What changed in this filing

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Item 9A. Controls and Procedures

2024-04-01 compared with 2023-03-28 · 509 added, 291 removed, 634 unchanged (56% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

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").

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 ineffective as of December 31, 2022 due to a material weakness identified and described below.

Based on the evaluation of our disclosure controls and procedures, due to the material weakness in internal control over financial reporting described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of December 31, 2023.

In light of the material weakness described below, management performed additional analysis and other procedures to ensure that our interim and annual financial statements were prepared in accordance with U.S.

2 unchanged sentences

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.

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.

Our internal control over financial reporting includes those policies and procedures that:

8 unchanged sentences

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

The Company did not design and maintain effective controls over the assessment of the accounting for shares held to settle tax liabilities.

The Company did not design and maintain effective controls to periodically reassess whether nexus was achieved in the states we do business.

This caused us not to be able to collect sales tax from our customers and subsequently remitting those sales tax to the appropriate state tax agency.

During our assessment in 2023, it was determined that we had prior period sales tax obligations on certain states, in which we failed to collect and remit the sales tax.

This annual report does not include an attestation report of our registered public accounting firm on internal control over financial reporting.

Remediation of Material Weakness existing as of December 31, 2023

Our management has executed a plan to remediate the material weakness described above.

This plan includes the enhancement of existing processes and controls over the accounting for shares held to settle tax liabilities.

Management, under the guidance of the Audit Committee, is committed to developing and implementing a comprehensive remediation plan.

Management formalized a process and will now review the Company’s revenue and whether Nexus is triggered in the states in which the Company has revenues on a quarterly basis.

If a new state or jurisdiction triggers nexus, our accounting system is updated accordingly.

The analysis and accounting system configuration will be reviewed and approved by the Accounting and Finance department leadership.

The material weakness will be considered remediated when management concludes that, through testing, the applicable remedial controls are operating effectively.

Remediation of Previously Disclosed Material Weakness

We previously identified and disclosed in our 2021 Annual Report, as well as in our Quarterly Report on Form 10-Q filed for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022 certain material weakness in our control environment whereby the Company did not have adequate controls for its accounting for equity compensation.

As of December 31, 2022, management has completed our remediation efforts of this material weakness.

Our remediation efforts included the following:

The Company engaged additional experienced accounting resources and implemented training of new and existing personnel.

The Company implemented a new brokerage system to assist in the management of the equity incentive plans;

The Company amended the equity incentive plan to eliminate the use of cashless exercises of awards.

Changes in Internal Control over Financial Reporting

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Other Information

Insider Adoption or Termination of Trading Arrangements:

During the fiscal year ended December 31, 2023, none of our directors or officers informed us of the adoption , modification or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

11 unchanged sentences

Our independent registered public accounting firm is FORVIS, LLP, Auditor Firm ID:

Our previous independent registered public accounting firm was EisnerAmper LLP, Audit Firm ID:

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

Balance Sheets as of December 31, 2022 and 2021

Statements of Operations for the years ended December 31, 2022 and 2021

Statements of Stockholders’ Equity for the years ended December 31, 2022 and 2021

Statements of Cash Flows for the years ended December 31, 2022 and 2021

Balance Sheets as of Dece mber 31, 202 3 and 2 022

Statement of Operations for the years en ded December 31, 202 3 and 2022

Statement of Stockholders' Equity for the years ended December 31, 202 3 and 2022

Statement of Cash Flows for the years ended December 31, 202 3 and 2022

3.1 Certificate of Incorporation of the Company (1)

9 unchanged sentences

10.6 Jeffrey Ishmael Employment Agreement**

10.7 Jeffrey Ishmael Option Cancellation Agreement (13) *

10.8 Jeffrey Ishmael RSU Agreement (13) *

10.9 Separation Agreement dated as of May 25, 2023 by and between the Registrant and Garrett Gafke (14) *

10.10 Separation Agreement dated as of Oct ob er 3 , 2023 by and between the Registrant and Russell Embry * *

14.1 Code of Business Conduct and Ethics (2)

1 unchanged sentence

23.1 Consent of FORVIS LLP **

23.2 Consent of EisnerAmper LLP **

31.1 Certification of CEO pursuant to Section 302 of The Sarbanes-Oxley Act of 2002 **

1 unchanged sentence

32 Certification of CEO and CFO pursuant to Section 906 of The Sarbanes-Oxley Act of 2002 **

97 I ntellicheck Clawback Polic y **

101.INS Inline XBRL Instance Document **

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(12) Incorporated by reference to Registrant’s Annual Report on Form 10-K/A filed June 9, 2022.

(13) Incorporated by reference to Registrant’s Current Report on Form 8-K filed March 31, 2023.

(14) Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed August 14, 2023.

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.

March 28, 2023 INTELLICHECK, INC.

April 1, 2024 INTELLICHECK, INC.

/s/ Bryan Lewis

Chief Executive Officer

President and Chief Executive Officer

(Principal Executive Officer)

1 unchanged sentence

INTELLICHECK, INC.

March 28, 2023 By:

April 1, 2024 By:

/s/ Bryan Lewis

Chief Executive Officer

President and Chief Executive Officer

(Principal Executive Officer)

March 28, 2023 By:

April 1, 2024 By:

/s/ Jeffrey Ishmael

Jeffrey Ishmael

Chief Financial Officer

March 28, 2023 By:

Chief Financial Officer and Chief Operating Officer

April 1, 2024 By:

Smith, Chairman and Director

March 28, 2023 By:

Bedard, Director

March 28, 2023 By:

April 1, 2024 By:

Davis, Director

March 28, 2023 By:

April 1, 2024 By:

/s/ William P.

Georges, Director

March 28, 2023 By:

April 1, 2024 By:

/s/ Dylan Glenn

Dylan Glenn, Director

March 28, 2023 By:

April 1, 2024 By:

/s/ Gregory B.

Braca, Director

March 28, 2023 By:

April 1, 2024 By:

Ullman, Director

March 28, 2023 By:

April 1, 2024 By:

/s/ Dondi Black

Dondi Black, Director

EXHIBIT INDEX

23.1 Consent of FORVIS LLP *

23.2 Consent of EisnerAmper 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 *

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)

* Filed herewith.

FINANCIAL STATEMENTS

REPORT S OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIR MS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

FINANCIAL STATEMENTS:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors, and Audit Committee

To the Shareholders, Board of Directors, and Audit Committee

Intellicheck, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Intellicheck, Inc.

(the Company) as of December 31, 2022, the related statements of operations, stockholders’ equity, and cash flows for the year then ended, 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, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying balance sheets of Intellicheck, Inc.

(the Company) as of December 31, 2023 and 2022, the related statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years in the two-year period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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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.

Such procedures included 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.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the 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 separate opinions on the critical audit matter or on the account or disclosure to which they relate.

Goodwill Impairment

As of December 31, 2022, the Company had recorded goodwill of approximately $8.1 million.

As described in Notes 2 and 5 to the financial statements, the Company tests goodwill for impairment on an annual basis in the fourth quarter, or between the annual tests, when events or changes in circumstances have been identified that may indicate that the carrying value of the Company exceeds its fair value.

If the carrying value exceeds the determined fair value, an impairment charge is recognized in an amount equal to the excess.

The Company operates as one reporting unit and performed the impairment assessment during the fourth quarter of 2022.

The fair value was determined using the weighting of certain valuation techniques, including both income and market approaches, which include a discounted cashflow analysis, an analysis of similar public company financial information, and an analysis of market transactions.

The Company’s fair value estimate, in performing this analysis requires management to make various judgments, assumptions, and estimates, the most significant of which include discount rates, projected revenue growth rates, operating margins and guideline public company multiples.

We identified the Company’s goodwill impairment assessment as a critical audit matter.

relates to discount rates, forecasted revenue growth rates, operating margins, and guideline public company multiples.

Furthermore, auditing certain of these inputs and assumptions made by management requires the use of an auditor-employed valuation specialist.

Our primary audit procedures performed to address this critical audit matter included:

• Obtained an understanding of management’s goodwill impairment assessment process, including management’s assessment of the significant inputs and assumptions utilized in determining the reporting unit fair value.

• Evaluated management’s forecasted revenue growth rates and operating margins by comparing actual results to management’s historical forecasts.

• Performed sensitivity analysis over significant estimates and assumptions including forecasted revenue growth rates and operating margins when assessing the overall impact on the estimate of fair value compared to the carrying value.

• Utilizing personnel with specialized knowledge and skills in valuation, we evaluated the significant assumptions in assessing the appropriateness of the fair value methodology utilized, including:

• Evaluating the reasonableness of certain assumptions used in the discounted cash flow model including the discount rates used by management by comparing it to a range of discount rates developed using existing market information for comparable entities, and

• Evaluating the market approaches including selected guideline company multiples and similar transactions for reasonableness, and

• Evaluating the mathematical accuracy of the calculations included in both the income and market approaches.

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 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 they it relates.

Sales and Use Tax Accrual

As described in Note 12 to the financial statements, the Company is required to collect and remit sales and use taxes on sales transactions it processes in various state and local jurisdictions and identified immaterial errors in its historical financial statements relating to reporting of sales and use taxes on customer sales transactions to state taxing authorities.

Conclusions on recognizing and measuring sales and use taxes involves management judgment including the consideration of the applicability of state and local transactional tax regulations on transactions.

Given the complexity and the subjective nature of the interpretation of transactional tax policies and regulations, management's estimates relating to the determination of sales and use tax accruals requires judgment.

We identified the Company’s sales and use tax accrual as a critical audit matter.

Our principal considerations for this determination included the high degree of auditor judgment and subjectivity in evaluating the reasonableness of management’s significant inputs and assumptions utilized in the determination of sales and use tax accrual, particularly as it relates to evaluating the applicable sales tax rates, applicable localities, and the determination of taxability of the services.

Furthermore, auditing these inputs and assumptions requires specialized knowledge and skills.

We also considered the effect of the identified material weakness, in determining the nature, timing, and extent of procedures over the sales and use tax accrual.

Our primary audit procedures performed in response to the critical audit matter included:

• Obtained an understanding of management’s process for developing the sales and use tax accrual.

• Evaluated management's methods and assumptions used in the identification, recognition, measurement, and disclosure of the sales and use tax accrual, particularly as it relates to evaluating the applicable sales tax rates, applicable localities, and the determination of taxability of the services.

• Tested the completeness and accuracy of the data used by management in their sales and use tax analysis.

• Selected a sample of transactions and compared the sales and use tax rates applied to the locality and recalculated the mathematical accuracy of management’s calculations.

• Utilizing personnel with specialized knowledge and skills in state and local sales and use tax regulations, we assessed the reasonableness of management's estimates by considering how sales and use tax law, including statutes and regulations, impacted management's estimate.

/s/ FORVIS, LLP

We have served as the Company’s auditor since 2022.

Tysons, Virginia

M arch 28, 2023

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Intellicheck, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Intellicheck (the “Company”) as of December 31, 2021, and the related statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Correction of a Misstatement

On June 9, 2022, the Company’s restated the 2021 financial statements, to correct a misstatement as the Company determined that a cashless withholding to satisfy personal income tax obligations from certain option awards exercised commencing in the third quarter of 2020 and the first quarter of 2021, caused the underlying options to no longer qualify as

equity awards and should have instead been classified as liability awards commencing on the date of exercise.

The change in the classification of the awards to liability classified awards requires the Company to remeasure the fair value of the awards at the end of each reporting period they remain outstanding, with the increase or decrease in fair value correspondingly charged or credited to selling, general and administrative expenses in arriving at net loss.

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 audit.

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 audit 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 audit, 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 audit 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 included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit 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 audit provides 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 was 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 judgment.

The communication of the 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.

Goodwill Impairment Analysis

As of December 31, 2021, the Company had goodwill of approximately $8.1 million.

As described in Notes 2 and 5 to the financial statements, the Company performs its impairment test of goodwill annually, or whenever events or changes in circumstances indicate that the carrying value of the Company exceeds its fair value.

The Company performed its annual impairment test of goodwill in the fourth quarter of 2021.

The Company operates as one reporting segment, operating segment and reporting unit.

The Company’s goodwill impairment test involves comparing the Company’s carrying value to its estimated fair value.

The fair value was determined using the weighting of certain valuation techniques, including both income and market approaches, which include a discounted cash flow analysis, similar public company financial comparisons, along with market capitalization.

The Company’s fair value estimates require management to make significant estimates and assumptions including discount rates, projected revenue growth rates, operating margins and guideline public company multiples.

We identified the impairment test of goodwill as a critical audit matter due to the significant judgement by management in the estimates and assumptions used in developing the fair value estimate of the Company.

This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s significant estimates and assumptions related to discount rates, projected revenue growth rates, operating margins and guideline public company multiples.

Additionally, the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.

We obtained an understanding and evaluated the design of controls over the Company’s impairment test of goodwill, including developing the estimate of fair value.

Our procedures included, among

evaluated the forecasted revenue growth rates and operating margins to the Company’s underlying business strategies and growth plans and considered if they were consistent with evidence obtained in other areas of the audit;

evaluated management’s ability to accurately forecast revenue growth rates and operating margins by comparing actual results to management’s historical forecasts;

and performed sensitivity analyses over significant estimates and assumptions including discount rates and projected revenue growth rates when assessing the overall impact on the estimate of fair value compared to the carrying value.

In addition, we utilized our valuation specialists with specialized skills and knowledge, in evaluating the reasonableness of the Company’s methodology for estimating fair value including both the income and market approaches;

evaluating the discount rates used by management by comparing it to a range of discount rates developed using existing market information for comparable entities;

evaluating market approaches including selected guideline company multiples for reasonableness and evaluating the mathematical accuracy of the calculations included in both the income and market approaches.

We served as the Company’s auditor from 2010 to 2022.

/s/ EisnerAmper LLP

EISNERAMPER LLP

Iselin, New Jersey

March 24, 2022, except for the effects of the restatement to the financial statements as discussed in the correction of misstatement paragraph above, as to which the date is June 9, 2022

April 1, 2024

INTELLICHECK, INC.

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Loss from operations ( 2,276 ) ( 4,030 )

OTHER (EXPENSE) INCOME

Gain on forgiveness of unsecured promissory note — 10

Interest and other (expense) income ( 5 ) 5

Total other (expense) income ( 5 ) 15

Net loss before provision for income taxes ( 3,727 ) ( 7,478 )

Provision for income taxes 124 —

OTHER INCOME (EXPENSE)

Interest and other income (expense) 234 ( 5 )

Total other income (expense) 234 ( 5 )

Net loss before provision (benefit) for income taxes ( 2,042 ) ( 4,035 )

Provision (Benefit) for income taxes ( 62 ) 124

Net loss $ ( 1,980 ) $ ( 4,159 )

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Stock-based compensation — — 2,778 — 2,778

Exercise of stock options, net of cashless exercise of 58,926 shares and 92,634 shares withheld

208,741 1 1,756 — 1,757

Issuance of shares for vested restricted stock grants 296,997 — — — —

Exercise of warrants 9,000 — 19 — 19

Net loss — — — ( 4,159 ) ( 4,159 )

1 unchanged sentence

Stock-based compensation — — 1,646 — 1,646

Issuance of shares for vested restricted stock grants 296,997 — — — —

Issuance of common stock for vested restricted stock units and earned performance stock units 421,689 — — — —

Shares forfeited in exchange for withholding taxes ( 24,720 ) — ( 57 ) — ( 57 )

Net loss — — — ( 1,980 ) ( 1,980 )

7 unchanged sentences

Net loss $ ( 1,980 ) $ ( 4,159 )

Adjustments to reconcile Net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile Net loss to net cash (used in) operating activities:

Depreciation and amortization 282 285

Stock-based compensation 1,596 2,455

Bad debt expense ( 17 ) —

Gain on forgiveness of unsecured promissory note — ( 10 )

Allowance for credit losses 49 17

Change in accrued interest and accretion of discount on short-term investments ( 206 ) —

Changes in assets and liabilities:

(Increase) in accounts receivable ( 2,115 ) ( 462 )

Decrease (increase) in other current assets 34 ( 302 )

(Increase) decrease in other current assets ( 84 ) 34

(Increase) in other assets ( 82 ) —

(Decrease) increase in accounts payable and accrued expenses ( 568 ) 1,551

(Decrease) increase in deferred revenue ( 367 ) 862

(Decrease) in liability for shares withheld ( 1,023 ) —

Net cash (used in) provided by operating activities ( 3,480 ) 1,116

Increase (decrease) in accounts payable and accrued expenses 616 ( 260 )

Increase (decrease) in deferred revenue 1,302 ( 367 )

(Decrease) in other current liabilities ( 25 ) ( 1,023 )

Net cash (used in) operating activities ( 647 ) ( 3,480 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment ( 93 ) ( 192 )

Proceeds from maturity of short-term investments 5,000 —

Purchases of short-term investments ( 4,914 ) ( 4,880 )

Capital expenditures ( 192 ) ( 662 )

Software development and other costs ( 407 ) —

Net cash (used in) investing activities ( 414 ) ( 5,072 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Return of repayment of unsecured promissory note — 10

Net proceeds from issuance of common stock from exercise of stock options — 47

Proceeds of insurance financing arrangement 319 —

Proceeds from insurance financing arrangement 49 319

Withholding taxes paid on RSU vesting ( 57 ) —

Repayment of insurance financing arrangement ( 147 ) ( 222 )

Proceeds from issuance of common stock from exercise of warrants — 19

Net cash provided by financing activities 97 76

Net (decrease) increase in cash ( 8,455 ) 530

Net cash (used in) provided by financing activities ( 155 ) 97

Net (decrease) in cash ( 1,216 ) ( 8,455 )

CASH, beginning of year 5,196 13,651

CASH, end of year $ 3,980 $ 5,196

Supplemental disclosures of noncash investing and financing activities:

Reclassification of stock option awards $ — $ 1,411

Supplemental disclosures of cash flow information:

9 unchanged sentences

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 eighteen (18) U.S.

and one Canadian patents, as well as three U.S.

patents pending.

Intellicheck continues to develop and release innovative products based upon its rich patent portfolio consisting of ten ( 10) U.S.

and one Canadian patents.

For the year ended December 31, 2023, the Company incurred a net loss of $( 1,980 ) and had net cash used in operating activities of $( 647 ).

1 unchanged sentence

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.

As of the filing of this Form 10-K, the COVID-19 pandemic, which first began affecting the Company in the first quarter of 2020, has impacted the Company’s business by a temporary decline in revenues from its customers.

Though the Company has had an increase in SaaS revenues for the year ended December 31, 2022 compared to the same period of 2021, the COVID-19 pandemic could continue to impact our business directly and/or indirectly for the foreseeable future.

The Company is further unable to accurately predict the full impact that the COVID-19 pandemic will have on its results of operations or financial condition due to numerous factors that are not within its control, including the duration and severity of the outbreak together with any potential statewide closures if cases increase in the future, the spread of COVID-19 variants, and the widespread adoption of vaccination measures including booster regimens.

SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.

ASC 718 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.

ASC Topic 718, " Compensation - Stock Compensation ", 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.

The Company determined the fair value of these awards utilizing a Black-Scholes option pricing model.

Allowance for Doubtful Accounts

The Company records its allowance for doubtful accounts based upon its assessment of various factors.

The Company considers historical experience, the age of the accounts receivable balances, credit quality of the Company’s customers, current economic conditions and other factors that may affect customers’ ability to pay.

Allowance for Credit Losses

Effective January 1, 2023 Intellicheck applied the new standard ASU 2016-13, codified as ASC 326.

This impacts how the allowance for doubtful accounts is calculated.

Prior to ASC-326, Intellicheck would not recognize bad debt expense until the loss from customer non-payment was probable of occurring.

Under the new model, Intellicheck’s allowance for doubtful accounts reflects the Company’s estimate of all expected future credit losses from its current customer balances.

Under the new guidance, the Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with accounting for 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.

Cash and Cash Equivalents

We classify 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.

Our 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

INTELLICHECK, INC.

1 unchanged sentence

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

We classify as cash equivalents time deposits and other investments that are highly liquid and have maturities of three months or less at the date of purchase.

Our cash and cash equivalents consist primarily of cash on deposits with banks and is maintained with major financial institutions in the United States.

Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, however amounts may exceed FDIC insured limits.

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.

Short-term investments

2 unchanged sentences

Debt investments with original maturities at the date of purchase greater than approximately three months but less than a year are classified as short-term investments, as they represent the investment of cash available for current operations.

All short-term investments that the company holds are classified as "held-to-maturity".

All short-term investments that the Company holds are classified as "held-to-maturity" as the Company has the intent and ability to hold these investments until maturity.

See Note 3 for more detail and a breakdown of the Company's short-term investments.

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Property and equipment are recorded at cost and are depreciated over their estimated useful lives ranging from three to seven-years using the straight-line method.

Leasehold improvements are amortized utilizing the straight-line method over the lesser of the term of the lease or estimated useful life of the asset.

Expenditures for maintenance and repairs are charged to operations as incurred.

Goodwill represents the excess of purchase price over the fair value of net assets acquired in business combinations.

Pursuant to ASC 350, 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 assessed qualitative factors to determine whether it was necessary to perform step one of the quantitative goodwill impairment test.

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, 2022 and 2021 More detail about this is referenced in Note 5.

The Company performed its annual impairment test of goodwill in the fourth quarter for the years ended December 31, 2023 and December 31, 2022, more detail about this is referenced in Note 5.

For the years ended December 31, 2023 and 2022, the Company determined no impairment charge was required.

Intangible Assets

Intangible assets include patents, copyrights, and developed technology.

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.

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 360.

To determine recoverability of its long-lived assets, the Company evaluates the probability that future undiscounted net cash flows, will be less than the carrying amount of the assets.

There were no impairment charges recognized for the years ended December 31, 2023 and 2022.

We capitalize 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 development stage, internal and external costs, if direct and incremental, are capitalized until the software is complete and available for its intended use.

We evaluate the useful lives of these assets and test for impairment whenever events or

INTELLICHECK, INC.

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changes in circumstances occur that could impact the recoverability of these assets.

There were no impairments of capitalized software development costs for the years ended December 31, 2023 and 2022.

Revenue Recognition and Deferred Revenue

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Customers typically receive the benefit of the Company’s services as they are performed.

Substantially all customer contracts provide that the Company is compensated for services performed to date.

During 2021, the Company adopted an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract.

Revenue for these transactions is recognized on a per transaction basis.

The Company's performance obligations are satisfied over time, and as a result, we may follow the right to invoice practical expedient meaning we recognize revenue monthly as invoiced based on our 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.

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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.

Actual results could differ from estimates and as such differences may be material to the financial statements.

The company does not estimate the variable consideration at any point;

rather we calculate and recognize 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.

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 have been immaterial.

The Company has not capitalized any costs to obtain a contract as the period of amortization for these associated costs would have been recognized over a period that is one year or less and the Company elected the practical expedient to expense those costs as incurred.

Nature of goods and services

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Software as a Service (SaaS)

Software as a service (SaaS) for hosted subscription services allows customers to access a set of data for a predetermined period of time.

Software as a service (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 our hosted subscription service but revenue is recognized each time the customer scans an identity document.

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.

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NOTES TO FINANCIAL STATEMENTS

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

Equipment Revenue

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Depending on the contract terms, that could either be at the time the equipment is shipped or at the time the equipment is received.

When sales of equipment occur, we recognize shipping and handling costs with the sales of equipment that are recognized as revenue.

Other Revenue

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NOTES TO FINANCIAL STATEMENTS

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

Other Revenues, which historically have not been material, consist primarily of revenues from other subscription and support services, and extended warranties.

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These subscriptions require continuing service or post contractual customer support and performance.

Accordingly, the revenue should be recognized over time based on usage, which can vary from month to month.

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.

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The related revenue is recognized ratably over the specified term of the warranty period.

The extended warranty is separate to the Company’s standard warranty of usually one year that it receives from its vendor.

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

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Advertising Costs.

Advertising costs, which are charged to expense as incurred, were $ 683 and $ 745 for the years ended December 31, 2022 and 2021, respectively.

Advertising costs, which are charged to expense as incurred and recorded as selling, general and administrative expenses in our statements of operations, were $ 536 and $ 683 for the years ended December 31, 2023 and 2022, 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 on the Statements of Operations.

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 and other taxes collected from customers and remitted to governmental authorities are presented on a net basis and thus excluded from revenues.

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.

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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.

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NOTES TO FINANCIAL STATEMENTS

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

inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions.

The 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).

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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

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $ 10.1 million and $ 13.7 million as of December 31, 2022 and 2021, respectively.

The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling approximately $ 8,980 and $ 10,076 as of December 31, 2023 and 2022, 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).

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The Company had no Level 3 assets or liabilities as of December 31, 2023 and December 31, 2022.

There were no transfers into or out of Level 3 measurements in 2023 and 2022.

Business Concentration and Credit Risk

Financial instruments, which subject the Company to concentrations of credit risk, consist primarily of cash.

The Company maintains cash with two financial institutions.

The Company maintains cash at two 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 of America and to U.S.

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 doubtful accounts based upon factors surrounding the credit risk of customers, historical trends, and other information.

During the year ended December 31, 2023, the Company made sales to three customers that accounted for approximately 47 % of revenue, 21 %, 14 % and 12 %, respectively.

The revenue was associated with commercial identity sales customers.

These three customers, in addition to one other customer, represented 63 % of the Company’s December 31, 2022 accounts receivable balance.

These four customers accounted for approximately 37 %, 14 %, 11 % and 1 %, respectively, of the Company's accounts receivable balance at December 31, 2022.

During the year ended December 31, 2021, the Company had two customers that accounted for 55 % of revenue;

38 % and 17 %, respectively and those same two customers, including one other customer together accounted for 65 %;

These three customers represented 66 % of the Company’s December 31, 2023 accounts receivable balance.

These three customers accounted for approximately 37 %, 6 %, and 23 % , respectively, of the Company's accounts receivable balance at December 31, 2023.

During the year ended December 31, 2022, the Company had three customers that accounted for 52 % of revenue;

22 %, 17 % and 13 %, respectively and those same three customers, including one other customer together accounted for 63 %;

37 %, 11 %, 1 % and 14 %, respectively, of its December 31, 2022 accounts receivable balance.

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Diluted net loss per share is computed by dividing the net 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, warrants and restricted stock is reflected in diluted earnings per share by application of the treasury stock method.

The calculation of

The dilutive effect of these common stock equivalents comprising of outstanding options, warrants and

INTELLICHECK, INC.

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diluted net loss per share excludes all anti-dilutive shares.

restricted stock is reflected in diluted earnings per share by application of the 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.

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Diluted $ ( 0.10 ) $ ( 0.22 )

The following table summarizes the common stock equivalents excluded from the 2022 loss per diluted share because their effect would be anti-dilutive:

The following table summarizes the common stock equivalents excluded from the 2023 and 2022 loss per diluted share because their effect would be anti-dilutive:

Stock options 1,152,714 1,120,244

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Stock-based Compensation

The Company accounts for the issuance of equity awards to employees in accordance ASC 718 (“Stock Compensation”) and ASC 505 (“Equity”), which requires that the cost resulting from all equity payment transactions be recognized in the financial statements.

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 equity payment 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.

1 unchanged sentence

The Company recognizes compensation expense related to equity grants on a straight-line basis over the requisite service period.

Comprehensive Loss

The Company’s comprehensive loss is equal to its net loss for the years ended December 31, 2022 and 2021.

Segment Information

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The Company’s Chief Operating Decision Maker, its Chief Executive Officer (“CEO”), reviews the financial information presented for purposes of allocating resources and evaluating its financial performance.

Accordingly, the Company has

Accordingly, the Company has determined that it operates in a single reportable segment.

All of the Company’s long-lived 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.

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

determined that it operates in a single reportable segment.

All of the Company’s long-lived 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.

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.

Subsequent Events

The Company reviewed all material events through the date these financial statements were issued for subsequent event disclosure consideration.

Recent Accounting Pronouncements

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2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments to measure credit losses on financial instruments, including trade receivables.

Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") to measure credit losses on financial instruments, including trade receivables.

The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments.

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Under the previous guidance, an entity only considered past events and current conditions.

The guidance is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.

The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis.

The Company does not expect this standard will have a material impact on its financial statements.

The Company concluded that the adoption of this standard, on January 1, 2023, did not have a material impact on its financial statements because of the short-term nature of its outstanding accounts receivable and there have been no significant forward-looking economic conditions identified by the Company that would impact its short-term investments.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280.

The enhanced disclosure requirements include:

title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances.

This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

This change will apply retrospectively to all periods presented.

The Company is currently evaluating the impact of this ASU on its financial statements.

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.

This change will apply on a prospective basis to annual financial statements for periods beginning after the effective date.

However, retrospective application in all prior periods presented is permitted.

The Company is currently evaluating the impact of this ASU on its financial statements.

Revision of Previously Reported Financial Statements

In connection with the preparation of its financial statements for the year ended December 31, 2023, the Company determined that it had a historical state sales and use tax liability related to prior periods that was not reflected in previously issued financial statements.

See Note 12 for further details.

Reclassification of Prior Year Presentation

Certain prior period amounts have been reclassified to conform to the current period presentation.

These reclassifications had no effect on net earnings.

An adjustment has been made to the Condensed Statements of Cash Flows to reclassify the allowance for credit losses.

This change in classification does not affect previously reported cash flows from operating activities in the Condensed Statements of Cash Flows.

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

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Short-term investments with original maturities of approximately three months or less from the date of purchase are classified within cash and cash equivalents.

Debt investments with original maturities at the date of purchase greater than approximately three months are classified as short-term investments, as they represent the investment of cash available for current operations.

Debt investments with original maturities at the date of purchase greater than approximately three months but less than one year are classified as short-term investments, as they represent the investment of cash available for current operations.

All short-term investments that the company holds are classified as "held-to-maturity".

The Company has accounted for and disclosed the purchase of its short-term investments in accordance with ASC 320 ("Investments - Debt Securities").

The following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of December 31, 2022.

The Company has accounted for and disclosed the purchase of its short-term investments in accordance with ASC 320 ("I nvestments - Debt Securities ").

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

following table summarizes the fair value of cash and cash equivalents, and short-term investments as well as any gross unrealized holding gains and losses as of December 31, 2023.

Due to the nature of these assets and the short-term nature of the U.S.

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Total cash, cash equivalents and short-term investments $ 8,980 $ — $ — $ 8,980

As of December 31, 2022

Amortized cost Gross unrealized holding gains Gross unrealized holding losses Estimated fair value

Cash and cash equivalents $ 5,196 $ — $ — $ 5,196

treasury notes (2)

4,880 3 ( 15 ) 4,868

Total cash, cash equivalents and short-term investments $ 10,076 $ 3 $ ( 15 ) $ 10,064

(1) These U.S.

treasury notes are classified as "held-to-maturity" as they were purchased in December 2022 and mature in July 2023.

Since these securities are intended to be held until maturity and mature in less than a year from its purchase date, any unrealized gains or losses are not realized until its maturity date and the amortized cost of these securities can be found

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

on this Form 10-K's balance sheet under Current Assets - "Short-term investments".

Any coupon payments from these short-term investments fall under "Interest and other (expense) income" on the Company's Statement of Operations.

treasury notes are classified as "held-to-maturity" as they were purchased in August 2023 and will mature in January 2024.

Any coupon payments or accretion of discounts from these short-term investments fall under "Interest and other income (expense)" in the Company's Statement of Operations.

(2) These U.S.

treasury notes were classified as "held-to-maturity" as they were purchased in December 2022 and matured in July 2023.

The Company did no t hold any securities that were in an unrealized loss position for more than 12 months as of December 31, 2023 and 2022.

There were no material realized gains or losses on these short-term investments during the years ended December 31, 2022 and 2021.

The Company recognized $ 206 and zero in realized gains on short-term investments that matured within the years ended December 31, 2023 and 2022, respectively.

PROPERTY AND EQUIPMENT

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Furniture and fixtures 139 139

Leasehold improvements — 55

Office equipment 618 614

Less – Accumulated depreciation ( 1,977 ) ( 1,800 )

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

Depreciation expense for the years ended December 31, 2023 and 2022 amounted to $ 177 and $ 180 respectively.

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Developed technology 5 years 400 ( 307 ) 93

Software development - 407 — 407

$ 1,182 $ ( 607 ) $ 575

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$ 775 $ ( 502 ) $ 273

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

The Company has capitalized $ 407 in software development costs to date.

The projects are still in development and not yet ready for their intended use and therefore no estimated useful life has been determined and these costs are not being amortized as of December 31, 2023.

The following summarizes amortization of acquisition related intangible assets included in the Statement of Operations:

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Cost of revenues $ 95 $ 95

General and administrative 10 10

Selling, general and administrative 10 10

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NOTES TO FINANCIAL STATEMENTS

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

The Company expects amortization expense for the next five succeeding years will be as follows:

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Although the Company believes that the factors considered in the impairment analysis are reasonable, changes in any one of the assumptions used could have produced a different result which may have led to an impairment charge.

Any future impairment loss could have a material adverse effect on our long-term assets and operating expenses in the period in which impairment is determined to exist.

For the years ended December 31, 2023 and 2022, the Company determined that the fair value of the Company was greater than its carrying amount and therefore the second step of the goodwill impairment test was not required.

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NOTES TO FINANCIAL STATEMENTS

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

Promissory Note

On April 15, 2020, the Company received a $ 10 advance from the U.S.

Small Business Administration (“SBA”) as part of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The Company repaid this EIDL advance on December 7, 2020.

The Company had not imputed interest on this advance as the rate was determined to be a below-market rate due to the scope exception in ASC 835-30-15-3(e) for government-mandated interest rates.

On December 27, 2020, Congress passed the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act (“the Economic Aid Act”) which relieves companies of their obligations to repay EIDL advances.

As a result of this ruling, the SBA returned this advance, plus interest to the Loan Servicer on February 18, 2021, which was immediately returned to the Company and included in Other income on the Statements of Operations.

Revolving Line of Credit

On February 6, 2019, the Company entered into a revolving credit facility with Citi Personal Wealth Management that allows 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 of Citi Personal Wealth Management’s Base Rate ( 7.50 % at December 31, 2022) minus 2 %.

The facility bears interest at a rate consistent of Citi Personal Wealth Management’s Base Rate ( 8.50 % and 7.50 % at December 31, 2023 and December 31, 2022) minus 2 %.

Interest is payable monthly and as of December 31, 2023 and 2022, there were no amounts outstanding under this facility and unused availability under this facility was $ 2,000 .

The Company is not subject to any financial covenants related to this revolving line of credit.

This line will remain open as long as the Company maintains depository relationship with the financial institution.

Insurance Financing Arrangement

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

In February 2023, the Company entered into a financing arrangement related to insurance premiums totaling $ 49 with an interest rate of 9.47 %.

The monthly loan payments of $ 5 were paid to financing company over a period of 11 months.

As of December 31, 2023, the Company had no remaining commitments related to this financing arrangement.The Company was not subject to any financial covenants related to this insurance financing arrangement.

On June 17, 2022, the Company entered a financing arrangement related to insurance premiums totaling $ 319 with an interest rate of 4.05 %.

The monthly loan payments of $ 32 are paid to HUB International New England for a total of 10 months.

As of December 31, 2022, the Company had a remaining commitment of $ 97 which is expected to be paid by March 17, 2023.

The monthly loan payments of $ 32 were paid to a separate financing company for a total of 10 months.

As of December 31, 2023, the Company had no remaining commitments related to this financing arrangement.

ACCRUED EXPENSES

Accrued expenses are comprised of the following as of December 31, 2023 and 2022:

(As Adjusted)

Professional fees $ 1 $ 259

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Incentive bonuses 824 846

Sales tax accrual 1,064 837

Other 197 174

$ 3,245 $ 3,156

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The Company is subject to federal and state income taxes as a Subchapter C corporation.

As a result of continuing losses for tax purposes, the Company has historically recorded a full valuation allowance against its net deferred tax asset.

The Company’s deferred tax assets are primarily the result of net operating losses (or NOLs).

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The valuation is based on management’s assessment that it is more likely than not the NOL carryforwards may not be realized in the foreseeable future due to objective negative evidence that the Company would not generate sufficient taxable income to realize the deferred tax assets.

The provision for income taxes as of December 31, 2023 and 2022 consists of the following:

Federal $ ( 12 ) $ —

State ( 50 ) 124

Total current tax (benefit) expense ( 62 ) 124

Total deferred tax (benefits) expense — —

(Benefit) Provision for income taxes $ ( 62 ) $ 124

INTELLICHECK, INC.

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

A reconciliation of the statutory U.S.

Federal rate to the Company’s effective tax rate as of December 31, 2023 and 2022 is as follows:

(As Adjusted)

Federal income tax benefit at statutory rate 21.00 % 21.00 %

State income taxes, net of federal benefit 0.25 ( 2.20 )

Other permanent items ( 0.30 ) ( 0.04 )

Stock-based compensation ( 9.94 ) ( 1.99 )

Lobbying expense ( 1.95 ) ( 0.92 )

Research and development tax credits ( 9.66 ) 9.92

Cumulative deferred adjustments ( 31.39 ) 26.14

Rate change ( 2.22 ) ( 18.06 )

Change in valuation allowance 36.20 ( 36.30 )

Other 1.07 ( 0.66 )

Effective income tax (benefit) expense rate 3.06 % ( 3.11 ) %

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of the Company’s deferred tax assets for federal and state income taxes as of December 31, 2023 and 2022 are as follows:

(As Adjusted)

Deferred tax assets:

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174 Capitalized costs 468 1,237

Sales tax accrual 245 197

Depreciation 50 18

1 unchanged sentence

Total deferred tax assets 7,547 8,286

Deferred tax liabilities:

Depreciation — ( 84 )

Total deferred tax liabilities — ( 84 )

Net deferred tax assets 7,547 8,286

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Deferred tax assets, net of allowance $ — $ —

A reconciliation of the statutory U.S.

Federal rate to the Company’s effective tax rate is as follows:

Federal income tax benefit at statutory rate 21.00 21.00

State income taxes, net of federal benefit ( 2.59 ) 2.28

Permanent items ( 3.19 ) ( 0.20 )

Research and development tax credits 10.74 1.34

Cumulative deferred adjustments 28.30 ( 12.46 )

Rate change ( 19.55 ) —

Change in valuation allowance ( 37.35 ) ( 11.91 )

Other ( 0.73 ) ( 0.05 )

Effective income tax (benefit) expense rate ( 3.37 ) % — %

There were no tax interest or penalties recorded in the financial statements for the years ended December 31, 2022 and 2021.

The Company’s available NOL at December 31, 2023 was approximately $ 26.3 million, of which $ 10.9 million expires between 2035 and 2037.

In accordance with the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), U.S.

NOLs arising in a tax year ending after 2017 will not expire.

NOLs arising in a tax year ending after 2017 in the amount of $ 15.4 million will not expire, but are subject to 80% limitation on utilization.

In addition to the NOLs, the Company has approximately $ 708 thousand of research and development credits.

The Company files numerous tax returns in various jurisdictions.

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ASC 740 requires evaluation of uncertain tax positions and as of December 31, 2023, the Company has no material uncertain tax positions.

There were no tax interest or penalties recorded in the financial statements for the years ended December 31, 2023 and 2022.

INTELLICHECK, INC.

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

The Company recorded an income tax expense of approximately $ 124 for the year ended December 31, 2022 related to state minimum taxes and within jurisdictions where there were not sufficient state net operating losses to offset taxable income.

The Company recorded an income tax credit of approximately $( 62 ) for the year ended December 31, 2023 related to state taxes.

The effective tax rate for the years ended December 31, 2023 and 2022 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances.

In 2022, the valuation allowance increased by approximately $ 1,372 , primarily related to temporary differences arising from Section 174 capitalized costs.

The Company had a taxable income in 2022 and the Company's existing NOL decreased primarily due to temporary differences that occurred during the year.

In 2023, the valuation allowance decreased by approximately $( 739 ), primarily related to temporary differences arising from Section 174 capitalized costs and stock based compensation.

STOCKHOLDERS’ EQUITY

14 unchanged sentences

The table below presents the weighted average expected life of the stock options in years.

The Company uses the simplified method for all restricted stock units and 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.

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.

5 unchanged sentences

The fair values of these awards are determined at each reporting period utilizing a Black Scholes option pricing model, and the associated compensation expense (credit) for the reporting period is recorded.

The Company decreased by $( 324 ) and $ 3,332 , of stock-based compensation expense in the years ended December 31, 2022 and 2021, respectively.

The Company recorded $( 50 ) and $( 324 ) of credits to stock-based compensation expense in the years ended December 31, 2023 and 2022, respectively, as a result of the change in fair value of these awards.

INTELLICHECK, INC.

10 unchanged sentences

Risk-free interest rate 4.19 % – 4.65 %

The fair value of the Company’s stock options granted in the years ended, December 31, 2018 and December 31, 2019, that are being classified as liability awards were marked-to-market using the Black-Scholes option pricing model with the following assumptions and weighted average fair values:

The fair value of the Company’s stock options granted in the year ended December 31, 2019, that are being classified as liability awards were marked-to-market using the Black-Scholes option pricing model with the following assumptions and weighted average fair values:

December 31, 2023

Valuation assumptions:

Exercise price range $ 2.68 – $ 2.87

Exercise price $ 2.68

Expected dividend yield 0 %

8 unchanged sentences

Forfeited ( 108,408 ) 4.53

Exercised ( 360,301 ) 2.34

Outstanding at December 31, 2022 1,120,244 $ 3.68 3.50 years $ 84

47 unchanged sentences

On November 4, 2021, the Company amended its PSU Plan so that 100 % of the PSUs will vest based on the Company’s market price as the sole vesting criteria.

As a result of this amendment, the adjusted EBITDA performance metric from the previous plan is no longer a criteria performance metric.

The Company recorded additional stock-based compensation expense of $ 164 in the fourth quarter of 2021 resulting from the amendment to the PSU Plan.

As a result of this amendment, the Adjusted EBITDA performance metric is no longer a vesting criterion.

The fair value of these awards with a market condition was estimated, at the date of grant, using the Monte Carlo Simulation model with compensation expense being determined on the closing market price of the Company’s common stock on the date of grant and is amortized ratably on a straight-line basis over the requisite service period.

With the amendment mentioned above such that the Company's market price is the sole vesting criteria for these awards, compensation expense is charged to operating expenses with a corresponding increase to additional paid-in capital and is not reversed if the vesting criteria is not met.

Following the amendment mentioned above which provided that the Company's market price is the sole vesting criteria for these awards, compensation expense is charged to operating expenses with a corresponding increase to additional paid-in capital and is not reversed if the vesting criteria is not met.

All outstanding PSUs vested during the year ended December 31, 2023 and as of December 31, 2023 there were no outstanding PSUs.

Shares Weighted

3 unchanged sentences

Forfeited ( 88,844 ) 7.91

Vested and settled in shares ( 88,844 ) 7.91

Outstanding at December 31, 2023 — $ —

As of December 31, 2022, there was $ 2,135 of total unrecognized compensation costs, related to all unvested stock options, restricted stock units and performance stock units.

As of December 31, 2023, there was $ 822 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 1.96 years.

15 unchanged sentences

All previously granted warrants were issued with an exercise price that was equal to or above the fair market value of the Company’s common stock on the date of grant.

As of December 31, 2022, the Company had no remaining warrants available to exercise.

There were 9,000 warrants exercised at a price of $ 2.20 during the year ended December 31, 2021.

As of December 31, 2023, the Company had no remaining warrants outstanding and all the warrants expired unexercised.

COMMITMENTS AND CONTINGENCIES

6 unchanged sentences

The Company is not aware of any infringement by our products or technology on the proprietary rights of others.

The Company is not currently involved in any legal or regulatory proceeding, or arbitration, the outcome of which is reasonably possible to have a material effect on its business.

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 GAAP, 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, 2023, no material amounts are recorded related to legal proceedings on the balance sheets.

The Company recently received a class action complaint in March 2024, and while we are unable to fully assess the probability and outcome of the matter due to recency of the filing, the Company does not currently believe that a material loss is probable.

As such, the Company has not recognized a liability and intends to fully defend the matter.

Cash Incentive Plans

In May 2020, the Board entered into a 2020 separate executive incentive bonus plan (“the 2020 Bonus Plan”) with the Company’s executive management team.

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 for the calendar year 2022 and is based as a percentage of the employee’s salary.

At December 31, 2022, this bonus liability for the executive and employee bonus plans amounted to $ 846 and is included in the Accrued Expenses on the Balance Sheets as well as Note 7.

INTELLICHECK, INC.

1 unchanged sentence

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

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 for the calendar year 2023 and is based as a percentage of the employee’s salary.

At December 31, 2023 and 2022, this bonus liability for the executive and employee bonus plans amounted to $ 824 and $ 846 and is included in the Accrued Expenses on the Balance Sheets as well as the Accrued Expenses table in Note 7.

RETIREMENT PLAN

4 unchanged sentences

The Company’s matching contributions were $ 108 and $ 118 for 2023 and 2022, respectively.

REVISION OF PRIOR PERIOD FINANCIAL STATEMENTS

The Company is required and subject to collect and remit sales and use taxes in state and local jurisdictions where it has economic nexus.

During the year ended December 31, 2023, the Company determined that a sales tax liability related to the periods of 2019 through 2023 was probable and determined an estimated liability for sales transactions processed in jurisdictions where it had not previously reported.

The Company determined that its previously issued financial statements for the period ended December 31, 2022 did not reflect the liability that was estimated to exist for that period.

The correction of these errors had no effect on the total cash flows from operations, investing, or financing of the Company.

In accordance with SEC Staff Accounting Bulletin No.

99, “Materiality,” (“SAB 99”) and SEC Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” (“SAB 108”), the Company evaluated the additional liability and has determined that the related impact was immaterial to the previously issued financial statements;

however, correcting the liability in the current period would have a material impact on the current financial statements.

Therefore, the Company, in consultation with the Audit Committee of the Company’s Board of Directors, concluded that the affected periods should be revised to present the identified adjustments.

The Company has not filed, and does not intend to file, an amendment to the previously filed Annual Report on Form 10-K for the period ended December 31, 2022, but instead is revising its previously reported financial statements in this Annual Report on Form 10-K.

All financial statements and footnotes presented herein have been adjusted to reflect the revisions below.

As of March 31, 2022

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 1,768 605 $ 2,373

Accumulated deficit $ ( 128,365 ) ( 605 ) $ ( 128,970 )

Total stockholders’ equity $ 18,938 ( 605 ) $ 18,333

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

As of June 30, 2022

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 2,321 677 $ 2,998

Accumulated deficit $ ( 129,463 ) ( 677 ) $ ( 130,140 )

Total stockholders’ equity $ 18,360 ( 677 ) $ 17,683

As of September 30, 2022

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 2,036 751 $ 2,787

Accumulated deficit $ ( 130,187 ) ( 751 ) $ ( 130,938 )

Total stockholders’ equity $ 18,332 ( 751 ) $ 17,581

As of December 31, 2022

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 2,319 837 $ 3,156

Accumulated deficit $ ( 130,748 ) ( 837 ) $ ( 131,585 )

Total stockholders’ equity $ 18,504 ( 837 ) $ 17,667

As of March 31, 2023

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 2,475 908 $ 3,383

Accumulated deficit $ ( 132,064 ) ( 908 ) $ ( 132,972 )

Total stockholders’ equity $ 17,830 ( 908 ) $ 16,922

As of June 30, 2023

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 1,980 984 $ 2,964

Accumulated deficit $ ( 132,841 ) ( 984 ) $ ( 133,825 )

Total stockholders’ equity $ 17,337 ( 984 ) $ 16,353

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

As of September 30, 2023

As Previously Reported Adjustment As adjusted

BALANCE SHEET

Accrued expenses $ 2,350 1,064 $ 3,414

Accumulated deficit $ ( 133,485 ) ( 1,064 ) $ ( 134,549 )

Total stockholders’ equity $ 17,071 ( 1,064 ) $ 16,007

For the Three Months Ended March 31, 2022

As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 2,943 76 $ 3,019

Total operating expenses $ 4,547 76 $ 4,623

Loss from operations $ ( 1,468 ) ( 76 ) $ ( 1,544 )

Net loss $ ( 1,468 ) ( 76 ) $ ( 1,544 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.08 ) $ — $ ( 0.08 )

For the Three Months Ended June 30, 2022 For the Six Months Ended June 30, 2022

As Previously Reported Adjustment As adjusted As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 3,124 72 $ 3,196 $ 6,068 148 $ 6,216

Total operating expenses $ 4,742 72 $ 4,814 $ 9,289 148 $ 9,437

Loss from operations $ ( 1,098 ) ( 72 ) $ ( 1,170 ) $ ( 2,566 ) ( 148 ) $ ( 2,714 )

Net loss $ ( 1,098 ) ( 72 ) $ ( 1,170 ) $ ( 2,566 ) ( 148 ) $ ( 2,714 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.06 ) $ — $ ( 0.06 ) $ ( 0.14 ) $ — $ ( 0.14 )

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

For the Three Months Ended September 30, 2022 For the Nine Months Ended September 30, 2022

As Previously Reported Adjustment As adjusted As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 2,917 74 $ 2,991 $ 8,985 222 $ 9,207

Total operating expenses $ 4,378 74 $ 4,452 $ 13,667 222 $ 13,889

Loss from operations $ ( 724 ) ( 74 ) $ ( 798 ) $ ( 3,290 ) ( 222 ) $ ( 3,512 )

Net loss $ ( 724 ) ( 74 ) $ ( 798 ) $ ( 3,290 ) ( 222 ) $ ( 3,512 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.04 ) $ — $ ( 0.04 ) $ ( 0.17 ) $ ( 0.02 ) $ ( 0.19 )

For the Year Ended December 31, 2022

As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 12,399 308 $ 12,707

Total operating expenses $ 18,413 308 $ 18,721

Loss from operations $ ( 3,722 ) ( 308 ) $ ( 4,030 )

Net loss $ ( 3,851 ) ( 308 ) $ ( 4,159 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.20 ) $ ( 0.02 ) $ ( 0.22 )

For the Three Months Ended March 31, 2023

As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 3,924 71 $ 3,995

Total operating expenses $ 5,232 71 $ 5,303

Loss from operations $ ( 1,310 ) ( 71 ) $ ( 1,381 )

Net loss $ ( 1,316 ) ( 71 ) $ ( 1,387 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.07 ) $ — $ ( 0.07 )

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

For the Three Months Ended June 30, 2023 For the Six Months Ended June 30, 2023

As Previously Reported Adjustment As adjusted As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 3,861 76 $ 3,937 $ 7,784 147 $ 7,931

Total operating expenses $ 5,137 76 $ 5,213 $ 10,368 147 $ 10,515

Loss from operations $ ( 773 ) ( 76 ) $ ( 849 ) $ ( 2,082 ) ( 147 ) $ ( 2,229 )

Net loss $ ( 777 ) ( 76 ) $ ( 853 ) $ ( 2,093 ) ( 147 ) $ ( 2,240 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.04 ) $ — $ ( 0.04 ) $ ( 0.11 ) $ ( 0.01 ) $ ( 0.12 )

For the Three Months Ended September 30, 2023 For the Nine Months Ended September 30, 2023

As Previously Reported Adjustment As adjusted As Previously Reported Adjustment As adjusted

STATEMENT OF OPERATIONS

Selling, general and administrative expenses $ 3,597 80 $ 3,677 $ 11,382 227 $ 11,609

Total operating expenses $ 5,147 80 $ 5,227 $ 15,516 227 $ 15,743

Loss from operations $ ( 815 ) ( 80 ) $ ( 895 ) $ ( 2,898 ) ( 227 ) $ ( 3,125 )

Net loss $ ( 644 ) ( 80 ) $ ( 724 ) $ ( 2,737 ) ( 227 ) $ ( 2,964 )

PER SHARE INFORMATION

Loss per common share

Basic and Diluted $ ( 0.03 ) $ ( 0.01 ) $ ( 0.04 ) $ ( 0.14 ) $ ( 0.01 ) $ ( 0.15 )

For the year ended December 31, 2021

As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 7,478 ) ( 529 ) $ ( 8,007 )

Accumulated deficit $ ( 126,897 ) ( 529 ) $ ( 127,426 )

Total Stockholders’ Equity $ 19,577 ( 529 ) $ 19,048

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

For the Three Months Ended March 31, 2022 For the Three Months Ended March 31, 2023

As Previously

Reported Adjustment As adjusted As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 1,468 ) ( 76 ) $ ( 1,544 ) $ ( 1,316 ) ( 71 ) $ ( 1,387 )

Accumulated deficit $ ( 128,365 ) ( 605 ) $ ( 128,970 ) $ ( 132,064 ) ( 908 ) $ ( 132,972 )

Total Stockholders’ Equity $ 18,938 ( 605 ) $ 18,333 $ 17,830 ( 908 ) $ 16,922

For the Three Months Ended June 30, 2022 For the Three Months Ended June 30, 2023

As Previously

Reported Adjustment As adjusted As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 1,098 ) ( 72 ) $ ( 1,170 ) $ ( 777 ) ( 76 ) $ ( 853 )

Accumulated deficit $ ( 129,463 ) ( 677 ) $ ( 130,140 ) $ ( 132,841 ) ( 984 ) $ ( 133,825 )

Total Stockholders’ Equity $ 18,360 ( 677 ) $ 17,683 $ 17,337 ( 984 ) $ 16,353

For the Three Months Ended September 30, 2022 For the Three Months Ended September 30, 2023

As Previously

Reported Adjustment As adjusted As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 724 ) ( 74 ) $ ( 798 ) $ ( 644 ) ( 80 ) $ ( 724 )

Accumulated deficit $ ( 130,187 ) ( 751 ) $ ( 130,938 ) $ ( 133,485 ) ( 1,064 ) $ ( 134,549 )

Total Stockholders’ Equity $ 18,332 ( 751 ) $ 17,581 $ 17,071 ( 1,064 ) $ 16,007

For the Six Months Ended June 30, 2022 For the Six Months Ended June 30, 2023

As Previously

Reported Adjustment As adjusted As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 2,566 ) ( 148 ) $ ( 2,714 ) $ ( 2,093 ) ( 147 ) $ ( 2,240 )

Accumulated deficit $ ( 129,463 ) ( 677 ) $ ( 130,140 ) $ ( 132,841 ) ( 984 ) $ ( 133,825 )

Total Stockholders’ Equity $ 18,360 ( 677 ) $ 17,683 $ 17,337 ( 984 ) $ 16,353

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

For the Nine Months Ended September 30, 2022 For the Nine Months Ended September 30, 2023

As Previously

Reported Adjustment As adjusted As Previously

Reported Adjustment As adjusted

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 3,290 ) ( 222 ) $ ( 3,512 ) $ ( 2,737 ) ( 227 ) $ ( 2,964 )

Accumulated deficit $ ( 130,187 ) ( 751 ) $ ( 130,938 ) $ ( 133,485 ) ( 1,064 ) $ ( 134,549 )

Total Stockholders’ Equity $ 18,332 ( 751 ) $ 17,581 $ 17,071 ( 1,064 ) $ 16,007

For the year ended December 31, 2022

As Previously

Reported Adjustment As

STATEMENT OF STOCKHOLDERS’ EQUITY

Net loss $ ( 3,851 ) ( 308 ) $ ( 4,159 )

Accumulated deficit $ ( 130,748 ) ( 837 ) $ ( 131,585 )

Total Stockholders’ Equity $ 18,504 ( 837 ) $ 17,667

For the Three Months Ended March 31, 2022

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 1,468 ) ( 76 ) $ ( 1,544 )

Increase (decrease) in accounts payable and accrued expenses $ ( 1,149 ) 76 $ ( 1,073 )

For the Six Months Ended June 30, 2022

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 2,566 ) ( 148 ) $ ( 2,714 )

Increase (decrease) in accounts payable and accrued expenses $ ( 497 ) 148 $ ( 349 )

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

For the Nine Months Ended September 30, 2022

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 3,290 ) ( 222 ) $ ( 3,512 )

Increase (decrease) in accounts payable and accrued expenses $ ( 588 ) 222 $ ( 366 )

For the year ended December 31, 2022

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 3,851 ) ( 308 ) $ ( 4,159 )

Increase (decrease) in accounts payable and accrued expenses $ ( 568 ) 308 $ ( 260 )

For the Three Months Ended March 31, 2023

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 1,316 ) ( 71 ) $ ( 1,387 )

Increase (decrease) in accounts payable and accrued expenses $ 712 71 $ 783

For the Six Months Ended June 30, 2023

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 2,093 ) ( 147 ) $ ( 2,240 )

Increase (decrease) in accounts payable and accrued expenses $ ( 22 ) 147 $ 125

For the Nine Months Ended September 30, 2023

As Previously

Reported Adjustment As Adjusted

STATEMENT OF CASH FLOWS

Net loss $ ( 2,737 ) ( 227 ) $ ( 2,964 )

Increase (decrease) in accounts payable and accrued expenses $ 204 227 $ 431

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 9A. Controls and Procedures