VERIFY SMART CORP. - FORM 10-Q

Attached files

file	filename
EX-99.1 - CERTIFICATION PURSUANT TO SECTION 302 (A) OF THE SARBANES-OXLEY ACT OF 2002 - VERIFY SMART CORP.	ex99.htm
EX-99.2 - CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 - VERIFY SMART CORP.	ex99_2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(X )	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2009

( )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934

	For the transition period form July 1,2009 to December 31,2009

	Commission File number 333-136492

VERIFY SMART CORP.

(Exact name of registrant as specified in its charter)

Nevada	20-5005810
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

57 Montague Street, Brooklyn NY 11201

(Address of principal executive offices)

(718) 855-7136

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (ss.229.405 of this charter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See definition of “large accelerated filer”, “accelerated filer” and “small reporting company” Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ] Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a small reporting company) Small reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes [X] No[ ]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PROCEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

52,215,000 common shares issued and outstanding as of February 9, 2010

INDEX

			Page Number
PART 1.		FINANCIAL INFORMATION

	ITEM 1.	Financial Statements (unaudited)	4

		Balance Sheets as at December 31, 2009 and June 30, 2009	5

		Statements of Operations For the three and six months ended December 31, 2009 and 2008 and from Inception (May 31, 2006) to December 31, 2009	6

		Statements of Cash Flows For the six months ended December 31, 2009 and 2008 and from Inception (May 31, 2006) to December 31, 2009	7

		Notes to the Financial Statements.	9

	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

	ITEM 3.	Quantitative and Qualitative Disclosure about Market Risk	25

	ITEM 4.	Controls and Procedures	25

	ITEM 4T	Controls and Procedures	25

PART 11.		OTHER INFORMATION	26

	ITEM 1.	Legal Proceedings	26

	ITEM 1A	Risk Factors	26

	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

	ITEM 3.	Defaults Upon Senior Securities	28

	ITEM 4.	Submission of Matters to a Vote of Security Holders	28

	ITEM 5.	Other Information	28

	ITEM 6.	Exhibits	28

		SIGNATURES.	30

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

These financial statements have been prepared by Verify Smart Corp. without audit, pursuant to the rules and regulations of Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with such SEC rules and regulations. The accompanying balance sheets of Verify Smart Corp. (Development stage company) at December 31, 2009 (with comparative figures as at June 30, 2009) and the statement of operations for the three and six months ended December 31, 2009 and 2008 and from inception (May 31, 2006) to December 31, 2009, and the statement of cash flows for the six months ended December 31, 2009 and 2008 and from inception (May 31, 2006) to December 31, 2009 have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

Operating results for the three and six months ended December 31, 2009 are not necessarily indicative of the results that can be expected for the year ending June 30, 2010.

VERIFY SMART CORP.

(A development Stage Company)

BALANCE SHEETS

	As of			As of
	December 31			June 30
	2009			2009
	(unaudited)
ASSETS

Current Assets
Cash	$	9,733		$	9,733
Prepaid expense		209,250			413,643
Total Current Assets		218,983			423,376

Other Assets
Prepaid expense-Long term		185,937			-
Deposit		-			10,626
Total Other Assets		185,937			10,626

Total Assets	$	404,920		$	434,002

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable	$	93,705		$	8,718
Loan payable		89,786			35,947
Total Current Liabilities		183,491			44,665

Total Liabilities		183,491			44,665

Contingencies and Commitments
Stockholders’ Equity
Common Stock, $0.001 par value, 250,000,000 shares authorized;
52,215,000 shares and 61,025,000 shares issued and outstanding as of December 31 and June 30, 2009		52,215			61,025

Additional Paid-in Capital		1,378,907			852,097
Deficit Accumulated During the Development Stage		(1,209,693	)		(523,785	)
Total Stockholders' Equity		221,429			389,337

Total Liabilities and Stockholders' Equity	$	404,920		$	434,002

The accompanying notes are an integral part of these unaudited financial statements.

VERIFY SMART CORP.

(A development Stage Company)

Statements of Operations (Unaudited)

													May 31, 2006
	December 31, 2009						December 31, 2008						(Inception)
	Three months			Six Months			Three months			Six Months			through
	Ended			Ended			Ended			Ended			December 31, 2009
REVENUES
Revenues	$	-					$	-					$	-
Total Revenues		-						-						-

Operation Expenses
General & Administrative expenses		9,564			40,744			930			1,391			69,887
Professional fees		18,166			35,997			2,000			6,000			79,432
Consulting fees		127,916			604,412		-			-				1,053,835
Total operation expenses		155,646			681,153			2,930			7,391			1,203,154

Loss from operations		(155,646	)		(681,153	)		(2,930	)		(7,391	)		(1,203,154	)
Exchange loss		(1,564	)		(4,755	)		-			-			(6,539	)

Net Loss	$	(157,210	)	$	(685,908	)	$	(2,930	)	$	(7,391	)	$	(1,209,693	)

Net Loss Per Share - Basic and Diluted	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.00	)

Weighted Average Shares Outstanding		55,081,304			58,329,783			4,000,000			4,000,000

The accompanying notes are an integral part of these unaudited financial statements.

VERIFY SMART CORP.

(A development Stage Company)

STATEMENTS OF CASH FLOWS (Unaudited)

	For the Six Months Ended December 31, 2009			For the Six Months Ended December 31, 2008			May 31, 2006 (inception) through to December 31, 2009
OPERATING ACTIVITIES
Net income (loss)	$	(685,908	)	$	(7,391	)	$	(1,209,693	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Foreign exchange gain(loss)
Stock-based compensation		536,456			-			974,563
Changes in operating Activities
Prepaid expense		10,626			2,000			-
Accounts payable		84,987			(163	)		93,705
Net Cash Used in Operating Activities		(53,839	)		(5,554	)		(141,425	)
Investing Activities
Deposit decrease		-			-			-

Net Cash Used in Investment Activities:		-			-			-
Financing Activities								-
Issuance of common stock		-			-			62,500
Share issuance costs		-			-			(1,128	)
Proceeds from loan payable		53,839			-			89,786
Net Cash Provided by Financing Activities	$	53,839			-			151,158
(Decrease) Increase in Cash		-			(5,554	)		9,733
Cash at beginning of period		9,733			19,231			--
Cash – End of Period	$	9,733		$	13,677		$	9,733

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	--		$	--		$	--
Income Taxes	$	--		$	--		$	--
Non-Cash investing and financing activities Common stock issued for services	$	518,000		$	-		$	1,369,750

The accompanying notes are an integral part of these unaudited financial statements.

VERIFY SMART CORP.

(A development Stage Company)

Statements of Changes in Stockholders' Equity

From May 31, 2006 (Inception) through December 31, 2009

(Unaudited)

	Common Stock		Additional	Deficit Accumulated
	Shares	Par Value	Paid-in Capital	During the Development	Total
	#	$	$	$	$

Balance - May 31, 2006 (Date of Inception)

Stock issued for cash on May 31, 2006 at $0.0003 per share	30,000,000	30,000	(20,000)		10,000

Net loss for the period		0	0	(430)	(430)

Balance - June 30, 2006	30,000,000	30,000	(20,000)	(430)	9,570

Stock issued for cash on October 31, 2006
at $0.0013 per share	30,000,000	30,000	10,000	0	40,000

Net loss for the year				(14,000)	(14,000)

Balance - June 30, 2007	60,000,000	60,000	(10,000)	(14,430)	35,570

Net loss for the year				(14,502)	(14,502)

Balance - June 30, 2008	60,000,000	60,000	(10,000)	(28,932)	21,068

Stock issued for consulting services	1,015,000	1,015	850,735		851,750

Stock issued for cash on May 27, 2009 at
$1.25 per share, net of share issuance costs	10,000	10	11,362		11,372

Net loss for the year				(494,853)	(494,853)

Balance - June 30, 2009	61,025,000	61,025	852,097	(523,785)	389,337

Stock issued for consulting services	1,190,000	1,190	516,810		518,000

Stock cancelled	(10,000,000)	(10,000)	10,000		-

Net loss for the six months ended December 31, 2009				(685,908)	(685,908)

Balance - December 31, 2009	52,215,000	52,215	1,378,907	(1,209,693)	221,429

The accompanying notes are an integral part of these unaudited financial statements.

VERIFY SMART CORP.

(A development Stage Company)

Notes to the Financial Statements (Unaudited)

December 31, 2009

NOTE1. ORGANIZATION

Verify Smart Corp. (the “Company”) was incorporated under the laws of the State of Nevada on May 31, 2006. The Company was originally formed to engage in the acquisition, exploration and development of natural resource properties. Effective March 25, 2009, the Company entered into a joint venture agreement with Verified Capital Corp. and Verified Transaction Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention (Note 11).

Effective March 19, 2009 the Company changed the name from Treasure Explorations Inc. to Verify Smart Corp.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Accounting Methods

The Company recognizes income and expenses based on the accrual method of accounting. These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. The Company has elected a June 30 year-end.

Dividend Policy

The Company has not yet adopted a policy regarding payment of dividends.

Basic and Diluted Net Income (loss) Per Share

Basic net incomes (loss) per share amounts are computed based on the weighted average number of shares actually outstanding. Diluted net income (loss) per share amounts are computed using the weighted average number of common and common equivalent shares outstanding as if shares had been issued on the exercise of the common share rights unless the exercise becomes anti dilutive and then only the basic per share amounts are shown in the report.

Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

Use of Estimates and Assumptions

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

VERIFY SMART CORP.

(A development Stage Company)

Notes to the Financial Statements (Unaudited)

December 31, 2009

(

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Income Taxes

Income taxes are provided in accordance with ASC 740 ACCOUNTING FOR INCOME TAXES. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Recent Accounting Pronouncements

In May 2009, FASB issued ASC 855, SUBSEQUENT EVENTS, which establishes general stands of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on the Company’s financial statements.

In June 2009, the FASB issued guidance now codified as ASC 105, GENERLLY ACCEPTED ACCOUNTING PRINCIPLES as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U. S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial statements or results of operations.

VERIFY SMART CORP.

(Development Stage Company)

Notes to the Financial Statements (Unaudited)

December 31, 2009

NOTE 3. GOING CONCERN

The accompanying financial statements are presented on a going concern basis. The Company had limited operations during the period from May 31, 2006 (date of inception) to December 31, 2009 and generated a net loss of $1,209,693. This condition raises substantial doubt about the Company’s ability to continue as a going concern. Because the Company is currently in the development stage, management believes that the Company’s current cash and cash equivalents of $9,733 is not sufficient to cover the expenses they will incur during the next twelve months in a limited operations scenario or until they raise additional funding.

NOTE4. LOAN PAYABLE

At December 31, 2009, the Company owes $89,786 (June 30, 2009 -$35,947) loans from an unrelated party.

NOTE5.WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional shares of common stock.

NOTE 6. RELATED PARTY TRANSACTIONS

The officers and directors of the Company may, in the future, become involved in other business opportunities as they become available, they may face a conflict in selecting between the Company and their other business opportunities. The Company has not formulated a policy for the resolution of such conflicts.

NOTE 7. INCOME TAXES

The Company utilizes the liability method of accounting for income taxes. Under the liability method deferred tax assets and liabilities are determined based on differences between financial reporting and the tax bases of the assets and liabilities and are measured using the enacted tax rates and laws that will be in effect, when the differences are expected to be reversed. An allowance against deferred tax assets is recorded, when it is more likely than not, that such tax benefits will not be realized.

NOTE 8. NET OPERATING LOSSES

On December 31, 2009 the Company had a net operating loss carry forward of $132,157 for income tax purposes. The tax benefit of approximately $44,933 from the loss carry forward has been fully offset by a valuation reserve because the future tax benefit is undeterminable since the Company is unable to establish a predictable projection of operating profits for future years. Losses will expire during 2030.

VERIFY SMART CORP.

(Development Stage Company)

Notes to the Financial Statements (Unaudited)

December 31, 2009

NOTE. 9. STOCK TRANSACTIONS

Transactions, other than employees’ stock issuance, are in accordance with ASC 718, Compensation – STOCK COMPENSATION. Thus issuances shall be accounted for based on the fair value of the consideration received. Transactions with employees’ stock issuance are in accordance with ASC 718. These issuances shall be accounted for based on the fair value of the consideration received or the fair value of the equity instruments issued, or whichever is more readily determinable.

On March 19, 2009 the Company effected a 15 for 1 forward split of its issued and outstanding share capital such that every one share of common stock issued and outstanding prior to the split was exchanged for fifteen post – split shares of common stock. The Company’s post-split authorized capital increased to 250,000,000 shares of common stock with a par value of $0.001 per share. All share amounts have been retroactively adjusted for all periods presented.

On March 25, 2009, the Company issued 750,000 shares of common stock at a fair value of $0.75 per share, amounting $562,500, pursuant to a consulting agreement.

On March 30, 2009, the Company issued 100,000 shares of common stock at a fair value of $0.75 per share, amounting $75,000, pursuant to a consulting agreement.

On April 9, 2009, the Company issued 15,000 shares of common stock at a fair value of $2.05 per share, amounting $30,750, pursuant to a consulting agreement.

On May 1, 2009, the Company issued 100,000 shares of common stock at a fair value of $1.34 per share, amounting $134,000, pursuant to a consulting agreement.

On May 27, 2009, the Company issued 10,000 shares of common stock at $1.25 per share for cash proceeds of $12,500. The Company paid finders’ fee of $1,128 (CDN $1,250) in connection with the private placement.

On June 1, 2009, the Company issued 50,000 shares of common stock at a fair value $1 per share, amounting $50,000, pursuant to a consulting agreement.

As of June 30, 2009, the Company had 61,025,000 shares of common stock issued and outstanding.

On July 14, 2009, the Company entered a consulting service agreement and issued 50,000 shares of restricted common stock at a fair value $0.53 per share, amounting $26,500 as compensation.

On August 15, 2009, the Company completed a private placement and issued 500,000 shares of common stock to Black Diamond Investment Group (“Black Diamond”) at $0.50 per share for cash proceeds of $250,000. The consulting agreement was entered

between Black Diamond and Verify Smart Corp., a private company located in British Virgin Island. Accordingly, these shares were issued in error. The shares are being returned to treasury for cancellation and the correct share issuance will take place from the private. The Company has treated the shares as unissued.

On August 14, 2009, the Company enter a consulting service agreement and issued 1,000,000 shares of common stock at a fair value $0.425 per share, amounting $425,000 as compensation.

VERIFY SMART CORP.

(A development Stage Company)

Notes to the Financial Statements (Unaudited)

December 31, 2009

NOTE.9. STOCK TRANSACTIONS - Continued

.On October 28, 2009, 10,000,000 shares of common stocks from Howard Gelfand were cancelled and returned.

On November 15, 2009, the Company enter three consulting service agreements and issued 140,000 shares of common stock at a fair value $0.475 per share, amounting $66,500 as compensation.

As of December 31, 2009, the Company had 52,215,000 shares of common stock issued and outstanding.

NOTE.10. STOCKHOLDERS’ EQUITY

The stockholders’ equity section of the Company contains the following classes of capital stock as of December 31, 2009: Common stock, $0.001 par value: 250,000,000 shares authorized; 52,215,000 shares issued and outstanding.

NOTE. 11. JOINT VENTURE AGREEMENT

Effective March 25, 2009, the Company entered into a joint venture agreement with Verified Capital Corp. and Verified Transaction Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention.

Upon the satisfaction of customary closing conditions, the Company will contribute an aggregate of $5,000,000 to the joint venture corporation, payable as $2,000,000 by May 1, 2009 and $3,000,000 by July 1, 2009, for a 70% interest in the joint venture corporation.

By amendment of May 19, 2009, the companies have agreed that all obligations of the Joint Venture agreement have been deemed to have occurred and the agreement is in full force in good standing. In addition to the foregoing, Verified Transactions Corp. will grant to the joint venture corporation a 25 year worldwide exclusive license to market and sell Verified Transaction Corp.’s internet security software and all other internet business of whatsoever nature and including all future developments of such business for a 25% interest in the joint venture corporation. Verified Capital Corp. will be granted a 5% interest in joint venture corporation upon the transfer of certain assets. Upon the closing of the joint venture agreement, the Company is the operator of the joint venture corporation and will contract with Verified Capital Corp. to be the sub-operator.

As of December 31, 2009, the joint venture corporation has not yet been formed.

VERIFY SMART CORP.

(A development Stage Company)

Notes to the Financial Statements

December 31, 2009

(Unaudited- Prepared by Management)

NOTE. 12. COMMITMENTS

On March 30, 2009, the Company entered into a consulting agreement with New Vision Consulting Corporation wherein New Vision has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 1,000,000 restricted shares of common stock. As further compensation for service to be rendered, New Vision shall receive an additional 500,000 restricted common shares prior to July 31, 2009. The agreement expires on September 30, 2009. On May 19, 2009, the Company issued 1,000,000 restricted shares of common stock at a fair value of $750,000 to New Vision for services to be provided over a six month period. On July 15, 2009, the consulting agreement was terminated as New Vision was unable or unwilling to perform the services. The Company asked for return the issued shares for cancellation.

On June 1, 2009, the Company entered into a consulting agreement with David Karpa wherein David Karpa has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 50,000 restricted shares of common stock. The agreement expires on November 30, 2009. On June 1, 2009, the Company issued 50,000 restricted shares of common stock at a fair value of $50,000 to David Karpa for services to be provided over a six month period. As at December 31, 2009, $50,000 was recognized as consulting expense.

On July 14, 2009, the Company entered into a consulting agreement with Wei Cheng wherein Wei Cheng has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 50,000 restricted shares of common stock. The agreement expires on January 14, 2010. On August 15, 2009, the Company issued 50,000 restricted shares of common stock at a fair value of $26,000 to Wei Cheng for agreeing to enter into this agreement. The Company shall also provide Cheng 50,000 shares of common stock, released in increments of 12,500 shares at the end of each 60 days period, commencement upon the agreement date. At December 31, 2009 the Company recorded $48,583 payable.

On August 14, 2009, the Company entered into a consulting agreement with Cohen Independent Group (“Cohen”) wherein Cohen has agreed to provide certain consulting services to the Company. As compensation under the agreement, the Company agreed to issue 1,000,000 restricted shares of common stock. The agreement expires on August 14, 2011. On September 14, 2009, the Company issued 1,000,000 restricted shares of common stock at a fair value of $425,000 to Cohen for services to be provided over a two year periods. As at December 31, 2009, $159,375 is included in prepaid expenses-short-term and $185,937 in prepaid expense-long-term and will be recognized over the remaining term of the consulting agreement.

e)	On September 22, 2009, the Company entered into a compensation agreement with AMG Group Inc. (“AMG”) wherein AMG has agreed to provide certain consulting services to the company. The agreement expires on September 22, 2011.

VERIFY SMART CORP.

(A development Stage Company)

Notes to the Financial Statements

December 31, 2009

(Unaudited- Prepared by Management)

12.	COMMITMENTS - Continued

In consideration of the consulting services provided by AMG, the Company hereby agrees to pay AMG the compensation as follows:

asset acquisition, merger, or other value acquisition or disposition (the “Event”) – the Company will pay within 30 days of closing of such an Event an amount equal to, at AMG election, 5% in cash or 10% in common stock with the stock priced at the weighted average stock price for the year, on the stated value of the Event or, failing contractual value, the fair market value of the Event;

ii)

card issuers or internet users – the Company will pay to AMG an amount of 10% of cash flow received by the Company (less direct third party costs) from bank, and any other business paying the Company based on card use or internet use of the Company’s products for the first five years and 5% thereafter for an additional five years. For the first institution of in excess of one million cards signed, the Company will pay AMG one million common shares the Company.

iii)

the Company shall pay AMG a monthly fee of $5,000 starting July 1 and pre-approved expenses.

As of December 31, 2009, the Company accrued $30,000 payable.

f) The Company entered into a five year office lease agreement effective May 1, 2009. There is no penalty payment due under the terms of the lease agreement. The Company forfeited the deposit.

g) On November 15, 2009, we entered into a consulting agreement with Eileen Duperron wherein Eileen Duperron has agreed to provide certain consulting services to the Company. As compensation under the agreement, we have agreed to issue 40,000 restricted common shares of our company. The agreement expires on May 15, 2010.

h) On November 15, 2009, we entered into a consulting agreement with Kim Baker wherein Kim Baker has agreed to provide certain consulting services to the Company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares of our company. The agreement expires on May 15, 2010.

j) On November 15, 2009, we entered into a consulting agreement with Intentional and Purposeful Living wherein Intentional and Purposeful Living has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares of the Company. The agreement expires on May 15, 2010.

13.	SUBSEQUENT EVENTS

Pursuant to ASC 855, the Company has evaluated all events to transactions that accrued from December 31, 2009 through February 16, 2010, the date of issuance of the unaudited financial

statements. During this period, the Company did not have any material recognizable subsequent events.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

FORWARD – LOOKING STATEMENTS

The quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward – looking statements by terminology such as “may”, “should”, “expects”, “plan”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve know and unknown risks, uncertainties and other factors, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward – looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our", "our company" and "Verify" mean Verify Smart Corp., unless otherwise stated.

CORPORATE OVERVIEW

The address of our principal executive office is 57 Montague Street, Brooklyn NY 11201.Our telephone number is 718- 855-7136.

Effective March 19, 2009, we effected a fifteen (15) for one (1) forward stock split of our authorized and issued and outstanding common stock. and the reduction of our authorized common stock As a result, our authorized capital has changed to 250,000,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares have increased from 4,000,000 shares of common stock to 60,000,000 shares of common stock.

Also effective March 19, 2009, we have changed our name from "Treasure

Explorations Inc." to "Verify Smart Corp".

The name change and forward stock split became effective with the Over-the-Counter Bulletin Board at the opening for trading on March 24, 2009 under the new stock symbol "VSMR".

We have not been involved in any bankruptcy, receivership or similar proceeding.

GENERAL OVERVIEW

We were incorporated in the state of Nevada on May 31, 2006. Since our incorporation, we had been in the business of the exploration and development of a mineral property in New Westminster, Simalkameen Mining Division of British Columbia, consisting of 336 hectares included with 16 mineral title cells. Our property was without known reserves and our program was exploratory in nature. We completed the Phase 1 exploration program in our property, the results of which were not promising and did not justify further expense. Because we were not successful in our exploration program, we abandoned the mineral claims and focused on the identification of suitable businesses with which to enter into a business opportunity or business combination.

Effective March 19, 2009, we effected a fifteen (15) for one (1) forward stock split of our authorized and issued and outstanding common stock. As a result, our authorized capital has changed to 250,000,000 shares of common stock with a par value of $0.001 and our issued and outstanding shares have increased from 4,000,000 shares of common stock to 60,000,000 shares of common stock.

Also effective March 19, 2009, we have changed our name from "Treasure Explorations Inc." to "Verify Smart Corp". The change of name was approved by our directors and a majority of our shareholders.

On March 24, 2009, Ralph Santos was appointed as a director of our company.

On March 24, 2009 Manly Shore resigned as president, chief executive officer and chief financial officer of our company and Ralph Santos was appointed president, chief executive officer and chief financial officer of our company.

On April 14, 2009, Adi Muljo was appointed as a director of our company.

Our board of directors now consists of Ralph Santos and Adi Muljo.

On March 25, 2009, we entered into a joint venture agreement with Verified Capital Corp. and Verified Transactions Corp. relating to the formation and operation of a joint venture corporation that will sell internet security software for credit card fraud prevention. Upon the satisfaction of customary closing conditions, we will earn a 70% interest in the joint venture.

We were required to contribute $2,000,000 by May 1, 2009, of which $250,000 will be paid to Verified Transactions Corp. as a license fee. Until such time as we have raised the $2,000,000, we will not be entitled to receive any revenue from the joint venture corporation. We were further required to contribute $3,000,000 to the joint venture by July 1, 2009, of which $500,000 will be paid to Verified Transactions Corp. as a license fee. As of the date of this report, we have not yet contributed the $2,000,000 owed to the joint venture. A joint venture corporation has not been formed, and as per the joint venture agreement we are the operator of the joint venture corporation. We have contracted the operator rights to Verified Capital Corp. as the sub-operator.

By amendment agreement of May 19, 2009, the Companies have agreed to a mutual understanding and agreement that the Joint Venture has been satisfactorily performed by our company and that we have performed the required financial obligations of Section 5.01 through both fund raising and joint venture cost sharing and accordingly, VSC's obligations of Section 5.01 are fully satisfied, the Joint Venture agreement is in full force and effect in good standing and VSC's revenue sharing right to 70% of the Joint Venture's revenue commences the date of the amendment agreement.

Pursuant to the joint venture agreement, Verified Transactions Corp. has provided to the joint venture an exclusive world-wide license to use, sell and sub-license its internet security software and all other internet business of such nature and including all future development of such business.

The term of the license is for a period of 25 years with an option to renew for an additional 25 years for a payment of $5,000,000. In consideration for the granting of the license, Verified Transactions Corp. will receive the license fees disclosed above, 10% of the revenue of the joint venture to a maximum of $1,250,000 and a 3% royalty on the gross revenue of the joint venture.

We have the right to acquire all of Verified Capital Corp.'s interest in the joint venture and all of Verified Transactions Corp.'s interest in the joint venture , excluding the royalty as set out in the joint venture agreement, at market value at the earlier of the joint venture generating $100 million in aggregate revenue per year with a minimum net margin of 25% or 5 years. Market value shall be determined by an agreed valuator or, failing agreement, we may hire a top-five chartered accountancy firm to prepare a market value report and, absent material error of standard calculation, such report shall be final.

Pursuant to the terms of the joint venture agreement, we have agreed to permit and have the right to tender to all shareholders and creditors of each of Verified Capital Corp. and Verified Transactions Corp. to convert their debts and shares into shares of our company on a one for one basis subject to our company raising the $2,000,000 (as set out above) and the joint venture earning gross cash flow of not less than $100,000 per week.

Under the license, Ralph Santos, our president, will receive a 10% carried equity interest in the Gateway internet business of the joint venture corporation. Mr. Santos is also a significant equity owner in Verified Transactions Corp. and Verified Capital Corp.

On March 25, 2009, we entered into a consulting agreement with Duke Enterprises LLC wherein Duke Enterprises has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 75,000 restricted common shares of our company. The 75,000 restricted shares were issued on May 19, 2009. The agreement expired on September 25, 2009.

On March 30, 2009, we entered into a consulting agreement with New Vision Consulting Corporation, wherein New Vision has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 1,000,000 restricted common shares of our company. As further compensation for services to be rendered, New Vision shall receive an additional 500,000 restricted common shares of our company. 1,000,000 shares of common stock were issued on May 19, 2009. The New Vision consulting agreement

expireson September 30, 2009. As of July 15, the Company terminated the consulting service with New Vision.

Effective June 5, 2009, we entered into an agreement with Ellick Corporation to provide our VerifyGateway, VeriSmart Card and VerifyNgo suite of services. As part of this agreement, Ellick Corp. will provide our company with Voice Over Internet Protocol (VOIP) and Contact Centre capabilities in Manila.

Effective June 11, 2009, we entered into an agreement with Crown Mutual Corporation to provide our VerifyGateway and VerifyNgo suite of services.

Effective June 19, 2009, we entered into an agreement with BetED Corporation to provide our VerifyGateway and VerifyNgo suite of services.

On July 14, 2009, we entered into a consulting agreement with Wei (David) Cheng wherein David Cheng has agreed to provide certain consulting services to our company. As compensation under the agreement, we have agreed to issue 50,000 restricted common shares of our company. The 50,000 common shares were issued on August 15, 2009. The agreement expires on January 14, 2010.

On July 14, 2009, we entered into an investment purchase agreement with Black Diamond Investment Group Corp. wherein Black Diamond had agreed to purchase 500,000 common shares in consideration of the payment of $0.50 per share for an aggregate purchase price of $250,000. We issued the 500,000 common shares on August 15, 2009. These shares were issued in error. The Black Diamond agreement was with Verify Smart Corp. (BVI), a private company, and the above shares are being returned to treasury for cancellation and the correct share issuance will take place from the private company.

Effective August 14, 2009, we entered into a consulting agreement with Cohen Independent Research Group wherein Cohen Independent Research has agreed to provide certain consulting services to our company. As compensation under the agreement we have agreed to issue 1,000,000 restricted common shares of our company. The 1,000,000 common shares were issued on August 14, 2009. The agreement expires on August 14, 2011.

On September 22, 2009, we entered into a compensation agreement with AMG Group Inc. wherein AMG Group Inc. has agreed to provide certain services to our company. The agreement expires on September 22, 2011.

On September 29, 2009, we signed a Beta Agreement with OneWorld Connections, Inc. to integrate all four of our applications for possible integration into alllevels of it's worldwide businesses.

On October 7, 2009, we signed a Letter of Intent with iMobile Interactive of New Jersey for iMobile to provide CDN (Content Delivery Network) and SMS (Short Message Service (text)) solutions to Verify Smart in more than 160 countries.

On October 8, 2009, we signed a Letter of Intent with iPay Commerce VenturesInc. (IPCV), a subsidiary of the Intellectual Property Ventures Group Corporation, a listed company on the Philippine Stock Exchange to initiate a two-stage integration of our VerifyTransfer platform.

On October 21, 2009, we signed a Memorandum of Understanding with Mr. Theodore"Teddy" Permadi Rachmat of Indonesia. The Memorandum of Understanding outlines the terms of an agreement between Mr. Rachmat and Verify Smart to form a joint venture company to introduce our technology to financial institutions, businesses and economic development groups in Southeast Asia.

In this quarterly report, unllThe following discussion and analysis should be read in conjunction with Verify Smart Corp’s (“Verify Smart”, “we” or “us”) financial statements and the notes related thereto. The discussion of results, causes and trends should not be construed to infer conclusions that such results, causes or trends necessarily will continue in the future.

On November 15, 2009, we signed the consulting agreements with Kim Baker, Eileen Duperron, and Intentional and Purposeful Living, has agreed to provide certain consulting services to our company. As compensation under the agreement we have agreed to issue 140,000 restricted common shares of our company. The 140,000 common shares were issued on January 14, 2010. The agreement expires on May 15, 2010.

The financial statements mentioned above have been prepared in conformity with accounting principles generally accepted in the United States of America and are stated in United States dollars.

DESCRIPTION OF THE JOINT VENTURE BUSINESS

The joint venture business will market and sell its licensed software which provides a comprehensive solution to credit card fraud by addressing the security needs of consumer clients, credit card companies, banks and merchants through instant verification that is inexpensive to implement and simple to use.

The software operates through the use of a cellular phone for secured verification of monetary transactions. The software has been developed to include debit card purchases, internet purchases, ATM, passport and mortgage verification.

We have also entered into preliminary discussions with Verified Capital Corp. wherein we would acquire either the assets or outstanding shares of common stock of Verified Capital Corp. The parties will jointly determine the optimum structure for the acquisition in order to best satisfy tax planning, regulatory and other considerations, including mutually agreed upon performance based milestones.

The acquisition contemplated by the preliminary discussions is subject to the fulfillment of certain conditions precedent, due diligence and the negotiation of a definitive agreement.

On April 3, 2009, the joint venture entered into an agreement with China Trust to launch our first credit card "VeriSmart(TM) Platinum Visa".

Under the terms of the agreement, China Trust will distribute, for pilot, 2,500 co-branded VeriSmart(TM) Platinum Visa Cards linked to our patent-pending Authentication system, VerifyNGo(TM), to serve as enterprise payroll, payout and remittance solutions affording centralized control and management of fund disbursement globally, anytime, anywhere.

On April 6, 2009, we entered into a services agreement with European hosting and infrastructure provider Prime Interactive S.R.O. The services agreement with Prime Interactive accelerates the European leg of our expansion plan and compliments our company's existing capabilities.

Under the terms of the agreement Prime Interactive will be providing the following services to our company:

* Web and Mobile Application Development

* Data Centre infrastructure servicing Europe and located in Slovakia

* Marketing access to a legacy worldwide customer base of 130,000

* Marketing access to established European Financial Industry vertical

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008

The following summary of our results of operations should be read in conjunction with our financial statements for the three and six months period ended December 31, 2009 and 2008.

We have not generated any revenue since inception and are dependent upon obtaining financing to pursue our business activities. For these reasons, our auditors believe that there is substantial doubt that we will be able to continue as a going concern.

Our operating results for the three month period ended December 31, 2009 and 2008 and the changes between those periods for the respective items are summarized as follows:

							Change Between
							Three Month
	Three Month			Three Month			Period Ended
	Period Ended			Period Ended			December 31, 2009
	December 31,			December 31,			& December 31,
	2009			2008			2008
Revenue	$	Nil		$	Nil		$	Nil
General and administrative expenses	$	9,564		$	930		$	8,634
Consulting expense	$	127,916		$	Nil		$	127,916
Professional fees	$	18,166		$	2,000		$	16,166
Exchange loss	$	(1,564	)	$	Nil		$	(1,564	)
Net loss	$	(157,210	)	$	(2,930	)	$	(154,280	)

							Change Between
							Six Month
	Six Month			Six Month			Period Ended
	Period Ended			Period Ended			December 31, 2009
	December 31,			December 31,			& December 31,
	2009			2008			2008
Revenue	$	Nil		$	Nil		$	Nil
General and administrative expenses	$	40,744		$	1,391		$	39,353
Consulting expense	$	604,412		$	Nil		$	604,412
Professional fees	$	35,997		$	6,000		$	29,997
Exchange loss	$	(4,755	)	$	Nil		$	(4,755	)
Net loss	$	(685,908	)	$	(7,391	)	$	(678,517	)

LIQUIDITY AND FINANCIAL CONDITION

WORKING CAPITAL

					Change between
					December 31, 2009
					and
	December 31,		June 30,		June 30,
	2009		2009		2009
	($)		($)		($)
Current Assets		218,983		423,376		(204,393	)
Current Liabilities		183,491		44,665		138,826
Working Capital/(Deficit)		35,492		378,711		(343,219	)

CASH FLOWS

							Change Between
							Period Ended
	Six Month			Six Month			December 31, 2009
	Period Ended			Period Ended			and
	December 31,			December 31,			December 31,
	2009			2008			2008
	($)			($)			($)
Net Cash (used in) Operating Activities		(53,839	)		(5,554	)		(48,285	)
Net Cash provided by Financing Activities	Nil			Nil			Nil
Net Cash used for Investing Activities		53,839		Nil				53,839
Net Increase (Decrease) in Cash During Period	Nil				(5,554	)		5,554

As of December 31, 2009, our total assets were $404,920 and our total liabilities were $183,491. We had a working capital surplus of $221,429. Our financial statements report a net loss of $157,210 for the three months ended December 31, 2009, and a net loss of $1,209,693 for the period from May 31, 2006 (inception) to December 31, 2009.

GOING CONCERN

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on the annual financial statements for the year ended June 30, 2009, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.

We anticipate that additional funding will be required in the form of equity financing from the sale of our common stock. At this time, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or through a loan from our directors to meet our obligations over the next twelve months. We do not have any arrangements in place for any future debt or equity financing.

CONTRACTUAL OBLIGATIONS

As a "smaller reporting company", we are not required to provide tabular disclosure obligations.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

CRITICAL ACCOUNTING POLICIES

BASIS OF ACCOUNTING

The Company's financial statements are prepared using the accrual method of accounting. We have elected a June 30, year-end.

BASIC AND DILUTE NET INCOME (LOSS) PER SHARE

Our company computes net loss per share in accordance with ASC 260 Earnings Per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

CASH EQUIVALENTS

We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

USE OF ESTIMATES AND ASSUMPTIONS

INCOME TAXES

Income taxes are provided in accordance with ASC 740 Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2009, FASB issued ASC 855, Subsequent Events, which establishes general standards of for the evaluation, recognition and disclosure of events and transactions that occur after the balance sheet date. Although there is new terminology, the standard is based on the same principles as those that currently exist in the auditing standards. The standard, which includes a new required disclosure of the date through which an entity has evaluated subsequent events, is effective for interim or annual periods ending after June 15, 2009. The adoption of ASC 855 did not have a material effect on our company's financial statements. Refer to Note 13.

In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on our company's financial statements, but did eliminate all references to pre-codification standards

Our company has implemented all new accounting pronouncements that are in effect and that may impact our financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

ITEM 3. QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS.

As a "smaller reporting company", we are not required to provide the information required by this Item.

ITEM 4(T). CONTROLS AND PROCEDURES.

MANAGEMENT'S REPORT ON DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the SECURITIES EXCHANGE ACT OF 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president, chief executive officer and chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure.

As of December 31, 2009, the end of our quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our president, chief executive officer and chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president, chief

executive officer and chief financial officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There have been no changes in our internal controls over financial reporting that occurred during our quarter ended December 31, 2009 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 1A. RISK FACTORS.

Our business operations are subject to a number of risks and uncertainties, including, but not limited to those set forth below:

WE HAVE A LIMITED OPERATING HISTORY, AND IT IS DIFFICULT TO EVALUATE OUR FINANCIAL PERFORMANCE AND PROSPECTS. THERE IS NO ASSURANCE THAT WE WILL ACHIEVE PROFITABILITY OR THAT WE WILL NOT DISCOVER PROBLEMS WITH OUR BUSINESS MODEL.

We have a limited operating history. As such, it is difficult to evaluate our future prospects and performance, and therefore we cannot ensure that we will operate profitably in the future.

WE HAVE LIMITED FUNDS AVAILABLE FOR OPERATING EXPENSES. IF WE DO NOT OBTAIN FUNDS WHEN NEEDED, WE WILL HAVE TO CEASE OUR OPERATIONS.

Currently, we have limited operating capital. As of December 31, 2009, our cash available was approximately $9,733. In the foreseeable future, we expect to incur significant expenses if we acquire and develop our new business. We may be unable to locate sources of capital or may find that capital is not available on terms that are acceptable to us to fund our additional expenses. There is the possibility that we will run out of funds, and this may affect our operations and thus our profitability. If we cannot obtain funds when needed, we may have to cease our operations.

WE DEPEND ON ATTRACTING AND RETAINING QUALIFIED EMPLOYEES, THE FAILURE OF WHICH COULD RESULT IN A MATERIAL DECLINE IN OUR REVENUES.

We intend to become a provider of identity protection/secured transaction services. Our revenues and future growth will depend on our ability to attract and retain qualified employees. This is especially crucial to our proposed business, as these employees will generate revenue by providing the services that are the staple product that we offer. We may face difficulties in recruiting and retaining sufficient numbers of qualified employees because the market may not

have enough of such personnel. In addition, we compete with other companies for qualified employees. If we are unable to retain such employees, we could face a material decline in our revenue.

U.S. INVESTORS MAY EXPERIENCE DIFFICULTIES IN ATTEMPTING TO ENFORCE JUDGMENTS BASED UPON U.S. FEDERAL SECURITIES LAWS AGAINST US AND OUR NON-U.S. RESIDENT DIRECTORS.

All of our operations and our assets are located outside the United States and some of our directors and officer are foreign citizens. As a result, it may be difficult or impossible for U.S. investors to enforce judgments of U.S. courts for civil liabilities against any of our individual directors or officers.

RISKS RELATING TO OUR COMMON SHARES

TRADING ON THE OTC BULLETIN BOARD MAY BE VOLATILE AND SPORADIC, WHICH COULD DEPRESS THE MARKET PRICE OF OUR COMMON SHARES AND MAKE IT DIFFICULT FOR OUR SHAREHOLDERS TO RESELL THEIR SHARES.

Our common shares are quoted on the OTC Bulletin Board service. Trading in shares quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common shares for reasons unrelated to operating performance. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like Amex. Accordingly, shareholders may have difficulty reselling any of the shares.

OUR SHARE IS A PENNY STOCK. TRADING OF OUR SHARE MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS WHICH MAY LIMIT A SHAREHOLDER'S ABILITY TO BUY AND SELL OUR SHARES.

Our share is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a

penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the shares that are subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common shares.

FINRA SALES PRACTICE REQUIREMENTS MAY ALSO LIMIT A SHAREHOLDER'S ABILITY TO BUY AND SELL OUR SHARE.

In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority, or FINRA, has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common shares, which may limit your ability to buy and sell our share.

TRENDS, RISKS AND UNCERTAINTIES

We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our common shares.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Effective August 14, 2009, we issued 1,000,000 restricted shares of our common stock to one U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities Act of 1933.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibits required by Item 601 of Regulation S-K

Exhibit

Number Description

(3) ARTICLES OF INCORPORATION AND BY-LAWS

3.1	Articles of Incorporation (incorporated by reference from our Registration Statement on Form SB-2 filed on August 10, 2006)

3.2	Bylaws (incorporated by reference from our Registration Statement on Form S-1 filed on July 21, 2008)

3.3	Certificate of Change (incorporated by reference from our Current Report on Form 8-K filed on March 26, 2009)

3.4	Certificate of Amendment (incorporated by reference from our Current Report on Form 8-K filed on March 26, 2009)

(10) MATERIAL CONTRACTS

10.1	Joint Venture Agreement among Verified Capital Corp., Verified Transactions Corp. and our company dated effective March 25, 2009

(incorporated by reference from our Current Report on Form 8-K file on March 26, 2009)

10.2	Consulting Agreement with Wei(David) Cheng (incorporated by reference from our Current Report on Form 8-K filed on August 20, 2009)

10.3	Consulting Agreement with Cohen Independent Research Group

(incorporated by reference from our Current Report on Form 8-K filed on September 22, 2009)

10.4	Compensation Agreement with AMG Group Inc. (incorporated by reference from our Current Report on Form 8-K filed on October 1, 2009)

10.5	Consulting Agreement with Kim Baker, Eileen Duperron, and Intentional and Purposeful Living (incorporated by reference from our Current Report on Form 8-K filed on November 23, 2009)

(31) RULE 13A-14(D)/15D-14(D) CERTIFICATIONS

31.1*

Section 302 Certification of Principal Executive Officer and Principal Financial Officer.

(32) SECTION 1350 CERTIFICATIONS

32.1*

Section 906 Certification of Principal Executive Officer and Principal Financial Officer.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VERIFY SMART CORP.
	(Registrant)


Date: February 9, 2010	TONY CINOTTI
	Tony Cinotti
	Director

Attached files

VERIFY SMART CORP. Reports

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