Intellicheck, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company's reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025. Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S. GAAP. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that: 27 Table of Contents a. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; b. Provide reasonable assurance that transactions are recorded properly to allow for the preparation of financial statements in accordance with U.S. GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and c. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the guidelines established in the "Internal Control—Integrated Framework" (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2025. This annual report does not include an attestation report of our registered public accounting firm on internal control over financial reporting. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2025 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Insider Adoption or Termination of Trading Arrangements: During the three months ended December 31, 2025, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408, except as follows: On December 17, 2025 , Bryan Lewis , our Chief Executive Officer , adopted a Rule 10b5-1 arrangement for the sale of 80,000 shares of our Common Stock, subject to certain conditions. The arrangement’s expiration date is July 31, 2026 . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 28 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated herein by reference from our 2026 definitive Proxy Statement (which will be filed with the SEC within 120 days after December 31, 2025 in connection with the solicitation of proxies for the Company’s 2025 annual meeting of stockholders) (“2026 Proxy Statement”) under the captions “Proposal 1 – Election of Directors,” “Other Information – Executive Officers,” and “Beneficial Ownership Reporting Compliance under Section 16(a) of the Exchange Act.” Item 11. Executive Compensation The information required by this Item is incorporated herein by reference from our 2026 Proxy Statement under the captions “Executive Compensation” and “Director Compensation.” Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference from our 2026 Proxy Statement under the captions “Other Information—Security Ownership of Certain Beneficial Owners and Management” and “Other Information – Equity Compensation Plan Information.” Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference from our 2026 Proxy Statement under the captions “Other Information – Related Party Transactions Overview,” “Other Information – Certain Transactions with Related Persons” and “Director Attributes and Independence.” Item 14. Principal Accounting Fees and Services The information required by this Item is incorporated herein by reference from our 2026 Proxy Statement under the caption “Proposal 2 – Ratification of the Selection of Independent Auditors.” Our independent registered public accounting firm is Forvis Mazars, LLP, Auditor Firm ID: 686 . PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements Balance Sheets as of December 31, 2025 and 2024 Statement of Operations for the years ended December 31, 2025 and 2024 Statement of Stockholders' Equity for the years ended December 31, 2025 and 2024 Statement of Cash Flows for the years ended December 31, 2025 and 2024 29 Table of Contents (b) Exhibits Exhibit No. Description 3.1 Certificate of Incorporation of the Company (as amended through the date hereof, compiled for SEC filing purposes) **) 3.2 Amended and Restated By-laws of the Company (1) 4.1 Specimen Stock Certificate (2) 4.2 Description of our Common Stock (3) 10.1 2025 Omnibus Incentive Plan (4) * 10.2 Jonathan Robins Employment Agreement (5) * 10.3 Bryan Lewis Employment Agreement (6) * 10.4 Adam Sragovicz Employment Agreement (7) * 10.5 Separation Agreement dated as of July 12, 2024 by and between the Registrant and Jeffrey Ishmael (7) * 14.1 Code of Business Conduct and Ethics (8) 19 Insider Trading Policy (9) 23.1 Consent of Forvis Mazars LLP ** 31.1 Certification of CEO pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 ** 31.2 Certification of CFO pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 ** 32 Certification of CEO and CFO pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 ** 97 Intellicheck Incentive-Based Compensation Recovery Policy (11) * 101.INS Inline XBRL Instance Document ** 101.SCH Inline XBRL Taxonomy Extension Schema ** 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase ** 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase ** 101.LAB Inline XBRL Taxonomy Extension Label Linkbase ** 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase ** 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Denotes a management contract or compensatory plan, contract or arrangement. ** Filed herewith. (1) Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 14, 2007. (2) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 11, 2010. (3) Incorporated by reference to Registrant's Statement on Form SB-2 (File No. 333-87797) filed September 24, 1999. (4) Incorporated by reference to Annex A to Registrant's Proxy Statement on Schedule 14A filed April 11, 2025. (5) Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed May 14, 2024. (6) Incorporated by reference to Registrant's Annual Report on Form 10-K filed March 21, 2019. (7) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q filed November 14, 2024. (8) Incorporated by reference to Registrant’s Current Report on Form 8-K filed October 28, 2009. (9) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 31, 2025. (10) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed April 1, 2024. 30 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant had duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 19, 2026 INTELLICHECK, INC. By: /s/ Bryan Lewis Bryan Lewis President, Chief Executive Officer and Director (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. INTELLICHECK, INC. Date: March 19, 2026 By: /s/ Bryan Lewis Bryan Lewis President and Chief Executive Officer (Principal Executive Officer) Date: March 19, 2026 By: /s/ Adam Sragovicz Adam Sragovicz Chief Financial Officer (Principal Accounting and Financial Officer) Date: March 19, 2026 By: /s/ Guy L. Smith Guy L. Smith, Chairman and Director Date: March 19, 2026 By: /s/ Dylan Glenn Dylan Glenn, Director Date: March 19, 2026 By: /s/ Gregory B. Braca Gregory B. Braca, Director Date: March 19, 2026 By: /s/ David E. Ullman David E. Ullman, Director Date: March 19, 2026 By: /s/ Dondi Black Dondi Black, Director 31 Table of Contents FINANCIAL STATEMENTS INDEX REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 686) F- 2 FINANCIAL STATEMENTS: Balance Sheets as of December 31, 2025 and 2024 F- 4 Statements of Operations for the Years Ended December 31, 2025 and 2024 F- 5 Statements of Stockholders’ Equity for the Years Ended December 31, 2025 and 2024 F- 6 Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F- 7 NOTES TO FINANCIAL STATEMENTS F- 8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders, Board of Directors, and Audit Committee Intellicheck, Inc. Opinion on the Financial Statements We have audited the accompanying balance sheets of Intellicheck, Inc. (the “Company”) as of December 31, 2025 and 2024, the related statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Software-as-a-Service revenue recognition As described in Note 2 to the financial statements, the Company’s revenues are primarily derived from Software-as-a-Service (“SaaS”) subscription sales arrangements including but not limited to fixed subscriptions and usage-based contracts. The Company also recognizes an estimate for breakage revenue from its usage-based contracts for unused prepaid transactions in certain SaaS arrangements, which represents approximately 2% of total revenues for the year ended December 31, 2025. We identified revenue recognition for SaaS arrangements as a critical audit matter. The principal considerations for this determination is the high degree of auditor judgment in evaluating the contractual terms and breakage revenue estimate from its usage-based contracts and overall effort in auditing these arrangements. Our primary audit procedures in response to the critical audit matter included: • Evaluating the design and implementation of controls relating to the revenue recognition process, including the identification of performance obligations, controls over customer utilization data, and recording of revenue. F-2 Table of Contents • Testing the completeness and accuracy of transactional data used to recognize revenue. • Testing management’s process in developing the breakage revenue estimate including significant data and assumptions such as the number of scans used and relevant contract terms. • Testing a sample of revenue transactions through inspecting source documents such as contracts, invoices and cash receipts. /s/ Forvis Mazars, LLP We have served as the Company’s auditor since 2022. Tysons, Virginia March 19, 2026 F-3 Table of Contents INTELLICHECK, INC. BALANCE SHEETS DECEMBER 31, 2025 and 2024 2025 2024 (in thousands, except share and per share amounts) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 9,650 $ 4,666 Accounts receivable, net of allowance for credit losses of $ 157 and $ 100 as of December 31, 2025 and 2024, respectively 3,365 4,675 Other current assets 892 571 Total current assets 13,907 9,912 PROPERTY AND EQUIPMENT, NET 394 536 GOODWILL 8,102 8,102 INTANGIBLE ASSETS, NET 2,077 2,374 OTHER ASSETS 1 9 Total assets $ 24,481 $ 20,933 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 226 $ 443 Accrued expenses 1,897 1,742 Deferred revenue 1,661 1,001 Total current liabilities 3,784 3,186 Total liabilities 3,784 3,186 COMMITMENTS AND CONTINGENCIES (Note 10) STOCKHOLDERS’ EQUITY: Preferred stock – $ 0.01 par value; 30,000 shares authorized; Series A convertible preferred stock, zero shares issued and outstanding as of December 31, 2025 and 2024 — — Common stock – $ 0.001 par value; 40,000,000 shares authorized; 20,225,323 and 19,782,311 shares issued and outstanding as of December 31, 2025 and 2024, respectively 20 19 Additional paid-in capital 153,887 152,211 Accumulated deficit ( 133,210 ) ( 134,483 ) Total stockholders’ equity 20,697 17,747 Total liabilities and stockholders’ equity $ 24,481 $ 20,933 The accompanying notes are an integral part of these financial statements. F-4 Table of Contents INTELLICHECK, INC. STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 (in thousands, except share and per share amounts) REVENUES $ 22,666 $ 19,997 COST OF REVENUES ( 2,166 ) ( 1,831 ) Gross profit 20,500 18,166 OPERATING EXPENSES Selling, general and administrative 14,100 15,477 Research and development 5,314 3,857 Total operating expenses 19,414 19,334 Income (loss) from operations 1,086 ( 1,168 ) OTHER INCOME AND EXPENSE Other income, net 245 283 Total other income, net 245 283 Net income (loss) before provision for income taxes 1,331 ( 885 ) Provision for income taxes 58 33 Net income (loss) $ 1,273 $ ( 918 ) PER SHARE INFORMATION: Income (loss) per common share - Basic $ 0.07 $ ( 0.05 ) Diluted $ 0.06 $ ( 0.05 ) Weighted average common shares used in computing per share amounts - Basic 19,546,473 19,327,132 Diluted 20,151,749 19,327,132 The accompanying notes are an integral part of these financial statements. F-5 Table of Contents INTELLICHECK, INC. STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (in thousands, except number of shares) Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount BALANCE, December 31, 2023 19,354,335 $ 19 $ 150,822 $ ( 133,565 ) $ 17,276 Stock-based compensation — — 1,082 — 1,082 Stock option exercises, net of cashless exercises 179,875 — 307 — 307 Issuance of shares for vested restricted stock grants 248,101 — — — — Net loss — — — ( 918 ) ( 918 ) BALANCE, December 31, 2024 19,782,311 $ 19 $ 152,211 $ ( 134,483 ) $ 17,747 Stock-based compensation — — 779 — 779 Stock option exercises, net of cashless exercises 360,173 1 897 — 898 Issuance of shares for vested restricted stock grants 82,839 — — — — Net income — — — 1,273 1,273 BALANCE, December 31, 2025 20,225,323 $ 20 $ 153,887 $ ( 133,210 ) $ 20,697 The accompanying notes are an integral part of these financial statements. F-6 Table of Contents INTELLICHECK, INC. STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 2025 2024 (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 1,273 $ ( 918 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 703 436 Stock-based compensation 777 876 Credit loss expense 145 248 Changes in assets and liabilities: Decrease (increase) in accounts receivable 1,165 ( 219 ) (Increase) decrease in other current assets ( 130 ) 121 Decrease in other assets 8 82 (Decrease) in accounts payable and accrued expenses ( 61 ) ( 1,946 ) Increase (decrease) in deferred revenue 661 ( 1,209 ) (Decrease) in liability for shares surrendered — ( 190 ) Increase in other current liabilities — 25 Net cash provided by (used in) operating activities 4,541 ( 2,694 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 52 ) ( 57 ) Proceeds from maturity of short-term investments — 5,000 Software development costs ( 213 ) ( 2,048 ) Net cash (used in) provided by investing activities ( 265 ) 2,895 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercises of stock options 898 307 Proceeds from financing arrangement — 320 Repayment of financing arrangement ( 190 ) ( 142 ) Net cash provided by financing activities 708 485 Net increase in cash 4,984 686 CASH AND CASH EQUIVALENTS, beginning of year 4,666 3,980 CASH AND CASH EQUIVALENTS, end of year $ 9,650 $ 4,666 Supplemental disclosures of cash flow information: Cash paid for interest $ 4 $ 9 Cash paid for income taxes $ 33 $ — The accompanying notes are an integral part of these financial statements. F-7 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) 1. NATURE OF BUSINESS Business Intellicheck, Inc. (the “Company” or “Intellicheck”) is a prominent technology company that is engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Intellicheck’s products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices. Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of ten ( 10) U.S. and one Canadian patents. Liquidity For the year ended December 31, 2025, the Company generated net income of $ 1,273 and realized cash provided by operating activities of $ 4,541 . As of December 31, 2025, the Company had cash and cash equivalents of $ 9,650 , working capital (defined as current assets minus current liabilities) of $ 10,123 and an accumulated deficit of $ 133,210 . Based on the Company’s business plan and cash resources, Intellicheck expects its existing and future resources and revenues generated from operations to satisfy its working capital requirements for at least the next 12 months from the date of filing of these financial statements. 2. SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Use of Estimates The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets including software development costs, revenue recognition (including breakage revenue), and the fair value of stock options granted under the Company’s equity compensation plan. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates. Cash and Cash Equivalents The Company classifies time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase as cash equivalents. The Company's cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits. The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts. Accounts Receivable, net Accounts receivable are reported on the balance sheets at the outstanding principal amount adjusted for an allowance for credit losses and any charge offs. Effective January 1, 2023 Intellicheck adopted ASU 2016-13, codified as Accounting Standards Codification ("ASC") 326 " Current Expected Credit Losses ". This impacts how the allowance for credit losses is calculated. The Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with the aging out outstanding receivables and other factors like current and forecasted market conditions, and potential future impacts to the industry. In estimating whether accounts receivable will be collected, the Company performs evaluations of customers and continuously monitors collections and payments and estimates an allowance for credit losses based on collections experience to date and any specific collection issues that have been identified. The allowance for credit losses is recorded in the period in which revenue is recorded or when collection risk is identified. F-8 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) Property and Equipment, net Property and equipment are recorded at cost and are depreciated and amortized over their estimated useful lives ranging from three to seven years using the straight-line method. Expenditures for maintenance and repairs are charged to operations as incurred. See Note 4. Goodwill Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations. Pursuant to ASC 350 " Intangibles - Goodwill and Other ", the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between annual tests, in certain circumstances. Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price. The Company performed its annual impairment test of goodwill in the fourth quarter for the years ended December 31, 2025 and 2024. More detail about this is referenced in Note 5. For the years ended December 31, 2025 and 2024, the Company determined no impairment charge was required. Intangible Assets, net Intangible assets include patents, copyrights, developed technology and capitalized software development costs. The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed. There were no impairment charges recognized for the years ended December 31, 2025 and 2024. See Note 5. The Company capitalizes internal-use software costs which includes costs incurred in connection with the development of new software solutions and enhancements to existing software solutions that are expected to result in increased functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once the software has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the software is complete and available for its intended use. The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. There were no impairments of intangible assets including capitalized software development costs for the years ended December 31, 2025 and 2024. Long-Lived Assets and Impairment of Long-Lived Assets The Company’s long-lived assets include property and equipment and intangible assets. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable in accordance with ASC 350 “ Intangibles – Goodwill and Other ” and ASC 360 “ Property, Plant and Equipment ”. To determine recoverability of its long-lived assets, the Company evaluates the probability that future undiscounted net cash flows, without interest charges, will be less than the carrying amount of the assets. Impairment is measured at fair value. There were no impairments of long-lived assets for the years ended December 31, 2025 and 2024. Revenue Recognition and Deferred Revenue General Most license fees and services revenue are generated from a combination of fixed-price and per-scan contracts. Under the per-scan revenue model, customers are charged a fee each time the customer scans an identity document, such as a driver’s F-9 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) license, with the Company’s software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access the Company’s software. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company measures revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, the customer receives the benefit of the performance obligation. Customers typically receive the benefit of the Company’s services as they are performed. The Company's performance obligations are satisfied over time, and as a result, it may follow the right to invoice practical expedient meaning the Company recognizes revenue monthly as invoiced based on its contract terms. The Company has an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract. Customers are charged a fixed monthly fee for a set number of scans (fixed consideration), with any overages charged on a per scan basis (variable consideration). The Company estimates the amount of unused transactions at the end of each contract period and recognizes a portion of that revenue as breakage revenue each reporting period. If the Company expects the customer to use all transactions in the specified service period, the Company will recognize the transaction price as revenue in the specified service period as the promised units of service are transferred to the customer. Alternatively, if the Company expects that the customer cannot or will not use all transactions in the specified service period (referred to as “breakage”), the Company will recognize the estimated breakage amount as revenue ratably over the service period in proportion to the revenue that the Company will recognize for actual transactions used by the customer in the service period. The Company does not estimate the variable consideration at any point; rather it calculates and recognizes the variable portion at the end of the contract term since these contracts are considered monthly due to the termination clauses included within them. The fixed and variable performance obligations are recognized monthly based on the contract terms. The Company also has a revenue model where customers purchase access to the Company's platform that includes a fixed, non-refundable annual access fee associated with a spend commitment that grants the customers stand-ready access to the platform. Revenue for this access is recognized ratably over the contract term, consistent with the nature of the stand-ready service. Invoicing is based on schedules established in customer contracts. Payment terms are generally established from 30 to 60 days from the invoice date. Accordingly, the Company has determined that its contracts do not include a significant financing component. Product returns are estimated and recorded as a reduction to revenue, however, such amounts are immaterial. The Company has capitalized costs related to obtaining contracts under the access fee model. Costs to obtain a contract are amortized over the expected period of benefit to which they are related. Nature of goods and services The following is a description of the products and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: Software-as-a-Service (SaaS) SaaS for hosted subscription services requires the Company to provide a stand-ready obligation and allows customers to access a set of data for a predetermined period of time. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the entity’s performance as the entity performs. Accordingly, the revenue should be recognized over time, under the fixed pricing model, based on the usage of the hosted subscription services, which can vary from month to month. Under the per-scan revenue model, the customer requires access to the Company's hosted subscription service but revenue is recognized over time as the customer scans an identity document. Equipment Revenue Revenue from the sale of equipment is recognized at a point in time. The point in time that the revenue is recognized is when the customer has control of the equipment which is when the customer receives the benefit and the Company’s F-10 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) performance obligation has been satisfied. Depending on the contract terms, that could either be at the time the equipment is shipped to the customer or at the time the equipment is received by the customer. Other Revenue Other revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, extended warranties and one-time implementation services. The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services. These subscriptions require continuing service or post contractual customer support and performance. As the customer obtains access at a point in time but continues to have access for the remainder of the subscription period, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. Accordingly, the revenue is recognized over time based on usage, which can vary from month to month. The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location. Extended warranty revenues are generated when a warranty is provided to the customer separately from other performance obligations when the equipment is sold. As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs. The related revenue is recognized ratably over the specified term of the warranty period. The extended warranty is separate from the Company’s standard warranty that it receives from its vendor, which is typically one year . Disaggregation of revenue In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue. For the Years Ended December 31, 2025 2024 Products and services SaaS $ 22,436 $ 19,810 Other 211 63 Equipment 19 124 $ 22,666 $ 19,997 Timing of revenue recognition Products transferred at a point in time $ 19 $ 124 Services transferred over time 22,647 19,873 $ 22,666 $ 19,997 Contract balances The deferred revenue at December 31, 2025 and 2024 was $ 1,661 and $ 1,001 , respectively, and primarily consists of revenue that is recognized over time for software license contracts and hosted subscription services. The changes in these balances are related to the satisfaction or partial satisfaction of these contracts. The entire December 31, 2024, deferred revenue balance was recognized as revenue in the year ended December 31, 2025. F-11 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period: 2026 2027 2028 Total SaaS $ 1,661 $ — $ — $ 1,661 $ 1,661 $ — $ — $ 1,661 All consideration from contracts with customers is included in the amounts presented above. Advertising Costs. Advertising costs, which are charged to expense as incurred and recorded as selling, general and administrative expenses in the Company's statements of operations, were $ 125 and $ 418 for the years ended December 31, 2025 and 2024, respectively. Shipping Costs The Company’s shipping and handling costs related to sales are included in cost of revenues for all periods presented. All other shipping and handling costs are included as a component of selling, general and administrative expenses within the statements of operations. Loss Contingencies and Legal Costs The Company accrues loss contingencies that are believed to be probable and can be reasonably estimated. As events evolve during the administration and litigation process and additional information becomes known, the Company reassesses its estimates related to loss contingencies. Legal costs are expensed in the period in which the costs are incurred. Sales Taxes Sales and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues. Income Taxes The Company accounts for income taxes in accordance with ASC 740, “ Income Taxes .” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are measured using expected tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not. The Company has recorded a full valuation allowance for its net deferred tax assets as of December 31, 2025 and 2024, due to the uncertainty of the realizability of those assets. See Note 8. Fair Value of Financial Instruments The Company adheres to the provisions of ASC 820, “ Fair Value Measurement ” which requires the Company to calculate the fair value of financial instruments and include this additional information in the notes to financial statements when the fair value of those financial instruments is different than the book value. The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable and accrued expenses. At December 31, 2025 and 2024, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature. Financial Accounting Standards Board (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The F-12 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: •Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. The Company's Level 1 assets consisted primarily of cash and cash equivalents totaling approximately $ 9,650 and $ 4,666 as of December 31, 2025 and 2024, respectively. •Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active). Level 2 includes financial instruments that are valued using models or other valuation methodologies. The Company had no Level 2 assets or liabilities as of December 31, 2025 and 2024. •Level 3—Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The Company had no Level 3 assets or liabilities as of December 31, 2025 and 2024. Business Concentration and Credit Risk Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash. The Company maintains cash at three financial institutions. The Company performs periodic evaluations of the relative credit standing of these institutions. The Company’s sales are principally made to large retail customers, financial institutions concentrated in the United States and to U.S. government entities. The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information. During the year ended December 31, 2025, the Company made sales to three customers that accounted for approximately 55 % of revenue; 31 %, 16 % and 8 %, respectively. The revenue was associated with commercial identity sales customers. These three customers represented 42 % of the Company’s December 31, 2025 accounts receivable balance. These three customers accounted for approximately 0 %, 36 %, and 6 %, respectively, of the Company's accounts receivable balance at December 31, 2025. During the year ended December 31, 2024, the Company had three customers that accounted for 50 % of revenue; 20 %, 18 % and 12 %, respectively, and those same three customers accounted for 66 %; 39 %, 23 %, and 4 %, respectively, of its December 31, 2024 accounts receivable balance. Net Income (Loss) Per Share Basic net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock equivalents outstanding during the period. The dilutive effect of these common stock equivalents comprising of outstanding options and restricted stock is reflected in diluted earnings per share by application of the F-13 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) treasury stock method. The calculation of diluted net loss per share excludes all anti-dilutive shares. In a period of net loss, all common stock equivalents are considered anti-dilutive. Years Ended December 31, 2025 2024 Numerator: Net income (loss) $ 1,273 $ ( 918 ) Denominator: Weighted average common shares – Basic 19,546,473 19,327,132 Weighted average common shares - Diluted 20,151,749 19,327,132 Net income (loss) per share – Basic $ 0.07 $ ( 0.05 ) Diluted $ 0.06 $ ( 0.05 ) The following table summarizes the common stock equivalents excluded from the loss per diluted share because their effect would be anti-dilutive: 2025 2024 Stock options 497,970 1,151,104 Restricted stock — 35,887 Total 497,970 1,186,991 Stock-based Compensation The Company accounts for the issuance of equity awards to employees in accordance ASC 718 “ Compensation - Stock Compensation and ASC 505 “ Equity ”, which requires that the cost resulting from all stock-based transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement objective in accounting for equity payment arrangements and requires all companies to apply a fair value-based measurement method in accounting for all equity payment transactions with employees and directors. All stock-based compensation expenses are included in operating expenses. The Company recognizes compensation expense related to equity grants on a straight-line basis over the requisite service period. See Note 9. Segment Information The Company adheres to the provisions of ASC 280, “ Segment Reporting ”. The Chief Executive Officer, as the chief operating decision maker (CODM), reviews the financial information presented for purposes of allocating resources and evaluating its financial performance. The key measure that the CODM uses to allocate resources and in assessing performance is the Company's net income (loss). Accordingly, the Company has determined that it operates in a single reportable segment. All of the Company’s assets are located in the United States. Since the Company operates in one operating segment, all required financial segment information can be found in the financial statements. F-14 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) Research and Development Research and development expenses are expensed as incurred and consist primarily of employee-related expenses (such as salaries, taxes, benefits and stock-based compensation), allocated overhead costs and outside services costs related to the development and improvement of the Company's SaaS applications. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. The Company adopted this standard effective January 1, 2025 and was applied retrospectively. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . The amendment requires new financial statement disclosures to provide disaggregated information for certain types of expenses, including employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of revenue, sales and marketing, and general and administrative expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. 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 will adopt this ASU in the first quarter of 2026 and adoption is not expected to have a material impact on our consolidated financial statements. 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. Subsequent Events The Company has evaluated subsequent events through the date these financial statements were issued and determined there are no subsequent events that require disclosure and/or accrual. The Company received a class action complaint on January 8, 2026 alleging that the Company collected biometric information from users in Illinois in violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. (“BIPA”). The Company is not able to fully assess the probability and outcome of the matter due to the need to conduct further investigation. However, it does not currently believe that a material loss is probable nor estimable. As such, the Company has not recognized a liability and intends to fully defend the matter. F-15 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) 3. CASH AND CASH EQUIVALENTS Short-term investments include investments in U.S. Treasury notes. Short-term investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents. As of December 31, 2025 Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Cash and cash equivalents $ 9,650 $ — $ — $ 9,650 Total cash, cash equivalents $ 9,650 $ — $ — $ 9,650 As of December 31, 2024 Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value Cash and cash equivalents $ 4,666 $ — $ — $ 4,666 Total cash, cash equivalents $ 4,666 $ — $ — $ 4,666 The Company did no t hold any securities that were in an unrealized gain/loss position for more than 12 months as of December 31, 2025 and 2024. The Company recognized $ 245 and $ 283 in realized gains on short-term investments that matured within the years ended December 31, 2025 and 2024, respectively. 4. PROPERTY AND EQUIPMENT, NET Property and equipment, net are comprised of the following as of December 31, 2025 and 2024: 2025 2024 Computer equipment and software $ 1,977 $ 1,930 Furniture and fixtures 139 139 Office equipment 636 631 2,752 2,700 Less – Accumulated depreciation and amortization ( 2,358 ) ( 2,164 ) $ 394 $ 536 Depreciation and amortization expense for the years ended December 31, 2025 and 2024 amounted to $ 195 and $ 187 , respectively. Depreciation and amortization expense is included in the Statements of Operations within the selling, general and administrative line item. F-16 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) 5. GOODWILL AND INTANGIBLE ASSETS, NET Identifiable intangible assets The following tables set forth the components of intangible assets as of December 31, 2025 and 2024: Estimated Useful Life As of December 31, 2025 Adjusted Carrying Amount Accumulated Amortization Net Patents and copyrights 2 - 17 years $ 375 $ ( 351 ) $ 24 Developed technology 5 years 400 ( 400 ) — Software development 5 years 2,667 ( 614 ) 2,053 $ 3,442 $ ( 1,365 ) $ 2,077 Estimated Useful Life As of December 31, 2024 Adjusted Carrying Amount Accumulated Amortization Net Patents and copyrights 2 - 17 years $ 375 $ ( 325 ) $ 50 Developed technology 5 years 400 ( 387 ) 13 Software development 5 years 2,455 ( 144 ) 2,311 $ 3,230 $ ( 856 ) $ 2,374 The following summarizes amortization of intangible assets included in the Statements of Operations: Years Ended December 31, 2025 2024 Cost of revenues $ 499 $ 181 Selling, general and administrative 10 10 Research and development — 58 $ 509 $ 249 The Company's estimated future amortization expense for intangible assets as of December 31, 2025 was as follows: 2026 $ 549 2027 539 2028 533 2029 389 2030 67 $ 2,077 F-17 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) These amounts are subject to change based upon the review of recoverability and useful lives that are performed at least annually. Goodwill Goodwill represents the excess of purchase price over the fair value of the assets acquired in businesses combinations. Under ASC 350, goodwill is not amortized, but rather is tested for impairment. The Company’s goodwill balance was $ 8,102 as of December 31, 2025 and 2024. This goodwill resulted from the acquisitions of Mobilisa, Inc. and Positive Access Corporation. For the years ended December 31, 2025 and 2024, the Company performed its annual impairment test of goodwill in the fourth quarter. Under authoritative guidance, the Company can use industry and Company specific qualitative factors to determine whether it is more likely than not that impairment exists before performing step one of the quantitative goodwill impairment test. An entity is not required to calculate the fair value of a reporting unit unless the entity determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. Events or changes in circumstances which could trigger an impairment review include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, other entity specific events and sustained decrease in share price. According to ASC 350-20, the Company conducted a qualitative assessment (Step 0) to evaluate goodwill for impairment for the years ended December 31, 2025 and 2024. In the qualitative assessment for the fiscal years ended December 31, 2025 and 2024, the Company found no significant events or circumstances indicating a decline in the value of goodwill. As a result, the fair value of the reporting unit remained above its carrying value as of December 31, 2025 and 2024, and the Company did not proceed with a quantitative assessment for either year. 6. DEBT As of December 31, 2025, the Company had no outstanding debt, borrowings, or credit facilities. The Company has not entered into any credit agreements, revolving credit facilities, term loans, or other debt arrangements. In November 2025, the Company closed the credit facility with Citi Personal Wealth Management that previously allowed for borrowings up to the lesser of (i) $ 2,000 or (ii) the collateralized balance in the Company’s existing fixed income investment account with Citi Personal Wealth Management subject to certain limitations. The facility bears interest at a rate consistent with the Citi Personal Wealth Management’s Base Rate minus 2 %. Interest is payable monthly and there were no amounts outstanding under this facility and unused availability under this facility was $ 2,000 as of December 31, 2024. The Company is not subject to any financial covenants related to this revolving line of credit. 7. ACCRUED EXPENSES Accrued expenses are comprised of the following as of December 31, 2025 and 2024: 2025 2024 Professional fees $ 37 $ 84 Payroll and related 524 764 Incentive bonuses 1,171 465 Sales tax accrual and other 165 251 Insurance financing — 178 $ 1,897 $ 1,742 Insurance Financing Arrangement F-18 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) In July 2024, the Company entered into a financing arrangement related to insurance premiums totaling $ 334 with an interest rate of 8.58 %. The monthly loan payments of $ 30 are paid to financing company over a period of 11 months. As of December 31, 2025, the Company had $ 0 in remaining commitments related to this financing arrangement. As of December 31, 2024, the Company had $ 178 in remaining commitments related to this financing arrangement. The Company was not subject to any financial covenants related to this insurance financing arrangement. The balance of this financing arrangement is included in the balance sheets within the Accrued expenses financial statement line item. 8. INCOME TAXES The Company’s deferred tax assets and liabilities are measured using the enacted tax rates that the Company believes will apply in the years in which temporary differences are expected to be recovered or paid. The Company is subject to federal and state income taxes as a Subchapter C corporation. The Company’s deferred tax assets are primarily the result of net operating losses (or NOLs). The Company has recorded a valuation allowance against its net deferred tax assets at December 31, 2025 and 2024, as it is more likely than not that not all of the deferred tax assets will be realized. This determination reflects management's assessment that it is more likely than not that the deferred tax assets will not be realized in the foreseeable future.. For financial reporting purposes, the net pre-tax book income and/or loss for the U.S. entity, in the aggregate was: 2025 2024 United States $ 1,331 $ ( 885 ) Total 1,331 ( 885 ) The provision for income taxes as of December 31, 2025 and 2024 consists of the following: 2025 2024 Current: Federal $ — $ — State 58 33 Total current tax expense 58 33 Deferred: Federal — — State — — Total deferred tax expense — — Provision for income taxes $ 58 $ 33 A reconciliation of the statutory U.S. Federal rate to the Company’s effective tax rate as of December 31, 2025 and 2024 is as follows: F-19 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) 2025 2024 Current tax at U.S. statutory rate $ 280 21.00 % $ ( 186 ) 21.00 % State income taxes, net of federal tax effect (a) 59 4.46 35 ( 3.95 ) Tax credits 26 1.97 Change in valuation allowance ( 992 ) ( 74.56 ) 107 ( 12.10 ) Nondeductible Items Stock-based compensation ( 52 ) ( 3.87 ) 15 ( 1.68 ) Lobbying expense 40 3.00 42 ( 4.73 ) Other nondeductible items 4 0.31 27 ( 3.01 ) Change in unrecognized tax benefits 682 51.25 Other 12 0.88 ( 6 ) 0.70 Effective income tax rate 58 4.44 % 33 ( 3.77 ) % (a) State taxes in Texas made up the majority (greater than 50 percent) of the tax effect in this category. Deferred income taxes reflect the net tax effects of temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of net deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. The following items comprise the Company's net deferred tax assets and liabilities as of December 31, 2025 and 2024: 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 6,641 $ 6,128 Payroll related accruals 264 157 Stock-based compensation 99 91 Intangible assets 89 97 Sec. 174 capitalized costs — 365 Sales tax accrual 26 61 Other 27 24 Depreciation — 20 Research and development tax credits — 708 Total deferred tax assets 7,145 7,651 Net deferred tax assets 7,145 7,651 Less: Valuation allowance ( 6,677 ) ( 7,651 ) Deferred tax assets, net of allowance $ 468 $ — Deferred tax liabilities Depreciation ( 5 ) — Capitalized R&D Costs ( 463 ) — Total deferred tax liabilities ( 468 ) — Total net deferred tax asset (liability) — — F-20 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) The Company recorded an income tax expense of approximately $ 58 and $ 33 for the years ended December 31, 2025 and 2024, respectively, related to state taxes. The Company files numerous tax returns in various jurisdictions. The Company is not currently under examination by any taxing authority, nor has the Company signed any waiver of the statute of limitations with any taxing authority. The Company remains open to examination by major taxing jurisdictions from 2021 to date. ASC 740 requires evaluation of uncertain tax positions and as of December 31, 2025, the Company has recorded a full reserve against the R&D credits. There were no tax interest or penalties recorded in the financial statements for the years ended December 31, 2025 and 2024. Our unrecognized tax benefits at December 31, 2025 relate entirely to research and development tax credits. The total amount of tax benefits at December 31, 2025 is $ 682 . If recognized, none of the unrecognized tax benefits would impact our effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): 2025 2024 Uncertain Tax Benefits - January 1 $ — $ — Gross increases - tax positions in prior period 682 — Gross decreases - tax positions in prior period — — Gross increases - tax positions in current period — — Uncertain Tax Benefits - December 31 682 — Our policy is to recognize interest and penalties related to income taxes as components of income taxes. We incurred no interest or penalties related to unrecognized tax benefits in the years ended December 31, 2025 or 2024. We do not anticipate any significant changes in our uncertain tax positions within twelve months of this reporting date. Valuation Allowance The Company assesses the realizability of its deferred tax assets on a quarterly basis by evaluating the available positive and negative evidence in accordance with ASC 740. Significant weight is given to evidence that is objectively verifiable, particularly the Company’s cumulative results over the most recent three-year period. As of December 31, 2025, the Company was in a three-year cumulative loss position after adjusting for permanent differences between book and taxable income, which constitutes significant negative evidence. While the Company generated pre-tax income of approximately $ 1,331 for the year ended December 31, 2025, this was insufficient to offset the cumulative losses of approximately $ 2,042 in 2023 and $ 885 in 2024. Accordingly, the Company determined that a full valuation allowance against its net deferred tax assets remained appropriate as of December 31, 2025. The valuation allowance was approximately $ 6,677 and $ 7,651 as of December 31, 2025 and 2024, respectively. The net decrease of approximately $ 975 during 2025 was primarily attributable to the acceleration of deductions related to research and development costs.. If the Company achieves sustained profitability in future periods and the three-year cumulative result transitions to a positive position, the Company may conclude that sufficient positive evidence exists to support a partial or full release of the valuation allowance. Such a release would result in the recognition of a non-cash deferred income tax benefit in the period the determination is made. Based on gross deferred tax assets of approximately $ 7,145 as of December 31, 2025, a full release of the valuation allowance would result in a non-cash income tax benefit of up to approximately $ 6,677 , although the actual amount recognized would depend on the circumstances and timing of any such determination. Net Operating Loss and Tax Credit Carryforwards F-21 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) As of December 31, 2025, the Company had federal net operating loss carryforwards of approximately $ 30,520 of which $ 10,892 was generated prior to 2018 and will expire between 2035 and 2037. The remaining $ 19,628 was generated after 2017 and may be carried forward indefinitely, subject to an annual limitation of 80% of taxable income under the Tax Cuts and Jobs Act of 2017. The Company also had state net operating loss carryforwards of approximately $ 3,670 as of December 31, 2025, which expire at various dates depending on the jurisdiction. The Company had federal research and development tax credit carryforwards of approximately $ 682 as of December 31, 2025, which expire at various dates through 2041 if not utilized. Utilization of the Company’s net operating loss and tax credit carryforwards may be subject to annual limitations in the event of a change in ownership as defined under Section 382 of the Internal Revenue Code and similar state provisions. The Company has not completed a formal Section 382 analysis to determine whether any ownership changes have occurred since inception. If such a change has occurred, or occurs in the future, the Company’s ability to utilize its net operating loss and tax credit carryforwards could be materially limited, potentially resulting in a significant portion of the carryforwards expiring unused. The Company intends to evaluate whether a formal analysis is warranted in connection with future tax planning activities. The following summarizes the cash taxes paid in for the periods ending December 31, 2025 and 2024: 2025 2024 Federal $ — $ — State Texas 28 — Other states 5 — Total 33 — 9. STOCKHOLDERS’ EQUITY Series A Convertible Preferred Stock In January 1997, the Board of Directors authorized the creation of 30,000 class of Series A Convertible Preferred Stock with a par value of $ 0.01 . The Series A Convertible Preferred Stock is convertible into an equal number of common shares at the holder’s option, subject to adjustment for anti-dilution. The holders of Series A Convertible Preferred Stock are entitled to receive dividends as and if declared by the Board of Directors. In the event of liquidation or dissolution of the Company, the holders of Series A Convertible Preferred Stock are entitled to receive all accrued dividends, if applicable, plus the liquidation price of $ 1.00 per share. As of December 31, 2025, and 2024, there were no outstanding shares of Series A Convertible Preferred Stock. Stock-based Compensation To retain and attract qualified personnel necessary for the success of the Company, the Company adopted the 2025 Omnibus Incentive Plan (the “Plan”) covering up to 2,000,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options, nonqualified stock options and restricted stock units. All the equity compensation plans prior to the Company’s 2025 Omnibus Incentive Plan have been closed. The Compensation Committee of the Board of Directors administers this Plan and determines the terms and conditions of stock options granted, including the exercise price. The Plan generally provides that all stock options will expire within ten years of the date of grant. Incentive stock options granted under this Plan must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110 % of the fair market value per share at the date of the grant for grants to persons owning more than 10 % of the voting stock of the Company. The Plan also entitles non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors. F-22 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) The Company uses the Black-Scholes option pricing model to value the options on the grant date. The table below presents the weighted average expected life of the stock options in years. The Company uses the simplified method for all stock options to estimate the expected life of the option and assumes that stock options will be exercised evenly over the period from vesting until the awards expire. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on U.S. Treasury yield curve in effect on the grant date. Options, generally, vest from one year to four years . The compensation expense is recognized over the requisite service period on a straight-line basis, reduced by forfeitures as they occur. Certain option awards are classified as liability awards. The fair values of these awards are determined at each reporting date utilizing a Black-Scholes option pricing model, and the associated compensation expense (credit) is recorded at each reporting period is recorded. The Company recorded $ 0 and $( 4 ) of credits to stock-based compensation expense in the years ended December 31, 2025 and 2024, respectively, as a result of the change in fair value of these awards. The fair value of the Company’s stock options granted in 2025 that are being classified as equity awards were estimated using the Black-Scholes option pricing model with the following assumptions and weighted average fair values: Year Ended December 31, 2025 Valuation assumptions: Grant price $ 2.41 – $ 2.60 Exercise price $ 2.41 – $ 2.60 Expected dividend yield 0 % Expected volatility 61.10 % – 79.30 % Expected life (in years) 4.28 – 4.38 Risk-free interest rate 3.77 % – 3.94 % Stock option activity during the periods indicated below was as follows: Number of Shares Subject to Issuance Weighted- average Exercise Price Weighted- average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at December 31, 2023 1,152,714 $ 3.07 3.18 years $ 38 Granted 652,979 2.00 Forfeited ( 472,713 ) 2.42 Exercised ( 179,875 ) 1.72 Outstanding at December 31, 2024 1,153,105 $ 2.94 3.88 years $ 536 Granted 596,651 2.58 Forfeited ( 213,162 ) 2.33 Exercised ( 360,173 ) 2.49 Outstanding at December 31, 2025 1,176,421 $ 3.00 4.44 years $ 4,663 Exercisable at December 31, 2025 590,794 $ 3.51 2.55 years $ 2,208 F-23 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on December 31, 2025. This amount changes based upon the fair market value of the Company’s stock. The following is a summary of stock options as of December 31, 2025: Options Outstanding Options Exercisable Range of Exercise Prices Number of Options Weighted- average Remaining Life Weighted- average Exercise Price Number of Options Weighted- average Exercise Price $ 1.81 to $ 2.52 434,403 3.68 years $ 2.08 306,566 $ 2.06 $ 2.53 to $ 11.50 742,018 3.81 years $ 3.55 284,228 $ 5.08 1,176,421 3.75 years $ 3.00 590,794 $ 3.51 The weighted-average fair value of the options granted during the year ended December 31, 2025 was $ 2.58 . All stock options were issued with an exercise price that is equal or above the fair market value of the Company’s common stock on the date of grant. The amount of unrecognized expense of the options for the year ended December 31, 2025 was $ 871 . Restricted Stock Units The Company periodically issues Restricted Stock Units (“RSUs”) which are equity-based instruments that may be settled in shares of common stock of the Company. The Company issues RSUs to certain directors as compensation which vest with the passage of time. The vesting of all RSUs is contingent on continued board and employment services. The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant, is amortized on a straight-line basis over the requisite service period and charged to operating expenses with a corresponding increase to additional paid-in capital, reduced by forfeitures when they occur. The amount of unrecognized expense of the RSUs for the year ended December 31, 2025 was $ 0 . Restricted stock unit activity during the periods indicated below is as follows: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2023 60,500 $ 4.23 Granted 223,485 4.23 Vested and settled in shares ( 246,028 ) 2.80 Outstanding at December 31, 2024 37,957 $ 2.51 Granted 58,876 4.54 Vested and settled in shares ( 83,096 ) 3.31 Outstanding December 31, 2025 13,737 $ 6.37 F-24 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) As of December 31, 2025, there was $ 871 of total unrecognized compensation costs, related to all unvested stock options and RSUs. These costs are expected to be recognized as compensation expense over a weighted average period of approximately 2.01 years. Stock-based compensation expense for the years ended December 31, 2025 and 2024 is as follows: Years Ended December 31, 2025 2024 Stock options $ 509 $ 467 Restricted stock units 268 409 $ 777 $ 876 Stock-based compensation is included in operating expenses as follows: Years Ended December 31, 2025 2024 Selling, general and administrative $ 668 $ 821 Research and development 109 55 $ 777 $ 876 As of December 31, 2025, the Company had 2,063,544 shares available for future grants under the Company’s equity compensation plans. 10. COMMITMENTS AND CONTINGENCIES Leases The Company leases an office in Melville, New York, on a month-to-month basis. Rent expense, which includes utilities, was $ 22 and $ 30 for the years ended December 31, 2025 and 2024, respectively, and is included in selling, general and administrative expenses on the Statement of Operations. The Company determines if an arrangement is a lease at lease inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company did no t have an operating lease right of use ("ROU") or operating lease liability as of December 31, 2025, as its office lease is on a month-to-month term and allows for either party to terminate the lease without a significant penalty. Legal Proceedings The Company is not aware of any infringement by its products or technology on the proprietary rights of others. From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. In accordance with Generally Accepted Accounting Principles, the Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impact of negotiations, settlements, ruling, advice of legal counsel and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling was to occur in any specific period or if a loss becomes probable and estimable, there exists the possibility of a material adverse impact on the Company’s results of operations, financial position or cash flows. As of December 31, 2025 and 2024, no material amounts are recorded related to legal proceedings on the balance sheets. The Company received a class action complaint on January 8, 2026 alleging that the Company collected biometric information from users in Illinois in violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. F-25 Table of Contents INTELLICHECK, INC. NOTES TO FINANCIAL STATEMENTS ( All dollar amounts are rounded to thousands, except share data ) (“BIPA”). The Company is not able to fully assess the probability and outcome of the matter due to the need to conduct further investigation. However, it does not currently believe that a material loss is probable nor estimable. As such, the Company has not recognized a liability and intends to fully defend the matter. Cash Incentive Plans In May 2020, the Board implemented a 2020 separate Executive Incentive Bonus Plan (the "2020 Bonus Plan”) with the Company’s executive management team. Each agreement, under the 2020 Bonus Plan, is based on certain goals achieved by the Company plus individual achievements by each executive. In June 2020, the Company’s executive management team created a 2020 Employee Incentive Plan for all the Company’s non-executives and non-sales personnel. The incentive payment is based on the Company attaining certain revenue goals plus individual achievements by each individual for the calendar year 2025 and is based as a percentage of the employee’s salary. At December 31, 2025 and 2024, this bonus liability for the executive and employee bonus plans amounted to $ 1,171 and $ 464 and is included in Accrued Expenses on the Balance Sheets. 11. RETIREMENT PLAN The Company has a retirement savings 401(k) plan. The plan permits eligible employees to make voluntary contributions to a trust, up to a maximum of 35 % of compensation, subject to certain limitations. The Company has elected to contribute a matching contribution equal to 50 % of the first 6 % of an eligible employee’s deferral election. The Company may also make discretionary contributions, subject to certain conditions, as defined in the plan. The Company’s matching contributions were $ 93 and $ 0 for 2025 and 2024, respectively. F-26