What changed in this filing

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Item 1A. Risk Factors

2026-03-19 compared with 2025-03-31 · 78 added, 64 removed, 126 unchanged (53% of the section changed)

Risks Related to Our Business and Industry (All dollar amounts are rounded to thousands, except per share data)

We have incurred losses since inception and losses may continue, which could result in a decline in the value of our securities and a loss of your investment.

We incurred net losses of $(918) and $(1,980) for the fiscal years ended December 31, 2024 and 2023, respectively.

Our accumulated deficit was $(134,483) as of December 31, 2024.

Since we expect to incur additional expenditures in line with the sales growth of our business, we may not achieve operating profits in the near future, and we could experience further losses.

This could lead to a decline in the value of our securities.

Although we achieved profitability for the fiscal year ended December 31, 2025, we have a history of operating losses, and we cannot provide assurance that we will maintain profitability.

We reported net income of $1,273 for the fiscal year ended December 31, 2025, compared to a net loss of $(918) for the fiscal year ended December 31, 2024.

Despite this recent profitability, we have an accumulated deficit of $(133,210) as of December 31, 2025.

We expect to continue incurring significant operating expenses as we invest in product development, specifically regarding our AI and fraud detection capabilities, and expand our sales operations.

These investments may increase our costs faster than our revenue grows.

Accordingly, we may not be able to maintain profitability in subsequent periods, which could result in a decline in the value of our securities .

Our proprietary software relies on reference data provided by government and quasi-government agencies.

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Disruptions at federal governmental agencies that we interact with, due to a reduction in workforce and/or inadequate funding, could prevent such agencies from performing normal functions on which our business relies, which could negatively impact our business.

The current President Trump administration (the “Trump Administration”) recently established the Department of Government Efficiency, which implemented a federal government hiring freeze and announced certain additional efforts to reduce federal government employee headcount and the size of the federal government.

It is unclear how these executive actions or other potential actions by the Trump Administration or other parts of the federal government will impact the regulatory authorities that oversee our business and the governmental and quasi-governmental agencies that we interact with.

These budgetary pressures may reduce the ability of certain governmental agencies to perform their responsibilities, which could have a material adverse effect on our business.

Changes in federal spending priorities, prolonged government shutdowns, constraints on agency budgets and staffing levels, or shifts in policy priorities could reduce the ability of certain governmental agencies to perform their responsibilities, including issuing and updating identification standards and sharing reference data with us, which could have a material adverse effect on our business.

Our business strategy exposes us to long sales and implementation cycles for our products.

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The longer sales and implementation cycles for larger retail companies continue to have an adverse impact on the timing of realizing our revenues.

In addition, budgetary constraints and potential economic slowdowns or inflationary pressures may also continue to delay purchasing decisions by these prospective customers.

These initiatives have costs associated with them, and we cannot assure you that they ultimately will prove successful, or result in, an increase to our revenues or profitability.

In addition, budgetary constraints and potential economic slowdowns or inflationary pressures also may continue to delay purchasing decisions by these prospective customers.

The industry for our systems and software is evolving and its growth is uncertain.

Demand and industry acceptance for recently introduced and existing systems, and software and sales from such systems, are subject to a high level of uncertainty and risk.

With changing administration in government, changes in government budgets, and slowly evolving government standards on use of identity products, the government sector is slowly developing.

The commercial sector can develop faster than the government sector, but it is also subject to a higher level of uncertainty because of potential uncertainty in the continued financial health of our commercial customers, as well as long sales cycles.

Our business may suffer if the industry develops more slowly than anticipated and does not sustain industry acceptance.

Changes in government budgets, and slowly evolving government standards on use of identity products have impacted the development of our business serving the government sector.

The commercial sector can develop faster than the government sector, but it subject to a higher level of uncertainty because of potential uncertainty in the continued financial health of our commercial customers, as well as long sales cycles.

Our business may suffer if the industry demand develops more slowly than anticipated and does not sustain industry acceptance.

Failure to manage our operations if they expand could impair our future growth.

If we can expand our operations, particularly through multiple sales to large retailers and government agencies in the document verification industry, the expansion will place significant strain on our management, financial controls, operating systems, personnel and other resources.

If we expand our operations, particularly through multiple sales to large retailers and government agencies in the document verification industry, the expansion will place significant strain on our management, financial controls, operating systems, personnel and other resources.

Our ability to manage future growth, should it occur, will depend upon several factors, including our ability to do the following:

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We continue to allocate significant resources to developing new and innovative technologies that are utilized in our products and systems.

Because our continued success depends on, to a significant degree, our ability to offer products providing superior functionality and performance over those offered by our competitors, we consider the protection of our technology from unauthorized use to be fundamental to our success.

This is done by processes aimed at identifying and seeking appropriate protection for newly developed intellectual property, including patents, trade secrets, copyrights, and trademarks, as well as policies aimed at identifying unauthorized use of such property.

Because our continued success depends on, to a significant degree, our ability to offer products providing superior functionality and performance to those offered by our competitors, we consider the protection of our technology from unauthorized use to be fundamental to our success.

This is done by processes aimed at identifying and

seeking appropriate protection for newly developed intellectual property, including patents, trade secrets, copyrights, and trademarks, as well as policies aimed at identifying unauthorized use of such property.

These processes include:

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If our future products incorporate technologies that infringe the proprietary rights of third parties, and we do not secure licenses from them, we could be liable for substantial damages.

We are not aware that our current products infringe the intellectual property rights of any third parties.

We are not aware of our current products infringing the intellectual property rights of any third parties.

We also are not aware of any third-party intellectual property rights that may hamper our ability to provide future products and services.

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Further, these outcomes could damage investor confidence in the accuracy and reliability of our financial statements.

Long lead times for the components used in certain products creates uncertainty in our supply chain and may prevent us from making required deliveries to our customers on time.

We rely exclusively on COTS technology in manufacturing our products.

The lead-time for ordering certain components used in our products and the production of products can be lengthy.

As a result, we must, from time to time, order products based on forecasted demand.

If demand for products lags significantly behind forecasts, we may purchase more product than we can sell.

Conversely, if demand exceeds forecasts, we may not have enough products to meet our obligations to our customers.

We obtain certain hardware and services, as well as some software applications, from a limited group of suppliers, and our reliance on these suppliers involves significant risks, including reduced control over quality and delivery schedules.

Any financial instability of our suppliers could result in having to find new suppliers.

We may experience significant delays in manufacturing and deliveries of products and services to customers if we lose our sources or if supplies and services delivered from these sources are delayed.

As a result, we may be required to incur additional development, manufacturing, and other costs to establish alternative supply sources.

It may take several months to locate alternative suppliers, if required.

We cannot predict whether we will be able to obtain replacement hardware within the required time frames at affordable costs, or at all.

Any delays resulting from suppliers failing to deliver hardware or delays in obtaining alternative hardware, in sufficient quantities and of sufficient quality, or any significant increase in the cost of hardware from existing or alternative suppliers could result in delays on the shipment of product which, in turn, could result in the loss of customers we may not be able to successfully complete.

Security breaches and other disruptions could potentially compromise our information and expose us to liability, which would be harmful to our business.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, and personally identifiable information of our customers, their customers and our employees, in our data centers and on our networks.

The secure processing, maintenance, and transmission, when applicable, of this information is critical to our operations and business strategy.

Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance, or other disruptions.

Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost, or stolen.

Any such access, disclosure or other loss of information could result in legal claims or proceedings, potential liability under laws that protect the privacy of personal information, and regulatory penalties.

This in turn could disrupt our operations and the services we provide to customers, damage our reputation, and potentially cause a loss of confidence in our products and service offerings, which could adversely affect our business and competitive position.

We rely on third-party mobile operating systems and hardware ecosystems that are outside our control.

A significant portion of our revenue depends on our software running effectively on third-party mobile devices (iOS and Android) and Point-of-Sale ("POS") hardware.

We do not control these platforms.

If Apple, Google, or POS manufacturers alter their operating systems—for example, by restricting access to camera feeds or NFC (Near Field Communication) chips—our products could become non-functional.

Furthermore, these platform providers may introduce competing native identity verification features (e.g., mobile IDs embedded directly in digital wallets) that could disintermediate third-party applications like ours.

We rely on third-party service providers and cloud infrastructure to host our platform and process data;

a cybersecurity breach, supply chain attack, or service disruption at these third parties could expose us to significant liability and disrupt our business.

Our SaaS delivery model and internal operations depend heavily on third-party service providers, including cloud infrastructure services, data center operators, and software vendors.

We also utilize third-party technology for some critical functions such as facial biometric matching and global document validation.

While we implement security measures for our own systems, we do not have direct control over the cybersecurity protocols of these third-party providers.

Sophisticated cyber attackers increasingly target these "supply chain" vendors to gain access to downstream customers like us.

If a third-party provider is compromised, attackers could infiltrate our systems, access sensitive personal information (PII) of our customers or their end-users or inject malicious code into our software updates.

Furthermore, any service outage, ransomware attack, or denial-of-service attack targeting our cloud providers could render our platform unavailable to customers, leading to immediate revenue loss and reputational damage.

Under current laws and regulations, we may be held liable for the unauthorized disclosure of sensitive data even if the breach

originates with a third-party vendor.

Such an event could result in substantial fines, legal claims, termination of customer contracts, and a loss of confidence in our ability to protect sensitive identity data.

Under our current governance structure, our Board of Directors oversees cybersecurity risk management as a principal business risk.

However, there is no guarantee that our oversight processes or the cybersecurity protocols of our third-party vendors will be sufficient to prevent a material breach.

Any such incident would require us to disclose the event under Item 1.05 of Form 8-K, which could lead to immediate negative market reaction and long-term reputational harm.

We are subject to risks associated with product failure and technological flaws.

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If we are unable to successfully respond to these developments, or do not respond in a cost-effective manner, our business, financial condition, and results of operations will be materially adversely affected.

Our percentage of revenues and customer concentration is significant.

We have a concentration of revenues with our ten largest customers which accounted for 71% of total revenues in 2024 and 2023.

Three customers accounted for 50% of revenues in 2024 and three customers accounted for 47% of revenues in 2023.

The loss of one or more significant customers could have a significant adverse impact on our business, financial condition, and results of operations.

A significant portion of our revenues is concentrated among a limited number of customers, and the loss or reduced usage of our products by one or more of these customers could materially adversely affect our results of operations.

For the fiscal years ended December 31, 2025 and 2024, our top ten customers accounted for approximately 77% and 71% of our total revenues, respectively.

The loss of any one of these significant customers, or a reduction in their spending levels, could have a material adverse effect on our business, financial condition, and results of operations.

Furthermore, these customers often have significant leverage in contract negotiations, which may result in pricing pressure or reduced margins.

Our ability to replace these customers or comparable revenue streams is uncertain and could take significant time and investment.

We are subject to risks related to data privacy and the storage of biometric information.

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Biometric data, such as facial recognition patterns, are uniquely vulnerable as they cannot be changed if compromised.

The company must implement robust security measures to protect this data from breaches, as any leak could lead to severe reputational damage, legal consequences, and loss of customer

The company must implement robust security measures to protect this data from breaches, as any leak could lead to severe reputational damage, legal consequences, and loss of customer trust.

Additionally, evolving privacy laws and regulations specifically targeting biometric data could impose new compliance burdens on the company.

Additionally, regulators are increasingly scrutinizing AI models for "algorithmic bias." If our fraud detection algorithms are found to perform differentially across demographic groups, we could face

regulatory fines, reputational harm, and requirements to alter our technology under laws like federal non-discrimination statutes.

We are subject to regulation and other legal obligations relating to data privacy and protection.

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Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

As an example, the California Privacy Rights Ace (the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things:

As an example, the California Privacy Rights Act (the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things:

provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information;

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Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy data and security concerns, even if unfounded, could result in additional costs, claims by and liability to third parties, government investigations and enforcement actions, damage to our reputation, and other adverse effects on our business, financial condition and results of operations.

The expansion of the use of artificial intelligence ("AI") within our business will pose ethical and bias mitigation challenges.

As Intellicheck incorporates AI in its identity verification processes, the company faces risks related to AI ethics and potential biases in its algorithms.

There's a growing concern about AI systems perpetuating or amplifying existing biases, particularly in identity verification contexts.

Intellicheck must ensure its AI models are fair, transparent, and free from discriminatory outcomes across diverse demographic groups.

Failure to address these ethical concerns could result in regulatory scrutiny, legal challenges, and damage to the company's reputation, potentially leading to loss of business and market share.

Additionally, the models used in those processes may produce output or take action that is incorrect, expose private or confidential information, infringe on the intellectual property rights of others, or be otherwise harmful.

Any of these risks could expose Intellicheck to liability or adverse legal or regulatory consequences.

Public health crises, such as COVID-19 or other similar pandemics in the future, can adversely impact our business.

Public health crises, such as the COVID-19 pandemic, could lead to government shutdowns, stay-at-home orders, travel restrictions, business closures, cancellations of public gatherings, and other measures, which may have material adverse effects on our business.

The level and nature of the disruption caused by a public health crisis is unpredictable, may be cyclical and long-lasting and vary from location to location.

While many of the original restrictions levied by governments in response to COVID-19 have been removed, additional variants, or similar pandemics in the future, could cause governments to reinstitute some or all of the previously implemented restrictive measures.

Such restrictions could lead to the cancellation of industry events which could limit our ability to meet with existing and potential new customers.

Rapid advancements in generative artificial intelligence ("AI") and "deepfake" technology could render our identity verification solutions less effective.

The identity verification industry is characterized by a "technological arms race." Bad actors increasingly are utilizing generative AI to create highly realistic synthetic identities and "deepfakes" capable of spoofing facial recognition systems.

If our technology fails to detect these sophisticated AI-driven falsifications, or if we are unable to develop countermeasures faster than fraudsters develop evasion techniques (such as camera injection attacks), our customers may lose confidence in our platform.

Furthermore, the shift toward 'digital-only' onboarding has increased our exposure to Synthetic Identity Fraud, where bad actors combine real and fabricated data to create entirely new, credible personas that do not have a history of prior fraud, making them significantly harder for traditional algorithms to detect.

This could result in increased liability, customer churn, and material adverse effects on our business.

Our significant deferred tax assets are subject to a full valuation allowance, and changes in our assessment could materially affect our reported results.

As of December 31, 2025, we had gross deferred tax assets of approximately $7,145, which were fully offset by a valuation allowance.

These deferred tax assets consist primarily of federal and state net operating loss carryforwards of approximately $30,520 at the federal level and $3,670 at the state level.

We evaluate the realizability of our deferred tax assets on a quarterly basis in accordance with ASC 740, weighing both positive and negative evidence.

Significant factors in this assessment include our cumulative results over the most recent three-year period, projected future taxable income, the nature and timing of reversals of existing temporary differences, and available tax planning strategies.

As of December 31, 2025, we were in a three-year cumulative loss position, which represents significant negative evidence under ASC 740, and accordingly we concluded that a full valuation allowance was required.

Changes in our future earnings would result in a release of the valuation allowance and recognized in the period which the assessments change, as deemed appropriate under ASC 740.

In future periods, if we determine that sufficient positive evidence exists to conclude that it is more likely than not that some or all of our deferred tax assets will be realized, we would reduce or eliminate the valuation allowance, resulting in a non-cash income tax benefit that could be material to our results of operations in the period of release.

Any such benefit would not represent a change in cash flows or operating performance.

Conversely, if we incur additional losses or

determine that the expected future taxable income is insufficient to support the realization of our deferred tax assets, we could be required to increase the valuation allowance, which would result in additional income tax expense.

Our federal net operating loss carryforwards include approximately $10,892 generated prior to 2018 that will expire if unused between 2035 and 2037, and approximately $19,628 generated after 2017 that may be carried forward indefinitely but are limited to offsetting 80% of taxable income in any given year.

Our ability to utilize these carryforwards could be limited or eliminated by future changes in tax law or by an ownership change as defined under Section 382 of the Internal Revenue Code.

We have not completed a formal analysis to determine whether any ownership changes have occurred that could limit our ability to utilize our net operating loss and tax credit carryforwards.

If such a change has occurred, or occurs in the future, the annual amount of our carryforwards available to offset taxable income could be materially limited, which could result in a significant increase in our future income tax liability.

Risks Related to Our Common Stock and the Market for Our Common Stock

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The market price of our common stock, like the price of shares of technology companies generally, has been and may continue to be volatile.

From January 1, 2002 to March 31, 2025, the intra-day trading price of our common stock has

varied from a high of $145.52 to a low of $0.75 per share, as reported on The Nasdaq Stock Market.

From January 1, 2024 to March 19, 2026, the intra-day trading price of our common stock has varied from a high of $7.48 to a low of $1.65 per share, as reported on The Nasdaq Stock Market.

Many factors may cause the market price for our common stock to decline, including:

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In addition, the stock market experiences extreme fluctuations in price and volume that particularly affect the market price of shares of technology companies, such as ours.

These price and volume fluctuations are often unrelated or disproportionate to the operating performance of the affected companies.

These price and volume fluctuations often are unrelated or disproportionate to the operating performance of the affected companies.

Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts and our stock price could decline as a result.

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These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.

Declines in our stock price for any reason, fluctuations related to our financial results or due to macroeconomic conditions, including inflation and rising interest rates, capital market volatility and global conflicts, including the Russia-Ukraine war, the Israel-Hamas war and the conflict between China and Taiwan, may adversely affect your ability to sell your shares at a price equal to or above the price at which you purchased them.

Decreases in the price of our common stock may also lead to de-listing of our common stock.

Future capital requirements may require incurring debt or dilution of existing stockholders.

Acquisition and development opportunities and other contingencies may arise, which could require us to raise additional capital or incur debt.

If we raise additional capital through the sale of equity, including preferred stock, or convertible debt securities, the percentage ownership of our then existing stockholders will be diluted.

Declines in our stock price for any reason, fluctuations related to our financial results or due to macroeconomic conditions, including inflation and rising interest rates, capital market volatility and global conflicts, including the Russia-Ukraine war, the recent military action against Iran, the Israel-Hamas war and the conflict between China and Taiwan, may adversely affect your ability to sell your shares at a price equal to or above the price at which you purchased them.

Decreases in the price of our common stock also may lead to de-listing of our common stock.

We may need to raise additional capital in the future, which may not be available to us on terms that are favorable to us, or at all, and could cause dilution to our existing stockholders

We had cash and cash equivalents of $9,650 and working capital of $10,123 as of December 31, 2025.

Our ability to fund our operations and execute our business strategy depends on our generating sufficient cash flows from operations and, when necessary, accessing capital markets or other financing sources.

Additionally, acquisition and development opportunities and other contingencies may arise, which could also require us to raise additional capital through accessing capital markets or other financing sources.

We may not be able to raise capital when the need arises on terms favorable to

us, or at all.

Further, adverse developments in the financial services industry, including bank failures, liquidity constraints, or significant volatility in equity markets, could limit our access to capital, increase our cost of capital, or reduce the amount of cash we can access on deposit with financial institutions, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Even if we are successful in raising additional capital, if we do so through the sale of equity, including preferred stock, or convertible debt securities, the percentage ownership of our then existing stockholders will be diluted.

In August 2025, we filed an S-3, also know as a Shelf Registration, that would allow us to sell shares in the market if the need arises.

Because we do not intend to pay dividends on our Common Stock, stockholders will benefit from an investment in our stock only if it appreciates in value.

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The Company's cash and cash equivalents could be adversely affected by bank failures or other events affecting financial institutions and could adversely affect our liquidity and financial performance.

We regularly maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks, in amounts which exceed the FDIC insurance limits.

We regularly maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks, in amounts that exceed the FDIC insurance limits.

The failure or rumored failure of a bank, or events involving limited liquidity, defaults, non-performance, bankruptcy, receivership or other adverse developments in the financial or credit markets impacting financial institutions, may lead to disruptions in access to our bank deposits.

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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-K

Item 1A. Risk Factors