Intellicheck, Inc.: Form 10-Q for the period ended Jun 30, 2026

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2026 based on the guidelines established in the "Internal Control—Integrated Framework" (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to be disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Based on its assessment, management concluded that the Company's internal control over financial reporting was effective as of June 30, 2026.

Limitations on Effectiveness of Controls.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving its objectives.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2026 that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this report, investors should carefully consider the factors discussed under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, 2025 (the “2025 Annual Report”). These factors could have a material adverse effect on our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by the forward-looking statements contained in this report.

There have been no material changes to the risk factors described in Part I, Item 1A, “Risk Factors,” included in our 2025 Annual Report, except as set forth below.

Geopolitical instability, sanctions regimes, energy market volatility, and resulting macroeconomic pressures could increase our operating costs and adversely affect demand for our services.

While we do not operate internationally or maintain direct exposure to conflict zones, our business may be indirectly affected by geopolitical instability through several channels. Export controls, trade restrictions, and economic sanctions imposed in response to international conflicts could limit our ability to procure hardware, software components, or services from affected vendors or geographies, potentially increasing our costs or requiring us to qualify alternative suppliers. In addition, geopolitical disruptions have contributed to volatility in energy markets and data-center operating costs, which may affect the pricing and availability of the cloud infrastructure on which our platform depends.

Beyond our own cost structure, geopolitical instability and the inflationary pressures it can generate may adversely affect the businesses of our customers. Our revenue is driven in part by transaction volumes — the number of identity verifications our customers perform in connection with their own commercial activity. If inflationary conditions reduce consumer spending, tighten credit availability, or otherwise slow the business activity of our retail, financial services, or other commercial customers, the volume of transactions processed through our platform could decline, which would negatively affect our revenues. Although we do not currently anticipate material near-term impacts from these conditions, there can be no assurance that future geopolitical developments or sustained inflationary pressures will not adversely affect our vendor relationships, operating costs, customer transaction volumes, or ability to deliver services.

A significant portion of our revenue is concentrated among a limited number of customers; our customer representing 29% of revenue for the first six months of 2026 has begun transitioning certain use cases to an alternative vendor under a multi-vendor architecture, and the pace, extent and duration of the resulting volume reductions are uncertain.

As previously disclosed under Risk Factors in the Annual Report for the year ended December 31, 2025 and 2024, our top ten customers accounted for approximately 77% and 71% of our total revenues for such years, respectively, and one customer accounted for approximately 31% of our total revenues for the year ended December 31, 2025. This customer has recently informed us that, as part of a vendor-resilience initiative, it is adopting a primary/secondary vendor architecture under which an alternative vendor is expected to become the primary provider for certain identity verification use cases, while we will remain the primary provider for certain other use cases and will retain secondary or failover roles for certain of the transitioned use cases. The customer’s communicated plans are scheduled to be implemented on a phased basis through the third quarter of 2026 and contemplate a reduction of approximately 70–75% in its transaction volumes with us during the second half of 2026 relative to the baseline reflected in those plans. The customer has indicated that its plans may be adjusted, and we cannot predict the pace, extent, or duration of the customer’s transition or the resulting effect on transaction volumes. As of August 13, 2026, the implementation of the customer’s multi-vendor architecture was underway and our transaction volumes with this customer had declined from prior-year levels; however, the reductions observed through that date were less than the pace and magnitude contemplated by the customer’s communicated plan.