{"url_path":"/sec/vrme/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A RISK FACTORS.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1104038/0001214659-26-006262-index.html","accession_number":"0001214659-26-006262","cik":"0001104038","ticker":"VRME","issuer_name":"VerifyMe, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1104038/0001214659-26-006262-index.html","primary_entity_key":"0001104038","primary_entity_name":"VerifyMe, Inc."},"word_count":818,"has_tables":true,"body_markdown":"**ITEM 1A. RISK FACTORS.**\n\n \n\nFor a discussion of the Company’s potential\nrisks or uncertainties, please see “Part I—Item 1A—Risk Factors” and “Part II—Item 7—Management’s\nDiscussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for\nthe year ended December 31, 2025, filed with the SEC, and “Part I—Item 2—Management’s Discussion and Analysis\nof Financial Condition and Results of Operations” herein. There have been no material changes from the risk factors as previously\ndisclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, except as set forth below.\n\n** **\n\n**We are not currently in compliance with\nthe Nasdaq continued listing requirements. If we are unable to regain compliance with Nasdaq’s listing requirements, our common\nstock will be delisted, which would negatively impact our common stock’s market price and liquidity and reduce our ability to raise\ncapital.**\n\n \n\nOn April 17, 2026, we received a deficiency letter\nfrom Nasdaq notifying us that, because the bid price of our common stock closed below $1.00 per share for 30 consecutive business days,\nwe were no longer in compliance with the Nasdaq’s Minimum Bid Price Rule, which is a requirement for continued listing on Nasdaq.\n\n \n\nWe cannot assure you that we will be able to regain\ncompliance with the Minimum Bid Price Rule and maintain compliance with Nasdaq’s other continued listing standards. Accordingly,\nour common stock could be delisted from Nasdaq. We and holders of our common stock could be materially adversely impacted if our common\nstock is delisted from Nasdaq. In particular:\n\n \n\n●we may be unable to raise equity capital on acceptable terms or at all;\n\n●we may lose the confidence of our business partners, which would jeopardize our ability to continue our business as currently conducted;\n\n●the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss\nof federal preemption of state securities laws;\n\n●holders may be unable to sell or purchase our common stock when they wish to do so;\n\n●we may become subject to stockholder litigation;\n\n●we may lose the interest of institutional investors in our common stock;\n\n●we may lose media and analyst coverage;\n\n●our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary\nmarket for our common stock; and\n\n●we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets,\nif at all.\n\n  \n\n**The Merger is subject\nto closing conditions and may not be completed, the Merger Agreement may be terminated in accordance with its terms, and we may be required\nto pay a termination fee upon termination.**\n\n \n\nThe Merger is subject\nto customary closing conditions that must be satisfied or waived prior to the consummation of the Merger, including, among other things:\n(i) approval by our stockholders and Open World’s shareholders necessary to consummate the Merger and the contemplated transactions\nthereunder having been duly obtained; (ii) a registration statement on Form S-4 having been declared effective under the Securities Act\nand not being subject to any stop order; (iii) our common stock issuable in the Merger having been approved for listing on Nasdaq; (iv)\nany applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) having expired\nor been terminated, and all other required regulatory approvals having been obtained; (v) Open World having received written approval\nof the Merger by the Cayman Islands Trade and Business Licensing Board; (vi) the absence of any order by a governmental authority permanently\nenjoining or otherwise prohibiting consummation of the Merger; (vii) the accuracy of the respective representations and warranties of\neach party, subject to certain materiality qualifications; (viii) compliance by the parties with their respective covenants; and (ix)\nthe absence of any material adverse effect with respect to either party.\n\n \n\nNo assurance can be given\nthat the required stockholder and shareholder approvals will be obtained or that the required conditions to closing will be satisfied\nor waived, and, if all required approvals are obtained and the conditions are satisfied or waived, no assurance can be given as to the\nterms, conditions, and timing of such approvals. Any delay in completing the Merger could cause the combined company not to realize, or\nto be delayed in realizing, some or all of the benefits that the parties expect to achieve if the Merger is successfully completed within\nthe expected time frame.\n\n \n\n 33 \n\n [Table of Contents](#toc)\n\n \n\nAdditionally, either\nparty may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the Merger is not completed by\nAugust 31, 2026, subject to certain conditions. In the event the Merger Agreement is terminated by us under specified circumstances, we\nmay be required to pay Open World a termination fee of $500,000 or an expense reimbursement fee of $400,000, as applicable."}