Intellicheck, Inc.: Form 10-K for the period ended Dec 31, 2025

OVERVIEW

We originally were incorporated in the state of New York in 1994 as Intelli-Check, Inc. In August 1999, we reincorporated in Delaware. On March 14, 2008, our corporation was renamed Intelli-Check - Mobilisa, Inc. after the consummation of the merger with Mobilisa, Inc. (“Mobilisa”) (references to “Intelli-Check” in this annual report refer to the Company prior to the merger with Mobilisa). At the closing of the merger, our headquarters were moved to Mobilisa’s offices in Port Townsend, Washington. On October 27, 2009, we made a further change in our name to Intellicheck Mobilisa, Inc. On May 4, 2017, with the approval of our shareholders, we changed our name to Intellicheck, Inc. (“Intellicheck,” “we,” “our,” “us,” or “the Company”). On August 31, 2009, the Company acquired 100% of the common stock of Positive Access Corporation (“Positive Access”), a developer of driver's license reading technology. The acquisition of Positive Access expanded the Company’s technology portfolio and related product offerings and allowed the Company to reach a larger number of customers through Positive Access’s extensive distribution network. On December 31, 2018, we formally merged the Mobilisa and Positive Access subsidiaries into one corporation under the name Intellicheck, Inc.

We are a prominent technology company that delivers on-demand digital identity validation solutions for Know Your Customer ("KYC") fraud, and age verification needs. We validate both digital and physical identities for financial services, fintech companies, BNPL providers, e-commerce, retail commerce businesses, law enforcement and government agencies across North America. Our software solutions can be used through a mobile device, a browser, or a retail point-of-sale scanner.

We plan to expand our business in the near term by continuing to pursue a strategy designed to increase market share in our existing markets and expand into new product markets that are expected to benefit from fraud prevention and identity validation. For example, we have extended our technologies into online applications to provide identity validation and fraud prevention for the billions of transactions that occur online each day. We also have incorporated biometric, facial recognition and other enhancements to several of our current product offerings in order to stay on the leading edge of technology.

We plan to leverage our intellectual property in the markets we are targeting to strengthen our competitive position.

Our primary businesses include Identity Systems products, which include commercial applications of identity card reading authentication.

Our technologies address problems such as:

• Commercial Fraud – financial institutions and merchants use our technology to prevent economic losses from check cashing, debit and credit card transactions, account take overs, and e-commerce as well as other types of fraud such as identity theft that principally use fraudulent identification documents as proof of identity;
• Instant Credit Card Approval – retail stores and financial institutions use our technology to scan a driver's license at a kiosk or at the Point of Sale (POS) to confirm that an applicant is who they claim to be with additional certainty. Once confirmed that a driver's license is valid, the transaction can proceed to the underwriting stage where qualified applicants can get instant approval for a loyalty-branded credit card. This technique protects consumer data and is significantly more likely to result in a completed transaction compared to in-store personnel asking customers to fill out a paper form and then entering the data;
• Age Restricted Product Access – products validate driver's licenses and other government forms of identification to confirm the age of customers purchasing age restricted products. Target industries include alcohol, cannabis, tobacco, gambling, bars and nightclubs.
• Unauthorized Access – our systems and software are designed to increase security and deter terrorism at airports, shipping ports, rail and bus terminals, military installations, high profile buildings and infrastructure where security is a concern;
• Fraudulent Retail Purchase Returns – implementing our validation software solutions can prevent fraudulent retail returns in situations where customers are seeking store credit or cash compensation for items being returned without a receipt when the transaction requires a driver's license for identification; and
• Inefficiencies Associated with Manual Data Entry – by reading encoded data contained in the bar code and magnetic stripe of an identification card with a quick swipe or scan of the card, where permitted by law, customers are capable of accurately and instantaneously inputting information into forms, applications and the like without the errors associated with manual data entry.

IDENTITY CARD READING AND VERIFICATION SECTOR

Background on Identification Documentation

Driver's license

The driver's license is the most widely used form of government issued photo identification in North America. The Real ID Act, which became federal law in May 2005, recognizes that the driver's license is also a quasi-identification card. In addition to its primary function, the driver license is used to verify identity for social services, firearm sales, check cashing, credit card issuance and use and other applications. Our technology can read the digitally stored barcode information on all currently issued driver's licenses even those that do not comply with the standards of the American Association of Motor Vehicle Administrators (“AAMVA”), the American National Standards Institute (“ANSI”) and the International Standards Organization (“ISO”). Today, all 50 states, the District of Columbia, territories of the United States, United States Military, and all 13 Canadian provinces/territories digitally store information on their driver license.

Non-driver identification card

U.S. and Canadian jurisdictions also provide a non-driver identification cards as an alternative form of identification for those unable to acquire a driver's license. These identification cards are issued with most of the same data found on a driver's license. Military documents and passports also provide a means of identification and contain encoded data as well. Since driver's licenses are the most widely used form of legally acceptable government documentation, we refer to all these identification documents as “driver's licenses.” Our software can perform its function on all these forms of identification.

Current Challenges Associated with Verifying Identification Documents

The high-tech revolution, coupled with the staggering amount of personal information available from data breaches, has created a major problem for those who rely on identification documents. In an age where high-tech scanners, computers and color printers are commonplace, and where personal information is so cheap to purchase off of the 'dark web', fake IDs of the highest quality with the identity theft victim’s actual information on the document are easily obtainable from many locations including college campuses and from multiple sites on the Internet. These fakes appear so real, even law enforcement agencies have encountered difficulty distinguishing them from legally issued documents. Additionally, high-tech equipment easily can alter properly issued forms of ID. Therefore, anyone can gain access to a false identity that gives them the ability, in a commercial transaction, to present fake and stolen credit cards or checks that are supported by false identification. Additionally, starting with only a fraudulent driver's license, an individual may be able to create multiple credit accounts, commit fraud, and buy age restricted products such as alcohol, tobacco and cannabis while underage, evade law enforcement and engage in other criminal activities, such as:

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• unlawfully committing pharmacy fraud, including false narcotic prescriptions; and •committing refund fraud

Given the ease with which identification can be falsified, simply looking at a driver's license may not be sufficient to verify age or identity and determine if it is fraudulent. Since merchants and financial institutions are facing significant economic losses due to these frauds, we believe that a document authentication system that can accurately read the digitally stored information is needed. We possess patented technology that provides an analysis of the data contained on the encoded formats of these identification documents by reading and analyzing the encoded format on the bar code on the driver's license and comparing it against known standards.

OUR PRODUCTS AND SERVICES

Our Products and Services generally are sold as Software-as-a-Service (“SaaS”) where customers pay for our cloud-based service.

Identity Systems Products and Services

Our Identity Systems are marketed to the Commercial, Retail, Financial and Government identification sectors.

Commercial Identification

Intellicheck® Service

The Intellicheck Service is a complete identity solution that checks whether an ID is valid, matches the ID to the person presenting it, and provides a risk score to help determine the risk of doing business with that person. It is designed to be used online and in retail settings using devices that can include a mobile phone or tablet, a PC or retail scanner. The Intellicheck Service is designed to address the needs of users across a variety of use cases including account access, account openings, receiptless returns, receipt of delivery, age restricted purchases and more.

Validating the ID

Using its own proprietary technology, Intellicheck utilizes an iOS or Android phone, or a retail scanner to read and verify the encoded format contained on U.S. and Canadian driver's licenses, state issued non-driver identification cards, military IDs and passports. Our technology has the ability to verify the encoded formats on all currently encoded documents, even those that do not comply with the standards of the AAMVA, ANSI and ISO.

Using integrated third-party technology, Intellicheck offers the ability, through certain platforms, to scan and verify more than 10,000 documents around the world including drivers licenses, state identity documents and passports.

Our Intellicheck Service quickly can determine:

• if the format of the document is valid;
• if the document has been altered or is fake by displaying the parsed, encoded data for comparison with the printed information;
• if the document has expired; or
• if the encoded data contains a date of birth equal to or greater than the legal age to purchase age-restricted products, such as alcohol, vaping products, cannabis and tobacco.

Matching the person to the ID

Intellicheck integrates third-party software to provide the ability to match a selfie of a person to the picture on the driver's license. These facial biometrics capabilities allow the Intellicheck platform to check for likeness to ensure that static photos are not being used as a stand-in for the user on both ends of the match, in addition to the ability to match the

ID photo to the selfie and provide a match score. This capability is integrated into the Intellicheck platform to allow for fast deployment and is an option for platform subscribers.

Determining the risk score

The Intellicheck Service offers the ability to analyze data or signals to determine the risk of doing business with the person on the identity document. Intellicheck provides access to a wide variety of data signals including device fingerprinting, IP address, phone number, time zone, geographic location and more to analyze, using machine learning, the risk of doing business with that person.

How Intellicheck Service is delivered

The Intellicheck Service consists of the following elements:

• IDN-Mobile
• IDN-Mobile is an Intellicheck-branded identity validation application that typically can be set-up for a user in under an hour. It provides the ability to scan an ID using a mobile phone or tablet. IDN-Mobile provides the flexibility to allow the Intellicheck customer or their customer to perform the scan. This enables the Intellicheck customer to manage their application online using the PC.
• IDN-Portal
• IDN-Portal has all the features of IDN-Mobile and additionally includes the ability to perform a facial biometrics test to match the picture on the ID to a selfie of the user presenting the ID. Additionally, Portal also adds global document validation, retail POS integration, additional data for analytics and analysis and online validation among other features.
• IDN-Direct
• IDN-Direct provides the capabilities of the Intellicheck Service within the user's own apps and integrated with their systems. IDN-Direct is accessible through the Intellicheck API to aid integration into customer applications and systems. IDN-Direct provides a Software Development Kit ("SDK") to simplify integration into the user’s mobile applications. IDN-Direct also provides access to additional data along with the ability to use the platform’s Risk Score capability to help with decision making.
• IDN-Capture
• IDN-Capture provides the capabilities of the Intellicheck Service within a flexible custom white label experience.

Advantages of the Service

• Fast results
• The Intellicheck Service provides results of an ID scan in under a second. Facial biometrics may add additional seconds to the process.
• Fast deployment
• With IDN-Mobile or IDN-Portal, customers typically can be up and running in under an hour.
• Accurate ID validation
• For North American documents, Intellicheck provides market-leading identity validation accuracy that can remove the need for manual review, as well as accuracy that leading businesses use to enable real-time processes. For the rest of the world, Intellicheck provides best of breed document accuracy.

Data Collection Devices

Our software products are designed for use with multiple data collection devices, which are commercially available in various compact forms and may contain either one or both of 2-D bar code and magnetic stripe readers. These devices enable our software applications to be used on a variety of commercially available data processing devices, including credit card terminals, PDAs, tablets, laptops, desktops, mobile phones, and point-of-sale terminals. Many of these devices contain an electronic serial number (ESN) to prevent unauthorized use of our software.

Instant Credit Application Kiosk Software Applications

These are custom software applications that Intellicheck developed for a variety of major financial service companies and retail stores. The software installed on multiple kiosk devices provides the customers of the major financial service companies and retail stores with the ability to perform in-store instant credit approval. The hardware platforms, on which the software applications run, range from stationary devices to handhelds to tablet PCs. The process involves the swiping or scanning of the driver's license to verify the encoded format and after verification, the information parsed from the encoded data is populated into the proper fields on the application displayed at the kiosk. The applicant then completes the application by entering the remaining required information that is not encoded on the driver's license, such as social security number and telephone numbers. The software application then sends the data to the financial service company’s backend “decisioning” tool for credit approval. If approved, the applicant is granted instant credit which then can be used to make purchases.

Upgrade Capability

Our Intellicheck Service products and related databases are constantly updated to stay current with identification formats, new forms of ID and government regulations guiding use of digital information.

STRATEGY

Our objective is to be a leading identity verification company providing world-class solutions in the identity sector. These solutions include our commercial identity systems focusing on workflow, productivity enhancement, fraud protection and risk management segments. Key elements of our strategy are as follows:

Commercial Systems

Enhance Productivity. We market our technology as a key productivity enhancement tool. Our proprietary Intellicheck Service software can add functionality to virtually any given software application to automatically populate fields within a given form, when a government-issued photo ID is presented. Our ability to correctly read and authenticate in all U.S. jurisdictions, coupled with our proprietary technology, is a key differentiator from our competitors. The automation resulting from the intelligence added to the form dramatically increases throughput and data integrity, and it significantly enhances the customer’s experience.

Develop Additional Strategic Alliances. We have entered strategic alliances to utilize our systems and software as the proposed or potential enrollment application for their technologies and to jointly market these security applications. We are an associate member of AAMVA and a member of AAMVA’s Industry Advisory Board. We believe these relationships will broaden our marketing reach through their sales efforts and we intend to develop additional strategic alliances with additional providers of security solutions.

Strengthen Sales and Marketing Efforts. We intend to capitalize on the growth in demand for document verification and productivity enhancement by continuing to market and support our systems and software. Our sales and marketing departments are organized by region and specifically named accounts to provide focus and proximity to build solid long-term relationships. Our recent focus has been on SaaS license arrangements in the financial services, retail, and hospitality services industries.

Enter into Additional Licensing Agreements. We intend to continue to license our software for use with a customer’s system. We currently are licensing our SDK software product for Windows, iOS, Android and other operating system platforms and intend to similarly continue to license our PC software solutions. Our software is intended to be used with a compatible hardware device. We have entered into multiple licensing agreements to date.

Protect Intellectual Property. We intend to protect our intellectual property portfolio to preserve value and obtain favorable settlements where warranted.

Our Revenue Sources

We derive our revenue primarily from the following sources:

• Sales of our products and services by both our own direct sales force and marketing partners;
• Per transaction or fixed price (SaaS) revenue from the licensed use of our technology;
• Extended warranties on equipment; and
• Other subscription and Support Services, such as jurisdictional updates to certain commercial customers and support services.

Our Target Industry Sectors

Commercial Identity Systems

The use of false identification cards, primarily driver's licenses and non-driver identification cards, to engage in commercial fraud, to gain access to unauthorized areas and to gain entry to critical infrastructure is all too common and the problem is growing with each passing day. Given the ease with which identification can be falsified, we believe that simply looking at a driver's license is not sufficient to verify identity and determine if such an identification card is fraudulent. Since merchants and financial institutions are facing significant economic losses due to these frauds, we believe that what they need is a document authentication system that can accurately read the digitally stored information. We target the industry sectors that we believe would benefit most from our systems and software.

We also market our products to businesses where there are opportunities for our Intellicheck Platform technology to enhance productivity. We have made significant progress in the sectors for the retail issuance of instant credit. We believe there are financial benefits and compelling business models for customers in the below sectors to utilize our technology.

Productivity Enhancement

Commercial Fraud Protection

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Access Control

Age Verification

Law Enforcement/Government

MARKETING AND DISTRIBUTION

Commercial Identity Systems

Our objective is to become a leading developer and distributor of document and age verification software. To date, our marketing efforts have been through direct sales by our sales and marketing personnel, through resellers and through license agreements. We are marketing our products through direct marketing approaches such as web marketing, a small number of select trade shows and well-known public interest and trade associations.

We generate revenues from the licensing of our software, and to a much lesser extent, the selling of bundled solutions that contain hardware and software. Depending on the specific needs of our clients, we tailor the solution for them.

Our Intellicheck Platform software is available to customers via the cloud (SaaS) and is available for Microsoft Windows, Android and iOS platforms in addition to devices such as credit card terminals and other operating systems such as Linux. We are marketing our Intellicheck Platform technology to financial institutions, mass merchandisers, government, airlines, airports, high-profile buildings or infrastructure, grocery, convenience and pharmacy chains, and casinos.

We have developed a comprehensive marketing plan to build customer awareness and develop brand recognition in our target industry sectors. We promote the advantages and ease of use of our products through:

We intend to continue to develop and market other related software applications.

MAJOR CUSTOMERS

Although the composition of our largest customers has changed from year to year, a significant portion of our revenues has been attributable to a limited number of major customers. In 2025 and 2024, our top ten customers accounted for approximately 77% and 71%, respectively, of total revenues. While we believe that one or more major customers could account for a significant portion of our sales for at least the next two years, we anticipate that our customer base will continue to expand and that in the future we will be less dependent on major customers.

REGULATION

The sale and use of our products are subject to regulation, such as on data protection and storage, by government authorities. We work on an ongoing basis with our customers to facilitate their compliance with such regulations. Additionally, we believe that we currently are in compliance with applicable United States federal laws, state and local laws and regulations relating to the protection of the environment.

COMPETITION

Commercial Identity Systems

We compete in an industry that is intensely competitive and rapidly changing. Unless a device can read, decode and analyze all the information that is legally permitted to be analyzed, which is digitally stored within the barcode on a driver's license, the user may not obtain accurate and reliable confirmation that a driver's license is valid and has not been altered or tampered with. We are aware of several companies that currently are offering products that electronically read and calculate age from a driver's license. We have tested and compared some of these products to the Intellicheck Service and believe that our product is superior in quality and functionality. We believe that units unable to read bar codes are at a significant disadvantage because all states and Canadian provinces currently utilize bar codes to encode their driver's licenses, as well as all U.S. military IDs and uniformed services cards.

We have experienced and expect to continue to experience increased competition in the document verification sector. If any of our competitors were to become the industry standard or were to enter or expand relationships with significantly larger companies through mergers, acquisitions or otherwise, our business and operating results could be seriously harmed. In addition, potential competitors could bundle their products or incorporate functionality into existing products in a manner that discourages users from purchasing our products.

MANUFACTURING

We do not manufacture readers or input devices but use products from several manufacturers. Some of these devices are private labeled and programmed by the supplier to work with our Intellicheck Service technology. Most of our hardware consists of commercial off-the-shelf (“COTS”) products. We rely on a small number of suppliers to provide our COTS products.

RESEARCH AND DEVELOPMENT

Our research and development efforts mainly are concentrated in the area of identity verification. Research and development expenses consist primarily of employee salaries, benefits, bonuses, and stock-based compensation. Research and development expenses also include consulting fees, software and subscription services, and a portion of our third-party cloud infrastructure expenses incurred in maintaining our platform.

INTELLECTUAL PROPERTY

We currently hold ten (10) U.S. patents and one (1) Canadian patent. These patents cover commercially important aspects of our capabilities relating to the authentication and verification of identification documents. We will continue to pursue patents for all our new technologies arising from our research and development efforts.

In January 1999, the U.S. Patent and Trademark Office granted us a patent on our ID Check® software technology. In October 2002 and July 2005, we were granted additional patents that are a continuation of our patents relating to our document authentication and age verification technology. Upon our acquisition of the assets of IDentiScan, we received equitable ownership and sole ownership rights to its intellectual property, including other patents and patent applications relating to age verification technology.

During 2010, we were granted two additional patents. The first patent was for a software key control for mobile devices. It is used to get a registration key for the parser that is based on the unique internal ID of one mobile device. The Mobile Key Manager communicates with the mobile device, reading its ID, and then requests a registration key specific for that ID from Intellicheck's server. This server maintains a database of all customers using IDecode Mobile Parsers, including the number of licenses they have purchased, the latest software version for which they have paid support, and the registration keys and unique device IDs associated with those licenses. The server generates a new registration key unique to the device ID and returns it to the Mobile Key Manager to register that device. In this way, the customer can deploy the IDecode Mobile Parser to only one mobile device for each parser purchased.

The second patent was related to a document comparison system and reinforces the innovative nature of Intellicheck’s security solutions involving documents. The technology described in the patent relates to a system and method for comparing information contained in at least two documents. For example, information on at least two different documents can be compared to determine whether the information is the same on each document. For instance, a name contained on an individual’s driver’s license is automatically compared with a name contained on the individual’s airline boarding pass.

In 2012, we were granted a patent relating to a system and method for comparing information contained in at least two documents, but not limited to just a driver's license and passport. This patent compares “like information” on different documents to determine whether the information is the same on each document. As an example, a passport is compared to a boarding pass to determine if “like information” matches, for instance name and birthdate.

In 2016, we were granted one patent in Canada that was a continuation of an earlier filed application and is related to identity matching in response to threat levels.

We were granted two patents in 2019 that were continuations of earlier filed applications. The first patent is related to checking the validity of identification documents using a remote database. The second patent related to identification scanning in compliance with jurisdictional or other rules.

In 2022, we were granted two patents that were continuations of earlier filed applications. The first patent is related to using a mobile device to perform verification of a selfie to a photo on an identification document. The second patent is related to a system and method for document comparison that compares information contained in multiple documents.

We own multiple copyrights in the United States, which are effective in Canada and in other major industrial countries. The copyright protection covers software source codes and supporting graphics relating to the operation of the Intellicheck Platform and other software products. We also have several trademarks relating to our company, its product names, and logos.

EMPLOYEES AND HUMAN CAPITAL RESOURCES

As of March 19, 2026, we had 38 full-time employees. Four are engaged in executive management — our Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, and Chief Commercial Officer. We have twenty employees in information technology including those participating in our research and development efforts, four employees in sales and marketing, seven employees in customer and support integration, and seven employees in administration. All employees are employed “at will.” We believe our relations with our employees are generally positive and we have no collective bargaining agreements with any labor unions.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and new employees. The principal purposes of our equity compensation and cash incentive plans are to attract, retain and reward personnel, whether existing employees or new hires, through the granting of equity and cash-based compensation awards. We believe that this increases value to our stockholders and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.

As the success of our business is fundamentally connected to the well-being of our employees, we are committed to their health, safety and wellness. We provide our employees and their families with access to convenient health and wellness programs, including benefits that provide protection and security giving them peace of mind concerning events that may require time away from work or that impact their financial well-being; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

Forward Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, particularly statements anticipating future growth in revenues, loss from operations and cash flow. Words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. These forward-looking statements are based on management’s current expectations and beliefs about future events. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Company is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements whether as a result of such changes, new information, subsequent events or otherwise.

RISK FACTORS

Risks Related to Our Business and Industry (All dollar amounts are rounded to thousands, except per share data)

Although we achieved profitability for the fiscal year ended December 31, 2025, we have a history of operating losses, and we cannot provide assurance that we will maintain profitability.

We reported net income of $1,273 for the fiscal year ended December 31, 2025, compared to a net loss of $(918) for the fiscal year ended December 31, 2024. Despite this recent profitability, we have an accumulated deficit of $(133,210) as of December 31, 2025. We expect to continue incurring significant operating expenses as we invest in product development, specifically regarding our AI and fraud detection capabilities, and expand our sales operations. These investments may increase our costs faster than our revenue grows. Accordingly, we may not be able to maintain profitability in subsequent periods, which could result in a decline in the value of our securities.

Our proprietary software relies on reference data provided by government and quasi-government agencies. If these governmental and quasi-government agencies were to stop sharing data with us, the utility of our proprietary software would be diminished in those jurisdictions and our business would be damaged.

Currently, every U.S. state, ten Canadian provinces and the District of Columbia, in most instances, conform to the guidelines established by certain organizations responsible for implementing industry standards and cooperate with us by providing sample identification cards so that we may modify all our hardware and software products to read and analyze the encoded information found on such jurisdiction’s identification cards. If one or more of these jurisdictions do not continue to provide this reference data, the utility of our proprietary software may be diminished in those jurisdictions.

Disruptions at federal governmental agencies that we interact with, due to a reduction in workforce and/or inadequate funding, could prevent such agencies from performing normal functions on which our business relies, which could negatively impact our business.

Changes in federal spending priorities, prolonged government shutdowns, constraints on agency budgets and staffing levels, or shifts in policy priorities could reduce the ability of certain governmental agencies to perform their responsibilities, including issuing and updating identification standards and sharing reference data with us, which could have a material adverse effect on our business.

Our business strategy exposes us to long sales and implementation cycles for our products.

Our target customers in the commercial fraud protection, financial services, retail, access control and age verification industry sectors include banks and credit card issuers, large retailers and to a lesser extent, government agencies, which typically require longer sales and implementation cycles for our products than do our potential customer base solely interested in age verification, such as restaurant, bar and convenience store operators. The longer sales and implementation cycles for larger retail companies continue to have an adverse impact on the timing of realizing our revenues. In addition, budgetary constraints and potential economic slowdowns or inflationary pressures also may continue to delay purchasing decisions by these prospective customers.

The industry for our systems and software is evolving and its growth is uncertain.

Demand and industry acceptance for recently introduced and existing systems, and software and sales from such systems, are subject to a high level of uncertainty and risk. Changes in government budgets, and slowly evolving government standards on use of identity products have impacted the development of our business serving the government sector. The commercial sector can develop faster than the government sector, but it subject to a higher level of uncertainty because of potential uncertainty in the continued financial health of our commercial customers, as well as long sales cycles. Our business may suffer if the industry demand develops more slowly than anticipated and does not sustain industry acceptance.

Failure to manage our operations if they expand could impair our future growth.

If we expand our operations, particularly through multiple sales to large retailers and government agencies in the document verification industry, the expansion will place significant strain on our management, financial controls, operating systems, personnel and other resources. Our ability to manage future growth, should it occur, will depend upon several factors, including our ability to do the following:

• build and train our sales force;
• establish and maintain relationships with distributors;
• develop customer support systems;
• develop expanded internal management and financial controls adequate to keep pace with growth in personnel and sales, if they occur; and
• manage the use of third-party manufacturers and suppliers.

If we can grow our business but do not manage our growth successfully, we may experience increased operating expenses, loss of customers, distributors or suppliers and declining or slowed growth of revenues.

Failure to protect our proprietary technology may impair our competitive position.

We continue to allocate significant resources to developing new and innovative technologies that are utilized in our products and systems. Because our continued success depends on, to a significant degree, our ability to offer products providing superior functionality and performance to those offered by our competitors, we consider the protection of our technology from unauthorized use to be fundamental to our success. This is done by processes aimed at identifying and seeking appropriate protection for newly developed intellectual property, including patents, trade secrets, copyrights, and trademarks, as well as policies aimed at identifying unauthorized use of such property. These processes include:

• including provisions for nondisclosure of proprietary information in our contractual arrangements;
• maintaining and enforcing issued patents and filing patent applications on innovative solutions to commercially important problems;
• protecting trade secrets, including software source code;
• protecting trademarks by registration and other appropriate means;
• establishing internal processes for identifying and appropriately protecting new and innovative technologies; and
• establishing practices for identifying unauthorized use of intellectual property.

Litigation can be very costly and divert management’s attention. An adverse outcome in any litigation may have a severe negative effect on our financial results. To determine the priority of inventions, we may have to participate in interference proceedings declared by the U.S. Patent and Trademark Office or oppositions in foreign patent and trademark offices, which could result in substantial cost and limitations on the scope or validity of our patents or trademarks.

Additionally, third parties, including our competitors or licensees, may seek to have our patents reviewed by the Patent Trial and Appeal Board of the United States Patent and Trademark Office in a post grant proceeding, such as post grant review or an inter parties review. Such proceedings, if instituted could cancel our patents or narrow the scope of our patent claims. We cannot predict the effect that such proceedings, if instituted, may have on our business or revenue received from licensing our patents.

In addition, foreign laws treat the protection of proprietary rights differently from laws in the United States. The failure of foreign laws or judicial systems to adequately protect our proprietary rights or intellectual property, including intellectual property developed on our behalf by foreign contractors or subcontractors, may have a material adverse effect on our business, operations, and financial results.

If our future products incorporate technologies that infringe the proprietary rights of third parties, and we do not secure licenses from them, we could be liable for substantial damages.

We are not aware of our current products infringing the intellectual property rights of any third parties. We also are not aware of any third-party intellectual property rights that may hamper our ability to provide future products and services. However, we recognize that the development of our services or products may require that we acquire intellectual property licenses from third parties to avoid infringement of those parties’ intellectual property rights. These licenses may not be available at all or may only be available on terms that are not commercially reasonable. If third parties make infringement claims against us, even if they are not upheld, such claims could:

• consume substantial time and financial resources;
• divert the attention of management from growing our business and managing operations; and
• disrupt product sales and shipments.

If any third party prevails in an action against us for infringement of its proprietary rights, we could be required to pay damages and either enter costly licensing arrangements or redesign our products so as to exclude any infringing use. As a result, we would incur substantial costs, delays in product development, sales and shipments, and our revenues may decline substantially. Additionally, we may not be able to achieve the growth necessary for our continued success.

Failure to attract and retain management and other personnel may damage our operations and financial results and cause our stock price to decline.

We depend, to a significant degree, on the skills, experience and efforts of our executive officers and other key management, technical, finance, sales and other personnel. Our failure to attract, integrate, motivate and retain existing or additional personnel could disrupt or otherwise harm our operations and financial results. We do not carry key man life insurance policies covering any employees. The loss of services of certain of our key employees, an inability to attract or retain qualified personnel in the future, or delays in hiring additional personnel could delay the development of our business and could cause our stock price to decline.

We incur significant accounting and other control costs that impact our financial condition.

As a publicly traded corporation, we incur certain costs to comply with regulatory requirements. If regulatory requirements were to become more stringent or if controls thought to be effective later fail, we may be forced to make additional expenditures, the amounts of which could be material. Some of our competitors are privately owned, so their accounting and control costs could create a competitive advantage over us. Should our sales decline or if we are unsuccessful at increasing prices to cover higher expenditures for internal controls and audits, our costs associated with regulatory compliance will rise as a percentage of sales.

Failure to maintain effective internal control over our financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could cause our financial reports to be inaccurate.

We are required pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, to maintain internal control over financial reporting and to assess and report on the effectiveness of those controls. This assessment includes disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Although we prepare our financial statements in accordance with accounting principles generally accepted in the United States, our internal accounting controls may not meet all standards applicable to companies with publicly traded securities. If we fail to implement any required improvements to our disclosure controls and procedures, we may be obligated to report control deficiencies and our independent registered public accounting firm may not be able to certify the effectiveness of our internal controls over financial reporting. In either case, we could become subject to regulatory sanction or investigation. Further, these outcomes could damage investor confidence in the accuracy and reliability of our financial statements.

We rely on third-party mobile operating systems and hardware ecosystems that are outside our control.

A significant portion of our revenue depends on our software running effectively on third-party mobile devices (iOS and Android) and Point-of-Sale ("POS") hardware. We do not control these platforms. If Apple, Google, or POS manufacturers alter their operating systems—for example, by restricting access to camera feeds or NFC (Near Field Communication) chips—our products could become non-functional. Furthermore, these platform providers may introduce competing native identity verification features (e.g., mobile IDs embedded directly in digital wallets) that could disintermediate third-party applications like ours.

We rely on third-party service providers and cloud infrastructure to host our platform and process data; a cybersecurity breach, supply chain attack, or service disruption at these third parties could expose us to significant liability and disrupt our business.

Our SaaS delivery model and internal operations depend heavily on third-party service providers, including cloud infrastructure services, data center operators, and software vendors. We also utilize third-party technology for some critical functions such as facial biometric matching and global document validation.

While we implement security measures for our own systems, we do not have direct control over the cybersecurity protocols of these third-party providers. Sophisticated cyber attackers increasingly target these "supply chain" vendors to gain access to downstream customers like us. If a third-party provider is compromised, attackers could infiltrate our systems, access sensitive personal information (PII) of our customers or their end-users or inject malicious code into our software updates.

Furthermore, any service outage, ransomware attack, or denial-of-service attack targeting our cloud providers could render our platform unavailable to customers, leading to immediate revenue loss and reputational damage. Under current laws and regulations, we may be held liable for the unauthorized disclosure of sensitive data even if the breach originates with a third-party vendor. Such an event could result in substantial fines, legal claims, termination of customer contracts, and a loss of confidence in our ability to protect sensitive identity data.

Under our current governance structure, our Board of Directors oversees cybersecurity risk management as a principal business risk. However, there is no guarantee that our oversight processes or the cybersecurity protocols of our third-party vendors will be sufficient to prevent a material breach. Any such incident would require us to disclose the event under Item 1.05 of Form 8-K, which could lead to immediate negative market reaction and long-term reputational harm.

We are subject to risks associated with product failure and technological flaws.

Our products are complex and may contain undetected errors or result in failures when first introduced or when new versions are released. Despite vigorous product testing efforts and testing by current and potential customers, it is possible that errors will be found in a new product or enhancement after commercial shipments have commenced. The occurrence of product defects or errors could result in negative publicity, delays in product introduction and the diversion of resources to remedy defects and loss of or delay in industry acceptance or claims by customers against us and could cause us to incur additional costs, any one of which could adversely affect our business. Because of the risk of undetected error, we may be compelled to accept liability provisions that vary from our preferred contracting model in certain critical transactions. There is a risk that in certain contracts and circumstances we may not be successful in adequately minimizing product and related liabilities or that the protections negotiated will not ultimately be deemed enforceable.

We carry product liability insurance, but existing coverage may not be adequate to cover potential claims. The failure of our products to perform as promised could result in increased costs, lower margins, liquidated damage payment obligations and harm to our reputation.

We may not be able to keep up with rapid technological change.

The sectors for all our products are characterized by rapid technological advancements. Significant technological change could render existing technology obsolete. If we are unable to successfully respond to these developments, or do not respond in a cost-effective manner, our business, financial condition, and results of operations will be materially adversely affected.

A significant portion of our revenues is concentrated among a limited number of customers, and the loss or reduced usage of our products by one or more of these customers could materially adversely affect our results of operations.

For the fiscal years ended December 31, 2025 and 2024, our top ten customers accounted for approximately 77% and 71% of our total revenues, respectively. The loss of any one of these significant customers, or a reduction in their spending levels, could have a material adverse effect on our business, financial condition, and results of operations. Furthermore, these customers often have significant leverage in contract negotiations, which may result in pricing pressure or reduced margins. Our ability to replace these customers or comparable revenue streams is uncertain and could take significant time and investment.

We are subject to risks related to data privacy and the storage of biometric information.

With the growing use of biometric data in identity verification, Intellicheck faces increased risks related to the usage and protection of this highly sensitive information. Biometric data, such as facial recognition patterns, are uniquely vulnerable as they cannot be changed if compromised. The company must implement robust security measures to protect this data from breaches, as any leak could lead to severe reputational damage, legal consequences, and loss of customer trust. Additionally, evolving privacy laws and regulations specifically targeting biometric data could impose new compliance burdens on the company. Additionally, regulators are increasingly scrutinizing AI models for "algorithmic bias." If our fraud detection algorithms are found to perform differentially across demographic groups, we could face regulatory fines, reputational harm, and requirements to alter our technology under laws like federal non-discrimination statutes.

We are subject to regulation and other legal obligations relating to data privacy and protection. Compliance with these requirements is complex and costly. The actual or perceived failure to comply with such obligations could materially harm our business.

We are or may become subject to numerous state, federal and foreign laws, requirements and regulations governing the collection, use, access to, confidentiality, disclosure, storage, processing, retention and security of personal information. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. As an example, the California Privacy Rights Act (the “CCPA”) requires covered businesses that process the personal information of California residents to, among other things: provide certain disclosures to California residents regarding the business’s collection, use, and disclosure of their personal information; receive and respond to requests from California residents to access, delete, and correct their personal information, or to opt out of certain disclosures of their personal information; and enter into specific contractual provisions with service providers that process California resident personal information on the business’s behalf. Similar laws have been passed in other states and are continuing to be proposed at the state and the federal level, reflecting a trend toward more stringent privacy legislation in the United States. The CCPA and other domestic privacy and data protection laws and regulations may increase our compliance costs and potential liability.

Although we work to comply with applicable laws, regulations and standards, as well as our contractual obligations and other legal obligations, relating to data privacy and security, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction and/or organization to another, and may conflict with one another or other legal obligations with which we must comply. Any failure or perceived failure by us or our employees, representatives, contractors, consultants, collaborators, or other third parties to comply with such requirements or adequately address privacy data and security concerns, even if unfounded, could result in additional costs, claims by and liability to third parties, government investigations and enforcement actions, damage to our reputation, and other adverse effects on our business, financial condition and results of operations.

Rapid advancements in generative artificial intelligence ("AI") and "deepfake" technology could render our identity verification solutions less effective.

The identity verification industry is characterized by a "technological arms race." Bad actors increasingly are utilizing generative AI to create highly realistic synthetic identities and "deepfakes" capable of spoofing facial recognition systems. If our technology fails to detect these sophisticated AI-driven falsifications, or if we are unable to develop countermeasures faster than fraudsters develop evasion techniques (such as camera injection attacks), our customers may lose confidence in our platform. Furthermore, the shift toward 'digital-only' onboarding has increased our exposure to Synthetic Identity Fraud, where bad actors combine real and fabricated data to create entirely new, credible personas that do not have a history of prior fraud, making them significantly harder for traditional algorithms to detect. This could result in increased liability, customer churn, and material adverse effects on our business.

Our significant deferred tax assets are subject to a full valuation allowance, and changes in our assessment could materially affect our reported results.

As of December 31, 2025, we had gross deferred tax assets of approximately $7,145, which were fully offset by a valuation allowance. These deferred tax assets consist primarily of federal and state net operating loss carryforwards of approximately $30,520 at the federal level and $3,670 at the state level.

We evaluate the realizability of our deferred tax assets on a quarterly basis in accordance with ASC 740, weighing both positive and negative evidence. Significant factors in this assessment include our cumulative results over the most recent three-year period, projected future taxable income, the nature and timing of reversals of existing temporary differences, and available tax planning strategies. As of December 31, 2025, we were in a three-year cumulative loss position, which represents significant negative evidence under ASC 740, and accordingly we concluded that a full valuation allowance was required. Changes in our future earnings would result in a release of the valuation allowance and recognized in the period which the assessments change, as deemed appropriate under ASC 740.

In future periods, if we determine that sufficient positive evidence exists to conclude that it is more likely than not that some or all of our deferred tax assets will be realized, we would reduce or eliminate the valuation allowance, resulting in a non-cash income tax benefit that could be material to our results of operations in the period of release. Any such benefit would not represent a change in cash flows or operating performance. Conversely, if we incur additional losses or determine that the expected future taxable income is insufficient to support the realization of our deferred tax assets, we could be required to increase the valuation allowance, which would result in additional income tax expense.

Our federal net operating loss carryforwards include approximately $10,892 generated prior to 2018 that will expire if unused between 2035 and 2037, and approximately $19,628 generated after 2017 that may be carried forward indefinitely but are limited to offsetting 80% of taxable income in any given year. Our ability to utilize these carryforwards could be limited or eliminated by future changes in tax law or by an ownership change as defined under Section 382 of the Internal Revenue Code. We have not completed a formal analysis to determine whether any ownership changes have occurred that could limit our ability to utilize our net operating loss and tax credit carryforwards. If such a change has occurred, or occurs in the future, the annual amount of our carryforwards available to offset taxable income could be materially limited, which could result in a significant increase in our future income tax liability.

Risks Related to Our Common Stock and the Market for Our Common Stock

Our share price may be volatile and could decline substantially.

The market price of our common stock, like the price of shares of technology companies generally, has been and may continue to be volatile. From January 1, 2024 to March 19, 2026, the intra-day trading price of our common stock has varied from a high of $7.48 to a low of $1.65 per share, as reported on The Nasdaq Stock Market. Many factors may cause the market price for our common stock to decline, including:

• shortfalls in revenues, cash flows, cash balances or continued losses from operations;
• delays in development or roll-out of any of our products;
• unfavorable outcomes from outstanding litigation;
• overall decrease of US stock prices as a result of rising inflation experienced in the United States, the accompanying increases in the benchmark lending rate by the Federal Reserve, and each of their effects on the economy;
• short selling or other market manipulation activities; and
• announcements by one or more competitors of new product acquisitions or technological innovations.

In addition, the stock market experiences extreme fluctuations in price and volume that particularly affect the market price of shares of technology companies, such as ours. These price and volume fluctuations often are unrelated or disproportionate to the operating performance of the affected companies. Because of this volatility, we may fail to meet the expectations of our stockholders or of securities analysts and our stock price could decline as a result. Furthermore, the trading price of our common stock may be adversely affected by third-parties trying to drive down the market price. Short sellers and others, some of whom post anonymously on social media, may be positioned to profit if our stock declines and their activities can negatively affect our stock price. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance. Declines in our stock price for any reason, fluctuations related to our financial results or due to macroeconomic conditions, including inflation and rising interest rates, capital market volatility and global conflicts, including the Russia-Ukraine war, the recent military action against Iran, the Israel-Hamas war and the conflict between China and Taiwan, may adversely affect your ability to sell your shares at a price equal to or above the price at which you purchased them. Decreases in the price of our common stock also may lead to de-listing of our common stock.

We may need to raise additional capital in the future, which may not be available to us on terms that are favorable to us, or at all, and could cause dilution to our existing stockholders

We had cash and cash equivalents of $9,650 and working capital of $10,123 as of December 31, 2025. Our ability to fund our operations and execute our business strategy depends on our generating sufficient cash flows from operations and, when necessary, accessing capital markets or other financing sources. Additionally, acquisition and development opportunities and other contingencies may arise, which could also require us to raise additional capital through accessing capital markets or other financing sources. We may not be able to raise capital when the need arises on terms favorable to us, or at all. Further, adverse developments in the financial services industry, including bank failures, liquidity constraints, or significant volatility in equity markets, could limit our access to capital, increase our cost of capital, or reduce the amount of cash we can access on deposit with financial institutions, any of which could have a material adverse effect on our business, financial condition, and results of operations. Even if we are successful in raising additional capital, if we do so through the sale of equity, including preferred stock, or convertible debt securities, the percentage ownership of our then existing stockholders will be diluted. In August 2025, we filed an S-3, also know as a Shelf Registration, that would allow us to sell shares in the market if the need arises.

Because we do not intend to pay dividends on our Common Stock, stockholders will benefit from an investment in our stock only if it appreciates in value.

We have never declared or paid any cash dividends on our shares of stock. We currently intend to retain all future earnings, if any, for use in the operations and expansion of the business. As a result, we do not anticipate paying cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash dividends will be at the discretion of our Board of Directors and will depend on factors the Board of Directors deems relevant, including among others, our results of operations, financial condition and cash requirements, business prospects, and the terms of our credit facilities and other financing arrangements. Accordingly, realization of a gain on stockholders’ investments will depend on the appreciation of the price of our stock. There is no guarantee that our stock will appreciate.

The Company's cash and cash equivalents could be adversely affected by bank failures or other events affecting financial institutions and could adversely affect our liquidity and financial performance.

We regularly maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks, in amounts that exceed the FDIC insurance limits. The failure or rumored failure of a bank, or events involving limited liquidity, defaults, non-performance, bankruptcy, receivership or other adverse developments in the financial or credit markets impacting financial institutions, may lead to disruptions in access to our bank deposits. These disruptions could impact our liquidity and financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis. As such, those funds in bank deposit accounts in excess of the standard FDIC insurance limits are uninsured and subject to the risk of bank failure.

Currently, we have full access to all funds in deposit accounts or other money management arrangements. The failure of any bank in which we deposit our funds could reduce the amount of cash we have available for our operations or delay our ability to access such funds. In the event of such failure, we may experience delays or other issues in meeting our financial obligations, our ability to access our cash and cash equivalents may be threatened and could have a material adverse effect on our business and financial condition.

Future adverse developments with respect to specific financial institutions or the broader financial services industry may also lead to market-wide liquidity shortages.

We have established procedures for evaluating, recognizing, and handling significant risks stemming from potential unauthorized events occurring on or through our electronic information systems, which could negatively impact the confidentiality, integrity, or accessibility of our information systems or the data stored within them. These procedures encompass a diverse range of mechanisms, controls, technologies, systems, and other processes aimed at preventing, detecting, or mitigating data breaches, theft, misuse, unauthorized access, or any other security incidents or vulnerabilities affecting digitally stored data. This data comprises confidential, business, and personal information that we gather, process, store, and transmit as part of our operations, including on behalf of third parties. Furthermore, we utilize systems and procedures intended to minimize the repercussions of a security incident involving a third-party vendor or customer. Additionally, we employ procedures to supervise and identify significant risks arising from cybersecurity threats linked to our utilization of third-party technology and systems, such as encryption and authentication systems, employee email services, back-office support systems, and other operational functions.

We adhere to a risk management framework based on applicable laws and regulations, incorporating industry standards and recognized practices to handle cybersecurity risks across our products, services, infrastructure and corporate assets. To evaluate and address cybersecurity threats, we analyze factors such as threat intelligence, first- and third-party vulnerabilities, changing regulatory requirements and observed incidents. We regularly conduct risk assessments to gauge the effectiveness and maturity of our systems, identifying areas for improvement. We engage third-party security experts and consultants to assist with assessment and enhancement of our cybersecurity risk management processes, as well as benchmarking against industry practices. We also maintain a privacy risk management program to assess risks related to user data collection, with an independent third-party privacy assessor to ensure compliance. These processes enable us to make informed, risk-based decisions and prioritize cybersecurity measures and risk mitigation strategies. Our risk mitigation efforts encompass a range of technical and operational actions, alongside annual cybersecurity and privacy training for all staff members.

Our cybersecurity risks and associated mitigations are evaluated by our IT team, including our Director of Information Technology and Security, as part of our enterprise risk assessments that are reviewed by our management team. Our Director of Information Technology and Security serves as the Company’s designated Chief Information Security Officer and is responsible for developing and implementing the cybersecurity risk management program, including reporting on cybersecurity matters to the Board of Directors. The Director of Information Technology and Security has more than 15 years of experience of cybersecurity oversight.

Our management team supervises efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents, which include: internal briefings from relevant personnel; threat intelligence and other information obtained from governmental, public or private sources, including external cybersecurity consultants; and alerts and reports produced by security tools deployed in our IT environment. In addition, the Board of Directors oversees the Company’s cybersecurity risk exposures and the steps taken by management and the Chief Information Security Officer to monitor and mitigate cybersecurity risks. However, we cannot guarantee that our efforts will prevent any cybersecurity incident from occurring.

In 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats. For additional information about these risks, see Part I, Item 1A, "Risk Factors" in this Annual Report on Form 10-K.

Our corporate headquarters currently is located in Melville, New York, where we occupy approximately 135 square feet of office space pursuant to a month-to-month lease. While all personnel currently operate out of their individual home offices throughout the country, this facility is primarily used for periodic, necessary in-person meetings. We believe that our existing facility is adequate to meet current requirements and that additional or substitute space will be available as needed to accommodate any expansion of operations.

We currently are not involved in any legal or regulatory proceeding, or arbitration, the outcome of which is expected to have a material adverse effect on our business.

The Company received a class action complaint on January 8, 2026 alleging that the Company collected biometric information from users in Illinois in violation of the Illinois Biometric Information Privacy Act, 740 ILCS 14/1 et seq. (“BIPA”). The Company is not able to fully assess the probability and outcome of the matter due to the need to conduct further investigation. However, it does not currently believe that a material loss is probable nor estimable. As such, the Company has not recognized a liability and intends to fully defend the matter.

Overview

We are a prominent technology company engaged in developing, integrating and marketing identity verification solutions to address challenges that include commercial retail and banking fraud prevention. Our products include solutions for preventing identity fraud across any industry delivered via smartphone, tablet, POS integration or other electronic devices.

Critical Accounting Policies and the Use of Estimates

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Significant estimates and assumptions that affect amounts reported in the financial statements include impairment consideration and valuation of goodwill and intangible assets including software development costs, revenue recognition (including breakage revenue), and the fair value of stock options under our stock-based compensation plans. Due to the inherent uncertainties involved in making estimates, actual results reported in future periods may be different from those estimates.

Revenue Recognition and Deferred Revenue

SaaS fees and service revenues are generated from a combination of fixed-price and per-scan contracts. Under the per-scan revenue model, customers are charged a fee each time the customer scans an identity document, such as a driver’s license, with our software. Under the fixed-price revenue model customers are charged a fixed monthly fee either per device or physical business location to access our software. In certain instances, customization services are determined to be essential to the functionality of the delivered software. Under Accounting Standards Codification (“ASC”) 606,

“Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. We measure revenue based on the consideration specified in a customer arrangement, and revenue is recognized when the performance obligations in an arrangement are satisfied. The Company adopted an additional revenue model where customers purchase a predetermined number of transactions for the term of the contract, where revenue for these transactions is recognized on a per transaction basis. The Company estimates the number of transactions that will be unused by the end of each contract period and recognized a portion of that revenue as breakage revenue each reporting period. Reference Note 2, “Significant Accounting Policies,” in the Notes to Financial Statements for additional details on the Company’s recognized and deferred revenue. The Company also has a revenue model where customers purchase access to the Company's platform that includes a fixed, non-refundable annual access fee associated with a spend commitment that grants the customers stand-ready access to the platform. Revenue for this access is recognized ratably over the contract term, consistent with the nature of the stand-ready service.

Stock-based Compensation

We account for the issuance of stock-based compensation awards to employees in accordance with ASC 718, “Compensation – Stock Compensation”, which requires that the cost resulting from all stock-based compensation payment transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement objective in accounting for stock-based compensation payment arrangements and requires all companies to apply a fair value-based measurement method in accounting for all stock-based compensation payment transactions with employees. Reference Note 9, “Stockholders' Equity,” in the Notes to Financial Statements for details on the Company’s stock-based compensation plans.

Valuation of long-lived assets

Our long-lived assets include property and equipment, goodwill, and intangible assets. As of December 31, 2025, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $394, $8,102 and $2,077, respectively. As of December 31, 2024, the balances of property and equipment, goodwill and intangible assets, all net of accumulated depreciation and amortization, were $536, $8,102 and $2,374, respectively. Reference Note 2, “Significant Accounting Policies”; Note 4, “Property and Equipment”; and Note 5, “Goodwill and Intangible Assets” in the Notes to Financial Statements for details on the Company’s valuations of our long-lived assets.

Internal Use Capitalized Software

We capitalize certain costs related to the development of our platform and other software applications for internal use. In accordance with authoritative guidance, we capitalize our costs to develop software when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. We stop capitalizing these costs when the software is substantially complete and ready for its intended use, including the completion of all significant testing. These costs are amortized on a straight-line basis over the estimated useful life of the related asset. We also capitalize costs related to specific upgrades and enhancements when it is probable the expenditure will result in additional functionality and expense costs incurred for maintenance and minor upgrades and enhancements. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded within research and development expenses in the statements of operations. We exercise judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized.

Income Taxes and Valuation Allowance

We account for income taxes in accordance with ASC 740, Income Taxes. Under this standard, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for net operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

We establish a valuation allowance against deferred tax assets when, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In making this determination, we consider all available positive and negative evidence, including:

• Our cumulative results for the most recent three-year period, adjusted for permanent differences between book and taxable income;
• The nature, frequency, and magnitude of current and cumulative financial reporting income and losses;
• Our forecasts of future taxable income, considering the predictability and sustainability of recent operating trends;
• The length of time net operating loss and tax credit carryforwards remain available, including the distinction between carryforwards with definite expiration dates and those that carry forward indefinitely;
• The nature and timing of reversals of existing taxable and deductible temporary differences; and
• Available tax planning strategies that could be implemented, if necessary, to accelerate taxable income.

As of December 31, 2025, we maintained a full valuation allowance of approximately $6,677 against our net deferred tax assets. Our three-year cumulative result through December 31, 2025, after adjusting for permanent differences, remained in a loss position, which constitutes significant objective negative evidence under ASC 740. While we generated pre-tax income of approximately $1,331 during the year ended December 31, 2025, representing a meaningful improvement from prior-year losses of $2,042 in 2023 and $885 in 2024, we have not yet established a sustained pattern of profitability sufficient to overcome this negative evidence.

This assessment requires significant judgment. Should we continue to generate taxable income in future periods such that the three-year cumulative result transitions to a positive position, and should we conclude that the weight of positive evidence outweighs the negative evidence, we may determine that a partial or full release of the valuation allowance is appropriate. Any such release would be recorded as a non-cash deferred income tax benefit in the period the determination is made and could be material to our results of operations. Based on the gross deferred tax assets as of December 31, 2025, a full release of the valuation allowance would result in a tax benefit of approximately $6,677.

Results of Operations

COMPARISON OF THE YEAR ENDED DECEMBER 31, 2025

TO THE YEAR ENDED DECEMBER 31, 2024

REVENUES. Revenues for the year ended December 31, 2025 increased $2,669 or 13% to $22,666 compared to $19,997 for the year ended December 31, 2024. The increase in revenues is primarily the result of higher SaaS revenue for the current period. SaaS revenues, which consists of software licensed on a subscription basis, increased $2,626 or 13% to $22,436 for the year ended December 31, 2025 compared to $19,810 for the year ended December 31, 2024.

GROSS PROFIT. Gross profit increased by $2,334 or 13%, to $20,500 for the year ended December 31, 2025, compared to $18,166 in the year ended December 31, 2024. Our gross profit, as a percentage of revenues, was 90.4% and 90.8% for the years ended December 31, 2025 and 2024, respectively.

OPERATING EXPENSES. Operating expenses, which consist of selling, general and administrative expenses and research and development expenses, increased by $80, or 0.4% to $19,414 for the year ended December 31, 2025 from $19,334 for the year ended December 31, 2024. Selling, general and administrative expenses decreased by $(1,377), or 9%, to $14,100 for the year ended December 31, 2025, compared to $15,477 for the year ended December 31, 2024. This decrease was primarily driven by lower general and administrative costs, specifically headcount-related expenses tied to severance expenses. Research and development expenses increased $1,457, or 38%, to $5,314 for the year ended December 31, 2025, compared to $3,857 for the year ended December 31, 2024. This increase was primarily due to less capitalization of certain software development expenses, as well as higher personnel costs and their related stock-compensation expenses.

OTHER INCOME AND EXPENSE. Interest and other income, net, was $245 for the year ended December 31, 2025, compared to interest income of $283 during the year ended December 31, 2024.

INCOME TAXES. Our provision for income taxes was $58 for the year ended December 31, 2025, compared to $33 during the year ended December 31, 2024.

NET INCOME. As a result of the factors noted above, we had net income of $1,273, or $0.07 per share, for the year ended December 31, 2025 as compared to a net loss of $(918), or $(0.05) per share, for the year ended December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $9,650, working capital (defined as current assets minus current liabilities) of $10,123, total assets of $24,481 and stockholders’ equity of $20,697.

For the year ended December 31, 2025, our cash increased by $4,984. Cash provided by operating activities was $4,541 for the year ended December 31, 2025 as compared to cash used in operating activities of $(2,694) for the year ended December 31, 2024. Cash used in investing activities for the year ended December 31, 2025 was $(265) as compared to cash provided by investing activities of $2,895 for the year ended December 31, 2024. Cash provided by financing activities was $708 for the year ended December 31, 2025 as compared to cash provided by financing activities of $485 for the year ended December 31, 2024.

We currently anticipate that our available cash and expected cash from operations will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least the next 12 months from the date of filing of these financial statements.

We keep the option open to raise additional funds to respond to business contingencies which may include the need to fund more rapid expansion, fund additional marketing expenditures, develop new markets for our technology, enhance our operating infrastructure, respond to competitive pressures, or acquire complementary businesses or necessary technologies. In August 2025, we filed an S-3, also know as a Shelf Registration, that would allow us to sell shares in the market if the need arises. There can be no assurance that we will be able to secure the additional funds when needed or obtain such on terms satisfactory to us, if at all.

Use of Non-GAAP Measures

Adjusted Gross Profit

We use Adjusted Gross Profit as a non-GAAP financial performance measurement. Adjusted Gross Profit is calculated by adjusting gross profit for the reduction of amortization expense. Adjusted Gross Profit is provided to investors to supplement the results of operations reported in accordance with GAAP. We believe Adjusted Gross Profit is important because it focuses on the current operating performance, as amortization expense does not accurately reflect the current costs required to maintain the operational usage of our service. Rather, amortization expense reflects the allocation of historical software development costs over their estimated useful lives.

As an indicator of our operating performance, Adjusted Gross Profit should not be considered an alternative to, or more meaningful than, gross profit as determined in accordance with GAAP. Our Adjusted Gross Profit may not be comparable to a similarly titled measure of another company because other entities may not calculate Adjusted Gross Profit in the same manner.

Adjusted EBITDA

We use Adjusted EBITDA as a non-GAAP financial performance measurement. Adjusted EBITDA is calculated by adjusting net income (loss) for certain reductions such as restructuring severance expenses, interest and other income, provisions for income taxes, depreciation, amortization and stock-based compensation expense. Adjusted EBITDA is provided to investors to supplement the results of operations reported in accordance with GAAP. Management believes that Adjusted EBITDA provides an additional tool for investors to use in comparing our financial results with other companies that also use Adjusted EBITDA in their communications to investors. By excluding non-cash charges such as amortization, depreciation and stock-based compensation, as well as non-operating charges for interest and provisions for income taxes, investors can evaluate our operations and can compare the results on a more consistent basis to the results of other companies. In addition, Adjusted EBITDA is one of the primary measures that management uses to monitor and evaluate financial and operating results.

We consider Adjusted EBITDA to be an important indicator of our operational strength and performance of our business and a useful measure of our historical operating trends. However, there are significant limitations to the use of Adjusted EBITDA since it excludes restructuring severance expenses, interest and other income, provisions for income taxes, stock-based compensation expense, all of which impact our profitability, as well as depreciation and amortization related to the use of long-term assets which benefit multiple periods. We believe that these limitations are compensated by providing Adjusted EBITDA only with GAAP net income (loss) and clearly identifying the difference between the two measures. Consequently, Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss) presented in accordance with GAAP. Adjusted EBITDA as defined by us may not be comparable with similarly named measures provided by other companies.

The reconciliation of GAAP net income (loss) to Non-GAAP Adjusted EBITDA is as follows:

Net Operating Loss Carry Forwards

Our available net operating loss (“NOL”) as of December 31, 2025 was approximately $30,520, of which $10,892 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 $19,628 will not expire, but are subject to 80% limitation on utilization. In addition to the NOLs, the Company has approximately $682 of research and development credits.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740), which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. The new guidance requires consistent categorization and greater disaggregation of information in the rate reconciliation, as well as further disaggregation of income taxes paid. This change is effective for annual periods beginning after December 15, 2024. The Company adopted this standard effective January 1, 2025 and was applied retrospectively. The adoption of this new standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

Except as discussed below, we do not expect the impact of the future adoption of recently issued accounting pronouncements to have a material impact on our financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires new financial statement disclosures to provide disaggregated information for certain types of expenses, including employee compensation, depreciation, and amortization in commonly presented expense captions such as cost of revenue, sales and marketing, and general and administrative expenses. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is in the process of evaluating the effect that the adoption of these standards will have on its financial statements.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The standard is effective for all the entities for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively. The Company will adopt this ASU in the first quarter of 2026 and adoption is not expected to have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software by replacing the previous stage-based model and aligning the capitalization process with current development practices, especially agile and iterative methods. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and may be applied prospectively, retrospectively, or using a modified transition approach. The Company is in process of evaluating the impact of the adoption of this ASU on its financial statements.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities nor entered into any option agreements on non-financial assets.

Interest Rate Risk

As of December 31, 2025, we had cash and cash equivalents of $9,650. The primary objectives of our investment activities are the preservation of capital, the fulfillment of liquidity needs, and the fiduciary control of cash and investments. We do not enter into investments for trading or speculative purposes. Due to the short-term nature of our investment portfolio, the effect of a hypothetical 100 basis point change in interest rates would not have a material effect on the fair market value of our portfolio as of December 31, 2025. We therefore do not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our Company's reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.

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

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external reporting purposes in accordance with U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

a. Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

b. Provide reasonable assurance that transactions are recorded properly to allow for the preparation of financial statements in accordance with U.S. GAAP and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

c. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the guidelines established in the "Internal Control—Integrated Framework" (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2025.

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

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2025 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.