VerifyMe, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a mixed performance in revenue and profitability compared to the previous fiscal period. The company, which operates in the Precision Logistics and Authentication segments, experienced a slight decline in net revenue, reporting $5.435 million for Q3 2024, down from $5.604 million in Q3 2023. For the nine-month period, revenue totaled $16.546 million, a decrease from $16.600 million in the same period last year.

Despite the revenue decline, gross profit for the nine months increased to $6.245 million, up from $5.153 million, resulting in a gross margin improvement from 31% to 38%. However, the company faced higher operating expenses, which rose to $4.765 million for Q3 2024, compared to $2.901 million in Q3 2023. This increase was attributed to a significant rise in general and administrative expenses, which decreased in the nine-month comparison, indicating a non-recurring severance expense in the prior year.

The net loss for Q3 2024 was $2.424 million, a substantial increase from a loss of $930,000 in Q3 2023. For the nine months, the net loss slightly improved to $3.323 million from $3.392 million. The company recorded impairment charges of $1.351 million for goodwill and $901,000 for intangible assets during Q3 2024, reflecting concerns about the commercial viability of the Authentication segment.

VerifyMe's total current assets decreased to $4.820 million as of September 30, 2024, from $7.686 million at the end of 2023, while total assets fell to $14.829 million from $20.705 million. Current liabilities also decreased to $2.765 million, down from $5.141 million, contributing to a reduction in total liabilities to $4.549 million from $8.174 million.

Strategically, the company announced the closure of its Trust Codes Global business by the end of November 2024, unless a buyer is found, due to concerns regarding its commercial viability. This decision follows the acquisition of Trust Codes Limited in March 2023 for approximately $1 million, which included contingent consideration based on future earnings targets. The company also reported a significant reliance on a single vendor for transportation costs in its Precision Logistics segment, which accounted for 99% of such costs.

Overall, VerifyMe's financial results reflect ongoing challenges in revenue generation and profitability, alongside strategic shifts aimed at addressing operational concerns within its segments.