Intellicheck, Inc. 10-Q

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2024 based on the guidelines established in the "Internal Control—Integrated Framework" (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Based on its assessment, management concluded that the Company's internal control over financial reporting was not effective as of June 30, 2024 due to a material weakness described in our 2023 Annual Report on Form 10-K, as filed with the SEC on April 1, 2024. 27 Index Notwithstanding the existence of the material weakness, we believe that the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present in accordance with the GAAP, in all material respects, our financial condition, results of operations and cash flows for the periods presented in this report. Remediation of Material Weakness existing as of June 30, 2024 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. Limitations on Effectiveness of Controls. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives. Changes in Internal Control over Financial Reporting Other than described above under "Remediation of Material Weakness existing as of June 30, 2024", there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2024 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Part II - Other Information