoenix
For the complete press release including financial tables please view the original press release at https://www.prnewswire.com/news-releases/verifyme-reports-2017-financial-results-and-provides-corporate-overview-and-business-outlook-300631347.html