What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-12 compared with 2025-08-12 · 46 added, 33 removed, 115 unchanged (41% of the section changed)

6 unchanged sentences

References made in this Quarterly Report on Form 10-Q to “we,” “our,” “us,” “Intellicheck,” or the “Company,” refer to Intellicheck, Inc.

The following discussion and analysis of our financial condition and results of operations constitutes management’s review of the factors that affected our financial and operating performance for the three months and six months ended June 30, 2025.

This discussion should be read in conjunction with the financial statements and notes thereto contained elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024.

17 unchanged sentences

The Company is in the process of evaluating the effect that the adoption of these standards will have on its financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets." This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers .

The standard is effective for all the entities for fiscal years beginning after after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted, and the standard is to be applied prospectively.

The Company is currently evaluating the impact of the adoption of this standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software by replacing the previous stage-based model and aligning the capitalization process with current development practices, especially agile and iterative methods.

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach.

The Company is in process of evaluating the impact of the adoption of this ASU on its financial statements.

Revenue Recognition and Deferred Revenue

15 unchanged sentences

Our long-lived assets include property and equipment, goodwill, and intangible assets.

As of June 30, 2025, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $463, $8,102 and $2,357, respectively.

As of September 30, 2025, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $436, $8,102 and $2,218, respectively.

As of December 31, 2024, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $536, $8,102 and 2,374, respectively.

5 unchanged sentences

In accordance with authoritative guidance, we begin to capitalize our costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended.

We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing.

We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant

These costs are amortized on a straight-line basis over the estimated useful life of the related asset.

7 unchanged sentences

(All dollar amounts are rounded to thousands, except share and per share data)

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2025

TO THE THREE MONTHS ENDED JUNE 30, 2024

Revenues for the three months ended June 30, 2025 increased $451, or 10%, to approximately $5,123 compared to $4,672 for the same period of 2024.

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2025

TO THE THREE MONTHS ENDED SEPTEMBER 30, 2024

Revenues for the three months ended September 30, 2025 increased $1,305, or 28%, to approximately $6,014 compared to $4,709 for the same period of 2024.

The increase in revenues is primarily the result of higher SaaS revenue for the current period.

SaaS revenue, which consists of software licensed on a subscription basis, increased $453 or 10% to $5,080 for the three months ended June 30, 2025 compared to $4,627 for the same period of 2024.

Gross profit increased $372, or 9%, to $4,600 for three months ended June 30, 2025 from $4,228 for the same period of 2024.

Our gross profit, as a percentage of revenues, was 90% and 91% for the three months ended June 30, 2025 and 2024, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, increased $455, or 10%, to $4,898 for the three months ended June 30, 2025 compared to $4,443 for the same period of 2024.

SaaS revenue, which consists of software licensed on a subscription basis, increased $1,207 or 26% to $5,868 for the three months ended September 30, 2025 compared to $4,661 for the same period of 2024.

Gross profit increased $1,158, or 27%, to $5,443 for three months ended September 30, 2025 from $4,285 for the same period of 2024.

Our gross profit, as a percentage of revenues, was 91% for the three months ended September 30, 2025 and 2024.

Operating expenses, which consist of selling, general and administrative and research and development expenses, increased $10, or 0.2%, to $5,205 for the three months ended September 30, 2025 compared to $5,195 for the same period of 2024.

The increase in operating expenses is primarily the result of less capitalization of research and development costs related to software development.

As a result of the factors noted above, the Company had a net loss of $(251) for the three months ended June 30, 2025 as compared to a net loss of $(127) for the three months ended June 30, 2024.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2025

TO THE SIX MONTHS ENDED JUNE 30, 2024

Revenues for the six months ended June 30, 2025 increased $665, or 7%, to approximately $10,017 compared to $9,352 for the same period of 2024.

The increase in revenues is primarily the result of higher transaction volumes for SaaS for the current period.

SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $712 or 8% to $9,948 for the six months ended June 30, 2025 compared to $9,236 for the same period of 2024.

Gross profit increased $519, or 6%, to $8,992 for six months ended June 30, 2025 from $8,473 for the same period of 2024.

Our gross profit, as a percentage of revenues, was 90% and 91% for the six months ended June 30, 2025 and 2024, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, increased $427, or 5%, to $9,638 for the six months ended June 30, 2025 compared to $9,197 for the same period of 2024.

As a result of the factors noted above, the Company had a net income of $290 for the three months ended September 30, 2025 as compared to a net loss of $(837) for the three months ended September 30, 2024.

COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2025

TO THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Revenues for the nine months ended September 30, 2025 increased $1,971, or 14%, to approximately $16,031 compared to $14,060 for the same period of 2024.

The increase in revenues is primarily the result of higher SaaS revenue for the current period.

SaaS revenue, which consists of software licensed as a service on a subscription basis, increased $1,920 or 14% to $15,816 for the nine months ended September 30, 2025 compared to $13,896 for the same period of 2024.

Gross profit increased $1,678, or 13%, to $14,435 for the nine months ended September 30, 2025 from $12,757 for the same period of 2024.

Our gross profit, as a percentage of revenues, was 90% and 91% for the nine months ended September 30, 2025 and 2024, respectively.

Operating expenses, which consist of selling, general and administrative and research and development expenses, increased $452, or 3%, to $14,843 for the nine months ended September 30, 2025 compared to $14,391 for the same period of 2024.

The increase in operating expenses is primarily the result of less capitalization of research and development costs related to software development.

As a result of the factors noted above, the Company had a net loss of $(569) for the six months ended June 30, 2025 as compared to a net loss of $(569) for the six months ended June 30, 2024.

As a result of the factors noted above, the Company had an improved net loss of $(279) for the nine months ended September 30, 2025 as compared to a net loss of $(1,406) for the nine months ended September 30, 2024.

As the Company strategically transitions customers from existing usage-based contracts to access based contracts we expect that our balance sheet accounts related to accounts receivable and deferred revenue will fluctuate with the related contract conversions.

This transition may also influence revenue trends, such as seasonality.

Liquidity and Capital Resources

As of June 30, 2025, we had cash and cash equivalents of $8,573, working capital (defined as current assets minus current liabilities) of $7,082, total assets of $23,065 and stockholders’ equity of $18,005.

During the six months ended June 30, 2025, we generated cash of $3,884 in operating activities as compared to net cash of $(312) used in operating activities in the six months ended June 30, 2024.

Cash used in investing activities was $(232) for the six months ended June 30, 2025 compared to cash provided by investing activities of $3,592 for the six months ended June 30, 2024.

Cash provided by financing activities was $255 for the six months ended June 30, 2025 compared to net cash of $0 used in financing activities for the six months ended June 30, 2024.

We currently anticipate that our available cash, expected cash from operations and availability under the revolving line of credit, will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months from the date of filing.

As of September 30, 2025, we had cash and cash equivalents of $7,223, working capital (defined as current assets minus current liabilities) of $8,150, total assets of $25,257 and stockholders’ equity of $18,907.

During the nine months ended September 30, 2025, we generated cash of $2,147 in operating activities as compared to net cash of $(1,373) used in operating activities in the nine months ended September 30, 2024.

Cash used in investing activities was $(254) for the nine months ended September 30, 2025 compared to cash provided by investing activities of $3,120 for the nine months ended September 30, 2024.

Cash provided by financing activities was $664 for the nine months ended September 30, 2025 compared to net cash of $20 provided by financing activities for the nine months ended September 30, 2024.

Reference Note 6, “Debt,” in the Notes to Unaudited Condensed Financial Statements for details on the Company’s revolving line of credit.

18 unchanged sentences

The reconciliation of GAAP gross profit to Non-GAAP Adjusted Gross Profit is as follows:

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

12 unchanged sentences

We use Adjusted EBITDA as a non-GAAP financial performance measurement.

Adjusted EBITDA is calculated by adjusting net loss for certain reductions such as interest and other income (expense), provisions for income taxes, depreciation, amortization and stock-based compensation expense.

Adjusted EBITDA is calculated by adjusting net loss for certain reductions such as restructuring severance expenses, interest and other income, provisions for income taxes, depreciation, amortization and stock-based compensation expense.

Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP.

Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing our financial results with other companies that also use Adjusted EBITDA in their communications to investors.

By excluding non-cash charges such as impairments of long-lived assets and goodwill, amortization, depreciation and stock-based compensation, as well as non-operating charges for interest and provisions for income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies.

By excluding non-cash charges such as amortization, depreciation and stock-based compensation, as well as non-operating charges for interest and provisions for income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies.

In addition, Adjusted EBITDA is one of the primary measures management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends.

However, there are significant limitations to the use of Adjusted EBITDA since it excludes non-restructuring severance expenses, provisions for income taxes, interest and other (expense) income, impairments of long-lived assets and goodwill, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods.

However, there are significant limitations to the use of Adjusted EBITDA since it excludes restructuring severance expenses, interest and other income, provisions for income taxes, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods.

We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net loss and clearly identifying the difference between the two measures.

1 unchanged sentence

Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other companies.

The reconciliation of GAAP net loss to Non-GAAP Adjusted EBITDA is as follows:

Three Months Ended June 30 Six Months Ended June 30

The reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA is as follows:

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

Net loss $ (251) $ (127) $ (569) $ (569)

Net income (loss) $ 290 $ (837) $ (279) $ (1,406)

Reconciling items:

Restructuring severance expenses — 376 — 376

Provision for income taxes — — — 2

Other income and expense, net (47) (88) (77) (157)

Other income, net

(52) (73) (129) (230)

Depreciation and amortization 189 130 513 275

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis