Not too long ago, when we heard the word, “counterfeit” we thought of counterfeit money. Now, the market of counterfeit offerings has far surpassed currency and targets clothing and any brands that carry value to consumers. Nike shoes, Gucci, Prada and Coach handbags, Levi jeans, Rolex watches, any known brand merchandise and about $200 billion per year in counterfeit pharmaceuticals make up close to a staggering $3 trillion per year in counterfeit merchandise.
Sure, counterfeits are oftentimes sold at a deep discount and the buyers frequently know they are buying counterfeits, but there are nonetheless a vast majority of unsuspecting buyers who believe they are buying the real deal. And the issue of real or fake becomes very important when it is something that you put on your body or in your body where a counterfeit is more likely to cause harm.
Then there are the problems of effectively authenticating voter ballots, driver’s licenses, passports, currency, and important documents. Even NFTs that are imploding faster than they grew as startups because counterfeit NFTs are now dominating the NFT market and killing sales.
No Effective Counterfeit Prevention On the Market
The fact that the level of counterfeit sales is still rising so dramatically indicates that there continues to be no effective solution to stop the practice of counterfeiting . . . Enter VerifyMe, Inc. (NASDAQ: VRME).
Though a little-known company, VerifyMe, has been working on this problem for years and with an accidental nudge from COVID, their technology took root and accelerated ease of consumer adoption almost overnight and is now just beginning to be discovered by industry users.
Before Covid, smartphone users were slow to adopt the QR code technology, but when they were forced to open menus through QR codes at restaurants due to “no touch” practices, everybody suddenly became very comfortable with using QR codes now.
'Bulletproof' Technology
VerifyMe launched their authentication platform that is totally bulletproof because it works perfectly now. All any consumer has to do is point their smartphone (everybody has one) at the proprietary VerifyMe QR code on the product, and then click on the link that appears and they INSTANTLY know if it is real or fake. The VerifyMe QR code is not possible to copy because it uses a combination of visible and proprietary invisible inks.
Perhaps of even greater importance to suppliers and marketing companies, once a consumer clicks on the QR code to authenticate a product, the supplier or marketing company immediately has a powerful new direct marketing portal to that consumer that never existed before. VerifyMe enables the provider to instantly send text messages directly to the consumer which has never been possible at this level before . . . a feature that the CRM giants are sure to jump on when they learn about it.
This undiscovered B2C marketing feature will likely hold substantial new value to B2C giants that need technology like this to improve their reach to their targeted audience.
Conclusion: Counterfeit Protection and Beyond
It is easy to see a big potential upside for VerifyMe, but success will be determined by the marketplace and by how effectively management can execute while they hold an advantage over industry competition. Perhaps an even greater value than the counterfeit protection offered by VerifyMe is the powerful new B2C marketing portal that has never existed before.
In terms of risk, potential investors are encouraged to visit the SEC filings for more detailed risk factors. It is also worth mentioning, that one of the greatest risk elements for any young company like VerifyMe, is the risk of running out of capital and the struggle for additional capital when needed.
Fortunately, VerifyMe reports a strong cash position of over $9 million and an equity investment of over $10 million.
As of 2021 year end, VerifyMe had 7,420,633 shares issued and 7,196,677 shares outstanding. 2.6 to 4.6 52-week range. Market cap 23.31m
For additional financial information please click here.
Richard Cavalli is a leading expert on young companies with disruptive green technologies that have promise to make our world better. The author was one of Charlie Munger’s earliest securities analysts in the late 1960s and continues to search out promising young companies from an ocean of potential opportunities.
The author is not a registered investment advisor and has a long position in warrants of this stock. The author was paid $7,500 by VerifyMe to write this article. This article is provided for information purposes only and is not intended to be investment advice of any kind. Readers are encouraged to do their own due diligence and consult with a licensed investment advisor prior to making any investment decisions.
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