Form 4: VerifyMe VP-Ops Fred Volk III Reports Stock Transactions

VerifyMe's VP of Operations, Fred Volk III, reported the vesting of restricted stock units and subsequent share withholding for taxes, alongside new performance-based RSU grants.

Summary

• Fred Volk III, VP-Ops of PeriShip Global LLC (a VerifyMe, Inc. subsidiary), reported changes in his beneficial ownership of VerifyMe, Inc. common stock.
• On January 1, 2026, 12,500 restricted stock units (RSUs) vested, converting into common stock on a one-for-one basis. These RSUs were granted under the issuer's salary reduction program, with the number determined by dividing the salary reduction amount by $1.60 per share.
• Concurrently, 4,201 shares of common stock were disposed of (withheld) to cover tax withholding obligations upon the vesting of the RSUs, at a price of $0.6008 per share.
• Following these transactions, Fred Volk III beneficially owns 73,108 shares of VerifyMe, Inc. common stock directly.
• Additionally, 75,000 new Restricted Stock Units (RSUs) were reported, which vest in three tranches based on continued employment and the company's stock price performance.
• Tranche 1 (20,000 shares) vests after June 18, 2025, if the stock price reaches $2.21 for 20 consecutive trading days prior to June 18, 2027.
• Tranche 2 (25,000 shares) vests after June 18, 2025, if the stock price reaches $2.94 for 20 consecutive trading days prior to June 18, 2027.
• Tranche 3 (30,000 shares) vests on June 18, 2027, if the stock price reaches $3.68 for 20 consecutive trading days prior to June 18, 2027.

Sentiment

Score: 5

Explanation: The filing is a routine disclosure of insider transactions related to executive compensation. It reflects standard RSU vesting and new performance-based grants, which are neutral in terms of immediate company performance or outlook, but align executive incentives with shareholder value.

Positives

• Fred Volk III acquired 12,500 shares of common stock through the vesting of restricted stock units, increasing his direct ownership in the company.
• The grant of 75,000 performance-based restricted stock units aligns executive compensation with shareholder value creation, as vesting is contingent on significant stock price appreciation.

Negatives

• 4,201 shares were disposed of to cover tax withholding obligations, reducing the net shares acquired from the RSU vesting.

Risks

• The vesting of 75,000 restricted stock units is contingent on specific stock price targets ($2.21, $2.94, $3.68) being met for 20 consecutive trading days within defined periods, introducing market performance risk for the reporting person.
• Failure to meet the stock price performance conditions or maintain continued employment could result in the forfeiture of the performance-based RSUs.

Future Outlook

The future outlook for Fred Volk III's compensation includes the potential vesting of 75,000 performance-based restricted stock units. These units are tied to VerifyMe's common stock achieving specific price targets of $2.21, $2.94, and $3.68 for 20 consecutive trading days prior to June 18, 2027, in addition to continued employment.

Management Comments

• The restricted stock units were granted pursuant to the issuer's salary reduction program, aligning executive compensation with company performance.

Industry Context

This Form 4 filing represents a routine disclosure of insider transactions related to executive compensation. The use of performance-based restricted stock units is a common practice in publicly traded companies to incentivize management to achieve specific financial or stock price goals, thereby aligning their interests with those of shareholders. Such filings are standard for executives of companies like VerifyMe, Inc. [VRME].

Comparison to Industry Standards

• The structure of executive compensation, including the use of restricted stock units (RSUs) with performance-based vesting conditions, is a common practice across various industries, particularly in technology and growth-oriented companies.
• Performance hurdles tied to stock price appreciation, such as those for VerifyMe's RSUs ($2.21, $2.94, $3.68), are typical mechanisms to incentivize long-term value creation, comparable to similar programs at small-cap technology firms aiming for growth.
• The withholding of shares for tax obligations upon RSU vesting is a standard procedure, consistent with compensation practices observed in most U.S. public companies.

Related Party Transactions

• The grant of restricted stock units to Fred Volk III, an officer of a VerifyMe subsidiary, constitutes an executive compensation arrangement, which is a form of related party transaction.

Stakeholder Impact

• Shareholders: The performance-based RSUs align executive incentives with shareholder interests, as vesting is contingent on stock price appreciation, potentially benefiting long-term shareholder value.
• Employees: The salary reduction program and RSU grants are part of the company's compensation strategy, which can impact employee motivation and retention.

Next Steps

• Monitoring of VerifyMe, Inc.'s stock price performance against the $2.21, $2.94, and $3.68 targets for the vesting of the 75,000 performance-based restricted stock units.
• Continued employment of Fred Volk III through June 18, 2025, and June 18, 2027, as a condition for RSU vesting.

Key Dates

Keywords

VerifyMe, VRME, Form 4, Insider Transaction, Restricted Stock Units, Executive Compensation, Stock Vesting, Beneficial Ownership