What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 125 added, 108 removed, 450 unchanged (34% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

2024 December 31,

2 unchanged sentences

Short-term investments — 5,000

Accounts receivable, net of allowance for credit losses of $ 87 and $ 69 at June 30, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 100 and $ 69 at September 30, 2024 and December 31, 2023, respectively

Other current assets 525 692

18 unchanged sentences

30,000 shares authorized;

Series A convertible preferred stock, zero shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series A convertible preferred stock, zero shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Common stock - $ 0.001 par value;

40,000,000 shares authorized;

19,492,702 and 19,354,335 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

19,550,965 and 19,354,335 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 151,687 150,822

6 unchanged sentences

(In thousands, except shares and per share amounts)

Three months ended June 30, Six months ended June 30,

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

21 unchanged sentences

(In thousands, except number of shares)

Three months ended June 30, 2024

Three months ended September 30, 2024

Common Stock Additional

3 unchanged sentences

Shares Amount

BALANCE, March 31, 2024 19,404,561 $ 19 $ 151,166 $ ( 134,007 ) $ 17,178

BALANCE, June 30, 2024 19,492,702 $ 19 $ 151,422 $ ( 134,134 ) $ 17,307

Stock-based compensation – – 265 – 265

Stock option exercises, net of cashless exercises

Stock option exercises, net of

cashless exercises

7,064 – – – —

Issuance of shares for vested restricted stock grants 83,266 – – – –

Issuance of shares for vested

restricted stock grants 51,199 – – – –

Net loss – – – ( 837 ) ( 837 )

BALANCE, June 30, 2024 19,492,702 $ 19 $ 151,422 $ ( 134,134 ) $ 17,307

Three months ended June 30, 2023

BALANCE, September 30, 2024 19,550,965 $ 19 $ 151,687 $ ( 134,971 ) $ 16,735

Three months ended September 30, 2023

Common Stock Additional

3 unchanged sentences

Shares Amount

BALANCE, March 31, 2023 19,215,863 $ 19 $ 149,875 $ ( 132,972 ) $ 16,922

BALANCE, June 30, 2023 19,251,920 $ 19 $ 150,159 $ ( 133,825 ) $ 16,353

Stock-based compensation – – 381 – 381

Issuance of shares for vested restricted stock grants 60,777 – – – –

Shares forfeited in exchange for withholding taxes ( 24,720 ) – ( 54 ) — ( 54 )

Issuance of shares for vested

restricted stock grants 47,627 – – – –

Shares forfeited in exchange for

withholding taxes — – ( 3 ) — ( 3 )

Net loss – – – ( 724 ) ( 724 )

BALANCE, June 30, 2023 19,251,920 $ 19 $ 150,159 $ ( 133,825 ) $ 16,353

BALANCE, September 30, 2023 19,299,547 $ 19 $ 150,537 $ ( 134,549 ) $ 16,007

See accompanying notes to unaudited condensed financial statements.

Six months ended June 30, 2024

Nine months ended September 30, 2024

Common Stock Additional

5 unchanged sentences

Stock-based compensation – – 865 – 865

Stock option exercises, net of cashless exercises 4,875 – – – —

Issuance of common stock for vested restricted stock units and earned performance stock units 133,492 – – – –

Stock option exercises, net of

cashless exercises 11,939 – – – —

Issuance of common stock for vested

restricted stock units and earned

performance stock units 184,691 – – – –

Net loss – – – ( 1,406 ) ( 1,406 )

BALANCE, June 30, 2024 19,492,702 $ 19 $ 151,422 $ ( 134,134 ) $ 17,307

Six months ended June 30, 2023

BALANCE, September 30, 2024 19,550,965 $ 19 $ 151,687 $ ( 134,971 ) $ 16,735

Nine months ended September 30, 2023

Common Stock Additional

5 unchanged sentences

Stock-based compensation – – 1,361 – 1,361

Issuance of common stock for vested restricted stock units and earned performance stock units 319,274 – – – –

Shares forfeited in exchange for withholding taxes ( 24,720 ) – ( 54 ) – ( 54 )

Issuance of common stock for vested

restricted stock units and earned

performance stock units 366,901 – – – –

Shares forfeited in exchange for

withholding taxes ( 24,720 ) – ( 57 ) – ( 57 )

Net loss – – – ( 2,964 ) ( 2,964 )

BALANCE, June 30, 2023 19,251,920 $ 19 $ 150,159 $ ( 133,825 ) $ 16,353

BALANCE, September 30, 2023 19,299,547 $ 19 $ 150,537 $ ( 134,549 ) $ 16,007

INTELLICHECK, INC.

1 unchanged sentence

(In thousands)

Six months ended June 30,

Nine months ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

7 unchanged sentences

Decrease (Increase) in accounts receivable 1,360 ( 1,284 )

Decrease (Increase) in other current assets and long-term assets 47 ( 178 )

Decrease in other current assets and long-term assets 167 31

(Decrease) Increase in accounts payable and accrued expenses ( 1,493 ) 431

(Decrease) Increase in deferred revenue ( 897 ) 1,246

(Decrease) in liability for shares surrendered

Net cash used in operating activities ( 1,373 ) ( 1,114 )

2 unchanged sentences

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

Purchases of short-term investments

Software development costs ( 1,833 ) —

Net cash provided by (used in) investing activities 3,592 ( 31 )

Net cash provided by investing activities 3,120 18

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercises of stock options

Proceeds of insurance financing arrangement — 49

1 unchanged sentence

Repayment of insurance financing arrangements — ( 133 )

Net cash used in financing activities — ( 124 )

Net cash provided by (used in) financing activities 20 ( 138 )

Net increase (decrease) in cash 1,767 ( 1,234 )

14 unchanged sentences

and one Canadian patents.

For the six months ended June 30, 2024, the Company incurred a net loss of $( 569 ) and used cash in operations of $( 312 ).

As of June 30, 2024, the Company had cash and cash equivalents of $ 7,260 , working capital (defined as current assets minus current liabilities) of $ 6,611 and an accumulated deficit of $( 134,134 ).

For the nine months ended September 30, 2024, the Company incurred a net loss of $( 1,406 ) and used cash in operations of $( 1,373 ).

As of September 30, 2024, the Company had cash and cash equivalents of $ 5,747 , working capital (defined as current assets minus current liabilities) of $ 5,699 and an accumulated deficit of $( 134,971 ).

Based on the Company’s business plan and cash resources, Intellicheck expects its existing cash 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.

3 unchanged sentences

Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements.

In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at June 30, 2024, the results of operations, and stockholders’ equity for the three and six months ended June 30, 2024 and 2023 and cash flows for the six months ended June 30, 2024 and 2023.

In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments necessary for a fair presentation of the Company’s financial position at September 30, 2024, the results of operations, and stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and cash flows for the nine months ended September 30, 2024 and 2023.

All such adjustments are of a normal and recurring nature.

Interim financial statements are prepared on a basis consistent with the Company’s annual financial statements.

Results of operations for the three and six-month periods ended June 30, 2024, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

Results of operations for the three and nine-month periods ended September 30, 2024, are not necessarily indicative of the operating results that may be expected for the year ending December 31, 2024.

The balance sheet as of December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and notes required by GAAP for complete financial statements.

45 unchanged sentences

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

Pursuant to ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31st, or between annual tests, in certain circumstances.

Pursuant to ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment on an annual basis in the fourth quarter on December 31, or between annual tests, in certain circumstances.

Under authoritative guidance, the Company first assesses qualitative factors to determine whether it is necessary to perform step one of the quantitative goodwill impairment test.

2 unchanged sentences

The Company performed its annual impairment test of goodwill in the fourth quarter for the year ended December 31, 2023.

For the six months ended June 30, 2024 and 2023, the Company determined no triggering events existed and as such no impairment charge was required.

For the nine months ended September 30, 2024 and 2023, the Company determined no triggering events existed and as such no impairment charge was required.

Intangible Assets

1 unchanged sentence

The Company amortizes these assets on a straight-line basis over their estimated useful lives, as it represents the pattern of economic benefits consumed.

There were no impairment charges recognized during the three and six-months ended June 30, 2024 and 2023.

There were no impairment charges recognized during the three and nine-months ended September 30, 2024 and 2023.

We capitalize internal-use software costs which includes costs incurred in connection with the development of new internal-use software solutions and enhancements to existing software solutions that are expected to result in increased functionality.

2 unchanged sentences

We evaluate the useful lives of these assets and test for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

There were no impairments of capitalized software development costs for the six months ended June 30, 2024 and 2023.

There were no impairments of capitalized software development costs for the three and nine months ended September 30, 2024 and 2023.

Advertising Costs

Advertising costs, which are expensed as incurred, were $ 183 and $ 371 for the six months ended June 30, 2024 and 2023, respectively.

Advertising costs were $ 105 and $ 172 for the three months ended June 30, 2024 and 2023, respectively.

These costs are recorded as a component of selling, general and administrative expenses within the Statements of Operations.

Advertising costs, which are expensed as incurred, were $ 327 and $ 470 for the nine months ended September 30, 2024 and 2023, respectively.

Advertising costs were $ 144 and $ 99 for the three months ended September 30, 2024 and 2023, respectively.

These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations.

Retirement Plan

2 unchanged sentences

The Company has elected to contribute a matching contribution equal to 50 % of the first 6 % of an eligible employee’s deferral election.

The Company’s matching contributions were $ 0 and $ 54 for the six months ended June 30, 2024 and 2023, respectively.

The Company’s matching contributions were $ 0 and $ 27 for the three months ended June 30, 2024 and 2023, respectively.

During the three months ended June 30, 2024, funds from the plan's forfeiture account were used to fund the matching contributions in accordance with the terms of the plan and as such, the Company recorded no expense during the current period related to its retirement plans.

These costs are recorded as a component of selling, general and administrative expenses within the Statements of Operations.

The Company’s matching contributions were $ 0 and $ 85 for the nine months ended September 30, 2024 and 2023, respectively.

The Company’s matching contributions were $ 0 and $ 31 for the three months ended September 30, 2024 and 2023, respectively.

During the three months ended September 30, 2024, funds from the Retirement Plan's forfeiture account were used to fund the matching contributions in accordance with the terms of the Retirement Plan and as such, the Company recorded no expense during the current period related to its retirement plans.

These costs are recorded as a component of selling, general and administrative expenses within the condensed Statements of Operations..

Shipping Costs

The Company’s shipping and handling costs related to sales are included in cost of revenues for all periods presented.

All other shipping and handling costs are included as a component of selling, general and administrative expenses within the Statements of Operations.

All other shipping and handling costs are included as a component of selling, general and administrative expenses within the condensed Statements of Operations.

Loss Contingencies and Legal Costs

7 unchanged sentences

Deferred tax assets are recognized subject to management’s judgment that realization is more likely than not.

The Company has recorded a full valuation allowance against its net deferred tax assets as of June 30, 2024 and December 31, 2023, as it is more likely than not these assets may not be fully realized due to the uncertainty of the realizability of those assets.

The Company has recorded a full valuation allowance against its net deferred tax assets as of September 30, 2024 and December 31, 2023, as it is more likely than not these assets may not be fully realized due to the uncertainty of the realizability of those assets.

Fair Value of Financial Instruments

1 unchanged sentence

The Company’s financial instruments include cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable and accrued expenses.

At June 30, 2024 and December 31, 2023, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature.

At September 30, 2024 and December 31, 2023, the carrying value of the Company’s financial instruments approximated fair value, due to their short-term nature.

FASB guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable.

4 unchanged sentences

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $ 7,260 and $ 8,980 as of June 30, 2024 and December 31, 2023, respectively.

The Company's Level 1 assets consisted primarily of cash and cash equivalents as well as short-term investments totaling $ 5,747 and $ 8,980 as of September 30, 2024 and December 31, 2023, respectively.

• Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Level 2 includes financial instruments that are valued using models or other valuation methodologies.

The Company had $ 0 and $ 4 of Level 2 liabilities as of June 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options.

The Company had $ 0 and $ 4 of Level 2 liabilities as of September 30, 2024 and December 31, 2023, respectively, for the liability-classified stock options.

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

1 unchanged sentence

Financial instruments are considered Level 3 when the fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The Company had no Level 3 assets or liabilities as of June 30, 2024 and December 31, 2023.

The Company had no Level 3 assets or liabilities as of September 30, 2024 and December 31, 2023.

Revenue Recognition and Deferred Revenue

45 unchanged sentences

In the following tables, revenue is disaggregated by product and service and the timing of revenue recognition.

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Products and services

Software as a Service (SaaS) $ 4,627 $ 4,663

SaaS $ 4,661 $ 4,635

Equipment 13 106

4 unchanged sentences

$ 4,709 $ 4,760

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Products and services

Software as a Service (SaaS) $ 9,236 $ 8,891

SaaS $ 13,896 $ 13,526

Equipment 109 152

5 unchanged sentences

Contract balances

The current portion of deferred revenue at June 30, 2024 and December 31, 2023 was $ 1,798 and $ 2,209 , respectively, and primarily consists of revenue recognized over time for software license contracts and hosted subscription services.

The current portion of deferred revenue at September 30, 2024 and December 31, 2023 was $ 1,312 and $ 2,209 , respectively, and primarily consists of revenue recognized over time for software license contracts and hosted subscription services.

The changes in these balances are related to purchases of a predetermined number of transactions, partially offset by the satisfaction or partial satisfaction of these contracts.

Of the December 31, 2023 balance, $ 2,130 was recognized as revenue in the six months ended June 30, 2024.

Of the December 31, 2023 balance, $ 2,106 was recognized as revenue in the nine months ended September 30, 2024.

Accounts receivable

Accounts receivable, net of allowance for credit losses, at June 30, 2024 and December 31, 2023 was $ 3,315 and $ 4,703 , respectively.

The allowance for credit losses at June 30, 2024 and December 31, 2023 was $ 87 and $ 69 , respectively.

Accounts receivable, net of allowance for credit losses, at September 30, 2024 and December 31, 2023 was $ 3,374 and $ 4,703 , respectively.

The allowance for credit losses at September 30, 2024 and December 31, 2023 was $ 100 and $ 69 , respectively.

Transaction price allocated to the remaining performance obligations

1 unchanged sentence

2024 2025 2026 Total

Software as a Service (SaaS) $ 1,376 $ 421 $ — $ 1,797

Other 1 — — 1

SaaS $ 615 $ 697 $ — $ 1,312

$ 615 $ 697 $ — $ 1,312

7 unchanged sentences

The Company performs ongoing credit evaluations, generally does not require collateral, and establishes an allowance for credit losses based upon factors surrounding the credit risk of customers, historical trends, and other market and economic information.

During the six-month period ended June 30, 2024, the Company made sales to three customers that accounted for approximately 45 % of total revenues, 19 %, 14 % and 12 %, respectively for each customer.

During the nine-month period ended September 30, 2024, the Company made sales to three customers that accounted for approximately 46 % of total revenues, 19 %, 15 % and 12 %, respectively, for each customer.

The revenue was primarily associated with commercial identity sales customers.

These three customers, in addition with one other customer, represented 61 % of total accounts receivable at June 30, 2024, 37 %, 1 %, 12 %, and 11 % respectively for each customer.

During the six-month period ended June 30, 2023, the Company made sales to the same three customers that accounted for approximately 48 % of total revenues, 22 %, 13 % and 13 %, respectively.

These three customers represented 46 % of total accounts receivable at June 30, 2023, 37 %, 8 %, 1 %, respectively.

These three customers, in addition with one other customer, represented 47 % of total accounts receivable at September 30, 2024, 30 %, 1 %, 6 %, and 10 %, respectively, for each customer.

During the nine-month period ended September 30, 2023, the Company made sales to the same three customers that accounted for approximately 49 % of total revenues, 21 %, 14 % and 14 %, respectively.

These three customers represented 46 % of total accounts receivable at September 30, 2023, 38 %, 3 %, 5 %, respectively.

Net Loss Per Share

1 unchanged sentence

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 outstanding options and restricted stock is reflected in diluted earnings per share by

application of the treasury stock method.

The dilutive effect of outstanding options and 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.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

2 unchanged sentences

Basic/Diluted 19,499,174 19,278,295 19,390,258 19,209,620

Net Loss per share –

Loss per common share

Basic/Diluted $ ( 0.04 ) $ ( 0.04 ) $ ( 0.07 ) $ ( 0.15 )

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

7 unchanged sentences

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.

Since the Company operates in one operating segment, all required financial segment information can be found in the condensed financial statements.

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

5 unchanged sentences

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 June 30, 2024 and December 31, 2023.

Due to the nature of these assets and the

short-term nature of the U.S.

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 September 30, 2024 and December 31, 2023.

Due to the nature of these assets and

the short-term nature of the U.S.

treasury notes being held to maturity, both these cash and cash equivalents and short-term investments fall under the Level 1 fair value hierarchy as referenced in Note 2.

As of June 30, 2024

As of September 30, 2024

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

10 unchanged sentences

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

The Company did no t hold any securities that were in an unrealized loss position for more than 12 months as of June 30, 2024.

There were no material realized gains or losses on these specific short-term investments during the three months ended June 30, 2024.

The Company did no t hold any securities that were in an unrealized loss position for more than 12 months as of September 30, 2024.

There were no material realized gains or losses on these specific short-term investments during the three months ended September 30, 2024.

PROPERTY AND EQUIPMENT

Property and equipment, net is summarized as follows:

September 30,

2024 December 31,

3 unchanged sentences

Less – Accumulated depreciation ( 2,116 ) ( 1,977 )

Depreciation expense for the six months ended June, 2024 and 2023 amounted to $ 92 and $ 86 , respectively.

Depreciation expense for the three months ended June 30, 2024 and 2023 amounted to $ 46 and $ 43 , respectively.

Depreciation expense for the nine months ended September 30, 2024 and 2023 amounted to $ 139 and $ 131 , respectively.

Depreciation expense for the three months ended September 30, 2024 and 2023 amounted to $ 47 and $ 45 , respectively.

INTANGIBLE ASSETS

The changes in the carrying amount of intangible assets, net for the six months ended June 30, 2024 were as follows:

The changes in the carrying amount of intangible assets, net for the nine months ended September 30, 2024 were as follows:

Net balance at December 31, 2023 $ 575

1 unchanged sentence

Amortization expense ( 136 )

Net balance at June 30, 2024 $ 1,912

The following tables set forth the components of intangible assets as of June 30, 2024 and December 31, 2023:

As of June 30, 2024

Net balance at September 30, 2024 $ 2,271

The following tables set forth the components of intangible assets as of September 30, 2024 and December 31, 2023:

As of September 30, 2024

Life Adjusted

4 unchanged sentences

Developed technology 5 years 400 ( 367 ) 33

Software development — $ 1,797 $ — $ 1,797

Software development 5 years $ 2,239 $ ( 57 ) $ 2,182

$ 3,014 $ ( 743 ) $ 2,271

The Company has capitalized $ 1,797 in software development costs as of June 30, 2024.

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 June 30, 2024.

The Company has capitalized $ 1,833 in software development costs as of September 30, 2024.

As of December 31, 2023

5 unchanged sentences

Developed technology 5 years 400 ( 307 ) 93

Software development — $ 407 $ — 407

Software development 5 years $ 407 $ — 407

$ 1,182 $ ( 607 ) $ 575

1 unchanged sentence

Three Months Ended

June 30, For the Six Months Ended June 30,

September 30, For the Nine Months Ended September 30,

2024 2023 2024 2023

Cost of revenues $ 24 $ 24 $ 71 $ 71

General and administrative 2 3 5 6

Selling, general and administrative $ 3 $ 3 $ 8 $ 8

Research and development $ 57 $ — $ 57 $ —

$ 84 $ 27 $ 136 $ 79

1 unchanged sentence

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 with Citi Personal Wealth Management’s Base Rate ( 8.00 % and 8.50 % at June 30, 2024 and December 31, 2023, respectively) minus 2 %.

Interest is payable monthly and as of June 30, 2024 and December 31, 2023, there were no amounts outstanding and unused availability under this facility was $ 2,000 .

The facility bears interest at a rate consistent with Citi Personal Wealth Management’s Base Rate ( 7.50 % and 8.50 % at September 30, 2024 and December 31, 2023, respectively) minus 2 %.

Interest is payable monthly and as of September 30, 2024 and December 31, 2023, there were no amounts outstanding 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.

2 unchanged sentences

Accrued expenses are comprised of the following:

September 30,

2024 December 31,

8 unchanged sentences

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

ASC 740 requires evaluation of uncertain tax positions and as of June 30, 2024, the Company has no material uncertain tax positions.

ASC 740 requires evaluation of uncertain tax positions and as of September 30, 2024, the Company has no material uncertain tax positions.

STOCKHOLDERS' EQUITY

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Compensation cost recognized:

Selling, general & administrative $ 58 $ 229 $ 382 $ 824

Research & development 14 94 23 181

Selling, general and administrative $ 220 $ 301 $ 601 $ 1,125

Research and development 17 41 41 222

$ 237 $ 342 $ 642 $ 1,347

2 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 restricted stock units ("RSUs") 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.

Volatility is determined using changes in historical stock prices.

5 unchanged sentences

The fair value 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 stock-based compensation expense by approximately $ 0 and $( 4 ) for the three and six-months ended June 30, 2024, respectively, as a result of the change in fair value of these awards.

The Company increased stock-based compensation expense by approximately $ 15 and decreased stock-based compensation expense by approximately $( 25 ) for the three and six-months ended June 30, 2023, respectively, as a result of the change in fair value of these awards.

The Company decreased stock-based compensation expense by approximately $ 0 and $( 4 ) for the three and nine-months ended September 30, 2024, respectively, as a result of the change in fair value of these awards.

The Company decreased stock-based compensation expense by approximately $( 39 ) and decreased stock-based compensation expense by approximately $( 14 ) for the three and nine-months ended September 30, 2023, respectively, as a result of the change in fair value of these awards.

Stock option activity under the 2015 Plan during the period indicated below is as follows:

7 unchanged sentences

Exercised ( 11,939 ) $ 1.87 — —

Outstanding at June 30, 2024 1,483,007 $ 2.05 2.10 years $ 852

Exercisable at June 30, 2024 479,129 $ 3.68 3.03 years $ 453

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on June 30, 2024.

Outstanding at September 30, 2024 1,577,171 $ 2.04 1.98 years $ 181

Exercisable at September 30, 2024 478,337 $ 3.68 2.78 years $ 72

This amount changes based upon the fair market value of the Company’s stock.

Restricted Stock Units

The Company periodically issues Restricted Stock Units (“RSUs”) which are equity-based instruments that may be settled in shares of common stock of the Company.

The Company periodically issues RSUs which are equity-based instruments that may be settled in shares of common stock of the Company.

The Company issues RSUs to certain directors as compensation which vest with the passage of time.

1 unchanged sentence

The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant, is amortized on a straight-line basis over the requisite service period and charged to operating expenses with a corresponding increase to additional paid-in capital, reduced by forfeitures when they occur.

Restricted stock unit activity during the period indicated below is as follows:

RSU activity during the period indicated below is as follows:

RSUs Weighted

2 unchanged sentences

Vested and settled in shares ( 184,688 ) 3.16

Outstanding at June 30, 2024 93,351 $ 1.96

As of June 30, 2024, there was approximately $ 1,218 of total unrecognized compensation costs, related to all unvested stock options and RSUs.

Outstanding at September 30, 2024 77,869 $ 1.75

As of September 30, 2024, there was approximately $ 871 of total unrecognized compensation costs, related to all unvested stock options and RSUs.

These costs are expected to be recognized as compensation expense over a weighted-average period of approximately 2.00 years.

The Company had 637,414 shares available for future grants under the Company's equity compensation plans at June 30, 2024.

The Company had 506,097 shares available for future grants under the Company's equity compensation plans at September 30, 2024.

COMMITMENTS AND CONTINGENCIES

The Company leases an office in Melville, New York.

Rent expense, which includes utilities, was $ 11 and $ 14 for the three months ended June 30, 2024 and 2023, respectively, and $ 15 and $ 35 for the six months ended June 30, 2024 and 2023 and is included in Selling, general and administrative expenses on the condensed Statements of Operations.

Rent expense, which includes utilities, was $ 8 and $ 19 for the three months ended September 30, 2024 and 2023, respectively, and $ 23 and $ 54 for the nine months ended September 30, 2024 and 2023, respectively, and is included in selling, general and administrative expenses on the condensed Statements of Operations.

The Company determines if an arrangement is a lease at lease inception.

The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

The Company did no t have an Operating Lease ROU or Operating Lease Liability as of June 30, 2024, as its office lease is on a month-to-month term and allows for either party to terminate the lease without a significant penalty.

The Company did no t have an Operating Lease ROU or Operating Lease Liability as of September 30, 2024, as its office lease is on a month-to-month term and allows for either party to terminate the lease without a significant penalty.

Legal Proceedings

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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.

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 June 30, 2024, no material amounts are recorded related to legal proceedings on the balance sheets.

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 September 30, 2024, no material amounts are recorded related to legal proceedings on the balance sheets.

The Company was served a class action complaint in March 2024 alleging violations of the Illinois Biometric Information Privacy Act.

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

What changed 10-Q

Item 1. Financial Statements