What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-31 compared with 2024-04-01 · 220 added, 490 removed, 653 unchanged (52% of the section changed)

4 unchanged sentences

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, 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.

Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024.

Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations, and cash flows as of and for the periods presented, in accordance with U.S.

1 unchanged sentence

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:

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Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 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).

Based on its assessment, management concluded that the Company's internal control over financial reporting was ineffective as of December 31, 2023 due to a material weakness in our internal control over financial reporting.

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 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.

Based on its assessment, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2024.

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

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.

Changes in Internal Control over Financial Reporting

Other than described above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2023 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2024 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

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The information required by this Item is incorporated herein by reference from our 2025 Proxy Statement under the caption “Proposal 2 – Ratification of the Selection of Independent Auditors.”

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

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

Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

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

Balance Sheets as of December 31, 2024 and 2023

Statement of Operations for the years ended December 31, 2024 and 2023

Statement of Stockholders' Equity for the years ended December 31, 2024 and 2023

6 unchanged sentences

4.1 Specimen Stock Certificate (6)

10.2 2015 Omnibus Incentive Plan (9) *

10.3 Bill White Severance Agreement (6) *

4.2 Description of our Common Stock (1)

10.1 2015 Omnibus Incentive Plan, as Amended (7) *

10.2 Jonathan Robins Employment Agreement (8) *

10.3 Bryan Lewis Employment Agreement (9) *

10.5 Garrett Gafke Employment Agreement(12) *

10.4 Adam Sragovicz Employment Agreement (10) *

10.5 Jeffrey Ishmael Employment Agreement (11)*

1 unchanged sentence

10.7 Jeffrey Ishmael RSU Agreement (12) *

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 * *

10.8 Separation Agreement dated as of July 12, 2024 by and between the Registrant and Jeffrey Ishmael (10) *

14.1 Code of Business Conduct and Ethics (2)

16.1 Letter furnished by EisnerAmper LLP, dated October 3, 2022 (11) **

23.1 Consent of FORVIS LLP **

19 Insider Trading Policy **

23.1 Consent of Forvis Mazars LLP **

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

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

97 I ntellicheck Clawback Polic y **

97 Intellicheck Incentive-Based Compensation Recovery Policy (14) *

101.INS Inline XBRL Instance Document **

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333-87797) filed September 24, 1999.

(2) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 30, 2004.

(3) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 21, 2019.

(2) Incorporated by reference to Registrant’s Current Report on Form 8-K filed October 28, 2009.

(3) Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 13, 2014.

(4) Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 9, 2017.

(6) Incorporated by reference to Registrant’s Current Report on Form 8-K filed December 4, 2020.

(7) Incorporated by reference to Registrant’s Current Report on Form 8-K filed October 28, 2009.

(5) Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 14, 2007.

(6) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 11, 2010.

(7) Incorporated by reference to Registrant’s Proxy Statement on Schedule 14A filed March 28, 2022.

(8) Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q filed May 14, 2024.

(9) Incorporated by reference to Registrant's Annual Report on Form 10-K filed March 21, 2019.

(11) Incorporated by reference to Registrant's Current Report on Form 8-K filed October 3, 2022.

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

(10) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q filed November 14, 2024.

(11) Incorporated by reference to Registrant's Annual Report on Form 10-K filed March 28, 2023.

(12) 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.

(13) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed March 30, 2004.

(14) Incorporated by reference to Registrant’s Annual Report on Form 10-K filed April 1, 2024.

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.

April 1, 2024 INTELLICHECK, INC.

March 31, 2025 INTELLICHECK, INC.

/s/ Bryan Lewis

President and Chief Executive Officer

President, Chief Executive Officer and Director

(Principal Executive Officer)

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INTELLICHECK, INC.

April 1, 2024 By:

March 31, 2025 By:

/s/ Bryan Lewis

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(Principal Executive Officer)

April 1, 2024 By:

/s/ Jeffrey Ishmael

Jeffrey Ishmael

Chief Financial Officer and Chief Operating Officer

April 1, 2024 By:

March 31, 2025 By:

/s/ Adam Sragovicz

Adam Sragovicz

Chief Financial Officer

(Principal Accounting and Financial Officer)

March 31, 2025 By:

Smith, Chairman and Director

April 1, 2024 By:

Davis, Director

April 1, 2024 By:

/s/ William P.

Georges, Director

April 1, 2024 By:

March 31, 2025 By:

/s/ Dylan Glenn

Dylan Glenn, Director

April 1, 2024 By:

March 31, 2025 By:

/s/ Gregory B.

Braca, Director

April 1, 2024 By:

March 31, 2025 By:

Ullman, Director

April 1, 2024 By:

March 31, 2025 By:

/s/ Dondi Black

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FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 686)

FINANCIAL STATEMENTS:

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders, Board of Directors, and Audit Committee

Intellicheck, Inc.

To the Stockholders', Board of Directors, and Audit Committee of Intellicheck, Inc.

Opinion on the Financial Statements

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(the “Company”) as of December 31, 2024 and 2023, the related statements of operations, stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2024, 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.

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, 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 included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

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(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

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matter - Capitalized Software Development Costs

As discussed in Note 2 to financial statements, the Company develops software for internal use and capitalizes the software development costs incurred during the application development stage.

Costs are capitalized when preliminary development efforts are successfully completed, it is probable that the project will be completed, and the software will be used as intended.

The Company stops capitalizing costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing.

Costs are amortized on a straight-line basis over the estimated useful life of the related asset.

The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditure will result in additional functionality, and expenses costs incurred for maintenance and minor upgrades and enhancements.

We identified capitalized software costs as a critical audit matter.

Our principal considerations for this determination is the level of subjectivity in management’s determination of whether the time and related costs incurred on software development projects have met the capitalization criteria and is accurately allocated to projects.

There is a high degree of auditor judgment and subjectivity involved in evaluating the audit evidence supporting management’s determinations, particularly as is relates to evaluating the capitalization of internal labor costs.

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

• Obtaining an understanding and evaluated the design and implementation of internal controls related to management's process for evaluating software development costs and the nature of software development costs capitalized.

• Testing the completeness and accuracy of data used by management to support the capitalization of internal-use software.

• Testing management’s process for determining eligibility of costs qualifying for capitalization.

• Evaluating the reasonableness of management’s significant assumptions related to eligibility and allocation of software development costs particularly as it relates to internal labor costs..

• Testing a sample of payroll-related costs to assess whether such costs were capitalized in accordance with the capitalization criteria inclusive of corroborative interviews of personnel involved in software development.

/s/ Forvis Mazars, LLP

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

April 1, 2024

Tysons, Virginia

March 31, 2025

INTELLICHECK, INC.

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DECEMBER 31, 2024 and 2023

(in thousands except share amounts)

(in thousands, except share and per share amounts)

CURRENT ASSETS:

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Short-term investments — 5,000

Accounts receivable, net of allowance of $ 69 and $ 20 as of December 31, 2023, and 2022, respectively

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

Other current assets 571 692

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Accrued expenses 1,742 3,245

Income taxes payable — 90

Equity awards liability — 4

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Total current liabilities 3,186 6,532

OTHER LIABILITIES

Deferred revenue, long-term portion — 1

Total liabilities 3,186 6,532

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Loss from operations ( 1,168 ) ( 2,276 )

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

Interest and other income 283 234

Total other income 283 234

Net loss before provision for (benefit from) income taxes ( 885 ) ( 2,042 )

Provision for (benefit from) income taxes 33 ( 62 )

Net loss $ ( 918 ) $ ( 1,980 )

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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 grants and earned

performance stock grants 421,689 — — — —

Shares forfeited in exchange for withholding

taxes ( 24,720 ) — ( 57 ) — ( 57 )

Net loss — — — ( 1,980 ) ( 1,980 )

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Stock-based compensation — — 1,082 — 1,082

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 )

Stock option exercises, net of cashless

exercises 179,875 — 307 — 307

Issuance of shares for vested restricted stock

grants 248,101 — — — —

Net loss — — — ( 918 ) ( 918 )

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(Increase) in accounts receivable ( 219 ) ( 2,115 )

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

(Increase) in other assets ( 82 ) —

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 )

Decrease (increase) in other current assets 121 ( 84 )

Decrease (increase) in other assets 82 ( 82 )

(Decrease) increase in accounts payable and accrued expenses ( 1,946 ) 616

(Decrease) increase in deferred revenue ( 1,209 ) 1,302

(Decrease) in liability for shares surrendered ( 190 ) —

Increase (decrease) in other current liabilities 25 ( 25 )

Net cash used in operating activities ( 2,694 ) ( 647 )

3 unchanged sentences

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

Software development and other costs ( 407 ) —

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

Software development costs ( 2,048 ) ( 407 )

Net cash provided by (used in) investing activities 2,895 ( 414 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercises of stock options 307 —

Proceeds from insurance financing arrangement 320 49

1 unchanged sentence

Repayment of insurance financing arrangement ( 142 ) ( 147 )

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

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

Net cash provided by (used in) provided by financing activities 485 ( 155 )

Net increase (decrease) in cash 686 ( 1,216 )

CASH, beginning of year 3,980 5,196

14 unchanged sentences

For the year ended December 31, 2024, the Company incurred a net loss of $( 918 ) and had net cash used in operating activities of $( 2,694 ).

As of December 31, 2023, the Company had cash and cash equivalents of $ 3,980 , short term investments of $ 5,000 , working capital (defined as current assets minus current liabilities) of $ 7,843 and an accumulated deficit of $ 133,565 .

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 December 31, 2024, the Company had cash and cash equivalents of $ 4,666 , working capital (defined as current assets minus current liabilities) of $ 6,726 and an accumulated deficit of $ 134,483 .

SIGNIFICANT ACCOUNTING POLICIES

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The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the Company’s financial statements and accompanying notes.

Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets, deferred tax valuation allowances, allowance for doubtful accounts, revenue recognition (including breakage revenue) and the fair value of stock options granted under the Company’s Equity compensation plan.

Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets including software development costs, revenue recognition (including breakage revenue), and the fair value of stock options granted under the Company’s equity compensation plan.

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

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 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.

NOTES TO FINANCIAL STATEMENTS

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

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

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

The Company's cash and cash equivalents consist primarily of both cash on deposits with banks, which are maintained with major financial institutions in the United States, and money market funds.

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

The Company has not experienced any losses with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.

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

Long-Lived Assets and Impairment of Long-Lived Assets

The Company’s long-lived assets include property and equipment, goodwill, and intangible assets.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable in accordance with Accounting Standards Codification (“ASC”) 350 (“ Intangibles – Goodwill and Other ”) and ASC 360 (“ Property, Plant and Equipment ”).

To determine recoverability of its long-lived assets, the Company evaluates the probability that future undiscounted net cash flows, without interest charges, will be less than the carrying amount of the assets.

Impairment is measured at fair value.

Property and Equipment

Accounts Receivable

Accounts receivable are reported on the balance sheets at the outstanding principal amount adjusted for an allowance for credit losses and any charge offs.

Effective January 1, 2023 Intellicheck adopted ASU 2016-13, codified as ASC 326.

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

impacts how the allowance for doubtful accounts is calculated.

The Company has applied a loss rate method which takes historical data as the basis for calculating the allowance amount, along with the aging out outstanding receivables and other factors like current and forecasted market conditions, and potential future impacts to the industry.

The allowance for credit losses is recorded in the period in which revenue is recorded or when collection risk is identified.

Property and Equipment, net

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.

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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, 2023 and December 31, 2022, 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, 2024 and 2023, more detail about this is referenced in Note 5.

For the years ended December 31, 2024 and 2023, the Company determined no impairment charge was required.

Intangible Assets

Intangible Assets, net

Intangible assets include patents, copyrights, developed technology and capitalized software development costs.

1 unchanged sentence

There were no impairment charges recognized for the years ended December 31, 2024 and 2023.

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

The costs incurred in the preliminary stages of development are expensed as incurred.

Once the software has reached the 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

Once the software has reached the application development stage, internal and external costs, if direct and incremental, are capitalized until the software is complete and available for its intended use.

The Company evaluates the useful lives of these assets and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

There were no impairments of intangible assets including capitalized software development costs for the years ended December 31, 2024 and 2023.

Long-Lived Assets and Impairment of Long-Lived Assets

The Company’s long-lived assets include property and equipment and intangible assets.

Impairment is measured at fair value.

There were no impairments of long-lived assets for the years ended December 31, 2024 and 2023.

INTELLICHECK, INC.

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

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.

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's performance obligations are satisfied over time, and as a result, it may follow the right to invoice practical expedient meaning the Company recognizes revenue monthly as invoiced based on its contract terms.

The Company has an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract.

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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.

rather it calculates and recognizes the variable portion at the end of the contract term since these contracts are considered monthly due to the termination clauses included within them.

The fixed and variable performance obligations are recognized monthly based on the contract terms.

2 unchanged sentences

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.

Product returns are estimated and recorded as a reduction to revenue, however, such amounts are 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.

2 unchanged sentences

Software-as-a-Service (SaaS)

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.

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.

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Other Revenue

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

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

The Company’s revenues from other subscription and support services includes jurisdictional updates to certain commercial customers and support services particularly to its Defense ID® customers.

3 unchanged sentences

The revenue is typically based on a formula such as number of locations in a given month multiplied by a fee per location.

Extended warranty revenues are generated when a warranty is provided to the customer separately of other performance obligations when the equipment is sold.

Extended warranty revenues are generated when a warranty is provided to the customer separately from other performance obligations when the equipment is sold.

As the customer obtains access at a point in time and continues to have access for the remainder of the warranty term, the customer is considered to simultaneously receive and consume the benefits provided by the Company’s performance as the Company performs.

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Products and services

Software as a Service (SaaS) $ 18,595 $ 15,728

SaaS $ 19,810 $ 18,595

Equipment 124 165

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Contract balances

The current portion of deferred revenue at December 31, 2023 and December 31, 2022 was $ 2,209 and $ 906 , respectively, and primarily consists of revenue that is recognized over time for software license contracts and hosted subscription services.

The current portion of deferred revenue at December 31, 2024 and 2023 was $ 1,001 and $ 2,209 , respectively, and primarily consists of revenue that is recognized over time for software license contracts and hosted subscription services.

The changes in these balances are related to the satisfaction or partial satisfaction of these contracts.

The entire December 31, 2023, current deferred revenue balance was recognized as revenue in the year ended December 31, 2024.

The noncurrent deferred revenue balances were $ 0 and $ 1 as of December 31, 2023, and December 31, 2022, respectively.

INTELLICHECK, INC.

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2025 2026 2027 Total

Software as a Service (SaaS) $ 2,201 $ — $ — $ 2,201

Other 8 — — 8

SaaS $ 1,001 $ — $ — $ 1,001

$ 1,001 $ — $ — $ 1,001

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Advertising Costs.

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.

Advertising costs, which are charged to expense as incurred and recorded as selling, general and administrative expenses in the Company's Statements of Operations, were $ 418 and $ 536 for the years ended December 31, 2024 and 2023, respectively.

Shipping Costs

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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.

INTELLICHECK, INC.

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( 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).

hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

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

The Company had $ 4 and $ 54 of Level 2 liabilities as of December 31, 2023 and December 31, 2022 respectively, for the liability-classified stock options.

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

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

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

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

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

There were no transfers into or out of Level 3 measurements in 2024 and 2023.

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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 market and economic information.

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

During the year ended December 31, 2024, the Company made sales to three customers that accounted for approximately 50 % of revenue, 20 %, 18 % and 12 %, respectively.

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During the year ended December 31, 2023, the Company had three customers that accounted for 47 % of revenue;

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

21 %, 14 % and 12 %, respectively, and those same three customers accounted for 66 %;

37 %, 6 %, and 23 %, respectively, of its December 31, 2023 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

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

INTELLICHECK, INC.

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

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.

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 $ ( 0.05 ) $ ( 0.10 )

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:

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

Stock options 1,151,104 1,152,714

Restricted stock 35,887 60,500

Performance stock units — 177,688

Total 1,186,991 1,213,214

Stock-based Compensation

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

This pronouncement establishes fair value as the measurement objective in accounting for equity payment arrangements and requires all companies to apply a fair value-based measurement method in accounting for all equity payment transactions with employees and directors.

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Segment Information

The Company adheres to the provisions of ASC 280 (“ Segment Reporting ”), which establishes standards for the way public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in financial statements issued to shareholders.

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.

The Company adheres to the provisions of ASC 280, “ Segment Reporting ”.

The Chief Executive Officer, as the chief operating decision maker (CODM), reviews the financial information presented for purposes of allocating resources and evaluating its financial performance.

The key measure that the CODM uses to allocate resources and in assessing performance is the Company's net loss.

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.

All of the Company’s assets are located in the United States.

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

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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.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU No.

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

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.

The credit loss estimate can now reflect an entity’s current estimate of all future expected credit losses.

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

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.

Recently Adopted Accounting Pronouncements

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

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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.

The Company adopted this standard effective January 1, 2024 and was applied retrospectively.

The adoption of this new standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In 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.

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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.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The amendment requires new financial statement disclosures to provide disaggregated information for certain types of expenses, including employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of revenue, sales and marketing, and general and administrative expenses.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

The Company is in the process of evaluating the effect that the adoption of these standards will have on its financial statements.

Subsequent Events

The Company has evaluated subsequent events through the date these financial statements were issued and determined there are no subsequent events that require disclosure.

CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

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

The following tables summarize 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, 2024 and 2023.

Due to the nature of these assets and the short-

INTELLICHECK, INC.

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( 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.

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.

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Treasury notes

5,000 — — 5,000

Total cash, cash equivalents and short-term investments

$ 4,666 $ — $ — $ 4,666

As of December 31, 2023

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Total cash, cash equivalents and short-term investments

(1) These U.S.

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.

$ 8,980 $ — $ — $ 8,980

(1) 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.

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

Property and equipment are comprised of the following as of December 31, 2023 and 2022:

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

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

The Company did no t hold any securities that were in an unrealized gain/loss position for more than 12 months as of December 31, 2024 and 2023.

The Company recognized $ 283 and $ 234 in realized gains on short-term investments that matured within the years ended December 31, 2024 and 2023, respectively.

PROPERTY AND EQUIPMENT, NET

Property and equipment, net are comprised of the following as of December 31, 2024 and 2023:

Computer equipment and software $ 1,930 $ 1,886

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Less – Accumulated depreciation ( 2,164 ) ( 1,977 )

Depreciation expense for the years ended December 31, 2024 and 2023 amounted to $ 187 and $ 177 , respectively.

Depreciation expense is included in the Statements of Operations within the selling, general and administrative line item.

INTELLICHECK, INC.

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( 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.

Depreciation expense is included in the Statement of Operations within the selling, general and administrative line item.

GOODWILL AND INTANGIBLE ASSETS

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Developed technology 5 years 400 ( 387 ) 13

Software development - 407 — 407

Software development 5 years 2,455 ( 144 ) 2,311

$ 3,230 $ ( 856 ) $ 2,374

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Developed technology 5 years 400 ( 307 ) 93

Software development 407 — 407

$ 1,182 $ ( 607 ) $ 575

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:

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

Years Ended December 31,

1 unchanged sentence

Selling, general and administrative 10 10

Research and development 58 —

The Company's estimated future amortization expense for intangible assets as of December 31, 2024 was as follows:

INTELLICHECK, INC.

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( 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:

These amounts are subject to change based upon the review of recoverability and useful lives that are performed at least annually.

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

Under ASC 350, purchased goodwill is not amortized, but rather is tested for impairment.

Under ASC 350, goodwill is not amortized, but rather is tested for impairment.

The Company’s goodwill balance was $ 8,102 as of December 31, 2024 and 2023.

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The Company performed the first step of the goodwill impairment test to identify potential impairment by comparing the fair value of the Company to its carrying amount, including goodwill.

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, an analysis of similar public company financial information, and an analysis of market transactions.

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.

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.

According to ASC 350-20, the company conducted a qualitative assessment (Step 0) to evaluate goodwill for impairment.

For the year ended December 31, 2023, the company bypassed the qualitative assessment and directly performed a quantitative assessment (Step 1), determining that the fair value of the company exceeded its carrying amount.

In the qualitative assessment for the fiscal year ended December 31, 2024, the company found no significant events or circumstances indicating a decline in the value of goodwill.

As a result, the fair value of goodwill remained above its carrying value as of December 31, 2024, and the company did not proceed with a quantitative assessment for that year.

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 ( 8.50 % and 7.50 % at December 31, 2023 and December 31, 2022) minus 2 %.

The Company maintains 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 the Citi Personal Wealth Management’s Base Rate ( 9.00 % and 8.50 % at December 31, 2024 and December 31, 2023, respectively) minus 2 %.

Interest is payable monthly and as of December 31, 2024 and 2023, 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 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.

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

ACCRUED EXPENSES

Accrued expenses are comprised of the following as of December 31, 2024 and 2023:

(As Adjusted)

Professional fees $ 84 $ 1

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Sales tax accrual 270 1,064

Insurance financing 178 —

Other ( 19 ) 197

$ 1,742 $ 3,245

INTELLICHECK, INC.

NOTES TO FINANCIAL STATEMENTS

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

Insurance Financing Arrangement

In July 2024, the Company entered into a financing arrangement related to insurance premiums totaling $ 334 with an interest rate of 8.58 %.

The monthly loan payments of $ 30 are paid to financing company over a period of 11 months.

As of December 31, 2024, the Company had $ 190 in remaining commitments related to this financing arrangement.

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 a financing company for a total of 11 months.

The Company was not subject to any financial covenants related to this insurance financing arrangement.

The balance of this financing arrangement is included in the balance sheets within the Accrued expenses financial statement line item.

The Company’s deferred tax assets and liabilities are measured using the enacted tax rates that the Company believes will apply in the years in which temporary differences are expected to be recovered or paid.

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Total deferred tax (benefits) expense — —

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

Provision for (benefit from) for income taxes

$ 33 $ ( 62 )

A reconciliation of the statutory U.S.

Federal rate to the Company’s effective tax rate as of December 31, 2024 and 2023 is as follows:

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 %

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Other 0.65 1.07

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

Effective income tax rate

( 3.77 ) % 3.06 %

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, 2024 and 2023 are as follows:

(As Adjusted)

Deferred tax assets:

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Deferred tax assets, net of allowance $ — $ —

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

The Company’s available NOL at December 31, 2024 was approximately $ 28,500 , of which $ 10,900 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 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.

NOLs arising in a tax year ending after 2017 in the amount of $ 17,600 will not expire, but are subject to 80% limitation on utilization.

In addition to the NOLs, the Company has approximately $ 700 of research and development credits.

The Company files numerous tax returns in various jurisdictions.

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

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

The Company recorded an income tax expense of approximately $ 33 for the year ended December 31, 2024 related to state taxes.

The effective tax rate for the years ended December 31, 2024 and 2023 is different from the tax benefit that would result from applying the statutory tax rates primarily due to the recognition of valuation allowances.

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

In 2024, the valuation allowance increase by approximately $ 104 , primarily related to temporary differences arising from Section 174 capitalized costs and payroll related accruals.

STOCKHOLDERS’ EQUITY

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To retain and attract qualified personnel necessary for the success of the Company, the Company adopted the 2015 Omnibus Incentive Plan (the “Plan”) covering up to 5,236,000 of the Company’s common shares, pursuant to which officers, directors, key employees and consultants to the Company are eligible to receive incentive stock options, nonqualified stock options and restricted stock units.

All the equity compensation plans prior to Company’s 2015 Omnibus Incentive Plan have been closed.

All the equity compensation plans prior to the Company’s 2015 Omnibus Incentive Plan have been closed.

The Compensation Committee of the Board of Directors administers this Plan and determines the terms and conditions of stock options granted, including the exercise price.

This Plan generally provides that all stock options will expire within ten years of the date of grant.

The Plan generally provides that all stock options will expire within ten years of the date of grant.

Incentive stock options granted under this Plan must be granted at an exercise price that is not less than the fair market value per share at the date of the grant and the exercise price must not be less than 110 % of the fair market value per share at the date of the grant for grants to persons owning more than 10 % of the voting stock of the Company.

This Plan also entitles non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors.

The Plan also entitles non-employee directors to receive grants of non-qualified stock options as approved by the Board of Directors.

The Company uses the Black-Scholes option pricing model to value the options on the grant date.

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Certain option awards are classified as liability awards.

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

The Company recorded $( 4 ) and $( 50 ) of credits to stock-based compensation expense in the years ended December 31, 2024 and 2023, respectively, as a result of the change in fair value of these awards.

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Risk-free interest rate 3.70 % – 4.40 %

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 $ 2.68

Expected dividend yield 0 %

Expected volatility range for grants after mark-to-market adjustment 79.88 % - 82.02 %

Expected life (in years) for grants after mark-to-market adjustment 0.08 – 0.54

Risk-free interest rate range for grants after mark-to-market adjustment 4.80 % - 5.59 %

Stock option activity during the periods indicated below was as follows:

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Exercisable at December 31, 2024 434,877 $ 4.07 2.64 years $ 115

INTELLICHECK, INC.

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

The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on December 31, 2023.

the-money options) that would have been received by the option holders had they all exercised their options on December 31, 2024.

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

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1,151,104 3.98 years $ 2.94 434,877 $ 3.97

The weighted-average fair value of the options granted during the year ended December 31, 2023 is $ 2.91 .

All stock options have been issued with an exercise price that is equal or above the fair market value of the Company’s Common Stock on the date of grant.

The weighted-average fair value of the options granted during the year ended December 31, 2024 was $ 2.94 .

All stock options were issued with an exercise price that is equal or above the fair market value of the Company’s common stock on the date of grant.

The amount of unrecognized expense of the options for the year ended December 31, 2024 was $ 726 .

Restricted Stock Units

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

The amount of unrecognized expense of the RSUs for the year ended December 31, 2024 was $ 0 .

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

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Granted 223,485 4.23

Forfeited ( 70,959 ) 10.04

Forfeited — N/A

Vested and Settled in shares ( 246,028 ) 2.80

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Forfeited ( 88,844 ) 7.91

Vested and Settled in shares ( 88,844 ) $ 7.91

Outstanding at December 31, 2023 — $ —

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As of December 31, 2024, the Company had 736,175 shares available for future grants under the Company’s equity compensation plans.

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, 2023, the Company had no remaining warrants outstanding and all the warrants expired unexercised.

COMMITMENTS AND CONTINGENCIES

The Company leases an office in Melville, New York.

Rent expense, which includes utilities, was $ 68 and $ 78 for the years ended December 31, 2023 and 2022 and is included in Selling, general and administrative expenses on the Statement of Operations.

Rent expense, which includes utilities, was $ 30 and $ 68 for the years ended December 31, 2024 and 2023, respectively, and is included in Selling, general and administrative expenses on the Statement of Operations.

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

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

The Company did no t have an Operating Lease ROU or Operating Lease Liability as of December 31, 2023, 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 right of use ("ROU") or operating lease liability as of December 31, 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

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

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

From time to time, the Company may be involved in lawsuits, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business.

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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 of December 31, 2024 and 2023, no material amounts are recorded related to legal proceedings on the balance sheets.

The Company received a class action complaint on March 24, 2024 alleging that the Company collected biometric information from users in Illinois in violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq.

The Company is not able to fully assess the probability and outcome of the matter due to the need to conduct further investigation.

However, it does not currently believe that a material loss is probable nor estimable.

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

2 unchanged sentences

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 2024 and is based as a percentage of the employee’s salary.

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.

At December 31, 2024 and 2023, this bonus liability for the executive and employee bonus plans amounted to $ 464 and $ 824 and is included in Accrued Expenses on the Balance Sheets .

RETIREMENT PLAN

4 unchanged sentences

The Company’s matching contributions were $ 0 and $ 108 for 2024 and 2023, 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